Thom Hartmann Don't Know much about Capitalism

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After eight years of watching conservatives blow trillions of dollars and comport themselves like anti-intellectual, jingoistic blockheads, I found myself ashamed to admit that the Left seemed to have all the genuine intellectuals—people who seemed to possess real curiosity, who refused to accept whatever official line the government was shelling out, and who sought genuine understanding instead of name-calling and pointless vitriol.

With the Left now in power, though, they’ve by and large reverted to form. The very same people who just a year ago prided themselves on evaluating every Pentagon press release with an air of suspicion and hostility now accept without cavil whatever the Federal Reserve chairman or the Treasury secretary tell them. They’ll believe whatever economic superstition, no matter how transparently ludicrous, that happens to be in fashion. Whatever happened to “Question Authority”?

Air America host Thom Hartmann is a perfect example. His article on the economic crisis posted at the Huffington Post gets pretty much everything dead wrong, and yet his point of view is by and large the conventional wisdom.

Let’s start with the economists whose ideas, according to Hartmann, led us to the current crisis. Why, they’re “Ludwig Von Mises, Freidrich [sic] Von Hayeck [sic], Milton Friedman, Alan Greenspan, Tom Freidman [sic], Robert Rubin, Larry Summers, and Ayn Rand.”

Now I’m sporting enough to look past the fact that Hartmann makes two spelling errors in a single economist’s name. Still, color me skeptical that Hartmann knows a blessed thing about the work of F.A. Hayek. (I assume he thinks these people are more or less interchangeable, that Mises = Friedman = Summers = Rubin, that Mises wouldn’t have denounced at least several of these figures, and that the differences between them are probably just trivial and not worth mentioning.)

Quiz time, Thom! Name one book on economic theory (so The Road to Serfdom, if you happen to have heard of it, doesn’t count) Hayek wrote that you’ve read, flipped through, held in your hand, or even heard of. Stumped? How about one article? Stumped again? Then why not do the decent and honorable thing and shut up until you can speak from authority rather than prejudice and ignorance? Sound fair?

Actually, Thom, I’ll be even more sporting. You can start condemning them again once you can at least competently summarize what someone who has read them tells you they say. How’s that?

Hilariously, then, Hartmann lumps Mises and Hayek in with Alan Greenspan, the so-called free-marketeer who thinks we need a Soviet commissar (namely himself) to plan money and interest rates. Um, Thom, Mises and Hayek opposed central banking altogether, arguing that it was not only a superfluous intervention into the market economy but also that it was destabilizing and the source of the boom-bust cycle. These men are supposed to be similar to Greenspan how, exactly? Can I take a wild guess that you’re out of your depth here, Thom, and therefore simply making things up?

I’ve summarized the Mises-Hayek position elsewhere (flip to page 13 here, for instance, or see Meltdown, my recently released book on what caused the crisis and why the free market is not the cause but the solution). In a nutshell, the point is that when the government’s central bank intervenes in the economy to push interest rates lower than the free market would have set them, the result of its tampering is a massive cluster of errors (to use Lionel Robbins’ phrase) on the part of investors and consumers alike. It goes without saying that a government central bank’s intervention into the market to push interest rates lower than the free market would have set them cannot, by definition, be the fault of the free market. The problems Hartmann identifies in his article, as well as the ones he neglects or doesn’t know about, are mere symptoms of a more fundamental cause, namely the creation of cheap credit by the Fed. Whatever happened to leftists’ interest in “root causes”?

This raises another issue about Hartmann’s piece: not a single word about the Federal Reserve System, as if it played no role at all in the crisis. Not one word! Is Hartmann actually ignorant of the Fed’s role? Does he, as I suspect, actually defend the Fed?

How I’d love to hear Thom’s defense of the Fed as a progressive institution. That would be rich. Here’s the guy who claims to oppose the transfer of wealth from the poor to the rich, and yet that is precisely what the Cantillon effects of expansionary monetary policy do. It’s also what the Fed’s role as “lender of last resort” does. If Hartmann thinks that power is exercised in defense of the little guy, he is hopeless. Hopeless with an exponent beside it.

Now I know you’re waiting with bated breath to know about Hartmann’s take on the S&L fiasco of the 1980s. What laser beam of insight might he share with us? Whatever could Thom blame that one on? Who can predict such a thing?

I’m telling you, you’ll need to do some breathing exercises, and perhaps a little quiet meditation, to prepare yourself for the careful nuance and devastating originality of Hartmann’s answer.

The S&L crisis was caused, he says, by…“deregulation.” (I’m as speechless as you are.)

Before Ronald Reagan and his crazy deregulation spree, you see, everything worked fine. Then Reagan was elected, and he repealed all the laws. Society practically reverted to barbarism. Everyone grew slightly hairier. Wolves ran free in the streets.

What actually happened was a little less cartoonish. First, so-called deregulation of the S&Ls began under Jimmy Carter, not Reagan. I say “so-called” because, as with most measures trumpeted as “deregulation,” it was nothing of the kind: all throughout the process of alleged deregulation, the S&Ls’ deposits continued to be covered under government deposit insurance. Deregulation means the removal of government involvement and control. Does this sound like the removal of government involvement and control to you? To the contrary, it gave us the worst of both worlds—though, naturally, Hartmann will blame the consequences on “deregulation” and “capitalism,” terms I doubt he could even define.

Under the government-established rules, the S&Ls could charge 6 percent on loans, and could offer depositors a mere 3 percent. Since most depositors had nowhere else to go, they had to content themselves with a miserable 3 percent return.

With the advent of the money-market mutual fund, ordinary people suddenly had the chance to earn higher returns, and began pulling their money out of S&Ls in droves. Consequently, the S&Ls wanted permission to offer higher interest returns for depositors, so “deregulation” allowed them to do so. Had the original government requirements remained in place, the S&Ls would have gone under then and there.

A consensus began to form that in order to save the S&Ls, their government-established loan and deposit interest-rate requirements, as well as the kind of loans they could make, had to be modified in light of the impossible conditions under which these institutions were forced to operate. The S&Ls needed to be permitted to engage in riskier investments than 30-year mortgages at 6 percent. (Notice: it’s the fault of the free market when the government modifies the government-established rules of a government-established institution, while its deposits continue to be guaranteed by the government. Got it?)

Maybe the S&Ls should have gone under in 1980. Perhaps they really did have an impossible business model. There is no non-arbitrary basis for deciding one way or the other, since the S&Ls were never genuinely subject to a market test. The government husbanded and cartelized the S&Ls, and stood ready to bail them out after that.

Thom Hartmann, meanwhile, looks at this situation and concludes that the problem was too much deregulation and too much capitalism. I am at a loss as to how to describe a person like this.

Hartmann also denounces the dreaded “Reagan tax cuts,” which were largely nullified by the Reagan tax increases and loophole closings. Tax revenues, in fact, rose substantially and consistently during the Reagan years, and you’d never know from Hartmann’s comments that the top 5 percent of earners now pay 60 percent of the costs of government. That’s not enough for Thom Hartmann, naturally, who never met a problem he didn’t think could be solved with more forced labor, which is what income taxation, stripped of the platitudes and propaganda, really is. (If you favor forced labor for the purpose of filling the coffers of our wise public servants, to be disbursed on behalf of society’s most vulnerable—since that’s our politicians’ number-one concern, don’t you know—then that makes you a “progressive” like ol’ Thom.)

Then comes the inevitable post hoc ergo propter hoc fallacy: the American economy was strong back when the top income tax rate was 90 percent, so therefore high marginal income tax rates are great for the economy! How does Hartmann know that American prosperity didn’t occur in spite of, rather than because of, those high rates? Without the help of economic theory, which Hartmann seems allergic to, how can we decide which of these possibilities is correct?

I genuinely wonder how someone like Hartmann thinks wealth is created. Nothing I can see indicates he’s given the matter much thought. The average person’s standard of living, he seems certain, occurs because we loot and shackle the wealthy, who are mere parasites on the backs of working people, the real engines of the economy.

Leaving aside the odd view that only manual laborers engage in “work,” all the brawn in the world could never have produced a steam engine or a Pentium processor. Only when informed by the knowledge of inventors and supplied with the capital saved by capitalists can the average laborer produce the tiniest fraction of what he is today accustomed to producing. The central ingredient in a laborer’s physical productivity is the equipment and machinery at his disposal. There is nothing natural or inevitable about the availability of this productivity-enhancing capital equipment. It comes from the wicked capitalists’ abstention from consumption, and the allocation of the unconsumed resources in capital investment. This process is the only way the general standard of living can possibly rise. Hartmann thinks it’s just swell to tax it.

The increases in the productivity of labor that additional capital makes possible, by increasing the overall amount of output and thereby increasing the ratio of consumers’ goods to the supply of labor, make prices lower relative to wage rates and thereby raise real wages. That’s why, in order to earn the money necessary to acquire a wide range of necessities, far fewer labor hours are necessary today than in the past—say, 1950 or 1900. Thanks to capital investment, which is what businesses engage in when their profits aren’t seized from them, our economy is far more physically productive than it used to be, and therefore consumer goods exist in far greater abundance and are correspondingly less dear than before.

American society, in short, would have been far wealthier and the material level of all people would have been dramatically higher had top income tax rates been lower throughout the twentieth century. Had government not seized so many resources to squander on consumption, those resources would have been available for investment that would have made the economy permanently capable of producing far more wealth than otherwise. Everyone’s standard of living would, as a result, have been far higher.

Hartmann gives no indication that he understands any of this. To the contrary, he seems to think (in addition to the egalitarian rationales he’d surely give for the seizure of some people’s property) the lack of government wealth redistribution yields the boom-bust business cycle! If wealth disparities caused the boom-bust cycle, we’d experience economic depressions everywhere in the world, constantly.

Hartmann’s argument runs, in effect: “Citizen, you need to be looted in order to stabilize the system [a nonsensical idea Hartmann came across in the popular Keynesianism that forms the entirety of his economic knowledge]. Let us hear no more anti-social talk about your so-called rights. All hail The System! Wherever would we be without the stabilizing power of violence!”

As for the nonsense about FDR’s New Deal “stabilizing us”—and the perverse argument that our economy will never be stable unless the people are violently expropriated—check out economist Robert P. Murphy’s new book The Politically Incorrect Guide to the Great Depression and the New Deal. Its playful title notwithstanding, this book mercilessly bludgeons thoughtless clichés like this.

At least the mafia has the decency not to put such transparently phony claims over on you. They’re honest: we’re taking your money because we have power, and you don’t.

What it all boils down to is this: one side of our political spectrum favors the central planning of Iraq, while the other favors the central planning of Americans. We can only hope for the continued growth of a third side, one that rejects as unworthy of a free people all the superstitious nonsense about the magical powers of our overlords, whether that power is exercised at home or abroad.

LysanderSpooner's picture
LysanderSpooner
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Jul. 31, 2007 4:01 pm

Comments

You lost me with "the left now in power". The left hasn't been in power in a very long time. The so called "left" is now right of the middle. Hasn't anyone been paying attention?

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am

Hey, whatever Thom Hartmann doesn't know, I know, so all bases are covered. If you want more facts read my blog-

http://www.thomhartmann.com/users/leighmf/blog/2013/02/connecting-banking-circles

http://www.thomhartmann.com/users/leighmf/blog/2013/02/inside-safe-homeland-security

You have to be able to concentrate to get it. Much more research behind my stuff than any books you mentioned which are written in a year or two or maybe less. I humbly offer you the open books...

leighmf's picture
leighmf
Joined:
Jul. 31, 2007 4:01 pm

Lysander wrote: Leaving aside the odd view that only manual laborers engage in “work,” all the brawn in the world could never have produced a steam engine or a Pentium processor. Only when informed by the knowledge of inventors and supplied with the capital saved by capitalists can the average laborer produce the tiniest fraction of what he is today accustomed to producing.

poly replies: All the capital in the world couldn't have made the inventions. People who actually work invented them. Production could have been financed by public banking...making financiers irrelevent.

Lysander wrote: American society, in short, would have been far wealthier and the material level of all people would have been dramatically higher had top income tax rates been lower throughout the twentieth century.

poly replies: Current low tax rates on the wealthy coupled with a rapidly declining middle class seems to contradict your statement. The proof of any theory is always in the pudding, isnt it? Results.

I find it interesting that Equador, which has rejected conservative economics and market fundamentalism is one of the few countries that are actually growing in the global downturn. Of course, upper tax rates went up, corporate taxes went up and the new Constitution guarantees decent housing, free medical care, and rights of nature among other things. It repudiated foreign debt engineered by banksters and corrupt politicians..

As their Pres. noted, bankers and the media no longer control the country. Amazing things happen when they are pushed aside..

http://www.guardian.co.uk/commentisfree/cifamerica/2012/jan/19/ecuador-r...

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&I...

Retired Monk - "Ideology is a disease".

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

I know LS, we tend to lump Mises and Von Hayek and connect them to the Greedspan/Friedmann et. al. because all the people who refer to and rely upon any or all of them use the same Big Brand. Yes, within that brand of Conservative there are a number of factions with different points to press. But, all of them blame "the Left" and the boogeyman of government doing something other than stomping all over other countries, but not on Americans. At least "real Americans." Government can take out their enemies without any Constitutional protest or movement solidarity.

So, you are that "third faction" of purity who understands economics and politics more clearly than others. I believe we have had ample time to sample, read and digest what you have to say because you have said it more than once in much the same content and manner. The question of centralized authority and control being applied to domestic policy is another huge distortion of what is and what we have advocated for a long time. If you want to complain about being misunderstood, please stop with the centralized command and control meme. We can agree that a militarized empire will run that way, but that does not mean that anything Progressive today has a central, top-down authority at the heart of our political theory.

Everything Green and Post-Industrial is bottom-up with the mega serving local and indigenous rather than commanding. What "free market" ideologues miss is the interdependence and cooperative nature of trade systems. The real origins of our commercial culture at the 'investor' level was piracy and exploration for loot. Local markets ran on cooperation and charity to those in need. Debts were often forgiven because people lived together and the creditors could afford it. Very practical stuff. Not what Wall St. gives a shit about.

I won't rechew that bone about what Americans call 'capitalism' actually being 'socialism.' If you own your own business, you are not a capitalist until you invest in somebody else's business, etc.

But, it does matter to the analysis not to miscast the positions with which you are engaged. Let us stipulate that you oppose Greedspan and all that crap and that it matters that your heroes really did not want authoritarianism. They were utopians, so of course they dreamed of a world unfettered by bonds of coercion and tried to find an economics that would yield such a society. Sort of a fool's errand, however, with the horse and cart thing. You have to design a politics as well as an economics to have anything of value. Your politics has to be more than "voluntarism" and "town meetings."

If you can find enough fellow believers to put together a good commune or whatever it takes to do your individualistic thing together so you won't have to be offended by democracy, peace be with you. Otherwise, accept that you are a small minority who are not that misunderstood after all. We just disagree with you and could only be convinced by real life examples of what you advocate actually working somewhere. Lacking that, you can decide how you want to live among the heathen and go along to get along. I have this thing about how the person who is never right about anything can be helpful to the larger process by forcing questions that others would not consider. Learning what is wrong with the question is invaluable, so the point about dissent for me is that it be civil when clearly outvoted unless one is ready to throw down. In that case, you need more backup, so let's not go there. Peace.

drc2
Joined:
Apr. 26, 2012 12:15 pm

Thom Hartmann gets a lot of his fundamental economic information from Ravi Batra, a business/economics professor at Southern Methodist University, which is in Dallas, Texas. I have read some of Ravi Batra's textbook material. It is very knowledgeable and very practical for a nation with economic business sense. If someone disagrees with Ravi Batra on the Myth of Free Trade, they are either conartists or dumber than doorknobs. And I could care less about which party they favor, whether it be the republicon party or the demorat party. If they don't understand that trade is NOT free. It is NEGOTIATED between nations and should be managed by governments, then they are either ignorant or deliberately deceptive.

You want to talk about taxes? Taxes should include tariffs on selected imported goods. In comparison, we should minimize taxes charged to U.S. manufacturers, who produce real wealth in the U.S. and follow U.S. environmental standards. Nations that don't follow environmental standards should be charged additional or higher tariffs on goods that they want to export to the U.S. This alone is the cost of cleanup. Thom Hartmann, I am sure agrees with this fundamental economic and business sense. Thom is VERY KNOWLEDGEABLE and VERY PRACTICAL.

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Mark the Shark
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Nov. 18, 2011 4:02 pm

Wow, I didn't realize that the S&L's weren't deregulated? The way I remember it it went kind of like this, from WIKI:

Major causes according to United States League of Savings Institutions

The following is a detailed summary of the major causes for losses that hurt the savings and loan business in the 1980s:[11]

  1. Lack of net worth for many institutions as they entered the 1980s, and a wholly inadequate net worth regulation.
  2. Decline in the effectiveness ofRegulation Qin preserving the spread between the cost of money and the rate of return on assets, basically stemming from inflation and the accompanying increase in market interest rates.
  3. Absence of an ability to vary the return on assets with increases in the rate of interest required to be paid for deposits.
  4. Increased competition on the deposit gathering and mortgage origination sides of the business, with a sudden burst of new technology making possible a whole new way of conducting financial institutions generally and the mortgage business specifically.
  5. Savings and Loans gained a wide range of new investment powers with the passage of theDepository Institutions Deregulation and Monetary Control Actand theGarn–St. Germain Depository Institutions Act. A number of states also passed legislation that similarly increased investment options. These introduced new risks and speculative opportunities which were difficult to administer. In many instances management lacked the ability or experience to evaluate them, or to administer large volumes of nonresidential construction loans.
  6. Elimination of regulations initially designed to prevent lending excesses and minimize failures. Regulatory relaxation permitted lending, directly and through participations, in distant loan markets on the promise of high returns. Lenders, however, were not familiar with these distant markets. It also permitted associations to participate extensively in speculative construction activities with builders and developers who had little or no financial stake in the projects.
  7. Fraud and insider transaction abuses.
  8. A new type and generation of opportunistic savings and loan executives and owners—some of whom operated in a fraudulent manner — whose takeover of many institutions was facilitated by a change in FSLIC rules reducing the minimum number of stockholders of an insured association from 400 to one.
  9. Dereliction of duty on the part of the board of directors of some savings associations. This permitted management to make uncontrolled use of some new operating authority, while directors failed to control expenses and prohibit obvious conflict of interest situations.
  10. A virtual end of inflation in the American economy, together with overbuilding in multifamily, condominium type residences and in commercial real estate in many cities. In addition, real estate values collapsed in the energy states —Texas,Louisiana, andOklahoma— particularly due tofalling oil prices— and weakness occurred in the mining and agricultural sectors of the economy.
  11. Pressures felt by the management of many associations to restore net worth ratios. Anxious to improve earnings, they departed from their traditional lending practices into credits and markets involving higher risks, but with which they had little experience.
  12. The lack of appropriate, accurate, and effective evaluations of the savings and loan business by public accounting firms, security analysts, and the financial community.
  13. Organizational structure and supervisory laws, adequate for policing and controlling the business in the protected environment of the 1960s and 1970s, resulted in fatal delays and indecision in the examination/supervision process in the 1980s.
  14. Federal and state examination and supervisory staffs insufficient in number, experience, or ability to deal with the new world of savings and loan operations.
  15. The inability or unwillingness of the Bank Board and its legal and supervisory staff to deal with problem institutions in a timely manner. Many institutions, which ultimately closed with big losses, were known problem cases for a year or more. Often, it appeared, political considerations delayed necessary supervisory action.

----

and

In 1979, the financial health of the thrift industry was again challenged by a return of high interest rates and inflation, sparked this time by a doubling of oil prices. Because the sudden nature of these changes threatened to cause hundreds of S&L failures, Congress finally acted on deregulating the thrift industry. It passed two laws, the Depository Institutions Deregulation and Monetary Control Act of 1980 and the Garn–St. Germain Depository Institutions Act of 1982. The deregulation not only allowed thrifts to offer a wider array of savings products (including adjustable rate mortgages, which fixed one important problem), but also significantly expanded their lending authority and reduced supervision, which invited fraud.[5] These changes were intended to allow S&Ls to "grow" out of their problems, and as such represented the first time that the government explicitly sought to increase S&L profits as opposed to promoting housing and homeownership. Other changes in thrift oversight included authorizing the use of more lenient accounting rules to report their financial condition, and the elimination of restrictions on the minimum numbers of S&L stockholders. Such policies, combined with an overall decline in regulatory oversight (known as forbearance), would later be cited as factors in the collapse of the thrift industry.[4]

---

Now from Phaedrus, reduced supervision, changes to lending markets including commercial, undoing restrictions on numbers of shareholders, and lending to distant markets that the S&L's had no real knowledge of? That looks like a free marketeers paradise!

A consensus began to form that in order to save the S&Ls, their government-established loan and deposit interest-rate requirements, as well as the kind of loans they could make, had to be modified in light of the impossible conditions under which these institutions were forced to operate. The S&Ls needed to be permitted to engage in riskier investments than 30-year mortgages at 6 percent. (Notice: it’s the fault of the free market when the government modifies the government-established rules of a government-established institution, while its deposits continue to be guaranteed by the government. Got it?)

Changing the rules at the pleas of the S&Ls to be permitted to go after riskier, and therefore higher return investments, is in Misesean, free market, magic uniciorn speak somehow not deregulating? They were restricted to boring, stable practives that were limited in risk, and therefore less returns. The S&L's got laws passed to kill those restrictive regulations. Which to any "English speaking non- moron" would qualify as deregulation.

Phaedrus76's picture
Phaedrus76
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Sep. 14, 2010 8:21 pm

Yup, and that is why you get to occupy that little den over there in the corner with the other radical "true believers." Please excuse us if we go on with our intelligent conversation. You have described quite thoroughly and accurately why you belong in that corner and we can ignore you now. We won't take away your privileges, of course, but we would appreciate it if you did not keep coming to our door with your religious pamphlets after we have told you we are not interested and know what they say.

drc2
Joined:
Apr. 26, 2012 12:15 pm

Why Mises and not Hayek?by Hans-Hermann Hoppe

Let me begin with a quote from an article that my old friend Ralph Raico wrote some 15 years ago:

Ludwig von Mises and F. A. Hayek are widely considered the most eminent classical liberal thinkers of this century. They are also the two best known Austrian economists. They were great scholars and great men. I was lucky to have them both as my teachers.… Yet it is clear that the world treats them very differently. Mises was denied the Nobel Prize for economics, which Hayek won the year after Mises's death. Hayek is occasionally anthologized and read in college courses, when a spokesman for free enterprise absolutely cannot be avoided; Mises is virtually unknown in American academia. Even among organizations that support the free market in a general way, it is Hayek who is honored and invoked, while Mises is ignored or pushed into the background.

I want to speculate – and present a thesis – why this is so and explain why I – and I take it most of us here – take a very different view. Why I (and presumably you) are Misesians and not Hayekians.

My thesis is that Hayek's greater prominence has little if anything to do with his economics. There is little difference in Mises's and Hayek's economics. Indeed, most economic ideas associated with Hayek were originated by Mises, and this fact alone would make Mises rank far above Hayek as an economist. But most of today's professed Hayekians are not trained economists. Few have actually read the books that are responsible for Hayek's initial fame as an economist, i.e., his Monetary Theory and the Trade Cycle and his Prices and Production. And I venture the guess that there exist no more than 10 people alive today who have studied, from cover to cover, his Pure Theory of Capital.

Rather, what explains Hayek's greater prominence is Hayek's work, mostly in the second half of his professional life, in the field of political philosophy – and here, in this field, the difference between Hayek and Mises is striking indeed.

My thesis is essentially the same one also advanced by my friend Ralph Raico: Hayek is not a classical liberal at all, or a "Radikalliberaler" as the NZZ, as usual clueless, has just recently referred to him. Hayek is actually a moderate social democrat, and since we live in the age of social democracy, this makes him a "respectable" and "responsible" scholar. Hayek, as you may recall, dedicated his Road to Serfdom to "the socialists in all parties." And the socialists in all parties now pay him back in using Hayek to present themselves as "liberals."

Now to the proof, and I rely for this mostly on the Constitution of Liberty, and his three volume Law, Legislation, and Liberty which are generally regarded as Hayek's most important contributions to the field of political theory.

According to Hayek, government is "necessary" to fulfill the following tasks: not merely for "law enforcement" and "defense against external enemies" but "in an advanced society government ought to use its power of raising funds by taxation to provide a number of services which for various reasons cannot be provided, or cannot be provided adequately, by the market." (Because at all times an infinite number of goods and services exist that the market does not provide, Hayek hands government a blank check.)

Among these goods and services are

protection against violence, epidemics, or such natural forces as floods and avalanches, but also many of the amenities which make life in modern cities tolerable, most roads … the provision of standards of measure, and of many kinds of information ranging from land registers, maps and statistics to the certification of the quality of some goods or services offered in the market.

Additional government functions include "the assurance of a certain minimum income for everyone"; government should "distribute its expenditure over time in such a manner that it will step in when private investment flags"; it should finance schools and research as well as enforce "building regulations, pure food laws, the certification of certain professions, the restrictions on the sale of certain dangerous goods (such as arms, explosives, poisons and drugs), as well as some safety and health regulations for the processes of production; and the provision of such public institutions as theaters, sports grounds, etc."; and it should make use of the power of "eminent domain" to enhance the "public good."

Moreover, it generally holds that "there is some reason to believe that with the increase in general wealth and of the density of population, the share of all needs that can be satisfied only by collective action will continue to grow."

Further, government should implement an extensive system of compulsory insurance ("coercion intended to forestall greater coercion"), public, subsidized housing is a possible government task, and likewise "city planning" and "zoning" are considered appropriate government functions – provided that "the sum of the gains exceed the sum of the losses." And lastly, "the provision of amenities of or opportunities for recreation, or the preservation of natural beauty or of historical sites or scientific interest … Natural parks, nature-reservations, etc." are legitimate government tasks.

In addition, Hayek insists we recognize that it is irrelevant how big government is or if and how fast it grows. What alone is important is that government actions fulfill certain formal requirements. "It is the character rather than the volume of government activity that is important." Taxes as such and the absolute height of taxation are not a problem for Hayek. Taxes – and likewise compulsory military service – lose their character as coercive measures,

if they are at least predictable and are enforced irrespective of how the individual would otherwise employ his energies; this deprives them largely of the evil nature of coercion. If the known necessity of paying a certain amount of taxes becomes the basis of all my plans, if a period of military service is a foreseeable part of my career, then I can follow a general plan of life of my own making and am as independent of the will of another person as men have learned to be in society.

But please, it must be a proportional tax and general military service!

I could go on and on, citing Hayek's muddled and contradictory definitions of freedom and coercion, but that shall suffice to make my point. I am simply asking: what socialist and what green could have any difficulties with all this? Following Hayek, they can all proudly call themselves liberals.

In distinct contrast, how refreshingly clear – and very different – is Mises! For him, the definition of liberalism can be condensed into a single term: private property. The state, for Mises, is legalized force, and its only function is to defend life and property by beating antisocial elements into submission. As for the rest, government is "the employment of armed men, of policemen, gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating, killing, and imprisonment. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom."

Moreover (and this is for those who have not read much of Mises but invariably pipe up, "but even Mises is not an anarchist"), certainly the younger Mises allows for unlimited secession, down to the level of the individual, if one comes to the conclusion that government is not doing what it is supposed to do: to protect life and property. And the older Mises never repudiated this position. Mises, then, as my own intellectual master, Murray Rothbard, noted, is a laissez-faire radical: an extremist.

LysanderSpooner's picture
LysanderSpooner
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Jul. 31, 2007 4:01 pm

So no acknowledgment that the S&L crisis was fueled by deregulation?
Oh, and Mises was a ideologue nutter, and Mssr. Hoppe sounds more like a nutter disciple than an economist.

Phaedrus76's picture
Phaedrus76
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Sep. 14, 2010 8:21 pm

Lysander posted:

In addition, Hayek insists we recognize that it is irrelevant how big government is or if and how fast it grows. What alone is important is that government actions fulfill certain formal requirements.

poly replies: I'd say the function of government is the well-being of their populations. Monarchs that did that well kept their thrones. Monarchs that didn't lost their thrones and their heads.

Probably the overthrows of unresponsive governments and installation of responsive ones in Latin America show that holds to be true even today.

I'm reminded of something Kennedy said about governments not able to protect their poor won't be able to protect their rich.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Thom Hartmann does see as a major U.S. problem, in part from what he has learned from Ravi Batra. That the U.S. with a high yearly trade deficit, as of the year 2011 with $785 billion dollars, is resulting in increased government debt. Since the U.S. economy is not creating enough real wealth with the production of goods and services in the U.S. as a society. This lack of economic stimulation is being restimulated by increased U.S. government debt. Both political parties are guilty of this regardless of whether they call themselves republicans or democrats. The only major U.S. presidential candidate in the last 20-25 years who understood this, saw the potential problems and promoted this was Ross Perot. As I understand, Thom Hartmann, did vote for Ross Perot in at least one election. So Thom Hartmann, does understand fundamental economics and supports it.

As for all this U.S. debt that overly stimulates the U.S. economy. What Thom Hartmann does not like is when the republicons whine and complain about increased U.S. government debt when they don't have control of the white house and ignore increased government debt when they do have control of the white house and congress, for example the 2000s under George Bush, Jr.

We all can learn from other people, for example from economist Ravi Batra and businessman Ross Perrot. And we all can get conned by deceitful people. For example, politicians who are taking the equivalent of bribes from multi-national corporations in support of their re-election campaigns. Pure economic business sense realizes that when companies invest money they want a return on their investment and this obviously includes any money as funding of political campaigns regardless of whether it is for republicons or demorats.

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Mark the Shark
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Nov. 18, 2011 4:02 pm

Actually, Mark, government doesn't have to borrow. It can simply create/spend money to utilize idle labor and idle productive capacity. It needn't borrow to do that. It can either do so directly, or indirectly through pensions and grants to increase the consumer money supply.

The U.S. Constitution provides for that. The last Pres. to adhere to it was Abe Lincoln.

Eliminate debt as an excuse to not do anything...because Constitutionally, the excuse doesn't exist. Economically, it doesn't exist either. Sovereign governments needn't borrow. The primary beneficiaries of government borrowing are banksters and financiers. Borrowing is a political choice, not a Constitutional or economic requirement.

Modern Monetary Theory Seminar (Columbia Univ.):

http://www.modernmoneyandpublicpurpose.com/archives.html

Retired Monk - "Ideology is a disease"

.

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

LS, we understand what you are saying. It is not persuasive. We do not care that Mises and Hayek get confused that much. Neither has anything we really need today. One might have done more neoliberal damage, but so what? You points add nothing to our debate or our useful knowledge. Apart from having a very full readout on your particular pathology of ideology.

As I say to my true religious believers, if you think that Mises is present in your life and it gives you comfort and inspiration to live as a good human being, go for it with my blessing.

drc2
Joined:
Apr. 26, 2012 12:15 pm

O.K. Polycarp2, that is a good point that you make and it should at least be an option for government stimulation. Of course, the best method of economic stimulation for a country is products and services made or done in their country. Of course, we also want good quality and high amount production.

One more point Polycarp2. What is your analysis with your described stated method as it pertains to inflation? And this is something both liberals and conservatives might agree on. We don't need the federal reserve as a private entity. This should be governmental.

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Mark the Shark
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Nov. 18, 2011 4:02 pm

Government can directly spend into the economy, without borrowing, any amount up to utilizing 100% of national productive capacity. It can't, for instance, purchase a million tons of steel for bridges if factory output is only half that running at full capacity. It should spend only on unused capacity....not on capacity that's already being utilized in the market place for auto mfr., etc..

Demand greater than productive capacity is inflationary just as rises in gas prices from demand vs. supply are inflationary.

Historically, monetary policy follows inflation as a response to inflation...it isn't the instigator of inflation. Usually, though not always, inflation is a domestic demand/supply issue. Sometimes it's triggered by an international demand/supply issue on commodities. Sometimes by monopolies as in OPEC.

The Fed in its present form would have to be abolished and a central bank more on the model of the state-owned Bank of N. Dakota would have to take its place...probably under the auspices of the Treasury Dept.

Government already keeps tabs on monetary supply vs. productive output. It would be a simple thing for Treasury to let Congress know how much money it could simply spend into the economy each year without borrowing or taxation. It would still be up to Congress to determine any expenditures.

Currently, the economy is operating at about 75% capacity. 25 % is unused. That equates to several trillions per year goverment could simply spend...without borrowing or taxation.

The primary beneficiaries of government borrowing are bankers and financiers. Borrowing is a poilitical choice It isn't a Constitutional requirement. Borrowing is seldom an economics requirement except under extreme circumstances like a major war.

To overcome borrowing, debt and economies operating below full capacity, you'd first have to overcome bankers and finance....the primary losers in a debt-free monetary system.

http://www.modernmoneyandpublicpurpose.com/archives.html

Retired Monk - "Ideology is a disease"

.

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Sorry I could not resist posting this somewhere on this message board. For those of you who think socialism is such a great thing, here is a slam dunk arguement against it. A college professor giving a class full of idelistic 20 year olds a lesson in reality:

Is there hardship in the world? Yes.
Is it the government's job to change it? No
Is it our calling to find the needs of our neighbor and help them? Yes
It takes LOVE.....which sometimes means tough love.An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on Obama's plan".. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.
When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. Could not be any simpler than that. (Please pass this on) These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Can you think of a reason for not sharing this?
Neither could I.

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Mauiman2
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Jul. 27, 2012 7:24 am

Hi guys! I have been out of it for a while because I have been having problems. I missed talking with you guys, but I just was mentally exhausted from dealing with my problems and stuff.

Mauiman2, you have a point in that it can be counterproductive that one person gives to the other with that other person not earning it. However, the way programs like the SSA, welfare, etc. work is by assuming that people will pay their taxes when they are working, and then take out of programs when not working and in crisis, such as an unexpected disability that has to be learned how to compensated for, and then those people will pay it back through their taxes again when they are working again. So if a person willingly and deliberately uses government programs with no intention of working and paying into these programs with their taxes, then you have a point. But fraud against the government by those who don't need it could be fixed with out hurting those who do need it.

I do acknowledge that people can save up their own money as a personal "safety net," but for all people to do this universally regardless of an inability to save up a personal "safety net" due to a severe disability, is not realistic. Your response might be that in such a situation, one should go to charity, but help from charity can be difficult to get if one is not "socially connected" with rich friends.

Nothing personal, and I missed talking with you in spite of my problems.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm
Quote micahjr34:

Hi guys! I have been out of it for a while because I have been having problems. I missed talking with you guys, but I just was mentally exhausted from dealing with my problems and stuff.

Mauiman2, you have a point in that it can be counterproductive that one person gives to the other with that other person not earning it. However, the way programs like the SSA, welfare, etc. work is by assuming that people will pay their taxes when they are working, and then take out of programs when not working and in crisis, such as an unexpected disability that has to be learned how to compensated for, and then those people will pay it back through their taxes again when they are working again. So if a person willingly and deliberately uses government programs with no intention of working and paying into these programs with their taxes, then you have a point. But fraud against the government by those who don't need it could be fixed with out hurting those who do need it.

I do acknowledge that people can save up their own money as a personal "safety net," but for all people to do this universally regardless of an inability to save up a personal "safety net" due to a severe disability, is not realistic. Your response might be that in such a situation, one should go to charity, but help from charity can be difficult to get if one is not "socially connected" with rich friends.

Nothing personal, and I missed talking with you in spite of my problems.

Thanks for the plug, nothing personal taken.

I don't think that anyone suggests that the government sould not redistribute SOME money, and that there are people who actually need help. The question is, what percentage of the GDP should the government redistribute? Hopefully we all can agree that it should be something less than 100%.

So who gets to decide? Basically it has to be the people paying the taxes, and the majority of the taxes are paid by the middle class. So if the middle class is not willing to open up their wallets any more than they are right now, then the government has to learn to live on the income it is getting, and cut programs until the budget is balanced (or at least close). That does not mean that we cannot have short periods of time when we overspend, but the 4 years (and counting) of over 1 trillion dollars a year overspending is out of control and cannot be sustained.

I find the recent debate on sequestration (sp?) laughable, the cuts there are nothing but a rounding error on a 3 trillion dollar a year plus federal budget. We simply have to make a lot bigger custs than this this survive.

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Mauiman2
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Quote Mauiman2:

Sorry I could not resist posting this somewhere on this message board. For those of you who think socialism is such a great thing

Since I don't "think socialism is such a great thing," I stopped reading here. Thanks for the qualifier so early in your propaganda piece.

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al3
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Jul. 31, 2007 4:01 pm

Socialism at its core is nothing more than direct worker ownership of their place of work. Sorry so many seem to be against independent plumbers, electricians and family- owned/operated businesses. They are socialist enterprises. They fit the major criteria as do co-ops..

The frightening scapegoat of government ownership isn't socialism...it's just a change of bosses .A change of bosses isn't socialism.

Probably, the anti-socialists should run down and picket their local dry cleaners. They are usually family owned/operated businesses. Terrible socialist-run enterprises.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

Mauiman2,

"Who gets to decide?" That is a million dollar question, no pun intended! While I do believe that a civil government does have have at the very least some responsibility for its citizens, if that responsibility is given to someone or some group that is incompetent or corrupt, it could make things worse. That is why I think some people dislike democracy, in that people tend to vote for charisma of personality instead of competence in office

micahjr34
Joined:
Feb. 7, 2011 4:57 pm
Quote Mauiman2: These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.


Really? Then why do we give defense contractors piles of money? They seem to get wealthy by taking from others.
Quote Mauiman2:

2. What one person receives without working for, another person must work for without receiving.


Is that the definition of a large corporation?
Quote Mauiman2:

3. The government cannot give to anybody anything that the government does not first take from somebody else.


Like when govt takes from us and gives to oil companies, defense contractors, etc etc.

Quote Mauiman2:

4. You cannot multiply wealth by dividing it!


No, but you cannot multiply wealth anyhow. People can work to increase their wealth. Or people can enslave others to work for them through force, or to work for them through the fear of poverty, and steal the fruits of that labor.
Quote Mauiman2:
5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Yep, once the few figure out that they can not work and force the rest of mankind to toil for them that is a problem.
Quote Mauiman2:
Can you think of a reason for not sharing this?
Neither could I.

So, the solution is to end wage slavery. No one may labor for another. Each man must farm his own food, and build his own home. No theft of the fruits of one's efforts through contracts.

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Phaedrus76
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Sep. 14, 2010 8:21 pm
Quote micahjr34:

Mauiman2,

"Who gets to decide?" That is a million dollar question, no pun intended! While I do believe that a civil government does have have at the very least some responsibility for its citizens, if that responsibility is given to someone or some group that is incompetent or corrupt, it could make things worse. That is why I think some people dislike democracy, in that people tend to vote for charisma of personality instead of competence in office

Yes you do understand some of the weaknesses of a democracy. Unfortunately I don't see anything that is any better in the long run.

Mauiman2's picture
Mauiman2
Joined:
Jul. 27, 2012 7:24 am
Quote Phaedrus76:
Quote Mauiman2: These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.


Really? Then why do we give defense contractors piles of money? They seem to get wealthy by taking from others.
Quote Mauiman2:

2. What one person receives without working for, another person must work for without receiving.


Is that the definition of a large corporation?
Quote Mauiman2:

3. The government cannot give to anybody anything that the government does not first take from somebody else.


Like when govt takes from us and gives to oil companies, defense contractors, etc etc.

Quote Mauiman2:

4. You cannot multiply wealth by dividing it!


No, but you cannot multiply wealth anyhow. People can work to increase their wealth. Or people can enslave others to work for them through force, or to work for them through the fear of poverty, and steal the fruits of that labor.
Quote Mauiman2:
5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Yep, once the few figure out that they can not work and force the rest of mankind to toil for them that is a problem.
Quote Mauiman2:
Can you think of a reason for not sharing this?
Neither could I.

So, the solution is to end wage slavery. No one may labor for another. Each man must farm his own food, and build his own home. No theft of the fruits of one's efforts through contracts.

You are obviously an anti capitalist. You have way too much faith in politicians like Jesse Jackson Jr.

Mauiman2's picture
Mauiman2
Joined:
Jul. 27, 2012 7:24 am
Quote polycarp2:

Socialism at its core is nothing more than direct worker ownership of their place of work. Sorry so many seem to be against independent plumbers, electricians and family- owned/operated businesses. They are socialist enterprises. They fit the major criteria as do co-ops..

The frightening scapegoat of government ownership isn't socialism...it's just a change of bosses .A change of bosses isn't socialism.

Probably, the anti-socialists should run down and picket their local dry cleaners. They are usually family owned/operated businesses. Terrible socialist-run enterprises.

Retired Monk - "Ideology is a disease"

You are confusing a form of government with a form of managing a private company. The owners run a private company, whether that is a group of stockholders, a single owner, or the workers.

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Mauiman2
Joined:
Jul. 27, 2012 7:24 am

Not anti capitalist, just pro worker.

America needs a government big enough to take protect citizens from threats. Whether those threats are foreign or domestic. So far in the Bush Recession, 1 bankster has been jailed. Bernie Madoff. And he was caught stealing from rich folks. HSBC was caught laundering drug dealer money, and got a slap on the wrist.

Phaedrus76's picture
Phaedrus76
Joined:
Sep. 14, 2010 8:21 pm
Quote Phaedrus76:

Not anti capitalist, just pro worker.

America needs a government big enough to take protect citizens from threats. Whether those threats are foreign or domestic. So far in the Bush Recession, 1 bankster has been jailed. Bernie Madoff. And he was caught stealing from rich folks. HSBC was caught laundering drug dealer money, and got a slap on the wrist.

S and P and their ilk needs to get thrown in the slammer. It was their job to blow the whistle on the bad loans and they did not.

Mauiman2's picture
Mauiman2
Joined:
Jul. 27, 2012 7:24 am
Quote Mauiman2:You are confusing a form of government with a form of managing a private company. The owners run a private company, whether that is a group of stockholders, a single owner, or the workers.
But aren't conservatives the ones who always seem to be the first one to mention the "s" word when resisting efforts to reign in corporate power, which is an economic discussion, not a discussion about government?

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al3
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Jul. 31, 2007 4:01 pm

I came across this comment elsewhere which also makes the point USA does not need to borrow.

14.00

Mark Robertson | January 13, 2013 at 12:57 pm | Reply

Frank there is some confusion regarding the word “borrow” when applied to the U.S. government.

The U.S. government creates all its money from nothing, and sends part of it through the Fed’s Open Market process before final disbursal. If the U.S. government borrowed all its money from the Fed, as you claim, then Congress would have no real say in the federal budget, and the “debt ceiling” charade would come from the Fed, not from Congress.

The U.S. government expects to spend about $3.8 trillion during FY 2013 (which began on 1 Oct 2012) and also expects to have a budget deficit of $901 billion by the end of FY 2013. Federal laws dating from the gold standard days require the US Treasury to sell various T-securities whose aggregate total equals the federal budget deficit each http://neweconomicperspectives.org/2013/01/public-debt-debt-ceiling-and-monetary-sovereignty-some-accounting-realities.html?replytocom=94574#respondyear

. Hence by the end of FY 2013, the Treasury will be required to have sold $901 billion worth of T-securities. The remaining $2.9 trillion in the federal budget will be dispensed with no connection to the sale of T-securities, although most of it will be stolen back from the economy via federal taxes.

The U.S. government could disburse all monies via direct deposit (like it does with Social Security) without selling any T-securities. But because politicians want to serve banks and the 1%, politicians will let $901 billion in public funds go through the Open Market process.

Thus, the Treasury will create $901 in T-securities out of nothing, sell those securities to investors, and then disburse the sales proceeds into the economy. That $901 will be lent by investors, but this is by government choice, not by necessity. The “borrowing” of that $901 billion will be strictly voluntary. The “loan money” (i.e. T-securities purchased) will come from investors, not the Fed.

I agree with you that the Fed and the big banks are raping us, but this is because politicians want to reduce federal spending on social programs, thereby forcing us to seek loans from greedy banks (e.g. $1 trillion in student loan debt).

My point is that I disagree with people who say the Fed runs the whole show. In reality, politicians and bankers cooperate to keep the 99% impoverished and enslaved.

From

http://neweconomicperspectives.org/2013/01/public-debt-debt-ceiling-and-monetary-sovereignty-some-accounting-realities.html#comment-94574

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pshakkottai
Joined:
Jul. 11, 2011 11:27 am

Reply to 18

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

You can increase social spending to spread resources to the needy like SS, free medicare for all, free college tuition and stipends etc

2. What one person receives without working for, another person must work for without receiving.

Not if govt creates money as required without excessive taxation. Taxation can be much lower for monetarily sovereign nations.

3. The government cannot give to anybody anything that the government does not first take from somebody else. Again not true for created money for public investments.It is not a zero sum game.

4. You cannot multiply wealth by dividing it! Created money builds national wealth. In fact govt deficits are peoples' non-deficits. Govt deficits are new created money and the sum of all created deficits becomes national wealth. Is this a guess? Is there any proof? See

http://pshakkottai.wordpress.com/2012/02/27/national-debt-and-national-wealth-compared/

1. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

In http://mythfighter.com/2012/08/22/how-would-you-make-disemployment-work/

Mitchell says “1. Legally reduce the traditional 40 hour work week to 30 hours and less.

2. Prevent hunger for lack of dollars. The government could provide for everyone’s basic food supplies by paying grocery stores to offer free milk, meat, fish and vegetables.

3. Provide health care for everyone. The government could pay for 100% Medicare for every American of all ages.

4. Keep people from suffering homelessness. The government to pay for home mortgages at a minimum level (Rather than “minimum wage,” we could have “minimum home mortgage,” where people could add dollars for more expensive homes. Or “minimum rent,” something akin to the government paying for hotel stays).

5. Just as today we provide free education, grades 1-12, the government should provide free college and advanced degree education to every American.

6. Begin with government-paid-for local, public transportation, then expand this by paying airlines and railroads for free national public transportation.

We began this discussion with three facts. There is a fourth fact: Disemployment is the future. As winter follows fall, nothing will stop it.” Those who enjoy work will because work is its own reward.

pshakkottai's picture
pshakkottai
Joined:
Jul. 11, 2011 11:27 am
Quote Mauiman2:
Quote polycarp2:

Socialism at its core is nothing more than direct worker ownership of their place of work. Sorry so many seem to be against independent plumbers, electricians and family- owned/operated businesses. They are socialist enterprises. They fit the major criteria as do co-ops..

The frightening scapegoat of government ownership isn't socialism...it's just a change of bosses .A change of bosses isn't socialism.

Probably, the anti-socialists should run down and picket their local dry cleaners. They are usually family owned/operated businesses. Terrible socialist-run enterprises.

Retired Monk - "Ideology is a disease"

You are confusing a form of government with a form of managing a private company. The owners run a private company, whether that is a group of stockholders, a single owner, or the workers.

Nope. A socialist government would tackle absentee ownership. When it bought GM for pennies on the dollar, it would have re-sold the shares back to GM's workers...those who actually operate the plants. The shares would have been paid for out of co. profits.

A socialist government would probably institute public-owned banking. While the banks themselves wouldn't be "socialist", they'd provide the financing for workers to buy or establish their places of employment...the prime criteria of socialism. Private financiers would be redundant. Dinosaurs.

Elements of a social democracy, such as public fire departments, libraries and schools, in themselves, aren't socialist. Librarians don't own the libraries. Sucn things are elements of a social democracy. They aren't socialism though they can be utilized under socialist governance. Such things are democratically determined.

The closest the U.S. ever came to socialism was at the nation's founding when the majority owned-operated their own workplace as independent farmers, crafstmen and shopkeepers. Europeans wanted that experience for themselves They called it socialism.

You need a grip on what the socialist movement actually was, not on what it's been redefined as being. It's been so misconstrued, the term has been dumped. It's now called Parecon (Participatory Economics).

If you're against socialism, you should probably picket your local, independent plumber. He's operating a socialist enterprise. He owns his own workplace. That's all socialism is. It utilizes economic fundamentals of capitalism. Every social system in history has done so...including subsistence farmers.

Even the monastery utilizes capitalism. It's just applied differently. It's a socialist enterprise. We own/operate our own workplace just like any other co-op or partnership. The Chief Executive (Abbot) carries out policy democratically determirmined. He doesn't dictate it.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm
Quote pshakkottai:

Reply to 18

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

You can increase social spending to spread resources to the needy like SS, free medicare for all, free college tuition and stipends etc

2. What one person receives without working for, another person must work for without receiving.

Not if govt creates money as required without excessive taxation. Taxation can be much lower for monetarily sovereign nations.

3. The government cannot give to anybody anything that the government does not first take from somebody else. Again not true for created money for public investments.It is not a zero sum game.

4. You cannot multiply wealth by dividing it! Created money builds national wealth. In fact govt deficits are peoples' non-deficits. Govt deficits are new created money and the sum of all created deficits becomes national wealth. Is this a guess? Is there any proof? See

http://pshakkottai.wordpress.com/2012/02/27/national-debt-and-national-wealth-compared/

1. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

In http://mythfighter.com/2012/08/22/how-would-you-make-disemployment-work/

Mitchell says “1. Legally reduce the traditional 40 hour work week to 30 hours and less.

2. Prevent hunger for lack of dollars. The government could provide for everyone’s basic food supplies by paying grocery stores to offer free milk, meat, fish and vegetables.

3. Provide health care for everyone. The government could pay for 100% Medicare for every American of all ages.

4. Keep people from suffering homelessness. The government to pay for home mortgages at a minimum level (Rather than “minimum wage,” we could have “minimum home mortgage,” where people could add dollars for more expensive homes. Or “minimum rent,” something akin to the government paying for hotel stays).

5. Just as today we provide free education, grades 1-12, the government should provide free college and advanced degree education to every American.

6. Begin with government-paid-for local, public transportation, then expand this by paying airlines and railroads for free national public transportation.

We began this discussion with three facts. There is a fourth fact: Disemployment is the future. As winter follows fall, nothing will stop it.” Those who enjoy work will because work is its own reward.

Sorry the taxpayers of this country are not willing to support this kind of government control, thank God.

Mauiman2's picture
Mauiman2
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Jul. 27, 2012 7:24 am
Quote Phaedrus76:

Not anti capitalist, just pro worker.

The problem with you is that you refuse to realize that the laws of supply and demand and elasiticity of demand apply not only to goods and services, but to labor also.

Mauiman2's picture
Mauiman2
Joined:
Jul. 27, 2012 7:24 am
Quote Mauiman2:
Quote Phaedrus76:

Not anti capitalist, just pro worker.

The problem with you is that you refuse to realize that the laws of supply and demand and elasiticity of demand apply not only to goods and services, but to labor also.

So then, what do you propose to do with our excess population?

Phaedrus76's picture
Phaedrus76
Joined:
Sep. 14, 2010 8:21 pm
Quote Phaedrus76:
Quote Mauiman2:The problem with you is that you refuse to realize that the laws of supply and demand and elasiticity of demand apply not only to goods and services, but to labor also.
So then, what do you propose to do with our excess population?
Not to worry. They'll live on Mauiman2's Social Security contributions.

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al3
Joined:
Jul. 31, 2007 4:01 pm

I was at a Christian bible teaching and gathering a couple of years ago. I was talking with a lady who favored the republican party. I favor the democratic party. Even when we discussed politics a bit we still got along fine because we agreed that in order for the U.S. economy to recover it needs to be more production based. U.S. production based is MADE IN USA with production NOT being outsourced to countries like China. And NO, when a nation has a 785 billion dollar trade deficit (year 2011), this is NOT enough production in the U.S. She also realized that balance of trade is important. But then she happened to be a common sense republican and not a neo liberal republicon or demorat. And yes, there are the equivalent of neo-liberals from both the republicon and demorat parties.

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Mark the Shark
Joined:
Nov. 18, 2011 4:02 pm

I could not resist the chance to give Island Guy a Real World Report on what his juvenile moralism misses.

First off, I hate the whole idea of "tough love" because it ought to be a reviewer's term for people who have hung in there for better and worse rather than a blessing for "savior complex" and "convenience" on the part of those who once tried to say that spanking hurt them more than it did the kid being spanked. Love is a lot tougher than this nonsense. The needed intervention is a lot more humble and compassionate than anything I have ever heard associated with "tough love."

"Who Gets to Decide" is a question for Civics 101. IG says that the Middle Class taxpayers, the one's burdened by the pass given to the rich and the lack of economic capacity below their status, will decide because they are the First Payers. Why these victims of Elite Greed refuse to vote for higher taxes at the top is not explained. We must take for granted that the solution is to reduce taxes on the Middle Class and nothing else.

I think the poor get to be equal participants in this "decision," and that the Middle Class so broadly defined needs to take a good look at who they are and who they are working to support. I suspect they will have more problems with paying for the lifestyles of the rich and famous than to be sure that infants and toddlers get the right food and healthcare. In any event, we have to make much smarter investments as well as some cuts in order to survive. To put this in reverse and make the cuts about surviving is to miss the real crisis and make it worse instead of better. This is the time to spend wisely to get value back and hasten our recovery.

drc2
Joined:
Apr. 26, 2012 12:15 pm
Quote Mauiman2:
Quote pshakkottai:

Reply to 18

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

You can increase social spending to spread resources to the needy like SS, free medicare for all, free college tuition and stipends etc

2. What one person receives without working for, another person must work for without receiving.

Not if govt creates money as required without excessive taxation. Taxation can be much lower for monetarily sovereign nations.

3. The government cannot give to anybody anything that the government does not first take from somebody else. Again not true for created money for public investments.It is not a zero sum game.

4. You cannot multiply wealth by dividing it! Created money builds national wealth. In fact govt deficits are peoples' non-deficits. Govt deficits are new created money and the sum of all created deficits becomes national wealth. Is this a guess? Is there any proof? See

http://pshakkottai.wordpress.com/2012/02/27/national-debt-and-national-wealth-compared/

1. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

In http://mythfighter.com/2012/08/22/how-would-you-make-disemployment-work/

Mitchell says “1. Legally reduce the traditional 40 hour work week to 30 hours and less.

2. Prevent hunger for lack of dollars. The government could provide for everyone’s basic food supplies by paying grocery stores to offer free milk, meat, fish and vegetables.

3. Provide health care for everyone. The government could pay for 100% Medicare for every American of all ages.

4. Keep people from suffering homelessness. The government to pay for home mortgages at a minimum level (Rather than “minimum wage,” we could have “minimum home mortgage,” where people could add dollars for more expensive homes. Or “minimum rent,” something akin to the government paying for hotel stays).

5. Just as today we provide free education, grades 1-12, the government should provide free college and advanced degree education to every American.

6. Begin with government-paid-for local, public transportation, then expand this by paying airlines and railroads for free national public transportation.

We began this discussion with three facts. There is a fourth fact: Disemployment is the future. As winter follows fall, nothing will stop it.” Those who enjoy work will because work is its own reward.

Mauiman replied: Sorry the taxpayers of this country are not willing to support this kind of government control, thank God.

True. Americans prefer taxes, rising poverty, government debt and wealthy banksters running the show. In a monetary sovereign nation-state...that needn't be. Taxation, rising poverty, government debt and wealthy banksters running the show is an ideological choice.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm
Quote Phaedrus76:
Quote Mauiman2:
Quote Phaedrus76:

Not anti capitalist, just pro worker.

The problem with you is that you refuse to realize that the laws of supply and demand and elasiticity of demand apply not only to goods and services, but to labor also.

So then, what do you propose to do with our excess population?

"Excess population?" That is a term I have never heard of. Please give me a definition, then maybe I can answer your question.

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Mauiman2
Joined:
Jul. 27, 2012 7:24 am
Quote drc2:

"Who Gets to Decide" is a question for Civics 101. IG says that the Middle Class taxpayers, the one's burdened by the pass given to the rich and the lack of economic capacity below their status, will decide because they are the First Payers. Why these victims of Elite Greed refuse to vote for higher taxes at the top is not explained. We must take for granted that the solution is to reduce taxes on the Middle Class and nothing else.

I think the poor get to be equal participants in this "decision," and that the Middle Class so broadly defined needs to take a good look at who they are and who they are working to support. I suspect they will have more problems with paying for the lifestyles of the rich and famous than to be sure that infants and toddlers get the right food and healthcare. In any event, we have to make much smarter investments as well as some cuts in order to survive. To put this in reverse and make the cuts about surviving is to miss the real crisis and make it worse instead of better. This is the time to spend wisely to get value back and hasten our recovery.

A couple of points here. For all you think that "tax the rich" is the solution, look at what England did in 2008. They tried "tax the rich" by raising their top rate from 40% to 50% (appox). The rich voted with their feet and left the country, and the amount of money England collected from the rich actually went down. England then had to cut that increase in half, from a 10% increase to a 5% increase to stop the bleeding. As mad as this makes you, the rich will not sit around and just pay extra taxes just because you think they should. That is reality, whether you like it or not.

And another point of reality is that those that have the money get to decide how to spend it. And most of the money is in the middle class. So until the middle class taxpayers in this country decide as a group that they are willing to open up their wallets a whole lot more than they are right now, cuts in social programs have to be made. Again I know that this reality makes you hopping mad, but it is reality, it is not my opinion.

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Mauiman2
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Jul. 27, 2012 7:24 am

Mauiman wrote: And another point of reality is that those that have the money get to decide how to spend it. And most of the money is in the middle class.

poly replies: Actually, 400 US. families have more wealth than the bottom 150 million. The rest of the nation's wealth is shared with the remnants of the shrinking middle class and the 1%. I expect within a few years 400 families will have more wealth than the bottom 250 million.

The elite do respond to labor demands. In Greece, it's now illegal to strike. If you refuse to work at the reduced wages, you go to jail. Behind the scenes class war in that country has come out into the open.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

I read Hayek's "The Road to Serfdom" cover to cover. If he's the poster boy for the Austrians, he's sure being misinterpreted by the unbrildled free marketeers. The book was published in 1944 which was a time of the "red menace" and the beginning of the ideological war with the Russian Bear. It was written as a reaction to statism as exemplified by Russia at the time. However, I was struck by how many times Hayek ceded to governmental regulation and oversight to keep human nature from working its will on economics. Yes, in some, actually many, unbridled greed is a part of human nature.

Economics doesn't exist as a science or a part of a nation's mores without human nature being a major factor. The apersonal economics you seem to cite here leaves out this massive variable in the systems. You can fill volumes with economic theories and how they will work to perfection and they all prove fallible once you introduce the fallible human being into the equation. We don't have to look too far back to find a great example. Start with the banksters from 2008 and before.

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Combad57
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May. 29, 2012 12:50 pm

I've been hearing mauiman's little story about the college class grades, at least in it's basic form for many years. It's an old an hackneyed story that usually ends thus.

"So you don't like the results in the grading? Welcome to the republican party."

It's a simple minded parable. Nothing more.

If the difference between Von Mises and Hayek as stated here is true, I'll take Hayek's world view of economics eight days a week over Von Mises.

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Combad57
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May. 29, 2012 12:50 pm

People that promote the republicon party here on this site and that are economic capitalistic neo-liberals are people filled with greed. They are the opposite of fundamentally and financially secure economists who realize the importance of products produced in a country. In contrast all they want is the cheapest labor possible, If they could have slave labor they would even want this. All they want is the highest money for themselves or those that they promote and in reality could care less amount the financial stability of a nation and government. They could care less if nations go down or even crash economically as long as their pockets are full to buy whatever they want at the cheapest price possible

Mark the Shark's picture
Mark the Shark
Joined:
Nov. 18, 2011 4:02 pm
Quote drc2:

but we would appreciate it if you did not keep coming to our door with your religious pamphlets after we have told you we are not interested and know what they say.

I'm going to steal this line and use it. Often.

Brilliant.

chilidog
Joined:
Jul. 31, 2007 4:01 pm
Quote Mark the Shark:

People that promote the republicon party here on this site and that are economic capitalistic neo-liberals are people filled with greed. They are the opposite of fundamentally and financially secure economists who realize the importance of products produced in a country. In contrast all they want is the cheapest labor possible, If they could have slave labor they would even want this. All they want is the highest money for themselves or those that they promote and in reality could care less amount the financial stability of a nation and government. They could care less if nations go down or even crash economically as long as their pockets are full to buy whatever they want at the cheapest price possible

And Liberals are not greedy? Greed is a basic human fallicy, and all political parties and viewpoints are equally guilty of it, as a group.

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Mauiman2
Joined:
Jul. 27, 2012 7:24 am

Very true, Mauiman2, very true! sigh...

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

What is excess population? If we are talking about workers' rights, and labor wages, and someone injects price elasticity into the discussion then that leads to what happens if the price of the good increases? What happens to the excess supply? Those supply-demand curves, the x axis represents quantity of products.

In the case of labor, the quantity are workers, an excess of supply are excess workers, which are people. You can throw around terms, they mean something. Don't bring up terms if you don't comprehend the entire thing you are discussing. I know conservatives will always move the goalpost each time their argument gets blown up, but really?

The problem is demand for labor is fairly inelastic, at current wage levels. Since corporate profits are at all time highs, clearly the productivity of workers is far greater than ever, and yet wages are stuck at very low levels. Why? The econ classes I took all claimed wages were a function of productivity, and not the result of collusion and corporate/ govt corruption to keep the MW low.

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Phaedrus76
Joined:
Sep. 14, 2010 8:21 pm

What to do with our excess population?

"Malthus argued that two types of checks hold population within resource limits: positive checks, which raise the death rate; and preventive ones, which lower the birth rate. The positive checks include hunger, disease and war; the preventive checks, abortion, birth control, prostitution, postponement of marriage and celibacy."

http://en.wikipedia.org/wiki/Thomas_Robert_Malthus

chilidog
Joined:
Jul. 31, 2007 4:01 pm
Quote Phaedrus76:

What is excess population? If we are talking about workers' rights, and labor wages, and someone injects price elasticity into the discussion then that leads to what happens if the price of the good increases? What happens to the excess supply? Those supply-demand curves, the x axis represents quantity of products.

In the case of labor, the quantity are workers, an excess of supply are excess workers, which are people. You can throw around terms, they mean something. Don't bring up terms if you don't comprehend the entire thing you are discussing. I know conservatives will always move the goalpost each time their argument gets blown up, but really?

The problem is demand for labor is fairly inelastic, at current wage levels. Since corporate profits are at all time highs, clearly the productivity of workers is far greater than ever, and yet wages are stuck at very low levels. Why? The econ classes I took all claimed wages were a function of productivity, and not the result of collusion and corporate/ govt corruption to keep the MW low.

FYI, I do have an MBA, so I am a little sharper than the average knife in the drawer, what are your credentials that you can lecture me on economics?

You still seem are blind to the fact that the laws of supply and demand apply to labor also. If there is an over supply of plumbers, guess what happens to the wages for plumbers? Right now there is a huge shortage of old farts (like me) who know their way around an oil refinery. The demand is much higher than the supply. Guess what has happened to my earnings in the last few years? The recession I keep reading about is only a rumor in my business. Yes oil companies are making money hand over fist right now, and they are willing to pay for talent that help keep it that way. You'l have to forgive me for enjoying the situation, because it has not always been this way, believe me.

The laws of supply and demand apply to labor as well as good and services, a fact that you are unwilling to concede.

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Mauiman2
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