Threads from Henry's Web

Tag: economy

  • Jesus Is Not on Your Side

    I’ve been watching the responses to Bill O’Reilly’s book Killing Jesus. Note that I said I was following the responses. I haven’t read the book and don’t intend to. I can’t stand listening to its author and I don’t feel any obligation to subject myself to reading his words. My attitude parallels Allan Bevere’s.

    I used to object to folks who would mention a book if they didn’t intend to read it. Now with the amount of reading material stacked on my desk, not to mention the amount I could stack there, I have to make choices. So this is a response to responses, not to the book.

    I truly enjoyed Christopher Skinner’s review. He’s very right to deplore the use of Jesus to pursue a right wing political agenda, or even a generally “American” political agenda. Our culture isn’t in line with Jesus, no matter how much we may talk about being a Christian nation.

    But now it’s time to annoy my liberal readers. Jesus doesn’t line up with liberal political views either. He lived in a world in which our political philosophies did not exist and would not have been functional. Being a businessman in Palestine of the 1st century wasn’t like being a businessman now. Nor was being a philanthropist. Or a teacher. Or an itinerant preacher.

    I don’t mean to say that we cannot look to Jesus and the principles he lived and taught to guide our political decisions. What I mean is that Jesus didn’t tell us just what to decide about how we put loving our brothers and sisters into practice outside the church. (He had a great deal to say about putting it into practice inside, though we ignore most of that.)

    Conservatives are criticized for trying to kill programs that benefit the poor. Liberals are criticized for being generous–with other people’s money (taxes). Conservatives believe that charity should be more private. Liberals believe that only the government can truly collect sufficient resources to deal with problems.

    Those are issues of political philosophy, and they are ones Jesus didn’t discuss. They just weren’t issues in his time. His audiences in Galilee weren’t going to be voting yes or no on ballots about how much to spend on education or support for poor children. Those simply weren’t options.

    There are many issues to discuss when we look at involvement by Christians in politics. I’m only focusing on one here. We tend to allege moral failure when we disagree with the means.

    For example, I might look at someone who opposes government paid health insurance, and decide that they don’t really care whether or not people get adequate health care. How can they oppose a program that will pay for adequate health care for poor people? I’m outraged! I believe they are sub-Christian, possibly sub-human! They want infants to die of preventable illnesses. They want mothers do die from inadequate pre-natal care. They want the elderly to die of cancer because they are unable to pay for the proper treatment.

    But if I take the time to talk to one of those people, I might find that they desire no such results. They may simply believe that the government will do poorly in distributing health care, that people will die because of the failures of government rather than the failures of private  providers. Whether they are right or wrong, they care just as much.

    And the accusations can be reversed. The failure, wherever it may be, is in being so certain that one’s method is correct, that one cannot imagine disagreement except through moral failure. My approach to solving the problems of health care provision and distribution are so right that the only way one can disagree is to be morally degenerate.

    And one can find morally degenerate people. I was behind a man in the Walmart shopping line who was using WIC to get food. It turned out it was for his grandchildren. He spent his time speaking ill of his son-in-law, a useless bum according to him, and his daughter, who lacked to good sense to say “no” to the proposal of marriage and then proceeded to produce children who would have to be on WIC. Aside from the stereotype that it’s bums who get WIC, His attitude (and his willingness to inform the line, stunk. And I do consider the possibility that he was so embarrassed to be using WIC that he had to find an excuse, but I still think that’s a stinky attitude.

    But there are people who might oppose the program who would be ready to pull money from their own pockets to pay for food for someone in need. It’s not their motivations that liberals should question. It’s the method.

    Jesus didn’t tell us what methods would work in our various modern societies. He left that to us to figure out. We’ll do it much better if we quit assigning either Christian or anti-Christian attitudes to the methods people believe will (or will not) work.

  • Bleeding Heart Libertarians and Austrian Economics

    I found this video enlightening. I like to note that I read von Mises before I met (encountered her writings) Rand. Rand is a cultural phenomenon, but von Mises is a deep thinker. In any case, this is an interesting interview. The more libertarians pay attention to this, the better, in my view. I’m a regular reader of the website referenced in the video, Bleeding Heart Libertarians.

     

  • I Don’t Understand This

    From CBS News:

    Eighty percent of speech watchers approve of President Obama’s plans for dealing with the economic crisis. Before the speech, 63 percent approved.

    Fifty-one percent of speech watchers think the president’s economic plans will help them personally. Thirty-six thought so before the speech.

    I have mixed emotions about President Obama’s economic policies, and I had mixed emotions about President Bush’s. My point is that this isn’t about criticizing or supporting the policies.

    President Obama gives a good speech. In this case there was even some content in the speech. But it wasn’t an explanation of his policies. It didn’t tell us anything new about why such policies were necessary, or why they would help particular people. I listened to the whole thing and was impressed, but it didn’t convince me of anything I didn’t already believe and I don’t see what element in the speech would be expected to change my mind.

    So what in the speech would change enough minds to cause a 17 point jump in the percentage who approve of the president’s handling of the economy? What produced a 15 point jump in those who think the plans will benefit them personally? Presumably those numbers will drop with time, but those are still some rather hefty gains.

    I truly don’t see how this works.

  • Dr. Reich Stirs up some Hornets

    I’ve been following Dr. Reich’s blog ever since I discovered it during the primary season. He was Labor Secretary during the Clinton administration, and I recall not always agreeing with him at the time, though I don’t recall the details. In any case, from the time when TARP was passed through the auto industry bailout, and now in specific testimony and writing regarding the stimulus package, I have to say that I have found him extremely thoughtful and constructive.

    Thus it’s interesting to note that no less (or greater!) a trio than Michelle Malkin, Sean Hannity, and Rush Limbaugh have misconstrued some of his testimony to congress, and of course have begun yelling about it. (Media Matters reports on it, HT to Robert Reich.)

    Of course, there is a group of people, fortunately small I think, who believe that every attempt to be inclusive is automatically an attack on white men. As a white man myself, I repudiate such notions. I believe that each of us is made better as society becomes more inclusive and that the expansion of the economy in size, in creativity, in competition, and in diversity is well worth any temporary displacement.

    Dr. Reich is merely asking that we make sure that the jobs created by the stimulus go to a broad range of people–an admirable goal. In any case, his suggestions are serious enough to merit careful and substantial debate, not a mauling by shallow political entertainers.

    I know, what fantasy land to I [want to] live in?

  • Thinking about Business Regulation

    The current financial crisis has been cast as a failure of the left by the right, and failure of the right by the left. Did laissez faire capitalism fail or was it excessive taxation or regulation? Perhaps it was a combination.

    I use “left” and “right” here strictly in the context of capitalism, with “right” being those who espouse a maximally laissez-faire position, and left being those who favor government intervention. My own position is moderate in that I am willing to look at all points on that spectrum, but I lean strongly to the right in terms of solutions. I favor the economic solution that most depends on the general will of the participants in the economic system expressed in the way the spend their money, not in the way they vote at the ballot box.

    I should note here for honesty’s sake, as well as to irritate those who can be irritated, that I see neither capitalism nor democracy as absolutes in and of themselves. They are both strategies used to accomplish something in particular. This means that I oppose socialism (in the sense of government ownership of the means of production, not in terms of progressive models of taxation), not because I think the idea of government ownership is morally bad in the first place, but rather because I believe socialism works poorly in appropriately distributing economic goods.

    Similarly, I see democracy as one tool in helping to prevent tyranny, but I don’t think it is all that effective by itself. I would have no problem with various means of limiting or redistributing voting rights, provided those are evenly and objectively implied. The U. S. electoral college and the senate are both violations of pure one-person-one-vote policy, and I support both. I also don’t have any objection to literacy tests or to property requirements for voting, except that they have rarely been applied with an even hand, and I think human nature suggests they are unlikely to be.

    Having thus thrown out a couple of inflammatory ideas not really related to my topic, let me proceed! My assumptions here, which I am not going to support in detail is that fraud prevention and infrastructure building are legitimate functions of government. Further I’m not an ideologue who holds a priori that government can’t do a certain thing. If an activity of government truly benefits its citizens, including not producing unacceptable side-effects, I wll accept it. In practice I generally believe that limiting government action to carefully circumscribed zones is better.

    I think there is an important distinction that needs to be made as we think about government regulation or supervision of market activities. Process is important, and the principles that underly our action are also critical. The temptation, to which legislators almost always yield, is to write a law that prescribes results. In presenting such a law to the public, it is the results that are emphasized. You don’t generally see bills titles something like – “A Bill to Hire 10,000 New Regulators and Cause them to Swarm over the Banking System.” No, the title will be more like – “A Bill to Ensure Honesty in Banking” or something similar. (Examples are intentionally very generic.)

    In the financial markets, we tend to get regulators looking to see to particular results, such as particular rations of assets to liabilities, certain levels of stability, guarantees of funds for depositors, and so forth. Not all of these goals are bad.

    An alternative is to look at regulation from the point of view of the honesty and transparency of the process itself. In other words, rather than making sure that a bank cannot cross a particular line, aim at making certain that the public will know when the line is crossed, and focus enforcement on going after those who misrepresent.

    Extreme capitalists may object to the additional regulation, but see no similar problem in, for example, requiring that someone who manufactures toasters is actually delivering toasters. If such a company instead delivers clever plastic models of toasters that do not do any toasting, that is fraud.

    Similarly I should be able to walk up to a building with the word “bank” on the sign, and assume that I am dealing with something recognizable as a bank, rather than say a junk security marketing service or something similar. It’s simple to tell whether the toaster company is delivering toasters. It’s much more difficult to determine whether the bank is what I would traditionally regard as a bank.

    When deregulation came along, this is an issue that I think was not adequately addressed. Banks were restricted from doing certain activities that were generally viewed as risky. Deregulation permitted such activities. So in effect we changed the definition of “bank” as applied to a business name from one thing to another. This deregulation was viewed as more capitalism. I would suggest that in some cases it was simply an abdication of the very proper role of capitalist government in preventing fraud.

    I think there are many regulations that might be explained in either way–as a prescription of results, or as preventing misrepresentation. But I would be much happier if, as we consider how to keep markets more stable, we tried to emphasize providing investors with accurate information (including such infinitesimally small investors as myself) over simply preventing them from taken risks that they intelligently choose.

    As a final note just to annoy a few more people if possible, I question the function of the stock market as it is constituted. I have no idea how one would change it, but right now it seems to me to be falsely labeled. It should be called the Stock Casino. I have no objection to legalized gambling, but I’d like gambling to be called gambling, and investing to be called investing. Unfortunately, there is a certain amount of gambling in investing, and there can even be investing in gambling. But could we try to draw a line?

    OK, in the near future I will return to subjects on which I have greater expertise. I promise!

  • Quick Thoughts on the Economy

    As an exercise in brevity, some things that occurred to me while watching political TV and reading the blogs:

    • An economic expert is one who provides the arguments that allow me to get what I want. An incompetent economist is one that says I can’t have it.
    • The entire argument is based on need. The financial sector needed capital, the automakers need money to get through this situation (however long that is), the country needs the auto industry not to collapse.
    • I hope someone is asking just what it is that is going to make any of these sectors come out of the spin. They aren’t going to do it because we need them to.
    • If a company is borrowing money to build a factory, that’s hopeful. If a company is borrowing substantially to cover cash flow, that’s dangerous. It doesn’t change if the government is lending the money.
    • It’s interesting to see the difference between the folks in the white house and those in congress. Bush is asking for things that a very similar to what Obama wants; congressional Republicans want to say no. (I’m with the congressional Republicans on this, though I doubt they’ll be at all consistent.)

    It doesn’t look good!

  • Republican Role: Defend Capitalism?

    In an MSNBC story today Senator Jeff Sessions, from our neighboring state of Alabama is quoted:

    Fellow Alabama Republican Senator Jeff Sessions also opposes helping the auto industry. “Once we cross the divide from financial institutions to individual corporations, truly, where would you draw the line?”

    Just a second here. Line? What line? Look in your rear view mirror. That thing way back there, practically out of sight? That’s the “line.”

    You see, congress may have passed a law providing relief to “financial institutions” but the actual money goes to–you guessed it–corporations. But the line was crossed many years ago when the government decided to rescue Chrysler, after which Lee Iacocca was known to run about posing as a champion of capitalism.

    I’m not a purist on capitalism, but I do think we need to realize what we’re actually doing. The most socialist actions we’ve taken recently are not proposing minor chances in the structure of redistribution as provided by the tax code. It’s in these gifts of capital to private industry.

    It’s good that Republicans are working on opposition to this type of activity, though I don’t think they will be very successful. There’s too much fear in our economy right now. I noted during the election that I was in kind of a reverse of the rest of the country. I thought I’d give McCain an edge on the economy and Obama the edge on foreign policy–not that McCain had a large edge.

    So what do I think ought to be done? Personally I would not directly aid these industries at all. We have a problem in this country regarding deficit spending, but most importantly we carry out deficit spending on projects that will not produce anything later. In other words we borrow money from our children and grandchildren with no prospect other than that we will have to borrow some more from their children and grandchildren in order to pay them back.

    But deficit spending is not necessarily bad in the short term. What is bad is when deficit spending becomes essentially eternal, when we will carry on building the deficit even when an emergency is past.

    Two elements would be necessary in any plan for me to feel unqualified support for it. (Note that I’m aware that nobody is waiting for my unqualified support!) First, it would have to accomplish goals that I generally think can be accomplished well by government, such as building infrastructure. (I include basic education as an infrastructure issue, so building schools would be acceptable.) Improving this country’s infrastructure would have the potential of improving our economy down the road, providing those infrastructure projects were well chosen.

    Second, we need a commitment to ending the spending, and making a corresponding reduction in either taxes or in the deficit (depending on how the work was financed) when the mission was accomplished. I have little hope that such a commitment would be made and kept, but since I’m writing almost entirely about fantasies–nobody’s going to do this stuff–why not fantasize about that as well.

    In the meantime we’re going to be stuck with debates on whether we are giving money to “institutions” or “individual corporations” carried out by people who ought to know better. Or perhaps they do know better but don’t feel like admitting it.

  • To Stimulate or Not to Stimulate

    The more I read Robert Rech’s comments on the current economic crisis, the better I like what I read. He’s been calling for stimulus that involves rebuilding the infrastructure. He’s calling for the same, but also suggesting that the lame duck congress will not be the ones to create a well-crafted stimulus package. He says:

    The coming stimulus package could be even more nonsensical. It will be voted on by a lame-duck Congress, many of whose members will want to reward campaign donors with juicy pieces of pork. Other lawmakers will see it as their last opportunity to include their pet project or tax perk, and some who won’t be accountable because they’ll be out of office in a few weeks anyway. In other words, it’ll be less a stimulus than a Christmas Tree.

    That brings up one of my pet peeves-the across the board cut in spending, related closely to the “throw money at it” idea. True deficit hawks, you know, sort of like the current Republican crop who keep increasing the deficit, like across the board cuts. Everybody cut 10%, for example. But that often cuts the essentials, things that help keep the economy going.

    I have a small business. I’ve had to cut some expenses. Where did I cut? Ten percent across the board? Did I go straight to my power bill? (Well, actually, I’ve managed some significant cuts in power consumption.) No, I looked for my least effective advertising, and for marginally performing activities and cut there.

    If I borrowed money, what would it be borrowed for? Would I choose to spend it evenly on my everyday bills? After all, it would still be more money going through my business! But no, if I borrowed, it would be for a specific activity that I had good reason to believe that would produce more money.

    I would like to think that the government will listen to the voices of folks like Robert Reich. Unfortunately, that would be unrealistic.

  • Borrow, Spend, and Rescue

    The senate has passed the bailout bill, and the house is expected it soon. I greet this event with seriously mixed emotions.

    I do believe that responsible legislators, should there be any, needed to support quick action, and because the action was quick, and because it was in response to a crisis, it is likely to be much less than perfect. Also, by the time you make all the compromises necessary to pass a bill quickly, the result is going to be substantially less than ideal.

    But while it is necessary at this point, this bill also reflects much of the financial mismanagement of which our government is guilty. I do blame both parties on this, though in different ways. (In my oft-repeated phrase, that’s another post.)

    The compromise results in borrowing more money, handing out more authority to executive agencies without adequate supervision, and in other measures that will serve to increase the deficit and our growing national debt. It seems that whatever good intentions the legislators start with, every bill ends up with us spending more and going deeper into debt.

    As a stop-gap, perhaps $700 billion, along with an extra $100 billion or so in tax cuts will help temporarily. But we cannot go on forever behaving in this fashion. Sometime things have to be paid for. Democrats want the government to do more, and at least they admit it. Republicans talk about smaller government but continually expand it, and also tend strongly to increase executive power.

    So while I believe this was necessary as a short term solution, I believe that we, as a nation, should feel like the consumer who has just charged his power bill by maxing out his last credit card–it can’t go on. Something has to give.

  • Whither the Budget Deficit

    Up, folks, always up.

    Those who know me as a moderate (which I prefer) or as a liberal (which I am often called) may be surprised to know that I started my political activism by working in the campaign of Ronald Reagan in 1976 when he ran against Gerald Ford. It was the first presidential election in which I would vote, and I registered as Republican. I worked as a precinct worker, which is to say mostly that I stood at the polling place on election day and tried to get people to change their vote to Reagan. It was Maryland, and I found it an uphill battle.

    The key thing that attracted me to Reagan was his $90 billion plan to balance the budget, as I remember it. I get a bit nostalgic when I think of those days, when only a $90 billion shift would have balanced the budget. It was a pretty controversial idea. Reagan lost, of course, though he did very well considering he was running against an incumbent president.

    By 1980 Reagan was running again and he had discovered supply side economics. No longer was the plan so much to balance the budget by carefully planning your taxation and spending. Now we were going to solve all our problems by reducing taxes and watching the revenue grow as the economy expanded.

    I don’t think supply side is totally without merit–quite. In general a less taxed economy is going to collect capital faster and grow faster. But it wasn’t the easy solution many thought it would be. It became the Republican excuse to spend without paying for it, and the deficit grew, and grew.

    I’ve heard a good deal of talk about redistribution in this campaign, and the truth is that no matter which slate of candidates we elect, we’re going to be redistributing income. It’s worked all through the system. I find it pretty disingenuous to argue that one should vote for a particular candidate because the other favors redistribution. It’s really a question of whose money gets redistributed and who benefits (if anyone) from it.

    In the case of deficit spending we’re doing some redistribution in a sense. We’re redistributing our problems into the future, and we’re doing so quite rapidly. The problem is that nobody wants to buckle down and actually pay the costs for the programs that they advocate, Democrat or Republican. Either telling people they can’t have certain things because there is no money, or telling them they’ll have to pay more taxes is generally a losing strategy in an election. At best, you can get by with what Barack Obama is doing by telling only a minority that they will pay higher taxes.

    There’s an interesting analysis of the tax proposals from the Tax Policy Center, and the results don’t look all that good.

    I don’t blame the current economic problems directly on deficit spending. Rather, I would suggest that we will face much worse problems in the future unless we start to be in a fiscally responsible manner. The proposals we have from the major candidates are not responsible, in my opinion.

    Crossposted to RedBlueChristian.com.