Feed the Face, Then Talk to Me About Freedom
If Tuesday’s election proved anything, it is that the conservative movement and the Republican Party are badly out of sync with the American people on the issue of economics. In the face of an economic crisis largely caused by the free market policies inspired by Ayn Rand and Milton Friedman, the conservative movement, led by the Tea Party, chose not to seek a viable alternative, but instead doubled down on an ideology from which the majority of Americans are entirely alienated.
Indeed, the most telling statistic of Tuesday night was the poll which revealed that 60% of the American people want taxes raised on the wealthy. For conservatives, this is simply another sign that the “moochers” and the “bums” have taken over, and an immoral parasite class is now poised to despoil the entrepreneurial creators of wealth and innovation that have made this country great.
This point of view is both willfully blind and grossly unfair. First, there is the simple fact that a great many Americans, through little fault of their own, are in a perilous economic state. As Bertolt Brecht once wrote: “Feed the face, then talk to me about freedom.” Even if the neoliberal point of view were correct—and I believe it is not—there is simply no viable argument against the fact of human suffering. People who are desperate will vote for anyone who is willing to ameliorate their condition to some degree. To believe otherwise is to disregard human nature; always a perilous path to take in a democracy, wherein the voice of the people is the voice of God.
Second, the argument that those in need of amelioration are parasitic moochers is simply not true. A great many of America’s wealthy are not creative or productive. Those who have become rich off the financial sector, for example, produce next to nothing, and make their money off of money, creating a closed circle in which money, rather than reflecting the true value of goods and services, simply reflects itself, leading to a greater and greater disconnect between the fantasy of its value and the reality. Eventually, of course, as it always does, reality reasserts itself, as the collapse of the financial sector in 2008 proved in the most catastrophic manner possible. At the same time, a great many others have become rich by exploiting natural resources and technology they do not own or have been developed by the public sector, such as oil and the Internet. Who is the moocher in such a situation?
There is nothing at all immoral about asserting that those who have made enormous and—in my view—unreasonable fortunes off of these industries owe a debt to the public. To a great extent, they are as parasitic a class as any legion of welfare dependants. Barack Obama was wrong to say “you didn’t build that,” but many have built their fortunes on a foundation they themselves did not construct, and it is immoral for them not to provide recompense for it, in the same way that it is immoral to deny them recompense for their efforts in building on that foundation.
At the same time, the conservative movement still has a great deal to offer on the issue of economics: The welfare state, improperly employed does indeed stifle growth and create dependency; a bloated public sector is a burden on the economy; and fiscal prudence is an indispensable factor in any prosperous society.
The American Right, however, is unready or unwilling at the moment to countenance anything like this. In conservative circles, even to imply that the welfare state is not entirely an unholy evil is as verboten as any heresy in history; and this does not bode well for its future. Conservatives in countries like Canada and the United Kingdom have made peace with the welfare state, while containing those aspects of it that are harmful to both the private and public sector. If American conservatives cannot do the same, I fear they are doomed to a long sojourn in the political wilderness.
Ummm… We have a rather large and costly welfare state already. I know you are in Israel but contrary to what you read in the Israeli leftist press we don’t have masses of dark complexioned people starving to death in ghettoes. Haven’t for a long time.
Also you seem to be under the mistaken impression that the wealthy pay no taxes at all, or very little. In fact, the top 5% of the population pays well over 60% of all federal taxes. It’s easy to look up.
If what you are advocating is that the top 5% pay 100 per cent of federal taxes then please be honest about it. And if that is your preferred policy then yeah, the 95% who pay no taxes at all but still, by weight of numbers, vote themselves increased benefits that others pay for are, in your words, PARASITIC MOOCHERS.
You’re gonna have to do better than that if you want to convince people to vote against their own economic self-interest, not to mention the long term health of the Republic. You might want to try joining the Democratic party whose already advocate the policies you are in favor of. Thanks.
macc -
Hard words, but hard to disagree with. I like Kerstein but he’s no conservative – the very fact that he would recommend “conservatives” in Britain and Europe as models for us to emulate is indicative of that.
He basically wants two parties going after the “unreasonably wealthy,” with the conservatives as prudent fiscal managers of a class-based social democracy. (It must be class-based if all of economics revolves around not socialism vs. free market, but who will fleece the wealthy better).
Two words: Yeah, no.
I’m not denying that Americans have pretty much thrown in the towel on the free market. But just because that’s where the river is flowing, it’s no reason for us to sing hallelujah to the river gods. If we go down and get drowned in the end, so be it. The left wll still be around, and eventually circumstances will force them to austerity – so Kerstein will have everything he wants.
Point is, we don’t advocate free market principles because it’s politically prudent; we do it because we believe “neoliberal” economics is correct and the best system for creating wealth, health, and prosperity. In other words, because we care.
So Kerstein wants us to abandon a set of deeply held principles and beliefs – which have not been falsified at all; rather the contrary – in order to gain electoral advantage and make ourselves as relevant as the Tories.
He also seems to think we run around laughing at suffering people, or denying that they exist. My recommendation to Kerstein – you give, you get – is to study conservatism some more. He still thinks about it like a leftist, and maybe he can fix that.
He also needs to get a clue about how it is that industries are created. I’m pretty sure that Edwin Drake didn’t have some bureaucrat telling him how to drill a well in Titusville, PA in 1859, that JD Rockefeller didn’t get too much advice on how to get it to market and that modern oil companies probably din’t get a whole lot of help in developing deep sea drilling techniques. Other than that, FORWARD comrades!.
This passage, “Conservatives in countries like Canada and the United Kingdom have made peace with the welfare state, while containing those aspects of it that are harmful to both the private and public sector.”
It makes me (and maybe you), wonder why this point was not expanded upon. Which “aspect” is NOT harmful? Please let us know. Other commenters have exposed the other nonsense leftisms presented as moderate paeak.
Like! Like! Like! x infinity.
Good call, macc. I was afraid the first commenter would agree with this nonsensical post.
The problem with our economic situation is that we’ve been following Ayn Rand and Milton Friedman too closely? Benjamin Kerstein is delusional at best, a Stalinist at worst.
Benjamin, please feel free to point out the specific places where free market ideals and fiscal responsibility caused our economic woes. It seems clear that America has been rejecting Rand and Friedman’s concepts of economic freedom for about 20 years.
Do you understand what Friedman says when he speaks? Have you heard him speak? Because every major policy enacted by the federal government for the last 12 years has been the opposite of Friedman’s views.
This post is simply rediculous.
Er, since when do Republicans follow the spending advice of Rand or Friedman? Bush was a worse spender than any other president in history except Obama. Just because Obama is much worse doesn’t mean anything. And the first Bush was terrible, too, raising taxes.
I am sick and tired of the Ayn Rand followers. Please go back to American Conservative classics like Russell Kirk and William F. Buckley. I don’t hear them quoted by the Conservative crowd lately. Ayn Rand was a fraud and her ideas are not even serious philosophy. Go back and read the philosophical foundations of the West, read good history, and get a grasp of the ideas of our Founding Fathers. How many have compared here that the American Revolution was akin to the French Revolution. Many indeed and ALL WRONG. Americans back then did not need to think exactly what Europeans told them to think. Illuminists my foot they were ORIGINAL in so many ways! Unfortunately not even those who claim to be their followers understand them these days!
Spot on Catino. And I might add rarely do I see anyone quoting Adam Smith as well.
I don’t agree with everything she says but we are “going Galt”.
Quite right…..
The precepts of Randian objectivism will lead us towards a third-world estate similar to the classic belgian congo and not some super-capitalist utopia. they’re just too thick to get that……..
What America needs right now is exactly a dose of Ayn Rand! Those are the proper principles to guide us back to freedom and prosperity. Read Atlas Shrugged.
First, of all, Catino, you need to read Rand for yourself before spreading ad hominen all over the place. Second, Buckely and the conservatives without accepting Rand’s moral justification for capitalism doomed their case. Christian altruism is what started this country down the socialist road it going. Third, the author, Kerstein, needs to learn the critical importance of the financial sector toward directing capital into the most profitable enterprises and industries. They are the mind & brains of capitalism. They earn their keep in spades.
One of the most uninformed bloggers on PJ Media for a long time. Mr. Simon, you let one slip through with this guy.
Test: Would you want Ayn Rand for a neighor when Sandy struck and the lights went out for two weeks? I wouldn’t. I’d much rather have some good old boys from Kentucky or Georgia. And I’m not even a Baptist.
Bigfoot,
Ayn was against altruism, right.
Letting a neighbor into your safe home when the other’s has a foot of water as a temporary affair which preserves the positive and supportive relationship you have and helps preserve security in contact with the current owner of a property bordering yours which may soon be sold (*breath*) differs from giving your neighbor your house, while you take your chances out in the storm.
One is a perceived kindness with real benefits and the other is blind altruism.
Ayn Rand would be a great neighbor.
If they are looking for benefits, it isn’t a kindness, it’s a transaction. I think you are thinking too much. It’s only real if you do it without thinking. In other words, do it the Jesus way, not the Rand way. I recommend you read Jesus’ Sermon on the Mount, Matthew chapters 5, 6, and 7. It is superior to Rand. And no, I am not argueing for the welfare state. It isn’t a state thing. Ayn Rand has a good arguement against a powerful state. But she is cold as ice, and I don’t want to live in her world.
Catino: read 1st 50 pages of Atlas shrugged, then report back so as to prove you read it. To all other readers: I suggest you read the 1st 50 pages, and then tell me how the arguments you hear today fromm the Left are any different.
Yes, the Republicans must reform and fix our broken crony capitalist economy. A crony capitalist economy favored and actively supported by the Democratic Party with the Republicans tagging along. Perhaps Mr. Kerstein should take another look at the election map and note that the very centers of our crony capitalist economy are the very centers of Democratic power. The majority of the wealthiest in this country vote Democrat.
The welfare state is anathema to individual liberty and freedom. Capitalism is not. Crony capitalism like that which we have now in the Western world geared and controlled by a rent seeking financial, legal and political class credentialed by a corrupt and morally empty academy will continue to support a welfare state that commands allegiance to preserve undo privilege. John Corzine is not a Republican. And yes that is bait, someone please suggest a list of all the privileged corrupt Conservative business, legal and academic leaders.
You hit it on the head Sydney, crony capitalist and big government is what destroys the system. The government is here to be the umpire as Milton Friedman has said. For one example, Just look at ObamaCare and all the waivers that have gone out to friends of the government.
Economic crisis largely caused by the free market policies inspired by Ayn Rand and Milton Freidman??? WTF are you talking about? How many pounds of crack have you smoked in the last hour?
It is precisely the opposite of the free market that caused this crisis.
And clowns like you (statist thugs) will just double – down on past failure.
Free market? What free market.
I’m sorry, but the idea that the current crisis was caused primarily by government is simply a myth. Fannie Mae and Freddie Mac played a part, but a minor one. The primary reason for it was the irresponsibility of the financial sector, coupled with the fact that almost the entire American middle class took on crippling debt in order to maintain their lifestyle in the face of the extraordinary concentration of wealth in a smaller and smaller percentage of the wealthy class. Ultimately, the bill came due and there was no one in the middle class who could pay it and no one among the wealthy class who was willing to. Thus consumption collapsed, and with it the economy.
What about the role of the Federal Reserve’s(a quasi-governmental entity) monetary policy? The low interest rates encouraged people to invest the housing market, which led to the housing bubble, which in turn led to the financial collapse.
I believe those low interest rates were deemed necessary because of the concentration of wealth occasioned by excessively free market economic policies. In effect, in order to drive continuing middle-class consumption, despite them lacking the wealth to do so, it was necessary to make debt easy to obtain. The bill, of course, eventually became due. I do not claim that the government played NO ROLE WHATSOEVER in the economic collapse, only that it did not play a decisive role.
I still wonder if those who bought up the toxic assets were acting on the assumption that it was a no-lose proposition. If the assets continued to increase-they win, if they crashed-the government would be forced to bail them out. I’m afraid that the more that people are insulated from the consequences of their decisions, things are only going to get worse.
Did not play a decisive role? What, pray tell, is a policy that encourages and is interpreted to mandate high-risk lending to poor candidates if not DECISIVE? Mother of God, man, what’s decisive- sending in the Army to point take cash at gunpoint and roll through poor neighborhoods throwing armfuls of dollar bills out the window?
Ludicrous.
“….. What, pray tell, is a policy that encourages and is interpreted to mandate high-risk lending to poor candidates if not DECISIVE? …….”
The “fact that almost the entire American middle class took on crippling debt in order to maintain their lifestyle”, is decisive. It is this VICE in the hearts of the people, the desire to get essentially something for nothing. If you are going to credit the virtues and good morals of the people for their prosperity and success, you are going to have to acknowledge the roles of self-delusion and double-dealing for when they are caught out in debt………
Lzzrdgrrl, your point is tangential. The fact that people willingly took on debt does not change the fact that it was government policy to put pressure on banks to MAKE that debt available.
Without that policy, fewer people would have taken on mortgage debt.
And while yes, people did take on debt to sustain their lifestyle, if it hadn’t been available would they have taken on so much? I severely doubt it- even with lax personal credit standards, the lack of a house as collateral makes it unlikely they could have racked up several hundred thousand dollars’ worth- usually it’s more like several tens of thousands, an order of magnitude smaller.
And speaking as a someone who had both student debt AND large credit debt after college, it’s possible to work off five figures of debt in about eight years on less-than-stellar pay. Not so for six figures of debt.
NO. What happened was not caused by the unfettered free market and anyone who believes so has not bothered to do the research or understand how things work. Period. Which is often caused by the confirmation bias of a Liberal. If you know it all, there’s no need to do research, is there?
It also has nothing to do with concentration of wealth among a smaller % of the population, other than that became the highly predictable effect, not the cause.
What happened was that crony capitalism, one short step from what Mussolini and Franco practiced, provided people, with their natural reactions to conditions presented to them, a perverse incentive to provide things like loans to those who could not afford them, due to the stick that would punish them otherwise. As a “civil rights” attorney Obama was one of many who sued the banks to force this behavior, under federal laws which enabled such lawsuits. There’s no way, however, this could be maintained, even over the short term, without some mechanism to provide the capital for it. Thus the loans were bundled together and began that particular use of credit default swaps, whereby potentially bad loans were bundled together and then sold on the market, often to unsuspecting investors, often who did not understand what it was they were really getting. They were backed by Credit Default Swaps, which are a form of insurance. Both the government and private insurance companies such as AIG were guarantors/insurers of these securities. Many investors did not concern themselves too much with the quality of these bundles because they were insured. CDS’s themselves were also sold and a few made billions off of them, because they collected on the insurance without ever having a significant amount of skin in the game. None of this would or could have happened if there was no bundling of lousy loans in the first place, loans which never would have existed without the Community Reinvestment Act and the forcing of banks to give loans they never would have given in a truly free market.
The credit rating agencies rated them items incorrectly (justifying it by saying that a large number of B-rated loans became AA or AAA simply by being bundled together!), to put it nicely, but were probably incentivised to do so by some carrot or stick from the government and/or Fed as well. The Federal Government looked the other way, in particular the Legislature. GW Bush, some Republicans and some insider and outsider Cassandras pointed out that this was a big problem, going to lead to massive problems. They were shouted down as racists and other nasty things by leading Democrats including Maxine Waters (whose husband was high up in a bank that made these loans) and Barney Frank. Sen. Chris Dodd and others got sweetheart loans from mortgage banks that were benefiting from this scheme. Congress and the Senate looked the other way for the most part because, in part, they knew damn well that without these CDS’s there weren’t going to be subprime loans. They were willing to play musical chairs with all of us, especially the poor and middle-class, of all races for short-term political gain, from votes to political donations from their interested groups, cronies (it’s called “Rent-Seeking”, don’t be lazy now, look it up — it ain’t capitalism) and clever people who saw the opportunity to make $$ off of government brinksmanship. Some may have also had worse motives, which people from Ayn Rand to Aldous Huxley have described quite clearly (if you’ve been warned that you’re driving toward a chasm and keep going, not a few observers might suspect you intended to go into it).
It is simply not the case that the government had little to do with it. It was the government that got the ball rolling in the first place, by interfering with the free market and providing both positive and negative incentives to do things which would ultimately only benefit certain politicians and their cronies and have the lovely side effect of being fertilizer for the rapid growth of government bureaucracy (with all those lovely new Democrat voters), power, and legions of lobbyists and lawyers with specialties that were unheard of only a few decades ago. Subprime loans were not the only cause of the problem, but most of the problems can ultimately be traced back to government and its friendly rent-seekers, not the free market. It is no coincidence that the wealthiest counties in the US are now those that encircle Washington DC, when not long ago they were spread out in many states and regions of the country, from Connecticut to Colorado to California.
It is those who are in denial or fail to study history who will lead us into a continuation and repetition of it.
Well, you can “claim” and “believe” what you wish. See comment by olorin. This crisis boils down to socialization of risk for the parties involved. The home “purchaser” got the reward of living in a home they couldn’t afford or take care of. The financial entities got the reward of making a living ostensibly as a person with financial skills while actually performing the job of nothing more than a clerk. All the while, the excess money the Fed was pumping into the economy was simply inflating the cost of housing, resulting in even more ridiculous lending, driving prices even higher until the whole thing collapsed. This whole mess was a crisis of Main Street, not Wall Street. True, some on Wall Street were stupid enough to provide the money that Main Street was playing roulette with, but the problem was in bailing out those Wall Street banks. The banks that figured out how to short the real estate market via CDO’s, etc. made money and deserved to make the money. The problem was that the real estate market should have been paying attention to what the risk market was saying via these shorts.
Public subsidization of losses and privatized gains. Look no further than that for the real culprit and government was responsible for public subsidization of the losses. The rest will follow eventually.
But, even so, suppose free markets did cause the crash (whatever that sentence could legitimately mean), why didn’t we let those that took the risk, bear the loss? Take away that “bearing the loss” part, and you have ruined the incentive to act appropriately under the circumstances because the enterprise is basically a free roll (which is gambling parlance for a bet you cannot lose).
Benjamin you are missing a key element of the liberal agenda that the financial industry exploited (Democrats and greedy Wall Street share the blame-not so strange bedfellows regardless of what you think). Liberals have converted the concept of “benefits” that were created in response to competition for employees – into “entitlements” for the middle class (i.e. Obama care). This on-going transformation of “benefits” to entitlements has created the current “where’s mine” attitude and tossed the concept of a meritocracy aside (those willing to work hard, take risks, earn their way). The American dream is an opportunity not a guarantee! Liberals have brain washed the middle class into believing that owning a home is their god given right and now they are telling them that if you don’t have the money for your piece of the dream; then as their benevolent government they will create the opportunity for you by taking from those that do have it (regardless of how they obtained it)
You argue that not all of the wealthy earned their money by innovation or creativity and since you can’t separate them out that all the wealthy should be “fleeced”. As a 1%’er I can say unequivocally that everyone I’ve ever met in this category is either more creative, bolder, works harder, or comes from a family lineage that demonstrates these characteristics – it’s not your right regardless to redistribute in this fashion – I’ll go so far as to say it’s discriminatory.
You also don’t acknowledge that the wealthy make an inordinate impact philanthropically and from Carnegie and Rockefeller to Buffet and Gates the progress of the world depends on people like this to lead the way. If government would get out of the way and appeal to these types of leaders to re-engineer today’s broken system, I have no doubt that the effectiveness of our social services would rise dramatically along with our economic growth (they would tie these two issues together and create a rising tide that would lift all boats). And before you try to argue that all the jobs created would be low wage jobs, I submit the opinion that working for your money provides a sense of purpose that won’t be derived from being part of the food stamp army. Sense of purpose is motivating and a pathway to self-motivation, which at the end of the day is required for anyone to get ahead in life.
Finally, even as a 1%’er I’m not far from the “defined middle class” and I see the “middle class” charitable giving in this country as unparalleled and want to make those decisions for myself, not have my government tell me where those dollars should go. This rewards my own moral compass and motivates me to continue on this path.
You are correct about the Federal Reserve–but that wasn’t the first time.
After the “dot.com” bubble burst in 2000, the Fed lowered interest rates to prevent a recession.
After the 9-11 terrorist attack in September 2001, the Fed lowered interest rates to prevent a recession.
And of course now with the current economic slump, the Fed has kept interest rates at extremely low levels–near zero in fact.
For years, the U.S. has disguised the hollowing out of its industrial base by propping up the economy with cheap Fed money. Unlike the 1950s and 1960s, the U.S. is no longer the undisputed manufacturing superpower, nor do we produce all the raw materials we need.
Mr. Kirstein isn’t correct–but neither are many of us free market conservatives.
Market economics isn’t enough. We have now learned the hard way that we can’t run a superpower on a service economy basis–even if that service economy is a free economy. We can’t import all our consumer goods from China and all our oil from Canada and the Middle East, while our own economy consists of caregivers, burger-flippers, casino croupiers, paper-pushing service representatives, bankers and financiers.
“I’m sorry, but the idea that the current crisis was caused primarily by government is simply a myth. Fannie Mae and Freddie Mac played a part, but a minor one. The primary reason for it was the irresponsibility of the financial sector, “
Hey Einstein, the financial sector is so intertwined with government that’s accurate to say that it’s a feature of big government. Nothing free market about it all.
This is just ignorance on parade. The mortgage crisis was caused almost entirely by a government housing policy which deems home ownership to be a primary good. That policy was, and is, enacted by regulations encouraging, nay requiring, that banks and other institutions extend mortgages to more and more people. The only way to do that is to lower the credit requirements. Lending institutions are already heavily regulated, especially when lending money to individuals. The only way to lower the credit requirements is to loosen the regulations, which was done continually, dating from enactment of the Community Reinvestment Act of 1978. The CRA also penalized institutions that did NOT lend enough money to people who clearly couldn’t pay it back.
Fannie and Freddie are the government’s primary vehicles for controlling the housing market, but they are not direct lenders. Housing policy encouraged, nay (again!) required, that F&F spend money buying mortgages that other lending institutions originated, thereby relieving the originators of the risk of the loans going south. Great deal: I lend you money and then immediately turn around and pass my risk off on Uncle Sucker while keeping fees involved in collecting the monthly payment. Uncle Sucker pays me for the loan, whereby I have the money to lend again. Around and around it goes.
So the lending institutions are merely responding to incentives in the law. On the one hand they’re penalized if they don’t make the “right” loans and, on the other, are relieved of their risk if they do. How can this NOT be a result of bone-headed policy?
The collapse of the secondary market is another tale, but said market would never have developed in the first place except for the government’s encouragement of giving mortgages to people who couldn’t afford them. Plenty of blame to go around, of course, but letting the government off the hook is just plain contrary to fact.
You can still say “NO”….. nobody put a gun to anyone’s head to take a mortgage. It’s done by collusion, a conspiracy between the loan officer and the party buying the house. “We’ll fudge the figures if you’ll sign on this line……”; whatever happened to, ‘if you can’t afford it, you don’t buy it’? The irresponsibility of the financial sector is that they would collude with this brand of idiocy. The irresponsibility of the home-buying market is that they would lie to themselves in this manner……
The banks didn’t “collude”–they were forced to participate in the sub-prime fiasco by the Community Reinvestment Act and its assorted amendments and related laws, along with lawsuits filed by people like Barack Obama, Esquire. The banks were damned if they did and damned if they didn’t: give the loans and take on huge risks, or don’t give the loans and get hit with government penalties and lawsuits.
Fannie May backed in excess of 40% of all home mortgages when they exploded, and was the entity responsible for creating the demand for no-income, no-job loans.
How exactly is that a small part?
Excuse me?
This nation hasn’t had “Friedman”-type free-market economics since FDR’s New Deal, and we’ve never practiced anything remotely like Rand’s theories. Unless you count the “looters” in Atlas Shrugged- we’ve had entirely too many politicians who behaved like them.
What we have had for nearly eight decades has been a succession of top-down “economic plans”, mainly emanating from the progressives, regardless of which party they were part of. Nixon’s wage-price freeze was of a piece with FDR’s bank holiday, the Community Reinvestment Act, Fannie Mae, and Freddie Mac were echoes of FDR’s WPA, TARP and “stimulus” were FDR’s National Recovery Act with more money and less sense, and so on.
What has been proven over and over again is that politicians with ideologies, dogmas, “narratives”, agendas- and law degrees- are a poor choice to “manage” an economy. Unfortunately, the only worse choice seems to be economists, who (if Paul Krugman is any indication) have the same “issues” and/or aspire to be lawyers.
As for Kerstein’s theory that “many of the wealthy don’t produce anything”, does he include Hollywood’s “wealthy” in that category? (Keeping in mind that most of them support The One.) Or the upper echelon of both Houses of Congress? (Reid, Kerry, Schumer, and Pelosi being cases in point.)
The only thing we haven’t tried is the government keeping its hands off the economy for even a few years. In small craft handling, one of the first things they teach is that when you have nearly swamped a boat by turning too tightly, the best thing to do is stop turning. In fact, stop, period; let the boat drift and it will right itself. Then start bailing out the water you’ve shipped.
What we have now is a situation in which the helm is busy tightening the turn to prove how good he is at boat handling, and he won’t let off the wheel or the throttle. And while we’re trying to bail on one side, he’s got a buddy dumping bucketsful of water into the boat on the other, to prove he knows more about the laws of buoyancy than G-d does.
Unfortunately, I see no evidence that the present crowd of self-defined “smartest guys in the room” will give up control of the helm, the throttle, or even the bucket. And when the boat sinks, they’ll blame the rest of us for not jumping out to save them.
I hate to say it, but I don’t see any way to keep the boat afloat, under the present conditions. The only thing I can suggest is that everybody get a life jacket, so that when it founders, you can at least tread water.
As for Kerstein’s arguments, unlike the boat, they don’t hold water.
clear ether
eon
Your argument seems similar to the Marxist claim that communism has never really been tried. I think your history is erroneous: Since Reagan, neoliberalism held the proverbial “commanding heights” of American economic policy.
Eon is correct; the one route we have not tried is economic freedom. To drag out Ronald Reagan is hilarious, his policies were merely slowed the rate of the growth of government, he did nothing fundamental.
I fear that holding to that point of view will put your ideology in the same place as Marxism: The ash heap of history.
It’s already damn near there.
Doesn’t make it wrong.
Really, then name ten regulations that were repealed in the last twenty years.
You must think that there are literally be tens of thousands of them that have been repealed since you believe that we’ve had a neo-liberal economic policy.
And how did the federal register expand by 120,000 pages in the same period of time.
The deregulation of the airline industry never happened? America’s hemispheric free trade agreements?
Oh come on! That is seriously dodging the question put to you. You were asked to name ten examples of deregulation, and since we’re talking about finance, banking and housing, the intent of the question was clear. You bring up the deregulation of the airline industry and trade agreements? Are you kidding?
Can you sit there and tell me that there are now fewer regulations governing the airline industry?
How about international trade- has the rulebook for that shrunk or grown?
Strawman arguments.
Airline pricing was deregulated in the late 1970s-Early 80s and so is more than 30 years.
The NAFTA treaty is 1700+ pages of rules and regulations. – Hardly a cut in regulations. It was however a cut in taxes, specifically tariffs.
If you are using the modern definition of neoliberalism, which advocates “laizzez-faire” policies, that lasted exactly as long as Republican control of Congress did. And it wasn’t even advocated by a majority of the Republicans, both Presidents Bush being cases in point of ones who preferred the older definition of the word, which holds to the “social market economy” model seen in West Germany from 1950 to the present.
In fact, that social market model seems to be what is driving the present policies in Washington. Unfortunately, as in Germany, it has become a portmanteau used to carry dogmas (“green energy”, “social justice”, etc.) that have little or nothing to do with whether or not the economy actually works.
It must also be pointed out that the theory does not take into account the actions of those outside the “local market” in non-economic areas. Which is why Germany, to continue the example, is shutting down nuclear power plants to please the “Greens” in spite of the utter failure of solar and wing power to make up the difference, and the rising costs of fossil fuels due to their primary sources being in the hands of people who don’t particularly like non-Islamic states, being Islamic themselves.
As for the theory that “Marxism has never been tried”, I’d say the progressives here have been trying it, or at least advocating it, for decades. The fact that they keep renaming it doesn’t change the substance of their theories, which are at least as heavily influenced by the Frankfurt School as by “neoliberalism”, which is the reason their arguments are made on the basis of “critical (fill in the blank) theory” at every turn.
To return to my original point, an actual free-market economy hasn’t been tried in this country since before FDR, and in fact I’d say probably not since before World War One. What we have had instead has been a series of experiments in original neoliberalism, in which government seeks to “channel” the economy in directions believed likely to achieve what government sees as worthwhile social goals.
The results have veered between crony capitalism on one side (which contributed strongly to the crash of 1929) and syndicalist socialism on the other (which is the situation we are fast approaching today).
I’m wondering how many more maneuvers like this the Ship of State Economics can take before it starts breaking up.
clear ether
eon
Right. Marxism hasn’t been fully tried (although on a small, local level, small “C” communism has been tried and failed — see Oneida Community, which went from communalism to a capitalist company in 32 years, fortunately without the usual bloodshed — doesn’t anyone study history anymore? Also don’t forget Jonestown, where an increasingly authoritarian and paranoid leader killed nearly all of his idealistic Marxist followers to prevent them from abandoning ship en masse), but only because even at the early stages it is a miserable failure. The further one gets into it, the worse it is, not least because it flies in the face of human nature. In a world where so many spend so much time trying to gain an advantage on other people, I’m trying to understand how anyone can believe that if we just impose Marxism on people they will all become angels with only others’ well-being in mind. People and animals react to incentives. It’s very simple. Even children expect disparate reward and punishment based on behavior. We are not angels, and if we were, we would need no political system at all, would we? (Which I suppose is the Marxist fantasy, but it is no more than fantasy. Obviously.) While Marxists in several countries have killed 10′s of millions to sort out those who are not their version of angels, that’s hardly a recommendation.
No, Ronald Reagan was not a purist anyway, and his administration was a fluke. Since Reagan it has been more and more and more government intervention.
Let me speak truth to the blind so they can see and i be as simple as possible .
I go to heaven weekly where the TRue God is and I go to purgatory where there is temporary distance from the True God and there is NO sexual relations but Divine Love rule which causes suffering in purgatory so i go to hell where there is sexual relations which creates temporary worlds in hell. Once you know where you are it is easy to fill in the blanks. The rich have created a heaven pleasure for themselves which is very very very temporary since they cough up their flesh body who can argue with this absolute so if they want to hold on to the pleasure heaven they must learn to serve those beneath them in hell for the PLEASURE Heaven in hell to stay strong. This is far from communism and socialism and this is why leftest hate Paul Krugman who believes God allows the rain on the good and the evil in hell where you are trying to hold on to what is temporary
1. Please God and create a culture that does not want to murder little babies in the womb to keep hell filled with new arrivals
I could say more but the blind are stubborn and they do not believe in God or have a rabbits foot for God that has given them magic pleasure they rub to produce material temporary riches
Mr Kerstein,
you wrote: “Those who have become rich off the financial sector, for example, produce next to nothing, and make their money off of money, creating a closed circle in which money, rather than reflecting the true value of goods and services, simply reflects itself, leading to a greater and greater disconnect between the fantasy of its value and the reality.”
Well, this IS Brechtian economics: Stale Marxism (“true value of goods”), ressentiment/resentment based on a lack of knowledge (“produce next to nothing”), and rhetorical fervor.
I myself did not use the phrase “Brechtian economics.” I wished to point out by quoting Brecht only that when people are in economic distress they will vote for someone who promises to help ameliorate that distress. This is not because they are immoral parasites or “moochers.” It is instead the natural human response to need. Free marketeers simply cannot ignore this, or they are ignoring human nature as surely as any communist.
Childish misrepresentations of conservative philosophy will fool no one but those who already hate conservatism.
If you want to convince us our ideas are wrong you might want to learn what they actually are. It has nothing to do with “bums” or “moochers”, those are simple straw men. Conservatives are far more interested in economic incentive and human nature.
That was part of my point: Incentives and human nature will drive suffering people to vote for those who will ameliorate their suffering. Conservatives have got to learn to face that fact and not simply deny it or conclude that it is meaningless because people who are suffering by definition deserve it.
“…will vote for those who [promise to] alleviate their suffering.” FIFY.
This is indeed human nature, which is why we see authoritarian government everywhere in history with few exceptions. Not sure why you think it’s wise to encourage the pernicious idea that government’s responsibility is to dry every tear.
America is not about government stopping people from suffering. America is about government preserving the framework by which people are empowered to live free, take risks, succeed, fail, and learn the art of self-government. Conservatives, in America, care about America, its Constitution, its Founders’ intentions, and what we see as the tenets and principles that have produced whatever greatness is here. I say again, with respect: You are asking conservatives to stop being what they are, by telling them to abandon not just this or that policy, but the foundation of their ideology.
I want to add this too: Comparing Friedman’s economics to Marxism is just overwrought and wrong (and I am not a libertarian, for the record – I have no love for Ayn Rand, and disagree with Friedman on many things). I’m sure you’d object to someone telling you that if Jews don’t compromise their fundamental beliefs to accommodate the “natural” xenophobia and hatred felt by Muslims, who, after all, just want their suffering to stop, then they’ll join the Nazis, their dialectical twins, on the ash heap of history.
This kind of rhetoric is pretty sketchy, and you’re the last person I expected to see slipping into it.
Sounds a bit too much like that Chomsky guy some smart writer recently published a book on.
Bastait has an interesting way of looking at your point “Now since man is naturally inclined to avoid pain and since labor is pain in itself it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it. When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor. It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. All the measures of the law should protect property and punish plunder. People are beginning to realize that the apparatus of government is costly. But what they do not know is that the burden falls inevitably on them.”
Fascism. Government control of the economy with the support and compliance of unions and big business who connive for mutual benefit at the cost of freedom of choice and thought. That is what we are heading for and have been under this administration. They are not stupic\d, not communists, they are fascists. As with Germany and Italy and other nations who were in severe economic and social upheval in the last century, we face a weak government led by a strongman with charisma.
History is not taught anymore, it is lived.
Fascism was a totalitarian movement that was defined by the “leader principle,” the assertion of power as the only morality, and violent opposition to parliamentary democracy. It did not have the support or compliance of unions or big business but controlled them through violence. I do not in any way propose such a thing.
That is a perfect description of the current state of the blue cities in America.
And yes, you are sorry… Come to America and let me take you on a tour of your glorious socialism/nanny state controlled utopias. Your ideology will not survive the trip.
Yup, the leader principle. Didn’t you see all that adulation of Obama’s personality in 2008, something that is still going on? Think about that children’s chorus singing songs of praise to the Dear Leader during his reelection campaign. We have just had a man thrown into jail for a year for putting a video on the net that annoyed the powerful. Obama has been issuing executive orders contradicting the laws passed by Congress, in particular thzat “DREAM Act” order, one he said himself a couple of years ago he couldn’t do legally.
The Dems are moving the US towards a fascistic socialism, complete with its own furherprinzip. The intertwining of big business and big government is widespread. Who takes it in the shorts is the smaller business that is bankrupted by regulations, government taxes, and mandated expenditures (now that it’s pssed, we are finding out that there are all sorts of traps in Obamacare’s 2,700 pages, including a 2.3 percent tax on gross revenues that is likely to destroy the medical devices industry; Hope and Change!). You propoae that the Packs become the Jackass-lite party? Nonsense on stilts.
What. Free. Market? Nothing resembling a free market economy has existed in America for well over a hundred years. America is a mixed economy, sectors like technology are still mostly free, but finance, banking, housing, and medicine are a nightmare of conflicting regulation and from-the-top central control and have been for decades upon decades.
Benjamin – You make some interesting points but your analysis of the panic and recession is weak. Two things happened. The first was an asset bubble. If there were no real estate bubble, there would have been no bubble bursting, no financial panic, no recession. The second was the panic. Not every bubble bursting leads to a panic. Why did this one?
My views: The asset bubble was caused by several factors, including (but not necessarily in this order): strong Government encouragement for the financial sector to finance affordable housing, global trade imbalances resulting in huge pools of money looking for safe investments, Fannie & Freddie buying 60% of all subprime mortgage securities, Wall Street’s development of securitization, bank and insurance regulators sleeping on the job, and the Fed keeping interest rates too low for too long. You might note the role that the Government played in several of these factors.
Why did the bubble lead to a panic? That’s a much more complicated question, which goes to the interconnection between financial parties and the fear of cascading liabilities. The growth of mega-banks – which the Government actually encouraged in order to compete with foreign universal banks – was part of the problem. The growth of the so-called shadow banking system – money market funds – was another part. Another part was widespread ignorance of how the credit default swap market worked, leading many participants falsely to overestimate the risks of other participants failing. Another part was the failure of insurance regulators to require the insurance companies that were writing credit default swaps (AIG, MBIA, AMBAC) either to hedge or reserve adequate funds against potential liabilities. Was this a failure of the free market? To some extent, I suppose, if you ignore the fact that most of the market participants seem to have assumed that the government would bail out the very biggest and most inter-connected entities. Why did they think that? Because that’s what the government has done ever since Continental Illinois went belly-up in 1984.
So as Don Corleone used to say, think about it.
Finally someone who knows what he’s talking about! My hat off to you, sir. Excellent post.
I don’t think we actually disagree all that much; we simply draw different conclusions. As I have said several times, I don’t deny government involvement in the crisis; only that the larger forces at work were free market ones. Most of the problems you point out, I think, could have been avoided by more prudent, that is to say, conservative, economic policies; but the conservative demonization of government interference has left them unable to formulate such policies in a responsible way. Instead, they respond to ad hoc political considerations.
As I have said several times, I don’t deny government involvement in the crisis; only that the larger forces at work were free market ones.
It is becoming painfully obvious that you have no idea what the phrase free market actually means.
None of which is what you actually said in your execrable “essay.”
Your concession of government’s role in the financial meltdown precludes blaming “free markets.” Once government is involved, “free markets” no longer exist. The private sector’s response to government policies such as forcing banks to make subprime loans (it was not merely “suggested” as you claim) was not driven by free markets, but the perverse incentives government-distorted markets created.
Nor does the conservative philosophy of minimal government intervention in the private sector equate to a “demonization of government interference.” Apparently, you’re so desperate to preserve such interference that you’re just as willing to distort conservatism as you are markets.
I’m no fan of unfettered capitalism; but I’m far less enamored of ignorance, poor reasoning, and disingenuousness masquerading as intelligent discourse.
PJM guidline #3: Disagree, but avoid ad hominem attacks.
Abide by it, please.
“Ad hominem” would be “Your argument stinks because you stink like garbage.”
Calling your reasoning faulty and foolish is not ad hominem- in this case, it’s fairly accurate and truthful.
“Most of the problems you point out, I think, could have been avoided by more prudent, that is to say, conservative, economic policies; but the conservative demonization of government interference has left them unable to formulate such policies in a responsible way. Instead, they respond to ad hoc political considerations.”
When has government ever NOT responded to ad hoc political considerations? The 1st flaw with your argument is simply that it assumes some sort of Solonic leadership on the economy as possible. The one point you’ve made with which I agree is your rejection of the “free markets haven’t been tried.” Of course not, if you are a purist. As you say, this argument is true of Marxism. I will point out it is true of feudalism, democracy, absolutism, fascism, or any other system one names. The best we will ever get will be a system which works OK in its impure form. One that can function when it is somewhat corrupt. We agree on that.
But the implication you miss is that this also applies to your advocacy of redistribution. Let’s leave aside the elemental rightness or wrongness of redistribution, per se. Exactly when and where has any state redistributed evenly? How can it? By what possible means do you suggest stopping the inevitable and universal transfer of wealth from the less to the more influential? You cannot. The impulse to turn anywhere for succor in distress is not the only constant in human nature.
Another problem you do not address is the simple math involved. Increasing taxes on the rich may give emotional satisfaction to some, but it will not even begin to touch the debt. There just isn’t enough money out there. And really, taxing the middle class won’t do either.
The whole article is an exercise in missing the point, I believe. If you look at what really vexes the middle class, you will see a shrinking opportunity to advance. You will see rising medical and education expenses, in the latter case, giving less and less for the money. You will see powerlessness, often exacerbated by the state; e.g., the way we tie insurance to employment, thus giving a big edge to large employers in the labor market, compared to both small businesses and to employees. Nothing you say seems to me to address these and like issues.
Finally, you do seem to have a somewhat cartoonish view of the right. I’m sorry to say it that way, but it is so. For instance, were you aware that Milton Friedman advocated a negative income tax? From what you write, you’d think he was a disciple of Rand’s. (I don’t say he’s right to do so, merely that your portrayal makes him sound like something he was not.)
I think I see where you are coming from, but the government set the rules and incentive structure. The “free market” you are complaining about is ordinary people (not anymore evil or immoral than the general population) operating under the rules set by the government, which incentivized certain types of activity and set structure to subsidize the losses. Not surprisingly, this created a strong incentive, which created a strong bubble, which burst. Based on the rules that had been set, this type of problem was almost inevitable.
Why the panic? Well, that’s what happens when economic bubbles pop. Otherwise it isn’t really an asset bubble.
When the bubble popped billions of dollars suddenly disappeared. I think panic seems a rather appropriate response.
Good to read you again, Benjamin Kerstein.
Keep your eye on whether Tom Coburn’s spending cuts get traction, if Sheila Bair enters Obama’s cabinet, and what role Conrad and Dorgan of North Dakota have.
And someone who finally puts supply-side economics to rest.
Trickle down economics has been just as damaging as trickle down government.
I mostly disagree with you,the election was not a rout for the anti-poor forces,we still have the House and 30 Governors.The welfare state IS for the most part an unholy evil! This Country is more and more morphing into a home for the jealous and envious,two crimes that are hard to cure. The so-called poor have simply discovered they can make more staying home than by working! The rich BUY STUFF,throw their money around,and the wheelbarrows full of it that they are accused of hoarding is invested! When a dollar is invested IT IS NOT PARKED,it is on loan to companies that are known to make it grow.
All of this spoken like a true socialist, Benjamin Kerstein. Give me a break. Sure, countries like Canada and Great Britain have made “peace” with the welfare state, and what has it gotten them? Sky-high taxes, huge debt, in Britain’s case chronically high unemployment and very low growth, and both countries have militaries that are a joke in both terms of size AND capability. It’s A LOT easier to pay for your social welfare programs when you don’t have to worry about a credible defense, but unfortunately we don’t have that same luxury. That is, of course, unless your goal is to become a third-rate power like Britain or Canada. Then, under Obama, we’re on the right path towards that goal.
You then went on to say, “People who are desperate will vote for anyone who is willing to ameliorate their condition to some degree.” Well, that’s true. After all, the Germans voted (yes VOTED) for Hitler in the 1930s because they were hungry and in bad financial shape (and he was a National SOCIALIST, don’t ch’ya know). People always forget that. Hitler was elected deomcratically to run Germany, and then that was the last election they ever had until after World War II.
The Democrats have learned that lesson very, very, well. Who cares about a president that by-passes Congress and usese the EPA or the FCC or the Justice Department to enforce his agenda, when that same president offers you as much food stamps, unemployment benefits, free school loans, fee insurance under Obamacare, and so much more free stuff it would put Santa Clause to shame? Who really cares when a president allows four Americans to die in a Libyan hellhole or lets an American boarder patrol agent get murdered because his administration allowed guns to be illegally transported to Mexico, when a woman can have as many free abortions or as much free contraception as they want? And who really cares that we have a president that is destroying our domestic energy production, when that same president is giving literally billions of dollars in subsidies to his friends in the “Green” energy sector, even those most of those companies have already gone bust (like Solyndra)?
Sorry Mr. Kerstein, you are dead wrong. This whole election was about free stuff. This whole election came down to “Ask not what you can do for your country, ask what your country can do for you.” As the soon-to-be defunct Newsweek magazine once famously said, “We are all socialists now” and the last election proved it beyond a shadow of a doubt. By any, ANY, economic measure Obama has been a failure and things are most certainly as bad (if not worse) than they were four years ago. Yet a slim majority of Americans don’t really seem to care. Looming budget crisis? Not my problem. Massive debt and deficits? Who really cares, just give me more free stuff. We’re headed down the road to becoming Greece? Talk to me when we get there. Until then, just keep giving me more FREE STUFF, even though we have no clue how we’re going to pay for it.
Oh, and by the way, as for that old canard that a lot of the people in Romney’s famous 47% are retired and on Social Security and Medicare, programs they paid into, that’s a nice thought but it’s also irrelevant. They are STILL getting paid by the government and will vote for anybody who keeps the checks coming in. It doesn’t really matter that both of those programs have been plundered and mismanaged by both Democrats and Republicans in Congress for years. The bottom line is, these people want their money and any administration that promises to keep giving it to them will get elected, regardless of the real cost to the American government (especially when it comes to Medicare). And once Obamacare fully kicks in and we really do go bust trying to pay for it, how understanding do you think the people who become dependent on Obamacare will be when you tell them that the country is now bankrupt and that benefits will have to be reduced? You will have massive riots just like in Greece. Because once you get people hooked on the public dole, they get very angry when you take their “benefits” away from them. And these same people care very little where the money to pay for all this comes from.
Tax the “evil rich” more, those “parasites” you talked about? Son, you could take every dime away from them and it won’t even make a dent in our $16 trillion (that’s trillion with a “T”) debt that we have and will easily become a $20 trillion debt by 2016 (if not more).
So it all comes back to becoming Europe. If you want to become just like them, if you want endless benefits and endless payments for social-welfare programs, then America is on the right path to that goal. But please, please do not bore me that conservatives should just roll over and die and accept the fact that we have hard economic times so you can’t blame people by the way they voted. That argument is just another excuse to embrace socialism. The simple fact of the matter is that we are in bad economic times because our president has embraced lousy economic policies that have retarded our economic growth to the point that we’re about to slip into another recession. And social welfare benefits may help cushion a little the people who suffered from that, but it will NOT solve our economic problems, let alone our massive (and growing) debt.
So spare me the excuses for why people voted the way they did last week. Don’t blame those “parasites” in the private sector. THAT is what capitalism is all about. No, Obama waged class warfare and the socialists won. Deal with it. Now more than ever we need to stick to our conservative principles. Because, if we don’t, we really will turn into England, where their conservatives today are nothing better than Liberal light, or people who just spend a little less than true liberals. We should not accept that, nor should we have to. When we do become Greece because of our unending spending, then people may start to realize that no matter how much you tax the rich, the real problem lies in Washington, not in the business sector.
I’m a Canadian and can assure you that we do not, compared to you in the US, still have “sky high taxes and debt.” ours is lower than yours, not least because — this pjmedia writer to the contrary who calls fannie and freddy minor — our banks cleverly decided NOT to give mortgages to welfare bums.
Your information about Canada is 20 years out of date.
Sorry, Kathy, lets look at your current tax rates. If you look at this chart put out by the Canada Revenue Agency, you can see your current tax rates: http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
You will note that on revenue over $132,406, Canadians are taxed at a rate of 29%. Now that SOUNDS reasonable, until you see all of the other taxes Canada has. You also have a Provincial sales taxes (PST), which is levied by the provinces, a Goods and Services Tax (GST), which is a value-added tax levied by the federal government, and the combined Harmonized Sales Tax (HST), also a value-added tax, which is a single, blended combination of the PST and GST which is used in British Columbia, Ontario, and the Atlantic provinces of New Brunswick, Newfoundland and Labrador, and Nova Scotia. The HST is then collected by the Canada Revenue Agency, which then remits the appropriate amounts to the participating provinces. All of these taxes (especially your GST, which is a value-added tax that affects EVERYTHING you buy), dwarfs anything we have here in the United States.
Oh, and by the way, you also spend next to nothing on defense. Your country always SAYS it will spend more on defense, but it never really does. So it’s nice to charge a lot of taxes and offer a lot of social welfare programs when you don’t have to spend much on defense as a percentage of your GDP. America has done the heavy lifting for decades when it comes to defense, ESPECIALLY NATO’s defense. So while you live in your socialist paradise up north, we get stuck with the bills for NATO. Nice.
And it’s only going to get worse. If sequestration kicks in, which it will, then much less money will be spent by the United States on NATO. So NATO will either whither away and die, or it will exist in name only, not having much muscle to back up any of its demands. All you have to do is look at that civil war in Libya. France, Britain, and Italy found it almost impossible to win that pathetic little conflict without some heavy support (especially in the beginning) from the United States. And that was a conflict where half of the Libyan population actually was on our side, and it still took quite a while to defeat Gaddafi.
Regarding our banking system, you’ll get no arguments from me there. That was a Democratic disaster waiting to happen, and it did. But the answer to that problem is NOT to give out even more money to people who shouldn’t be owning homes. And Washington STILL has not learned that lesson.
So while it is true Canada’s debt isn’t that bad, you’re also up to your ears in taxes and pay little for national defense. You’re just like Britain, only without the debt. So, sure, if we did what you did we would be in fine shape. The question is, if we withdraw from the world and become just another third-rate European-style welfare state, like France, who fills the power vacume in the world? Oh, that’s right, countries like China and Iran. Good luck with that!
I’m sure b. “INSANE” obama can find a place in his politboro for Mr. Kerstein as a ‘conservative who “strongly agrees” with the emperor’s dictats’(the way some people keep odd, worthless pets just to tell their friends “look at THIS THING, ain’t it WEIRD). If you just keep repeating ‘the rich deserve to die, the rich deserve to die, the rich deserve to die’ enough times then unthinking people will accept it as fact.
To be quite brutal, $250,000/year (in this country, at this time)sure as hell does NOT make a person a ‘millionaire or a billionaire’. I work in the natural gas industry and REGULARLY work 130 hour WEEKS! (that’s NOT a typo, that’s 130hrs/WEEK!)and consider myself extremely lucky to have a job. If I can string enough 130hr weeks together in a year I can approach 250K. b.”INSANE” obama and his gang now have four more years to completely kill this industry off (and MAKE NO MISTAKE ABOUT IT, THAT IS ONE OF THEIR GOALS). In the meantime, they take the taxes I pay and subsidize wind farms other such “green energy” boondoggles (conveniently owned by their campaign bundlers).
If you do the research (the internet is very handy for such research), when you consider all the government subsidies involved in the building, permitting, maintenance , and operation of a wind farm the cost of the electricity ACTUALLY produced over the useful life of the project will come in at about $56.29/megawatt hour. Compare that to .64/megawatt/hr subsidies involved in the useful life of a coal or natural gas fired electrical generation facility. The EPA will keep “mandating” that a larger and larger percentage of your monthly electricity comes from “green energy sources” (that ‘nudge’ thing at work).
That little throw away statement from early in obama’s first term about “of course your electrical bills will necessarily skyrocket because of our policies” now comes into the full light of comprehension. Turns out that the “rich” who have to FORCED (due to EPA regulations) to pay their ‘fair share’ includes ANYBODY WHO LIVES IN A HOUSE HOOKED UP TO AN ELECTRIC LINE! Gee, the last time I looked, even the poorest of the poor in this country still live in dwellings with electricity (unless they live on Staten Island). Don’t we all feel richer now?
So, the con works like this, b.”INSANE” obama gets up on TV and declares “the rich have to be FORCED to pay their fair share” and the people who have been fed the ‘kill the rich, kill the rich, kill the rich’ rhetoric for so long they now believe it, hear this and think to themselves “well that sounds reasonable” how could those evil heartless Republicans possibly disagree with that? In the meantime, EVERYBODY (rich poor and everybody in between) pays more for 1.electricity 2.food (because of rising fuel costs due to government regulations), and 3.everything else that it takes to exist as a human being.
Ain’t “income redistribution” grand? We all get to participate in it NO MATTER HOW POOR WE ACTUALLY ARE! According to this administrations’ thinking NOBODY should be “allowed” to be rich (with the exception of b.”INSANE” obama and a few hundred of his political contributors). Everybody else should feel privileged to be equally poor so that everybody gets “their fair share” OF MISERY!
As a side note, those people in NYC that are living in tents in the snow because the power STILL isn’t on should have their “hearts” warmed that their “God” is going to make an appearance there this coming Thursday for a photo opp. and to tell them that everything is OK now that he has been re-elected. Then he and his wookie will fly to Thailand for some much-needed rest and recreation after a brutal election campaign. Such a compassionate man (just ask Moochelle)!
There is a big difference between people down on their luck in a bad economy and the multi-generational welfare families. People in hard times can be helped, but offered a hand up to get back on their feet, not a hand out to stay in the Democrat hammock. It is possible to help the former if taxes and regulations were cut and frozen for at least a decade to business wouldn’t live in terror or what the lunatics in DC would do next week. We need to be competitive again on the world stage and bring manufacturing jobs back to the US, which will mean a major overturning of people in DC, especially the bureaucrats, who are dedicated to the de-industrialization of America in the name of saving the planet. We also need to get rid of plundering Democrats who want to add as many people to their hammock as possible.
But let’s state the obvious. Feeding the mouth sounds nice, but where are you going to get the money? There isn’t any left. “Squeeze the rich” and you cost more jobs. Force business to pay more taxes or handouts, you lose more jobs. More lost jobs mean more mouths to feed. People need to be taught all of this, but government schools have deliberately ignored this and here we all are.
As for investors producing nothing and their gains immoral: what do you think they do with that money? Most of it is invested on companies that employ people. It is those investments which allow companies to operate. Without investments our economy would grind to a stop. The rest of the money they spend. People squeal about them buying mansions and yachts and sure that provokes some envy, but recall how many tens of thousands of jobs were lost when Clinton passed his luxury tax. That spending supports jobs. Like it or not, there it is. If their wealth honestly using a skill set beyond what most of us can do, why begrudge them more than a pro ball player using equally esoteric skills?
America was far more prosperous, with many more jobs, during the Clinton years, largely because of prudent fiscal management by him and the Gingrich congress.
Not exactly.
Gingrich and Clinton “balanced” the federal budget by creating programs then which would be paid for in the future. At the same time they gutted the military to collect a “Peace Dividend.” Of course most of that money was then spent on the welfare side of the ledger while, as even Clinton officials admitted after 9/11, the cuts had weakened the military too much.
Aside from that, Clinton was taking away economic safeguards which had stood since the Great Depression, including slashing the SEC’s budget. At the same time he ratcheted up demands for banks to give loans and mortgages to unqualified people. In short, his economic “success” laid the groundwork for the DotCom and mortgage busts. While it seemed great at the time, in the long term, not so much.
Sure, Obamacare has nothing to do with our continuing, chronic unemployment. It’s not like businesses announced lay offs on Wednesday as soon as it was known that the law wasn’t gonna be repealed. Let’s face it, the continuing unemployment is due to all the costs now associated with hiring somebody, especially a full-time employee. The medical device tax certainly doesn’t help.
I’ll be the first to admit my ignorance of economics, but it does seem like the American default is now punishing success and rewarding failure.
Economics is absurdly simple to understand. They only get complicated if you go into precise business models. Government economic models aren’t based on economics but political agendas and so shouldn’t be taken seriously. These models and projections should still be looked at mind you, but then compared to reality to get an idea of just how badly they are going to mess things up.
If you look online you can find the works of Bastiat. Searching for his “Broken Window Fallacy” should find you the whole of that particular set of essays. It is rather short but take your time reading them. Bastiat doesn’t get into numbers and supply and demand, but uses real examples to illustrate economic points. This was written in the 1800′s, but economic laws are still the same. I think Mises might have it.
“Economics in One Lesson” by Hazlitt is a 1946 update of Bastiat and the information is still applicable. It too is free on the internet.
If you want more detail, Thomas Sowell has a book called “Basic Economics.” It is pretty good.
The problem is that most economic textbooks and other books have a Keynesian bias to them. That is to say they see government spending as a stimulus to the economy rather than a drag to one degree or another. Many also have a bias toward a favorable view of debt. However, once you understand the basics of economics and who Keynes was, you’ll be able to identify these bias.
You’re absolutely right. The recovery ended the day Obamacare passed. Job growth flatlined from that day until now. With the election over, and Obamacare likely to actually get enacted, we’re seeing the start of the job destruction of Obamacare. Up until now, it was merely preventing the creation of new jobs. Now, its destroying current jobs.
There is a viable argument against human suffering: charity.
Charity is the responsibility of each person: to help our fellow man in the face of disaster and suffering. This requires a society that puts forth that government’s role is not that to be succor of last resort and that we, as individuals, are to be shamed at such suffering and are to understand that we are to extend our hands to help our fellow man.
When this is put into politics it is a debasement of our better nature to say: let someone else do this hard work for me.
In a democracy the voice of the people is the voice of Caesar, not of God. Yet when politicians start to import deific qualities to government, that thing which we hand our negative liberties in caretaking and oversight for the protection of the Nation and society, these negative powers so lent are then given positive aspects: the carrot and the stick, the food and the whip. Government in every aspect is of this world and made amongst men and is a mere organ of society and it is the process organ of taking the coarsest and most harmful parts the body is subject to and to put them out of the body. It is neither the heart nor the brain. When that singular organ becomes overstuffed it binds up and the body of society fails because it is given functions to which it is not suited nor created to do.
For government to feed and give care it must take from the productive economy. Those great trusts are investment vehicles, and an argument can be made that such trusts and companies when treated as corporate individuals need limits as do corporeal individuals have (that is an expiration date). Even barring that, those movers of money (the unproductive as is put in the article) serve a function of having capital stored in a non-liquid form and do, indeed, grow rich off of transactions. Perhaps we should lessen the cost of the transactions, lessen their complexity and drive these ones to provide some useful skill? But that requires the withdrawal of State power and letting individuals figure it out for themselves… yet if made simple, the laws clear, the transactions transparent then much good would be done and those seeking rent on money would find that there is no job in it.
It is, indeed, government that backs such rent-seekers on money. Governments with National financial institutions under the fiat of government thus empowers those who are already powerful and isolates them from transparency, from oversight and from accountability. Then they get guaranteed life by being ‘too big to fail’ which is, in itself, a guarantee of failure and propping such businesses up is folly in all circumstances.
The ‘housing crisis’ starts not just with Fannie and Freddie, but then Ginnnie which was argued for by the Labor Dept. to ‘securitize’ home loans and allow commercial banks to compete with them against the smaller and more local S&Ls. The ‘housing crisis’ also embodies well-meaning rules for IRA’s which changed the category of what a house was, from a place to live to an ‘investment’, by creating a protected class of savings that was the final haven for individual money: inside the IRA. Homes then turn from simple domiciles that gained little in value per year, to ‘investments’, which were expected to appreciate in value. S&Ls were the victim of rising home prices and undercut by the large commercial banks… that was the START of the ‘housing crisis’ and it has multiple roots all stemming from government. Conservative local savings institutions were thrown to the commercial venue and the simple rules for lending then ‘had to change’ because of these large institutions putting in large institutional policies for lending. Government then puts in a Community Reinvestment Act which gives the federal government power to punish lenders that do not lend in the way the government wants. That is built upon by ‘activists’ who seek to get ‘social ends’ without regard to them being economical. Changes to the CRA in the 1990′s then puts in a new class of borrower that must be lent to: those with No Job, No Income or Assets. Already the housing market prices were inflating during the 1980′s, and to attract in this and other classes of borrowers required new, creative and unsustainable loan vehicles that promised a low entry cost and high exit cost. From that the phenomena of ‘flipping homes’ starts to stay within that low cost period, do minor modifications, mark up the price to cover cost and then sell to the next buyer.
All of that is from regulation of the entire lending industry and NONE OF IT took into account human nature. Are those who take such contracts for over-priced homes to blame? Yes, of course and the sanctity of the contract must be backed. Are those who lend such money to blame? To a degree that the institutions sought entry into that market decades previously, and then sought to undercut traditional systems that led to stable communities, yes. Is government to blame? It is the main cause of this problem in thinking that regulation in multiple venues would NOT interact to create new economic viewpoints and circumstances, so yes it is to blame by changing the playing field.
Why is government regulation to such depth so good? When government breaks private contracts as it did with the auto bailouts, then how can ANYONE trust such a system where government will do as it will with private agreements? Why is government fit to do this? What makes it so wise, so capable, so insightful? The answer is, of course, NOTHING. It is made up of people who have human nature as part of their make-up and when granted power in the negative realm they then have those aspects of power use come forward as well. These bureaucrats, when working with those they regulate, then seek to make agreements with them and those being regulated then see a good reason to lobby government. Soon it is the corporation and the State working together, also known as Corporatism or, as those from the First International warned about in later years, State Capitalism which is the worst of all possible forms of capitalism as it has only the interest of the State and its powers at heart. You don’t get to the OWS ‘banksters’ without government, regulation, and lobbying. It is the common man who loses out in that… yet for the last century few have spoken up against this cancer from government on the body of society. Now no good comes of that. Is the answer yet more government? More of the cancer? Does it suddenly become good when it is large? Or just more incompetent, more distant, more authoritarian and less accountable. History speaks to this so often that it isn’t funny… yet the great ‘good’ that government can do belies what its function is… and it is neither the heart nor brain of the body society.
Voluntary charity is clearly insufficient. If it were sufficient, America would not be in the mess it is now.
Voluntary charity is insufficient because government has not only crowded it out but raised expectations too high. Welfare programs took away much of the need for private charities and indeed took away the ability of many to give to them because of the taxes needed to support it. At the same time there was no need to ever get off welfare, which is effectively a hammock for life, where private charities were seen as temporary, needed only until one could get back on their feet. At the same time, welfare and all the other “benefits” can easily exceed wages from a minimum wage job and then some. Private charity can’t match that.
So, government crowded out charity while at the same time creating more of a demand for charity-like services. It has harmed charitable giving by the taxes needed to support the welfare system as well.
I don’t know what mess you think we’re in that has to do with the efficiency of charity. Because our mess isn’t a “poverty” mess, it’s a debt and deficit mess, driven primarily by Social Security and Medicare, which collectively take up about 60% of our budget.
Just as hungry people will vote for whomever promises them bread, bankers, made to lend money that they will not get back, will figure out ways to cover their behinds. Using Mr. Kerstein’s logic, no one is to blame for anything. They are just being themselves and acting entirely human. Yeah, so? Let’s not look at and blame the policies that led to this, let’s surrender to them. What’s so great about Europe and Canada, by the way? If the US economy goes down, who does Canada trade with? Mr. Harper is busily attempting to hedge Canada’s bets using India and China but it’s not going to work. Who protects Europe and Canada in order to allow them to continue to lead unserious existences? Who keeps the wolf from the door? Certainly not Obama. Putin may BE the wolf so we can count him out. China? Not likely.
You strike me as arguing that the rich are never to blame for anything. I think there is blame to go all round: rich, middle class, and indeed poor.
Beat on that straw man if you must but you apparently have trouble with your own logic. Rich people are just people with more money. It doesn’t surprise me that they behave in their own self interest too. It’s apparently news to you. You seem to understand that folks getting free stuff won’t give it up for the good of the republic, did you think when banks were forced to make bad loans, bankers would just say, “Oh alright then, we’ll eat that loss for the good of all those little people who can’t afford homes?” The fact that the methods used to protect themselves lined their pockets and were murder on the economy is no different than picking up your Obamaphone, times a several million.
Sure they’re to blame for things. They want, and get, “too big to fail”. They get bailouts. And the entrenched get such things as excessive entry costs to many types of work, through increasing regulation, whether it be mandates to insure your employees to the government’s satisfaction, or the costs of taxi medallions, or limits even on hair braiding businesses. In New York, it is virtually impossible to work in construction without bribing someone. In education it is almost impossible to get a teaching job unless you have an education degree, which is tantamount to saying, unless you are uneducated yourself; indeed, unless you are hostile to the very idea of education.
Once again, in what world will government do anything to alleviate rather than aggravate this?
It’s not that the rich aren’t to blame for anything, it’s that welfare state policies punish those other than the rich, who can afford the extra taxation, rather than the middle class, who can’t. And the regulations often help the rich stamp down their rivals.
Economic policies inspired by Keynes favor the rich. Economic policies inspired by Friedman favor the middle class.
Monopolies only come with help from government intervention. Government programs do little to alleviate the suffering of the poor, but create a dependent “serf” class. I don’t give a flying f*ck what Bertolt Brecht said, if you “feed the face” and THEN speak of freedom, then you’ve lost freedom for the sake of a meal and don’t be surprised if those meals begin to disappear as government policies begin to fail.
” I don’t deny government involvement in the crisis; only that the larger forces at work were free market ones.”
How can you argue free market anything when decisions were made on the assumption the federal government would subsidize all negative consequences?
You do not differentiate between profit and plunder. If the financial class produces no value to the public it’s because their ‘job’ is to produce profit for the shareholders-who then use the profits for themselves. If the financial sector looses money, it is between them and their shareholders. That’s a free market- financial style.
Plunder is illegal; Profit is not.
And class warfare/social justice/fair share can not be discussed without the bedrock immoral assumption that your profit is not your own. An idea incompatible with a Constitutional Republic founded on individual liberty, individual rights and responsibilities. The government exists to defend individual rights, and the individual determines how they will handle their responsibilities and lives with the consequences.
The rich SHOULD BE ENCOURAGED to contribute to help care for the needy. “. . Classical Liberals insisted that charitable undertakings were a key component of a just society. Such notables as Justice William Story insisted that all individuals of good fortune had an “imperfect obligation” to provide support for the needy out of their winnings. These obligations were enforced by an uneasy combination of personal conscience, social sanctions, and religious obligation—but generally not state power. . . ”
Because as Andrew Klavan has said, “Free people can treat each other justly, but they can’t make life fair. To get rid of the unfairness among individuals, you have to exercise power over them. The more fairness you want, the more power you need. Thus, all dreams of fairness become dreams of tyranny in the end.”
“… a long sojourn in the political wilderness.” Like, in the Congress?
For the rest, the writer can go and have a word with Jon Corzine – the one who took what others did not build. Just like Mr Kerstein, he made the call on who deserved and who did not. Divine powers, indeed, and social justice aplenty, no?
The Republicans hold the House. That is all. They failed to retake the Senate despite an extremely favorable environment and the presidency appears out of reach for the foreseeable future. This is something many conservatives have been saying over the past week.
You can argue with a socialist until you’re dead and he’s moved on to confiscating someone else’s property. It won’t do you any good. It’s not so much that he doesn’t understand your arguments, as it is that he doesn’t care.
He’ll act like he doesn’t understand to keep you arguing. You’ve got to learn to simply move on once you realize you’re wasting your time talking to a socialist. They will always steadfastly refuse to join with reality.
Who let the socialist wander in here?
There is nothing free about the our markets. There is nothing fair about taxing the successful at exorbitant rates to pay the non-productive. And there is nothing logical about any of it.
The rich and even the upper middle class are already over the hump of the Laffer Curve. (My wife and I spent the weekend talking about how and whether to reduce our income if those taxes on the “rich” are raised.) Raising their taxes will result in less revenue, not more.
Sorry for the brutal truth, but this is just plain stupidity coming from stupid people – including the author.
You appear not to know what a Socialist is. I do not advocate state ownership of property or industry. The Laffer Curve has been proven untrue by recent experience. If more wealth to the rich actually increased tax revenues, the government would be awash in cash right now, given the extraordinary amount of wealth concentrated in the upper brackets. Instead, revenues are down, which is natural, since the collapse of the middle occasioned by that concentration has destroyed the consumer class.
A question perhaps? We all understand that in order to have a legitimate discussion about wealth and taxes it is imperative to use the same definitions of descriptive words used in the discussion.
Give us your breakdown of the classes. Where does the middle class start and end in your definition?
I’m not sure a dollar definition is helpful. I would say that the middle class are people who, for the most part, own their own houses, own a vehicle or two, have been to and/or intend to send their children to institutes of higher education, and have a reasonable amount of disposable income to spend on entertainment and other forms of recreation. Unfortunately, most of these things have, for the last several decades, been financed through increasingly ruinous levels of personal debt; mainly due to growing income inequality.
The descriptors you listed can be said of people in very high income brackets as well as those in very low bordering on the poverty level as defined by the govt. What your answer tells me is that you do not want a solid definition of the “middle class” as that would be counter to your argument. As is said, the devil is in the details.
Anyone who has a small business or is in middle management of a large corporation will be subject to ruinous regulation and destructive taxation by a govt such as we have now. You do know that the day after the election our govt sent out a decree that oil drilling in the west is now verboten? Why would they do that?
Take two months Mr. Kerstein and come to America outside of the cities. It will enlighten your viewpoint and quite possibly change your ideology.
A lack of dollar definitions is even LESS helpful. “Reasonable” is so open to interpretation that it is meaningless.
Especially when “reasonable” is being used as the basis for applying confiscatory tax rates.
Benjamin, please look up the word socialist in a dictionary, because it is clearly you who fails the understanding class.
Your ideas are socialist. Your viewpoint is socialist. If it walks like a duck, and confiscates property like a socialist duck, then….
From Merriam-Webster’s: “Any of various economic and political theories advocating collective or governmental OWNERSHIP and administration of the means of production and distribution of goods.”
I’ve seen NO examples proving the Laffer Curve false. Recently even the Socialist government of France has begun to scale back their tax plans due to revenue. The same recently happened in England when tax increases lowered their revenue.
The US had a 70% top tax rate throughout the 1950s and, as you can see, revenues rose steadily throughout; just as steadily as in the ’80s and 2000s, when the top rate was substantially lower http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200 The Laffer Curve would appear to be completely irrelevant.
I believe that the Laffer Curve is very relevant. The French are about to prove it.
You fail to mention that revenue grew even faster after the Harding, Kennedy, Reagan, and Bush tax cuts. Never did revenue drop after an income tax cut.
So the justification for the tax increase? To appease the mob? To please their envy? To beat Democrats by becoming them?
The Laffer Curve doesn’t have a time-dimension to it. It says nothing about how tax revenue will change over time at constant tax rates. In fact, we would expect tax revenue to rise over time as wages and population rise.
I stand corrected – I should have said Fascist. State control of the economy through massive regulations and taxes.
The same strikes me as true of the Bush years as well. Despite a tax cut for the wealthy, revenues went down and the deficit skyrocketed.
Revenues fell and the deficit went up for several reasons. Revenues fell in no small part because around the time of 9/11, another stock market bubble was in the process of bursting. The economy was headed for a recession, but rather than let that happen and seem a weakness adding to the shock of 9/11, the Federal Reserve began dumping money into the economy and Bush and others told people to borrow and spend. This they did. With the business cycle short circuited, the bad money from the bubble simply built up along with the new money. That went into mortgages and then that went bust. That bust was bailed out and now there is a big monster lurking out there.
The point being that the economy was inflating because of all of this. Most people lost a lot of money during this time so revenues were down. Wages didn’t really increase to keep up with the inflation so more people fell out of the taxpayer roles.
Let’s also not forget the social programs Bush created along with the war. Both of those were significant drains on the economy: the war in the immediate terms but the social programs are well exceeding it now with no signs of slowing down.
This is the same reason spending and debt and skyrocketing under Obama. Obama is giving more handouts paid for by more debt and a shrinking pool of taxpayers. In truth though Obama’s spending is being paid for by the mere printing of money totally unrelated to economic demands. Inflation is already ticking up, regardless of what figures say, and that if destabilizing the economy.
Lastly, if your ideas are true, that feeding the mouth is the way to go, why hasn’t Obama’s debt spending, more than all Presidents up to Bush combined, created a booming economy? Because it can’t. That debt has to be paid for and government consumes 2/3 of every dollar spent on services. Altogether is is highly wasteful and not sustainable in the long run, as we are soon to learn the hard way.
Your ignorance is exceeded only by your shamelessness in displaying it.
Why don’t you head over here and discover the truth. Go to Table 6 and scroll down to Rows 56 and 128. You’ll no doubt need a math tutor to explain the chart to you, but the upshot is that tax revenues increased after 2003, and the rich (especially the top 1%) paid a higher percentage of overall taxes.
http://www.irs.gov/uac/SOI-Tax-Stats—Individual-Income-Tax-Rates-and-Tax-Shares
Once again, abide by Guideline #3, please.
Don’t deflect. You claimed Bush tax cuts led to the reduction of revenue, when revenues actually increased.
He sent me a link to a series of tables which did not contain the information he claimed, or his directions to it were mistaken. Either way, I have only is word for it that this was the case. Should he proffer more direct evidence, I’d be glad to look at it.
That link goes directly to the IRS website, and I gave precise directions how to access that information – which is, in fact, right there.
I guess we can add either dishonesty or the inability to follow simple instructions to your list of credentials.
They do contain the information he claimed.
According to table six, row 56, the revenue fell sharply after the dot com bust. At 2002, when the tax cut was first passed, revenue continued to fall for the next fiscal year, but much less so. From 03 – 04, after growth had taken hold as a result of tax cuts, tax revenue dramatically increase, back to almost what it was before the dot com bust. The revenue continued to grow until the 08 financial crisis. Taxes never got raised in that period.
Row 128 shows that the share of taxes paid by the poorer people decreased, proving that the rich paid more after the cut and the tax cuts did not FAVOR the rich.
It must be nice to live inside of a bubble, where all concepts can be argued from the perspective that all things happen in a vacuum. For socialists, tax reduction always results in skyrocketing deficits, because from their perspective the spending programs are a natural part of the equation. From Kerstein’s perspective, it was wrong and evil not to have those spending programs from the inception of our country, thus to eliminate those programs is inconceivable.
Forget about economic activity, too. If consumer spending is down, then that has nothing to do with decreased revenue. Hey, Benjamin, if people spend less, fewer tax dollars will be collected. Moreover, companies will collect less and hire fewer workers and fewer income taxes will be collected.
The “economy” is this big, complicated thing that’s formed by all of the humans interacting and freely trading with each other. It is NOT the government.
I made absolutely none of the arguments you describe. You are fighting a caricature of your own creation.
Wow. That is the attitude that reelected Obama. Let me know if you still think the same way in 4 years. Heck, I think that by January the cracks might be showing. Good luck with you version of reality.
Romney talked a lot about getting people back to work so they could feed their faces and their families faces. The electorate obviously did not like that message or Romney would have been our president elect. Seems to me that the did indeed vote for free stuff…..birth control pills health care etc rather then go the route of working and providing for themselves.
Let the sequestration begin. I’d really like to get this can moving in the right direction and at least taking a look inside the can will give everyone top to bottom a look at what we are facing and maybe even start a constructive conversation. Most people are utterly clueless as to what is actually occurring or for that matter what a trillion really is as opposed to a billion. Albeit in all truth I look for more can kicking. What a world. What a waste.
This has become “The Land of Free Stuff” and “Freedom From Reality”
The super rick voted for Obama because they want freedom from competition: “Give me more bailouts and regulate my competitors out of existence.”
They voted for freedom from consequences.
Others voted for freedom from having to think about the enormous debt they are heaping upon the children and grandchildren. They want the freedom to think about their favorite celeb or about the latest version of iPhone. In other words, they voted for the freedom to divert their minds from reality.
And of course there are plenty who just want free stuff.
The Republicans have a nasty habit of reminding voters about reality. The majority do not want to hear about reality–unless it is some new Reality show on network TV.
Medicate them, entertain them, divert them. Offer them some shiny new trinket like a cell phone. Whatever you do, never mention anything so unpleasant as debt and responsibility.
Your comments are right on the mark
“Conservatives in countries like Canada and the United Kingdom have made peace with the welfare state”
And that is why the UK is being overrun by Muslims who won’t assimilate, has a very large percentage of its population “on the dole” and who simply won’t hold a job, and is in danger falling over a financial cliff of public debt.
The American way has always been to keep the government to the minimum level necessary and to let the private charities and institutions and the communities and lower levels of government help the poor (remember, the Federal government is not the only government in the U.S – state and local government are equally as important). If the Federal government assumes responsibility for this than there is simply too much temptation for all concerned to purchase votes and political power with the public purse.
It’s not so, anyway. Canada has since implemented healthcare reform, giving back to the people private hospital options, since their government based program hasn’t been working.
I am amused when foreigners define conservatism for us. Please note that Brecht was a committed Marxist and lived in East Germany. He supported the Russian suppression of the 1952 E. German uprising. You may love your socialism in Israel where you have a huge class of orthodox living off the dole and not even doing military service. Dependency is the opposite of freedom.
I suggest one cut to the US budget is to let Israel fund their entire military budget and they can ask the rich Wall St bums that Kerstein hates to cough up the deficiency. After all there is a tax deduction available. Oh maybe we should do away with that also.
I was born in the United States and lived there for two decades.
So you left while still an idealist youth and your vision of America is still colored by the experience of a version of yourself barely out of adolescence (and, actually, not quite out of puberty technically).
You know nothing whatsoever about me but what you assume based on your own stereotypes. And again, please abide by PJM guideline #3 re: ad hominem attacks.
This is neither an ad hominem attack, as I said nothing about your personal character, nor an assumption about you as a person, as it was based on you implying you left at 20 and the biological fact that twenty is still the late stages of puberty for most people, as well as the neurological fact that the brain doesn’t completely finish developing until approximately 25 years of age.
The only assumption is that, based on those facts, I assume you had the clouded, and idealistic view of things that most young people (myself included, at that age) have, meaning that having been here for the first two decades does not necessarily mean you know what is going on here.
It is a valid argument, though still opinion and not fact itself, though based on two facts that you claimed were personal attacks.
Do not keep quoting guideline 3, if you intend to keep misusing it.
I don’t know what hole you pulled this article out of, but its more likely the one you sit on than the one you speak from.
“…an economic crisis largely caused by the free market policies inspired by Ayn Rand and Milton Friedman…” What? What the hell are you talking about? You’ve just admitted that you a) don’t know anything about the financial crisis or what caused it AND b) you also don’t know anything about what either of those people had to say.
Which means nothing further that you say has any value at all. I will never read your column again.
Oh, please, don’t do that, John. Mr. Kerstein is an infallible guide to the latest trendy theories of How To Make The World Perfect on the progressive side.
Like the canary in the coal mine, he tells us what noxious vapors are wafting our way.
It is easier to counter the disastrous behavior of the ideologically self-deluded, when you know in advance exactly what form their delusions are going to take next Tuesday.
I read the New York Times, and New Yorker magazine, for precisely this reason.
cheers
eon
Please point out where I “admitted” these things.
He did when he quoted you blaming the economic crisis on things no economist but Krugman would blame it on, and even then Krugman would have to add the caveat that other things were involved.
That isn’t an answer of any kind. Frankly, it’s barely comprehensible. And I don’t read Paul Krugman. Never have.
Yes, it is absolutely an answer. He said that when you claimed that policies no economists are blaming for crisis caused the crisis, you are doing the same thing as admitting you don’t know anything about it. And whether or not you read Krugman is irrelevant. I didn’t say “you got all your points from Krugman”.
This writer may be right that the Republican Party is out of sinc with the average American voter, but he is wrong to say that the correct response is to support this pattern. Lets take our lumps and soon the whole country will be looking for answers that only a return to our Constitution can even partially provide. Collectivist politics always fails once collectivists become solely responsible for the malaise they have created. The only way they can continue pointing the finger at Conservatives is if they can show Conservative compliance with their agenda. Lets help them to own this mess and their whole house of cards will eventually come down on them. Collectivist governing policy has never stood on its own for more than a generation before breaking down to tyranny and I don’t expect the Democrats to need a generation to be begging for a better way here. Additionally, I would like to say that free markets have never destroyed any economy without a boost from collectivist propaganda, primarily coming in the misnomer we now call education. Finally, I would say that this author made no effort to explain how Milton Friedman and, for crying out loud, Ayn Rand are responsible for Obamanomics. But he will soon be jolted and will realize the extent of his own ignorance.
Wow! This is one of the most, truly Ignorant articles I have ever seen on the economic situation! The failure is in the “Hybridization” of Capitalism and Socialism! 100 years of this failure and you still refuse to see the failures of attempting to hog tie Capitalism with Socialist policies! it certainly shows a total ignorance of history and a refusal to acknowledge and learn from 100yrs of this Failure! But you keep on coming up with nonsensical excuses for your ideological failures and you will continue to FAIL! Keep denying history and the results of your shortsighted ideology and you will continue to come up with inane excuses for obvious and predicted failures!
http://www.paratisiusa.blogspot.com
God Bless America!
1. It is nice that the intellectuals from Tel Aviv are so eager to help with our “mess,” especially since they have done such a great job fixing their own.
2. I love it when P J Media writers descend to straighten out the incorrect thinking of commentators. It is an admission that their articles cannot stand on their own because they are are insufficiently enlightening.
3. It is also amazing that this writer wants to blame our fiscal crisis on “unreasonable” wealth and the supposedly skewed class structure in the United States, but he is unwilling to specify what constitutes “unreasonable wealth,” or how we define a social class without including income as a criterion of class status. So, we are to accept the ideology of class struggle without a theory of class nor any meaningful evidence of how social classes are organized in our society. If the problem is the unreasonable distribution of wealth, it makes little sense to refuse to include it in our measurement of social class.
How about a billion dollars? Is that unreasonable enough?
No, I’d rather have a more abstract description. Because an arbitrary absolute number has no moral or immoral connotation to it. A billion cannot be unreasonable unless there’s a rational explanation of why it is unreasonable. And, just because it is more than what other people have is an explanation, just not a rational one. Likewise, because they earned it on the backs of the poor is just plain demonstrably false. Give a reason besides those two.
I’m afraid you don’t get to move the goalposts on a whim. You asked for a figure, I gave you one.
I didn’t, nor did the post you were responding to. The OP asked “what constitutes” unreasonable wealth. That does not have to be, and for a rational argument SHOULD not be, an arbitrary figure. It can, and should, be a concept.
Your suggestion of 1 billion dollars is naive and too suggestive.
One may be a owner of several businesses and needs cash reserves to make payroll and other expenses. Sometimes business is good. Sometimes business is bad and said billion dollars are needed to make up for the business downturn.
The 1 billion dollars are not kept under the mattress, it is available to all (including the poor) for loans. A person accumulating 1 billion dollars may have a plan to self-finance a new business: applying for a bank loan brings risk of rejection.
I argue that keeping obscene amounts of money to a few individuals is much better than having Government to have all that money: the more money government keeps the greater the ease for the State to wage War. Going back centuries, Kings and Emperors have to beg on bended knee to the fatcat bankers for finances needed to wage war.
A billion dollars seems perfectly reasonable as an example of an obscene amount of money that no one person could possibly spend in a lifetime and which is more than enough to keep him in absurd luxury until the end of his days. Whether he has it or the government, it doesn’t really matter; it is certain that it is not contributing to the economy and is not in the hands of the consuming class that is necessary to keep any advanced economy from collapsing. Ironically, extreme concentration of wealth destroys the system that creates it.
“no one person could possibly spend in a lifetime”
utter nonsense, many billionaires gave billions away and SPENT billions building libraries, universities, etc..
” which is more than enough to keep him in absurd luxury until the end of his days”
utter nonsense. Steve Jobs lived a modest lifestyle and he kept his billions as a safeguard against possible failures of new Apple products.
“it is certain that it is not contributing to the economy”
utter nonsense. I repeat:The 1 billion dollars are not kept under the mattress, it is available to all (including the poor) for loans.
Most of the time, people take out loans for big-ticket items: car, appliances, homes.
You are just repeating the old debunked Leftist talking points.
“A great many of America’s wealthy are not creative or productive.”
Why are we seeing debunked labor theory of value nonsense on pjmedia?
Wow.
We lost the elections and in five days we get a dude quoting Brecht writing on PJM.
That’s a really fast way to “adapt” yourself to the regime.
Good.
As expected, the consolidation of the regime will make very clear who is standing where.
Sorry, no debate with the totalitarians, this is America, we don’t quote the monsters like Brecht here.
Conservatism and the rule of law is wrong because the Democrats disagree with it??? What did your mother tell you about following others over the cliff?
Personal Property rights (money) is still the core principal of the Constitution of the USA. Just because somebody wants what another has does not “yet” mean that they have a right to it. Jealousy, lust and greed is what we are protected from by the Bill of rights. By greed I mean the greed of government and of welfare. There is no end to the greed of people wanting what another has.
Losing an election is not the end of the world, losing ones freedom and principles and right to self determination is.
“Eventually, of course, as it always does, reality reasserts itself, as the collapse of the financial sector in 2008 proved in the most catastrophic manner possible.”
Seriously, you’re blaming a crises developed by left-wingers attempting to encourage banks to lend mortgages to poor people on free market policies that ignore the poor?
Pardon me; that’s “crisis”.
As I have noted elsewhere, I do not agree with your characterization of the origin of the crisis. And I think the Fannie Mae Freddie Mac explanation is a self-serving one.
‘At the same time, a great many others have become rich by exploiting natural resources and technology they do not own or have been developed by the public sector, such as oil and the Internet. Who is the moocher in such a situation?”
How do gas companies not own the oil they buy for purposes of refinement? It’s like saying I don’t own a book I bought, because someone else bound it. Or that the publisher doesn’t own the paper they bought to bind it with, since someone else made the paper. Or that the paper company didn’t own the wood they bought to make paper out of, since someone else cut the wood.
As for the Internet; it was not purely a government created thing. It was developed various and many different people, both government employees and private citizens, bit by bit. Regardless, no one MOOCHES from it, as everyone has to pay for hosting on it.
Furthermore, the internet is not “government provided” ARPANET served as the backbone in early days, but lost its primacy almost immediately upon the internet becoming mainstream. Now, the “backbone” of the internet (which is MANY things, not one) is a collection of servers, routers and cables owned by the ISPs, whom we charge for use of it. They each own their own slice of the internet, since the internet is nothing more than a collection of connections from server to server; computer to computer.
I really don’t think you understand how economics works. One, since you don’t understand the basis of trade and value and, two, because you quote a writer instead of an economist with regards to your views.
If you’d even used Krugman as your basis, I’d have taken you more seriously than with Bertolt Brecht.
Again, I used the Brecht quote only to illustrate a point, not to propose any economic theory of his, since he had none.
“many have built their fortunes on a foundation they themselves did not construct”
Nor, in most cases, did the government. Here’s the thing, I’m actually training for Homeland Security and must learn to protect “critical infrastructure”. In the VAST majority of cases, the most critical infrastructure was built and maintained by private companies, leading us to the necessity of partnering with private industry.
Those business today that use an infrastructure they did not make are using an infrastructure made before them by other private industries. Roads are made by the government today; we do pay recompense for that. Government provides the military, police, and first responders (firefighters and emts) for protection. Beyond that, what do they really do for us?
“Conservatives in countries like Canada and the United Kingdom have made peace with the welfare state, while containing those aspects of it that are harmful to both the private and public sector.”
Canada is rolling back its welfare state, while the UK is imploding as a result of it.
All 3 major parties in the UK are statists. Their Conservative Party is statist, and the only real difference between them and the Lib/Dem and Labour Parties is the type of faction that their leadership hails from.
“Conservative” means a very different thing in Europe than it does here in the US. American Conservatives view the European ‘conservatives’ policies as socialist, and correctly so.
When people figure out that capitalism and people are motivated by the concept of personal profit, and not ‘providing for the welfare state at my expense’, then we might see this madness go away.
but as long as people can be bribed with the fruits of others labor, it will not happen.
what the socialists still don’t get is that a lot of people are figuring out ‘why should I support people at my expense with no remuneration for me?’ It’s my money.’
Gonna be a rough ridge as they flail and don’t get what they want
Mr. “Galt” – If you would be so kind as to post your easily accessed figures, I’d be happy, as I said, to look at them.
Well, let’s assume you actually did have the info and it actually exists. Judging by the chart I linked to above, your claim about tax revenues post-2003 is partially correct. They went up. However, they did not go up at a rate appreciably higher than before the Bush tax cuts. In fact, following the 2001 tax cuts, they actually go DOWN slightly. Now, post-2003, they do tick up slightly, and then go effectively flat, showing lower growth than in the ’90s, when taxes were higher.
Second, these years correspond with enormous growth in the deficit, meaning that even though revenues go slightly up, they can purchase less and less. Ultimately, it seems the Laffer Curve has little or no effect. Tax revenues seem to go up at a slightly higher rate when taxes are higher, and grow at a somewhat flatter rate when they are lower.
Mr. “JLanceCombs” – That poor people paid less does not mean the taxes did not favor the rich. Everybody paid less. For the rich, this would naturally involve a much larger amount; an amount, moreover, which they are perfectly capable of paying without any suffering on their part. Unfortunately, this also left revenues either flat or at a slower rate of growth, with an enormous deficit (which, I agree, Obama has only made considerably worse).
I do not see why both you and Mr. “Galt” do not mention that tax revenues almost always go up; the question is the rate at which they do so. Following the tax cuts, that rate either flattened or slowed considerably – especially in comparison to eras in which tax rates were higher, even considerably higher – again disproving the Laffer Curve.
Kerstein raises a strawman. For one thing there just isn’t enough cash held inside “idle” investments to pay off our level of spending. And how does one differentiate between the cash held for a Trust Fund and that held in a “productive” portfolio? Many investors determine their investment strategy via the current tax code -a tax code written by Progressive lawmakers. Kerstein offers up no specifics. But, it is the specifics which yield the current situation we so enjoy (or suffer from). The Consitutional reality is that investment income in most cases has already been taxes once, twice, thrice (it all depends on how many times it has been cycled through our economy). The distinction between earned and unearned income is a construct -a Progressive Construct. And it is a fluid one. Consider the State of Indiana’s public employee’s pension fund. Sometine during the last decade or so, the State of Indiana purchased millions of dollars in Chrysler’s corporate bonds. Progressives would be consider this a very productive investment; the pensioners are public employees (read SEIU and other union employees). Secondl, the investment was “safe” and supported other unions such as the UAW. But, then suddenly things changed. The bondholders overnight became millionaires and billionaires. If Chrysler went through the normal bankruptcy process, the bondholders may have recovered their original investment plus a few points of interest (much below the agreed contract -but it was better than nothing). Instead of bankruptcy, Obama got involved and told the bondholders to accept pennies on the dollar of their entire bond issue. The end result was public service employees were given a haircut.
But, lets dispense with the nonsense. In 2011, the federal government spent over $1 trillion on welfare (food stamps, direct cash payments, heating assistance, etc…). That doesn’t even count Medicaid. That comes out to $60,000 per every adult living below the poverty line. The US has borrowed $5.6 trillion in 3.5 years. In 2001 total federal spending was $1.8 trillion. Today it is just below $4 trillion. Mr Kristin, do you suggest we close the spending gap by raising a total of $2 trillion in additional taxes? Have you even clue what that comes to in real terms? Perhaps there may just be a correlation between the federal government level of spending and borrowing and the falling incomes of the US middle class earners ($4000 loss over the last 4 years), and anemic job GPD growth (1.8%/year)?
The total assests in the US (property, cash, equity investments, bonds, etc…)come to just over $40 trillion (a loss of $10 trillion since 2008). And those assests produce an annual GDP of $13 trillion. Again, do the math. Subtract the takings of the base asset holdings and you subtract the total amount of goods and services produced. Here’s a excercise. Outline in detail the total amount of investments in the US, and outline whether they are “productive” or none productive (cash in savings accounts would be considered non-productive as they are only used to cover banking operations; I suppose, ditto for CDs.) Post your results.
Even trust fund money isn’t just sitting there. If nothing else, if that money is in a bank account it is serving as a basis for the bank to make loans from. Money Market and other types of active accounts are only more so. That money, like savings and investments in general, is still working in the economy. The only way it wouldn’t be is if they cashed it all out and stuffed the mattress with it.
“economic crisis largely caused by the free market policies inspired by Ayn Rand and Milton Friedman…”
Ok, that’s where I stopped reading. If the author thinks we’ve been living under a free market economic system, he’s full of …. We certainly haven’t had a free market system since at least 1913 and arguably not since before the Civil War, or at least, not since The Progressive Era. An argument can be made that we haven’t had a true free market system since the Jackson administration.
Then, he compares objectivists to free market capitalists? …and openly compares Rand and Friedman to conservatives and Republicans? Hell, they all but hate Rand and many of them hate Friedman!
He starts out with two or more false premises. Conservatives aren’t going to hear anything else he has to say, no matter how true or valid it might be.
Mr Kerstein, what part of the Wall Street bank, GM, Obama cronies bailout IS free market capitalism?
The United States is FAILING because it is adopting the economic policies YOU (and Obama) endorce. We are going BANKRUPT because the government is too big and it SPENDS to much.
That is why the economy is slowly imploding, the socialists have almost run out of other peoples money.
“Conservatives in countries like Canada and the United Kingdom have made peace with the welfare state, while containing those aspects of it that are harmful to both the private and public sector.”
BULLSHIT, the welfare state in both those countries are sending it down the plughole JUST like the United States. Try looking at the math instead of pulling opinions out of thin air.
We spend 40% MORE than we earn, that which CANNOT continue will stop.
Socialism CANNOT work, the incentives it creates won’t allow it too and printing money out of thin air (QE3) ALWAYS ends in hyperinflationary collapse and reduces people to serfdom.
Argentina in 2001, that’s the change 4 more years is bringing.
“As Bertolt Brecht once wrote: ‘Feed the face, then talk to me about freedom.’”
That explains why Brecht never talked about freedom and why the DDR and its masters in the USSR never freed their subjects: if you don’t feed the face, you needn’t talk about freedom.
Keep your subjects, poor, hungry, and on the dole, and they’ll be your subjects forever. The goal of the Democrat Party, like its parent the Socialist/Communist Party, is perpetual power on the back of the impoverished and oppressed.
This is exactly it. Beautifully put! If you’re struggling for food and shelter, you are rarely going to have higher aspirations, and even if you do, you won’t have much time to pursue them. Victims of “socialist” dictatorships know this well. Just ask any North Korean or ordinary citizen of the former USSR.
“There is nothing at all immoral about asserting that those who have made enormous and—in my view—unreasonable fortunes off of these industries owe a debt to the public”
Sounds good to me. Right after the Clintons, Sean Penn, Michael Moore, Barbara Streisand, Jane Fonda, et. al., give up their millions to the public, I’ll take this view seriously. Or if Obama despoils the Clintons. As it is now, it’s nothing more than a theory used to rob one’s wealthy enemies while protecting one’s wealthy friends.
I can be sure I will not be following Kerstein’s byline.
Ever.
I am with you.
Some commentators say Kerstein is proposing socialism and Kerstein denies that.
And Kerstein is correct. Kerstein is proposing Fascism (government control of the privately-owned means of production). In today’s world, a good part of economic production is intellectual: is Kerstein proposing Government control of our minds?
To go from free-market to Socialism, you have to go through Fascism.
I don’t think today’s leftists really want government ownership of production. Owning stuff makes them responsible for results. Leaving ownership in private hands (while controlling them) allows them to blame greedy capitalists whenever things go wrong.
Corporatism, I believe, is the term we’re looking for.
As much as I hate to do it, here’s a wikipedia link: http://en.wikipedia.org/wiki/Corporatism
Mr. Kerstein is a Corporatist. He also shows a remarkable ignorance of what conservatives actually believe and is convinced of the typical Leftist ‘revisionist’ history, where reality is rewritten to fit the Leftist narrative. Truth be damned.
Personally, I don’t see much difference between Progressive Corporatism and Fascist Corporatism in practice. The theories have some slight differences, but what the Democrats are doing here compared to what Fascists did in Argentina, Spain, Italy, Germany and elsewhere is really just minor variations on a theme. They even share the same racist scapegoat for their policy failures.
The only difference between the Fascists of the past and the Democrats in the US today is that the Fascists loved their countries.
The article doesn’t describe the dynamic in the party well. Not all Republicans are conservative. All are capitalistic with some being crony style some free market style. The party is split between these two with the conservatives providing the vote and the crony capitalists providing the funding. The money talks. Conservatives walk. America rejected the party because they see it. Its an unholy alliance and has been identified by the majority of Americans.
“, the conservative movement, led by the Tea Party, chose not to seek a viable alternative, but instead doubled down on an ideology from which the majority of Americans are entirely alienated.”
Are you under the influence of drugs?
If you think that Mitt Romney was the TEA Party’s choice for the GOP nomination, you are so out-of-your-gourd misinformed that you have either been high on dope for months or you are a certifiable imbecile. Seriously, the clue-phone is ringing, answer it…it rings for YOU.
““Feed the face, then talk to me about freedom.” Even if the neoliberal point of view were correct—and I believe it is not—there is simply no viable argument against the fact of human suffering. People who are desperate will vote for anyone who is willing to ameliorate their condition to some degree.”
Oh really? In New York City, lower Manhattan, Queens, Staten Island and out along coastal New Jersey and Long Island are people who voted, in rather large numbers, for Obama that are living in tents and eating from garbage dumpsters while FEMA has to find warehouse space for its portion of the 450 million rounds of .40 caliber ammunition the DHS bought.
Despite that Obama heralded that his Administration deported more illegal aliens/undocumented workers than any other administration in history, 7 out of 10 “Hispanic” voters cast ballots for him.
How does those facts square with your claim?
” At the same time, a great many others have become rich by exploiting natural resources and technology they do not own or have been developed by the public sector, such as oil and the Internet. Who is the moocher in such a situation?”
The government. The government does not spend a DIME to produce oil from beneath the small sliver of America’s coastline that it ALLOWS such activity in…it leases the right to do so, and taxes the result of the pay. I work in the Oil Industry…even one single oil company cannot afford to foot the price of an oil production spar today.
And the internet? If private for-profit business had not seen a way to make money with it, the internet would today be as successful as the US Postal Service or Amtrak.
“The American Right, however, is unready or unwilling at the moment to countenance anything like this. In conservative circles, even to imply that the welfare state is not entirely an unholy evil is as verboten as any heresy in history;”
The welfare state is supposed to be a hand “up” when you need it…not a generational hand-out way of life, which is what it IS.
Seriously man, put down the bong!
The ‘Brechtian economics’ phrase was the clue, here. iow, the author is promoting full-bore Marxism and is asking you to like it and to endorse it. otoh, at least, it is a more or less coherent political philosophy. Fairly successful, for that matter, at least for those who gain power under it.
The political philosophy the right has been using isn’t working so well…and isn’t, at heart, coherent. ‘Let and let live,’ would work better. It has simplicity and coherence going for it, anyway. If your political philosophy actually worked, you wouldn’t have to bemoan the fact that you keep losing policy and political contests all the time. Nor would you have to blame everyone and everything *but yourselves* for your subsequent losses.
So, someone that works within the system that is in place (by others) is somehow “immoral …not to provide recompense for it..”? Where is that written in the US Code? Or the Ten Commandments? Or any other law, other than progressive liberal doctrine?
Basically, your whole argument comes down to…”You didn’t earn that”.
Damn, there are some smart people on this blog site and I only hope that you folks are writing your congressman (or their lobbyists) and trying to shape government policy going forward.
It appears to me we have become the United Slavery of America where the “Master” is the federal government and the “field slaves” are us taxpayers. The “house servants” are the moochers whose only job is to support the “Master” without fail so that the free stuff keeps coming. Essentially, America is now the “New Plantation”.
You can label the current fiscal situation with whatever political philosophical flavor you choose and argue/debate/bicker ad nauseam, but the apathy (100 million eligible voters stayed home last week) that led to Obama’s re-election will continue until the spending stops.
(Sorry to go off-topic, but I was getting bored…..)
Such is the state of our situation, I don’t know why any conservative would have a problem with Obama raising taxes on the rich. After all, most wealthy people these days are voting for the Democrats in order to feel good about themselves while raking in all that money. The more they pay in taxes, the less they will contribute to the Democrats. What’s more, when Obama raises those taxes and still is left with a trillion dollar deficit, the Republicans can point out the egg on the Messiah’s face.
And let’s face it; Mr Kerstein is right that there are in fact many wealthy individuals who don’t produce anything worthwhile. No reason to get defensive about it. And I say that as a conservative libertarian.
Benjamin, I can’t recall having read any of your posts before, but this one has convinced me that you are an idiot.
To quote you:
“In the face of an economic crisis largely caused by the free market policies inspired by Ayn Rand and Milton Friedman…”
What utter nonsense.
Once again, and not for the last time, I imagine, PJM Guidline #3. Please abide by it.
Somebody needs to learn the definition of “ad hominem”…and a whole lot more.
I would like to clear up one or two misconceptions I’m seeing here: First, I am emphatically NOT endorsing socialism. Quite the opposite. I believe private property should be in the hands of those who make the best and most productive use of it, much as Adam Smith would have advocated.
Second, I do not endorse Obama’s economic policies and it should be clear that I think debt, personal or government, is ruinous. Precisely the reason I want conservatives to engage with the welfare state is that they would run it better and more prudently than liberals.
Third, I am not opposed to free markets, I AM opposed to the Randian-Friedmanite style of free market messianism, which holds that a) Markets can solve EVERYTHING, and b) anything that “interferes” with the market is evil. There are some things only the state can do or does better than markets, and there are forms of non-interference that are as immoral as interference.
Four, I quoted Brecht only in order to illustrate an obvious point that should be common sense to anyone: People have basic needs that come before any ideological concept. In a democracy, politicians ignore this at their peril.
“First, I am emphatically NOT endorsing socialism.”
No, but you are pushing for Fascism (government control of private-owned means of production). Mussolini had the trains run on time.
“the reason I want conservatives to engage with the welfare state is that they would run it better and more prudently than liberals”
Yep, the conservative will assist in the decaying of society but at a slower rate. But what principles dictate that Welfare must be the role of Government? My grandparents lived in Harlem (NYC) during the Great Depression and they received all needed assistance from various benevolent societies (yes, many people received all their needs from Government but my grandparents did not). Starting in the late 1800′s, the Progressives/Socialists proceeded to demonize/eliminate the various non-government civil institutions that de Tocqueville admired so much.
“I AM opposed to the Randian-Friedmanite style of free market messianism”
Can you provide ANY quotes from Ayn Rand or Milton Friedman relating to this free-market “messianism”? Both authors stressed the need of Government to maintain a just, efficient Justice System. It appears you are just pushing Leftist talking points to demonize Rand and Friedman.
News to you: companies do not like to be sued. Various professional associations – on their own – instituted their own code of ethics, code of professional behavior, and other codes relating to the exercising of their professions. The AMA (American Medical Association) regulated hospitals and standards of medical care long before Government got into the act. The ASME (American Society of Mechanical Engineering) instituted by themselves safety codes for boilers and other machinery long before Government got involved. I can go on and on.
“Markets can solve EVERYTHING”
This statement is 100% emotional and 0% objective. There are problems (such as mortality: no one wants to die) which are unsolvable. I do not know of any problem solved better/faster by people under the yolk of Government than by free people using their own initiative. This much truer now than, say, 1000 years ago. During the ancient roman times, road construction was the domain of Government: in those days, financial instruments were rudimentary and there was no private institution capable of coordinating such large amount of manpower to build the road. Today, sophisticated financial tools and mechanized construction tools allow the private sector to do independently road construction.
“anything that “interferes” with the market is evil”
Neither Rand nor Friedman made such statements. I may be wrong but please give us quotes. Whenever Government comes into play, rent-seekers show up and curry political favor to have government-subsidized monopolies. Talking about monopolies, the more local (state, county, city) the government is, the less “evil” is the interference.
“There are some things only the state can do or does better than markets”
Really? Give us some examples. Currently war is a government enterprise and with today’s technology, war can be waged with a few people (thus hire a private outfit to do the killing). In the old days, Kings and Emperors hired mercenaries (private armies). In the area of Justice, there are many private mediation companies to resolve conflicts before they escalate to Government Justice. The book of rules/regulation of a private corporation is much, much more streamlined and unambiguous than the book of rules/regulations of Government, especially Federal Government.
“there are forms of non-interference that are as immoral as interference”
More platitudinal nonsense. Give some examples. I laugh at Obama’s principle of “Responsibility to Protect” which he used to kill Kadaffi in Libya. Obama is not using this principle in Syria and many more people are killed than in Libya. Afghanistan will be a dilemma for the Pashtun culture is cruel to women and when the US withdraw, who will protect the women?
Marx once observed that unfettered capitalism would result in the sale of human flesh in the marketplace. This is self-obviously true or course. Some regulation of the marketplace is necessary. The rub of course lies in the definition of “some.” What you appear to be saying is that the right needs to deal with the facts on the ground and not ideological dogma.
The problem however is that 90% of the readership herein will look at the Marx quote and conclude a) the Marx quote is wrong because it was made by Marx and we all know Marx is the Devil, and b) since Marx is and was never right about anything the only people who could quote him must be socialists, closet or otherwise.
Dude, you have your work cut out for you. Best wishes.
“Marx once observed that unfettered capitalism would result in the sale of human flesh in the marketplace.”
Just like Kerstein, what is the reference? In Das Kapital, Marx wrote about the traffic of human flesh: he was referring to the slave trade. Are you making up a bogus quote?
Now, as I read your sentence the first time, it seems you are referring to cannibalism. In truth, cannibalism has been practiced (under forced circumstances) to a much greater extent in Socialist/Communist regimes than under Democratic Republics. Currently there are accounts of females in North Korea (in and out of prison) eating their dead babies. Engels and other contemporary Marxists (cannot say for K Marx himself but today’s marxist historians have done a lot of revisionist history) claimed that homosexuality is the product of decadent Capitalism. What can be more decadent then cannibalism?
“This is self-obviously true or course.”
Incorrect. Mainstreaming of cannibalism into american society will come under the drive of marxists. The goal of marxism in the US is to nauseate the american culture and make it suppress its gag reflex. Then polygamy and bestiality will be forced by the marxists into the american mainstream and pushed until the gag reflex is suppressed. Then cannibalism. Then coprophagia. Etc..
Some regulation of the marketplace is necessary. The rub of course lies in the definition of “some.”
A set of useless sentences. As stated in another comment, professional associations set their own professional code and rules of the exercise of their profession for the main purpose to do good by their customers. Companies do not like to be sued. Here citizens need to active to get whatever harm to be redressed. The lawsuits bring about changes in the professional codes by the companies and professions. The relevant question is to what extent should be Government involvement in writing these codes.
“What you appear to be saying is that the right needs to deal with the facts on the ground and not ideological dogma.”
Another useless sentence based on false premises. Conservative and the basics of free-market economy, as written by the likes of Adam Smith, was based on the review of history going back to Ancient Greece and prior. Conservative tenets are based on pragmatism and historical fact. Marxism, as written by Engels and Marx, is based on a dream of an Utopia. History provide examples of collectivist societies which stayed mired in misery and poverty.
“Marx is the Devil”
Incorrect. Conservatives pity Marx for he knew so much that just wasn’t so. Marx was not evil, just wrong.
Marx is a confessed atheist but he did not say anything about the Devil. The Left does not believe in God. However the Left does believe in Lucifer to whom Saul Alinsky dedicated his work “Rules for Radicals”.
“Marx is and was never right about anything”
CORRECT.
“only people who could quote him must be socialists, closet or otherwise.”
Nope. Many people quote Marx to show how stupid he is.
“Four, I quoted Brecht only in order to illustrate an obvious point that should be common sense to anyone: People have basic needs that come before any ideological concept. In a democracy, politicians ignore this at their peril.”
As I stated earlier, the poor have not problem feeding their faces. Last year the “poor” on average received $1 trillion in welfare payments (this does not include Medicaid). This equates to $60,000/every person living in poverty. Try shopping at at one of America’s 4000 Wal-Marts. You will notice a large number of consumers paying for their groceries with EBT Cards; you will also notice quite a few withdrawing cash from ATMs. The poor in Broolyn or Chicago are not the same poor who lived in Berlin Wedding during Brecht’s time.
Old school socialism was never about burdening the working class with taxes in order to provide subsidies for voting constituents. Old school socialism believed jobs enabled people to escape poverty, and that the private sector needed to provide those jobs. They didn’t oppose capitalism and they weren’t on favor of spending ungodly amounts of taxpayer money.
To tell the truth it’s hard to see where old school socialism an the tea party differ.
Marxist Socialism is about workers getting the profits of their labor rather than the entrepreneurs that risked their capital creating the business. So, there is no point being an entrepreneur, and Marxist economies fail as a result.
Democrats, on the contrary, are far to the Left of Marxists. Democrats confiscate ever increasing %’s of the wages of workers and redistribute that to people that don’t work at all. We now have 87 federal welfare programs. They combine to redistribute $2.7 Trillion per year. If you sign up for them, you can easily get to an effective annual income of about $65k per year without ever having to get off your couch. Where Marxism discouraged entrepreneurs from starting businesses, Progressivism discourages people from bothering to get a job.
“Free market” is used here quite a bit.
What is a/the “free market”. Definition.
“In the face of an economic crisis largely caused by the free market policies inspired by Ayn Rand and Milton Friedman…”
In what bizzarro alternate universe have you been living in?
The economic crises was caused by the collapse of the housing bubble. The housing bubble was the direct, and predictable, result of Government intervention in the housing market. Clinton’s expansion of the Community Reinvestment Act, and lawsuits by Obama himself among others, forced banks to make thousands of ‘subprime’ (ie. high risk) mortgages, for racist reasons. Cuomo and Franklin Raines used Fannie/Freddie to buy up all those bad notes, bunled them with good mortgages, and sold the bundles as AAA paper.
The Free Market policies of Ayn Rand and Milton Freedman had precisely NOTHING to do with the resulting inflation of the housing bubble and its subsequent collapse.
The whole premise of your article is therefore BS.
Okay, I’ll bite. If banks were being strong-armed by the CRA to make loans that accounts for around 1/3rd of subprime. Around 2/3rds were from Mortgage lenders like Countrywide, Ameriquest et al. which were under no CRA restrictions.
They weren’t being forced, what gives?
Gummint provided the incentive with the money and strings, and then it gutted the controls, like gutting the FHA lending standards. Banks could now make unlimited money with no risk, because they could sell bad loans to Fannie and Freddie. Fannie and Freddie are NGO’s which had the backing of the FedGov, which means they had no risk either. Gummint gutted the risk.
In free markets, there is no FHA lending standard, because there is no FHA. There is no Fannie/Freddie. There is no CRA. There is no gummint-counterfeited money feeding the banks. Everyone lends their own money, and the risk of losing that money makes them prudent in action. Remove the risk, and you get a bubble.
Real free markets are based on risk/reward. Government alters that equation, distorts it, and business responds accordingly.
Okay, go back to what I was saying about banks versus mortgage lenders. An FHA loan is prime by definition. So again you still haven’t answered the question of who forced mortgage lenders to make the majority of these subprime loans.
It’s true that Fannie and Freddie were buying subprime paper but not true necessarily that we were guaranteeing these loans. Think about it, if Fannie and Freddie were backing all these loans why were we bailing out AIG and other banks who were “insuring” these loans through credit default swaps?
If what you’re saying is true, people default on their loans, Fannie and Freddie pass the bill onto the American taxpayer and the banks are made whole.
That’s not what happened. So can you explain why for example Merrill Lynch had to write down $15 billion of bad mortgages on their books? Moreover, why did Merrill Lynch go out of their way to buy First Franklin a subprime lender and begin to underwrite their own CDO’s?
@Benjamin Kerstein
Here’s what I don’t understand: Why are you allowed to post on PJMedia at all? There is absolutely nothing in your post that any Republican or any Conservative would ever agree with. We disagree for the simple reason that your ideas are in synch with the ideological Left and your statements are contrary to established fact.
When American Republicans and Conservatives abandon their beliefs, and their hope for the future of our country, and desire to become powerless subjects of a totalitarian socialist state, we’ll give you a call and ask your advice.
Why don’t you go post to your fellow statists at the DailyKos or MoveOn.org? You would fit right in over there.
The ignorant author knows nothing about Rand or Friedman if he believes the economic crisis was caused by the free market. The problems were caused by government, not capitalism. It is government that provides corporate welfare, not capitalism. Yes, there are wealthy people who did not earn their wealth but stole it. But there are also wealthy people who earned their wealth. You do not punish all of them with higher taxes just because some of them are crooks. Put the Jon Corzines in jail, not the Henry Fords.
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Kerstein writes, “always a perilous path to take in a democracy, wherein the voice of the people is the voice of God.” Well, since anywhere between 68 percent and 90 percent (depending upon the poll) of the American people are against massive immigration (legal or both), I guess God has spoken, and Kerstein is on the same side as Pat Buchanan.
The only problem with this is that I agree with it.
The Right is invested in blaming the government and the poor, facts be damned. There is a tremendous amount of mental gymnastics employed to avoid the conclusion that a big chunk of the problem was greed and wholesale memory loss that these mortgages based products were huge moneymakers, the greatest thing since sliced bread.
One thing the free market would not have is the conversion of corn and soybeans (food), into fuel. This is a government sponsored idea, that raises the price of food enormously! Watch food prices rise this year. This is a dictate ,designed wholly around ideology! It is done to subsidize an industry, farming, that in a free market, produces excess food!
While everyone argues about who is at fault- parasitic people having no business getting home loans or government that forced lenders to give loans, you fail to see the actual event that precipitated everything. Computerized trading of the financial markets, particularly commodities and especially oil. How these systems used to work is traders would see trends and events and make trades based on them. The first to spot the trend made the most, the last on the boat usually sunk with it. That is free market. Today people do not trade, computers do and in order to be first on the boat, the algorithms are looking at more data, many which have no bearing on free market forces. Because of computers, many trades are made today that would not have been made when people, in prior years, had to make the conscience decision to trade. These non market forces are becoming self fulfilling prophecy and result in wild market swings. Note: in the 80′s the average P/E of the Dow was about 15 and nobody touched stock above 20; today 25 is normal.
One year before the real estate bubble burst oil went from $48 a barrel to $150 with no real supply and demand issues. This in turn drove up prices on nearly everything else. The inflationary pressure caused upward pressure on interest rates. This caused Libor and Prime to go up. As a result ARM rates went up faster than anticipated. This generally lowers housing values. With the number of people marginally able to afford the homes they lived in, the increase in costs of food and energy caused many to fall behind in their mortgage payments causing further downward pressure on housing values. And then the problem snowballed.
Would this have happened regardless? Maybe, but the rapid rise in oil, with no logical explanation, surely exacerbated the problem. And this increase did not occur by free market forces.