Congeries of cross connected concepts
Our Mr. Eagar wants to make a bet on whether President Bush or President-Elect Obama will end up nationalizing more of the economy. I think that’s an interesting wager and am happy to take him up on it.
However, we must be careful about what we mean by nationalizing. Mr. Eagar starts with a figure of $4T for Bush but doesn’t specify where this number comes from. Should we include the financial industry bailout? In general no, but we should probably count any stock purchases made. But that’s only $700B and I can’t think of what else would account for the rest. Support for Fannie Mae and Freddie Mack? Possibly, but I would lay that at the feet of the Democratic Party, not Bush, as the massive expansion that led to such debt was a creation of the Congressional leaders of that party.
Another issue is whether we count taxes, which one can argue are a de facto nationalization. If taxes go up as a percentage of GDP, does that count as nationalization?
Finally, are we counting only one side of the ledger, or do we consider counter vailing efforts? For instance, health insurance accounts. Or free trade agreements. I certainly won’t defend Bush as a leader for free markets, but his record is overall mixed. He at least made a pass at privatizing Social Security, which would have been the biggest de-nationalization in American history.
| Harry Eagar Thursday, 20 November 2008 at 02:01 |  |
$4T appears to be, more or less, the amount of imaginary money (which, however, we taxpayers will be expected to make good at some future date) that is being transferred to financial entities. Some of this seems to be a straight purchase, and the rest loans that are (I hope) senior debt.
I am not sanguine about the solvency of most of the people accepting this money and expect the gummint to end up owning a lot of empty shells with Ritz pricetags on them.
I certainly expect taxes to go up as a %age of GNP, since at best GNP is going down, and even if that does not continue very long, taxes will have to be raised to pay off the Bush largesse. So it seems the correct calculation would be something on the order of %age of GDP+$4T.
I don’t understand how you bring in free trade agreements, unless you are arguing that they make the private economy expand. The evidence for that is, to put it mildly, meagre at the moment, what with China returning unloaded shiploads of US steel scrap already contracted for. Chinese notions of ‘free trade’ may be different from mine.
From my point of view taxes are more like rent than property, since you get services back. Unless your company would like to run a line item for, say, the Army.
While I am not a natural conspiracy theorist, in the darker hours of the night, the legacy Bush is leaving to Obama looks awfully similar to the Reaganite dream of bankrupting the government so that it could not expand. The vision of the United States as Argentina has never appealed to me, but it has always had a powerful fascination for the right wing.
| Annoying Old Guy Thursday, 20 November 2008 at 10:39 | |
Ah, but handing out loans to bad risks isn’t nationalization, it’s just fiduciary misconduct. You’ll not get much objection from me if you claim Bush as one of the biggest spenders to ever occupy the White House.
As for free trade agreements, those are things that free market types like and Socialists hate. Therefore they stand as evidence for Bush not being a complete Socialist.
In my dark hours of the night, I think of Obama meeting with his secret cabal of ex-KGB operatives and hard core Marxist revolutionaries plotting the downfall of the USA. But in reality, I expect that Obama just has vague notions of Socialism acquired at cocktail parties for revolutionary poser academics. I expect he’ll drift in to disaster much more from fecklessness than planning (not by himself, though — it’s the Democratic Party in Congress who’ll do the real pushing).
It’s funny, though, that you bring up Argentina, which was ruined by Socialists running on a cult of personality. Are you thinking that Obama is really a sock puppet for the VRWC? Or just a useful idiot for them?
| Harry Eagar Thursday, 20 November 2008 at 11:59 | |
‘Sfunny, I thought Argentina was ruined by military goons in funny hats.
Speaking of funny, since you guys don’t read the papers, I’ll just pass along the testimony yesterday of 3 big-time CEOs, under oath, about what determined the success or failure of their strategies. They said it was just luck.
I don’t believe I ever said Bush was a socialist. I said he was nationalizing companies.
Generally, as in the example of Mexico in the ‘20s seizing US-owned oil operations, when socialists nationalize a company, they try to get something for nothing. Bush’s nationalization policy gives something for nothing. It’s evil and crazy, but it isn’t socialism.
| Annoying Old Guy Thursday, 20 November 2008 at 12:31 | |
No, the military goons had their fun after and in response to the ruination of Argentina. That is what I thought you were getting at, that Obama was being set up by the VRWC to bring the country to Socialist ruin so agents of the VRWC could “rescue” it and thereby sieze power.
No, you didn’t say that, but your comment was in response to my concern of Socialism so I consider that the subject at hand. Further, based on your comments here, I thought you viewed Bush’s Big Bailout as spending something to get nothing (i.e., non-repayment of loans).
| Harry Eagar Thursday, 20 November 2008 at 16:57 | |
That’s exactly what I think Bush’s Big Bailout is. At Restating the Obvious, I described as the greatest transfer of wealth since the Battle of Gaugamela. The idea that the fisc would someday profit is, I suppose, on history’s scrapheap along with all Bush’s other fantasies, like a democratic and freedom-loving Iraq, a privatized retirement system in which we just hand over all our pelf to his Wall Street friends for a thank you — oh, wait, we’ve done that one, without even the thankyou.
I think you need to go back a little further in your Argentinian history. The Falange was a revolution against the goons in funny hats. The goons made a comeback, and then the Falange made a comeback. There was never a happy, prosperous, democratic Argentina.
But, no, I am old enough to remember the gleeful departures of the likes of Paul Craig Roberts when the first Reagan skein ran out, that they were handing over a permanently crippled US government. They thought that was a good idea.
| Annoying Old Guy Thursday, 20 November 2008 at 20:31 | |
There certainly was a happy and prosperous Argentina, which at one point has the fourth highest per capita GDP in the world and was the bread basket of South America. Its ruination was the increasing intervention of the government into markets, property, and trade. Its attempts at autarky were no small part of its decline, which is part of the relevance of Bush’s work on free trade.
| David Cohen Friday, 21 November 2008 at 13:16 | |
This would be a somewhat more interesting debate if it were more closely related to reality. I’d like to see some basis for Harry’s $4T estimate and, even more, I’d love to see you guys make a factual argument that the last eight years have been especially profligate. The federal government has spent about what it’s always spent, about .5% more of GDP then Clinton, about the same less than Carter and much less than Reagan. If you consider that we’ve fought a global war, including the invasion, occupation and then garrisoning of a nation halfway around the world, we’ve been positively miserly.
| Harry Eagar Friday, 21 November 2008 at 15:37 | |
I was lowballing. Some people think it’s a lot closer to $5T. Whatever, it hasn’t been transparent.
I am not sure that profligacy is the issue here. It’s spending over income. While I don’t give Clinton any credit for his surpluses, he did underspend income for a while. I don’t believe anybody since Eisenhower has done that, and Ike did it with some dodgy accounting.
It’s also what we got for what we spent. Plenty of room for argument there, but I cannot think of any new spending initiated by Bush that got anything worth having. I wish he had spent many, many tens of billions more on expanding the Army, instead of wrecking it.
| Harry Eagar Monday, 24 November 2008 at 18:02 | |
As usual, I am too optimistic about the imbecility of the Bush regime. I said $4T, thinking to be conservative, although I believed the correct figure was closer to $5T. According to latest reports, it is at least $7.7T.
Sigh.
Vice President-elect Joseph R. Biden Jr. turned to one of the most experienced Democratic staffers i
