The Era of Living Dangerously

[motorfirebox]

This is the source of a basic philosophical difference between us. I understand what you write and there is much truth in it -- but I'm also pretty well convinced that you could redistribute all the money in the world today and within a year, most of it would migrate back to the same people without a great number of exceptions. Class, as used here, is as natural as breathing and it is not going to be eliminated no matter how hard some wish and some try.

I agree to a large extent. Class isn't ever going away, and I wouldn't get rid of it if I could--not only is it as natural as breathing, it's a necessary result of a system that allows success.

But the role class plays in future success can and should be limited. If we're not going to limit it, then we ought to quit pussyfooting around and go back to absolute monarchy. The purpose of a capitalist economy, as opposed to an economic free-for-all, is to keep the pot stirred. When the top goes up, part of that good result should be used to bring the bottom up a few points. Not up to the top, not so much that the top goes down to the bottom, but enough to keep circulation happening.

Because what's happening now is the exact opposite. The top is going up, which is fine, but it's doing do in large part by lowering the bottom. That is natural, too--as natural as the strong caveman barging in and taking the weaker caveman's wife.

Most programs start as good ideas -- the problems accrue as they are modified by politics to cater to certain events, persons or efforts. That is a natural evolution and will only be changed by changing the players or actors on the political scene very regularly. Those actors know that and thus try to skew things to insure their continuity or continuing incumbency. Programs must be modified to adapt to changing circumstances and doing that with politicians as opposed to referendums is more efficient and effective.

I agree. I've often thought that most laws and government programs ought to come with an expiration date rather than automatically being perpetual. Even that can stagnate, of course, and result in a government that spends most of its time voting to renew aging laws, but that's a procedural issue rather than a matter of principle.

There is no logical reason to not means test Medicare and Social Security -- yet that idea is strongly resisted by many politicians not due to their oft stated 'slippery slope' argument but because in reality it would mean lessened 'loyalty' bought from voters, lessened control by those who wish to impose their vision of 'governance' (scare quotes obligatory because that is scary...) on a docile populace. I don't buy it

Sure, that's fair.

That's the progressive mantra. Unfortunately, it's not at all what I wrote, not even close.

...That again is something I did not suggest or write. What I have written is that most social programs have merit but have been prostituted and transmuted into vote buying schemes by venal Congressional fiddles and that fiddling should be eliminated.

Hyberbole on my part, and some conflation with those who actually do argue that result is the sole indicator of ability and worth. Buuuuut...

My comments also attack the "what's the government going to do about this" outlook of a great many Americans of all classes and wealth levels today. Sixty or so years ago, one rarely heard or read that, people would pitch in an fix things themselves. There was, for example no FEMA. Are we better off now with FEMA? Unquestionably. Does the existence of FEMA adversely impact self sufficiency and foster reliance on the government? Also unquestionable. Whether this is a good or bad thing is viewpoint dependent. In my view it is not totally beneficial. For example, FEMA says that, post hurricane, you must be prepared to survive on your own for a week or so without their assistance (the States are far faster, Counties and cities faster yet...) but they downplay that excellent advice, tout their good works -- and provide oversized checks to people not always in need in an effort to buy loyalty and keep the local Congroids happy with FEMA 'performance.' Good program -- manipulated and misused -- needs adjustment (Not by any Congress person whose district or State benefited from FEMA's excessive largesse... ).

There are those who contend one should not confront miscreants; let the Police do it. Unfortuantely, it's proven that there's never a cop around when you need one...

Government absolutely cannot do everything for everyone, regardless of income level, and it is IMO criminal for politicians and academics to imply that it can. It is also probably unwise for folks to believe they can rely on the government to make bad things go away...

I don't deny that there's over reliance on government, but I don't think that over reliance is on the part of people who have to worry about whether or not there's a cop around when they need one. Most of the reliance seems to be on the top end, rather than the bottom end--it's on the part of the guys who are able to afford personal security. Gosh darn those poor and middle class people, why can't they go get their own multi-billion-dollar bailout instead of trying to steal what the financial industry rightfully obtained as ransom!

That's sorta specious, isn't it? Regardless of fiat-ability, one can only get so much blood even from a turnip. It becomes an issue of priorities. I gather your priority would be toward social spending with a view toward 'equalizing'. Mine would provide adequate social spending to care for those with needs but would means test such funding; 'equality' would not be a goal but equal opportunity (which we do not now emphasize -- been to Court lately?) would be a major goal.

Not really. The US isn't a turnip, it's a... tick. You can get a lot of blood from a tick if you squeeze it hard enough! Gross analogy, but it's hard to buy the turnip argument when Wall Street is posting record profits.

I don't see equalizing--movement towards equalizing, not to be confused with absolute imposition of equality--as separate from equal opportunity.

Your comment addresses part of it, no question but the excessive emphasis by the Federal Government on the regulation of every facet of business is burdensome and expensive. A Doctor I know could operate his Office with himself and two others. He has seven and is hiring another because the new computerized medical record requirement will add another to his two billing and insurance clerks who are needed not to answer the insurance company requirements but to insure compliance with federal regulations. The burden is not due to this Administration (in fact, they've vowed to try to reduce the problem (LINK) the Regulatory overkill has been building for years and both parties as well as our governmental system are at fault. Congress can effect change but it is not in their interest to do so -- unless the voters start wholesale firings of them to send a message. As I said above, the issue is not the burden of any particular regulation and few of them are very onerous, it is the cumulative effect of a massive government that is trying to do things to justify its existence -- or, more correctly, of the various departments and agencies of a massive government who must justify the existence by doing something...

A significant part of the that regulatory problem is that those diktats from one Agency often contradict those from another and adjudication is required, the bureaucracy grinds very slowly and to most businesses, time is money.

Mmmmm okay. There's bloat. My concern is that in getting rid of the bloat, we'll end up skewing things even more to favor those who already well-positioned.

I agree with that. We probably agree on goals -- we just disagree on how to get there...

I think that's true. Mainly, I think that our current situation comes as close to fulfilling the phrase "fox guarding the henhouse" as one can get without involving actual poultry, and I think the most effective solutions are going to be those that remedy that.

Proving yet again that this era is not really very dangerous...

I think we're heading towards danger, but I agree that we're not really in danger right now. We're a lot closer than is comfortable, though, and I think a lot of current violence that is attributed to other causes--mainly race--is more accurately the result of financial distress.

(I've cut out a lot, trying to keep my responses to the main points--starting to run into the text length limit.)

[Pete]

The most amazing thing about this thread is that it's about politics but has not turned into a partisan mud-slinging contest. No Democrat vs. Republican vs. Tea Party stuff here. The discussion in this thread is mainly conducted on a philosophical level.

Not once in this thread has our venerable Brown Shoe said, "Impeach Earl Warren!" But like they said back in 1964, "In Your Heart You Know He's Right."

[Ken White]

But the role class plays in future success can and should be limited. If we're not going to limit it, then we ought to quit pussyfooting around and go back to absolute monarchy.

Don't agree. Monarchy has little or nothing to do with class in the US (as opposed to many other nations...). Our classes divide by wealth, by job or career field, by academic accomplishments (a relatively recent addition...) and ethnically or nationally (and I mean that not in the racist sense. The Scotch Irish despise the English, many Italians do not like Germans, etc.). Even geography enters into it -- royal or peerage issues not at all.

The purpose of a capitalist economy, as opposed to an economic free-for-all, is to keep the pot stirred.

Is that a purpose or a by product?

When the top goes up, part of that good result should be used to bring the bottom up a few points. Not up to the top, not so much that the top goes down to the bottom, but enough to keep circulation happening.

Most will agree, many will quibble about mechanisms and degrees of up...

Because what's happening now is the exact opposite. The top is going up, which is fine, but it's doing do in large part by lowering the bottom. That is natural, too--as natural as the strong caveman barging in and taking the weaker caveman's wife.

There's truth in that and it does make a good if questionable talking point (in that it is repeatedly raised by some media personages and some politicians for partisan, not altruistic, reasons) but there's also a degree of unintended consequence. Recall that part of the top's recent upward trajectory was imparted by failures of social policies aimed at raising the bottom...

I agree. I've often thought that most laws and government programs ought to come with an expiration date rather than automatically being perpetual...

Strongly agree. I'd also add the stringent Hodenosaunee or Iroquois requirement that the Sachems and councils had to consider effects unto the seventh generation.

I don't deny that there's over reliance on government, but I don't think that over reliance is on the part of people who have to worry about whether or not there's a cop around when they need one...Gosh darn those poor and middle class people, why can't they go get their own multi-billion-dollar bailout instead of trying to steal what the financial industry rightfully obtained as ransom!

Hyperbole again???

My observation -- admittedly mostly but not exclusively in the South -- is that the over reliance exists in all strata but the emphasis on what's expected differs sometimes strongly from locale to locale and level to level in a rather complex mix.

Regardless, it is IMO becoming more problematical and has contributed to a somewhat coddled and certainly risk averse society. It also seem to have a slight adverse impact on initiative and innovation.

Not really. The US isn't a turnip, it's a... tick... it's hard to buy the turnip argument when Wall Street is posting record profits.

True on the profits but consider also that the sale of new cars (as opposed to homes -- though we are arguably already over endowed with individually owned homes in comparison with most other nations even considering the Housing crunch) and large flat screen TVs to the great unwashed (we just bought a flat screen... ) indicate that while the bottom may not be getting elevated as much as many of us would like, much -- not all but much -- of it is living better than that Royalty did a few years ago.

I don't see equalizing--movement towards equalizing, not to be confused with absolute imposition of equality--as separate from equal opportunity.

We can disagree. Equal opportunity to me is to offer unimpeded access to use one's potential. Equal outcomes are efforts to insure that, regardless of capabilities, effort, merit or productivity, all have a relatively even standing in all things. In no case is the sorting of that simple, nor can, due to the variation in people and circumstances, hard and fast rule be laid down. It is also very important that everyone realize that nuances aside, there will always be outliers and exceptions and that, while true in any event, is particularly true in an issue this complex and in a nation as large and diverse as are we. One of the major flaws with the big government crowd is their refusal to acknowledge the inevitability due to our size of poor rules that will not work in all segments of the society or nation. They create flawed law, see inequities and try to fix it, often only making it worse for someone else...

For most of us the difference between those things is nuanced and probably variable, the largest discriminator IMO being the amount of effort required by the individual versus the amount given by the state.

Mmmmm okay. There's bloat. My concern is that in getting rid of the bloat, we'll end up skewing things even more to favor those who already well-positioned.

The well positioned will certainly try to insure that is the case. Rather logical and to be expected. the role of the politicians is to insure that does not happen. Experience shows that Politicians each side will skew the efforts to suit their ideology and that, whether they champion 'more freedom' or 'better control,' the result will be the favoring of the well positioned.

Is that the fault of the well positioned or of politicians from both sides who simply do not do their job and place partisan interests, contributions and votes ahead of the interests of the nation and its people?

Whatever the answer to that question, history says we will screw it up, one way or another and then slowly, over many years adjust and eventually get it about right. It's the American way; we always over react then over correct.

I think that's true. Mainly, I think that our current situation comes as close to fulfilling the phrase "fox guarding the henhouse" as one can get without involving actual poultry, and I think the most effective solutions are going to be those that remedy that.

Being old, I can sigh and write: It's been worse, yeah, we'll mess it up but eventually sort it a bit and then it'll later return. Everything goes in cycles...

...and I think a lot of current violence that is attributed to other causes--mainly race--is more accurately the result of financial distress.

Yep. That too is historically illustrated. It'll probably get worse before it gets better. Democracy is messy and inefficient. American democracy is particularly messy and extremely inefficient. Based on time spent in 30 plus other nations, it still beats most others in most ways most of the time...

[Dayuhan]

Kind of lost track of this one, consequence of a big typhoon knocking out the power for a while...

It's way too easy to assume that "oversight" and "regulation" are the answer, and way to easy to look back and think that rule x, y, or z could have prevented this or that. In practice it's not quite so simple, and looking forward isn't like looking back. Seems to me that government had all the tools it needed to manage the events since the mid 90s, which are inextricably related, but for political purposes declined to use them in the way that was needed. It's not about the toolkit, it's about the political will to use it, and that's constrained as much by playing to Main Street as it is by playing to Wall Street.

I think we're heading towards danger, but I agree that we're not really in danger right now. We're a lot closer than is comfortable, though, and I think a lot of current violence that is attributed to other causes--mainly race--is more accurately the result of financial distress.

Seems to me we're just adjusting to having to play on the same field as everyone else, and to the need to compete. A shocking thing, for Americans, but it was going to happen sooner or later.

Again, the ogre of Wall Street is easy to hang the blame on, but if we don't look at the real contributions to the mess coming from DC and from Main Street, we're going to keep going in circles. Lots of fundamental shifts in attitude needed, not just stricter rules on those Bad Rich People.

[motorfirebox]

Don't agree. Monarchy has little or nothing to do with class in the US (as opposed to many other nations...). Our classes divide by wealth, by job or career field, by academic accomplishments (a relatively recent addition...) and ethnically or nationally (and I mean that not in the racist sense. The Scotch Irish despise the English, many Italians do not like Germans, etc.). Even geography enters into it -- royal or peerage issues not at all.

So our derivatives-based monarchy will look a little different. It won't change its basic nature: peasants go down here, stockholder-royalty goes up here.

Is that a purpose or a by product?

A purpose. Otherwise, why not just let the financial elite run over everyone else?

Most will agree, many will quibble about mechanisms and degrees of up...There's truth in that and it does make a good if questionable talking point (in that it is repeatedly raised by some media personages and some politicians for partisan, not altruistic, reasons) but there's also a degree of unintended consequence. Recall that part of the top's recent upward trajectory was imparted by failures of social policies aimed at raising the bottom...

I still don't completely agree on that point. I don't think the social policies aimed at raising the bottom were the problem--the problem was the ability of those at the top, caused by reduced and weakened oversight, to exploit those programs to a disastrous degree.

My observation -- admittedly mostly but not exclusively in the South -- is that the over reliance exists in all strata but the emphasis on what's expected differs sometimes strongly from locale to locale and level to level in a rather complex mix.

Possibly, but I don't see the alleged over reliance of the lower strata as causing nearly as much of a problem as the over reliance of the upper.

True on the profits but consider also that the sale of new cars (as opposed to homes -- though we are arguably already over endowed with individually owned homes in comparison with most other nations even considering the Housing crunch) and large flat screen TVs to the great unwashed (we just bought a flat screen... ) indicate that while the bottom may not be getting elevated as much as many of us would like, much -- not all but much -- of it is living better than that Royalty did a few years ago.

That's becoming less true. While the middle class is doing better now--arguably--than it was two decades ago, we're eating into the middle class's savings and shunting them into the lower class.

We can disagree. Equal opportunity to me is to offer unimpeded access to use one's potential. Equal outcomes are efforts to insure that, regardless of capabilities, effort, merit or productivity, all have a relatively even standing in all things. In no case is the sorting of that simple, nor can, due to the variation in people and circumstances, hard and fast rule be laid down. It is also very important that everyone realize that nuances aside, there will always be outliers and exceptions and that, while true in any event, is particularly true in an issue this complex and in a nation as large and diverse as are we. One of the major flaws with the big government crowd is their refusal to acknowledge the inevitability due to our size of poor rules that will not work in all segments of the society or nation. They create flawed law, see inequities and try to fix it, often only making it worse for someone else...

I'm not talking about the same kind of equality of outcome you are. I am especially not speaking in favor of equal outcomes "regardless of capabilities, effort, merit or productivity". What I am in favor of is addressing the issue of generational wealth. In large part, generational wealth has to do with equality of outcome, because the outcome (or rather the income) of one generation directly affects the opportunities of the next. Now, let me be clear: people should never be prevented from using their wealth to improve the lives of their children. But. What concerns me is that lack of generational wealth--people lacking wealth with which to improve the lives of their children--has far too large a negative impact on the outcomes of their childrens' lives. This isn't a matter of Bobby being born in a poor household and growing up to be a poor man, while Charlie is born in a rich household and grows up to be a rich man--this is a matter of Bobby's great-great-great grandfather being poor, and all of Bobby's friends' great-great-great grandfathers being poor, and very few of them ever escaping being poor. At some point, the disparity of outcome between population groups over time becomes a clear indicator that there is a severe inequality of opportunity.

[Ken White]

So our derivatives-based monarchy will look a little different. It won't change its basic nature: peasants go down here, stockholder-royalty goes up here.

Hyperprole!

A purpose. Otherwise, why not just let the financial elite run over everyone else?

The financial elite would like that especially as they think the pur[pose of capitalism is to provide them with lots of capital. Stirring the pot is NOT on their agenda. They want stability -- tranquility, even -- and they're willing ala Alfred Krupp and Otto Von Bismark to pay to get it -- but not too much...

I still don't completely agree on that point. I don't think the social policies aimed at raising the bottom were the problem--the problem was the ability of those at the top, caused by reduced and weakened oversight, to exploit those programs to a disastrous degree.

Not a problem, we can disagree; you blame those at the top, I blame politicians. Both are at fault -- but the politicians had and have the responsibility to mitigate the excesses of those at the nominal top who may or may not be altruistic. Been my observation that altruism needs encouragement...

Possibly, but I don't see the alleged over reliance of the lower strata as causing nearly as much of a problem as the over reliance of the upper.

The detriment is about equal IMO but they're different in their effect. The upper are simply manipulating the system; the lower believe that the government will and can do things that are far from certain thus the incentive to prepare oneself for potential problems or to enhance one's potential for success is removed -- so the nominal underclass stays where it is with little change . Want evidence? Look at the history of the US and its 'efforts' to improve the lot of that underclass over the last 100 years...

That's becoming less true. While the middle class is doing better now--arguably--than it was two decades ago, we're eating into the middle class's savings and shunting them into the lower class.

True to an extent but mostly as a result of our failure in 1990 to start adapting to a world that had changed in the previous 20 plus years. Needed efforts were identified but not implemented because they were not believed to be important or were politically unpalatable. However, my comment reached into all classes -- because all are buying big flat screens (to use a metaphor...). Even those lower class folks, old and new...

What I am in favor of is addressing the issue of generational wealth. In large part, generational wealth has to do with equality of outcome, because the outcome (or rather the income) of one generation directly affects the opportunities of the next. Now, let me be clear: people should never be prevented from using their wealth to improve the lives of their children. But. What concerns me is that lack of generational wealth--people lacking wealth with which to improve the lives of their children--has far too large a negative impact on the outcomes of their childrens' lives. This isn't a matter of Bobby being born in a poor household and growing up to be a poor man, while Charlie is born in a rich household and grows up to be a rich man--this is a matter of Bobby's great-great-great grandfather being poor, and all of Bobby's friends' great-great-great grandfathers being poor, and very few of them ever escaping being poor. At some point, the disparity of outcome between population groups over time becomes a clear indicator that there is a severe inequality of opportunity.

I totally agree there is a severe inequality of opportunity in this country (thus my been to Court lately question). What you say is generally correct --Charlie sometimes fritters away the Shekels and Bobby sometimes gather more wealth than Charlie could have dreamed of -- but by and large, you're right. Where we differ is on the solution. Since the 1930s, we have spent an inordinate amount of money and effort in trying to insure equality of outcome with little success. That's why Bobby and his friends are caught in the trap. You may not think of equality as equality of outcome but your government, mostly, has and that to the exclusion of rectifying the terrible problems of unequal opportunity. Throwing money at schools isn't the answer, nor are jobs programs -- fixing schools and making jobs are the answers. The first is a governmental responsibility and most governments at all levels have done an abysmal job of operating schools and they have killed efforts that succeeded where they could because that might upset the status quo. As a friend said, "Those latte drinkers need Baristas -- and sweepers; plus somebody's gotta build those bike trails."

The second is not (because government will never offer more than scut work on a temporary basis for mediocre pay...). Government just needs set the stage, provide employers some incentives and then get out of the way...

[slapout9]

The second is not (because government will never offer more than scut work on a temporary basis for mediocre pay...). Government just needs set the stage, provide employers some incentives and then get out of the way...

Ken, that just isn't true. They created the Hoover Dam,They electrified the south through the TVA(Tennessee Valley Authority) they created Nuclear Energy, and they created NASA which has created more physical wealth that is used by Americans than any organization in the history of Mankind! Them wuz guvmint jobs!

And more important it is not just Government but it is the American Government. "We the people" not "I" the banker.

[Fuchs]

All general remarks on the role of government tend to be wrong much of the time.

This age is an age of difficulties - as probably every age before, too.
You cannot set up a maxim/ideology/rule and expect to be right more than about 60% of the time.

Example (de)regulation:
There's no simple answer. You need to look at the issues on a case-by-case basis and take many, many second order effects into account.
Sometimes you'll end up discovering the need for more regulation, sometimes one for better one, sometimes for less.


There's little hope that governments will be gotten right until people (at least the powerful ones) understand that simple maxims and rules are nonsense.
Simplification allows laymen to discuss things, but applied at actual decision-making it merely means that the decision-maker flips a coin and is essentially ignorant.


The whole small government - big government debate is thus a huge display of ignorance.

Btw, this small government - big government thing is a fixation of the anglophone world, most evidently of the U.S.. It's not among the top 100 memes of many, many developed countries world-wide while Americans appear to even go crazy about it.

[motorfirebox]

Hyperprole!

Honestly? Not so much. I'm not saying we're there yet, but I think we're headed directly to that state of affairs.

Not a problem, we can disagree; you blame those at the top, I blame politicians. Both are at fault -- but the politicians had and have the responsibility to mitigate the excesses of those at the nominal top who may or may not be altruistic. Been my observation that altruism needs encouragement...

Actually, I place more root blame on the politicians. Those at the top are doing what they're supposed to be doing--trying to make a buck any way they can. Gasoline is supposed to burn. The politicians' job is to encourage that when it's needed and to limit it when it would be harmful, the way a fuel system directs more or less gas to combust depending on the needs of the system and the direction of the driver. I think S&P ought to be punished, for instance, because I think their actions are harmful to the system and that situation needs to be corrected. Any personal satisfaction--while very real!--would not be the driving concern.

The detriment is about equal IMO but they're different in their effect. The upper are simply manipulating the system; the lower believe that the government will and can do things that are far from certain thus the incentive to prepare oneself for potential problems or to enhance one's potential for success is removed -- so the nominal underclass stays where it is with little change . Want evidence? Look at the history of the US and its 'efforts' to improve the lot of that underclass over the last 100 years...

So if people get help they won't want to succeed? That's simply not a position that makes any sense as a philosophy of government. Why have cops, it just encourages people to leave their doors unlocked. There's certainly a point at which help becomes harm, but when the median wealth of a black woman is $5 I don't see how it's possible to argue we're helping her too much.

True to an extent but mostly as a result of our failure in 1990 to start adapting to a world that had changed in the previous 20 plus years. Needed efforts were identified but not implemented because they were not believed to be important or were politically unpalatable. However, my comment reached into all classes -- because all are buying big flat screens (to use a metaphor...). Even those lower class folks, old and new...

I would say the failure started in the 70s, when we started shifting the majority of our profits into capital gains rather than splitting it with guys who actually make the widgets. The original comment, though, was about squeezing blood from a turnip. The US certainly isn't a turnip--the funding to do the things that, in my opinion, ought to be done is there for the taking.

I totally agree there is a severe inequality of opportunity in this country (thus my been to Court lately question). What you say is generally correct --Charlie sometimes fritters away the Shekels and Bobby sometimes gather more wealth than Charlie could have dreamed of -- but by and large, you're right. Where we differ is on the solution. Since the 1930s, we have spent an inordinate amount of money and effort in trying to insure equality of outcome with little success. That's why Bobby and his friends are caught in the trap. You may not think of equality as equality of outcome but your government, mostly, has and that to the exclusion of rectifying the terrible problems of unequal opportunity. Throwing money at schools isn't the answer, nor are jobs programs -- fixing schools and making jobs are the answers. The first is a governmental responsibility and most governments at all levels have done an abysmal job of operating schools and they have killed efforts that succeeded where they could because that might upset the status quo. As a friend said, "Those latte drinkers need Baristas -- and sweepers; plus somebody's gotta build those bike trails."

The second is not (because government will never offer more than scut work on a temporary basis for mediocre pay...). Government just needs set the stage, provide employers some incentives and then get out of the way...

Throwing money at schools may not be the whole solution, but I find it hard to believe that continually reducing school funding is the way to go, either.

To a large extent, I think we agree on the solution: I think we're both in favor of empowering individuals. I think greatly disincentivizing capital gains, and greatly limiting the power and rights of corporations, would be a good start. But I also think there myriad ways in which the government, right now, can and should shift wealth from the top of the pyramid to the bottom. Not because rich people shouldn't be rich--as fun as it is to bash executives, this isn't about wealthy individuals as it is about corporate machinery--but because the manner in which the financial elite have gained much of their current wealth amounts to outright theft from the rest of the country.

[slapout9]

Link to interview of Economic Historian Dr. Michael Hudson by Max Keiser.


http://www.youtube.com/watch?feature...v=bC-EQM7YHz0#!

[slapout9]

All general remarks on the role of government tend to be wrong much of the time.

This age is an age of difficulties - as probably every age before, too.
You cannot set up a maxim/ideology/rule and expect to be right more than about 60% of the time.

Example (de)regulation:
There's no simple answer. You need to look at the issues on a case-by-case basis and take many, many second order effects into account.
Sometimes you'll end up discovering the need for more regulation, sometimes one for better one, sometimes for less.


There's little hope that governments will be gotten right until people (at least the powerful ones) understand that simple maxims and rules are nonsense.
Simplification allows laymen to discuss things, but applied at actual decision-making it merely means that the decision-maker flips a coin and is essentially ignorant.


The whole small government - big government debate is thus a huge display of ignorance.

Btw, this small government - big government thing is a fixation of the anglophone world, most evidently of the U.S.. It's not among the top 100 memes of many, many developed countries world-wide while Americans appear to even go crazy about it.

Nope. Here is my general simplistic theory. America largely grew to such prominence because after WW2 we developed all the advanced German technology when we gained access to the German Scientific Archives. If it hadn't been for that we probably wouldn't be having this conversation. Science is the real creator of wealth and it dosen't care what your politics/or economic philosophy are.

[ganulv]

Here is my general simplistic theory. America largely grew to such prominence because after WW2 we developed all the advanced German technology when we gained access to the German Scientific Archives.

How many other nations apart from Sweden even had an intact industrial infrastructure to take advantage of it in the immediate post-War years? That’s something I wish everyone who wants the America their daddy grew up in back would keep in mind.

[Fuchs]

Those "archives" exceeded by far the ability of allied countries to absorb and exploit their content. Aerospace know-how transfer was spectacular, but didn't carry more forward than for a few years.
The deletion of previously published patents on the other hand helped the Western Allies' chemical industries a lot.

The classic economic science answer to what creates economic output is still
* labour input
* natural resources input
* capital usage
* productivity (productivity gain = "technological progress", but it's not wholly about tech or even science)

And then there's the issue whether economic output - be it nominal or in PPP - does mean a lot or not. 'happiness' studies don't show a very strong correlation, and a sizeable chunk of our economic output is about repairing BS or socially useless activity.

[slapout9]

Well I’ll be, a link to something by David Graeber at the SWC! Sidney Mintz and Eric Wolf might also be of interest. Mintz’s Sweetness and power is one of my personal favorites.

Regarding Fannie Mae, there was a very good interview on Fresh Air a few months ago.

ganulv, do you know him? Here is my theory it's not credit and debt....it was the pervsion of the words credit and debit! They simply mean right and left side of your account. Debit was perverted to the word debt which means you owe with interest probably by so historic Mafia type

[Ken White]

Ken, that just isn't true.

I'm afraid it is very true -- in part. Anbother part is as you say untrue but that's my fault for not being clear about the type of program to which I referred.

They created the Hoover Dam...

Google Six Companies, Inc. Note that both Bechtel and Morrrison-Knudsen were involved.

They electrified the south through the TVA(Tennessee Valley Authority)

The government did -- but TVA was exceptional in several respects, was and is controversial and most of the high paying jobs were not typical Government make work efforts -- though some were:

""The unemployed were hired for conservation, economic development, and social programs such as a library service that operated for the surrounding area. The professional staff headquarters was composed of experts from outside the region. The workers were categorized into the usual racial and gender lines of the day. TVA hired a few African-Americans for janitorial positions. TVA recognized labor unions; its skilled and semi-skilled blue collar employees were unionized, a breakthrough in an area known for corporations hostile to miners' unions and textile unions. Women were excluded from construction work, although TVA's cheap electricity attracted textile mills that hired mostly women."" (LINK).

they created Nuclear Energy, and they created NASA which has created more physical wealth that is used by Americans than any organization in the history of Mankind! Them wuz guvmint jobs!

Yes, they were -- and both the AEC and NASA are productive and permanenet entities of the US Government and not the often temporary make-work government programs like the CCC and WPA were and that many suggest today. Or as had been suggested, expanding AmeriCorps. I should have made clear are the types of thing I was referring to...

Particularly as I had one of those permanent type Guvmint jobs for which I was significantly overpaid...

And more important it is not just Government but it is the American Government. "We the people" not "I" the banker.

Bankers are people, too. they just have different priorites than you or I do...

[Surferbeetle]

...it's interesting to consider the capacity of the current crop of the 1st world's political class. Is this crop able to successfully conduct demographic analysis, conduct risk analysis, understand technical (economic, military, etc) considerations, negotiate, craft deals, lead, and perform as committed statesmen and stateswomen?

From the Financial Times, European Officials Round on Lagarde, by FT Reporters, 28 Aug 2011

European officials rounded on Christine Lagarde on Sunday, accusing the managing director of the International Monetary Fund of making a “confused” and “misguided” attack on the health of Europe’s banks.

Ms Lagarde, the former French finance minister who replaced Dominique Strauss-Kahn as head of the IMF in July, used her address at an annual meeting of central bankers in Jackson Hole, Wyoming, to call for an “urgent” recapitalisation of Europe’s weakest lenders, saying that shoring up the banking system was key to cutting “chains of contagion” across the region.

From the Financial Times, Caterpillar Chief Attacks Washington, by Hal Weitzman, August 28, 2011

Mr Oberhelman joins a growing chorus of US business leaders who say they are fed up with the widening gap between Democrats and Republicans, displayed most recently in the gridlock over the debate to raise the country’s debt ceiling.

Howard Schultz, Starbucks chief executive, has called on his peers to stop donating to politicians until Congress reaches a bipartisan agreement on debt reduction. More than 100 business leaders have backed the campaign, including Duncan Niederauer of NYSE Euronext, Walter Robb of Whole Foods and Myron Ullman of JC Penney.

[Ken White]

Honestly? Not so much. I'm not saying we're there yet, but I think we're headed directly to that state of affairs.

Sigh. Okay, no more plays on words...

Actually, I place more root blame on the politicians...

That's good to know but hard to divine from your comments.

So if people get help they won't want to succeed?

Not what I wrote but a good snap back on what I did write. The granting of excessive aid and creating of excessive dependency on government can have that effect on some persons. Note the use of "excessive." That's a value determination that will vary widely among people; some are more susceptible to coasting than are others.

That's simply not a position that makes any sense as a philosophy of government. Why have cops, it just encourages people to leave their doors unlocked. There's certainly a point at which help becomes harm, but when the median wealth of a black woman is $5 I don't see how it's possible to argue we're helping her too much.

The existence of Cops doesn't encourage that -- though one's place of residence can -- and we have Cops to take care of most law enforcement issues to the best of their ability. Note use of the words "most" and "best of their ability." The Cops cannot take care of all such issues, just as Government in toto cannot take care of all issues. Nor can you or I take care of every issue with which we're confronted -- that's just reality. Sometimes we need help, nice if its available -- it is also nice and quite satisfying to be able to do things by and for oneself (well, for most people, anyway...). The question is what capabilities are needed and what are we willing to pay for or do to get a selected capability...

The real issue here is not the provision of help but the methods used. We've been trying what you seem to wish for approaching 80 years -- effectively for my lifetime -- and the underclass still exists. Net figures for poverty and such have changed very little. Educational attainment has in many instances declined in spite significantly more spending (we tie with Switzerland in first in the world for the amount per pupil, K-12). What you seem to want to continue, even expand, simply is proven to not work.

...The US certainly isn't a turnip--the funding to do the things that, in my opinion, ought to be done is there for the taking.

Still, if that is done, they will come at the expense of something else; wealth, yes -- unlimited wealth, no. Someone has to work to make that money that is taxed to feed the Turnip Crusher. Yes, we're wealthy, perhaps too wealthy in some senses -- but like many with inherited wealth or other wealth that isn't hard earned by ourselves, we do not spend wisely. IMO, you propose to keep spending the same way -- except more.

Throwing money at schools may not be the whole solution, but I find it hard to believe that continually reducing school funding is the way to go, either.

There is no continuing or consistent reduction in school spending nationwide of which I'm aware. There are cases of temporary reduction due to tax shortfalls. Where I live, there is for example a slight retrenchment, they're letting a few teachers go (but no Administrators -- claiming State and Federal Regulatory requirements make them necessary ) -- though I note we're buying a multi million dollar AV system for the City Council and Bike Path construction continues...

... But I also think there myriad ways in which the government, right now, can and should shift wealth from the top of the pyramid to the bottom.

So can I. Most of them have been tried and do not work because people find a way to manipulate them and because they eventually cut too heavily into the tax base and revenues decline so retrenchment is necessary and the cycle begins anew...

Not because rich people shouldn't be rich--as fun as it is to bash executives, this isn't about wealthy individuals as it is about corporate machinery--but because the manner in which the financial elite have gained much of their current wealth amounts to outright theft from the rest of the country.

You forget to add in there somewhere 'abetted by Politicians.' You keep leaving that part out. It modifies your complaint a considerable amount.

Until the political problem is fixed, your issues will continue apace...

[omarali50]

As an immigrant, some random thoughts: There seems to be very little (by world standards) retail corruption and a high level of trust in daily life; If I get ticketed, I dont expect to buy off the officer, and we have left a wallet and a phone in a major mall and had if turned in to the lost and found both times, and so on. But expectation of incorruptibility in govt is rather low.... There seems to be more corruption in the county aldermen and suchlike, and then there seems to be quite a lot of higher level corruption (Congress, for example). Since it seems to have been even worse in the 19th century, one wonders if its actually compatible with long term growth? Or does it eventually filter down to the retail level and then the whole culture decays and looks more like India or Pakistan? How does a culture of basic honesty and trust get transmitted? how long can it survive? And does it even exist or is Wisconsin just an illusion? (leftists tell me that its only because most of the country is so "rich"...let them become poor and watch the trust evaporate..I am not sure I buy that either) And why is guvmint expected to be corrupt in a society that is not so corrupt in everyday life? Does that mistrust in guvmint fuel corruption or reflect a healthy aversion to corruption?
Just wondering...

[slapout9]

Those "archives" exceeded by far the ability of allied countries to absorb and exploit their content. Aerospace know-how transfer was spectacular, but didn't carry more forward than for a few years.
The deletion of previously published patents on the other hand helped the Western Allies' chemical industries a lot.

I would say it is was much more than that. They had Television,better vacum tubes, and the beginnings of genetic engineering, and a very differant view of how to finance an economy. My Physics professor was named Han Ri Furherand (who was a real live rocket scientist) and he had to stick pretty much to the standard stuuf in the textbook but occasionly he would talk about an alternative view of just what science was.The German view of science stood the world on it's head. Short answer Einstein said the universe expands but the Germans said the universe spins.
What that means is zero-point energy is possible but that it the subject of a another thread I will start shortly, hope you stick around for it.

[slapout9]

As an immigrant, some random thoughts: There seems to be very little (by world standards) retail corruption and a high level of trust in daily life; If I get ticketed, I dont expect to buy off the officer, and we have left a wallet and a phone in a major mall and had if turned in to the lost and found both times, and so on. But expectation of incorruptibility in govt is rather low.... There seems to be more corruption in the county aldermen and suchlike, and then there seems to be quite a lot of higher level corruption (Congress, for example). Since it seems to have been even worse in the 19th century, one wonders if its actually compatible with long term growth? Or does it eventually filter down to the retail level and then the whole culture decays and looks more like India or Pakistan? How does a culture of basic honesty and trust get transmitted? how long can it survive? And does it even exist or is Wisconsin just an illusion? (leftists tell me that its only because most of the country is so "rich"...let them become poor and watch the trust evaporate..I am not sure I buy that either) And why is guvmint expected to be corrupt in a society that is not so corrupt in everyday life? Does that mistrust in guvmint fuel corruption or reflect a healthy aversion to corruption?
Just wondering...

Real News interview on the subject. Economic instability leas to Political Instability leads to Insurgencies....living dangerously.
http://therealnews.com/t2/index.php?...4&jumival=7169