Yesterday, in a snarky post about Matt Welch (and again, someone I genuinely enjoy reading), I asked the following:
“Do our libertarian friends at Reason feel the same way about those receiving welfare?”
In my email this morning, I found a link to this Jesse Walker piece:
“What gets people upset, and rightfully so,” President Barack Obama declared last week, “is executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers.” Pounding his fist, he announced that the flood of federal money into corporate hands would cease, effective immediately.
Ha! No, of course he didn’t say that. He announced that henceforth, when taxpayers subsidize a failing Wall Street firm, the company will have to cap the boss’s pay at $500,000 a year.
It was merely the latest effort to expand the bailouts into a behavior modification program. When Democrats proposed a subsidy package for Detroit last year, for example, the plan included another set of limits on executive pay. Not to be outdone, the Republicans countered with a requirement that union workers agree to wage cuts. But for the most part, the idea of using the taxpayers’ money as a Trojan horse for new controls has been a Democratic enthusiasm, not a Republican one.
***Are there differences between old-fashioned workfare and corporate workfare? Sure. At least some of the original workfare plans were devised to make the dole less attractive, for example, whereas Washington seems intent on bailing out even those banks who claim they don’t want the money. But the most important difference is simply one of scale. Put together, food stamps, Supplemental Security Income, and Aid to Families with Dependent Children rarely rose above 4 percent of the federal budget. If only that were true of the Troubled Assets Relief Program. Say what you will about AFDC, but there never was a risk that it would saddle the Treasury with enormous, unpayable debts. That put a different spin on the old workfare debates: Whatever trade-offs you made between extravagance and intrusiveness, the larger social impact would be limited.
That isn’t true of the bailouts, and that leaves policy makers in a double bind. It is absurd to give out trillions of dollars without demanding some sort of behavior in return. And when we’re directly subsidizing CEOs’ lifestyles, every misspent penny is going to spark a new wave of resentment. When the chiefs of the Big 3 came to Washington in private jets, they might as well have pulled up in welfare cadillacs.
***There’s a reasonable case to be made that CEO pay is often inflated, a result of the sort of self-dealing that’s possible when the people who control the company are not fully answerable to the people who own it. The least sensible way to address this is by moving decision-making power even further from shareholders and into the arms of the government. You might as well try to teach a mother personal responsibility by institutionalizing her in a group home.
Now, I have excerpted this, so read the whole thing. But tell me if you aren’t in the same bind as me by the time you get to the end of it- “What is he actually proposing?”
Is he proposing we simply stop propping up the financial system? That would be a fair argument that some have made. Some on the right propose just letting them all fail, others on the left propose nationalizing. If we just let them fail, then what? Do the libertarians have a plan for the coming dark decade? If so, is it more than just capital gains tax cuts to combat the widespread and inevitable poverty?
Is he proposing that we continue to prop them up, but do nothing to regulate how they spend the money and pay no attention to excessive CEO pay and what not? Is the libertarian position that once you have violated the first order principle of giving money to these banks, then you do nothing lest you violate the principle of non-interference of private industries? And if so, does that deal with the reality that these no longer are really “private” businesses now that they continue to exist solely because of government support?
Is he proposing we just end welfare? If so, does he honestly think that is tenable? Is he proposing that we limit the regulations we impose on recipients of welfare?
Or maybe the piece was just a documentation of what has happened, and not an attempt to propose anything. If that is the case, then how do libertarians ever expect to have their ideas advanced when they simply refuse to move from the land of the ethereal to to the real world, where a course of action is required? I know I am not the sharpest tack, but I have read that three times and can not figure out what, if I were to vote for Jesse Walker, he would do.
And I don’t mean to pick on either Matt or Jesse, both of whom are people I read and like. It is just that when I read libertarian economic critiques these days, I get to the end of them, am mad as hell and just as mad as the authors, but then I calm down and ask what they wanted to do, and at that point things get thin. Compare that to their decisive, clear, and unwavering positions on issues like marijuana laws, no-knock raids, police abuses, and so forth. Does anyone have any confusion about what the folks at Reason would do in regards to no-knock raids? I don’t.
Go read the piece. What do you think they are proposing?
Zzyzx
Well I think they have a problem in that they can’t say what they want to propose because I think to some degree even they know that it wouldn’t work and it’s definitely politically infeasible.
My belief about the economy is that we need both the free market and regulation but the correct path at a given time changes due to what had been done in the past as fixing a problem creates new ones. So we need both die hard libertarians and socialists to argue for their cause and to push things in their direction when the time is needed for their solution but things would be horrid if either actually won for good.
uh_clem
Libertarianism, like Marxism, is a very useful tool for analysis.
However, as a prescription for actually implementing solutions, both fall painfully short (or worse).
So, don’t expect a constructive solution from our libertarian friends (and if they provide one, don’t touch dare touch it.)
GSD
Please don’t interfere with our Burkean circle jerk by injecting the concept of actually spurring us into offering constructive actions as opposed to an endless parade of overly wordy armchair critiques.
-The Libertarian Parlour Club
Lit3Bolt
He’s proposing that you stroke his need to appear reasonable. Faster, bitch.
taylormattd
Maybe he is proposing free weed for all?
Zzyzx
Oh and when I officially gave up on Libertarianism is when I was on the boards for the free state project – the people who want all libertarians to move to NH and take over the state government … it’s an interesting idea but trying to get all of those people to choose the same state way beyond the group – and someone told me, "How dare you tell your neighbor that they couldn’t keep a nuclear bomb at their house. Who are you to say what they can or can not do?"
Yeah, because there’s no chance they could miscalculate their skill and blow up me too…
Lev
The drug-centeredness of modern libertarianism is enough to turn many people off to it completely. I’m not unsympathetic to their concerns but it seems like that’s their signature issue instead of, I don’t know, economic policy or something of that sort. Honestly, I don’t want to take advice from people who think the biggest problem in American society is the drug war. I can think of a dozen more pressing concerns for which libertarians have no answers.
Xecklothxayyquou Gilchrist
What do you think they are proposing?
Tax cuts and marijuana.
jenniebee
Go read the piece. What do you think they are proposing?
More cowbell?
Makes as much sense as anything else.
Of course, you can pretty much boil the entire "philosophy" of modern libertarianism down to: "Get off my lawn! You’re trampling the weed!"
Tim H.
If I read it right it’s:
Don’t try to interfere in any way with an executive’s ability to grab money. It won’t work, and if you ignore this obvious fact you probably shouldn’t bail them out at all and save the money.
jlo
Perhaps he’s proposing we do nothing and see if the system fails. Then after society has collapsed into Mad Maxian chaos I can feel justified running over him in my tricked out armor plated (with machine guns) Toyota Matrix because he was one of the ones stupid enough to want to do nothing.
flounder
Larry Kudlow just told me that if you stop banking executives from hiring Sheryl Crow for executive parties at golf tournaments and birthday parties, they won’t be able to engage in any insider trading during rounds of golf. Eventually country clubs, without this (TARP) corporate welfare, will close, and Larry Kudlow won’t be able to play golf. At that point society as we know it ends.
Maybe other libertarians (economic) like Larry, are saying that if you make it harder to pay country club dues, they won’t get to play as much golf.
Just Some Fuckhead
Libertarianism as an economic philosophy isn’t any different from conservatism. But there is a solution: legalize all drugs and libertarians will mercifully just go away and we won’t have to pretend to take them seriously anymore.
jibeaux
Their indignation over "controls" and "behavior modification" doesn’t make any sense to me. You are talking about private businesses who want a handout from the taxpayer. If we want to make as a condition of our handout that the CEOs have to wear purple lederhosen and sing Danke Shoen off the top of the Sears tower to get our money, then so be it. They can go to iTunes and start rehearsing, or they can decide maybe they’re not in such dire straits after all. That’s really all there is to the story.
KDP
My libertarian coworker would say that the proposition is that control of executive compensation should be in hands of the shareholders through the board of directors. So, he would propose a massive shareholder revolt telling the BoD that they must stop funding executive failure at inflated rates. For those invested through mutual funds, he would propose that you write to the mutual funds saying that you will withdraw your money.
This was his response when I proposed sending a letter to AIG telling them I was prepared to remove my business from 21st Century if they did not reverse bonuses, as I did not want my money going into AIG coffers.
Of course, to be effective, his strategy requires just as much group action. Shareholder revolt requires people to stop voting their shares by proxy and/or write to all of these boards demanding that executives not be rewarded for failure.
And, aren’t the taxpayers now shareholders in these propped up banks? As it see it, based on the very argument that shareholders should dictate compensation through the BoD, it should be within libertarian principles for the government to define the rate of compensation paid to the executives running the corporations in which the taxpayers now own a share.
The problem I have with the libertarian philosophy is that it presupposes that everyone will take personal responsibility and be held accountable for their choices, and that the self-serving principles by which people act will not have a negative effect on those around them.
John Harrold
I think the title of the article:
is a pretty good indication of what the article is about: There are secondary effects of accepting bailout money that people may not be aware of, the article then attempts to illustrate those.
wilfred
I doubt they have a cohesive policy thought out, although there are plenty of alternative proposals being floated about. I would think that this is fertile soil for a new political party, not necessarily Liberatarian, that could ceretainly come with less ideologically tinged solutions than those put forth by the current group of morons.
This is a time for skepticism, not blind belief. Any system that is so fucking dependent on living on credit and borrowed money can’t be that good. Realizing that opens the doors for some creative thinking, certainly more creative than borrowing yet more money.
Josh Hueco
What I want to know is, were libertarians all latch-key kids when they were young, and their sullen cynicism towards government an outgrowth of their disappointment that the grownups weren’t there to raise and nurture them like they should have been?
Robin G.
Libertarianism seems to keep having a Lincoln/Douglass debate ("Is this right?") while everyone else is having a policy debate ("Will this work?"). There’s plenty of room in the world for L/D, but if you’re going to be using it with regards to governmental recommendations, you’d better have a policy aff waiting in the wings.
No, I’m not a debate geek, why do you ask?
MH
One huge, glaring fallacy the authors make is in their description of the Democratic program as trying to make the bailouts into "behavior modification." This is "understanding the concept of incentives" FAIL.
All government action* incentivizes certain behavior. A lack of financial regulation and low capital-gains taxes incentivizes bubble-business policies, for instance. The Democrats are simply adjusting those incentives towards more productive ends.
As always, the libertarian fallacy is to assume it’s only the other guy who has an ideology.
.
.
.
*(indeed, all private action as well, although the varied actors of the priavte sector tend to cancel each others’ incentives out more often than the heavy hand of the state)
jenniebee
@jibeaux:
Amen, brother. They want our money, we want them to act responsibly. But if we say "quid pro quo" they accuse us of being Hannibal Lecter. Instead of rectifying this disaster like reasonable people, they’re giving us the option of either giving them everything they want and blowing them kisses for taking it, or else playing chicken with total economic collapse.
I don’t know if the revolution will be twittered or blogged, but its motto is definitely "What Now, Bitches?"
jibeaux
@KDP:
I agree with that completely, as long as you take out the part where we’re giving them our money.
If you can’t put limitations on that money, I don’t see how you get around what Jon Stewart mocked along the lines of "you spent the money on a corporate retreat? But we gave that to you to create jobs! That violates the conditions we didn’t put on the money!"
cleek
the system cannot fail. we can only fail the system.
The Other Steve
I’m struck by the people complaining about giving money to people who made bad decisions buying houses. Ok, fine… but I’ve lost $60k on my house already and allowing my neighbors to foreclose may cost me another $40k.
Is it so wrong on balance to give $10k to my neighbor to get them out of this trouble?
A better analogy might be a battle. You know you are going to lose soldiers, but you also know the ground must be taken. The battle plan is factored upon minimalizing that loss. You don’t send infantry alone to take a town defended by tanks and machine gun nests. You have to back them up with artillery, air support and such because otherwise they’ll be slaughtered.
There’s an obvious understanding there though, that the good outweighs the cost of the bad.
Solutions are never perfect. There is no perfect solution to this financial collapse, however we can do good on balance.
Sitting their sniping claiming it ain’t perfect isn’t helpful. Complaining and offering advice on how to make it better would be.
The Other Steve
@KDP:
I’ve seen companies who have gone through extreme efforts to keep the shareholders away from the public meetings. Holding them at resorts in Bermuda and what not.
DougJ
I don’t know but his point about the total expenditure of food stamps etc. is a very good point. So I think he may have something intelligent to say here and I’m just not getting it yet.
wilfred
The Machine just stopped.
Nothing’s perfect, sure. But in the infinite series between doing nothing and doing something there has to be a better solution than giving taxpayer money to the banks, which will then turn around and lend the taxpayers their own fucking money at interest and use the points to pay to stay in a business they’ve already proved they don’t belong in.
Include me out.
OneMadClown
…the free state project – the people who want all libertarians to move to NH and take over the state government…
I live in NH, and in case there were any doubt, DO NOT WANT. We have plenty of homegrown nuts, no need to start importing.
But in so far as the drug issue goes, its one of the few positions I can give them credit for. Legalize and tax weed at the rate of tobacco taxes ($7 billion for the fed and $19 billion for states in 2007), and stop wasting money on marijuana prosecutions ($7 billion + savings). Its a drop in the bucket, but for state governments like mine, it could possibly erase our looming budget deficit.
Plus I like to get high.
QrazyQat
They’re proposing the little question marks that made up step two of the underpants gnomes business plan.
Balconesfault
Economic libertarianism fails, imo, because libertarians fail … no, steadfastly refuse … to deal with one fundamental truth.
Nobody created the land. Property boundaries are absolutely artificial constructs. There are only two ways that someone can "own" land – either sitting on the back porch with a gun and shooting anyone who violates their "property rights" … or having Big Government around to protect their property rights for them.
While some libertarians are stupid enough to embrace the "sitting on the back porch" thing, most at least realize that this would just lead to "bigger gun consortia" who would use large paramilitary forces to expand their land holdings. So they understand Government needs to be around to do the metes and bounds thing.
But there is a social contract in place, as soon as Government starts doing that. The landowner has do give something back to society to incentivize society allowing them to "own" those umpteen acres that they may have lawfully purchased, but which originally became someone’s property only by virtue of a government decree.
They’re not really into that "giving something back to society" part of the deal, selfish little bastards.
Jon H
" The least sensible way to address this is by moving decision-making power even further from shareholders and into the arms of the government. "
Dude… the government ARE the shareholders now, effectively.
John Cole
@DougJ: That is what drives me nuts. Sure, they make good points, but then what? I mean if the entire point of this was to point out there may be unintended consequences of limiting CEO pay when they are on the dole, that really doesn’t give us much to work with, does it? I just don’t get it.
And I’m afraid they are going to think I am hostile to the cause, which I am not. I just don’t get what they want to do o how they think it will make things better.
Jon H
"I live in NH, and in case there were any doubt, DO NOT WANT. We have plenty of homegrown nuts, no need to start importing."
In any case, it was a poor choice due to the proximity to Boston.
Even if the libertarians were able to take over the state and turn it into a tax-free libertarian utopia, all the liberals would move in from Boston to take advantage of the tax benefits, and in short order they’d be in the majority, and it would start reverting to the mean.
They should pick Wyoming, they’d be safe there.
cleek
next plane for Somalia leaves in three hours. start packing.
liberal
@uh_clem:
Nope. Neither is a useful tool, since both of them like to pretend that "land" is "capital," when in fact it isn’t.
wilfred
@John Cole:
You’re being too hard on them. There was never as compelling a reason for a viable third party as there is today. When better, more thoughtful people start looking for alternatives to the two parties that got us into this mess than they’ll be able to formulate positions.
wilfred
I’m not very far from there now. I can think of a few better places to ride out the end of the economic world, like where I am at the moment.
Xanthippas
That would be all well and good, if corporations were not structured to place power in the hands of CEOs who then "direct" who ends up on the Board of Directors. The single class I took on corporations in law school was enough to teach me that the system is gamed by high-powered executives, which is why despite one high-profile corporate flop after another (Enron to AIG) executive compensation only continues to rise. Those execs won’t stop themselves, and no one else can either. You know what’s necessary? A reform of the laws that govern corporate formation and structure. You know who would oppose that? Libertarians.
Ailuridae
Paul Samuelson had just about the best explanation of the problem with Libertarianism this past fall in Der Spiegel
The libertarian critiques don’t appeal to me in any way. They are lot like reading the writings or Ayn Rand – its simply a juvenille world view that can never provide a prescriptive solution for any problem (save Marijuana legisaltion of course.)
wilfred
@liberal:
Not exactly. The Marxist rentier just evolved into the merchant banker. Since Mrax was writing at the dawn of market capitalism it was acutely prescient of him to see the conversion of land into re-financed mortgages
KG
I’m fairly libertarian in my leanings, and I can’t speak for the rest of them, but my approach would be this:
1. let the financial sector fail. it sounds terrible, but poorly run businesses fail all the time. new, better run businesses will take their places, it may take some time, and yes we have become impatient, but perhaps a lesson in patience is what the world needs now.
2. to ease the fall a bit, rather than nationalization, I would suggest chartering the Third Bank of the United States. This is one of those areas where I don’t have much problem with the government as a market-participant.
3. start enforcing anti-trust laws again, if a company is "too big to fail" then it should get the Standard Oil Treatment ™.
4. eliminating welfare is not going to happen, nor should it. but, much like medicare and social security, leaving a system in place that was designed for a much less dynamic economy, and a (for lack of a better word) simpler time, is also foolish.
5. unlike some, I recognize that regulation is actually necessary to protect a "free market". In a society the size of ours, unrestrained capitalism will lead to oligarchy in short order (some would argue we’re already there). So, sensible regulation with periodic review would be nice.
Ultimately, it comes down to balancing governmental power so that it is strong enough to protect individual liberty while not being strong enough to destroy individual liberty. Delicate balance, that.
b-psycho
That’s basically an admission that the entire concept of holding shares being equivalent to ownership — in the sense of control — is bullshit. It’s the same indictment routinely (and rightly, IMO) made of government, that of unaccountability to those depended on for resources, applied to the corporation.
Someone at Reason suggesting this!? Congrats, you just found a fucking unicorn…
To Xanthippas’ point: Incorporation itself is a creation of the government, so an argument can be made that they can restructure it however the fuck they want & the executives have zilch of significance to say about it. In principle, I’d rather that such artificial privilege just be destroyed, but if you’re dead set on reform feel free.
D. Mason
Things like this are what stop me from being a Libertarian. I agree with a lot of their stances… Especially as it relates to government intrusion in individual lives. I think both Democrats and Republicans are pretty much wrong on the economy(though Republicans are clearly more wrong) and Libertarians sometimes offer a few valid points(spend what you like, we’ll print more will eventually fail) but that’s where it ends.
It’s clear to me that something drastic has to happen in terms of how our economy operates on the whole. But what? I would love to hear some of these Libertarians, who are so quick to point out problems as you have demonstrated, propose a few things we could do to get back on track in the real world.
Zzyzx
Wyoming or Montana would have been a much better call… agreed.
The other thing about Libertarianism is that we’d be a lot LESS free under their rules. No public property means no real first amendment rights. No restrictions on contracts means that it would be trivial to create a class of indentured servants through confusingly worded non-compete clauses… Unless you want to have a lawyer present for every transaction you ever make, restrictions on contracts are important… one of the reasons our system works is because people understand that there’s an extra level of protection.
The Moar You Know
Someone needs to explain to them that Mad Max was a work of sci-fi cinema and not a training film.
Surabaya Stew
Thanks for the link; it is good to be reminded why I am not a Libertarian. (You are correct about Matt Welch being an enjoyable read, but I have found that every fourth or fifth column of his is barely tolerable.) As much as I admire many of their goals, Libertarianism is simply not ready for prime time.
In fact, the very page you linked to has an add for a John Stossel special; this only serves to highlight their shortcomings in the PR department. Stossel is so damn trite and condescending that his good ideas are inevitably overlooked while he plays the blame game with his bewildered interviewees. He a cold spokesman for a cause that deserves better.
gwangung
That’s something people forget. Corporations can gang up on individuals, because it’s literally many on one; they have the advantage in time, money and expertise. The only way to do that is for an individual to bring in a collective him/herself, with just as much time, expertise and money. That’s usually either a union or the government.
I’m open to alternative solutions, but just from a sense of fairness, folks should be able to call upon equal resources…
Maus
"how do libertarians ever expect to have their ideas advanced when they simply refuse to move from the land of the ethereal to to the real world, where a course of action is required?"
That’s just it, "the TRULY free market will regulate itself" is their mantra.
Any abuses of the free market that come to light were "caused by government influence", regardless of whether they would exist independent of underfunded and neutered government "watchdog" agencies staffed by lobbyist-approved agents.
It never fails to surprise me how otherwise grown adults, long past the usual college Rand-fascination get stuck in the manchild "MORE FREE MARKET!!!!" mindset. Oh, they’ll improve self-regulation of industry, but only when the pesky government leaves them completely alone.
I’m hardly anti-business, but I’d love to see non-white collar criminals use the same negotiating tactics with law-enforcement agencies, and try to sell the public on the same.
Maus
Libertarians don’t "forget", they willfully deceive when they compare small businesses to businesses that have every advantage of scale.
Shygetz
@KG: I’ve actually advocated government participation in the market for a while. For industries that are largely centralized and vital to national welfare, I think the government should own and operate one company in the industry and operate it as a non-profit corp. This ensures that there will always be at least one functioning provider in the industry, it allows for centralized control of prices through competition, while requiring the company to remain solvent, and does all of this without direct control of private properties.
mark
Heh, I blew up on one of Matt Walchs post last night after reading him snark on Obama. He may be a good writer, but right now reason is too busy trying to snark Obama without really bringing a good reasoned (no pun intended) discussion of the issue.
They’re really exemplifying a peanut gallery over there with regard to Obama. And worse, it’s a peanut gallery that isn’t doing a good job of explaining themselves. And even worse than that, they’re trying to claim contradictions when they don’t exist.
John S.
Holy shit, I agree 100% with wilfred!
These are strange days we live in…what’s next, cats and dogs living together?
Shinobi
I think one of the problems I have with Libertarianism is that it is a philosophy without any care for human suffering. If the economy fails people will suffer. And it isn’t the executives who are going to suffer, unless by suffer you mean "have to sell the house in the hamptons and fire the maids."
Poor people are really going to suffer, they are going to go hungry, be stuck on the streets. Crime rates will go up, and people are going to be pissed.
"Oh but we needed to reform welfare because 1% of people who had it didn’t really need it and we’d rather see millions suffer than a few people profit when they shouldn’t." Unless of course we’re talking about people who are already rich. They should always profit.
John S.
Any school of thought that relies on espousing what they DON’T believe in rather than what they DO believe in is unlikely to do so.
Cyrus
@KDP:
Group action requires organization and a major time commitment. Like someone upthread said, if you don’t like how the company is currently spending the money that’s theoretically yours, you have to go to Bermuda to stop them. Or send someone to Bermuda. In addition, the people who don’t like the current system are almost always less powerful than those who do, or they would have already changed it. So even if representation at a meeting itself wasn’t a problem, there’s some kind of uphill battle. Suppose it’s a simply numerical disadvantage: 55 percent of shareholders at AIG approve of the current leadership for some reason. The remaining 45 percent have basically no legitimate recourse within the company itself other than saying "pretty please."
However, why limit themselves to action within the company? Those shareholders could ask for cooperation from current and future customers of the company, from shareholders in other companies, etc. Again, that cooperation would take organization. For the moment, let’s call such an organization a "department" of "commerce"…
Mrs. Peel
It’s hard to say. But never let go of the underpinnings that Libertarians are just Republicans who don’t want to sit in the same corner with the bible thumpers & snake-handlers. Even though their politics are damned near identical.
Given that understanding, what ever he’s trying to say is just going to end up pissing you off when it becomes clearer.
itsbenj
Well, the Libertarian plan for the coming "dark decade" would be something like this: smoke lots of pot, and stock up on weapons and gadgets and rugged individualism so that you can personally act to preserve your own few remaining rights in the Mad-Max-like scenario which is about to unfold.
The Republican plan for the bad times should no rescue be attempted would be something like this: fuck you, shut up, stop complaining, or we’ll send people to hurt you.
TenguPhule
John, that *IS* being hostile to their cause by their definition.
Comrade Stuck
Libertarianism, like Conservatism should be confined to impolite discussions at Dinner Parties and Blogs. Like doctrinaire Conservatism, It also lacks a "program repair function" grounded in pragmatism. And often taken to it’s natural progression in actual situations of governance, starts to resemble anarchy. In comparison, the political concept of true progressivism, the over riding idea is for finding what works and doing it. Until it doesn’t work, then fixing it or trying something new. And I don’t necessarily equate Liberal of Left wing dogma as automatically "progressive". It can be without the dogma part and a "program repair" function based in the pragmatic. And, once upon a time there were creatures that were progressive conservatives. They have long since become extinct and may be buried alongside TR.
TenguPhule
My plan is to supplement fishing and farming with the occasional roasted Republican.
In lean times they will be dried and salted.
And every winter a fat rump roast or cooked GOP goose.
Kirk Spencer
@D. Mason:
Well, the one I see most frequently cited is "return to a gold standard." I happen to think that’s idiotic, myself. Heck, I’ll steal the thread a moment to explain why.
Item 1 – Gold (or commodity) backed currencies are subject to manipulation, with a typical result being deflation (with attendant panic-level depression). The short example (not proof) is that no nation with fiat currency has experienced deflationary depressions unless specifically intended by the government of that nation. The GD? We were still tied to gold (fractionally).
Item 2 – transition issues. Set aside for a moment that if the US goes to gold-backed and nobody else does we’re subject to nasty manipulation, consider the change of current "money" to gold. We can keep the rate at about $3,000 per ounce only if we wipe out (nationalize) all monetary value beyond M1. Or to make it more plain, if we make one new dollar equal approximately 5 old dollars – a deflation rate of 80%.
Item 2a – usability issues. If an ounce of gold is $15,000 (or even $3000), how do I shave off enough to buy a six-pack of beer? The "obvious" answer is that I can use a representative coin for that 1/3000 ounce of gold. The problem is that according to base principles I can insist on paying gold – and getting gold in exchange. I can take the AUG$1 coin to the bank and receive 1/3000 ounce gold in exchange. If I – and many of my peers – decide in our worry we want our gold, we create a run on the bank.
Item 2a is historical – it’s the basis of runs on the bank.
For what it’s worth, this pattern occurs in most libertarian solutions I’ve seen. The recommended changes have problems of their own, problems that in many cases have been shown to be worse than the ones they’re intended to fix. As a result, while I think the notional principles of libertarianism are appealing, the practical application fails.
Jesse Walker
Hi, John. I didn’t really write that particular piece to advance a proposal, though I think it’s pretty clear that I don’t think the companies should be getting money in the first place. Once you’ve started bailing businesses out, you put yourself in the double bind I describe.
So do I have a counterproposal to the stimulus/bailouts/etc.? Yeah. Here it is in two oversimplified parts:
1. We’re in a recession because of malinvestment, and if we try to rescue those poor investments we’ll only be (a) delaying the day of reckoning while (b) creating new problems in the meantime, such as the inflation that’s likely to start hitting us soon. So we shouldn’t try to prevent a necessary market correction. The government should not be propping up corporations that need to restructure or go out of business. It should not be reinflating house prices that that have been overvalued. It should not encourage new spending among consumers who need to start saving instead. (I’m generally against "stimulus" measures, which historically haven’t worked — and yes, that includes the tax cuts the GOP is pushing. I may well favor tax cuts for other reasons — indeed I do favor them for other reasons, and am especially pleased that someone’s finally taking a knife to the payroll tax — but the push for them on stimulus grounds is dishonest.)
2. So does that leave no room for compromise between my hands-off libertarian attitudes and the preferences of liberal Democrats? Actualy, it leaves an enormous room for compromise. Just because the government shouldn’t try to prevent a market correction doesn’t mean it can’t help people who feel the pain that goes along with that recession. I’m not bent out of shape about temporary increases in unemployment insurance and food stamps, for example. I’d be amenable to even larger relief measures if the tradeoff was that the government halted the bailouts and related programs. That’s the compromise I think free-marketeers in Congress should be pursuing, not the Republicans’ "Let’s see if we can get some tax cuts to go along with all these spending increases" approach, which doesn’t strike at the problem at the heart of the bill.
different church-lady
They are proposing "every man for himself"
It’s what they always propose.
b-psycho
Another personal rebuttal?
Man, I guess in the new America Reason reads YOU…
Comrade Stuck
@Jesse Walker:
Maybe. Most here would agree, I think. I was against it too, until it became obvious that it was an economy wide problem and the consequences of letting them fail without trying to build a money bridge for a softer landing, would likely sink the economy into a depression. The same goes for reinflating house values, until you consider the devastation that would result from so many people losing their homes and equity.
This is an obvious great point, in hindsight, and for future sight. If we were in a normal downturn, then I would agree. And if Obama ONLY proposed a cash stimulus, certainly so. But his plan is much more than immediate stimulus and is comprehensive, and every new dollar that gets spent is better than no dollars in a frozen economy. Nobody knows if it will work this time with all the other measures, but the negative feedback loop is upon us and if it gets a foothold then we will have a lost decade for sure, IMO.
And I think you are comparing Obama to Bush’s approach of just throwing money at the big banks and letting them reform themselves. I think Obama has vowed not to let that happen and I will give him the leeway, for now, to carry out that promise of reform/bailout.
b-psycho
@Kirk Spencer:
The current monetary structure plainly doesn’t work either, but no one seems to have a 3rd idea. Is there any alternative that’s flexible, yet doesn’t allow the government to screw it to goose speculation?
Brachiator
There’s half a point to be made here. There are Democrats and "progressives" who have a bug up their ass about "income inequality." They truly believe that the world would be a better place if CEOs and other wealthy individuals had some kind of income cap imposed on their earnings.
Of course, this strangely bypasses more draconian remedies, such as putting a bank CEO in jail or at least firing them (as happened with some of those involved in the S&L crisis a few years back).
By the way, the Brits are having similar problems over the question of how to deal with the heads of failed banks:
But libertarians never have a real solution, nor any means at arriving at a solution. They merely have a philosophical world view. Marxists, evangelicals and Islamic fundamentalists think much the same way. All these types just "know" how the world should be. It doesn’t matter whether there is any way of getting to the promised land or whether the results are achievable or tolerable.
D. Mason
Nothing coming out of Washington will strike at the problem at the heart of the bill because the problem at the heart of this particular bill is Washington. Simultaneously entering and exiting the same thing at the same time… The science doesn’t work.
The Other Steve
I rather have a job.
eyelessgame
Guns. Guns and pot.
Wisdom
After decades of telling you liberals and ‘conservatives’ that your world was just one giant ponzie scheme, you have nothing to offer but scorn to those who were right. The only candidate who actually talked about this impending disaster was fodder for your yuck-yuck echo chamber.
Now that you have dug the hole that has destroyed America, and are tossing more of the peoples money into that bonfire, you demand that the libertarians reply to your snapping fingers and come up with a 5 point plan that will save your quaint notions of life.
Heh.
While you will not listen, here is a suggestion. Buy some land away from your liberal enclaves. Learn to cut a tree down, build a house, how to farm, how to hunt and how to skin an animal. Buy warm clothes and stock plenty of supplies. There are plenty of real Americans out here who will be happy to help you once you are over your superiority complex.
For the rest of you, we have plenty of ammo. Stay in your enclaves.
jibeaux
@eyelessgame:
And that’s *still* more than the Republicans have.
Thanks, I’ll be here, well, forever, probably.
Daulnay
The Libertarians won’t have a worthwhile proposal until they realize that large businesses are just as much institutions for governing people as organized churches and political institutions like states are. Until then, they have a huge blind spot that will cripple any proposal they make.
Why waste your time?
Shinobi
Finally a straight answer, thanks Wisom. The Libertarian solution is a rejection of specialization and a return to subsistence farming.
I for one welcome our new bovine overlords.
SBW
Jesse,
Excellent comments on part 1. We do need to concentrate on the malinvestment factor.
Comrade Stuck,
Exactly how are your comments not kicking the can down the road? From the 1980s until now, we’ve had numerous financial crisis — and on every one the conventional wisdom was– we just got to get through this thing right now! No time for debate about adverse impacts in the future! Normal people will get hurt!
And after the crisis passes, nothing is ever done to correct the source of the problem.
The end result — with each successive financial bubble, financial behavior becomes ever more risky and irresponsible, resulting in increasingly damaging impacts to the economy as a whole.
And here we are.
Tell me — during the tech crash, would you have argued for cheap money to be pumped into the system to offset the pain the public would have felt otherwise? As a public, are we better off now because we weren’t forced to take the corrective steps then?
If now is not the time for housing prices to reset to their natural levels — when?
If now is not the time to dismantle insolvent, failed financial institutions, when?
The Reason crowd may not have a plan, and are rightly mocked, but they don’t hold office. I still don’t see a responsible financial restructuring plan from this administration, and who, considering the opposition, are the public’s only hope.
terry chay
Libertarians are all confused because the capital market was supposed to fail because of runaway inflation…and the opposite happened. We were supposed to deal with the impending Fed collapse because we weren’t on the Gold Standard, and right now all the capital is moving to the U.S. dollar because all the other safe investments are having one massive freak out.
Give them a little while to re-read Atlas Shrugged. I’m sure Ayn Rand said something relevant about what to do when everything she ever said is proven wrong.
At least I can watch amused as Ron Paul claims he was right all along—“I was talking about VOLATILITY.” Right… :-D
James F. Elliott
The author clearly knows nothing of either institutionalization or group homes.
Michael
The only explanation is that the ossified culture of incompetence is brought about by a monolithic generational status quo among the monopolists and corporatists.
Plus ca change!
Michael
At some point, those who are bereft of economic stability and have no hope of ever seeing that economic stability reach for the only other tools in the kitbag. The first thing they reach for is political strenth, via the last economic tool they have available – their vote.
If that fails, they have nothing left to resort to, save violence. At that point, they have no vested interest in keeping the status quo ante. Yes, the beneficiaries of the status quo ante can moan and gripe about it all being so unfair, that it is just business, but those cries get muffled under the black hood as they get frog marched to a noose.
Comrade Stuck
@SBW:
You may have noticed my handle with a sarcastic Comrade pre- fix. I simply hate doing what we are doing with bailing out asshole bankers and Wall Street greed merchants. And that goes for the idiots at the major 3 as well . And I railed against all of it here and elsewhere when it began. But it has become evident to me that the sheer magnitude of the problem, if not addressed with government help, would sink us into a dark crevice of destitution the likes of which we haven’t seen, maybe ever. My concern is, as always, with the Ma’s and Pa’s Kettle’s of the world, and putting mass numbers of them onto the street and soup lines is not an option I will consider. And it may be "kicking the can" down the road, nobody knows, and if Bush were still presnit, or Mccain, then I would say we’re doomed regardless. Obama isn’t a Messiah but he is smart and competent like no other prez in my lifetime, and I have decided it is better to give him a shot at fixing this, and reforming as necessary. And if it fails, we are all royally fucked anyhow, and it won’t matter much the number of zeros we are indebted. So belly up to the counter I say, I’ll take my shit sandwich with pickles and radish.
Comrade Stuck
@Wisdom:
Can I haz me a Cave Woman too. Libertarians, the mavens of Chicken Littleism.
Jesse Walker
James Elliott: I’m not sure what you’re getting at. The line was a reference back to a part of the article that John didn’t excerpt in his post, about a paternalist proposal (which fortunately didn’t go anywhere) to compel welfare mothers to live in group homes.
Other Steve: I think the economy needs to undergo the correction before it can start growing again. But obviously, yes, the end aim is to return to growth and see more people able to work for a living, the sooner the better.
Comrade Stuck: I think there’s a more destructive feedback loop to worry about, and that’s the one SBW described—where "with each successive financial bubble, financial behavior becomes ever more risky and irresponsible, resulting in increasingly damaging impacts to the economy as a whole." (Anyway, I’d prefer my shit sandwich with melted cheese and salsa.)
Everyone: As an editor at a libertarian magazine, I’m as entertained as anyone (maybe more so) by jokes about libertarian gun nuts, potheads, Randians, survivalists, pie-in-the-sky intellectuals, pasty-faced suburban sci-fi buffs, etc. But there’s a difference between describing the obnoxious Objectivist you met on Usenet last year and engaging libertarian ideas. If you haven’t found the nuances in libertarian thinking, you might want to read more libertarians. (Translation: Subscribe to Reason! Just $19.97 a year! C’mon, it’ll stimulate the economy!)
The Other Steve
This MUST be mocked
There’s just so much there to mock. Although he has a point about Joe the Bumber, it’s still funny. :-)
Maus
The ones on GoldIsMoney are literally buying thousands of dollar store toothbrushes to use as barter for "the new economy".
Chris Johnson
Um, I suck at skinning animals, but I’m probably a lot better at making digital-signal-processing code do what I want than you. I’ve never cut a tree down, but I can help people communicate in a variety of ways and express their imaginations. People get pretty desperate for something to think about after staring at the ass end of an ox all day, plowing fields.
I think you’re gonna get REALLY fuckin’ bored sitting in your fortress, wrapped in animal skins, with a gun pointed out the peep-hole to guard your turnips from looters.
Normal people cooperate in a thing called a ‘society’ which does allow for collective action and some specialization, and you are a total fool to suggest the answer is to always be able to fall back on total self-reliance.
How about learning to make FRIENDS, friend?
Maus
An-Caps are usually just this side of Autistic, replacing the gub’mint with a series of lawyers and flimsy contracts they do not intend to uphold, nor protect with anything but mercenary force.
Admit it, you bought Fallout 3 solely for masturbation fodder, didn’t you :)
theturtlemoves
@The Other Steve: Yeah, what grand "American ideas" was he talking about that are conservative anyway? Queers and taxes are bad? The poor fellow is just as delusional as Joe the Half-a-bee, but admittedly more articulate in describing his fantasy world.
Michael
When you were in college, remember the nerd in the dorm room down the hall who had a problem with obsessive-compulsive Onanism? He became a Libertarian, and spends a lot of time fantasizing about using his many guns to rescue hot teen girls from ravaging hordes of urban scavengers. Afterward, they’d be grateful, and would happily share his warm bed in his private, well-armed, well-stocked compound, sometimes more than one at a time.
Sadly, the guy doing the fantasizing is 56 years old, pot-bellied, thrice divorced and suffering from gout, hypertension and a hiatal hernia. He couldn’t wheeze his way around the block, much less dash across a defensive position laying down a withering fire.
While in battle with the urban hordes, in between potty breaks mandated by his swollen prostate, he shouts "WOLVERINES! Stop the Porkulus!"
At least, so long as the battery on his electric scooter holds out, whirring along angrily.
Chuck Butcher
Libertarians always come down to the "rugged individual" and their "self-reliance." It’s like the imaginary world of "Wisdom" above.
The movie scenario of the resolute sherriff facing down the mob, "I can’t get all of you but which ones want to be the ones I do?" The reality is demonstrated by armies where the calculation is "it won’t be me." They make up a world and populate it with Rand’s fictional characters and expect to be taken seriously – then throw tantrums when they’re not.
John seems to be mistaking the ability to string words together well with making any sense, at all. It isn’t even the "ivory tower" kind of lack of common sense, it just makes things up and justifies them on the basis of making things up. They build an artificial construct and then state that you’ve messed up my construct by violating its rules.
The simplest rule is that of force, once you decided to move past that one you are stuck with keeping it at bay. Whatever system you propose, some are going to do better within it than others so a reasonable system will try to reduce the incentive for force being used to achieve redress. That is the complication they can’t deal with and why you won’t hear anything reasonable from them.
Comrade Stuck
@Michael:
LMAO!
Kirk Spencer
@Wisdom:
I’ve done all that. What I discovered was that I was lonely, that my first couple of houses still left me needing to learn some carpentry/wiring/plumbing skills, that a bad year sucks for a farmer relying solely on himself, that hunting only goes so far, and that fur (and leather) does not make good underwear. Oh, wait, then you stick in that I’m supposed to buy warm clothes and stock plenty of supplies. Believe it or not, that’s the sane part of what you said.
By specializing in something that’s of use to the community, the community pays me for my specialty. Because of this I have more people around, I have a house built by several skilled individuals, I have been able to buy food, clothes, and other supplies. And here’s the real knock-out — I have MORE than I did when I tried to do it all myself.
Yeah, you have guns and ammo. Thing is, you don’t have anything I want. And it’s not likely to happen.
One of the things that astounds me about all this is the number of people jacking for the End of the World – or at least Mad Max the Reality. Sorry, folks, it isn’t going to happen. Consider a couple of facts:
– The United States is still the number one manufacturing nation in the world (measured in dollars). That’s true even with "only" 20% of GDP being from the industrial sector.
– The United States is still one of the major producers of foodstuffs in the world.
Yeah, we’ve got a nasty economic situation pending. We’re in a recession, probably in a depression (at least by technical definition – ie by the end we’re more than 10% below GDP potential), and have a really large private/public debt. On the other hand, we’ve been through recessions and depressions before. As for the debt, it’s been a LOT higher in proportion to GDP. Despite 1865, 1873, 1893, 1929, and 1946 we’re still here. There are things that concern me in regard to this, but "total collapse" is not one of them.
b-psycho
Jesse: I suspect your sales pitch will go down as well as those "FREE GOVERNMENT MONEY!!!" ads Google thinks Reason readers would be interested in…
Besides, pointing out the Ponzi scheme nature of the US economy has deeper implications than even you acknowledge. I don’t think we’re even close to bottom. This is because of the choice to rest our economy on consumption for its own sake, only to decide rather than allow increased labor power — so people could get more money and, um, actually afford the ever-growing pile of shit they were expected to buy to keep it going — that no longer seeing debt as a bad thing was a better idea.
snds4x4
I have been working next to a Libertarian for over 25 years.
There are various types of Libertarians, just like Democrats or Republicans, (Ie: some are more liberal than others, etc).
The main reason everyone else doesn’t understand Libertarians is because they really pratice a form of what I call Darwinism. The strong and smart survive and the weak and dumb die off. It is as simple as that.
Government should only be involved in areas like infrastructure, police, fire protection and a few things like that.
Any laws governing behaviour should be limited to crimials who hurt other people. And maybe a few anti monopoly type of buisness laws. Otherwise, let the chips fall where they will. They laugh at the thought of making things fair, because life isn’t fair, so deal with it.
This may be a over simplification, but I think I’m more or less correct.
Kirk Spencer
@b-psycho:
Really? It doesn’t work?
I’m not convinced of that. Not yet, anyway.
The core of the Keynesian belief is that we can ‘smooth out’ business cycles, making the upswings last longer while reducing both duration and depth of the downswings. We’ve been sorta applying the theory in practice for about 80 years, and so far it’s stood the test.
There’s this concept running around a lot of … I’ll call them black helicopter blogs though that’s not really fair … that "every nation that used fiat money collapsed", and the fiat money was the direct cause. There happens to be a small problem with the claim — prior to the 1900s, no nation ever had a fiat monetary system. Fractional, yes. (One of the problems of the Confederate Dollar demonstrates what I’m saying. The CSA printed a crapload of paper that made each dollar very fractionally backed by gold and silver – but still backed by gold and silver. A silver Peso could be used to buy about the same quantity of something in 1861 and 1864, but you needed almost 50 times as many confederate dollars to do the same. It’s the classic argument gold bugs and libertarians make as to why gold is money, but in reality it’s only applicable WHEN gold is money.)
SBW
Comrade Stuck,
I’m definitely not against government intervention, just the type. It’s a bit rich for anyone, but almost always Republicans (and some libertarians), to complain about the stimulus raising the national debt when our former president was truly the $10 trillion dollar man.
However, I don’t see Obama — or the financial advisers he picked — as being committed to a radically different path than what you stated (to paraphrase): ‘throw money at the banks and hope they reform themselves.’ Nothing so far has indicated otherwise. What’s a failed stress test going to result in — more taxpayer funded capital injections into the same financial organizations, with the same management teams?
Perhaps you are right, and Obama and his administration are waiting for the best time to strike. I hope so.
But without reforms, and with lots and lots of wasted taxpayer money, we may muddle through this and end up in the same place again in 2025. (Unless there is a society-wide change in the way rigged ‘free markets’ are viewed.)
AnneLaurie
This is so effin’ perfect, I just wanted to savor it again.
As my late dad used to say, "A Libertarian is a Marxist who can’t even *pretend* to be interested in other human beings."
This has pretty much happened already, which is why NH’s electoral votes went to Obama. The people moving out of "Taxachussetts" because they wanted cheaper condos and no state income tax didn’t always call themselves ‘liberals’, but they eventually discovered that they liked well-equipped schools for their kids, well-paved roads in their new development, and fast-response professional EMT service when they got chest pains. Amazingly, it turns out that using ‘tha gummint’ for the collective action necessary to provide such goodies is more cost-effective than paying for private schools, self-supporting toll roads, and personal hospitals! — who knew?
And while the hardcore Libertarians are free to move to one of the more sparsely-settled ‘personal responsibility’ states (like Idaho), most individual Libertarians of my acquaintance prefer living within range of the much-derided "Creative Class" enclaves. Because if you’re not Ted Turner, it’s hard to find good ethnic restaurants, or quirky little boutiques, or even high-paying knowledge-based employment in Wyoming.
Comrade Stuck
@SBW:
I pretty much agree with everything you say in this comment. My understanding is that later on there will be considerable re-regulation of the financial markets in forthcoming legislation, and the new Bank Bill will have reform measures for internal banking procedures. We shall see/
b-psycho
Kirk, I already said I’m no goldbug. If anything, the dollar has been tracking oil by default (making us very lucky that demand for oil cratered as much as it did).
Maybe I was too blunt about it. Whether or not the system works depends on how you define success. To me, the aim seems to be little more but encouraging speculation & volatility in the hope that we can just shout "freeze!" on an upswing. The volatility part worked, the freezing part didn’t.
I suspect that keeping the system as it is will mean these swings will get larger until we hit a low too deep to climb out of — that’s why I disapprove of it.
b-psycho
For some reason it wouldn’t let me edit my comment, even within the 5 minutes. Meant to mention this, maybe help get my issue more clearly: IMO, the "credit crunch" talk was a load of crap, and was more accurately described as a crash after a lengthy credit GLUT.
Brachiator
@snds4×4:
Of course, this isn’t Darwinism (i.e., natural selection) at all. Natural selection is all about reproductive success. If you are a weak parasite that is wily enough to survive and reproduce, you have won the Darwinian lottery.
Nope. Not even. Oddly enough, there ain’t much agreement about the areas that government should or should not be involved in to be found in the various writings and statements that lead to the founding of America, or the philosophical background. And even here, the founders were shrewdly inconsistent, more pragmatists than idealists.
Libertarians need to remember that the Founding Fathers just weren’t that into you.
bellatrys
Zzyzx, you need to know the aftermath of the Free State Project for full hilarity.
Many of them came from points south and west to escape the DFHs in NY and Cali and so forth.
They came to a place where – just to give you one example – a couple of years ago in southern NH we got 18" of snow in what was predicted to be a piddling 2-4" storm, all in one afternoon. We cussed, and dealt with it more or less efficiently. City budgets got strained plenty because of it, as always, but we muddled along like always.
The Free Staters were going to move up north to the Unincorporated Townships, which are basically areas of nearly entirely uninhabited wilderness (there are some ghost towns out there, and abandoned mines and suchlike) because, well, it’s up in the high hills and it snows even more and the snow lasts until late spring and even to summer in a few vales, and there are more moose than humans per square mile because, well, it’s just trees & rocks & rocks & trees and you can’t eat either of them. It’s scenic as hell, but it’s really not easy to live there. (So most people don’t.)
So they ended up staying – most of them – down here in the thickly-settled lowlands, complaining about the fact that they have to live in cities and towns with governments that collect taxes and use them to plow and salt the roads that allow them to go to work … and also to meet up at local restaurants and complain and talk about their Great Plans to conquer the world…
Then there was the interesting conflict with one group of rich Glibs that did move up to an unincorp and started renovating a Victorian ghost resort, and got in trouble for leeching social services like snowplows and EMTs off of their poor, but nevertheless still-functioning, neighboring towns…I don’t know how that all wound up, but Conway etc were threatening to cut them off and make them buy their own snowplow and they were freaking out because basically, they were going to have to reinvent the town government wheel with no practise at cooperation…and figure out how to tax themselves and spend the money to take care of themselves!
snds4x4
@Brachiator:
Just a note, I’m not a Libertarian. My friend and I have some lively debates.
When I used the word Darwinism, I meant a social form a Darwinism.
And my ideas of what a Libertarian might believe in is only through observation and what I can get out of the Reason magazine. Which has some good articles, but some of the conclusions baffle me.
bellatrys
Actually, Annie Laurie, most of the ex-Massholes who moved up here are STILL Republicans. This is not just anecdotal based on all my Conservatarian bosses/ex-bosses and co-workers: I spent a lot of time graphing election results against census data, the commuting corridor along 93 slants HEAVILY magenta, and has in the last 3 presidential elections, with other red warts around the Lakes region and a small bit up on the northwest border composed of tax-refusers from VT who nevertheless still hop over the border to work at the ski areas there.
The richer the neighborhood, with *very* few exceptions, the darker red it will be. Doesn’t matter which part of the former Bay Colony they came from. Bedford, frex, is full of expats from MA (I went to school with their kids) who commute back for the higher paychecks (gas prices and all) and are terrified to go shopping in Manchester because, and I quote a shopkeeper of my acquaintance mocking her Bedfordite customers, "There are BLACK people there!"
My blue-collar ward, mostly full of white people whose ancestors were born here going back to the 1800s, many of whom never went to college, many of whom have never *been* outside NH, went way bluer these past 2 elections than Bedford, or Derry (another ex-Mass-pat-ful enclave), or Wolfeboro, or the oh-so-snobby North End, frex.
(There was also interesting data in 2004 about how the rich NH Republicans were willing to vote out the failed GOP governor despite his anti-tax vauntings, thanks to his having scared them up close and personal with his fecklessness – but *not* GWB, foolishly thinking that what he did in DC wouldn’t affect their personal incomes negatively vs the tax cuts he promised them…Some of them eventually figured it out and voted D this time, but some of them are still listening to Rush and accepting the FOX spin that none of it was Bushco’s fault. And yes, they listen to Rush in MA, too – when they’re not listening to Jay Severin instead!)
Kirk Spencer
@b-psycho: Yeah, sorry if it seemed I was getting, um, intense. It’s an ongoing discussion I’m having elsewhere.
As to the rest, largely the problem is another facet of the same one we’re dealing with elsewhere. The people who are supposed to take away the punchbowl when the guests are getting rowdy spiked it instead.
Now we got a LOT of that in the last 8 years, but the monetary punchbowl controller was in control a lot longer. Same basic principles as the recent administration, just smarter. I’m speaking of Greenspan, of course. (It’s idly amusing to compare the economic/monetary health of the nation under the "classicists (free-marketers)/conservatives" Burns and Greenspan vice the health under the "keynesians/liberals" Martin and Volcker.)
Thing is, when the people doing the job use the DFH theories, things happen pretty much according to the theories’ predictions. And when they use the serious peoples’ theories, we find ourselves having hangovers from too much punchbowl time. You’d think we’d learn.
gerry
In my experience, libertarianism is a moral philosophy based on individualism. Only the individual exists and collective action not based on voluntarism is immoral. So government is bad because coercive and business is good because voluntary. In this way, "freedom" is quantified. More freedom produces good results and less, bad. This sort of adolescent philosophy appeals to bright boys who often cannot outgrow this addiction to simple, morally easy ideas. In this way, Ayn Rand continues to damage this country.
glasnost
Right. This is the typical libertarian approach: let it go down the tubes.
The problem is that they have no idea what they’re talking about. "Let it go down the tubes" sounds great as an abstraction. It feels great. Greedy rich people fucked up! You deserve it! Rot, suckers! And they do deserve it.
The *size* of the "neccessary market correction" is a variable. And not a simple one, but a self-reinforcing one.
When you let those home prices fall, you are shutting off equity credit. You already have huge unemployment shutting down demand. We’re already talking about widespread business failures on the way across the country. If you let throw in bank collapses, you are talking about the literal end of this country’s financial system. There *aren’t* any "good" banks to pick up the pieces and profit – at least not any large enough to fill the void, or even survive the void. If you want everyone you know’s stock and bond values to go to zero, then this is your route. If you want everyone you know with a pension or a 401k to see it dissapear – I don’t mean decline, but default – then this is your route. Meanwhile, on the way to that, the financial industry will try to collect on you immediately for the full value of any and every debt you have. So get ready to have any indebted assets repossed, all the solid ones sold off, and everything in your bank accounts cleaned out to pay off your credit card debt to companies that are going bankrupt anyway.
You can go the libertarian route – if you want to literally make basic economic transactions impossible in this country. Don’t just make references to Mad Max, people. It’s a lot scarier when someone spells out the intermediate steps. You can’t run this economy on people with no more in the bank than their last paycheck, and many fewer of those to boot. You’re talking about the end of a 20’th century standard of living.
The financial system has a gun to everyone’s head in the country. Frankly, you folks should be thanking Bush and Obama on their knees for being willing to keep the system afloat, because it beats a bullet in the head. It really does. I’m all for firing the executives. Heck, I’m all for incarcerating every last one of them in Attica for the rest of their natural lives. But the balance sheets must be kept running, or get ready for the end of the world.
glasnost
Here’s a good example of the very first link in our personal little resonance cascade that did not in fact, ever happen:
http://www.qando.net/?p=751
glasnost
And here’s yet another example:
http://finance.yahoo.com/news/FDIC-raising-fees-on-banks-apf-14492541.html
What happens when we let Citigroup go bust and the money the US has to pay in FDIC guarantees is more than what’s in the fund?
If Obama even dreamed of taking the libertarian approach, I’d be pulling my cash out of my bank tomorrow. And so would everyone else. FDIC does *not* guarantee the absence of bank runs.
People angry about handing money to bankers should consider how they would feel about the evaporation of all of their liquid and solid assets. That’s the alternative. Are you so angry about the taxpayer dollar that you want to start calling your friends around to see if any them managed to get cash out of a bank before it vanished? Are you okay with begging food instead of buying it? It’s not going to just hit some mythical subset of "people already in trouble". Financial collapses *put* people in trouble who seemed to be just fine. Lord, there has never been a better time to have a government job..