Stinky and stinkier
Posted by aogFriday, 30 January 2009 at 19:01 TrackBack Ping URL

In InstapunditAnn AlthouseThe Daily Beast is the quote from an unnamed Republican about President Obama pushing the Porkalooza —

he didn’t convince anyone. After he left, we looked at each other, and said, “How can they stick him with this garbage?”

Why not? Much of the American Street will simply not vote for Republicans just “because”, regardless of actual policies or the effects of those policies. Beyond that, much of the GOP has become part of the old style Democratic Party ruling class which means there’s not much alternative. So why worry about whether the plan Obama is peddling makes any sense?

Comments — Formatting by Textile
David Cohen Friday, 30 January 2009 at 21:27

The more I see of the “stimulus,” the more disastrous it looks.

Annoying Old Guy Friday, 30 January 2009 at 21:59

Gosh, I hate to lose a chance to do some President Obama bashing, but really — isn’t this what I and so many other critics have said since before the election? That Obama has his problems but the real push into the death spiral was going to be the unleashed looting of a Congress strongly controlled by the Democratic Party? How much of the junk in the bill is actually from Obama, and how much for Democratic Party Congress Critters? About 5% to 95%? And to hear House Speaker Pelosi defending stimulus spending on contraceptives and STD prevention programs — not even Obama went there.

erp Saturday, 31 January 2009 at 08:44

AOG, it doesn’t matter. Obama is the face of the Democratic party. If he objects to things in the stimulus, it’s his obligation to the people to speak up against it.

Annoying Old Guy Saturday, 31 January 2009 at 09:51

I am not claiming Obama objects to any of it, just that he would not have put most of it in. Just like it was wrong to blame former President Bush for everything that happened at the federal level over the last 8 years, Obama may be politically responsible but we (hopefully) can look deeper than that.

I also wanted to note just how badly Obama got rolled on this. First Pelosi totally stiffs the Republicans, which is also an action that was strongly disrespective of Obama as he tried to get GOP votes. Then the GOP stiffed him. We are left with a President who is apparently great at appearing charming but not actually charming.

pj Saturday, 31 January 2009 at 09:51

Obama will rival George W. Bush in the infrequency of his vetoes. Nancy is his only friend, at least until the dog arrives.

David Cohen Saturday, 31 January 2009 at 10:54

AOG: I’m pretty sure that I said that, too. I think that Obama is without strong conviction, very thin-skinned, and came up through the Chicago machine as a go-along-to-get-along guy. I don’t blame him for much of what’s in the bill, but I don’t think he’s going to do anything about it. Realistically, what can he do? He’s not going to veto his own stimulus package and any threat to do so would be laughable. Our only hope is the Senate, which is to say, there’s no hope.

Harry Eagar Saturday, 31 January 2009 at 13:06

I predict the package will be 819/160ths as effective as Bush’s stimulus package. If Obama’s package should return even 1% of its outlay, it will be better than Bush’s.

David Cohen Saturday, 31 January 2009 at 14:19

What Bush stimulus package do you mean? The incredibly effective one he rammed through Congress in 2001-2002, or the nonexistent one passed in his last month in office?

Annoying Old Guy Saturday, 31 January 2009 at 14:31

Beyond that, I don’t understand the logic at all. Because Bush engineered a loser of a stimulus package, it’s a good thing that Obama is thrown even more money down the rat hole? I think the better claim would be that the current effort will be 819/160 times as stupid. Mr. Eagar reminds of the apocryphal wife who comes home with some extravagant purchase and says “see, I saved enough money on this purchase to cover the cost of my last one!”.

Harry Eagar Saturday, 31 January 2009 at 23:20

David, I mean the $600 per taxpayer gift back in May.

Guy, I haven’t said the Obama package is good (except that catching up on deferred maintenance is generally to be applauded).

There is no logic. Nobody knows what to do, although I would propose getting rid of the managers of all the banks, large industrial firms etc. Replace ‘em with anybody. The rumdums at the DT ward down at the county hospital couldn’t do any worse, although that would not be the very first place I would look for replacements.

Annoying Old Guy Sunday, 01 February 2009 at 15:25

I haven’t said the Obama package is good

Yet you go on the attack if we claim otherwise. Your actions belie your claim.

Nobody knows what to do

Then perhaps doing nothing is the best choice.

Harry Eagar Sunday, 01 February 2009 at 19:12

We know for certain the Republicans are wrong. They’ve proved that. They haven’t critiqued Obama to any extent, they just bleat ‘reduce taxes’ like those horrible announcers in airport bathrooms.

We know for certain that reducing taxes won’t help. Been there, done that, crashed the market.

Nothing may in the end be the best choice. But the voters did not elect Obama to do nothing.

Welcome to democracy.

Bret Sunday, 01 February 2009 at 21:40

Harry Eagar wrote: “We know for certain that reducing taxes won’t help.

We do? How? How and when did reducing taxes crash the market?

Annoying Old Guy Monday, 02 February 2009 at 08:59

Bret, Bret, Bret; reducing taxes is a Republican policy, therefore it is wrong and at the root of our economic troubles. Pay not attention to any obviously biased and partisan voices which claim otherwise. Pay no attention to the historical record of how many states and nations have revived their economies by tax cutting.

Annoying Old Guy Monday, 02 February 2009 at 09:34

More contrary thoughts on letting successful businesses keep more of their profits vs. having the government spend it.

Harry Eagar Monday, 02 February 2009 at 11:53

You mean Bank of America and AIG aren’t profitable producers?

We know lowering taxes doesn’t prevent crashes because the two whopper crashes were both preceded by great tax lowering frenzies.

Hey Skipper Monday, 02 February 2009 at 12:40

We know lowering taxes doesn’t prevent crashes because the two whopper crashes were both preceded by great tax lowering frenzies.

Now that is a championship caliber case of post hoc reasoning.

Annoying Old Guy Monday, 02 February 2009 at 14:01

Mr. Eagar;

Not if they needed government money to avoid bankruptcy. But you still miss the key point, which is IMHO a fundamental flaw in your world view. The key problem in socialism and central planning in general is who makes the decisions. If you don’t keep that in mind, as its seems for you, then naturall most criticisms of that economic model will fail to register. This is a classic case. A general tax cut keeps the decisions of who should get the money dispersed so that it is far less susceptible to graft and cronyism. You scoff at the combined intelligence of the market yet seem to have near worship of the far more limited intelligence of the sort of people who get elected to Congress or appointed to high rank in the executive branch. I find that odd but sadly not unusual.

I think you suffer from another cognitive error, which I see quite often in my line of work. That is the belief that you can isolate effects in complex systems. This is rarely, if ever, possible. One cannot point at an instance of a good result and deduce from it that the system as a whole could be modified to produce more of those results without any other effects. The functionality of complex systems does not decompose in such a linear fashion.

Skipper;

Note also that Mr. Eagar has strongly modified his counter-claim, from “tax cuts caused the crash” to “tax cuts don’t prevent crashes in every single case”. One might as well argue that safety regulations don’t prevent accidents for the same reason. We might further note that even this modified counter-claim still does not correspond to any actual claim.

Harry Eagar Tuesday, 03 February 2009 at 12:12

The claim is that tax cuts cannot be expected to do anything to revive, stimulate or restart an economy that crashed: 1) despite very substantial tax cutting already; 2) despite 0 tax liabilities among the sickest sectors already.

If you were to review all my comments ever, you would not find any support for a planned economy, although some for planning.

Raising taxes (or keeping them even) is not the same thing as a Five-Year Plan.

Sheesh.

Your faith in markets is charming but hard to reconcile with the results we have in front of us.

I do feel confident in planning to police crooks, and, though to a lesser extent, to forestall fools.

What I do not believe is that leaving Bernie Madoff free to pursue his personal economic interest magically leads to results that benefit everybody.

erp Tuesday, 03 February 2009 at 14:22

Five Year Plan?

Harry Eagar Tuesday, 03 February 2009 at 21:34

Or, if you prefer, Four Year Plan.

Annoying Old Guy Wednesday, 04 February 2009 at 08:27

Mr. Eagar;

That’s not how any of the rest of us read this. You are also committing the error that a stimulus must stimulate the worst off sectors of the economy, which is certainly not the view of any other pro-stimulus person of whom I have heard.

If you were to review all my comments ever, you would not find any support for a planned economy, although some for planning.

Mentally reviewing all your comments, it is hard for me to pick out any consistent principles at all, except “Republicans bad!” and “free markets evil!”, although it’s not clear what the latter means given your unique definition of “free market”. I do note, however, that you seem to strongly oppose any reduction in planning and frequently (if not always) support additional planning / centralization. That makes you a ratchet for central planning, even if that is not explicitly your policy. See The Road To Serfdom for more detail.

What I do not believe is that leaving Bernie Madoff free to pursue his personal economic interest magically leads to results that benefit everybody.

This is precisely what I was pointing out in my previous comment. You think we can get exactly this result without any other consequences. Further, you think we can do that with additional regulations (i.e., more centralization) rather than enforcement of existing ones. That seems hard to reconile with the results we see before us.

Your faith in markets is charming but hard to reconcile with the results we have in front of us.

But I see the results as a direct and inevitable consequence of the sort of regulatory growth you favor. Further, your use of the term “faith” shows that you have yet to actually grasp the argument the free market crew in this group is making. Our faith is in the corruption and decay of increasing regulation, and in the benefits of personal liberty. Free markets are simply a term used to describe an idealized version of that.

Annoying Old Guy Wednesday, 04 February 2009 at 09:08

Now it occurs to me to wonder, why would Mr. Eagar be upset about Bernie Madoff? All of his victims were rich and/or professionals. Isn’t it we free market types who (in Eagar’s view) care only about the rich and are blithely indifferent to the poor? Could it be that we are, as we claim, neutral in that regard? No, no, it must all be some coordinated public relations effort.

Harry Eagar Wednesday, 04 February 2009 at 11:58

I am upset about Madoff on two grounds:

1. His clients were as crooked as he was, and I have always resented the fact that using public resources to pursue and prosecute con artists of that kind inevitably also uses public resources to make other crooks whole. In the Madoff situation in particular, his so-called victims are likely to pass off 40% of their losses (via tax claims) to people like me who were too honest to deal with Madoffs.

2. Because Madoff was acting as a Smithian rational man and acting to maximize his income, a lot of people — and I don’t mean those who invested with him — are going to suffer, some very much, because of his miscalculation.

Your problem is that you misidentify who the victims were,

On principle, if a person employed by, say, Lehman Brothers can usefully plan an investment strategy — we’ll take that as a gedanken, since the evidence that it really happens is thin — then why on earth cannot a person employed by a public agency usefully plan something?

Your objection is that central planning attempts to plan too much. Agree. I have never advocated central planning. My position is that attempting to plan, eg, $55 trillion in credit default swaps also plans too much. Plus, the incentives to plan to screw other people is much, much greater in the private than the public sector.

I am amused this morning to learn that the Republicans have finally proposed some sort of economic stimulus that is not a tax cut: they want the government to mandate mortgage interest rates. ROTFL.

As for stimulated the ‘worst off sectors,’ all sectors are pretty badly off. I am dubious that the economy can be revived. I am far more concerned that the international financial collapse has not been definitely forestalled. The bank profit statements suggest that the situation will collapse any moment.

Annoying Old Guy Wednesday, 04 February 2009 at 16:47

In essence, then, you disagree with how reality works. I don’t think even the Democratic Party can overcome that. Every time any one acts, other people suffer negative consequences. You want results but don’t want to think about the policy needed to achieve them or any other consequences from that policy. For instance, in the Madoff case, what policy should be changed? No tax deductions if your loss is caused by your broker being a crook? Or if you’re a crook? One need only look at the Geithner nomination or TARP to see how well that would work in practice for the well connected.

On principle, if a person employed by, say, Lehman Brothers can usefully plan an investment strategy — we’ll take that as a gedanken, since the evidence that it really happens is thin — then why on earth cannot a person employed by a public agency usefully plan something?

Naturally it’s all good if you look only at the successful outcomes. In principle, if a person employed by, say, Lehman Brothers, can make massive multi-billion dollar mistakes, why on earth cannot a person emplyed by a public agency make the same sort of mistake, and make it in a way that forces everyone to particpate? If you object so strongly to the partial fallout from Madoff’s actions, why are you so blasé about the even more higher percent of the fallout we pay when a public agency does something like that? As I have noted previously in this very thread, you can’t seem to grasp the concept of free markets as damage limiters. So that, for instance, we only have to pay 40¢ on the dollar for Madoff instead of 100¢ on the dollar for Pelosi.

Harry Eagar Wednesday, 04 February 2009 at 20:13

But in principle, planning is planning. Should Eisenhower have invaded France without planning? He was a government employee. Bush invaded Iraq without planning, and we see how that worked out.

You have defined what you want as reality. It is not necessarily the case that planning could not have limited the depredations of Madoff. In fact, extension of Glass-Steagall, and a will to enforce it, probably would have done it.

Anyhow, if we take you at your word about risk/reward, then at least can we stop hearing about how the market punishes and rewards risktakers according to their acceptance of risk?

It doesn’t, but it does punish non-risktakers. Maybe we should try to fix that.

How much is Jack Welsh suffering for what he did to GE stockholders? Not much from what I read. Steve Case?

Annoying Old Guy Wednesday, 04 February 2009 at 21:07

But in principle, planning is planning

In principle, money is money — does that mean there’s no difference between US dollar and a Zimbabwean dollar? You’re trying to play with the words rather than address the substance.

Also, I never claimed “planning could not have limited the depredations of Madoff”. I claimed that

  1. The planning that would do so would have consequences beyond Madoff.
  2. That it unlikely that it would have because what Madoff did is already illegal.

How much more illegal would more planning make it? How would that additional planning prevent all of the regulators who were actually there and legally entitled to regulate from not doing their jobs? You note “a will to enforce it” but how would the existence of Glass-Steagall create that?

if we take you at your word about risk/reward

What word is that, precisely?

can we stop hearing about how the market punishes and rewards risk takers according to their acceptance of risk?

No. You have anecdotes, other people have data. As always with you, any incidents that go against the general trend discredit free markets, but no incident that goes against the general trend discredits regulation (e.g., Madoff).

it does punish non-risk takers. Maybe we should try to fix that.

And sometimes people who drive safely are hit by risky drivers. Maybe we should try to fix that.

Even more, a free market rewards those non-risk takers. If you “fix” the punishing, you’ll also fix the rewarding. If that’s what you truly want, then you could do what the Amish do, who are not the least bit punished by Madoff and his ilk. If you’re not willing to do that, then as noted before you want all the success without any failure. And that is disgreeing with how reality works.

Harry Eagar Thursday, 05 February 2009 at 10:48

Well, then why isn’t Jack Welch’s income about the same as a Wal-Mart greeters’? Where is his punishment for taking stupid risks that didn’t work out.

Glass-Steagall wouldn’t have affected Madoff because he wasn’t a bank. Extending G-S would have cost next to nothing and would have saved, oh, say, $25 trillion — if the overseers of the regulators had believed in regulation, which they explicitly didn’t.

I think planning for the contingency that crooks might go where the money is would not cause the economy to grind to a halt. (The Amish economic model is not quite as bad as you think. Lancaster County, Pa., has shown the highest farm receipts of any county through most of our history, and when I was in Iowa it’s farmers were showing a profit while Iowa’s farmers were losing their shirts and their farms.)

Annoying Old Guy Thursday, 05 February 2009 at 11:32

why isn’t Jack Welch’s income about the same as a Wal-Mart greeters’?

Because life is not perfect and statistical tendencies not absolute. You are also neglecting selection effects, in that risk takers who lose big don’t achieve the notoriety of someone like Jack Welch. All I would ask of you is that if you are going to require this level of perfection from free markets that you require the same perfection from your preferred society structures.

Also, could you tell me which one of these two statements is currently operative for you?

[1] It is not necessarily the case that planning could not have limited the depredations of Madoff. In fact, extension of Glass-Steagall, and a will to enforce it, probably would have done it.

[2] Glass-Steagall wouldn’t have affected Madoff because he wasn’t a bank.

This is precisely the kind of thing that makes deducing any principles from a thorough review of your comments so difficult for me.

I think planning for the contingency that crooks might go where the money is would not cause the economy to grind to a halt.

And where is the money? The stimulus package. Perhaps you would favor planning for the contingency that that is where the crooks might go? Private schemes are one thing but the real money is always rooted in government intervention. I am always impressed by your ability to come so close to this realization yet swerve away at the last moment.

Harry Eagar Thursday, 05 February 2009 at 15:13

I absolutely think the crooks will gather around the stimulus plan, as they have around TARP. Recall, I haven’t endorsed the stimulus plan, aside from saying it’s usually a good idea to catch up with deferred maintenance. (I didn’t say, but also think, you should raise taxes for that, not put it on the never-never.)

I said, recall, that G-S should have been extended, and if it had been, guys like Madoff probably would have been exposed earlier than they were. SEC didn’t do a good job, but by the time they even became responsible for him, he had been running his con for three decades.

Anyhow, the reward/penalty component of the risk theory is so far out of whack that we see this.

It shouldn’t be too hard to hold public activities to that standard.

Annoying Old Guy Thursday, 05 February 2009 at 15:36

I said, recall

I quoted you and provided links, so I think we can take the recall as given. Based on your further comment, it would be statement 2 that is now inoperative. Gotcha.

it shouldn’t be too hard to hold public activities to that standard.

Are you serious? You can read what has gone in to this “stimulus” bill and still type something like that?

Further, your link doesn’t even hold a candle to Franklin Raines and the bonuses he got ($90M) while greasing the skids to our current economic troubles. See, there’s the difference — in your story, a guy loots one company. In my story, a guy loots all of us and leaves an entire economy to suffer. In choosing between these, give me the first one every time. And it’s another example of how we can not / do not, in fact, hold public activities to that standard.

Bret Thursday, 05 February 2009 at 16:37

aog wrote: “In my story, a guy loots all of us and leaves an entire economy to suffer.

To me, the interesting thing is at the intersection of Harry’s and aog’s stories.

Let’s say, for a moment, that currently everyone in government is perfectly altruistic and everyone with even a hint a managerial capability in business is maliciously greedy (which is pretty much how I interpret Harry’s statements).

Then, if we expand government, there’s no choice but to take some of those greedy businessmen and give them access to the reigns of power in government. Instead of having altruistic people watching greedy businessmen, we’ll have greedy businessmen looting the government and taxpayers.

I can’t think of a better reason to government small. Make it too big and lucrative and it will attract the most greedy and power hungry people imaginable.

Annoying Old Guy Thursday, 05 February 2009 at 20:42

The best question about the “stimulus” bill yet —

Why do we need to spend $87,000,000 for an icebreaking ship when global warming is melting everything?

bad

Harry Eagar Friday, 06 February 2009 at 13:36

Guy, you keep ignoring ‘extending Glass-Steagall.’ Even an extended G-S wouldn’t have caught Madoff if antiregulating zealots had been supervising the SEC.

G-S worked perfectly on banks. The crooks, naturally, figured out ways to evade oversight, with results we see.

Bret, you ignore the possibility of filling up the government with the rumdums at the DT ward (a possibility I’ve already mooted). You’re right, I do think the average ethical level of business is ‘crook.’ Always have. So does everybody else. Have you ever read a commercial lease contract? Why does it take a 400-page document to hedge about the behaviors of a landlord and a man wanting to open an ice cream parlor?

My father was fired and blacklisted for blowing the whistle on his bosses (a Fortune 500 company you never heard of because when the smoke cleared, it was gone). Some, not all, of the crooks he called out ended up in Leavenworth. That was before you were born.

Bret Friday, 06 February 2009 at 15:02

Harry,

If you agree that businessmen are crooks and go where the money is to try and steal it, why would you want government to be bigger?

Harry Eagar Saturday, 07 February 2009 at 12:58

Where did I say I want government to be bigger? I want government — that is, the victims — to supervise business ethics, via, eg, a Glass-Stegall law. I am indifferent to the size of government, as such. Tell me the program and let’s evaluate that. If there are a lot of good programs, add them up and the size of government will be big. So what?

Think back about the relationship of business to government: selling rotten pork, embalmed beef or — lately — imaginary securities. Are you certain you are worrying about the real problem?

Annoying Old Guy Tuesday, 10 February 2009 at 09:12

Where did I say I want government to be bigger?

Can you point out any instances where you thought it should be smaller? You completely ignored my ratchet comment above. That’s the answer to this question. Let’s look at your solution to the lack of enforcement against Maddoff. Your solution is, as usual, more regulation, even though Maddoff’s activities were already illegal. As far as I can see, your claim is that you don’t in general want goverment bigger, just in every specific instance.

Your comment is basically what Obama said, yet here we have the “stimulus” bill. I think you’re just as sincere in your claim as he was in his. That’s beyond the error that asking if a government program is “good” is the wrong question, one must ask “is it better” than leaving the money with the citizens. Your very phrasing shows your underlying bias for bigger government.

Guy, you keep ignoring ‘extending Glass-Steagall.’

I find it interesting that when confronted with a clear communication problem, your solution as a professional journalist is to repeat your statement slower and louder rather than, say, providing additional context to clarify it.

Trackbacks
Tracked from Unpartisan.com Political News and Blog Aggregator: Obama hosts labor leaders; will undo Bush orders on 31 January 2009 at 02:44

President Obama is playing to one of the Democratic Party's most reliable constituencies organized l

Post a comment