One Long Infomercial – but With a Difference

by Don Boudreaux on May 6, 2011

in Other People's Money, Politics

I returned home a few nights ago from teaching a late class to find my son asleep on the couch.  He fell asleep with the t.v. on.  By the time I got home, one of those absurd late-night infomercials was playing.  I looked at it only long enough to determine that it featured a hip-looking young man explaining to an older, supposedly verily impressed host how he (the hip young man) has made “hundreds of thousands of dollars” in just a few months by investing in real-estate.  (Note that the year is 2011!)

And this hip young man – he looked so earnest! – was eager to share with every viewer his fail-proof secret of success.  “If I can do it, you can too!” the hip young man assured the no-doubt rapt and grateful audience out there in late-night tv land.

So it dawned on me.  Infomercials are the closest phenomenon that the private-sector offers to politics.  Fraudulent clowns, skilled at lying, promise gullible audiences something for nothing.

The difference, of course – and it makes all the difference – is that no one is forced to buy (either figuratively or literally) whatever it is the infomercial clowns are selling.  And those of us who don’t buy these clowns’ offerings aren’t forced nevertheless to suffer the consequences of the fact that large numbers of our fellow citizens do consistently, even eagerly, fall for the idiotic claims and promises and assurances offered by these greedy imposters posing as our friends.

At the very least, it’s a regrettable fact that all of us have much of our lives ‘governed’ by people who watch infomercials.  Those viewers vote.  And so politicians obviously appeal to these fools for their votes.  And everyone suffers from the resulting absurdities that emerge as “public policy.”

What a joke politics is.

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Methinks1776 May 6, 2011 at 1:05 pm

Don, because you have the luxury of editing (I’m not complaining. Well, I am, but sheepishly because you give us so much already it’s impolite to ask for more.)…

You have a petite typo: “if I can to it…” should be “if I can do it…”

Don Boudreaux May 6, 2011 at 1:07 pm

Thanks! Corrected.

muirgeo May 6, 2011 at 4:23 pm

I knew what he meant.

Methinks1776 May 6, 2011 at 4:25 pm

Congratulations. Would you like a gold star?

Krishnan May 6, 2011 at 7:14 pm

Why ask? GIVE HIM ONE. For once, a comment that makes sense!

Pfloyd May 6, 2011 at 5:01 pm

There is a first for everything!

John V May 6, 2011 at 6:33 pm

LOL.

Slappy McFee May 6, 2011 at 1:09 pm

Bravo good sir… tho I rather do enjoy my Saturday afternoon Banjo Minnow informmercials. Someday I may actually purchase one.

shawn May 6, 2011 at 2:33 pm

they do work…but then again, that’s here in florida, where at the right time, you can throw a shoestring and catch bass.

unless you can get them on sale, don’t bother.

anonymous May 6, 2011 at 1:10 pm

This is an absurd comparison, Don. I like Billie Mays, Vince the Slap Chop guy and Tony Little. I can barely think of a politician that I wouldn’t want to beat to death with an Ab Roller.

Methinks1776 May 6, 2011 at 1:12 pm

LMAO!!!

Anotherphil May 6, 2011 at 3:59 pm

Hold on. I think Don is referring to a specific type of infomercial. Billie Mays (Oxyclean) and Vince (slap chop), weren’t pushing pie-in-the sky promises, they were demonstrating novel products that WORKED.

As for any exercise equipment, that’s a bit less honest. Most of those home exercise products are useless, because there’s suble misrepresentation there. Consider the typical person portrayed. (usually under 30, when youth is the major factor in rock hard abs and taut muscles.) Worse, since the old gym adage is “everything works and nothing works for very long”, getting one piece of equipment is the key to stagnation (and repetitive motion injuries)
. However, if you’ll get off your er couch and ditch the chips for 30 minutes a day on that gazelle thing, you’ll be better off, just probably not going to be confused with some muscle mag cover figure. Russ did a really good podcast with Art Devany about his “evolutionary fitness” ideas, if you want to delve into the deficiencies of aerobic only exercise.

However, if the infomercial is promising material wealth or freedom from want-with the ingredients being little effort and their secret-they might as well be hawking social insecurity (hey give us money and maybe you’ll get some later, but we aren’t sure when you’ll be eligible-that’s insecurity) or that freaking disaster, Medicrap.

Joshua May 7, 2011 at 5:02 pm

I do not see America breaking its promises to the elderly, turning out millions onto the doorstep of charities like some Dickens novel. Seniors have the ballot box to ensure it.

matt May 6, 2011 at 1:15 pm

10 Points to Gryffindor, good sir

muirgeo May 7, 2011 at 12:47 pm

I think you mean Slytherin.

Scott G May 6, 2011 at 2:00 pm

It’s also regrettable that the fools you refer to are rather small in number in comparison to the much larger, rationally-uninformed voting population that Bryan Caplan refers to in his book The Myth of the Rational Voter.

Economic literacy is the bane of the greater freedom and wealth that I desire.

I didn’t cause Krugman.
I can’t control Krugman.
I can’t cure Krugman.

(Krugman being the pseudonym for his audience).

All I can do is live my life, do my part and remind myself that evolution (i.e. a spontaneous process which I have almost no control over) has consistently lead to increased freedom and wealth.

Joshua May 7, 2011 at 4:59 pm

I didn’t cause Rogoff.
I can’t control Hayek.
I can’t cure Trump.

Mark May 6, 2011 at 2:02 pm

I agree.

Politics is absurd, yet I still pay attention.

Though the system, and politics is imperfect, what is the better option?

I don’t think there is one.

Don Boudreaux May 6, 2011 at 2:03 pm

Private markets.

Methinks1776 May 6, 2011 at 2:06 pm

So much more satisfying voting with my dollars than voting at the polls.

muirgeo May 7, 2011 at 8:45 am

So who do you vote for Goldman Sachs, Enron, ADM or BP. Who makes the decision to open the levees on the Mississippi…

Dave May 7, 2011 at 1:01 pm

None of those entities can take one dollar of my money unless I choose to give it to them — unless the politicians get involved.

muirgeo May 7, 2011 at 2:06 pm

Well… except for the taxes you paid to bail them out and all the other treasury/ fed cost past on to you … oh and the credit card tax basically we all pay in mark up’s to cover the service fee they charge retailers (you pay regardless if you use their credit cards or not). Of course if you use their cards they have you convinced you are earning free miles… but yeah keep repeating the phrase that you said above…. they like that when you do that for them. It’s a great sound bit.

Marcus May 7, 2011 at 2:10 pm

It must be in retailers best interest to pay the credit card fees or they wouldn’t be paying it.

Also, you have to compare things to their alternatives. The alternative to credit cards is cash and cash has its own costs. It’s more likely to be stolen, a person had to make a cash run to the bank, the bank charges processing fees, and so on.

Retailers take credit cards because it’s a good deal for them.

brotio May 7, 2011 at 6:10 pm

So who do you vote for Goldman Sachs, Enron, ADM or BP. – Ducktor Yasafi Muirduck

Ducktor Muirduck specifically voted for ADM and GE to receive government subsidies because His Holiness: The Divine Prophet Algore I said that it was essential to the survival of Mother Gaia for those poor, struggling corporations to receive government kickbacks.

Ducktor Muirduck specifically voted for General Motors to receive a government bailout and takeover because The Self-anointed Savior of Socialism: Barack Obama said that it was essential to the survival of the UAW.

The only corporatist who regularly posts to this Cafe is Ducktor Yasafi Muirduck, the hypocrite. Not one libertarian, or other individualist at this Cafe has ever voiced support for corporatism, but our lying, stupid ducktor continually accuses us of the very thing he emphatically, and religiously supports.

Tom May 6, 2011 at 3:02 pm

Isn’t that an argument against democracy? After all, in the private market, those with the most resources call the tune.

Emil May 6, 2011 at 3:39 pm

No they don’t because in private markets there are many tunes and no one is powerful or resourceful enough to control them all…

Sam Grove May 6, 2011 at 3:59 pm

They usually acquire many resources by satisfying the many.
If fact, the purpose of having so many resources is to organize to satisfy the desires of the many…at least in the market.

Stone May 6, 2011 at 4:26 pm

In free markets, consumers “call the tune.” In regulated markets, producers to use laws to tell consumers what to do. Obama care is a recent example; insurance companies use the new laws to force people to buy insurance from them, and they also make it illegal for any company to offer low cost health insurance.

Liberals tend to feel that regulations help fight abuse by corporations. Conservatives tend to realize that regulations are written to help companies make more money and kill their competition, which hurts consumers, especially the poor.

Don’t believe the clowns on TV or in the news. Regulations are almost always designed by the companies themselves for their own benefit.

Joshua May 7, 2011 at 4:57 pm

Yes, the minimum wage was created to increase firms profits and kill their competition.

Gil May 6, 2011 at 10:41 pm

Those who own private land rent them will compete with one another and those who seek private land will compete wth one another.

muirgeo May 7, 2011 at 8:50 am

Yes it is… they don’t generally like democracy around here. It’s considered mob rule. Better to have the board of 12 of Goldman Sachs and their 10 top share holders run your life. Kleptocarcy YES ..Democracy…NO

muirgeo May 7, 2011 at 9:01 am

No,no,no…. everything goes before The Invisible Hand God…she sees …wait he? sees that everything works out. She … er it keeps monopolies at bay, it destroys the kleptocrat and the rent seeker. The Invisible Hand God responds to all externalities and destroys angry mobs, and takes weapons away from gang

Emil May 7, 2011 at 1:13 pm

Replace the words “invisible hand” with “the good and wise government” in your post and anyone (except you probably) will realise the absurdity of the alternative you are advocating

muirgeo May 7, 2011 at 2:21 pm

There is ni absurdity at all Emil.

From 1940 to 1980 when we had good and more fair rules and oversight the economy boomed.. there were no bust. When we relaxed that oversight we found ourselves here…again.. like the last depression. Do we need to do this one more time to convince you guys that your economic philosophy is just one more opiate for the masses. The profiteers who push this silliness know it for what it is. A useful device to control an appease the masses so they can maintain power.

Joshua May 6, 2011 at 11:23 pm

How would that even work though? Can you name a place where just private markets replace any sort of political system? I think warlord despotism qualifies as a type of political system, so Somalia is out.

Seth May 7, 2011 at 1:39 am

There is much room for improvement by moving a lot that has been pushed into government back into private markets again.

muirgeo May 7, 2011 at 12:52 pm

No they can’t name a real place. They did read about one in an Ayne Rand book though…. so yeah it’s real to them. There’s even a movie out now that proves it even more.

Dave May 7, 2011 at 1:02 pm

“Private markets” doesn’t mean rule by force. Somalia doesn’t have free markets, property rights, etc.

muirgeo May 7, 2011 at 8:48 am

Worked so great for Iceland to turn over their banks and their economy from public to private… Yeah I’m sure they are happy they went with The Chicago Boys advice. That really is a faith based belief system and all this time I thought you said you were a non-believer.

IdahoMauleMan May 7, 2011 at 9:53 am

Iceland’s private banks were still operating under a fractional-reserve system and fiat currency….a legalized form of fraud, sanctioned by government, that had utterly predictable consequences. As it does everywhere, including USA 2008.

Joshua May 7, 2011 at 10:42 am

every country has banks. they are cornerstone institutions and have been lending out reserves since the days of gold coin

muirgeo May 7, 2011 at 9:03 am

Yea because they work out so well for the drug trade we should model all of society after them.

brotio May 7, 2011 at 6:16 pm

Not very wise to demonize an industry that was created by the State in order to extol the virtues of the State.

Sandre May 6, 2011 at 2:13 pm

But Don, infomercials promise something for nothing only if you believe the choreography and the advertisement. LOL.

For context, check this comment out -

Daniel Kuehn May 4, 2011 at 9:59 am

http://cafehayek.com/2011/05/what-weve-learned-about-obama.html

SheetWise May 6, 2011 at 3:00 pm

One important distinction … advertisers are accountable under truth in advertising laws for any claims they make about themselves or their competitors that are provably false. If politicians could be held liable for knowingly telling lies, it sure would change the dialogue. There would be a lot of politicians claiming ignorance. That, at least, would help settle the long debate on whether they’re dumb or evil.

Anotherphil May 6, 2011 at 4:10 pm

“advertisers are accountable ”

UNless you are GE, pushing “ecomagination”.

Q.) Why Mr. Imelt, what is “ecomagination”?

A.) Its actually, nothing, but the government’s cool with it and actually their going to pay us to make some windmills and stuff.

(Not even close to a quote, but Imelt did admit it is nothing but branding),

Gil May 6, 2011 at 10:44 pm

Then why are there silly exercise machines advertised where you appparently do repetitive midsection movements that cause fatties to morph into bodybuilders legal?

SheetWise May 7, 2011 at 7:32 am

Apparently the phrase “provably false” does not resonate with some.

Stephan May 6, 2011 at 3:08 pm

Aha. Don Boudreaux thinks Hans-Hermann Hoppe is on the point. “Those viewers vote.” That’s the problem with democracy. We need a monarch!

Anotherphil May 6, 2011 at 4:06 pm

Oh please, I’m already sick of the endless buildup and hyperbole over the just past nuptials.

Its a fairy tale come true (didn’t get any brownie points with the Missus by pointing out the same overwrought nonsense was said just about thirty years ago in connection with the union that produced the groom, but she’ll get over it)

Ike May 6, 2011 at 4:09 pm

I can think of one big difference.

Someone paid their own money to air the infomercial.

If the federal government did it:

- the production money would be taxpayer guaranteed
- it would be piped into schools for mandatory viewing
- it would be mandated to appear on its own channel, preempting another show
- if not enough people watched, there would be extensive (expensive) studies done to determine why
- someone would write a book about all of the stupid people who claim to be patriots but didn’t watch the show
- the author would be interviewed by Nightline, Jon Stewart and Charlie Rose
- the book wouldn’t sell quite well enough, necessitating more extensive marketing — like, say, an infomercial……

muirgeo May 6, 2011 at 4:22 pm

“What a joke politics is.”
DB

Such an easy thing to say from the safety of American suburbia. So easy to say having been born into the thriving privilege and booming economy that was mid 20th century America. So easy to ignore what has happened through all of history and is happening now all over the world… were they don’t have such politicking.

Stephan May 6, 2011 at 4:38 pm

Agreed! Especially easy with tenure (protection from competition and being fired for ignorance/incompetence) and working as a public employee (sucking on government tits).

Anotherphil May 6, 2011 at 5:04 pm

And your guy Obama wants us to be rid of politics by taking the fast lane on the Road to Serfdom. I despise politics, I despise the concentration of power more.

muirgeo May 7, 2011 at 1:05 am

Power is concentrated not in the politicians but the corporations that own them and play one countries politicians against another.

The power is not with politicians but with the global multinational corporations, the bond markets and the global financiers you guys idolize…. the demon spawn of so called free markets.

tkwelge May 7, 2011 at 2:38 am

More like they both share power. The corporations would not have their power without the government, and the government cannot act without recognizing economic reality, cannot subsidize without subsidizing the already wealthy, and cannot plan without picking winners and losers in the sphere of business. I’m not seeing why you aren’t getting this…

What part of the global marketplace today is spawned by “free markets?” What multinational corporation isn’t benefiting from government interference in the market? When are you ever going to learn anything?

Methinks1776 May 7, 2011 at 8:23 am

Do you know how many times over the years this fool has been told that politicians seek to monetize their power by selling it to the corporations? He is incapable of learning. Just doesn’t have he capacity.

muirgeo May 7, 2011 at 9:12 am

What part of the global marketplace today is spawned by “free markets?”

How about CDO’s and other complex financial derivatives for starters… The global market place has ratcheted down one set of rules against another. In your free market rules don’t go away. They, instead of being made somewhat democratically, are made by boards of 5- 10 and top share holders numbering another 5 or so in a most authoritarian way.

You should watch Inside Job. You might learn something.

Methinks1776 May 7, 2011 at 10:40 am

Please, dipshit, teach us what you know about CDOs and other derivatives. Never mind complicated ones like Bermudas. Just give us the lowdown, not cut and pasted from wiki, on standardized equity options. Make sure you cover teeny options because that’s what CDO’s are.

I mean, since you’re a financial sage and all….

muirgeo May 7, 2011 at 2:24 pm

methinks,

Would you like to claim that CDO’s had nothing to do with the crash? you want to go down on record as saying that?

Actually I think you are already on record saying something to that effect…. but that WAS a long time ago… BEFORE THE CRASH.

Methinks1776 May 7, 2011 at 5:02 pm

‘splain what a CDO is, fool. I’m waiting to be splashed with your wisdom.

muirgeo May 7, 2011 at 11:32 pm

A CDO is an unregulated insurance product that the “wizards” of Wall Street created… a free market product…. which allowed 1 trillion dollars of bad loans to be leveraged to $100 trillion…. it is a device that blew up the economy and along with it the idea that free market fundamentalist should be taken any more seriously than creationist … except for the very real danger they pose … like regular terrorist to the rest of the good productive people of society…. THAT’S what a CDO is.

robert_o May 8, 2011 at 12:46 am

muirgeo, you could have at least peeked at Wikipedia or something. A CDO is not a CDS is not a CD, despite all 3 having vaguely something to do with “finance” and sharing 2 letters.

At least we have you on record, on a forum post you can’t edit. Another muidiocy to add to the list…

HaywoodU May 7, 2011 at 7:17 am

Which came first. Corporations or Government?

muirgeo May 7, 2011 at 9:15 am

Government… then corporations… starting under very specific authority. But like a contained highly deadly biological they escaped and now have captured the regulatory authority of the government and the government itself. They are like zoombies that never die. We need to shoot their heads off.

muirgeo May 7, 2011 at 2:27 pm

“Do you know how many times over the years this fool has been told that politicians seek to monetize their power by selling it to the corporations?”
methinks

I completely understand your point but what I also understand is your’s is NOT a solution that will end such kleptocracy. Your’s is an avenue…shall we say a road… the speediest route to it. As the real world results are showing us now and as they have shown us over, and over and over in the past.

John V May 7, 2011 at 4:40 pm

“I completely understand your point but what I also understand is your’s is NOT a solution that will end such kleptocracy. Your’s is an avenue…shall we say a road… the speediest route to it. As the real world results are showing us now and as they have shown us over, and over and over in the past.”

And it’s precisely when you try to explain this rather than just assert it that you completely and repeatedly fall on your face by saying things that run counter to people here advocate and say while trying to pass it off as part of people here advocate and say.

tkwelge May 7, 2011 at 10:30 pm

“As the real world results are showing us now and as they have shown us over, and over and over in the past.”

Once again, we’re right back to believing that we live in a world run by libertarians! FUUUUUUUUUUUUUUUUUUUUUUUCK! You are getting really tiresome.

brotio May 7, 2011 at 6:18 pm

Power is concentrated not in the politicians but the corporations that own them…

You mean the Chairman of General Motors, and President of the United States – Barack H Obama?

muirgeo May 8, 2011 at 10:59 am

Robert you are right. It should be CDS.

Me mislabeling it doesn’t change the reality of what it is… does it?

Methinks1776 May 9, 2011 at 8:43 am

Idiot, you have no idea what a CDS or a CDO is. That much is absolutely clear. Given that you know absolutely nothing about either, you’re correct – your mislabeling things doesn’t matter much. You have no clue what you’re drooling about.

John V May 6, 2011 at 6:37 pm

“you are pretending that mechanics are analogous to doctors because…well I guess I’m not really sure why”

How patronizing….and inaccurate. By saying that, you assume some people don’t have the luxury of saying politics is a joke because it’s more important to them.

Pro-wrestling and politics are both jokes…whether you find them important or not.

John V May 6, 2011 at 6:38 pm

wrong quote:

“Such an easy thing to say from the safety of American suburbia.”

previous cut and paste still on my system.

Stone Glasgow May 6, 2011 at 4:30 pm

They have politics in the third world, but they don’t dress the clowns as well or keep the guns out of sight so often.

SheetWise May 7, 2011 at 7:53 am

I’m not really an expert on fashion — but I always thought they dressed them better.

Country Thinker May 6, 2011 at 4:30 pm

It’s funny you mention that infomercial because I saw it while I was visiting Miami last month. I lived there during the “Age of Flippers.” Some people say that pople have short memories. A more likely explanation is that many don’t know what’s going on, either in real time or in hindsight.

Your analogy to politicians is very appropriate.

Stone Glasgow May 6, 2011 at 4:38 pm

Brilliant analogy, Don. We can continue it and realize that the men who paid the actors and told them what to say are analogous to the special interests that support political campaigns. Investors who put infomercial clowns on TV, and investors that put politicians in office have the same goal. They both hope to turn a profit by convincing the masses that it is possible to get something for nothing by paying the clown.

Vito May 6, 2011 at 4:41 pm

Excellent observation, Don.

This idea of politics as infomercial has occurred to me, too. My father and others have mentioned to me what a great speaker the President is, and my response is, “Great! Let him sell ShamWows!!”

vidyohs May 7, 2011 at 8:27 pm

Great speaker? Oh please, it is to laugh. Get that fool away from a teleprompter and he sounds like a bumbling democrat, not even fit to carry the slippers of Bush II.

http://www.redstate.com/moe_lane/2011/05/06/permit-me-to-correct-the-new-york-times/

Check that out, scroll down into the comments until you come to the photo with the caption “Utterly dependent on the teleprompter.” It doesn’t get more apt than that.

tw May 6, 2011 at 4:43 pm

C’mon…don’t you find yourself watching The Dean Martin Variety Show infomercial a little? And laughing….just a little bit??

Randy May 6, 2011 at 6:05 pm

Informing a target audience of the potential benefits of a product that works is productive behavior. Manipulating a target audience into buying a product that doesn’t work is political behavior.

Debashish Ghosh May 6, 2011 at 6:47 pm

“And those of us who don’t buy these clowns’ offerings aren’t forced nevertheless to suffer the consequences of the fact that large numbers of our fellow citizens do consistently, even eagerly, fall for the idiotic claims and promises and assurances offered by these greedy imposters posing as our friends.”

This sounds at least slightly contradictory in both substance and tone to the argument offered in some other posts on this blog – that people (including the economically more disadvantaged ones) are good at discerning which products/services will be optimal for fulfilling their needs, and hence do not need government regulations to reduce the chances of being fooled.
Now, I am generally not at all a fan of government regulations/evaluations of private business and their products (including their marketing/advertising). Even if some people are getting fooled by these “clowns” and buying their dubious products, I usually do not see that as grounds for initiating government regulation.
It’s just that from my experience in engaging in conversations on such topics with people, contradictory rhetoric at different times (which seem only to suit the immediate context at the time) serve to diminish the chances of convincing people of the merits of not having government regulation – specially when the audience comprises of people who are not already libertarian or pro-free market leaning.

Ken May 6, 2011 at 7:23 pm

Debashish Ghosh,

People look at their own lives and understand that they are in the best position to make the best decisions for their own lives – where to live, what jobs to have, with whom to associate, how to by clothes, what food to buy, what time to get up and what time to go to bed, etc. Then they look at how others live and think clearly they are wrong, so we will vote for someone who will make those others live better lives. It’s not contradictory at all to recognize the hubris of mankind and limit it’s capability to do harm by limiting what a government can do.

In other words, shocking I know, people think more highly of themselves than they do others.

Don and Russ take the view that many don’t: they understand their own limitations, as well as others’. Many people think other people are more limited in understanding in themselves, so have no problem making bold, across the board statements and electing politicians that say the same. It takes real humility to understand your own limitations. A humility that many, if not most, people don’t have.

Regards,
Ken

Debashish Ghosh May 7, 2011 at 11:55 am

Ken, I think you misunderstood the point I was trying to make – perhaps my reply to the commenter below makes more clear what exactly the contradiction is that I was referring to – the contradiction is not in the merits/demerits of govt regulation, but only in one of the reasons Don uses to advance it, because different posts written by Don seem to offer differing opinions on what he thinks of peoples’ ability to judge for themselves.

Gil May 7, 2011 at 12:21 pm

With that reasoning there’s no such thing as fraud.

Methinks1776 May 6, 2011 at 7:42 pm

Ever dealt with a regulator, Debashish? I’ll sum it up this way: even during an in-depth examination of a firm, they haven’t a clue what’s going on. They protect you from nothing more than lower prices and more efficient service.

Reduce the chance of getting fooled? LOL!! There’s no such incentive in any regulatory agency. None.

Government does not reduce your probability of getting fooled. Government increases costs and lulls you into thinking you’re protected. Just think about the number of bad doctors, contractors, money managers, lawyers, and drivers there are in the world. All licensed by government.

Unless you’re a complete fool, you will likely do some research and talk to a couple of experts before you make a large purchase. I’ve found consumer reports to be invaluable, for instance. The fact that someone is licensed and regulated by government tells me absolutely nothing.

Debashish Ghosh May 7, 2011 at 11:51 am

Well, I already stated that I am not a fan of regulation at all, so you are preaching to the choir.
My only point here was that Don acknowledges in this post that there are many people who are fooled by the claims of unscrupulous “clowns” who advertise on these late night infomercials. Now, In other posts on this blog, Don has argued that people are not stupid and make the best decisions for themselves, hence don’t need govt regulation. Aren’t these two claims by Don contradictory (even if the argument against govt regulation has solid merit for other reasons) ?

Sam Grove May 7, 2011 at 12:42 pm

I think you didn’t get Don’s point, which is that the claim that people are too dumb to decide how to spend their own money does not jibe with the implicit assumption that they are then able to choose their rulers wisely.

Methinks1776 May 7, 2011 at 5:09 pm

Debashish, people are in the best position to make their own decisions and overall make better decisions for themselves than government can make for them. That is fact. Every decision people make does not have to be smart for that to be true. And that’s not even mentioning that bad decisions are the ones we learn from to make better decisions in the future.

Joshua May 7, 2011 at 10:51 am

Great point. Democracy is the free market of political systems.

vidyohs May 7, 2011 at 8:40 pm

Noooooooo! Arrrgh, ouch, uuuugh. Not true. Not even close to true.

Democracy = rule of the majority…..and baby that not de way de market be worken.

I go to the supermarket and look for bacon. I have maybe 8 or 9 different brands and flavors to choose from. The majority does not tell me which of those to buy, I choose the one I want.

Democracy would be seeing only what the majority thinks should be there…….whether it be bacon, cars, airplanes, mixers, shirts, or steros et. al.

There is no comparison between politics and markets, they work on totally different philosophies.

Name Redacted May 6, 2011 at 7:34 pm

You can always break the law. The problem isn’t that the clowns (politicians) are saying what they are saying, but that people listen to them and will actually listen to them and do what they say (initiate force on others.)

SheetWise May 7, 2011 at 7:59 am

“You can always break the law.”

If only it was that hard. Not breaking the law would be a full time job, were it possible.

Gil May 6, 2011 at 10:47 pm

Don’t forget infomercials scams help to cull the dimwits of their money while the government forces the productive to part with their money to give to dimwits.

Dave May 6, 2011 at 10:56 pm

“Infomercials are the closest phenomenon that the private-sector offers to politics. Fraudulent clowns, skilled at lying, promise gullible audiences something for nothing.”

Professor Boudreaux,
This is not the first time I’ve left a comment on Cafe Hayek with the promise that I am going to “steal” a phrasing of yours or Professor Roberts. I promise to give citation… for a while

Dave May 6, 2011 at 11:22 pm

One important difference: infomercials rely on voluntary exchange.

muirgeo May 7, 2011 at 9:28 am

Choice of country to live in is voluntary as well.

Sam Grove May 7, 2011 at 12:43 pm

Which one are you going to move to?

muirgeo May 7, 2011 at 2:34 pm

I do not plan to move. I live in California…. the most productive culturally advanced place in the whole world. I will continue to fight for a government that represents people not corporations. And if it came to it I’d be prepared to fight another revolution against the corporate greed mongers taking over our democracy. If they push it too far that’s what it will come to. That is clearly what history shows us. But I prefer the peaceful revolution of democracy.

But again Sam I’m talking as if I am a part of the real world… which I understand isn’t real relevant to you. I do hope you find your Libertopia some day… down in the deep recesses of your brain. Oh … is everything edible in Libertopia?

vidyohs May 7, 2011 at 8:43 pm

Oh you’d fight to keep outsiders from taking over your Californian utopia alright, little teacup muirhuahua; but oh you’d fight just as hard to keep the rest of the nation paying the bills you silly bastards pile up in your regressive utopia.

You are the most expressive argument for retroactive birth control of any living critter I have ever seen.

Emil May 7, 2011 at 1:18 pm

That explains the massive move of people from the left to Cuba…

Joshua May 7, 2011 at 4:53 pm

You imply leftist policies ruined Cubas economy. I’d say it was decades of militarily imposed trade isolation. We may yet be moving to China in droves…

Marcus May 7, 2011 at 5:00 pm

Well, according to all your buddies, global trade makes countries poorer. So Cuba should be one of the wealthiest countries on the planet.

So which is it? Does global trade make countries better off or worse off?

Joshua May 7, 2011 at 5:05 pm

I’m in favor of free trade, not all liberals are protectionists. Your turn, is China a powerhouse economy despite socialism or because of it?

Marcus May 7, 2011 at 5:08 pm

I don’t have an explanation for China that I’m entirely satisfied with. I don’t think anyone else does either.

It is certainly true that the more they’ve opened their markets the better off their people have become. But the jury is still out as to what will ultimately happen. Will the people win a true democracy as Friedman predicted? I don’t know.

brotio May 7, 2011 at 6:28 pm

You imply leftist policies ruined Cubas economy. I’d say it was decades of militarily imposed trade isolation.

The United States is virtually the only country in the world imposing such an embargo.

Are you asserting that Cuba would truly be the Worker’s Paradise that communist socialism promises if only it were allowed to trade with the eeeevil, capitalist United States?

vidyohs May 7, 2011 at 8:47 pm

@Joshua
Yep, China is becoming a powerhouse in spite of the socialism that remains in areas of their politics.

I guaran-damn-tee you that without embracing as much capitalism as they think they can keep a handle on, the Chinese would still be in the near stone-age Mao led them to.

You are actually an idiot to put forth the proposition that socialism is the reason for China’s advances in the material world. To even suggest it puts you on the same degenerate intellectual level of the muirduck.

Methinks1776 May 7, 2011 at 11:51 pm

China is a powerhouse? Have you ever noticed the number of people in China? Have you ever compared the gdp/capita for China vs. the United States.

Powerhouse my *ss. Don’t forget that people called the decrepit Soviet Union a powerhouse. Just before it completely collapsed.

Scott May 6, 2011 at 11:16 pm

*slowly stands and claps*

Bravo, good sir.

danphillips May 7, 2011 at 12:07 am

“What a joke politics is.” Unfortunately it’s not a joke. It’s deadly serious.

muirgeo May 7, 2011 at 1:13 am

“Infomercials are the closest phenomenon that the private-sector offers to politics. Fraudulent clowns, skilled at lying, promise gullible audiences something for nothing.”
DB

Think CDO’s…. then turning it all around getting the country to bail you and and then getting them to believe the problem is government spending… yeah they are that good and yes THAT IS WHAT FREE MARKETS ARE…infomercials. And some people actually buy in to these things.

Peter McIlhon May 7, 2011 at 2:01 am

Who is ‘them’ exactly? I assume you aren’t referring to the Fed or Congress (because they NEVER bail anybody out…right?)

muirgeo May 7, 2011 at 9:20 am

It’s all one group at this point. They are all the same. The Fed banks are run by Wall Street and politicians graduate to become higher paid lobbyist or go to work for Wall Street. THAT IS the free market system. It will always happen.

But libertarians hate the common people which are most people and do not have any shame climbing corporate ladders or being their Vassals at places like Cato Institute. These are the same Tory folk who defend the King and privilege based on birth.

Sam Grove May 7, 2011 at 12:48 pm

Looking in the mirror once again. You erect and slay straw men libertarians.

Obviously explaining free markets and libertarianism to you is an exercise in futility, because the only interpretation your brain can make is straw men.

YOU are the one that looks down on common people. No doubt when they bring their children to your office you can’t help thinking how ignorant those poor slobs are and how you can help save them (and your guilt) by supporting progressive government to manage the lives of those poor slobs because you just know they will never get anywhere without the assistance of your beneficent self.

John V May 7, 2011 at 9:58 pm

“The Fed banks are run by Wall Street and politicians graduate to become higher paid lobbyist or go to work for Wall Street. THAT IS the free market system. It will always happen.”

No. It is not the free market system and you know this. How do you feel no shame stating things that you to be false?

tkwelge May 7, 2011 at 2:40 am

YOu are just frothing at the mouth now… There is not one logical sentence in the paragraph that you wrote.

muirgeo May 7, 2011 at 9:21 am

nope…you are right it never happened…nothing happened…I’m frothing…making it all I am. Please ignore me…

tkwelge May 7, 2011 at 10:31 pm

Are you really as stupid as you let on?

Russell Nelson May 7, 2011 at 7:20 am

There is no such thing as a ‘free market’, muirgeo. There are only markets regulated by government, and markets regulated by customers. You have examples where markets aren’t well-regulated by customers. Fine. But if you want us to accept that governments will regulate better than customers, you have to prove it. You can’t just assume it.

Maybe you can! But that doesn’t mean that in any instance, you can say in advance that government regulation will be better than customer regulation. Given the hit-or-miss nature of government regulation, it’s better strategy to presume that government regulation won’t be successful, and to always rely on customer regulation.

Oh, but wait, I’m trying to teach something to a rock. You’re dumber than a rock. You’re dumber than a box of rocks.

Dave May 7, 2011 at 1:17 pm

You do realize that at least part of the reason people were trading those credit default options and the securitized mortgages was because the government forced the financial ratings firms like Moody’s, Standard & Poor’s, etc. to estimate the worth of those securities, and set up obstacles to competing against those ratings firms. So you had people trying to put a value on something that there was no way of knowing what the value was.

To put it more simply: the financial meltdown was not a failure of free markets, and government bailouts are not free markets either.

Joshua May 7, 2011 at 4:12 pm

financial panics predate the fed, the sec, and ratings agencies.
they are a feature of markets.

vidyohs May 7, 2011 at 8:53 pm

Yeah, Joshua, yawn!!!

We all remember the great Babylonian depression of 2300BC, when all the paper currency was made useless because of the central banking induced inflation.

I particularly was interested in the Roman financial crash of 23AD, and the crash of the Gual stock markets in 700AD.

Seriously looney, are you suggesting that central bankers are a necessary feature of markets……free markets?

Joshua May 7, 2011 at 11:51 pm

Um sorry you`re just wrong. Look up some history. Panic of 1819,1837, 1857 etc.

brotio May 8, 2011 at 1:15 am

Please tell us how long it took to recover from those panics versus how long it took to recover from the government-managed depression of 1930-1945.

Also please tell us what the inflation rate was from 1789-1912 versus the inflation rate from 1913-2011.

robert_o May 8, 2011 at 2:14 am

Are you sure the panics of 1819 and 1837 were unrelated to central bank actions? The Federal Reserve isn’t called “The Third Central Bank” for nothing.

Emil May 7, 2011 at 1:23 pm

this is marvellous, you really believe that

1) finance is (was) an unregulated industry
2) the fact that the government made a bad decision in bailing out the banks means that there should be more government intervention…

muirgeo May 7, 2011 at 2:37 pm

Did the government make the decision to bail out the banks… or did a former CEO of Goldmann Sachs make that decision?

Marcus May 7, 2011 at 2:51 pm

Both.

Of course, the solution must be to concentrate more power in government so that CEO’s can still better line their pockets. Like GE’s.

Right muirgeo?

muirgeo May 7, 2011 at 4:15 pm

Did the government have more power or less power after FDR and the 50 years of growth that occurred without a major crash.

The power of the government needs to be more closely tied to the interest of people and completely cut off and separated from corporate interest.

Marcus May 7, 2011 at 4:40 pm

Is that what you think FDR did? Cut off and separated the government from corporate interests?

Nothing could be further from the truth. While FDR certainly thought that workers had a place at the big table, he most certainly reserved chairs for the corporate interests too. FDR was the start of corporatism in this country. The specific flavor is called tripartism. Look it up.

muirgeo May 7, 2011 at 9:26 am

“But if you want us to accept that governments will regulate better than customers, you have to prove it.”

When and where was the strongest economy the world ever saw? The history has already happened. I know why I chose well rgualted markets and mixed economies based on history. On what basis?… on what history do you chose markets that are regulated by customers only… where did you see that happen? Or is this just something you think should happen based on theory or something you believe?

IdahoMauleMan May 7, 2011 at 10:02 am

If it’s not to prevent coercion by force or fraud, “Regulation” in it’s most simple definition prevents voluntary transactions from occurring between 2 parties.

If you can step beyond your simple correlative analysis (The USA has regulation + The USA has a strong economy -> Regulation = Strong Economy) for a moment, I’d like you to explain how preventing voluntary transactions from occurring between 2 parties creates a strong economy.

Hint: There are cases…..but instead of defining those for you, I’d like to see if you can do it by yourself.

Joshua May 7, 2011 at 11:22 am

I’ll just say this: It seems most the private sector people who support Austrian economics are, how shall we say, relatively wealthy, and the rest, who are considerable in number and influence are either in academia, the (political) media or directly in politics, and essentially derive thier reputation for serving the elites well with their biased talking points, budgets, commentary or research.

The Tea Party, Ron Paul, Glen Beck, Don Beaudreax?

Everyone in this debate can’t escape their bias, and it is becoming more transparent by the day that this is all nothing more than partisan cheerleading. Way to give your faction a semblance of academic legitimacy Russ, Don, Rogoff et al.

carlsoane May 7, 2011 at 11:47 am

I’m so glad you’re here to protect us from the Koch-financed, Austrian economist assault on the impoverished defenders of expanding government.

Sam Grove May 7, 2011 at 12:49 pm

Oh god, another muirbrain.

Joshua May 7, 2011 at 4:22 pm

Regulation is key to the efficiency of markets. Take the entire legal code, how much of it relates to private property rights, contracts, tort, banking statutes, the SEC, or how about setting up a standard system of weights and measures etc. etc. Alot of regulation isn`t for the benefit of markets, but for the rest of society, child labour laws, health and safety codes, etc. etc. The govt does and always will have a central place, and democracy, well, its the least bad option.

Don Boudreaux May 7, 2011 at 4:27 pm

Joshua writes “democracy, well, its the least bad option.” I agree that this claim is valid *for those decisions that must be made collectively* (which are, btw, much smaller in number than most people presume). But democracy is a terrible option (as are any other non-individualized methods of decision-making) for making decisions that can be made individually. I can, for example, choose which size toilet tank to purchase, whether or not to work at a wage below the legislated minimum, how safe my automobile is for its passengers, and on and on and on. Government need not – and ought not – make such decisions.

IdahoMauleMan May 7, 2011 at 4:43 pm

You are mixing regulations that prevent coercion and fraud (I might call them “laws”) with regulations that prevent voluntary transactions from occurring between 2 consenting parties.

And as Don points out below, you are also confusion regulation that deals with externalities with those that govern decisions without externalities.

Sweeping them all into one bucket – the necessary and the un-necessary – and then purporting that they are all required for a properly functioning society is disingenious at worst, or poorly understood and poorly thought-through, at least.

muirgeo May 7, 2011 at 4:21 pm

Have you seen Inside Job yet. Great summary of why these believers are no different then the religious right. Their belief comes first. We are living the results of “freeing up” markets and they clearly are disastrous. But you are right this is nothing more than modern day Kingdom… with think tanks and lobbyist and “academics” all serving as various vassals, knights and even court jesters. The free market equivalent of useful idiots. Man I hate religion. Spirituality is fine but group think and mind control that these religious institutions promote is so destructive to rational advancement of the human enterprise.

Joshua May 7, 2011 at 4:36 pm

There is some connection between Billionaires, Chicago/Austrians, and the religious right. I was raised rural and christian, and there is much support among the poor and ignorant for all of the above. My theory is that big money and the media have forged a traditional alliance with small business owners and the religious right to create the numbers needed to win elections. They support each other’s causes: freedom, independence, liberty etc. The religious right became the house servants, to use a non racist phrase. If you think about it, they might make more obedient and reliable employees. It’s a far out narrative, a terrible generalization but I find it an amusing thought, and perhaps there is a kernel of truth to it. lol

tkwelge May 7, 2011 at 10:35 pm

So you’re theory is that you’re right and everyone who disagrees with you is wrong…. because? That’s a great theory, sir. Let’s see you actually debate issues with people on this blog, and we’ll see who is stupid and brainwashed.

tkwelge May 7, 2011 at 10:36 pm

Chicago/Austrians

What!?!?!?!?!??

robert_o May 8, 2011 at 12:32 am

He must have read Soros’s recent article.

Joshua May 7, 2011 at 4:44 pm

as for the banks, I’m with Bernanke and Geithner. A bailout was the only sane choice. Congress could have acted sooner but ended up shooting themselves in the foot (face?) with that protest vote. Then Britain went ahead and bailed out some Irish bank, was it, and then the cat was out of the bag.

tkwelge May 7, 2011 at 10:34 pm

You never make a logical argument for anything, and you call us the religious?!?!? WOW!

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