Tax Day Tea Party-Goers Maligned By Those Who Support Unprecedented Deficit Spending
by Ted Slater on 04/15/2009 at 4:19 PM
Today thousands of people in dozens of cities around the United States are gathering to protest the billions trillions that our elected representatives are confiscating from our yet-to-be-born children to spend on stuff.
The idea for these marches may have begun in early February when blogger Keli Carender organized a grass-roots protest in Seattle, and then brought into the national limelight when CNBC's Rick Santelli suggested that it was time for "Tea Parties" to protest "subsidizing bad behavior," something he associated with our current administration's mortgage entitlement expansion plans.
Though mostly driven at the grass-roots level via the Internet, a couple of larger groups have stood up to facilitate the marches: Tax Day Tea Party and National TEA Party Day. PajamasTV is providing ongoing coverage of today's events.
And you know, as long as these protests remain non-violent, I think they're fine. It's healthy to see normal Americans express themselves this way.
On the other hand, we have reports of groups destroying and defecating on promotional materials, and seeking to infiltrate the marches to disrupt and defame those who are marching. And we have the national media (e.g., MSNBC, CNN, and others) relishing in homoerotic vulgarity by referring to those marching as "Tea-Baggers" bent on "Tea-Bagging."
So there you go. Some people are protesting out-of-control spending. And others are belittling and threatening them. Good thing that one of those groups is under the loving and watchful eye of Big Brother our Department of Homeland Security.
1. BDB said the following at 5:19 PM on Apr 15:
Um...you used some terms I'm not familiar with...I'm afraid to click on the links...
2. Kevin said the following at 5:24 PM on Apr 15:
Sweet! Another political post! Gotta love these.
3. S said the following at 5:43 PM on Apr 15:
The Christian radio station I listen to on the way to work had this as their verse(s) of the day:
Romans 13
Submission to the Authorities
1Everyone must submit himself to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God. 2Consequently, he who rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves. 3For rulers hold no terror for those who do right, but for those who do wrong. Do you want to be free from fear of the one in authority? Then do what is right and he will commend you. 4For he is God's servant to do you good. But if you do wrong, be afraid, for he does not bear the sword for nothing. He is God's servant, an agent of wrath to bring punishment on the wrongdoer. 5Therefore, it is necessary to submit to the authorities, not only because of possible punishment but also because of conscience. 6This is also why you pay taxes, for the authorities are God's servants, who give their full time to governing. 7Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.
4. Mark W said the following at 5:54 PM on Apr 15:
Ted,
I thoroughly agree with your position here and the position of all of the tax protesters. I think, unfortunately, the reason that those in the mainstream find it so easy to criticize the Tea Party-ers has to do with the fact that many of the same people (yes, I'm looking at you Boundless) were utterly silent about the trillions in deficit spending, expansion of civil gov't, and trampling on civil liberties that occurred under George W. Bush. I'm glad that so many neocons have supposedly now seen the light of liberty and freedom, but where were all of you when Bush was doing the same thing?
Yes, Obama's spending plan is even worse, and when it comes to fiscal and civil liberty issues he does not represent "change" in any way whatsoever. But you would have more credibility if you had an even standard for judging administrations.
Remember, the federal gov't serves no one's interests but its own. And that's true whether the "guy in charge" says all the right things to make himself sound like an evangelical or whether he's the hippest, trendiest fad on the block right now.
5. Leeandra said the following at 6:05 PM on Apr 15:
I have absolutely no problem with people peacefully protesting spending bills, or any other bills they don't agree with for that matter.
But I do wonder...if today's "Tea Parties" are all about economics and our children's future and not about partisan politics...where were these protesters during the Bush administration?
After all, GWB and the Republican Congress were no stranger to deficit spending either.
6. BDB said the following at 6:17 PM on Apr 15:
#5 wrote:
>>After all, GWB and the Republican Congress were no stranger to deficit spending either.<<
Yes. That's why they lost in 2006 and 2008. They refused to listen - even to Republicans who were screaming about spending.
Today's events were more driven by facebook and Internet organizing - it was not organized by the Republican party.
7. Rachael said the following at 6:27 PM on Apr 15:
I love tea. Especially berry-ish, white, red, green...yum ~
8. BDB said the following at 6:40 PM on Apr 15:
If there was a way to "like" comment #7, I would do so...
9. JB said the following at 6:40 PM on Apr 15:
I've been to a number of demonstrations and marches against the World Trade Organization and the invasion of Iraq. In my experience, being mocked, belittled, defamed, and monitored by the government isn't all that bad, really.
10. Jonathan Sarfati, Ph.D. said the following at 7:12 PM on Apr 15:
Ann Coulter on the Tea Parties and their sqawking leftist detractors, who never met a tax on other people they didn't love — Obama's Recipe For Change Not My Cup of Tea.
11. Leah said the following at 7:40 PM on Apr 15:
I am getting really really sick of Boundless continually saying nothing but bad things about the American government, and the petty way in which many of the contributors argue about such topics. (And as an Australian, I'm usually only too happy to listen to Americans whinging about America :P)
Leeandra - I have a feeling the Obama administration is creating a rather larger deficit than Bush might have.
12. Jonathan Sarfati, Ph.D. said the following at 7:45 PM on Apr 15:
"People are tired of wasteful government programs and welfare chiselers, and they're angry about the constant spiral of taxes and government regulations, arrogant bureaucrats, and public officials who think all of mankind's problems can be solved by throwing the taxpayers' dollars at them."
"Government can't tax things like businesses or corporations, it can only tax people. When it says it's going to 'make business pay,' it is really saying it is going to make business help it collect taxes."
"We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much."
"Our tax policy is engineered by people who view tax as a means of achieving changes in our social structure."
"Raising taxes will slow economic growth, reduce production, and destroy future jobs, making it more difficult for those without jobs to find them and more likely that those who now have jobs could lose them."
"My friends, history is clear: Lower tax rates mean greater freedom, and whenever we lower the tax rates, our entire nation is better off." — Ronald Reagan (1911–2004)
13. JF said the following at 8:33 PM on Apr 15:
I remember hearing of one other tea party that was a protest, though I wasn't born when it happened. I believe it was called the Boston Tea Party...
14. Irene M. said the following at 8:50 PM on Apr 15:
The idea of sending tea and holding tea parties is quite creative. It's a peaceful and historically relevant way to protest and I can certainly appreciate that. However, I can't really blame liberal media for "relishing in homoerotic vulgarity." They're not the only ones calling the protesters "teabaggers." I was watching a fox news last week and I almost chocked on my drink when I heard what the presenter's language. Granted, he probably didn't know what it meant, but someone should have clued him in.
So, it's a great idea but, it's been poorly executed at times.
15. Keith said the following at 9:05 PM on Apr 15:
We are meant to leave our children an inheritance, and not a debt. Our children should be blessed because of our hard work, rather than being burdened by our bad mistakes.
I support the stimulus spending to get the economy going again, but not without a smartly planned exit strategy to get out of debt. You don't take a mortgage for a $300,000 house without a detailed plan and contract on how the money will be repaid. In the same way, the government should not spend a cent more than it needs to, and needs to stick to a responsible plan to get out of debt.
16. IMO said the following at 9:23 PM on Apr 15:
Leah,
This was all over the news. Sure it wasn't the top headline...but it was definitely talked about.
So I'm not surprised it showed up on Boundless.
17. farmer Tom said the following at 9:43 PM on Apr 15:
4. Mark W. said,
Amen, brother, preach it, say it louder and longer brother, AMEN, and AMEN, AMEN.....
#3. S, I have a question for you, ....... I know that this is going to be tough for you to answer, so read the passage you quoted several times before you reply,
Can government do evil?
And now the follow up,
Please give an example of government doing evil, can you think of anything?
Let me give you a couple of examples, like for instance, would it be evil for the government to take, oh I don't know, say 90 percent of your income?
or would it be evil if the government pretended that the God ordained covenantal union of a man and woman in marriage, can also apply to two sodomites?
or how about if the government says that killing infants in the womb is morally acceptable?
Are you still going to bow down to the alter of government, or are you going to do as Paul and Peter did?
What happens when the government does wrong S., are we just supposed to forget about it, let it slide, think happy thoughts? What is our response to a government that does evil?
From the passage you quoted,
When "God's servant to do you good", does evil, what is the Christian's response to be?
When the "agent of wrath to bring punishment on the wrongdoer", punishes the righteous, what is the Christian's response to be?
Remember this passage from Isaiah 5:
18. Jonathan Sarfati, Ph.D. said the following at 9:46 PM on Apr 15:
Leah (#11), maybe you should actually find something good that the abortion-loving, spendthrift, neo-Chamberlainite Obama admin has done, then inform Boundless of this astounding news ;)
19. BDB said the following at 11:08 PM on Apr 15:
JB #9 has realized why it's better to live in a Westernized Democracy!
20. composer girl said the following at 5:10 AM on Apr 16:
Oh wow. I didn't know that Reagan said that (#12). Wise man.
21. Irene M. said the following at 7:04 AM on Apr 16:
Sorry, I should have said national media instead of liberal media. Complaining about the "liberal media" is a misreading of the post.
Mr. Slater, I'm really sorry about that and will be more careful next time I comment.
22. Boston Matt said the following at 7:07 AM on Apr 16:
Johnathan,
HERE HERE!!!
23. obewan said the following at 8:59 AM on Apr 16:
I was pleased to see in the press that there was finally a non-partisan protest that Democrats and Republicans could actually agree on. Both parties turned up according to the new videos I saw yesterday.
However, I now must ask: Where were the tea parties for Bush's trillion dollar war? The war money will never be paid back. Loans to banks are just that. Loans will be paid back with interest. And I have to admit that money for public transporation will help me a lot more than a war that we did not need.
24. Saidahwk said the following at 9:01 AM on Apr 16:
I think this post brings up two truths:
1. Boundless readers need to heed the Bible; "do not be afraid," and "watch and pray."
2. Boundless readers strongly underestimate and are disturbingly unfamiliar with the reality of the "end times." I'm not saying the world is coming to an end tomorrow, but the parallels between Revelation and modern times are starting to get freaky.
Ex.
Revelation 17: 1-6 vs. The Greek 2 Euro Coin. REALLY freaky. lol.
25. Adam said the following at 2:40 PM on Apr 16:
#18 & #22:
I am smiling about my $400 tax cut! He's appointed people who's job is to reduce abortions. He has spent millions promoting fatherhood.
Yeah, I could probably make a longer list of things that he has done that I disagree with. But Bush had his share of things that I disagree with as well. Just take a look at how much the National Debt has increased under him and other Republicans! The Democrats haven't been good either, but have definitely been better than the GOP.
_____________________
National Debt (from treasurydirect.gov):
Carter:
09/30/1977 698,840,000,000.00
09/30/1981 997,855,000,000.00
Reagan:
09/30/1981 997,855,000,000.00
09/29/1989 2,857,430,960,187.32
Bush:
09/29/1989 2,857,430,960,187.32
09/30/1993 4,411,488,883,139.38
Clinton:
09/30/1993 4,411,488,883,139.38
09/30/2001 5,807,463,412,200.06
Bush:
09/30/2001 5,807,463,412,200.06
09/30/2008 10,024,724,896,912.49
_______
26. HER said the following at 3:02 PM on Apr 16:
# 17 I know you did not ask the question of me, but this is what I was wanting to say as I read through the comments so I am going to address it. Yes government can do wrong. Yes we must obey God rather than man. But what law of God are you breaking by paying taxes, even if they tax too much and spend unwisely. The government of Rome was not exactly above reproach and it is to that government that Christ said to "Give unto Caesar what is Caesar and to God what is God."
I personally do not like what our leaders are doing. I do believe they are destroying our countries economy with their laws. But I am commanded in scripture to "fear God. Honor the king." (1 Peter 2:17). This command is in the context of Christians being warned that their government is going to persecute them. PERSECUTE THEM. Kill them. Throw them to the lions. Beat them. Take away their livelihood. And God says to Honor the King. In the following verse the author commands submission not only to good masters, but also to harsh. I wonder how often we have an attitude of honor for our leaders. Not only the good ones, but also the harsh. Romans 13 reminds us that these authorities have been established by God. Remember these authorities that Paul claims were established by God are the same authorities that persecuted the early church. What honor is due to our authorities? How should we speak of them? I would suggest that these commands were given to Christians in far more difficult circumstances than we face today.
Now I am not suggesting that we should never disagree with authorities, but we must make sure we have a correct attitude towards them, one that honors them. I am increasingly concerned that conservative Christians are not honoring or even attempting to honor the rulers God placed over us.
Yes I must obey God rather than man. As soon as government asks me to sin I will stand up and say no. But I must obey God and He commands me to honor the king. Pray for my leaders. Do good to those who spitefully use me. That is the challenge to my faith.
27. S said the following at 3:34 PM on Apr 16:
#17-
I was just stating the verse that was quoted on my local Christian radio station that morning.
28. JB said the following at 3:47 PM on Apr 16:
BDB,
Of course! I would strongly advise anyone in the market for a political system to go with liberal democracy. The trick, though, is to keep reminding it to live up to its highest ideals. Hence the protests.
29. Kelly said the following at 8:00 PM on Apr 16:
Jonathan (18) - How can you possibly judge someone from what's reported in the media/official channels?! We have no idea what the truth of the situation is.
That's why I never bought into the Bush-bashing and I'll never buy into the Obama-bashing. They're just MEN, trying to do their job, and are surrounded by countless advisors and PR people who distort the truth into what they think we should/want to hear.
(Also, an honest question, why do you sign your name with Ph.D.? There are several commenters here with the same qualification yet they don't feel the need to include it.)
30. Stephanie said the following at 8:36 PM on Apr 16:
#26 - well said!
31. Jonathan Sarfati, Ph.D. said the following at 8:42 PM on Apr 16:
Kelly (#29), I am already outed here as a Ph.D. when Boundless published a few of my articles.
I don't judge by the media or official channels, but by the actions. In every case, Obama has advanced the abortion agenda and higher taxes on the most productive.
32. Dan real-name said the following at 11:26 PM on Apr 16:
Hey gang,
At first I was bothered by the increasingly social-political posts on this blog. But look at it this way: there ARE issues that WILL impact the 20somethings this site is trying to reach. At least you all have a respite from the once-ubiquitous "get-married-now/why-won't-men-put-down-the-game-controllers-and-step-up-to-the-plate-and-ask-a-woman-out" articles (tounge not in cheek).
33. Jonathan Sarfati, Ph.D. said the following at 2:59 AM on Apr 17:
To back up Farmer Tom, the Million Taxpayers' March criticised tax-loving big-spending socialists — from BOTH parties!
34. Sarah P. said the following at 8:00 AM on Apr 17:
(#24): Christians have been predicting the end times for generations. I bet the Black Plague sweeping through Europe in the 14th century kind of looked like the end of everything too. :P
People want to feel like their lives were meaningful. If they are not secure in Christ, they search elsewhere. In government, they want to do something to Make a Difference, rather than serving in an invisible way that keeps the country running. So they enact hands-on policies. Those policies cost money.
And those are the people with good intentions. Then there are fearful people seeking to demonstrate to their constituents that they've done something, so that they can keep their job. And last, some people are seeking to accrue as much personal power as they can.
What a mess.
35. Trisha in AR said the following at 12:25 PM on Apr 17:
At this point, I don't care who is in office. The foundation of this country is crumbling each and every day and I feel that I need to be a part of expressing my discontent. As one sign stated, 'Ignore your rights, and they will go away.'
#10 - Gotta love Ann Coulter!
#25 - Thanks for the detail of the debt. First time I've seen it broken down. But haven't the democrats controlled congress for the past two years? Either way, they both play a part in our situation.
36. BDB said the following at 4:35 PM on Apr 17:
Sarah P. (#34) wrote:
>>I bet the Black Plague sweeping through Europe in the 14th century kind of looked like the end of everything too. :P<<
During Y2K, I heard someone point out that as Europe approached the year 1000, they were pretty freaked out as well.
I guess they assume that God uses a base-10 counting system and likes round numbers.
(Tip of the hat to Dilbert).
37. Jonathan Sarfati, Ph.D. said the following at 5:43 PM on Apr 17:
Trisha (#35) indeed, spending bills must constitutionally come from Congress, not the Presidency, so it matters a lot that the Dems were in charge for the last two years. They got that way because the GOP spent like Dems and Bush failed in his duty to veto such unconstitutional spending.
Worse, see this video footage of Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis.
38. Mark W said the following at 5:53 PM on Apr 17:
To further back up farmer Tom, Dr. Sarfati, and myself:
http://www.lewrockwell.com/blog/lewrw/archives/026378.html
39. Jethro said the following at 9:34 PM on Apr 17:
Evidence the Tea Parties actually harmed the GOP: http://www.huffingtonpost.com/2009/04/17/tea-party-fallout-indepen_n_188235.html
40. Mike Theemling said the following at 9:34 AM on Apr 18:
Before knocking the Dept of Homeland Security Ted, just remember who created it in the first place and in response to which event. :)
41. IMO said the following at 11:02 AM on Apr 18:
Why don't you just stay at Huff instead of coming over here and not contributing to anything edifying?
42. JB said the following at 12:17 PM on Apr 18:
Thanks, Jethro, for the interesting article.
43. Jethro said the following at 6:18 PM on Apr 18:
But if I stayed at Huff I wouldn't have the joy of interacting with you IMO.
44. Jonathan Sarfati, Ph.D. said the following at 6:46 PM on Apr 18:
The GOP is foolish when it takes the advice of liberals, including limousine liberals like Huffington. They tried the moderate route with McCain, but the only time he was ahead in the polls was when he nominated Palin. Moderate Republicans caused their party to be a congressional minority for decades.
Remember when they won big? When Reagan stood as a real conservative who articulated free market policies and rejected the "blame America first" nonsense. Gingrich led his party to congressional victories with a clear vision.
But now the GOP is deservedly in the tank, largely because of their porkophilia and lack of clear articulation of principles. Reagan and Gingrich explained why their principles were good for the country; the current mob's only real slogan is that the other lot would be worse (true but hardly a votewinner).
It's fine to want to broaden the party's appeal. But opportunistically promising moderates what they could get better from the Dems is no way forward. Rather, they should repeat Reagan and Gingrich and show why conservatism and the free market are good for moderates and the country.
It may not be a bad thing to harm the GOP as it currently stands
45. Jethro said the following at 12:57 AM on Apr 19:
"Rather, they should repeat Reagan and Gingrich and show why conservatism and the free market are good for moderates and the country"
The only problem is they aren't.
46. farmer Tom said the following at 6:34 PM on Apr 19:
AMEN
47. Kyra said the following at 7:45 PM on Apr 19:
My understanding of the original Tea Party was that participants were protesting "taxation without representation." We, obviously, have representation. Therefore the connection between the Boston Tea Party and this one seems shoddy at best. Personally I feel that the only U.S. citizens who can validly cry "taxation without representation" are those female churchgoers who are asked to tithe and donate without the hope of ever seeing themselves or another female in a position of power, discussing the issues most relevant to them (ahem...but I digress...)
While I thought the original bailout was poorly thought out and executed, am I correct in understanding that the TARP legislation bailing out five major banks and many smaller ones was crafted by Republicans prior to Obama taking office?
It seems to me that the majority of money in the current spending plan(all of which can be tracked on the government website) falls into two categories:
1) Patching the grievous wounds left by the deregulated markets by doling out the rest of the bailout money;and,
2) Finally addressing all of the other long neglected sectors, namely infrastructure, education, health care, etc.
As for the $30K per person price tag for the next generation, add it on to the end of their student loan bills! I'm sure they won't even notice the blip. At least they'll have operating banks at which they can take out loans, they'll have safe bridges to drive over to get to campus, and textbooks to read once they get there.
Anyway how much do we really need to worry about a future generation? I mean, how many currently jobless, homeless mothers facing unplanned pregnancies do you think are going to elect to keep children they can't even afford to birth let alone feed? If we don't start offering the (formerly) working class some real, immediate help, there won't be a future generation.
48. Phoebe said the following at 12:03 AM on Apr 20:
Hi Dr. Safarti... are you the Dr. Safarti I know about through Creation magazine?
49. Mark W said the following at 7:48 AM on Apr 20:
Jethro,
Re #45: Please give a rational explanation of why free-market economics are not good for the country. Also please explain if you have a better alternative.
50. Trisha in AR said the following at 7:50 AM on Apr 20:
(#37): Yep, I can agree with that. And RINO's are a whole other topic...
Couldn't view the video - company firewalls. I'll have to check that out at home. Although, I'm quite aware of the dems responsibility. Letters were written and warnings were given before this even passed...but to no surprise, they were ignored.
51. Jonathan Sarfati, Ph.D. said the following at 8:54 AM on Apr 20:
Jethro (#45), in line with his motto "In Big Government We Trust", ignores the prosperity that came when Reagan's and Gingrich's free market policies were adopted to some extent. Evidently he prefers the government meddling that produced the Hoover/FDR Great Depression and the Carter stagflation.
52. Ted Slater said the following at 10:26 AM on Apr 20:
Kyra (#47) -- Democrats controlled both the House and the Senate for two years prior to Obama's coming into office. They were responsible for TARP, though both Democrats and Republicans voted for it in about equal numbers:
In the House, H.R. 1424 passed with the following breakdown of votes:
Democratic 172 Yea; 63 Nay
Republican 91 Yea; 108 Nay
In the Senate, H.R. 1424 passed with the following breakdown of votes:
Democratic 41 Yea; 10 Nay
Republican 33 Yea; 15 Nay
Oh, and for me and my family, $30k of extra financial burden is not a "blip."
53. KM said the following at 11:30 AM on Apr 20:
Ted (#52),
I'm having a hard time understanding how the Democrats, who have held a congressional majority since 2006, bear sole responsibility for TARP when by your admission, "Democrats and Republicans voted for it in about equal numbers," and Republican President Bush signed the bill without reservation. Moreover, the figures you cite show that neither the House nor Senate Democrats could have passed TARP without a significant Republican contingent. Can you please elaborate?
KM
54. Ted Slater said the following at 11:49 AM on Apr 20:
KM (#53) -- Not sure how to further clarify what I wrote. Both bodies of Congress -- the House of Representatives and the Senate -- have been controlled by Democrats since 2006. The legislation and lack of oversight that have led to the current financial crisis have come out of a Democrat Congress. TARP was written primarily by them, and they were in control of the process. They were "responsible" for bringing it to the table.
And a lot of Republicans in Congress voted for this legislation (though fewer, percentage-wise, than the Democrats). The Republican President signed off on it. These Republicans share "responsibility" with Democrats for seeing this bill passed.
Again, those are the facts. Nobody has "sole responsibility" for TARP, though Democrats do bear the bulk of it, since it came out of their Congress and since it received more D votes than R votes. Not sure what I can add to further clarify.
I would like to add that the spending spree the Democrat-controlled government is on is placing a crazy burden on my children, who've yet to earn a single taxable dollar. I can't imagine how we can get our way out of this mess, other than facilitating a dollar-weakening inflation, which will have the effect of reducing the debt burden. If President Bush was wrong to increase our national debt the way he did (with the cooperation of Congressional Democrats, who provided the budgets), then President Obama is even worse than Bush for our nation's financial stability.
I think I'm in denial about how bad this spending spree is. If I really understood how terrible it is, I might have a panic attack (no offense toward those who suffer panic attacks, OK?).
55. BDB said the following at 12:05 PM on Apr 20:
Incidentally, TARP is not "spending." It is loans that pay interest until they are repaid. That has been lost in the discussions of how "bailout money" is being "spent." If you charge something on a credit card, the credit card company can't vilify you for what you bought - you spend knowing that you must pay the money back. I don't care if firms that receive TARP money pay bonuses, they still have to pay all the money back, plus interest. The bipartisan nature of TARP support is no doubt why it is a loan rather than a giveaway.
AIG is another matter. That was a total bailout because they really didn't price their insurance contracts anywhere near the realm of reality. I do think that "stay" bonuses are legitimate if for no other reason that it buys some stability to figure out how to wind things down without blowing everything up. The top executives should lose their jobs for approving those risks. But the mid-level executives and managers were doing what the top executives told them to do - as soon as they finish winding down the business they're out of a job, too. Probably for a long time - the stay bonuses are to tide them over for that impending unemployment. AIG is at the epicenter of several regulatory problems, such as the implied (now explicit) government backing of Fannie Mae and Freddie Mac that made people believe the governmet was insuring all these risky mortgages. Taking over those three companies is the real price of government pushing risky loans via Fannie and Freddie.
But that's the Federal Reserve, not the actual budget. Neither party control the Federal Reserve, it's supposed to be a nonpolitical entity to make things more stable than politicians, who all seem to have ADHD when it comes to policy. Besides, most people in Congress are lawyers who are clearly bad at math.
The "stimulus" is actual spending, and adding a ton of debt to the nation's balance sheet. That was done by Democrats.
56. Trisha in AR said the following at 12:08 PM on Apr 20:
Last I heard, our debt is $186,717 per man, woman and child - - or $746,868 per family of 4.
Ted, you may now have your panic attack.
57. Amir Larijani said the following at 12:23 PM on Apr 20:
Ted: Quit calling it a "spending spree". To call it by that name is far too mild.
This is our government CREATING MONEY OUT OF THIN AIR to spend.
On top of the official tax hikes that are inevitable, we are already paying an underhanded, hidden tax in the form of an erosion of our standard of living.
This is why I nominally make twice as much money today than when I graduated college 19 years ago. But that money does not buy me twice as much as it did in 1990.
Make no mistake: that is every bit as much of a tax as the "official" posted tax rates.
58. KM said the following at 12:37 PM on Apr 20:
Ted,
I misread the part in your comment regarding responsibility - thank you for clarifying.
I see the argument you're trying to make but it appears to be a non-sequitur. You say that the Democrats' legislative initiatives and lack of oversight led to the current financial crisis. Do you have any support? I've heard that argument a lot but never any valid support. Without being too technical, all available economic data, along with liberal and conservative analysis, suggests that the subprime lending and accompanying leverage problems in the financial markets began in 2005, approximately 18 months before the Democrats took majority control of Congress in January of 2007.
I'm not blaming either party, and while you are absolutely correct that a smaller percentage of Republicans voted for TARP than did Democrats, there is enough well-placed blame for everyone.
Also, I do suffer panic attacks but took no offense to your comment :)
59. Mark W said the following at 12:51 PM on Apr 20:
"I can't imagine how we can get our way out of this mess, other than facilitating a dollar-weakening inflation, which will have the effect of reducing the debt burden."
Unfortunately that's Obama's and Ben Bernanke's only thought as well. The problem is that they're only reinflating the bubble. We've been here before. You can keep propping up the U.S. economy with inflation, but then you always, ALWAYS have a recession and/or depression to correct for it. You cannot beat the laws of the market. Adam Smith's invisible hand keeps proving the Keynesians wrong. The other problem is that the Fed is currently printing money at such a rate as to risk hyperinflation.
The best course of action for the gov't to follow is, and has been from the beginning, to do absolutely nothing - allow bad businesses to die, go through the pain of a severe recession, and then rebuild the economy on firmer ground. Yes it would be very painful, but it would also probably be over quickly and it's the only way forward. By continuing to artifically keep the economy alive our leaders are only prolonging the inevitable (and drawing out what would be relatively quick recessions as well as making the eventual total collapse that much worse).
The Austrian economists (the only economists who have been accurately predicting these recessions/depressions since the creation of the Fed in 1913) have been saying this forever, but unfortunately, the gov't saying that in the best interests of everyone it will do nothing doesn't play very well on CNN. Until and unless we have a revolution in American politics where our leaders understand sound money and care more about the common good than bailing out their friends and/or how impressive their legislation sounds on TV, get ready for the endlessly recurring bubble-recession cycle for the rest of your life; or at least until our foreign creditors stop bailing us out and the gov't basically goes broke.
"then President Obama is even worse than Bush for our nation's financial stability."
This is the most ironic part of all of this. Everyone is rightly blaming the gov't for this mess; however, when it comes to gov't spending we haven't had a substantial policy change since Reagan took office. The MSM loves to criticize Bush (again, rightly so) while also praising Obama, not realizing that Obama is doing the exact same things that Bush did to get us into this mess, only on a larger scale.
60. BDB said the following at 1:37 PM on Apr 20:
From an economic standpoint, I agree with Mark W.
The last three bubbles were created when three things came together:
A) Fed lowering interest rates to make cheap money available.
B) A regulatory environment favorable to a new innovation.
C) A legitimate need that sparked the initial interest in the innovation.
Here's how that played out for the last three bubbles:
"A" occurred in all three.
INTERNET:
B) Congressional moratorium on Internet sales.
C) Need to convert systems for Y2K. This is why the bubble burst 3 months after Y2K - the need evaporated.
REAL ESTATE:
B) Government pushing subprime loans to increase home ownership, implicitly backing the mortgages, thus attracting lots of investors to mortgages.
C) Housing is a real need with population growth - particularly in places in California where there is usually a shortage of single-family housing due to high development costs.
COMMODITIES (OIL & GOLD):
B) A vast array of restrictions on building new refineres and new drilling in North America.
C) Substantial economic growth in China, India and other nations driving up world demand.
My guess is that the next bubble will be in alternative energy companies. The Fed is easing again, so you have "A."
B) Combination of stimulus funding with EPA regulation of CO2 and mandates to switch electricity generation to non-fossil fuel sources while still allowing regulations to hamper non-CO2 producing sources like hydroelectric and nuclear.
C) Legitimate concerns about future oil-price shocks creating a market for plug-in vehicles, thus potentially increasing electrical demand via other sources.
61. BDB said the following at 2:00 PM on Apr 20:
Sorry - it should read Congressional moratorium on Internet taxes, not sales. The Internet has been treated like mail-order catalogs where sales taxes cannot be imposed across state lines - such taxes are prohibited by the U.S. Constitution.
There is discussion in the news today about Congress allowing such taxation. It will of course be litigated by Amazon and others who believe fiercely that such taxes are unconstitutional.
I hold with those who believe "Use Tax" is unenforceable because it is a de facto tax on items imported from another state.
62. Jethro said the following at 5:19 PM on Apr 20:
This article in The Atlantic from a former IMF Chief Economist does a pretty good job of explaining the perils of unregulated markets.
63. Jonathan Sarfati, Ph.D. said the following at 5:35 PM on Apr 20:
Kyra (#47):
"My understanding of the original Tea Party was that participants were protesting "taxation without representation." We, obviously, have representation."
Yet there is the death tax, "taxation without respiration", an iniquitous double taxation on assets on which tax has already been paid, which destroys many family businesses. And the IRS is a law unto itself.
And King George's taxes were only about 2.5%; now Americans pay far more for the Social Security Ponzi/Madoff scheme alone.
Compare the Declaration of Independence with today:
"He has refused his Assent to Laws, the most wholesome and necessary for the public good." Runaway judicial despots striking down pro-life laws
"He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance." All the bureaucratic alphabet agencies that interfere in many aspects of American lives, which combine both legislative and executive powers against the Founders' wishes.
"He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people." Lincoln's armies against the Confederacy asserting their constitutional right to secede from the Union.
See also A speech against "Christian" American Patriotism by an American biblical Christian who argues that the War of Independence was anti-biblical.
"Personally I feel that the only U.S. citizens who can validly cry "taxation without representation" are those female churchgoers who are asked to tithe and donate without the hope of ever seeing themselves or another female in a position of power, discussing the issues most relevant to them"
Typical illogical feminist rant. Of course, female churchgoers are indeed "asked", but the government doesn't "ask" for taxes, it forces payment at the implied point of a gun.
64. Jonathan Sarfati, Ph.D. said the following at 5:40 PM on Apr 20:
Mark W (#59):
"The MSM loves to criticize Bush (again, rightly so) while also praising Obama, not realizing that Obama is doing the exact same things that Bush did to get us into this mess, only on a larger scale."
Right you are, but what else is new. FDR's policies were basically a continuation of Hoover's. Yet the media and government schools all mandaciously claim that Hoover was a laissez-faire do-nothing capitalist, whereas he was an interventionist, protectionist and raiser of tax rates.
Since you like the Austrian school (which BHO thinks speaks Austrian :P), check out the Mises.org review of New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America by Burton Folsom, Jr. (which you may very well be familiar with already).
65. Jonathan Sarfati, Ph.D. said the following at 6:58 PM on Apr 20:
PS: Kyra (#47), I recommend these two articles by Lita Cosner; she is a bright young apologist and New Testament scholar:
What's in a pronoun? The divine gender controversy
Bible Society reports that the Bible is not anti-female: is this news?
66. Jonathan Sarfati, Ph.D. said the following at 7:04 PM on Apr 20:
Phoebe (#48): indeed I am the Dr Sarfati (sic) who co-edits Creation magazine. I've written four articles for Boundless on creation:
Now a Creationist
Lousy Creationist Arguments
What is Evolution?
Evolution: Observed? (co-authored)
Disclaimer: Creation Ministries International is non-denominational and apolitical; anything I write here on politics and economics is strictly my own view, not necessarily that of CMI. But CMI is unashamedly pro-life and pro-family.
67. Jonathan Sarfati, Ph.D. said the following at 7:58 PM on Apr 20:
See Why I Dissed Republicans at the Tea Party by Jerry Agar. He is a recently unemployed immigrant who thinks that government is the problem not the solution.
He also dissed those who hate other people's pork, but are very happy with their own, and vote for the rep who delivers it.
68. Jonathan Sarfati, Ph.D. said the following at 11:06 PM on Apr 20:
Jethro's cited article (#62) actually exposes the dangers of crony capitalism, not free markets. Big business has long been the friend of big government, practising "rent-seeking" by lobbying for tariffs, supporting regulations that would hurt its competitors even more than themselves, and trying to persuade the government to "pick winners" as long as they are the picked winner. See also Big Business and Big Government by Timothy P. Carney, CATO, 21 July 2006.
John Stossel nails the real reason for the problem which über-lefties refuse to touch:
“The root is government power. When government is free to meddle in every corner of our lives and regulate the economy through taxes, regulation and subsidies, then "special interests" have every incentive to work on the politicians to preserve their turf or gain an advantage.
…
“In a real free market, a company succeeds only by making things consumers want to buy and keeping costs low enough that the market price yields a profit. Sadly, in our mixed economy, success can be achieved another way: by lobbying the government for advantages over one's competitors. The prospect of favorable government intervention creates incentives for producers and their lobbyists to strive to satisfy legislators and bureaucrats instead of consumers. The resulting competition for privileges sets the stage for the improper relationships that reformers fret about.
“The irony is that the "good government" types favor big government, so they undermine their own efforts to eliminate corruption.
…
“There is one way to rid the political system of this sort of corruption: severely restrict government power as the founders intended. Only when we eliminate the state's ability to meddle in business will business will stop meddling in government.
“A genuine free market, unburdened by government interference, is the route to cleaner politics.”
In summary, when buying and selling are regulated, the first things to be bought and sold are the regulators.
69. Louise from Chicago said the following at 7:35 AM on Apr 21:
Dr. Sarfarti, with all due respect, why are you so worked up about U.S. taxation issues?
You're Australian!
70. Mark W said the following at 8:10 AM on Apr 21:
Jethro,
I'm sorry but your article only further proves my point. The point the article makes is that gov't is in bed with big business to the point where big business is controlling the gov't. Surprise surprise. But do you really think more regulation will fix that? Think about it. Washington and Wall Street are too closely intertwined... so we should trust Washington to come up with new legislation to separate them? Bullcrap. That's just a recipe for more of the same.
If we truly had a free market, with Washington totally divorced from the economy and unable to interfere, it would solve the corruption problem overnight because big business would have no reason to buy out a gov't that could do nothing for them. Additionally, there would be no such thing as a firm that would be "too large to fail" and siphon money away from taxpayers; it would just fail.
Regulation is an inherently wasteful activity. Free markets (i.e.: ones with as little gov't inteference as possible) regulate themselves. True economic growth occurs best when economic activity is uninhibited by gov't planners who think they're smart enough to run an entire economy. We humans don't do well when we try to play God.
71. Jethro said the following at 4:46 PM on Apr 21:
Mark (#70),
I think the article makes a number of points. One of them is that big business has too much influence over government. Another is that there is too little regulation. The two are not mutually exclusive.
To answer your question, yes I do think more regulation will fix, at least partially, the problem. Better regulated economies, like Australia, have experienced far less fallout from the GEC than under-regulated economies like the US. I don't say regulation is the silver bullet, but it certainly helps.
I also disagree with you re the efficiency of 'truly free markets'. I think it's pretty fair to say that where there is no government intervention you have the development of huge monopolies that manipulate prices to discourage competition, ultimately to the detriment of the so called 'average Joe'. Look for instance at Standard Oil (which wasn't even a true monopoly).
I will agree with you however that a government divorced from the economy is less susceptible to corruption. What I disagree with however, is that this is a good thing. Clearly corruption is bad, but I do not want my economic future placed solely in the hands of unelected oligarchs and captains of industry. I certainly don’t think we can blame government solely for corruption though. You must remember that it is business doing the corrupting. Hardly what I would call blameless or pure. I am thankful for the government. I would just like to see them do more, not less.
72. Jonathan Sarfati, Ph.D. said the following at 6:35 PM on Apr 21:
Louise (#69), with all due respect, why did so many people get so worked up about Nazi genocide?
They weren't even German!
73. Jonathan Sarfati, Ph.D. said the following at 8:12 PM on Apr 21:
Once again, businesses could not corrupt government if the government had no power to regulate buying and selling. It's not surprising that the worst monopolies and cartels exist with government support that restricts competition.
Consider wealthy sugar barons that lobby both parties to keep tariffs, so American consumers pay over twice the world price for sugar. And companies that use sugar have been driven out of America, with far more jobs lost than were saved by the sugar protectionism.
And why do you Americans think you pay through the nose for lamb? Because your inefficient sheep farming lobby has persuaded corrupt politicians to impose tariffs on efficiently produced high-quality Australian and New Zealand lamb (NB Louise! ;)
"Land of the Free"? Don't make me laugh, given such protectionism aka anti–free-trade.
OK Jethro (#71), let's look at Standard Oil as you request:
What about Rockefeller's Standard Oil?
Standard Oil was punished for dropping the price of oil more then half, by buying up competitors in order to gain greater economies of scale — as their market grew they were able to achieve greater economies of scale, and thus lower their production costs, and thus lower their prices, while increasing their profits. Of course, by taking over inefficient refineries and charging lower prices, their inefficient competitors were unable to compete successfully (i.e., they were free to enter the market and compete, but because they were not as productive they could not 'win'), and so under antitrust 'Standard Oil' was punished for being too successful.
Writes Dominick Armentano [professor of economics at the University of Hartford],
“The little-known truth is that when the government took Standard Oil to court in 1907, Standard Oil's market share had been declining for a decade. Far from being a "monopoly," Standard's share of petroleum refining was approximately 64% at the time of trial. Moreover, there were at least 147 other domestic oil-refining competitors in the market — and some of these were large, vertically integrated firms such as Texaco, Gulf Oil, and Sun. Kerosene outputs had expanded enormously (contrary to usual monopolistic conduct); and prices for kerosene had fallen from more than $2 per gallon in the early 1860s to approximately six cents per gallon at the time of the trial. So much for the myth of the Standard Oil "monopoly."”
74. Mark W said the following at 10:33 PM on Apr 21:
Jethro,
"Better regulated economies, like Australia, have experienced far less fallout from the GEC than under-regulated economies like the US. I don't say regulation is the silver bullet, but it certainly helps."
Please tell me, specifically, how more regulation would have mitigated the effects of this crisis in the U.S. As far as I understand it, the only failure of gov't regulation is that banks were allowed to re-package extremely risky loans as top-ranked securities; in effect lying to their investors. This does not require any additional regulation, merely enforcement of laws against fraud. In fact, I would argue that the gov't was responsible for this crisis in numerous ways, but most notably with respect to the operation of a free market, by creating Fannie and Freddie and through legislation, requiring them to issue extremely high risk loans. Due to the laws of the market, other banks had to do the same in order to compete. In addition, the Federal insurance of bank money further fueled extremely risky behavior by the banks which otherwise would have been discouraged by natural market forces. Government's misguided attempt to “help the poor” by offering them the illusion of home-ownership (which many who received loans could NOT afford) was arguably the single biggest cause of this crisis.
"I think it's pretty fair to say that where there is no government intervention you have the development of huge monopolies that manipulate prices to discourage competition, ultimately to the detriment of the so called 'average Joe'. Look for instance at Standard Oil (which wasn't even a true monopoly)."
There are two problems with this argument. First, is that you're arguing against one type of monopoly in favor of another one - that of gov't. At least when it comes to private companies, you have the option of not doing business with them. Gov't is the only organization that can force you to do business with it at the (implied) barrel of a gun. Yes, monopolies can be bad, but in a truly free market they would always be the result of consumer choice. You bring up Standard Oil. Ironically, a large part of Standard Oil's ability to run its competitors out of business was because they were able to charge such lower prices. This is hardly anti-consumer. And indeed, if consumers had preferred other oil companies, Standard Oil would never have gotten to the point where it was accused of being a monopoly. If Standard Oil ever reached the so-called “end stage” of monopolistic behavior where it totally eliminated all competition and raised prices precipitously; these higher prices would then attract competition, as the profit margins in selling oil would be so high. As competitors entered the market, they and Standard Oil would again be forced to compete on price, thus breaking up the monopoly (or at the very least, anti-consumer behavior by the larger company). No Sherman Antitrust Act required. More on that here and here.
"I certainly don’t think we can blame government solely for corruption though. You must remember that it is business doing the corrupting. Hardly what I would call blameless or pure."
And I am sure that gov't is so innocent that it would never do anything wrong for any reason whatsoever. Yes, private corporations are seeking profits. Therefore when there is the possibility that the gov't will steal their profits and/or enrich them, of course businesses will have an incentive to try to control the outcome. (Which is why, as I said, we need a gov't that is prohibited from interfering in the market.) On the other hand, gov't is controlled by politicians - people who have made their career aim the accumulation of political power - the ability to force someone to do something at the (implied, if not obviously present) barrel of a gun. And we're supposed to trust these people? I think I'd sooner trust those who were merely after profits.
"I am thankful for the government. I would just like to see them do more, not less."
Unfortunately, I'm sure you'll get your wish. And then I and all other hard-working Americans will have the "privilege" of being forced by threat of imprisonment to buy the government's services. If you were willing to pay for all of these things you want the gov't to do out of your own pocket (as well as pay off the national debt since it's incredibly irresponsible to continue to purchase things you have no way of paying for when you're already in debt), then I might be more inclined to believe that your intentions are noble. As it is, they amount to freeloading.
75. Mark W said the following at 10:12 AM on Apr 22:
"As far as I understand it, the only failure of gov't regulation is that banks were allowed to re-package extremely risky loans as top-ranked securities; in effect lying to their investors. This does not require any additional regulation, merely enforcement of laws against fraud."
One more thought on this... Even if there were no gov't enforcement whatsoever, the market would still self-regulate here. Once investors realized what was going on, all of them would pull out and the offending company would go broke (or at the very least, lose an obscene amount of money that they wouldn't be getting back from the American people through taxation). Additionally, the investors who fueled this poor lending strategy would have lost money on their investment and thus been "punished" by the market for investing in the housing bubble rather than investing wisely (thus incentivizing them to be more careful with their investments next time). Voila, market self-regulation with no gov't intervention required at all.
It's also true that in a free market scenario the creation of "bubbles" would be extremely difficult and unlikely because you wouldn't have the Fed inflating money supply and making easy credit available (usually in the interest of making less fortunate people feel like their gov't is "helping" them) but that's another story...
76. Jonathan Sarfati, Ph.D. said the following at 11:02 PM on Apr 22:
How about updating “no taxation without representation” to No spending without Constitional authority?
“I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” … “With respect to the words general welfare, I have always regarded them as qualified by the detail of powers (enumerated in the Constitution) connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.” — President James Madison (1751–1836), the Father of the US Constitution.
“I cannot find any authority in the Constitution for public charity.” — President Franklin Pierce (1804–1869)
“I feel obliged to withhold my approval of the plan to indulge in benevolent and charitable sentiment through the appropriation of public funds. I find no warrant for such an appropriation in the Constitution.” — President Grover Cleveland (1837–1908)
“I don’t like the income tax. Every time we talk about these taxes we get around to the idea of ‘from each according to his capacity and to each according to his needs.’ That’s socialism. It’s written into the Communist Manifesto. Maybe we ought to see that every person who gets a tax return receives a copy of the Communist Manifesto with it so he can see what’s happening to him.” — accountant and Commissioner of Internal Revenue T. Coleman Andrews (1899–1983)
77. Jethro said the following at 11:47 PM on Apr 22:
Mark W,
You answered your first question yourself. Clearly better regulation would have detected the actions of banks in repackaging risky securities. Remember, better doesn’t always mean more.
Re Standard Oil, yes they ran other businesses out by charging lower prices. Then they jacked their prices back up. In the end the consumer loses.
Whether government ‘helping the poor’ by removing barriers to homeownership was a good or bad thing is a matter of opinion. It is somewhat amusing though that the general conservative mantra of ‘personal responsibility’ is pushed to one side for the conservatives’ other favorite pastime ‘bashing the government’.
On which note, I never suggested the government is innocent or would never do anything wrong. We all know that’s not true. I am simply saying that faced with a choice, I know where I’d be planting my flag and it is on the side of government. I don’t quite understand why you think it has to be all or nothing? I am happy with government and business working together. It really is a false dichotomy.
As a more general observation, it’s interesting to see you trust so heavily in the free market. The entire doctrine of laissez faire capitalism is predicated on the assumption that consumers and businesses are rational actors. If there is one thing I think we know for sure about humanity it is that we are not always rational. Time and again we have seen the free market break down when left to its own devices.
Dr Sarfati
“Once again, businesses could not corrupt government if the government had no power to regulate buying and selling”
Once again, you lay the blame entirely on government. Can you not see it takes two to tango? Businesses are hardly innocent bystanders in the game of corruption.
78. Mark W said the following at 10:33 AM on Apr 23:
"Re Standard Oil, yes they ran other businesses out by charging lower prices. Then they jacked their prices back up. In the end the consumer loses."
Um, no. As I said, that doesn't work. And the data bears that out. As soon as they bring their prices up, they're inviting competition back into the market. And as Dr. Sarfati pointed out, this is exactly what happened.
"Whether government ‘helping the poor’ by removing barriers to homeownership was a good or bad thing is a matter of opinion. It is somewhat amusing though that the general conservative mantra of ‘personal responsibility’ is pushed to one side for the conservatives’ other favorite pastime ‘bashing the government’."
First of all, let's please refrain from liberal-conservative labels. They mean different things to different people and are generally unhelpful in a discussion such as this. I am pro-market, pro-liberty, and pro-extremely-limited-gov't-to-the-point-of-almost-nothingness (which necessarily means I am also anti-war). I don't know what label that makes me but you can figure out what you want to call me.
Secondly, I think in this case, the failure of Fannie and Freddie and current recession would clearly show that the gov't artificially manipulating currency and credit (as well as relaxing credit requirements through legislation, thus tampering with the natural market aversion to risk) in order to extend easy credit to people who could never reasonably be expected to pay it back was damning to both the poor and the economy as a whole. This is not an "anti-poor" position. Ask the people who are swallowed up in debt or who have been evicted from homes they thought they owned if they feel they've been "helped" by the gov't. I find the gov't, albeit with the best intentions, is often the most anti-poor entity on the planet. But the road to hell...
Also, there is no contradiction whatsoever between favoring a market system that rewards personal responsibility and being against the federal gov't, insofar as the gov't interferes with that system.
"I don’t quite understand why you think it has to be all or nothing? I am happy with government and business working together. It really is a false dichotomy."
It has to be all or nothing because there is no such thing as an almost-free market (or almost-freedom for that matter). As soon as the gov't uses force to distort market realities, that does two things: (1) erode the confidence investors have in the system and its stability and thus deter further investment (because if they're just stepping in and adjusting things whenever they feel like it, how do I know they're not gonna screw me by doing that in the near future?) and (2) whichever sectors of the economy the gov't intervention favors (which is usually unintentional and unpredictable) are given an ultimately unsustainable competitive advantage which results in a hugely inflated "bubble" which then has to pop, resulting in a recession and/or depression. You may have heard about this in the news lately.
"As a more general observation, it’s interesting to see you trust so heavily in the free market. The entire doctrine of laissez faire capitalism is predicated on the assumption that consumers and businesses are rational actors. If there is one thing I think we know for sure about humanity it is that we are not always rational."
That human beings are not rational is an obvious truism. The free-market does not require every human to be Einstein. It only requires them to be smart enough to make a decision between gas that costs $3/gallon and gas that costs $1/gallon. I don't know about you, but I'm confident that most people can make that choice. You're saying instead that, people are stupid, so they need a gov't babysitter to take care of them. Which leads me to the obvious question, why should we trust the gov't? What makes them so smart? That their central economic planning has averted disaster and saved us from so many recessions/depressions? That they're so fiscally responsible that they always pay their debts and keep spending under control? Oh wait...
Obviously the free market is not perfect, but I am aware of no better system. And it also lacks the moral quandries that gov't intervention necessarily brings. As soon as you disrupt totally voluntary human economic interaction with threat of force, you're destroying human freedom and short-circuiting the economic system that has undeniably been the most beneficial to the human race during its history on this planet. (Don't believe me? Compare the economic history of the U.S. pre-1913 with its history post-1913. If more gov't control is such a good thing, why are the disparities between rich and poor so much greater now? Why has the dollar lost 94% of its value? Why have we had only one decade without a major recession or depression since that time? Also, please explain the total failure of nearly all socialist economies.)
"Time and again we have seen the free market break down when left to its own devices."
Please document this.
79. Mark W said the following at 10:47 AM on Apr 23:
One more thing...
"Once again, you lay the blame entirely on government. Can you not see it takes two to tango? Businesses are hardly innocent bystanders in the game of corruption."
You're missing the point. Obviously businesses and gov't are both to blame. The point though, is that if you remove the incentive that big business has to corrupt politicians (i.e.: that immense amounts of money are at stake) by restricting the government's ability to interfere with the market, you would clean up the corruption overnight. This should be very simple to understand. If you can't do anything for me, I have no reason to buy you out. The fact that I would have bought you out if you could help me is irrelevant, as is whether or not you would respond to my bribes, as there would be no buying out taking place. There'd be no reason for it.
80. Louise from Chicago said the following at 2:25 PM on Apr 23:
Comment 72 does not make sense as an answer to comment 69.
The situations are not comparable.
81. BDB said the following at 2:53 PM on Apr 23:
Jethro (#77) wrote:
>>You answered your first question yourself. Clearly better regulation would have detected the actions of banks in repackaging risky securities. Remember, better doesn’t always mean more.<<
But it wasn't the bankers who committed fraud by saying, "These aren't risky."
It was the government giving an implicit guarantee that Fannie and Freddie would be backed up by taxpayers.
The government entities, Frannie and Freddie, then created these risky mortgages and set up the rules everyone followed. Because of the government guarantee, their debt, including collaterallized debt obligations, was considered "safe." They weren't inherently safe based on the underlying investment. They were deemed safe because of the government guarantee.
The root cause of the failure was that the government meddled in the underwriting standards, and agreed to back high-risk loans under the guise of "promoting home ownership."
It's not that we need MORE regulation, it's that we need to recognize that politcians distort true markets. In this case, Democratic Rep. Barney Frank and Democratic Sen. Chris Dodd personally benefitted from HUGE campaign contributions from Fannie Mae and Freddie Mac. Those politicians then turned around and encouraged the risky lending.
As an aside, Democratic Senator Dodd still refuses to release the details of his sweetheart loan deals from Contrywide Home Loans.
Though I notice that lots of Democratic politicians are being forced to give away the campaign contributions they received from these tainted organizations.
Ultimately, this is why "regulation" fails. Those who are regulated turn to the political process. Politicians are notoriously corrupt, and they then use "regulation" to reward those who give them the most in
bribescampaign contributions.82. BDB said the following at 3:47 PM on Apr 23:
Mark W (#68) wrote:
>>Standard Oil, yes they ran other businesses out by charging lower prices.<<
For the record, the Standard Oil monopoly was in kerosene. It was broken up by the U.S. Supreme court in 1911, long before automobiles became the primary mode of transportation. Technology often makes antitrust regulatory action irrelevant.
83. Mark W said the following at 4:07 PM on Apr 23:
BDB re #82,
The statement you quoted me as saying is correct and I agree with it (in isolation), but I just wanted to point out - you quoted me quoting Jethro.
84. Jonathan Sarfati, Ph.D. said the following at 6:24 PM on Apr 23:
Louise (#80), the whole point is that the logic is comparable. My argument was a reductio ad absurdum of your view that I shouldn't comment on wrongs committed in a country not my own. For further reading on logical techniques (which Jesus used with great skill), consider the statement of young apologist and New Testament scholar Lita Cosner: “Dr Sarfati’s article, ‘Loving God with All Your Mind: Logic and Creation’, helped me realize that true faith and intelligence aren’t mutually exclusive.”
85. Jonathan Sarfati, Ph.D. said the following at 6:54 PM on Apr 23:
Jethro (#77): I trust the government too — trust it to comprise people who are just as self-interested, greedy and flawed as everyone else! That is the whole point of Dr Thomas Sowell’s concept of the "constrained" or "tragic" vision. That's why we should prefer the free market.
To explain: take an extremely greedy and selfish person (of course, none of us are greedy and selfish; only other people are, as Milton Friedman joked). But no matter what his greed and selfishness, they won't make him a dime. How can he make lots of money?
First, consider a free market, under a government restricted to preventing fraud and coercion, settling disputes and enforcing contract. The greedy will prosper only by providing lots of customers things they want at a price they are willing to pay. And it's in his own best interest to provide good pleasant, service to retain his customers, even if he hates them.
If there is some competition, say from free trade, which undercuts him by 20%, then our greedy man will have to improve his product or lower his prices to succeed. Consumers win!
But under an anarchy, he has another option. He can hire thugs to go down to the dock, and force (at gunpoint) buyers of overseas goods to pay a 25% tribute. That way, the greedy man's business is protected.
But under the mixed economy advocated by Jethro and both main political parties, our greedy man can do something just as thuggish, but legally. He can bribe a politician to pass a law for a 25% tariff, i.e. this time the thugs with the implied threat of gunpoint are government agents acting within the law.
Of course it won't be called "bribery" but a "campaign contribution". The politician, who is also selfish, and greedy (but for political power), will be happy to oblige.
And the selfish motives will be hidden; instead, they are "saving American jobs". People will indeed see the jobs saved; what they will NOT see, as Bastiat pointed out in 1850, is the far more jobs lost in industries that use the protected products.
Consumers of course likewise suffer by paying more than they need to. But their costs are diffused, so individual consumers just put up with them; while the benefits of the business-politics collusion are concentrated, so there is every incentive to lobby.
And because consumers have less money to spend, other businesses suffer. But they are unlikely to make the connection to the business-politician collusion. So the selfish businessman makes huge profits from the protectionism, and the selfish politician wins re-election.
Again, the free market doesn't cure selfishness, since it's a universal failing of fallen humanity. Rather, it ameliorates its effects by balancing different special interests, to the benefit of consumers.
86. BDB said the following at 10:09 PM on Apr 23:
#83 wrote:
>>but I just wanted to point out - you quoted me quoting Jethro.<<
Yeah - I couldn't find the original comment...
87. Jonathan Sarfati, Ph.D. said the following at 11:42 PM on Apr 24:
As an Australian, I don't know why Jethro credits regulation for our relatively healthier economy. Rather, while we are not a real free market, we are freer in many ways than America:
Elected representatives make laws, not philosopher kings in black robes.
Hardly any trade barriers. A few left on cars, unfortunately, but are being wound down. America, the supposed "land of the free", hurts its consumers by its evil tariffs on sugar, lamb and steel for example, and its subsidies on ethanol and to millionaire big farmers.
Personal retirement accounts where we can invest how we please; even better than the moderate change GWB wanted to introduce to the American
Ponzi–Madoff schemeSocial Security system (before the Congressional RINOs got cold feet).Dividend imputation: i.e. we avoid America's iniquitous double taxation, since we impute (credit to the account) the company tax already paid to the taxpayer's return.
Clayton's school vouchers (the vouchers you have when you're not having vouchers ;), since the government partly funds private schools as well as the State system (OK, real vouchers would be better still, and best of all would be education tax rebates).
No death tax. Actually, the much maligned Joh Bjelke-Peterson abolished it in his state Queensland. Of course, nay-sayers bemoaned the revenue loss, and the lefties among them hate the idea of parents passing their hard-earned (and already taxed) savings to their kids. But as he realized, many wealthy retirees flocked to his state, which helped turn an economic backwater into an economic powerhouse. The other states thus cried "uncle" and also got rid of the nasty tax that destroys so many grieving family businesses in America.
Prudent government spending of the previous Howard government for 4 terms. They inherited a large debt from the previous Labor government, went through the Asian financial crisis, the NASDAQ tech wreck and 11-9, yet still ended their administration with a healthy surplus and low unemployment.
Indeed, it was such sound economic management that Labor's Kevin Rudd explicitly campaigned as an "economic conservative". But in office, he has denounced the market in a turgid essay full of self-serving revisionism (see a former state Labor treasurer denounce it, Rudd on a dangerous, ill-informed crusade, 6 Feb 09). He has now embarked on a spending spree which he promised would create (not Obamov's "create or save", note) 75,000 jobs, but unemployment has soared instead. Just like FDR and Japan, this government spending will not create jobs but just leave billions of dollars of debt, just as FDR's treasury secretary Morgenthau admitted:
“We have tried spending money. We are spending more than we have ever spent before and it does not work….I say after eight years of this Administration we have just as much unemployment as when we started….And an enormous debt to boot!”
Conversely, Britain is the Sick Man of the G-20, but has had a Labour nanny government for the past decade. So regulations are hardly the panacea.