Truer Words Were Never Spoken

George Will is correct that:

"And it [Congress] will mandate "socially responsible" spending -- an infinitely elastic term -- by the favored companies."

The rhetorical spin is vital to BIG government's success. Just think about the term "social security"; rhetorical genius for the purveyors of BIG G. The term suggests that only someone who is anti-social and in favor of old-age insecurity would oppose SS.

Of course the SS spin is pure BS, but like so many government programs it is a tar-baby: once it is contacted, the struggle to escape it only entraps its victim to a greater and greater degree.

This is the contents of some spam received a bit ago:

GovernmentMoneyFinder wrote:
> Dear Customer,
>
> Get the Free Money Advantage! Learn how to tap into million$ in available money for many purposes...
>
> * Real Estate
> * Business startup/expansion
> * Research
> * Education
>
> Get it now: http://Angelus.wankelenginepowerwind.com/c/c/14...
>
> Did you know that 35 million Americans got free money last year alone?
> You need to know how and where to receive assistance.
> The general public isn't aware of the various programs available to them,
> and billions of dollars go unclaimed each year as a result.

Yes, there isn't much respect for markets right now, but that has been CREATED by liberals, just as the current economic crisis was, for the purpose of electing Obama president. But that isn't the market's fault. It's the GOVERNMENT'S fault. Democrats say it's because of "eight years of Bush's bad policies," but they can't point to a single policy that would cause this.

Well, I was addressing the claim that the bailouts have prevented a depression. I doubt that the masters will allow hyperinflation, so they may manage to ease us into a somewhat prolonged depression, obscured by various wars on this or that (think climate change).

We'll have to "sacrifice", to pay for the bailouts.

Given the belief system of the ruling class, we get one of two alternatives:

The picture is not so simple really. Maybe you're right about the belief system of the ruling class, but I'm not sure. Painting a picture with only these two dire alternatives enables Beezer to claim that since we don't experience hyperinflation or great depression, your entire picture must be mistaken.

I rather expect that we'll be on the road to "recovery" sometime next year, with reports of falling unemployment, moderate inflation and economic growth. If the price of oil remains so low (though still much higher than in '04), the more moderate inflation is practically guaranteed.

After all, "profit" is just a matter of ordering one lot of corporatists to buy what another lot of corporatists is selling, so that Beezer can keep his place in the sun, and our fascist masters are very practiced at engineering economic statistics now.

We can have a stagnant, corporatist economy with a perpetual class of financial masters centered in D.C. and N.Y. Common prices can be stable in this system, and the system need not lead to any great depression, but avoiding hyperinflation and great depression is not my definition of "success".

I do think we'll finally pay more for Chinese imports though. The Chinese recently announced a half trillion dollar "stimulus package", paltry by U.S. standards these days but still quite a lot by Chinese standards.

With a huge, rapidly aging population and a more labor intensive agricultural sector, remaining "food independent" seems a challenge for China, so I suppose the Chinese want more young Chinese peasants remaining in the agricultural business rather than flocking to industrial centers, compared with recent decades, so I expect the "stimulus", as well as internal market forces, to direct more of the output of Chinese industry to the domestic agricultural sector and less to export.

Why would they want to sell the stuff to us anyway? They probably can't buy food from us even if they want to, and who wants our paper, other than the Treasury notes, these days?

What was Will's stance on the original bailout?

The alternative was to do nothing and have the vast majority of citizens get fried in the ensuing depression.

The assumption being that somehow a depression has been prevented.

Given the belief system of the ruling class, we get one of two alternatives:

1. hyperinflation

2. depression

The fact the hyperinflation will be followed by a worse depression leaves us with one realistic option: surrender to recession.

Don Boudreaux says “It's much truer to say that a necessary, if not sufficient, condition for the rule of law to flourish is for government to be as small and as confined as possible -- minuscule to the point of irrelevance.”

And I could agree with that, if all other actors involved were also “minuscule to the point of irrelevance” but, this of course, they are not. And so one has to act on both side of the specter, reigning in the governments and reigning in the powers of all other too powerful market participants.

In this respect let me just remind everyone that with respect to George Will’s comment on “the current political distribution of a trillion dollars by the federal government” that it is still quite small when compared to the just as political regulatory induced distribution, of many more trillions, that the credit rating agencies, de facto, did through their credit rating agencies, without neither Boudreaux or Will commenting on it, probably just because these monstrously relevant agents were private.

The alternative was to do nothing and have the vast majority of citizens get fried in the ensuing depression.

No. The alternative was to let unprofitable organizations fail and to let more profitable organizations replace them. If the unprofitable organizations were unprofitable because they bought too much political paper, so much the better.

Bankruptcy does not lead to Great Depression, particularly if it occurs more routinely than we allow it to occur these days. Bankruptcy only leads to paper losses for some investors and requires some employees of unprofitable organizations to find other work, often to their long-term benefit. I've lost several jobs, and my compensation has always gone up.

This process of discovering the real value of promissory notes and seeking profitable employment is how we avoid economic contraction, not how we create it.

I prefer the current situation primarily because it probably keeps me from being fried.

I don't now what you do for a living, but rising unemployment compensation claims and unemployment survey results suggest that plenty of people now find themselves out of the frying pan and into the fire. Maybe you're in a profitable business, or maybe you're in a business entitled to more rents.

In the latter case, your unemployment compensation is only built into your business model, like all the soldiers in Iraq with little fear of losing their jobs. Distinguishing these scenarios is practically impossible now, and the built-in variety of unemployment compensation is not less a burden to the rest of us than the temporary, more honest variety. It's a heavier burden.

Can we all avoid the risk of being fried while suffering only a little sunburn this way? I suppose so. We'll be poorer, and we'll be chronically sunburned, and we'll develop a lot of skin cancer, but at least we'll never be fried. Many of us do seem to prefer this option.

Paulson gave the funding to his friends. Rational for him. Obama and the Democrats will give the funding to their friends. Rational for them.

The alternative was to do nothing and have the vast majority of citizens get fried in the ensuing depression. Meanwhile, under that scenario, both Paulson's and Obama's friends would have moved across the valley and watched the flames, only to return to replant the forest. I prefer the current situation primarily because it probably keeps me from being fried. Maybe just sunburned.

But your apparent implication that Dr. Boudreaux favors that original request over what we've got is dead wrong.

Apologies for leaving off the name.

I know that Boudreaux doesn't favor the request. My remarks address George Will more than Boudreaux. I suppose Will doesn't favor the original request either, but he does phrase his objection entirely in terms of the Congress, as though Congressional meddling must be the source of all misappropriation of these funds, as though the wise, unitary Executive and its minions might be trusted to dole out this booty if not for the interference of our mindless committee of representatives.

This neocon (fascistic, Hobbesian, monarchist) idea infecting Will's rhetoric is tragically laughable. The problem with central authority is its centrality. Electing a lot of committeemen in biannual plebiscites to exercise the authority in a majoritarian committee doesn't solve the problem, but vesting all of the authority in a single individual certainly doesn't solve it either.

We had the individual central authorities before we had the committees. We dumped the latter for the former, on the dubious theory that many central committeeman, all congregating in D.C. and bickering over the precise form of their one-size-fits-all solutions, somehow can be wiser than a single central authority sitting in D.C. and dictating one-size-fits-all solutions.

I disagree with T L Holaday: whatever is government in a democratic society inevitable involves politics.

T L Holaday mistakenly supposes that the rule of law is a product of government (or at least requires enforcement by government). Not so. It's much truer to say that a necessary, if not sufficient, condition for the rule of law to flourish is for government to be as small and as confined as possible -- minuscule to the point of irrelevance.

The government is going to be responsible for handing out a tremendous amount of money to private industry, and we're supposed to expect there to be no politics involved?

It's a given that Congress will give this money away in as corrupt a fashion as they can get away with, but the real absurdity is that more people aren't crying foul.

What comes to mind is the fact that most people do not trust Congress as a whole, but they tend to trust their individual elected officials. Kind of like understanding that children will tend to misbehave in school, "But not my little Johnny!"

George Will draws a false equivalence between government and politics. Do not be taken in.

Ask him whether he claims that "the rule of law" is politics.

By "political" I think The Economist ((Nov.15) in "Saving Detroit" got it right, Congress is itching to "saving jobs" in order to counter the public relations disaster of bailing out Wall Street.

I think they rightly point out that Chapter 11 was created precisely to help companies that need protection from their creditors while they restructure their liabilities and winnow out the good business from the bad, that their activities elsewhere (China, Brazil and Russia- where only 3 out of every hundred persons of driving age own a car) would be unaffected and that even in North America their businesses could continue to make vehicles as they shed costs and renegotiated contracts.

Otherwise, I'm very much interested in the implications of conceptual developments in the emerging field of behavioral economics for the libertarian point of view, for instance, as they were presented in Dan Ariely's "Predictably Irrational" and other gurus who seem now to have considerable influence in the newly forming executive aministration.

To the above commenter: I think you're right that Paulson's original request, if granted, would likely have been worse than what we've got. But your apparent implication that Dr. Boudreaux favors that original request over what we've got is dead wrong. He has explicitly criticized the bailout since it was first suggested.

Congress already has its fingers in the pie, but suppose Paulson had gotten his original, three page, no strings attached, bailout wish, essentially a blank check for $700 billion taxpayer dollars to dole out entirely at his own discretion without even a potential for judicial review? If one unelected, appointee of the Sovereign spends $700 billion, that's not politics? The Supreme Bailer Out in Chief will not show compassion for this, that or the other industry? What exactly is the Royalist's point today?