It's only contradictory if you willfully oversimplify what I said.

There is a point where you can overextend yourself, especially if a lot of the money you've spent is not paying off as effectively as it might. I invested in WWE stock right around the time they launched the XFL. Had I invested in Apple I would have been better off. Likewise right now if I put all my money into stocks and can't pay my mortgage I have a problem, even if that stock money is likely to pay dividends in the long term.




Yes yes, Europe's current problems invalidate their welfare state, even though many of them have undertaken austerity programs that have made things worse.

I also think you are aware of what a third world nation actually looks like. They don't look like France, Germany, the UK, Sweeden, Finland, etc. Lets dial this back a bit so it's possible to take you at least marginally seriously.



It's an investment in avoiding further human wreckage and preserving a degree of social stability. The problem is not that it exists. The problem is that it is not nearly enough. What cracks me up about these complaints coming from someone like you is that if it was not for these programs keeping people pacified you'd actually need all those guns you've been hording, and we'd end up with either a failed state, some kind of fascism, or an actual socialist left--not the center left (conservative by the rest of the world's standards) modest welfare state we have.



I suspect that green investment is not what is holding back our economic recovery. But like I said to HB above, investment requires risk. Some will be successful and others will not, but spending money on technological innovations that fail is the price you have to pay to find the ones that are successful.



wouldn't that be a good thing? Do you mean fails to re-appropriate it? I couldn't say. I would venture a guess that the nerve endings around your asshole are perhaps so sensitive that you'll probably never be comfortable.



yes, you are entitled to make that grand statement provided we ignore the role the government played in developing the railroads, computers, internet, scientific and medical innovations, agricultural developments, educating millions of scientists, etc.




do you actually read your posts?




oh good, we agree.



you know, I often end up being the person arguing in defense of welfare rights, etc. but the middle class is getting screwed here as well (although they are every bit as dependent on the welfare state--it's just better hidden, or not classified as welfare for no real reason--think pell grants, tax credits for home purchases, etc). I would suggest that as long as the benefits of productivity and development are funneled into such a tiny percentage of people that no one is going to get a fair opportunity to compete. We increasingly fail to provide the opportunities necessary for both meritocratic competition and the proper utilization of our human capital (that was one of the arguments made during the Great Depression in favor of the programs the New Deal championed--that we needed a 'new deal' to restore those possibilities'.

There is a lot that people have to be angry about right now. But I don't think the problem here is the existence of our welfare state, such as it is. And attacking that doesn't stop the giant vacumn sucking away our collective wealth into the hands of very few people.

Have you read Sumner's What the Social Classes Owe Each Other?, yet? It remains, by far, the most impressive philosophic statement of your position that there is.


If only Dear Leader spent MORE debt - it's investments.[/quote]

Solyndra was a bad investment, and so weren't about two dozen other green investments that have gone belly up. And so aren't the subsidies. And the tax credits. Every windmill, every solar panel that is built is a bad investment. It's not the tax payers job or responsibility to bear the costs of bad (private) investments. It's private investors responsibility to shoulder the cost of bad investments. What if Solyndra was successful on a no interest government loan? Then what? What if it turned into a multi-billion dollar company? Then what? Then you've socialized the risk, and PRIVATIZED THE GAINS! Instead you had a situation where Obama's campaign bundlers were rewarded with no interest loans and shouldered NO RISK in the business venture they wanted to pursue! They had nothing to lose! Why should anyone expect companies like Solyndra or GM to turn into something successful when the people involved in running the companies have no skin in the game!? Anybody who thinks GM, AMTRAK, and the Post Office will EVER be successful are out of their mind,

Do you realize what the purpose of banks and private equity firms are? Their entire purpose in life is to measure risk, and appropriate capital efficiently. Banks do this - not government. Government DOESN'T do this because it's terrible at measuring risk, and it's prone to corruption. Government doesn't invest in things like artists and drugs, based upon the merits of the investment. It invests in things that the private sector won't invest in specifically because they are not profitable or they are looking to protect people from risk. It's collections of people who don't want to risk their own capital to implement their own ideas. It's collections of people who don't want to compete. It's Bastiat's definition of plunder. AND YOU CANNOT expect an economy to recover based on these precepts. You can't take away capital from current or future production and devote it to an economic dislocation that's not going to be profitable and expect economic gains.

The 40s through the 70s were stable because we had no economic competition, our society had balanced skills, and the world wasn't globalized. Let's pretend that market WAS regulated. How, exactly, do we achieve any additional growth in the economy? Stip - regulations hinder economic growth prima facie.

A government that has integrity should not create laws that favor one aspect or player in a market over the other.

The idea that the vast majority of investments came from government is fucking folly. Spoken like a true academic that's never set foot in the private sector.

Here is how your argument works: government extracts massive sums of capital out of the market place. By removing this capital for its own purposes it explicitly creates need, and withdraws from the private sector its ability to naturally cater to the demands of society. Government re-injects the capital as it sees fit. It eliminates competition, it creates an atmosphere of plunder, and then takes responsibility for "creating it" while pretending that mutually exclusive alternatives couldn't possibly exist.

The same people who complain about Wal*Mart paving over farmlands and green spaces are the same people who think they could never build a road.

[/quote]

Either speak in absolutes or don't. The government shouldn't be in the business of taxing people for the investments they want specifically because it's individuals using the force of government to make the public shoulder the risk for the things they desire. You STILL don't understand what you're saying, and you're defying the crux modern Keynesianism and Krugmanist economics. Government spending is SUPPOSED to provide a return on investment. That's how you forward this "modern economy." If debt spending is an investment, and it always returns an investment, then you can never take on too much debt. Your stock comment is totally irrelevant.

Really you're just highlighting the inherent problem with driving economies on debt with government spending. Government appropriates resources to losers, it creates dislocations, and doesn't efficiently move wealth into what is in demand. It withdraws capital from its natural state, and just puts it wherever - thus it doesn't work.

Much of Europe is in the process of reverting to third world status. Just because the reversion hasn't completely happened yet doesn't mean that they're slowly beginning the spiral downward. And even after all of our discussions, you still don't understand the purpose of austerity. It's unbelievable. I'll help you out one more time. It's either austerity or complete collapse. The choice is simple. This is what happens when your nation debt spends and doesn't get a return on their investment. This is what happens when your nation consumes like a modern western nation, but can only produce like a third world one. Eventually those who are externally financing you debt begin to realize that it's not providing a return on investment, and that your nation produces like a third world nation. Suddenly those financing your debt stop doing it, and you're fucked. Completely fucked. We're not talking about the efficacy of a social welfare state. We're talking about governments investing with gross sums of debt! So redact Sweden, Finland, and possibly Germany (although they're fucked too.) France will look like a third world country in ten years. They're fucked. Half of their nation earns just about our poverty line. Only 10% of their population earns more than $75,000 of household income. They can't tax their rich enough to cut their debt. They can't do ANYTHING to keep their ship from sinking with debt spending. Their society is incapable of producing enough to sufficiently supply themselves with what they demand. They're totally fucked. The Algerians would be better off heading back to Algeria now.

Scandinavia won't end up looking like a third world nation, but the rest of them will. And yes, I have been to a number of third world nations. I lived in one for two years. In a few years Greece and Spain will look like third world nations. A few years after that, the whole lot of them will. Their whole social welfare systems are collapsing under their inherent instability. There will be no access to modern healthcare. There will be no modern education. Their infrastructure will crumble. And Europe will erode until they learn to be self-sufficient again.

Now, back to that third world thing. You are sitting here saying that paying people off to keep them living comfortably is what keeps from needing my arms. Hilarious, because I spent two years living in a nation of shanty towns and urban slums, with 60% unemployment, gross morbidism, stuntism, malnutrition, and 40% of the population relying on the world food program. Yet nobody was violence. I could walk the fucking slums of Djibouti, at night, by myself, and not have to worry about my safety. And you're telling me that I should be held hostage by curmudgeons and scumbags who will try to harm me if I don't. Very telling of the society your precious social welfare system has built. Giving someone something for nothing IS NOT AN INVESTMENT! All you are doing is devaluing the labor of others! You can't reach into the register at the grocery store and withdraw capital from it to give it to someone who does nothing so they can buy groceries and call it an investment!



Yeah, because if government didn't do it, none of it would have ever happened. In fact, the vast majority of those things have their basis in the private sector - not government.

The inherent problem with our society and its devolution since the oil crisis isn't that capital is flowing to an ever more concentrated state at the top. It's that we've created a helpless, dependent welfare state that cannot take care of itself, and is unwilling to take risks and capture economic signals in a globalized world. The capital at the top is a signal. Signals to the rest of the population to pursue that course. The more competition there is, the more skills society has, the more equitable wealth distribution will be. But when there are professor out there in the country planting in the minds of COLLEGE EDUCATED people that nothing happens without government, and our dependence to it is inherent and inevitable, then we're fucked just like Europe.

Your example of Pell Grants and mortgage credits benefitting the middle class is nothing more than another example of government CREATING need. You tax middle class people like my mom and dad out of 40% of their earned income: fed taxes, state taxes, local taxes, and consumption taxes. Then you turn back around and pretend you're doing them a favor by giving me a $700 pell grant and deducting their mortgage interest. It's fucking sick.

Well I will certainly agree that I would like to see the public own a larger piece of what they subsidize. But even if they don't if the end result is the development of a technology we need/enhances our lives than it was probably worth it. The public paid many times over for the railroads in terms of land grants, subsidies, and all the rest. But it was probably worth it. Even if some of these are bad investments.

Bracketing GM, which is a separate issue, the post office and Am Trak don't have to be profitable to be successful. They just need to provide useful services. The whole point of public organizations is that they are fulfilling a public need. The military doesn't turn a profit for us, but that's no need for us to start hiring even more mercenaries than we do.




yes, if only it had the sterling reputation for honesty and fair play that is the hall mark of the financial sector. Also, the government doesn't measure risk. Nor does a bank or a firm. Analysts measure risk, and they are perfectly capable of doing so working for public or private organizations. I agree that there are political complications that can make this more difficult sometimes, which is why so much investment happens via private firms, and that this is a good thing.



this is such a dessicated understanding of what the public is that I can't even start to comment on it.



yes, that's true, but it is also tautological. If you argue that government is by its very nature going to make terrible economic decisions than any economic decision it makes is terrible. Within your premises that argument works fine. It's just that your premises aren't true.




see above



That's a fair point. It's a delicate balancing act, and perhaps a dangerous one. but the rough standard of a demonstrable public interest can help navigate it. As I've said earlier, focusing on questions like this, rather than your earlier breathless ranting about the incompetence and illegitimacy of government, would be better for everyone.



I work in the private sector. But I would also hazard that if I owned my own small business that this marginal experience probably doesn't qualify me to make grand sweeping statements about economic policy either.

An academic is someone who is paid to study an issue intensely and know more about it than anyone else, which would therefore make them more qualified to speak on a topic than, say, someone who isn't paid to study an issue professionally. If this helps, think of them as private sector analysts.


The private sector caters to the demands of society that it can exploit (I don't mean that pejoratively) to make a profit. If society has a demand that can't easily be satisfied via someone else making money off of it, OR if society would be better off if the product/process/technology/innovation was publicly owned so that more of the benefits were directly transferred to it that's potentially okay as well.


yes, that's one way of looking at it. I can also recast that exact sentence using nice words. This conclusion makes perfect sense if you accept every one of the premises leading up to it. I just happen to reject almost all of them.



I bet this sounded awesome in your head, but I don't understand it.

?


Not to keep belaboring this, but I reject that the relationship between individuals and government is necessarily adversarial.



I would prefer to not speak in absolutes. Krugman, Keynes, and all the rest would tell you that there is a point at which you need to pay down debt. It's just not periods of recession or sluggish growth. Both would also (I presume) argue that there is a breaking point beyond which you simply cannot spend.

And debt spending does not ALWAYS have to return an investment. Some types are more stimulative or productive than others. And some spending could be bad. My point is that there is nothing wrong with spending in the abstract. You'd have to look at what the money is being spent on.




No, it probably isn't. The other option is stimulus spending in the face of a slowdown in private demand. This assumes that the massive inequality at the heart of this is not caused by government spending on social programs. I'm sure you think it is.


why are they being redacted?



Well not to dismiss your point, since I agree that this is a problem, but we are both building our economic arguments off of fundamentally different premises.



So the answer isn't more education, then?

and just to be clear, there are a number of reasons I would justify the existence of a welfare state to provide support for the poor, working, and middle classes. Moral decency, investment in human capital. I'd probably put avoiding violence and revolution at the bottom of the list. It just seems like a reason you'd be into.

my semester starts on Tuesday, btw. So someone else will need to pick up my banner until the winter break.

Stip, a failed state and some kind of fascism is not a prediction of the future, it is the very present.

I agree with you that there is no magical answer, no one size fits all. All people who defend political/economical descentralization have the comprehesion that there are multiple ways to do things and the best thing to do is to NOT supress the discovery of those ways.

An austrian economist would be the first to say that economists are somewhat useless. The study of economics used to be about understanding how people with needs and desires but limited resources and time spontaneously create a complex but logical order. With the rise of central planning, economics become a posivistic tool used by bureaucrats and politicians to enforce what they consider ideal. The economist changed from an understander of society to a manager.

only if your definitions of either of these things are useless. There are very deep problems with the United States right now, and many of them are structural. Almost all have structural causes. The 2012 election will address how much bleeding there is, but not the wound itself, although there is more potential for redress under Obama since the Republican party has either systematically misdiagnosed almost every problem and created all sorts of new ones in their short sighted desire to win the election in front of them (God help them if they actually have to govern under the conditions they've created).

Fascism and failed states mean something very concrete with real historical antecedents and contemporary applications. They do not apply to the United States right now. Also neither George Bush nor President Obama were as bad as Hitler/Stalin. And George Bush was many things, but he was not a fascist. Obama is many things, but he is not a socialist. These words have meaning and applications beyond pejorative labels for people you don't like.

Stip.

I ask you to stop speaking in absolutes because you came right out and said that government spending was an investment - and now you've gone on to delineate how that's not necessarily the case. The relationship between government and the individual in terms of economics is explicitly adversarial. Krugman, at least since Obama took over the presidency, doesn't believe that there is a point where we pay the debt down. He sees it as an entity that grow ad-infinitum, because it always provides a return on investment that's greater than the interest on the debt.

If you agree that there is a breaking point where you simply cannot spend, then what is the major problem in understanding that Spain, Greece, Italy, and Portugal reached this point. Why is it that the private bond market isn't a sufficient indicator when it comes to analyzing the a nations debt? You're ignoring what private people who hold Euros and want to invest them think, and instead printing Euro's, devaluing pre-existing Euro's, and giving them to people of failed states to spend. These are nations who haven't produced what they demand for decades now. They have run perpetual deficits. As modern life became more expensive and expensive, they choked the productive engines of their nations, castigated the rich, and romanticized the worker. Their debt accumulation accelerated, and they finally broke the bank. What you are advocating is turning whole nations into zombie consumers. Nations of people that don't produce anywhere near to the lives they live. You're using the printing press at the ECB to turn Germans into slaves.

Have you actually been paying attention to Greece? 25% unemployment? Basic medical facilities shutting down? Infrastructure eroding already? Kids being abandoned? This continent is going down. I don't think that inequality is caused by government. Inequality in socio-economic terms has nothing to do with the crisis in Europe. Especially when you look at their pre-recession GINI coefficients.

We redact Sweden and Finland because they essentially have balanced budgets and responsible government spending.

Yes, education IS the answer, as it enables people to capture economic signals and shoulder risk better. It creates a more stable economy. It creates an environment where those who have capital are more likely to invest it in other people, as opposed to bubbles, speculation, foreign markets, and hide their capital in foreign banks.

----------------------------------------------

Why would you want the public to own a larger piece of what they subsidize? Greece had larger control of what they subsidized, and how did that work out? The last thing I want is a generally ignorant public to have control over the economic means of production. It's a sure fire way to collapse an economy as you enable the people to reward themselves to levels that extend beyond their means of production.

And yes, AMTRAK and the Post Office have to be profitable, or at least break even, to be successful. These are business entities, and they are perfect examples of the failures of government and its economic pursuits. What you have to do is justify the FORCED TAXATION of the population to economic losers. The private market has determined that there isn't enough need to economically justify entities like the Post Office and AMTRAK. So at what point is justifiable to tell the people of the nation to fuck off and subsidize these entities?

The military is a COMPLETELY different animal and you know it. It starts when you define things as "public needs." The military IS a public need. It an economic loser which benefits us all. It benefits us all equally at that. AMTRAK and the Post Office do NOT benefit us all equally. It benefits SOME people to the detriment of others. It benefits people who use AMTRAK at the expense of everyone who doesn't. The Post Office ignores viable alternatives that could exist. Subsidizing AMTRAK economically harms entities that would otherwise benefit from AMTRAKs customers using alternatives. And its these billions and billions of losses that gradually strangle economies. And why should we bracket off GM? IT'S THE SAME THING!

Banks don't have sterling reputations because they don't have to. When you know you're gonna get bailed out, who the fuck cares? Do what you want! Risk doesn't matter. Just so long as President Stip has our back and will inject us with the billions we lose to fill in our lack of demand and our unwillingness to lend.

If analysts in the private sector, from multiple banks and private equity firms analyze a project and determine its too risky, then what right would government have to TAX PEOPLE to finance that risky venture? Just an absurd relationship and statement.

The idea that government doesn't invest in economic winners because the private sector doesn't pick them up isn't tautological at all. It is REALITY! Government is where people go begging for money when they can't find private investors. And the idea that all decisions are terrible because government makes terrible investment decisions is ludicrous and an incredible fallacy. You can't even begin to justify at the most basic level. You've strawmanned like a pro here.

Let's look at it from another perspective: if a an investment is profitable, there is no need for the government to step in because the private sector will capture that investment. Government invests in LOSERS that the private sector won't pick up.



No. If people can't make it a profit on it, then it shouldn't happen. It should stand back on the sidelines and wait for someone to innovate and come up with the means of satisfying that need, or the people need to create more wealth to satisfy their demand. If you subsidize it, like with Solyndra or GM, then you kill the innovative process. There is no need to be innovative, to bring down costs, to improve efficiencies, to make the product more equitable because you now have a perpetual stream of support coming from the government. Conversely, you get into a race to the bottom with your public that will cease increasing the production of wealth due to their new found access to the printing press and other's wealth (Greece, Spain, Italy, France).

Emotions have no place in discussions about economics. And your argument is emotional.

How is my comment about government creating need and pretending that mutually exclusive alternatives couldn't exist innaccurate? Pretty it up. Go ahead, do it. My comment is REALITY! You need not look any farther than the Demcratic Party's current political lexicon of: "You didn't build that!" and "Republicans hate old people/women/minorities". Government extracts 4.5% of your earnings and puts it towards retirement. By taking this money from you THEY CREATE NEED! They take away your ability to save for your own retirement, and then give it back to you as if they're doing you a favor. Then they turn around and demonize people like for wanting to change the system. The same can be said for medicare. The can be said for anything that is an economic investment.

Governments argument, and your own really, is one of central planning versus nihilism. I want people to go hungry because I don't want the government cultivating corn.

As to my Wal*Mart comment - it goes back to the whole, "you didn't build that, somebody else did!" The common blithe argument is that the private sector won't build roads and we won't have any means of getting from point A to point B efficiently. My point is that Wal*Mart and other businesses don't need government to build their parking lots, so what makes you think they'd have a difficulty constructing roads? Yet again, government takes money from Wal*Mart and the public that they could use to finance their own private roads. It then takes that money, builds the roads, and assholes like Obama lay claim to the construction of the road, and castigate business owners by telling them "you didn't build that." You force people to pay property taxes to support a public school, you take away their ability to educate their kids in private schools or home school, then Obama turns around and says, "you didn't build that, a bunch of public school teachers made that happen."

Only AFTER compelling people with the force of law to cough up the fruits of their labor does government gain the ability to stake claim to ANYTHING that it does. And if you don't support what they do, you're a nihilist.

Let's dissect this some more.

If the government has analysts that look at the profitability of government spending, do you think they will perform to the same level as people in the private sector?

Second, what the hell does it even matter if we have analysts in government if you are just going to turn around and justify government spending that loses money and call it a success anyway! This is bonkers! And this is how government works. It'll sell a project like AMTRAK on the merits of its economics. Then, after it proves to be an economic loser, they will claim it is success based upon some non-economic factor and perpetuate its existence forever, and tout it as a success. Your argument establishes a foundation where no government spending can be bad! All you do you is ignore the economic loss, and tout some non-economic gain! So why have analysts in the first place? All government has to do is spend money and its a success. There's no need to judge the Solyndra's, GMs, AMTRAKs, Post Offices, and Ethanol industries of America. Or solar, or wind! If it's "good" then we can invest in it. And alllllll is right with the world.

The saddest part is that you try to equate this to a private sector where there are failed investments. Banks don't always win. Bain capital doesn't always win. Warren Buffet doesn't always win. Curb records doesn't always win. And this is fair up to a point. But for private entities there is a LIMIT to the failure - and the losses are private. With your big government model there is really no limit to the losses they can absorb - and those losses are socialized across the board. Government can invest in loss, after loss, after loss. And with central planning versus nihilism arguments, and by pointing to non-economic factors, these losses can continue in perpetuity! Particularly when you are dealing with an ignorant population that is largely voting out of its own economic self-interest. Where much of their need is created from government taxation in the first place.

And here's the worst part. The worst part is that turns a naturally functioning market into one that functions on plunder. Instead of having economic actors capturing real demands within the economy, you instead turn these people into individuals trying to extract money from the tax base! So a guy who might normally be creating a new consumer product, or working on a natural gas car, is instead going to Washington to start up a solar firm because he knows that is what people like Obama, who control those tax dollars, is willing to spend it on! It's like this whole "Paul Ryan lied!" fiasco. Paul Ryan stands against the stimulus bill in the firmest terms. But then it passes, and suddenly he wants a solar firm in his state to get some stimulus money. They call him a hypocrite. But yet again, the begging of government only came AFTER to promise to tax the nation. The moment you tax Ryan's state, Ryan must then go begging to get the money back! You created the need by taxing people! And you turn around and claim you did something good when you give the money back, regardless of whether it's a viable investment or not! And when you start talking about TRILLIONS of dollars that are the disposal of a few individuals, who are devoted to giving this money to special interests that they have, and don't care if it makes money because of some emotional good, it is a recipe for economic disaster. You just have all these people trying to get government dollars instead of spending that capital where the most potential for profit exists.



How could this model EVER collapse a nation?

I'll respond to this if I have time, LW, but I may not since my next few days here are very busy and then the semester starts. But I've read it and I'm not intentionally ignoring you. And like I said, as far as critique goes, there is certainly some truth to what you say, even if I emphatically disagree with your alternative and the overall thrust of it

Many nowdays consider that when debt crosses 90% of GPD, it will only snowball futher. Currently it's over 100%, growing by 1.5 trillion every year with all kind of future liabilities, all foundations are cracked, no need to wait for the build to collapse to know it will.

Economically speaking the american state is quite fascist, but yeah I know fascism makes many think of military parades with soldiers marching with heavy steps, but the current corporatism is pretty much the functional core of fascism.

The american state is increasingly a corporate state, for sure, but that isn't fascism. The American state is also highly militaristic, but that also isn't fascism. It's the American hostility towards the state, its sense of individualism, that makes it something different.

Fascism is a philosophy that subordinates all aspects of national life and national identity towards the idea of a collective, national greatness. There is a close connection between well organized corporate organizations that largely run the economy, and the state, but under fascism corporate power is still largely subordinate to the state. Corporations serve it. In the US, the state serves corporations. Alexander Hamilton supported corporate power, wealth, and hierarchy as tools to national greatness. He would have likely been sympathetic to fascism. He probably would not have approved of what we have today, since it is so divorced from any sense of national strength or power. Our approach is different. The American corporations see the government as a vehicle that can be used to transfer public wealth into their private coffers, with essentially zero sense of reciprocity. It is hard to even think of most American corporations as American, anymore. They are their own entities that prize their independence, and think of themselves as anational much more than national.

A fascist country conquers land and other territories to strengthen their domestic industrial organizations because they are a source of national strength. Again, in the American case, the military is a vehicle of corporate power, not national power. Even the dangerous expansion of our domestic intelligence capabilities--the ability of the government to monitor what everyone is doing, is far more likely to be used to squash dissent that criticizes the economic order, rather than the political order. A corporate state, not a fascist state.

This is to say nothing of the engaged militarism at the heart of fascism. Fascism was a philosophy of action, that believed individuals test and form themselves through struggle--usually violent struggle, and through the subordination of the individual into the cause of something greater--historically a crusade to purify the state in some way. We have the weird dichotomy of an incredibly powerful military alongside an incredibly disengaged citizenship. Even in the aftermath of 9/11 there was no effort to really engage citizens in a grand crusade. Instead what we ask for (or better, what our politicians give us) is the promise that we will be left alone to live our lives and make money (as individuals, not as members of something larger than ourselves), as long as we leave everything to the elite.

So there's lots the United States has to be worried about, and to not be proud of. I am fiercely critical of the way our system currently operates. But it is not fascistic. That would require a far greater investment of the state in the lives of citizens than we have, far greater control over our economy than the state currently has, and far more subordination of individuals to the state than currently exists.

I'm going to be brief LWing, since I have limited time and neither of us are likely saying anything new here.


I'm not sure that Krugman said that (not in anything I've read, anything). The point most of these guys make is that you need to pay it back eventually, but it should during a period of strong growth.

I would also question your assumption that the relationship between government and the individual is explicitly adversarial. It can be if I am not benefiting from that relationship. If I am then it isn't, and of course there are lots of ways one can define benefit--it could be a direct economic benefit, it could be the indirect benefit that comes from a healthier economy, or the investment in human capital, it could be the benefit that comes from moral commitments to human decency, etc. As I've said in the past, there's no logical right or wrong answer to this (well, there are probably some wrong ones) so we have democratic politics to provide us with a peaceful vehicle for the temporary negotiation of an answer.



I have a hard time crediting the argument that the rich have not been given enough money, and that this is the source of our problems. Or is the problem that the rich feel bad? they aren't respected enough? There isn't incentive to be successful in these countries? Really?


I fail to see how I am advocating that. I would actually like to see more laws that make capital less mobile (Germany has these, for instance) so there is greater investment in the nations, rather than seeing the benefits of productivity transferred out of a particular nation into the hands of rootless organizations that are just concerned with enriching themselves. Imagine if states saw even a fraction of the trillions of dollars estimated to be hidden in the tax shelters of the world.


I am not disputing that Greece is a mess, or even that budget deficits are a part of it. I am disputing your basic explanation as to why, and contesting who the guilty parties are.



McP said this in the education thread (or maybe I said it and he agreed) but if you think education is important, and I definitely do, then you also need to spend money to create the conditions and context under which education is possible. Unless you are making the much more narrow claim that people need to learn to manage their money better, which, I would suggest, is not even remotely possible in the absence of stiff oversight to ensure that everyone plays by the rules, information is disseminated accurately and on time, people are not gaming the system, etc. In either case, education never happens in a vacuum.



Control, of operations no. of course not. Who argues for the mass public to have a literal say in operations. But the public should be able to appropriate the benefits of their investment, and publicly owned companies or investments are perfectly capable of having effective people managing them, or ineffective people. There is nothing magical about markets that allow things to be done properly, nor anything supernatural about governments that make them run ineffectively. There are no angels and demons here--just people of greater or lesser competence.




No, what you have are quasi autonomous agencies that are performing a service that the public deems is necessary, even if not economically profitable. It is subsidized because people believe it is important. In fact, this is the area where the state can frequently do the most good. No business will make much money curing malaria in a third world country. Do we wait until we figure out how to do it, or do we decide that it is worth paying to cure it, even if it costs us money. What you're saying makes sense only with your ridiculously thin and ludicrously adversarial conception of government. Thoreau's civil disobedience is a fun essay, and it makes sense that it was written by a guy who spent his time camping out alone near some pond. It is atomistic and self referential to the point of parody.



Does it? The collective public benefit we derive from the military ends with safe borders. it does not require the empire of bases and hundreds of billions of dollars of spending each year. The size and scope of American imperial power hardly benefits us all. it benefits the people who are well positioned to take advantage of it. We can get by with much less spending if its sole justification is universal benefit. All we need to do is keep the Mexicans and Canadians out.

It's pretty rare where everyone literally benefits from something. So again we have politics to make the case for a particular benefit. And there are times where, in the interest of individual rights, dignity, etc. we are willing to extend asymmetrical benefits to a particular group or region to bring them up to par with everyone else. It is always a fair question to ask whether or not a particular instance of this is worth doing. Asking whether or not Amtrak is necessary is fair. Condemning it because it does not run a profit misses the point entirely.


GM is meant to be a for profit company, where extant viable alternatives exist who will provide the exact same service for the exact same clientele. The post office and amtrack service areas and people likely to be forgotten by for profit entities. That's not to say I opposed the bail out of GM (I didn't)--but it's a different beast than what we are talking about here.




Wait, what? I support breaking up too big to fail banks that got bailed out. I think once you require a bail out the bail out should exist because there is a public benefit that occurs, but that by asking for it you largely give up your ability to dictate terms. You become a public entity. Try and avoid making me a bulletin board for everything you hate.




their conception of risk is likely bound up exclusively in profitability. There are other standards the public would presumably be using in addition when they make their decisions.







Perhaps. I have no idea what you're talking about, and I've read that paragraph a few times. Oh wait, is that a statement I attributed to you. Are you not arguing that the government always distorts markets by making bad investment decisions? Do you actually read what you write? Am I being unfair? Please clarify your position if so.

Oh, and look at what your next statement is:



what, precisely am I strawmanning here?



Wow...



It is? And here I was believing I was a model of understated restraint.



Oh come on LWing. You are, in theory, smarter than that. This is a statement the Republican party's attributed to their imaginary democratic party. That comment referred to the fact that private success is predicated on all sorts of context, infrastructure, and history already being in place to make that success possible. If you are denying this I don't even know where to begin...




Wait, what?



Oh, okay. I can see why this would bother you, given how thin your conception of the public (and the common good) is.

How the did you survive in the military? it is so antithetical to your values.





I think if you get good people, then sure. Keep in mind you're making this argument in the aftermath of two massive failures of the private sector to assess profitability (housing bubble and internet bubble). This is hardly the golden age of Wall-Street responsibility.



As I suggested elsewhere, there are other metrics to gauge success than profitability.



Actually I'm opposed to ethanol subsidies since I don't think the public reward is worth the cost. I actually think it's quite harmful, based on what i know. I never said investments couldn't be bad. I said that profitability is not the only measure of public interest.

Look to your own life. If you never end up shooting a home invader were your guns a waste?




Yeah, that's a concern, and something that should potentially constrain public investment.




Unregulated or 'naturally functioning' markets are built on the strong plundering the weak. In the absence of external constraints on power this is almost always what you end up with. So I'd rather run the risk of having the plunder occur through the overreach of a democratic state I can hold at least partially accountable than through a private economic organization I cannot.



What new tax went live because of the stimulus that Ryan had to offset?


Man, that took longer than I had hoped.

i hope others are reading this exchange. LWing and I are starting from almost an entirely different set of assumptions, and so we're both really writing for third parties here.

and if you are reading, join in!

Hello, yes. I am reading.

team stip, obviously.

is there a 'most awesome stip posts of all time' thread anywhere?

anyway- I've been reading this thread for the last few days, stip and while I'm completely unqualified to participate, I've thoroughly enjoyed it. Excellent, well thought out, and well explained commentary throughout.

Alright, since other people are actually following along, let's do this...

First, we need to splice a few quotes together













Okay - do you realize how contradictory and utterly absurd this is? You're basically saying that we need a bunch of small, elite individuals managing the investments of society based upon their subjective measures and OPINIONS of what constitutes social capital and profit! You then go on to explain numerous multi-billion dollar DISASTERS that you subjectively feel aren't worth the costs! You single out GM because mutually exclusive alternatives that generate profit, and IGNORE the other areas where "profit can be measured," but go on to insist that mutually exclusive alternatives couldn't exist with the postal service and AMTRAK! You say that a bunch of government entities exist because the public thinks they're a good thing, admit that this isn't universal, but then grant credence to one person's priorities and wants over others in the free market.

All you need is the right technocrats, with the right viewpoint, and you can then ignore the economics and profitability of everything you do, and simply claim that externalities make it all worth while. All while PRETENDING that those tangential costs aren't built into the price of any commodity in a free market anyway. And then you go on to justify society using the force of government to artificially distort pricing in their favor. Just crazy stuff... How does this vary from your definition of fascism?

Still, I gotta love the ethos: We can't trust man to make his own decisions, so we need a small group of men managing the decisions of everyone! Surely this can't go wrong...

_-----------------------------------------

Stip, surely you understand that allowing people to keep their earned money is not "giving away" money? I don't understand how as an academic you can be some intellectually empty by suggesting that "not taking away" money via taxation is "giving away" money. The source of the problem is that there's no balance in many western economies. They source is that people are divided. It's not that the rich feel bad, it's that they feel they are being taken advantage of, and the the economic policies of these nations aren't worth the investment and hard work. Whether someone can be successful is completely irrelevant. It's work versus reward. If you gauge success by some subjective measure that doesn't fit with the productive class of your nation, and you have nobody to fill in the vacancies, then you've done nothing but dig your own economic grave.

What benefit do you think making capital less mobile provides to investment? It just makes people who have the capital want to leave the nation if more viable economic opportunities exist elsewhere. Germany doesn't have strong reinvestment in its society because of these laws, it has it because they have a really skilled and well educated society that offers domestic investment opportunities.

McP didn't say we needed more money for education. HOW MUCH FUCKING MONEY do we need to create the conditions and context under which education is possible? We've tripled per student spending, but seen no improvement in scores. Utah spends a quarter of what is spent in DC, with FAR better results. Even our poor schools spend more than most European nations.



Big government versus nihilism. Tell me, what interest do I have in plundering from a weak public? How about you? Or anybody else? Please explain to me why someone in a dynamic globalized world would want weak Americans? I mean, ignoring the political party that garners power from weak Americans...



Uhhhhh, the tax that must be generated today or in the future to repay the people financing the stimulus bill?

I still can't believe you're struggling with this idea that when government monopolizes some given task, and extracts tax dollars, that it creates need. And it's entirely disingenuous to tax people, fill a demand, and claim it all happened because of you.

"I believe in you. I stood by you, I bet on you," - Barack Obama

He did that.

From The Detroit News: http://www.detroitnews.com/article/2012 ... z25o1VtTxQ


Lastly, my guns have lasting a retained value whether I waste a home invader or not. They have intrinsic value. I can pass them on after I die, etc.
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Krugman on debt:

http://www.nytimes.com/2003/03/11/opini ... d=2&src=pm

Paul Krugman, circa 2003 wrote:
With war looming, it's time to be prepared. So last week I switched to a fixed-rate mortgage. It means higher monthly payments, but I'm terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits... [In 2001] the administration promised to run large surpluses. [In 2002] it said the deficit was only temporary. Now it says deficits don't matter. But we're looking at a fiscal crisis that will drive interest rates sky-high...But unless we slide into Japanese-style deflation, there are much higher interest rates in our future.

Paul Krugman, circa 2011 wrote:
Perhaps most obviously, the economic “experts” on whom much of Congress relies have been repeatedly, utterly wrong about the short-run effects of budget deficits. People who get their economic analysis from the likes of the Heritage Foundation have been waiting ever since President Obama took office for budget deficits to send interest rates soaring. Any day now!

Paul Krugman, circa 2003 wrote:
But what's really scary -- what makes a fixed-rate mortgage seem like such a good idea -- is the looming threat to the federal government's solvency.

Paul Krugman, circa 2011 wrote:
For while debt can be a problem, the way our politicians and pundits think about debt is all wrong, and exaggerates the problem’s size.