"The Hotel of Impossible Promises"

I agree it collapsed because it went private but had public backing. Social Security fortunately averted the same fate for now and is doing fine.

Here's a graph of home ownership trends in the United States. Note the upswing when Fannie Mae was created and the steady growth until we turned it into a deformed hybrid in 1968 when Johnson "privatized" it. This too has happened with Medicare being infested by private for-profit insurers as well. And the Glass-Steagall Acts demise also allowed massive too big to fail conglomerates with layers of conflicts of interest and Uncle Sam's backing to mutate into the hideous monsters they now are.

The lesson isn't that government can't work. The lesson is to keep government and private enterprise as separated as possible.

The lesson isn't that government can't work. The lesson is to keep government and private enterprise as separated as possible.

Government can work as long as it doesn't try to do more than prohibit fraud and aggression.

Any attempt to use government to manage society or economy will result in a co-mingling of public and private agency with results such as we have experienced.

It's not an accident of history that things have become so bad, but a natural consequence of allowing politicians the power to tax at will to meddle in the productive activities of the people.

We all tend to agree with muirgeo as to what the problems are. We disagree on the root causes, and thus, proposed solutions.

Muirgeo thinks the problem is insufficient democracy and "bad" regulations, whereas libertarian/free market types see the problem rooted in government attempts to make the market "work", which creates the perverse incentives inherent in any mixed economy.

Or perhaps the way law and order types see increased enforcement as a solution to drug gang violence while libertarians see a repeal of prohibition as a big step in reducing said violence.

I just wrote the Board members of the Federal Reserve.

Dear Board members ( who as your subtitle states, provide me with a safe, flexible and stable money and financial system),

I understand that there are some upcoming meeting with Richard Fuld and his friends. Could you please post the times and place where these meetings are to occur. As a tax paying citizen I'm very interested in helping this process along to a successful or unsuccessful conclusion as the case may be.

Also, just wondering, I know you're all pretty busy and all but I just installed some awesome hradwood flooring! Well we had some cost over-runs and the interest rate I'm paying on the balance is causing some issues for me and my wife. Could a couple of you stop by and help me resolve this issue. I'm thinking if I could just get a little cash infusion or maybe I could go to that window you have that has the low interest rates and get some of them. It might really help. And since you're so good at dealing with these financial issues I could really use your advice. What a great service you provide for your customers. Thanks for everything!

If you want you can just text me at 707-688-****.

Thanks, George A Balella

Muirgeo explained it best. He sees the current financial turmoil as a result of "kids playing with Loaded guns and no adults supervising it". He identifies the lack of supervision as the cause of the problem, whereas the Libertarians identify the loaded gun as the cause of the problem.

The problem with the analogy is that no meaningful distinction exists between "kids" and "adults" in the analogous "private" vs. "public" dichotomy.

In Murgeio's imagination, "private-for-profit" players are the "kids", and state regulators are the "adults", but this distinction is meaningless in reality. Official state employees are no more "adult" than others. I've been both and will personally testify to this fact. Federal civil servants' "look after our own". That's a direct quote from a meeting of civil servants at Marshall Space Flight Center discussing whether a daycare center should be open to government contractors working on site or limited to civil servants.

The daycare center was subsized only insofar as the Marshall provided space. A board of parents using the daycare administered the center without pay, and parents paid for the services, including the wages of daycare providers and needed supplies other than rent on the space. In the minds of some civil servants speaking at this meeting, that space wasn't public. It was ours. I ultimately won this debate, but my voice was a minority of one at the time, because only civil servants attended the meeting.

Furthermore, the interests authorized to organize massive resources for profit are "private" in name only. They are "outside the state" only because we choose arbitrarily to describe them with these words. In fact, they exercise state power fundamentally, and only a few generations ago, they were a titular Nobility that no one bothered much to distinguish from "the state". We don't officially assign these titles in the U.S, but this distinction between lords of capital in the U.S. and elsewhere is largely a matter of statutory formality and not a meaningful distinction.

So Murgeio's solution, to keep "government and private enterprise as separate as possible", seems senseless to me. The problem with Medicare's prescription drug benefit is not that nominally "for profit" organizations in the nominally "private" sector finance the purchase of drugs for the elderly. The problem is that the elderly don't finance these purchases themselves with the aid of persons more directly interested in them, like their children or other people with whom an elderly person has established a relationship, like a church or an insurer of long standing or a tenant or a master in an apprenticeship relationship.

And I don't mean some collective of Children defined by some committee of Congress and simply ordered to purchase drugs for an Elderly collective. We're all children after all, and most of us hope to be elderly some day.

More to the point, I am the child of my parents specifically, the people who supported me and provided my medical care as I was born and raised, so I owe them a reciprocal obligation in my way of thinking. I don't owe it to someone else's parents, and I don't owe it to Parents collectively, much less the Elderly. I might share this obligation with other children supporting their parents through an insurance arrangement, but elderly people who never supported children obviously don't belong in this arrangement. The relevant distinction here is not "public" vs. "private". The relevant distinction is "supported children" vs. "didn't support children".

If we expect rationally to obligate young people to provide health care to old people, the obligation must be reciprocal and proportional. Some older people can be expected to collect rents from titles to real estate they have accumulated, and some of these people might finance their health care this way. Young people paying the rents then contribute to their health care. These contributions are coercive obligations. The rents exist only insofar as a scarcity of other opportunities exist; otherwise, a young person would live on previously untitled land in a comparable house built by his contemporaries, or he might just drive the useless old fart off the land and claim it for himself, as Nature's God clearly intended for countless generations of human ancestors.

But we don't want the young (or the stronger) driving the old (or the weaker) off of land, so we do want a measure of forcible propriety that young and old alike will respect (and the young primarily will enforce). We want the forcible propriety for this humane reason, not because titles to property are simply "right" fundamentally. They're labeled "rights", but they aren't the right thing to do fundamentally. They're means to this end, the security of the old against the zeal of the young, among other ends.

The word "rational" in an economic context is synonomous with "proportional". A ratio is a proportion. Many classcial liberals have simply forgotten what our ancestors meant by terms like "rational distribution". Muigeo's Libertopians essentially are the Anarcho-Capitalists imagining that a few rights to forcible possession and contract are sufficient to organize all resources rationally. They believe these rights are "rational" because the rights are "enlightened" or "reasonable" in some absolute sense, like the God of Reason handed them down on stone tablets or something. The idea is nonsensical as well as irrational.

Anarcho-Capitalism is not remotely equivalent to classical liberalism. Locke, Smith, Hayek and Friedman were not anarcho-capitalists, and they are liberal tradition far more than the disparate ramblings of Ayn Rand and Murray Rothbard (who frequently disagreed anwyay). Of course, Rand rejected Anarcho-Capitalism, though her Objectivism often is also irrational. I often like what both Rand and Rothbard have to say, but that's beside the point.

Pass me the pork, B!+ch

…Rand rejected Anarcho-Capitalism, though her Objectivism often is also irrational.

Rand's problem was in building the delusion that she had managed to transcend subjective nature.

Though reason is a very powerful tool, it will always be wielded by creatures of a subjective nature.

Rand's problem was in building the delusion that she had managed to transcend subjective nature.

Agreed.

A married couple both contribute to the program their entire lives and then when the husband dies the widow loses her entire life's contributions (or his).

Widows qualify for benefits, so I'm not sure what you mean here. Regardless, the system screws couples raising children, because children are the real productive means taxed to provide Social Security benefits, but the system doesn't account for this fact at all.

The idea that an individual's payroll taxes somehow provide the individual's benefits is economic nonsense. The only relationship between an individual's taxes and expected benefits is a statutory entitlement formula that becomes unsustainable when demographics change. We pretend to "invest" in our future security while actually supporting our parents, but our parents are headed for the grave and will produce nothing for us when we're old. By contrast, an actual investment in future production (the support of our children) doesn't appear in any statutory benefit formula.

So Social Security doesn't only screw widowed mothers. It screws fathers as well. It screws supportive single mothers and fathers (regardless of legal custody) as much as married parents. The principal beneficiaries are people who don't support children but become entitled to support from other people's children by supporting their parents, even though people supporting children must also support their parents.

If a couple's parents never receive Social Security benefits (because they aren't U.S. citizens for example), but the couple supports their parents otherwise, they're doubly WhiPed.

And left-wingers have the audacity to claim this is for the widow's benefit.

It's not a simple "left v. right" divide, and it's not strictly "men v. women" either, but the system is terribly inequitable for many reasons.

"Widows qualify for benefits, so I'm not sure what you mean here."
– Posted by: Martin Brock | Sep 15, 2008 11:57:31 AM

For retirees, when a woman's husband dies she has to choose between losing either her social security check or her husband's. Usually, her husband's SS provides the greater income so she likely will choose to keep his and give up her's.

Compare that to savings. If a couple spent their entire lives contributing to a savings account, when a husband dies the widow doesn't loose half of it.

I use widows as examples because it men tend to die earlier than women (as is the case for my mother), but it applies to widowers as well.