The American Spectator

Jeremiah| 12.3.08 @ 3:11PM

30 billion here, 100 billion there....

Back in the 90s Republicans assured us that if they were permitted to take over Washington -- if only for a few years -- we would see the return of a Golden Age.

The federal government would shrivel so small you could drown in your bathtube, and freedom would prevail. (Oxymoron not my fault.)

Well, I guess I see now what you all meant.

Freedom has prevailed. Without rules or restricitions, people are free to behave in any old way they please.

If those people are poor or middle class, they have to live with the consequences of their actions.

If they are very, very wealthy, the government will prevent them from feeling even the mildest discomfort as a result of their action.

I guess that's what free market economics looks like.

I'm very happy with the results, too. Just look around. American society is bursting with optimism, hope, and youthful exuberance. The Conservative Revolution has made it Morning in America. Thanks very much to all of you who helped bring this about.

Deborah| 12.3.08 @ 3:30PM

This isn't what free market economics looks like. This has nothing to do with conservatism. It has everything to do with crony capitalism. Free market would let them fail so that the stronger could come in and do what they do competently. Try blaming Carter/Clinton for the Community Reinvestment Act, or unions for dragging their companies to bankruptcy with their demands. Then you can blame Hank Paulson for his incompetence and throwing money down a huge black hole. None of this is conservative.

Jeremiah| 12.3.08 @ 4:22PM

Deborah --

Nothing is more hilarious than listening to conservatives claim the current economic crisis should be blamed on Carter and Clinton. (I mean, Carter? Jeez. Are you people crazy?)

First, that would mean Republican presidents were the most inept, irresponsible, incompetent, impotent fools ever to hold office.

You mean Carter in four years did such damage that 8 years of Reagan, 4 years of HW Bush, and another 8 long years of W could not undo it?

Carter must be a genius of economic sabotage.

Same for Clinton, only the numbers are less absurd. But still, you'd have to be able to convince a reasonable person that while during the 90s most of us did pretty well, Clinton deviously set in motion of chain of events that would only unfurl the horrors -- at the end of the Bush presidency 8, 9, 10, 11 years later.

You people -- in your stark but very very entertaining desperation -- give Democrats way too much credit.

But do keep it up. It is very fun to read.

Bob| 12.3.08 @ 4:36PM

By the way, Deborah, it was not the Community Reinvestment Act that caused the problem. It was Greenspan lowering the Fed rate and Wall Street developing derivatives based on CDO's and loan guarantees (credit default swaps) in an unregulated environment with virtually no capital requirements. The CRA only played a minor role. Without securitization, none of this could have occurred. You don't believe Rush on this, do you? Another thing he knows nothing about....

Bob| 12.3.08 @ 4:40PM

IMO, the auto makers should go into Chapter 11 to restructure. The plan they presented to shutter 9 plants, close around 1500 dealers, get rid of Saab/Pontiac/Hummer/Saturn and to delay the healthcare payments to the union is not enough. The legal agreements to make this occur must be dissolved. Otherwise, there is no acceptable way to do this. The agreements can only be voided through bankruptcy.

ruth| 12.3.08 @ 4:40PM

Well, look at this. See how 'open-minded' Jeremiah's post is? Jeremiah says he visits the AmSpecBlog because he is interested in Conservative thoughts and view-points; that it's proof of his willingness to look at all sides of issues. But I don't see much of your 'open-mind' exhibited in your comments, Jeremiah. In fact, as usual, I see you spewing your same snotty, hostile, snarky, closed-minded DNC talking points. And by the way, in case you have forgotten or are being devious, 9/11 occurred within the first 7 months of Bush's first term as president; just months after Clinton's 8 years of dereliction of duty. Open-mind, right.

daboss| 12.3.08 @ 4:40PM

Ok you two ....

Not to speak for all libertarian or conservatives, but I think the core trouble is government intervention in the marketplace (what we call socialism or fascism). This is wrong, and I would argue unconstitutional as well, when done by any party or president.

All individuals should be protected and treated equally – that’s the role of the Fed (at least one of the few). If you can receive a loan on your merits – great – if not, rent.

You have to isolate the trouble though too – and the community reinvestment act is at the core of the trouble. It should have been stopped by Bush or never expended by Clinton and never signed by Carter.

I have no trouble at all blaming a either party when they bypass the constitution and chose winners or losers. HUD, ED, DOT, HHS, etc. should be scrapped – then maybe the budged would balance and we can keep more of our PROPERTY – which is the essence of freedom.

All this out of control/unconstitutional spending will lead to the demise of this great republic.

Time to think of the bigger picture!

ruth| 12.3.08 @ 4:45PM

Bob, I don't know if you are ignorant or devious, perhaps both, but the CRA certainly had a great deal to do with our current economic crisis. Liberal social engineering lead to this mess, and it's not just Rush who states this; it's common knowledge among those who value truth.

daboss| 12.3.08 @ 4:53PM

Yes – the CRA led to this ….I think the logic is simple.

The CRA led to removing homes from the market place by allowing those who should have been renters to buy. By removing THOSE homes from the market, qualified buyers were pushed into new home sales.

When the CRA renters defaulted – a ton of houses were put back on the market – thus depressing all home values – cause when you have a lot of something, the price goes down. Couple that with mark to market and here we are. Too much available inventory and not enough qualified buyers. All so the government can BUY off people for votes.

And BTW - where was SOX compliance in all of this? The ENRON executives were crucified over their failure … where are the heads from Fanny/Freddie?

Jeremiah| 12.3.08 @ 5:02PM

Folks,

If I were to gather the men in my family and neighborhood -- working class men of basically conservative values -- they would agree that the economy seems to have begun working against them sometime in the mid 70s and continued that way with only a few breaks up until now.

Most of them would probably buy the silliness you people are talking about: that Clinton and Carter are somehow to blame for the fact that middle class families now buy with two incomes just a little more than they used to buy with one.

I think all kinds of economists would assure us the everyone's standard of living has increased dramatically since the 70s, but there's a subjective certainty that work doesn't pay now what it once did.

I'd propose that this subjective impression is largely caused not by absolute buying power but by income disparity. Everyone expects there to be some rich, some poor, and lots in the middle. However, the difference between what my uncles, who are hard working carpenters, earn and what the wealthiest people in our state earn is like nothing this country has ever -- ever in its history -- seen.

When the Constitution was written there was little out and out poverty (relatively speaking). America had very wealthy people, but the difference between (say) the wealthy and the thriving middle class was not that great.

Income disparity creates resentment, envy, and the angry politics we have today. It's toxic. It's bad for morale.

You can keep your Joe the Plumber philosophy. I think things were better in the 1950s, when the wealthiest man in the company tended to earn around 30 times what the poorest earned -- not 300 or 3000 times.

You be the judge. Were people happier and more content in 1958 than they are in 2008? If so, might it not be because people felt more a part of a community then? Might it be because people trusted that work meant something and would be rewarded?

ruth| 12.3.08 @ 5:09PM

Fanny/Freedie executives; just look at some of Obama's campaign advisors. Also, Rahm Emmanuel, Jamie (firewall) Gorelick from the inside--Obama, Chris Dodd on the outside. Democrats' fingerprints are all over the Fanny/Freddie debacle, that's why they so vociferously try to avoid/deny the issue.

ruth| 12.3.08 @ 5:10PM

Fanny/Freedie=Fanny/Freddie

daboss| 12.3.08 @ 5:11PM

It's none of yours or the governments business how much people make. We all have the opportunity … and yes – it takes 2 incomes to survive today. But look at all the taxes we have to pay to support the utopia that will never arrive.

Give me the budget – I bet you I can balance it in a week AND give a HUGE tax cut to everyone. Go back to the constitution – let the people or the sates manage all the utopian fluff.

Really – do we need a fed department of EDU/DOT … Ohio has one … oh wait, so does the county I live in. Is that a good use of money?

Jeeze.

ruth| 12.3.08 @ 5:29PM

Wrong again, Jeremiah. Liberals gain power by creating and exploiting class-envy, it's been your strategy for a long time. A perfect example is the ponderous Teddy Kennedy; he of massive trust- fund wealth . Crappy nationalized healthcare won't touch Teddy a bit, he's got the big bucks to pay for the best medical care available. Same with his liberal position on crime; why should he care? He's protected by his minions of bodyguards: He's the perfect example of a liberal elitist. Socialism doesn't work--ask the Russian people, or ask the average Brit or Canadian about their crappy Socialized healthcare systems. Why should some people work harder than others and not be rewarded for it? It is fundamentally unfair and eventually productivity declines. Meritocracies are best but can only survive when the people have integrity.

Jeremiah| 12.3.08 @ 5:48PM

daboss --

You're expressing a political philosophy that as far as I know hasn't been practiced in America since the nineteenth century -- if it even was then.

Sounds kind of fantasy based to me. Besides, I see no problem with the government using tax and monetary policy to strengthen social bonds. As all the Enlightenment philosophers (whom Jefferson et al read) knew, an orderly and well articulated public sphere is the context in which personal liberty thrives. The USA is a country, not a Wal Mart.

Jeremiah | 12.3.08 @ 5:53PM

Ruth --
Just because liberals address the problems raised by income disparity does not mean they are "exploiting" it.
Corporatists "exploit" economic disparity by displacing the anxieties it raises onto other forms of social difference, making people mistake economic insecurity for cultural insecurity. To put it another way, middle class people come to feel that their problems are caused by Whoopie Goldberg and liberal anthropology professors and not an economic system that is based more and more on their heavy borrowing and stagnant wages. It is that curious process whereby someone like you comes to feel downright hatred for someone like me because I publicly express a desire for a more responsible society that takes care of the least of its members, educates its children, constructs bridges, engages in science, and promotes the common good.

ruth| 12.3.08 @ 5:58PM

'Orderly and well articulated public sphere', sounds like China, Venezuela, and the USSR in its heyday, etc. We all know how well Personal Liberty has thrived in these three countries, right Jeremiah?

ruth| 12.3.08 @ 6:10PM

Hon, don't flatter yourself, (you're such a drama queen), I don't hate you, I ridicule you. Liberals have certainly exploited class envy for their own gain; I cited Kennedy for you. What's better: Give a starving person a fish or teach that same person how to fish? It's so fundamental, Conservatives seek to empower the individual and Liberals steal from those who work hard to prop up those who don't or can't. Eventually, people will stop their efforts to excell if they don't realize their hard-earned rewards. That's why liberalism and socialism don't work; they are anathema to human nature.

Jeremiah| 12.3.08 @ 6:30PM

Ruth --

The only way to teach a man to fish is to raise taxes from those fishermen already established so that you can set up a school to do the teaching in. Taxes, while they can become to burdensome, are precisely how we turn (say) a subsistence farmer or scavenger into someone who knows how fish and trade and build supluses. Just to use your metaphor.

Education is almost always the rock against which libertarianism -- a wicked and adolescent philosophy -- crashes.

The only way to ensure your liberty (property, privacy, and personal sovereignty) is to ensure ORDER. Order is the greatest good because it what ensures human existence will not be reduced to might making right.

China and N. Korea may seem orderly, but they're not. In those cases, government power has run entirely out of control. Order is proportion and proportion is justice.

ruth| 12.3.08 @ 6:36PM

Jeremiah, since you mentioned education: Just how well is your liberal educational system doing these days? Care to brag about your 'stellar' results? Our education system is a disaster precisely because you liberals run it, which further proves my point: Liberalism doesn't work.

ruth| 12.3.08 @ 7:13PM

I think it's funny you've mentioned order, because liberalism is based on chaos. Also, who are you to decide who keeps their earnings? Who died and made you king? You are all about coercion because your policies can't be enacted unless you use force, right, Mr. Marxist? Also, the super-rich, like Kennedy, will never be negatively impacted by your socialistic laws, just the struggling people trying to build a better life like Joe the plumber. Your hard-working uncles won't be better off; there will just be less for everybody who's not super-rich.

Captain America| 12.3.08 @ 8:00PM

I know. Let's roll the Big 3 into the Big 2 and call them Reid & Pelosi.

They have obviously ran huge global automotive corporations and have the special sauce needed to make them profitable.

daboss| 12.3.08 @ 8:52PM

Jeremiah :

“The only way to teach a man to fish is to raise taxes from those fishermen already established so that you can set up a school to do the teaching in.”

Are you serious? This is the crux of liberalism/socialism – only the government can teach you things. Yes – dear leader J – you are correct – send me to the reeducation camp.

Who taught the first fisherman to fish? The government, supplied from the confiscation of property, or maybe the parents? Who taught Edison how to make a light bulb? Ford to create the assembly line? Gates to “create” dos/windows – Jobs to create the MAC?

The computer industry is most likely the least regulated industry and look at all the innovation. And - wait for it - the price keeps coming down on everything - strange how that does not happen when you make a car ....

Look at all the ingenuity that comes from N. Korea/Cuba/Russia – love that Yugo!! Chavez can barely keep the oil wells a pumpin!

And Jefferson – whom you site above – wrote the Declaration. You should read it and understand that in all his enlightenment he was a suspicious of government and those who knew how to manage your life better than you. You should read it – if the Declaration does not move you then pack up your bags and move to Cuba!

ruth| 12.3.08 @ 10:08PM

Jeremiah blogs from Cuba; Venezuela on his days off.

Jeremiah| 12.3.08 @ 10:48PM

Ruth and daboss --

Computers are largely a product of the nation's largest social program: the military.

Government spending (through public educational institutions) accounts for 80% of all innovation of medicines. There's another example. There's more.

Only -- your point is correct. Government by and large does not innovate well. Government does, however, educate well.

Ruth, to you:

American institutions of higher learning, a liberal blend of public and private, are the best -- without exception -- in the world.

In universities, professors are not asked to carry out the grosser functions of society and family as grade schools are asked to do. And no, I'm not just talking about unruly urban schools. The fact is, parents are not sending children to schools who are ready to learn. A total lack of adult involvement and way too much television make the unmanageable and extremely difficult to teach. The teachers your tax dollars pay for work harder than you can know unless you are a teacher. They have enormous challenges facing them and very little help from the other institutions of society.

But here's something for you both: when it comes to education, I'd consider myself "conservative" -- although not like you. I believe that our students need much more discipline than they receive. I believe that parents have a choice: educated children or children who watch television. In fact, I'm probably twice as "conservative" on these topics as many of you.

As for taxes being bad. I don't know what to tell you. Taxes build bridges, pay soldiers and teachers and judges. Taxes send men to the moon. What's the trouble?

Thomas| 12.3.08 @ 11:49PM

A very interesting discussion on the forcible redistribution of wealth by the government. But Jeremiah and Bob forget the fable of the goose who laid the golden egg. What do you do when you have killed the goose? Where does the money come from when you kill the individual's incentive to go out and earn money?

Government produces nothing. The private sector builds bridges. The private sector builds computers. The private sector produces radios and televisions. The private sector creates things. If the military were the sole purchaser of computers, there would be about 5 of them in the country, they would still be as big as a one bedroom house and they would each cost about 5 billion dollars apiece. Radios? Once again, our troops would have one per company and each would fill the back of a truck. Send men to the Moon? It wouldn't have happened if there wasn't a civilian market for the products developed for the space program. Government is inherently bad, but some government is necessary. It must be kept small and tightly controlled. Why? Read on.

Now this is the facts. Programs, beginning with the FHA and continuing through Fannie and Freddie and the CRA, pressured lending institutions into making more unsecure home loans by "guaranteeing" federal backing for those loans. The Clinton administration compounded the problem by threatening the lenders with legal action if they didn't expand the number of low security loans that were applied for. Fannie and Freddie promised to cover those loans. Investors, believing that they were trading financial instruments back by the federal government, packaged them and began trading them. First, the Federal government changed the mark to market rules forcing companies to devalue their assets to true market value. Then the rise in housing prices stopped and began to roll back. Consumers, who could not afford to pay their mortgages, began to default. At that point, the mortgage holders suddenly discovered that the quasi-public mortgage entities, Fannie Mae and Freddie Mack could not cover the mortgages that they had ostensibly agreed to cover. Now all of these mortgages become worthless. The companies that had invested in them now have to discount those investments to their current market value which is near $0. Investment banks begin to collapse. Then commercial banks, to limit their exposure, stop issuing credit, except in the most secure cases. Those still holding a significant amount of defaulted mortgages find themselves in the same boat as the companies that have heavily invested in these sub-prime loans. Through all of this, the leaders of our country, both in the White House and the Congress, fiddled while Wall Street burned. Why? Because they were responsible and they refused to accept that responsibility when something could still be done to save the economy. Then, when Wall Street was in flames, the same people in Congress who refused to stop the runaway train of the economy fueled by the mortgage credit collapse, turned around and began shoveling more coal into the boiler to the tune of nearly 2 trillion dollars rather than cutting a few cars loose. Now the economy is running downhill at breakneck speed and these idiots are going to shovel more coal into the boiler. Where does this coal, money, come from? I'll give you a hint, nowhere. It is fiat money. Conjured up by the magicians of the Treasury and the Federal Reserve Board, from thin air. But, as we all remember from the old stories, magic is fleeting and simply fades away. What happens when this money simply evaporates like the Government's promises to cover the low security home loans? I'll tell you. Deflation sets in. You pay $20 for a loaf of bread, because your money is worthless. Commerce stops. Famine reigns. And then come War and Pestilence.

Blame is not important at the moment. Identifying those still in power who were instrumental in allowing this mess to evolve and removing them is. Tough times are ahead for the world. But, steps must be taken not to repeat the mistakes of the past. Otherwise, the only metal having any value will be lead ans steel.

ruth| 12.3.08 @ 11:52PM

Oh, come on, Jeremiah, you know the schools are a disaster in this country. Our kids are so far behind those of other nations that our future is in jeopardy. But they do have good self-esteem and they sure know how to have sex. Taxes aren't the problem--it's the uncontrolled spending that will break us. Do you run your household without a budget? If you spend too much, do you just print more money to replace it? Your household budget is just a microcosm of our country's economy; if overspending will destroy your finances it will also destroy our economy, the fundamentals are the same. I am just so worried about our country, for my children.

ruth| 12.4.08 @ 12:43AM

Oh, my God, Thomas, your summation is as brilliant as it is terrifying. Everything is just happening so fast and I don't see an endgame here.

ruth| 12.4.08 @ 1:08AM

What has really puzzled me is what did President Bush get out of this economic mess? I understand Barney (Arrrgggh) Frank's , and all the other democrats' motives, their liberal social engineering, etc. But why didn't Bush even have a hint of what was coming? Surely, he had access to expert information pertinent to this economic upheaval. Nothing makes sense except that it seems part of a larger plan, a bloodless coup d'etat if you will.

Jeremiah| 12.4.08 @ 1:18PM

Ruth --

As I said, the grade schools are a mess. The university system most certainly is not. If you have any information to the contrary, I'd like to see it.

American higher education is the envy of the world. Our public institutions contribute massively to research and development of products, completely giving the lie to the notion that the market is the sole source of innovation.

Thomas --

Computers were invented and developed in the military.

It is true that private companies have greatly improved on them, but the initial investments were governmental.

And...private companies build bridges? That's news to me. Why would they do it, unless they were being paid by the government to do it?

Thomas| 12.4.08 @ 4:27PM

Jeremiah,

Sorry to disillusion you, but mechanical computer development was well underway, in the private sector worldwide, in the 1920's. The military did not show much interest in computers until 1941, when a need arose for high-speed computing machines to break enemy codes. During WWII, the US Navy financed further computer development as an adjunct to their flight simulator program. What the military did directly develop was the network that was to become the internet. And that was primarily used to provide researchers working on government projects with a means of quick communication.

However, my point is that the government and the military do not represent a large enough customer base to support any industry, let alone the R&D;that most modern industries engage in. In fact, with a few exceptions, government computer systems are far behind the systems used by most large private business entities and even the pimply-faced geek playing Warcraft in his bedroom.

As for bridges, until the Great Depression most bridges were built entirely as private projects; either as property upgrades or as speculative toll projects. Government got into the bridge financing business due to an increase in automotive transport and New Deal public works projects. And no government entity has a bridge building division. Bridges are built by private companies. All that governments do is disburse taxpayers' money for the construction. Few, if any of these construction companies survive on government bridge contracts. Most of them are involved in private sector contracts. Who pays for railroad bridges? Not the government.

My point was that government may assist in the growth of an industry, but that government, alone, creates nothing. When a need exists, whether that need is sparked by a government project or private sector desire, industry will fill that need. If there is not sufficient ongoing customer base, then that product stagnates or disappears. It is simple market dynamics. Look at how much was spent to send a manned space craft to the Moon. What happened? Where are the orbital space stations, the Lunar habitats, men walking on Mars? They do not exist because there was no pressing market for private investment in extra-atmospheric industry. What about government financing to open the new frontier. Where did that go? It is tied up in our tax money that was flushed down the rathole of social entitlement programs. And, unlike the benefits that were made possible by government needs such as military and the space program, civilization has garnered no tangible return from most of these programs. In fact, a good case can be made that these programs, which were supposed to help the citizens of this nation, harmed them. Taxes, in and of themselves, are not good. Taxes that benefit the society and the species Are good. The important function of government is to utilize our money wisely.

ruth| 12.4.08 @ 4:54PM

Jeremiah, spin it any way you want, but only a fool would look at our dismal test scores and not be alarmed. It doesn't matter if our University system is good, if our kids are not prepared at the primary levels. Come on, admit it, liberals have destroyed education for grades 1-12. My two daughters attended Catholic and private schools and are very well educated. My son is another matter. I literally had to sit on him to make him learn to read when he was 7 years old. The kid wouldn't go with the program, attended public schools and is paying the price every day. He's just as smart as his sisters, but I had to fight the culture every step of the way to keep him on the straight and narrow. That wasn't an easy task: He's 6'6", 265 lbs. Late bloomer, I guess.