D in CT

The comments here seem to have evolved into a pleasant conversation between just you and me.  But I suspect there must be a whole lot of otherwise bored readers out there. 

Nonetheless, I don’t share your alarm at the current fiscal situation.  Serious it may be but catastrophic it certainly isn’t.  America has faced debt loads nearly as large in the past (the present situation is statistically distorted by the near Depression depth of the current ‘recession’ and the absence of price deflation) and survived.  If you study American political history you will find that anguished yelps that the fiscal sky is falling down are perennial.  In good times and bad there are always those who anguish over the debt.

While the minutia of policy can be discussed endlessly, let us agree that the situation is serious enough that cool heads must prevail.  My family and I have experienced two radical political upheavals in Europe, both promising to rid the world of corruption and create a moral economic order.  But in the end both were unpleasant to say the least.  Therefore, I have little faith that radical changes which are intended to make America more honest and fair are going to turn out any better.  It is the time I think for the center to hold and cool heads to apply time honored solutions and not revolutionary change.  In this I may oddly be more conservative than you because I do trust in the restorative powers of America’s democratic government and the essential effectiveness of its system.

Your statement about, ‘utopian hopes for “fairness” or “equality”,’ I sincerely believe misses the point of America on two levels.  1) It is a bit too cantankerously dismissive of the democratic ideal.  Of course, I can see how you have come to that attitude being witness to a lot of feckless and shiftless fellow Americans.  However, 2) the striving for “fairness” and “equality” has benefits in the real world where it makes for more social concord and higher productivity.  But these results are hard to see in any short term.

Finally, Thomas Jefferson should never be taken at face value on the matter of dept.  Because he was constantly deep in personal debt and hounded by creditors. Therefore he dreamed, like all perennial debtors, of a debt free world.  Likewise his talk about limited government was the talk of a plantation owner who wanted no interference with his right to push out the boundaries of his land.  And he certainly didn’t think of limited government when he founded the Patten Office which was meant to protect his rights as an inventor of inventions which might solve his financial problems.

LJL,

Well I hope you are right, because a centrist approach seems the easiest.  I just
fear that by definition, centrism may mean sticking close to the status quo with
very incremental change, which normally, or in stable/sustainable times, I
would feel most comfortable.

My worry is that our current state of status quo affairs is very unsustainable
and has internalized within it, much of the short term thinking, utopianism,
and cozy corruption that has finally come to a nasty economic outcome.
Incremental change may not fit the bill.

In short, that the crisis was not just a one time event, but was the opening
chapter in a sad story of an unsustainable and corrupt approach that is finally
falling apart.

Again, I feel like our whole society, aided by the Fed easy money, and eager-
to-please, unprincipled politicians, has been living wayyyy beyond its means,
fueled by debt, and now we are being forced to reset to a more sustainable,
realistic level.  That means households, and that means how much the Federal
Government has to spend on our utopian hopes for “fairness” or “equality”, as
well-intentioned as they are.

It seems to me, the status quo crowd, backed by Keynsian philosophy, is not
willing to let us reset to a more realistic level, and is happy to continue to use
debt spending to keep “the dream” alive, instead of letting the market and
prices reflect what people want/need.  We have to pay for that through taxes
and inflation and a weaker dollar.  And since the people who really make the
money off this model is bankers who do the lending, and Wall St types who
bring the credit to the market in various forms, and the politicians they corrupt
along the way, it doesn’t seem like a fair shake. And when that also comes in
the form of expanding government participation in the economy, a model that
has not ended well historically, in terms of economic vibrancy or individual
liberty, it doesn’t seem worth the promise of the “virtuous cycle” that will save
us all.

Finally, to go American, and not Austrian:

“And this is the tendency of all human governments. A departure from principle
in one instance becomes precedent for a second; that second for a third; and
so on, till the bulk of the society is reduced to be mere automations of misery,
to have no sensibilities left but for sinning and suffering. Then begins, indeed,
the ‘bellum omnium in omnia’ [war of all against all], which some philosophers
observing to be so general in this world, have mistaken it for the natural,
instead f the abusive state of man. And the fore horse of the frightful team is
public debt. Taxation follows that, and in its train wretchedness and
oppression.”

Thomas Jefferson

D in CT

Thanks.  All those old Austrians remind me too much of my uncles and reinforce in me the idea that America has to come up with a uniquely American solution to its dilemma.  Moreover, as you must have gathered I am convinced that America has already found the solution.  It lies in the unspectacular centrist policies with which America managed its economy for much of the 20th Century.

LOL I need to brush up on my German.  I do appreciate the back and forth, I am
sincere in my exploration of the issues, trying to keep an open mind in these
historically charged times.

D in CT,

Thanks for the citation, however, Ich bin aber Wiener und brauche niemanden mir über österreichische Wirtschaftswissenschaftler zu erklären.  von Mises, von schmises!

http://www.campaignforliberty.com/article.php?view=1150

I find it just a tad too easy to place the blame for our current predicament on the Fed and corrupt politicians.  We’ve had both in good times and bad.  For example, there has never been a time in history there weren’t corrupt politicians.  And corrupt citizens too.  And as far as the Fed goes, it was there during the post WWII economic recovery.  I’m not saying the Fed is irreformable or advocating corruption as a political virtue.  I am just saying that America has surmounted these minor obstacles before and can again.

The telling difference is the sea-change in public attitude that has occurred.  Whereas there used to be a national consensus about the common good which encompassed both workers’ welfare and entrepreneurial ambition, this consensus has eroded.  So that now private entrepreneurial ambition eclipses the common good. 

The apocryphal, though telling, anecdote of Secretary of Defense Charles Wilson illustrates the change of attitude.  He supposedly said, “What is good for G.M. is good for American.”  and this caused a fire storm of criticism from Republicans as well as Democrats, because at the time in the 1950’s it was commonly assumed that “what is good for America is good for G.M.”  (Truth is Wilson said both.  But in this case the legend is more important.)  Today, there is a significant portion of the population who really do think that “what is good for business is good for America.” 

Along with this has grown a visceral dislike (hatred) of democratic government.  This more than anything is a sure sign of the breaking down of the national consensus.  People on the far Right will claim that the government has forfeited the people’s trust, but others will say it is a symptom of deeper psychological forces that foster personal alienation and isolation.  A sign of it is consumerism which prizes stuff above social consequences of work and living.  It is demonstrated by the credit card mentality which is tempted by cheap introductory interest rates into a life of debt.

Your statement, “Did we the people ask for a housing bubble? No.”  Is superficially true.  But it hides the deeper truth that the happy McMansion buyers and second/third mortgagers were not consciously asking for a ‘bubble’ but were grasping after a dream.  Dumb and foolish, yes.  But they did not think they were pursuing their own ruin.  And this, to my mind, is exactly what is going to happen with all this hatred of the government and ‘I can do it better myself’ attitude’ taking hold of the American mind.  Everyone thinks he’s striding to the bright uplands, but will find that social and governmental dissolution will become more ruinous than the ‘housing bubble’ ever was.

QuantumBubbler, October 12 at 7:43 am:

‘“The West Krakow Stamp Club’s reason for existing is social injustice?  Tell me more.”

Oh! So you’re in the rather receptive ultra-liberal frame of mind? OK, then misconstrue your heart out… the West Krakow Stamp Club’s reason for existing is social injustice… you can believe that, right? Here’s another one, Barrack Obama loves Americans!’

You said that all groups become increasingly irrational over time.  I asked about the groups that were not states or religions.  You wrote, ‘About all of the groups that are not big ticket, God help them if they were to accidentally change the social injustice which underlies their reason for existing!’  I was wondering if you thought this applied to such as the West Krakow Stamp Club, an organized group.  According to you they should be becoming increasing irrational, and their reason for existing is social injustice.  And now you’re off on a misspelled Obama.  Can I at least get an explanation of your opinions about those irrational, unjust stamp-collecting Poles before we go chasing after Mr. O’s emotions?

‘I didn’t say anything about population growth… none of my business… I’m not a meddler.’

You said previously, ‘As for how to tell of the rationality of a country, within the context of this correspondence, that would be economic behaviors and their impact, plus or minus effects upon the population of the group.’  I am doubtful as to whether that is a good measure of rationality in the present world.

‘But I am curious if people who drank the kool-aid are setting aside guns and rations like the rest of us. If you’re not, well, bye-bye!

That’s very romantic.  Do you have a redoubt in the woods, or what?

“The West Krakow Stamp Club’s reason for existing is social injustice?  Tell me more.”

Oh! So you’re in the rather receptive ultra-liberal frame of mind? OK, then misconstrue your heart out… the West Krakow Stamp Club’s reason for existing is social injustice… you can believe that, right? Here’s another one, Barrack Obama loves Americans!

I didn’t say anything about population growth… none of my business… I’m not a meddler.

But I am curious if people who drank the kool-aid are setting aside guns and rations like the rest of us. If you’re not, well, bye-bye!

QuantumBubbler, October 11 at 2:36 pm:

‘As for how to tell of the rationality of a country, within the context of this correspondence, that would be economic behaviors and their impact, plus or minus effects upon the population of the group.

About all of the groups that are not big ticket, God help them if they were to accidentally change the social injustice which underlies their reason for existing! More than likely, the underlying justification for their existence will just change of it’s own accord and they’re dues will dwindle but they can usually hang on, after all, nothing costs them nothing but their own hot air.’

The West Krakow Stamp Club’s reason for existing is social injustice?  Tell me more.

As for rational countries, I don’t see why population growth is necessarily rational.

“But as I see it the market has already too tragically found where growth lies . .
. and their discovery is that profits grow out of accounts books and not the
factory floor.”

I would posit that the Keynsian Federal Reserve Policy of Greenspan/Bernanke
(contrary to popular belief, Greenspans Libertarian or “Rand” days were in his
younger, pre-fed years), was the source of all the free money that led to
malinvestment in the Financial Sector. I think that is fairly well accepted. So its
Fed actions that drives profits in a Maladjusted sector. Meanwhile, you get
corruption in Washington that lets Wall St and Washington cronies make billions
off what should be illegal. Recall that libertarians/Austrians DO propose a legal
framework within which individuals can pursue their interests.

A market not warped by Fed policy and Washington-directed economic plans
(Freddie Fannie and Financial shenanigans- Mr Scheer clearly implicates both
parties in this), would not have invested in those directions, and hence the
profits of the last 20+ years would NOT have been in the “account books”.

The unaccountable Fed, the corrupt 2-party system, and our over-reliance on
Keynsian notions of Government deciding where to spend money, all the while
piling on debt that enriches the banking sector via the infinite transactions, is
what is driving us into the ground.

Did we the people ask for a housing bubble? No. While there were certainly
plenty of irresponsible individuals, it all started with classic Fed behavior,
furthered by corrupt politicians and Wall streeters who lack an appropriate legal
framework, and abetted by a naive public who still believe in Keynsian dreams
of Demand at all costs, organic or not, as well as trusting the government,
instead of their neighbors, to allocate capital responsibly and productively.

Well, the way the teaching of the RCC inflect such torrid animus upon homosexuals… even one homosexual in their whole organization would seem to be an overrunning! One out of three? Come on! It’s a stinking mess of a group of people. Makes me just want to go to an RCC church and maybe take some tykes away!
The pope will forgive me! He can forgive anybody!

As for how to tell of the rationality of a country, within the context of this correspondence, that would be economic behaviors and their impact, plus or minus effects upon the population of the group.

About all of the groups that are not big ticket, God help them if they were to accidentally change the social injustice which underlies their reason for existing! More than likely, the underlying justification for their existence will just change of it’s own accord and they’re dues will dwindle but they can usually hang on, after all, nothing costs them nothing but their own hot air.

D in CT

It seems that we pretty much agree about the state of the economy, though we have different solutions.  I think we’ve been edging closer and closer to a laissez-faire economy for at least a generation. An arbitrary starting point perhaps could be placed when Carter began deregulating the transportation industry.  Maybe some would place the beginning at Kennedy’s lowering the marginal tax rates.  Of course, both these policies seemed at the time to have many things to commend them, just as the abolition of the Fair Trade laws in the late 50’s seemed commendable. But the unintended consequences of these seemingly good actions, have snow balled into the mess we’ve got today.

You write,

“An Austrian or Libertarian way would seem to be to let the market show where growth is wanted or needed,
and price things accordingly, so that money and prices reflect true value once again.”

But as I see it the market has already too tragically found where growth lies . . . and their discovery is that profits grow out of accounts books and not the factory floor. It is a process that did not begin with Bush, but might possibly be traced to Kennedy and Carter who innocently adopted radical free market solutions to the problems of their day.  But however you trace the history, these misapplied market policies explain the steady loss of American jobs and decline in real wages.

In the course of experimenting with varieties of free market policies during the past generation, America has redefined capitalism.  Whereas formerly capitalism envisioned a dynamic economy where capital worked, producing not only products and wages, but profits too.  The new capitalism which we’ve invented sees its goal as profits and accumulated wealth.  The new capitalism should be called hoardism.  To my mind President Obama is trying to restore the American economy to a more traditional capitalist footing in the American mold. 

I believe we must re-balance our fiscal and economic policies to a more tradition American mix.  It is not because the market can not reliably find the course of least resistance to profits but that the concern of America is not solely the bottom line but it should be the citizenry as a whole.

QuantumBubbler, October 10 at 5:55 pm:

‘... Empirical proof of groups becoming more irrational over time? Easy, about all of the nations of the so-established Western world, uh, how bout the Catholic church and their being overrun by gay priests? ...’

I doubt if the RCC is quite overrun with Gay priests, and in any case, that might be a rational development.  I don’t know about all the nations of the Western world.  Has Portugal become more or less rational?  How would we know?  What about all the groups that are not big-ticket religions or national states?

LJL,

Appreciate the serious comments.  Was just reading about all that debt
maturity business last night.

A couple of things concern me:

” We have been deeper in the hole than now and managed to get out of it. And
there is no reason to believe that we can’t do it again, if cool heads prevail and
the hysterical Chicken Littles are kept well away from the government.”

Chicken Little is one analogy, The Boy who Cried Wolf could be another.

What I fear is there is simply not the prospects for the type of growth- real
growth- not debt financed, kick the can until dollar crashes growth, that has
gotten us out of the hole in the past.  We haven’t been a nation all that long,
and it seems the first part of our economic story has been exploitation of the
vast resources of North America, and the continued growth and consumption of
the resources with continued settling of the country.  Then we were a
manufacturing country, making real things, with real value, with families
actually saving money. It seems in our latest chapter, the easy picking of
natural resources and settlement expansion are coming to a close. Now we have
been running on debt based consumption, mostly for Keynsian consumptions
sake, consuming tons of crap from plastic gadgets to Hummers, that we all
know are not really necessary for our true standard of living.  The most recent
chapter of course was the expansion of the Financial sector into our GDP, the
real house of cards, debt, and abuse by the banking/wall street crowed,
enabled by the greed/stupidity of us all to think it could all be real.

So now that the financial jig of pretending things have value that don’t is up,
what is the next big thing. And it has to be a REAL thing, a thing of value, and
everyone else in the world has to want it from us, if we have a chance of getting
out of our hole.

I just don’t believe debt spending that substitutes for organic demand.

What about the idea that people are realizing that the apparent level of our
economy, and our consumption and house sizes and hummers was just
ridiculous, and that many people are fine to accept that the economy is
notching down to a more REAL level.  But of course that REAL level, is not
enough to pay the taxes required to pay back all the DEBT we have…..so I
guess we keep the charade going?  And be environmental stewards along the
way?

The Keynsian analysis that demand is not keeping up with the previous capacity
of our economy and thus we need to spike demand, seems kind of gross and
corrupt to me, as we all know the old level was irrationally and unsustainably
high.

Second.
“Companies have discovered they can thrive in a low employment environment
where low taxes coupled with a permissive tax code and easy regulations
makes profiteering a snap.  On the other hand neither the American people nor
their governments can thrive in this low employment environment. “

But that may just be the truth. That companies can make what they need to
make to sell, with less people. It may be terrible for us when we are laid off, but
competitive business just can’t be in the social welfare business.  So should we
print money, take on more debt, and pay ourselves with borrowed money
creating government jobs instead? A conundrum indeed!

And the Nature of the Fed?  Constant inflation? The idea of actively perpetuating
infinite growth seems to be the Keynsian way. An Austrian or Libertarian way
would seem to be to let the market show where growth is wanted or needed,
and price things accordingly, so that money and prices reflect true value once
again.

D in CT,

Of course, the budget is serious.  There has been no time in the history of the nation that the budget has been a matter of comedy.  But America has a more than two century history of managing its budget.  We have been deeper in the hole than now and managed to get out of it. And there is no reason to believe that we can’t do it again, if cool heads prevail and the hysterical Chicken Littles are kept well away from the government.

In a nut shell, when it has been necessary for the American government to borrow large amounts of cash it has managed to do so at low interest rates.  Last year, for example the service on government debt fell because of low interest rates.  Clinton solved the deficit problem with a relatively painless rejiggering of the tax code.  But the undoing of his fixes set us up for our current dilemma.  Today the real danger associated with the deficit is not its apparently staggering size but how it is held.  For the first time in our history Bush and then Obama were forced to sell off relatively short term instruments (the average maturity now is 50 months) and this necessitates a faster economic recovery than we can manage without another politically difficult stimulus plan. 

Here is the problem.  1) The country has lost 12 to 15 million jobs since 2007.  2) We are burdened with record low business taxes.  3)  American companies are awash with record high cash reserves.  And 4) companies are still reluctant to hire.  If we had higher business taxes they could be lowered to prod hiring, but taxes are already low and even though Obama has lavished more tax breaks on companies to incentivize hiring there isn’t enough umph left in that gun to do much more than minimal good.  And there is no legal way to make companies use their cash to hire more workers.  In the meantime, states and local entities are seeing revenues shrink and so are laying off more workers which further contracts revenues. 

And now is where laissez-faire theory stumbles big time.  Companies have discovered they can thrive in a low employment environment where low taxes coupled with a permissive tax code and easy regulations makes profiteering a snap.  On the other hand neither the American people nor their governments can thrive in this low employment environment. 

Either companies without the prodding of more tax breaks (because there really aren’t many more tax breaks that can be given) will have to accelerate hiring on their own or the government will have to come up with more stimulus if we are to avoid being eaten by the debt maturing in the next 50 months.  There are simply not enough cuts left to be made in the budget to avoid this, so people who think that is the way to avoid catastrophe are arithmetically challenged.  The only way out is to drastically increase employment, which Obama has tried and companies have refused to do.  And as I see it this can only happen if there is a miraculous change in the nation’s psychological outlook or in some very clever fixes to the tax code.

“We have managed so far to mostly escape the evils of criminal laissez-faire
policies while maintaining a livable level of needed regulations against the
mafia minded de-regulators.”

We’re broke.

As a registered democrat, and what I would consider a
progressive/independent, by the way, I am not the far right fawning over
anyone.

I’m disillusioned not only with the two party corruption, but the whole notion of
the Federal Reserve and Banking industry, which has them wrapped around
their finger.  The power of the Fed is arguably the greatest power on earth, and
yet they are not democratically elected, not democratically accountable, and not
even audit-able.  The whole bubble creation, popping, and taking regular folks
money away during each crises, and then constantly with inflation, seems very
easy to understand, and infuriating.

What do you think of it?

D in Ct:

Whether it is Chicken Little on the far Left or Chicken Licken on the far Right crying that the sky is falling and demanding a puristic crack pot solution to the problem, they have been rightly rejected throughout by the American people.  Of course, the traditional American solution does on occasion create imbalances (usually you must admit under laissez-faire capitalist crazy conservative rule) but on the whole America has done all right (especially when more reasonable democratic Democrats are in control).  Whatever inequities you see in America (and there are plenty) you must also recognize and applaud the benefits that have resulted from the balanced American economic and social model. We have managed so far to mostly escape the evils of criminal laissez-faire policies while maintaining a livable level of needed regulations against the mafia minded de-regulators.

The absolute Monty Pythonesque irony of the silly American Right embracing the Austrian School is that this Viennese gang is composed of psychologically damaged men all of whom were schooled at tax payers expense but became embittered because their assumed privileges were taken away.  That is, they had minor titles which were rescinded when Austria became a democratic republic and for the rest of their lives they flailed around like singers in a bad operetta reminding everyone who would listen of their lost aristocracy.  Needless to say the Austrian are people acquainted with these characters and thoroughly reject their loony theories.  But they found suckers in America who adulate them and fawn over them because of their ‘old world’ Habsburg gravitas and because they promised an alchemical route to wealth.

“Truly free” is what you see in Nature and maybe on the battlefields of Man except that is all just fake. Scratch that, men are slaves to men.

Empirical proof of groups becoming more irrational over time? Easy, about all of the nations of the so-established Western world, uh, how bout the Catholic church and their being overrun by gay priests?

People get used to the fact that ‘it’s just a group’ and they’re just going along with it yadda yadda yadda… like the Democratic environmentalist person I know who I just discovered leaves an incandescent light burning on her back porch 24/7. She knows deep inside it’s all just an act for a soul-less group.

“No real wealth ever resulted from laissez-faire policies, in fact all prosperity
created in America depended on government support (railway fortunes were
made because of free right of ways secured by federal troops,  High Tech mega
fortunes were created because tax educated scientists went to work for Gates,
etc).  Anyone who is silly enough to suggest that the democratic government
should get out of our economy is threatening to destroy America.”

Since when have robber baron fortunes been considered prosperity for all?
Aren’t we currently concerned with a record disparity between mega-wealth
and the rest?

Corruption and business coziness with government that intervenes is a much
surer way of concentrating wealth in a few hands, than true competition.

Did you read this RE the Government and Big Banks, Railroads etc?

http://www.lewrockwell.com/rothbard/rothbard66.html

It is time for traditional Americans to stand up along aside Conason to reaffirm the wisdom of America where freedom along with social cooperation have made a livable country. It takes a fair amount of courage in this time of whining Tea Party animals and amorphous ‘progressive’ complainers to stand up for American democracy.  However, American prosperity was exc;usively created because there has been a common sense mix of taxes, regulations, unions and political freedom in this country. No real wealth ever resulted from laissez-faire policies, in fact all prosperity created in America depended on government support (railway fortunes were made because of free right of ways secured by federal troops,  High Tech mega fortunes were created because tax educated scientists went to work for Gates, etc).  Anyone who is silly enough to suggest that the democratic government should get out of our economy is threatening to destroy America.  The Austrian laissez-faire capitalist ideas were last tried in the Middle Ages and proved so successful then that no sane person has touched them since.

@dave
“Unfortunately because contrary to popular belief, I think progressives and Tea partiers might be closer than they think”

Dave I agree it is dissatisfaction with the status quo that these Tea Partiers are fighting against. If progressive would take off their blinders and seek to
make common cause, we might have an effective third party. After all the person they admired was Anti-War Anti-Fed Ron Paul.Instead the smart right wing Libertarians of the Koch stripe, the Neo-Cons like Palin have spotted this and drawn them off on a more right wing direction. The Boston Tea Party was a populist revolt against the colonial government of their time. It was a progressive movement. Instead the narrowminded politics of race and the elitism of progressive blinded them to a chance for real change.  Just like this article.

QuantumBubbler, October 9 at 9:18 am:

‘IMO: Rational expenditures are only possible inasmuch as they are considered by an individual, and only if the individuals are truly free. Groups become irrational over time. Can you see empirical proof of that concept?’

I’d definitely like to see a proof of that proposition.

By the way, what does ‘truly free’ mean?

“You obviously have no notion whatsoever of comparative systems or the underlying factors of Health Care.”

I did no comparing of systems and did not spotlight any underlying factors yet somehow, you can dig into my rhetoric and come up with the above statement? You have been educated into a very prejudiced person. I am suspectful of your reasoning.

Anyhow, in forgiveness of your disrespect for me, I continue.

IMO: Rational expenditures are only possible inasmuch as they are considered by an individual, and only if the individuals are truly free. Groups become irrational over time. Can you see empirical proof of that concept?

I could go on an on but you can just dis me if you like…

““We are all Keynesians now” is a now-famous phrase coined by Milton Friedman (1965, Time mag interview) and attributed to U.S. president Richard Nixon. It is popularly associated with the reluctant embrace in a time of financial crisis of Keynesian economics by individuals such as Nixon who had formerly favored free market capitalism.”—wikipedia

so much for your grasp of economic and its history in the u.s.

hey joe, maybe you should be writing about another ‘ideology’ that is finding its way into teabag politics—the NSM (National Socialist Movement)

QB: The forerunners (Anything that precedes something similar in time, i.e., Medicaid, Medicare, StudentLoans) have already had significantly much less than NO OR LITTLE return to our nation.

Let’s start with Health Care. You obviously have no notion whatsoever of comparative systems or the underlying factors of Health Care.

First of all, our per capita cost ($7250 per person per year) is twice or three times more expensive than most European countries that maintain a National Health System (a full-fledged Public Option) for the same quality of service.

Secondly, much of the overly costly American system is subsidized by the Federal Government (by law), meaning that corporate heath insurance policies are reimbursed in part by the Treasury. The so-called “competitive insurance market” is not the least bit competitive and the American tax-payer is paying through the nose for the lack of competition. So, why have it?

Thirdly, the part of corporate health care that is not subsidized is simply recuperated by factoring it into the price of a company’s goods/services. Meaning we all pay for it as consumers. (It was thought to add $1200 to the price of every car that Detroit manufactured, before bankruptcy changed the benefits entitlements.)

Fourthly, European Public Options are far cheaper to run because HC is an oligopoly (there is no real competition because Demand far outstrips Supply of services). In such a market condition, prices must therefore be mandated to reduce costs. Americans don’t like price-regulation but it is the only way to reduce hallucinatory HC-costs.

As for Tertiary Education:
* Most European systems have no tuition costs, just and enrollment fee. The cheapest cost for an American student, in a state university, is about $12,000 per year. Which is why barely a third of the American population has a university degree.
* All vocational training is part of any UI-program. Meaning, the unemployed are paid to go into training courses.
* Europe has far better vocational apprenticeship programs, which are effective in getting people the work-experience that facilitates finding a job—and there is factual evidence to prove this.
* Etc., etc., etc.

Blah, blah, blah to you too ...

DINCT: Some people, unlike the establishment dogma Dems and Repubs are trying to find common cause, instead of tearing down, to move us away from the status quo.

Easy to say, cataclysmic to do.

One must evolve from the present to the future, since the economic dislocation of “tearing down” would be too great for any people to assume.

Let’s first get a consensus on where we have to go before all piling on a train that runs off a cliff. Americans are far, far, far away from understanding the fundamental nature of the economic transition that is playing out.

They’ve been drinking too much tea lately ...

Austrian/Libertarians, Non-Keysians predicted the meltdown.

http://mises.org/daily/4730

Some people, unlike the establishment dogma Dems and Repubs are trying to find
common cause, instead of tearing down, to move us away from the status quo.

http://www.activistpost.com/2010/10/5-key-principles-that-unite-
populist.html

Unless you really do think we need a centralized/statist/socialist organized society
to avoid more of the same, your real enemies are in Washington, not the Tea Party
and its rough edges.

“So prove it ... that a Public Health Option and lower-cost Tertiary Education are irrational expenditures with no or little return to nation.”

OK, I’ll prove it, ready?

The forerunners (Anything that precedes something similar in time, i.e., Medicaid, Medicare, StudentLoans) have already had significantly much less than NO OR LITTLE return to our nation. Some fair amount of negative trillions of dollars… I don’t want to get scary ‘bout it. But that’s proof of no or little return to the nation.

Before you deliver the next most obvious retort about how I don’t care enough to ... yadda yadda yadda. I admit, I like it when poor people just get health care for free. In fact, the only change I would make for the profession is they charge the same fee for each person, and then after discovery of net worth, they adjust the fee so again, the poor get theirs for free and through fee adjustment over a certain geographical area, the rich pay the fees the poor were not charged. This could be a simpler system than the LESS THAN NO OR LITTLE existing ‘system’.

Going broker and broker is no longer an option.

I have been a full time 24/7 activists for 41 years.  Nothing has PERMANENT change for the better.  Everything that has change for the worse is all still with us since day one.  Folks, the United States of American has gone way beyond the half way point of diminishing returns.  Outside of technology but the human condition today what you see is what you get no more no less.  Right now with the way things are no one has a right anwer. We are guilty of what we have become.  So where do we go from here, we need to start again with a NEW square one.  Tlamatini-vicente

Anarcissie,

If you have a definition of the political right and left that will clarify things for me, I’d be happy to hear it.

pabbott, October 8 at 2:59 am:

Too far to the left, and government absorbs all private property.  Too far to the right, and private property (i.e. giant corporations, mammoth banks, and hedge funds) absorb all government. ...

You are using the terms ‘left’ and ‘right’ in such a way as to obscure meaning and thought.  No wonder you get the two mixed up.

MYOPIA REIGNS

QB: The ‘free’ part goes into the red as the bureaucrats are piled on to make sure it is working according to their plan rather than leaving it to individuals involved to make the choices. It costs a lot for the gummint to give away money, a whole lot! Too much for it to ever work.

And bollocks to this notion, too.

For your edification, there is an expenditure on human resources called Social Investments, which has proven beneficial. As in business, nothing ventured, nothing gained—thus Social Investment can bring general improvement in living standards, yes, when done properly.

If our nation does not make these kinds of simple investments in its citizens then we deserve to have the sort of nonsensical argument, devoid of even rudimentary proof, as that cited above.

It’s shortsighted to think that just because a government makes an investment, it is wasteful bureaucracy. It can only be wasteful when its utility is proven as squandering.

So prove it ... that a Public Health Option and lower-cost Tertiary Education are irrational expenditures with no or little return to nation.

Hmmmm… FiftyGigs… maybe the world needed some better articulators? Clay, Lincoln, Hamilton, they’re all failures?

I say that because, from what is evident empirically, when something truthful is explained correctly to another sane mind, it is accepted completely and hence the seal of Truth is awarded. This endeavor engenders a Happiness in real individual people (people without the ax of a greater group they have to grind).

But then there are ‘whiners’ who are made ‘out of tune’ in their childhood years, hence the symptom of whining. They could be fixed, but, now here’s my point, here is why you are wrong about the ‘fix’:

The same federally financed scientific research and educational infrastructure, a public work of professorial social engineers, whom you extol, scuttled the first true psychological science decades ago. That’s just one ‘for instance’ of an institution not delivering for the ‘common good’. They refused to teach the new psychology in their public educational institutions. The new science worked so well, the psychological industry might go out of business! How’s that for corporate welfare? (Millions of people read some $4.00 paperbacks and became genuinely sane anyway.)

It’s also an example of public institutions not doing what they should.
There is a natural reason this happens. It happens because ‘groups’ always end up with the top tier becoming populated with the people who want most to be in the ‘top position’ within the group and have the social skill of ‘seeming slightly better than common’. When one bad apple gets a high position, then two, then three… a cascade will occur and the group will be useless, for the so-called common good. And of course, the underlying conditions for the group’s existence WILL change and their requirement will lessen. The NAACP requires race problems to the extent they even recently tried making them out of the clear blue. Rhetoric is crafted to make group leaders appear as ‘understanding’ what is going on, long after it has gone on of course, they still don’t ‘get it’. They can’t get it for you.

Group leader use the powers of persuasion within the group of believers to extend their usefulness to the point of ROFLMAO ridiculous! You cited the uneducation of the American people, aren’t the bureaucratic DOE uneducating our children? They are, because wholesome individuals, in the big picture are antithetical to the group psyche. Groups need needy people for their coherence, but not too needy! Luckily for the individual, the group leaders will usually get out of the way when you get too needy, or they will show their fangs, which is more fair than their smiling…and if you replace the group with another group it will happen again… that is the sh*t that happens… I’m sorry for anyone dependent on groups.

But as your Dept of Education continues making needy people, what do you expect to end up with? When there’s nothing but needy people, who takes care of them? Given the rate of birth defects and accidents, the number of actual needy people in reality is a much lesser percentage than what is contrived today and it would be affordable…

We live in a very complexed world so you’ll have to depend on the complexors… that’s what they want… go ahead… I believe in Freedom. If you don’t find living your best by your own decisions at the moment without regulations from afar you’re free to give up freedom.

You ended your economic dreams with: “And that both should be as near free, gratis and…”

The ‘free’ part goes into the red as the bureaucrats are piled on to make sure it is working according to their plan rather than leaving it to individuals involved to make the choices. It costs a lot for the gummint to give away money, a whole lot! Too much for it to ever work.

Our forefathers had it all right nearly, work on what they made or re-invent the wheel.

CONVENTIONAL WISDOM

About the link to the distribution of wealth analyses, University of Santa Clara, Department of sociology.

The person responsible for that page, D. Domhoff, did not do the analyses that led to his conclusions—which makes them no less pertinent. The analyses, if you look at the references, were performed by reputable economists.

Here is the most poignant, I submit, of Mr; Domhoff’s conclusions that demonstrate more than adequately the ignominy of wealth distribution in the US:

In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers).

America is a “fair country”? By what standards? America is a “free country”? Again by what standards?

Answering the above is where the political debate should be centered, but isn’t. Why isn’t it?

Because we continue to gob—hook, line and sinker—the Conventional Wisdom regarding our democracy, which is pap for the masses. And what might that Conventional Wisdom be?

That if you work real hard (and win the lottery) you can achieve the American Dream—being richer than Croesus, or, at least, Brad Pitt.

Believing that is dumber than dumb; it’s idiotic.

POST SCRIPTUM

Now Wealth is not the same as Income, we all know that. But there is no wealth without the accumulation of income—and this latter comes from work, doesn’t it?

Well, no, not for some people. For you and me, yes, we work—but some people just sit back and call their Asset Manager at Goldman, Sachs (or some other such bank). And, in that respect, here is another telling quote from D. Domhoff:

But it’s important to note that for the rich, most of that income does not come from “working”: in 2008, only 19% of the income reported by the 13,480 individuals or families making over $10 million came from wages and salaries.

Meaning that money begets money. (Or, it never sleeps, according to the new Oliver Stone film.)

Still, what does all that mean? My response, and mine alone:
* We know we don’t want a society or an economy that promises absolutely equal shares of the wealth generated for all. That just won’t work and the demise of centrally-planned economies, like communism, proved the point.
* However, neither does it mean that we want (or need) a society/economy where the wealth is mostly concentrated upwards - because the wealth has no real utility.

And as an economist, I just used the magic word, which is “utility”. Economists have been haggling over this word for more than a century. Utility is the measure by which the most good is done for the most people. And the concentration of wealth generating income in only 19% of the population is hardly useful. Why’s that?

Because there is no possible way that at a certain level of wealth it can be “useful” to anyone. How many houses in how many continents do you need? How many Ferraris in how many garages does any one person need or use?

Wouldn’t the wealth, if it became tax revenue, do more good for more people, by means of Public Option Health Care or a Tertiary Education system that provided each and every student the wherewithal to compete in today’s difficult labor market? And that both should be as near free, gratis and for nothing as possible?

I think it would ...

BACK TO THE PAST

pabb: Too far to the right, and private property (i.e. giant corporations, mammoth banks, and hedge funds) absorb all government.  Either way, the result is the same, with all power concentrated in too few hands - and decisions being made solely to serve the interests of those few.

Well put … economic fairness is somewhere in between the two extremes Right and Left.

When power and influence move too far to the Right, as they have since Reckless Ronnie came to office (and reduced Marginal Income Tax rates from 70 to 27%), the result is a concentration upwards of the wealth generated by the American economy. Which is characterized by the rise of a Plutocrat Class.

The irony of it all is that the plutocrats, with their influence over the generation of wealth in the Industrial Age, is identical to the aristocracy that owned/exploited land in the Agricultural Age, during which the American rebellion was fought against its leader, the monarch George the Third of England.

As a nation, we have made a round-trip back to the past of aristocratic hegemony in the 18th century. Today, since our modern day aristocrats are not noble, they are called plutocrats.

Therefore,  in compromising/corrupting the democratic process by means of influencing Congressional elections - we have instituted a plutocratic government the purpose of which is to serve the vested-interests of its breed. And the rest of us live in servitude, just like our ancestors prior to 1776.

FREEDOM NOW

We think we are free, because there are no apparent bonds or shackles. Because we are allowed to share in a wee bit of the economic wealth that the American economy generates. When the much larger part of the economic riches go to a select minority of the American population. (I repeat for edification the ugly fact of today’s ignominious sharing of wealth in America found in the analyses reported here.)

Our democracy is run, presently, by people beholden to plutocrats for their reelection – due to the nefarious way funding so influences the outcome of political campaigns. (Mind you, that too is our fault. Why do we allow ourselves to be influenced by marketing campaigns that sell candidates as if they were soap powder—“Mine washes whiter than white!”)

Corporate Welfare is rampant – in the M-I-C, in Health Care, in the manner in which the Justice Department is neutered (not prosecuting companies for abuse of market domination), in Farm Subsidies to conglomerates, etc., etc., etc., ad nauseam. The list is long of corporations drinking copiously from the trough of government spending.

These same corporations also contribute handsomely to political reelection campaigns. Knowing the facts, ask yourself, “Is there not a better way?”

Too far to the left, and government absorbs all private property.  Too far to the right, and private property (i.e. giant corporations, mammoth banks, and hedge funds) absorb all government.  Either way, the result is the same, with all power concentrated in too few hands - and decisions being made solely to serve the interests of those few. 

Freedom is not necessarily the opposite of regulation.  As someone once said, “Your freedom to extend your arm ends where my nose begins.”  Regulations are often just a way of letting us all know where someone’s nose begins - and therefore attempt to guarantee someone’s freedom from being hit at the same time they attempt to limit another’s freedom to hit.

To use a concrete example, does anyone seriously want to do away with sanitation regulations?  What if your neighbour decided his family could save money by foregoing a bathroom and just having the whole lot of them shit in the back yard? 

If you don’t like the government, you can vote in a new one.  If you don’t like a large corporation, what can you do exactly?  I keep hearing conservatives say that the free market and my spending decisions will make corporations change, but if that’s true why is it that I can’t find a phone company that doesn’t make me wait 20 minutes on the phone listening to muzak every time I need service, or a washer-dryer (or any other “durable” good for that matter) that isn’t designed to break down in five to ten years?

Mr. Conasson raises an interesting question:  “So why would the tea party movement, so prone to bouts of jingoism and xenophobia, embrace an untried foreign ideology?”
  Because they are a very lonely crowd of lonely individuals (left outers, feel themselves sinking).  Contrary to their belief in “individualism”, they are brought together first by fear—a fear unchecked by the authority of good educational backgrounds that would warn them against fear as a prime mover.
  Still doubting themselves, still needing the support of an authority, they follow some leader, preacher,teacher to strengthen their confidence.   
  Yet even beyond their leaders, they need the authority of print—books(Bible, Rand, Hayek etc.,foreign or otherwise)  supporting their point of view—rugged individualism plus authoritarianism. Even though they themselves yearn for freedom, they are driven to get together with others—a contradiction they are not aware of.They also yearn to be led.
  People like the Tea Partiers are prime examples of “contradiction worse confounded” for the louder they talk about “individualism” “freedom” and “competition” the more they gang together, try to deny equal rights to those who differ, and push for the use of force, political/military which involves forced unity, denial of diversity, and the yen for overwhelming power characteristic of fascism/communism or any other rigid undemocratic ideology that promises “law and order” and authoritative management.
  There’s more, of course, but this, I feel,is basic.

Let’s please note that the first ‘state’ [watch it, imparts false symbolic value] had
been the citystate, say, UR, Eridu, which had been founded on ownership of
nature: land, people, and animals.
And all uncivilized peoples had emulated that model. Only some high
civilizations such as some blacks and most ‘indians’, avoided it; preferring a
idyllicly-structured society.

And no patching reforming [deforming, in fact], regulating, deregulating,
‘educating’, changing this or that wld change the invariant i just posited; and
change being giving owned-people more or less crumbs or freedoms.

To some people, the causes for our miseries and that of our planet is zionism,
capitalism, economy, taxes, some, ‘jews’, etc. In fact these aspects of one reality
appear as mere symptoms.

It is the symptoms on which all MSM columnists dwell only—and not on
important ones, either.

Btw, “the clash of civilizations” represents one of the great snake oil sales. Many
people believe that US society is highly civilized. In fact, it is highly uncivilized
society.
In kind it may be more civilized than that of kurdistan, india, pak’n, et al; seems
worse only because of its fire power; however, not in kind or who cares how one
limns it?

Another great swindle is the infamous “End of History”. This means that fascsits
can now be much freer to continue owing people or even increasing ownership
of them.
Ending the ownership of people is what we need to work for. tnx

EUROPEAN CENTRISM

Among the most bitter complaints against President Obama is his supposed penchant for European notions concerning health care reform, climate change and global security. His angriest critics at tea party demonstrations maliciously suggest that the president is himself a foreigner who doesn’t respect the American way.

Can Europeans be blamed for being ahead of the 8-ball in stead of behind it?

Seriously, the three issues mentioned above make America look as if it were still in the 19th century:
* Health Care is a rip-off of a privileged class of their fellow citizens, with the quiet acquiescence of BigBrother Gummint,
* The US is at a sad 61st place on the Environmental Performance Index (see here),  and
* As regards extension of military might—well if Uncle Sam wants Toys for His Boys to play and die with, smart Europeans let him.

The Republican Party, in all of its forms, is coming to an end of the Reagan Cycle, which began in the 1980s. America is transitioning from the Industrial to the Information Age and with that will go remnants of an economy that was living on borrowed time.

The Ayn Randian notion that the individual prevails over the collective is as bypassed as most Right-wing economic philosophers of the 20th century. In the case of Ayn Rand it was a visceral hatred of communism that began in her homeland Russia during her time there. But to think the demise of communism proved the validity and supremacy of Free Market Systems is naive to the point of foolishness.

European Centrism (which is defined by both the extremes of the Right and Left) has shown that the Capitalist Cash Cow can be milked for the benefit and general pursuit-of-happiness of any society.

America has yet to learn that lesson, however, stuck, as it is, with its fixation on the concentration of wealth upwards. So be it, but it is this upcoming generation that will pay the price of that folly.

Hmmmm… FiftyGigs… maybe the world needed some better articulators? Clay, Lincoln, Hamilton, you’re all failures?

I say that because, from what is evident empirically, when something truthful is explained correctly to another sane mind, it is accepted completely and hence the seal of Truth is awarded. This endeavor engenders a Happiness in real individual people (people without the ax of a greater group they have to grind).

But then there are ‘whiners’ who are made ‘out of tune’ in their childhood years, hence the symptom of whining. They could be fixed, but, now here’s my point, here is why you are wrong about the ‘fix’:

The same federally financed scientific research and educational infrastructure, a public work of professorial social engineers, whom you extol, scuttled the first true psychological science decades ago. That’s just one ‘for instance’ of an institution not delivering for the ‘common good’. They refused to teach the new psychology in their public educational institutions. The new science worked so well, the psychological industry might go out of business! How’s that for corporate welfare? (Millions of people read some $4.00 paperbacks and became genuinely sane anyway.)

It’s also an example of public institutions not doing what they should.
There is a natural reason this happens. It happens because ‘groups’ always end up with the top tier becoming populated with the people who want most to be in the ‘top position’ within the group and have the social skill of ‘seeming slightly better than common’. When one bad apple gets a high position, then two, then three… a cascade will occur and the group will be useless, for the so-called common good. And of course, the underlying conditions for the group’s existence WILL change and their requirement will lessen. The NAACP requires race problems to the extent they even recently tried making them out of the clear blue. Rhetoric is crafted to make group leaders appear as ‘understanding’ what is going on, long after it has gone on of course, they still don’t ‘get it’. They can’t get it for you.

Group leader use the powers of persuasion within the group of believers to extend their usefulness to the point of ROFLMAO ridiculous! You cited the uneducation of the American people, aren’t the bureaucratic DOE uneducating our children? They are, because wholesome individuals, in the big picture are antithetical to the group psyche. Groups need needy people for their coherence, but not too needy! Luckily for the individual, the group leaders will usually get out of the way when you get too needy, or they will show their fangs, which is more fair than their smiling…and if you replace the group with another group it will happen again… that is the sh*t that happens… I’m sorry for anyone dependent on groups.

But as your Dept of Education continues making needy people, what do you expect to end up with? When there’s nothing but needy people, who takes care of them? Given the rate of birth defects and accidents, the number of actual needy people in reality is a much lesser percentage than what is contrived today and it would be affordable…

We live in a very complexed world so you’ll have to depend on the complexors… that’s what they want… go ahead… I believe in Freedom. If you don’t find living your best by your own decisions at the moment without regulations from afar you’re free to give up freedom.

Once again the Tea Party is said to be fond of libertarian political philosophy.  But where are the facts?  I don’t see any, except a vague attribution to that fount of wisdom and truth, the New York Times.

There was another Austrian (with a funny mustache), whom the current Tea Party crowd would have blindly supported, had they been around in a previous era.

“As articulated by thinkers from Alexander Hamilton to Henry Clay to Abraham Lincoln, it included…

- protective tariffs to foster industry,
- national support for scientific research,
- federal spending to finance public works,
- regulation of private infrastructure,
- and universal education.”

Thank you for articulating what should be repeated often in the liberal media, our agenda, what we’re doing, what we vote for. Well done.

Bonus! Joe also articulated the Republican conservative agenda:

“... corporate-funded outfits like Americans for Prosperity are promoting their own familiar agenda ... in tearing down government, extirpating regulation, and destroying public institutions ... to completely dominate an increasingly impoverished, uneducated and undefended people” living in the richest nation on earth.

This is kind of insight I expect from TruthDig. Keep it up, and remember to vote.

“...tearing down government, extirpating regulation and destroying public institutions, what would be left standing?”

What should be left standing? Instead of ‘regulations’, how about a court with a jury of 12 peers to decide, based on the circumstances of the case before them, what should be done? Oh, Progressives are against that, they prefer a more committee like approach to justice… sorry.

Public institutions? They are not normal. In normal living the cream rises to the top. In public institutions it gets to the point where the sh*t floats and the cream ... just isn’t gonna dominate the flavor of the stew.

For the most part, the problems are not political but rather a failure brought about by group dynamics. Groups always fail, they require individuals to compromise to the point where the individuals are not worth having what the group was gonna do for them done in the first place. It’s an exciting carnival ride and it will break down. It will hurt you if you did depend on it. You can try to fix it with more complexity but I would suggest trying to keep it simple like our country was designed to be. That is what was working, what we have piled onto the core of our country is what is destroying it.

Our forefathers had enough information and they did make the right decisions.

“Why should European ideologies of the far right suddenly become fashionable among citizens who so blithely accuse the White House of importing “socialist” policies from abroad?”

EXTERMINATE THE BRUTES!  So writes the Belgian, Kurtz, at the bottom of his treatise on bringing enlightenment to the dark heathens.  That is ultimately what the USA far right wants - exterminate all of them, no matter where they are.

The American System has never been popular with the oligarchy:

Lessons for Denver: FDR’s 1932 Victory Over London’s Wall Street Fascists