Upping the Stimulus Dosage

[SOCALHUSKER]

Upping the Stimulus Dosage

By: Peter Schiff

 

Euro Pac - Upping the Stimulus Dosage

 

Insanity is often defined as repeating the same action while expecting a different result. Recent Congressional activity to push through this year’s second economic “stimulus” package certainly indicates that many of our political leaders may have special needs.

 

Responding to the $150 billion stimulus that was passed at the beginning of the year, I made the following observation in my February 15th commentary Upping the Inflation Dosage : “The failure of the stimulus plan to cure the economy will cause the Government, and the Wall Street brain trust, to conclude that it was simply too small. Their next solution will be to administer an even stronger dose.”

 

It’s interesting to recall that at the time, just 9 months ago, the $150 billion package caused much hand wringing, especially from Republicans still clinging to notions of Federal restraint. This was before an avalanche of more than $2 trillion in new spending initiatives….before Bear Stearns, wide open discount windows, AIG, Fannie/Freddie, Federal Mortgage Auctions, Detroit loan guarantees, and preferred shares in the banks. In retrospect, the $150 billion stimulus seems quaint. It is not surprising that the latest package is expected to be twice as large. When this one fizzles, look for “Stimulus III” to be even larger.

 

The problem with our Government’s version of economic stimuli is that it encourages the very activity that brought our economy to the brink of financial ruin in the first place. Quite plainly, the goal of all these plans is to give consumers more money to spend. However, excess consumer spending is part of the problem, not part of the solution. After a decade long spending orgy, market forces are finally trying to restrict consumer spending and dampen credit. But the stimulus looks to provide a new source of funds after savings, income, and credit have been exhausted. Our imbalanced economy is in desperate need of retrenchment, but stimulus plans will effectively hold the firemen at bay while throwing gasoline on the flames.

 

Politicians may say that the plan is not all about consumer spending, but is designed to fund investment. But investments conceived and executed by governments, and guided by political considerations rather than profit, often yield poor returns. The clumsy hand of the state is no substitute for the invisible hand of the free market. In addition, public sector “investment” often soaks up much of the capital which otherwise would have been available for more efficient private sector uses.

 

If the government were sitting on a pile of foreign reserves, then at least a stimulus plan could make some economic sense. But of course, that’s not where the money comes from. To finance their largesse, the government either borrows more money from abroad, or gets it from the Fed, which simply creates it out of thin air. Either way, we undermine our economy with additional debt or inflation.

 

Unfortunately, the one stimulus we do need will not be supplied. To fix our current economic mess we need to diminish the activity that undermined our economy and encourage the behavior that will restore balance. Instead of encouraging Americans to go deeper into debt to buy more foreign products that we cannot afford, Americans should be encouraged to save their money, and produce more goods for export.

 

Fortunately, no government policy is needed to achieve this. Market forces would produce such incentives on their own. Higher interest rates and tighter credit world force people to borrow less, while simultaneously rewarding those who saved. A falling dollar that would eventually result from a recession would diminish our capacity to import while helping to restore our global competitiveness (provided it was accompanied by lower regulations and taxes) in manufacturing. Of course a lower dollar is not a good thing, but unfortunately it is the necessary consequence of our past profligacy.

 

Market based solutions would not be painless, which is precisely why our leaders resist them. However, as the saying goes, “no pain no gain”. If we ever expect to make any legitimate progress, a higher pain threshold must be accepted.

 

If our elected officials really were concerned about easing the burden on consumers, they would be looking for ways to reduce government spending. If government was less expensive, taxes could be lowered across the board. The only way for American citizens to spend more is for their government to spend less. Unfortunately, our government and the leading private economists believe that everyone can spend more without any serious consequences on the downside. It’s a comforting idea, but it’s a lie. The truth may not be pretty, but it’s the only path towards a sustainable recovery.

[papersun87]

Epic triple post.

[AR Husker Fan]

The one thing that President-elect Obama is advocating that makes a lot of sense is to have the government invest in infrastructure projects. Those are projects that simply won't be done if the federal government doesn't undertake them, and for which there is a crying need. Examples are repair/replacemet of the Interstate system, upgrades to water systems and the electrical grid, etc.

 

Invest in those, and you immediately give an infusion to the economy at the most basic level - job creation and disposable income. It has the double effect of putting money into the economy that would generate production in all sectors while also reducing expenditures for federal programs for aid to those who lost jobs.

[bennychico11]

I thought the first idea of the stimulus plan was stupid and not going to work...but I still spent the money. Bought myself a nice new tempurpedic mattress (I highly recommend them, btw).

 

And I'll think it's stupid once again if they decide to just hand out more money to "Joe six pack" expecting him to spend it responsibly and fix this economy with it. We're the ones that got ourselves in this mess to begin with!

 

 

Of course, I really have been wanting a new 50" TV....hmmmm, dilemma

[SOCALHUSKER]

The one thing that President-elect Obama is advocating that makes a lot of sense is to have the government invest in infrastructure projects. Those are projects that simply won't be done if the federal government doesn't undertake them, and for which there is a crying need. Examples are repair/replacemet of the Interstate system, upgrades to water systems and the electrical grid, etc.

 

Invest in those, and you immediately give an infusion to the economy at the most basic level - job creation and disposable income. It has the double effect of putting money into the economy that would generate production in all sectors while also reducing expenditures for federal programs for aid to those who lost jobs.

 

Great, another New Deal!!

 

Who says that infrastructure jobs couldn't be done if the federal government didn't undertake them? Of course they would!! We don't live in the 17th Century. There are plenty of companies that could undertake any job the government does, get it done faster and for less money. One of the biggest fallacies about using government to provide unemployment is that they create jobs from nothing and that somehow it stimulates the economy. The truth is government intervention is flat out unnecessary and always causes more harm then good.

 

The problem with politicians is that they only see the immediate effects of the policies and not the big picture or the long term effects. They only see the jobs created and not the jobs that weren't created. They only see those who were helped by the policies and not those who were hurt. The government doesn't pay the workers with nothing, they use taxpayer money to cover expenses. For every dollar spent creating jobs for infrastructure that's a dollar taken away from the taxpayers and whatever he or she would've spent the money on.

 

What about all the jobs that weren't created because the taxpayer wasn't able to choose how he spent the money? Because we spent the money on bridges and roads, we have fewer auto jobs, fewer TV technicians, fewer lanscapers, fewer computer technicians, fewer clothing workers, and fewer farmers. How is that helping the economy?

 

Many of these ideas were taken from Henry Hazlitt's book "Economics in One Lesson" if you haven't read it, give it a try!!

[strigori]

The one thing that President-elect Obama is advocating that makes a lot of sense is to have the government invest in infrastructure projects. Those are projects that simply won't be done if the federal government doesn't undertake them, and for which there is a crying need. Examples are repair/replacemet of the Interstate system, upgrades to water systems and the electrical grid, etc.

 

Invest in those, and you immediately give an infusion to the economy at the most basic level - job creation and disposable income. It has the double effect of putting money into the economy that would generate production in all sectors while also reducing expenditures for federal programs for aid to those who lost jobs.

 

Great, another New Deal!!

 

Who says that infrastructure jobs couldn't be done if the federal government didn't undertake them? Of course they would!! We don't live in the 17th Century. There are plenty of companies that could undertake any job the government does, get it done faster and for less money. One of the biggest fallacies about using government to provide unemployment is that they create jobs from nothing and that somehow it stimulates the economy. The truth is government intervention is flat out unnecessary and always causes more harm then good.

 

The problem with politicians is that they only see the immediate effects of the policies and not the big picture or the long term effects. They only see the jobs created and not the jobs that weren't created. They only see those who were helped by the policies and not those who were hurt. The government doesn't pay the workers with nothing, they use taxpayer money to cover expenses. For every dollar spent creating jobs for infrastructure that's a dollar taken away from the taxpayers and whatever he or she would've spent the money on.

 

What about all the jobs that weren't created because the taxpayer wasn't able to choose how he spent the money? Because we spent the money on bridges and roads, we have fewer auto jobs, fewer TV technicians, fewer lanscapers, fewer computer technicians, fewer clothing workers, and fewer farmers. How is that helping the economy?

 

Many of these ideas were taken from Henry Hazlitt's book "Economics in One Lesson" if you haven't read it, give it a try!!

Calm down. You do not understand what AR said, or what infrastructure is at all. The infrastructure is something that companies not only do not own, but should never, under any circumstances own. Things like the electrical grid, the interstate systems. And at this day in age, infrastructure for internet. Most of these systems have not had real upgrades in more than 20 years.And the gov doesnt pay people directly for anything like this, they hire contractors.

 

You seem to think that businesses are the answer to everything, and deregulation is always a good thing. If your name does mean you are from CA, how did you like those rolling black outs, and high electrical costs? Direct effect of deregulation. The companies who own the systems like the high costs brought on by not having enough supply that the market demands, and will not build new power plants. In NE where the utilities are publicly owned, we dont have those problems. The idea that a total free market is the ideal, is exactly like the idea that communism works. They are the polar opposites, and both work on paper, and neither work in the real world, once you introduce greed and corruption into the mix. Look at the current economic mess. Yet another case of deregulation letting greed run amok. The trick is to find the balance.

[SOCALHUSKER]

The one thing that President-elect Obama is advocating that makes a lot of sense is to have the government invest in infrastructure projects. Those are projects that simply won't be done if the federal government doesn't undertake them, and for which there is a crying need. Examples are repair/replacemet of the Interstate system, upgrades to water systems and the electrical grid, etc.

 

Invest in those, and you immediately give an infusion to the economy at the most basic level - job creation and disposable income. It has the double effect of putting money into the economy that would generate production in all sectors while also reducing expenditures for federal programs for aid to those who lost jobs.

 

Great, another New Deal!!

 

Who says that infrastructure jobs couldn't be done if the federal government didn't undertake them? Of course they would!! We don't live in the 17th Century. There are plenty of companies that could undertake any job the government does, get it done faster and for less money. One of the biggest fallacies about using government to provide unemployment is that they create jobs from nothing and that somehow it stimulates the economy. The truth is government intervention is flat out unnecessary and always causes more harm then good.

 

The problem with politicians is that they only see the immediate effects of the policies and not the big picture or the long term effects. They only see the jobs created and not the jobs that weren't created. They only see those who were helped by the policies and not those who were hurt. The government doesn't pay the workers with nothing, they use taxpayer money to cover expenses. For every dollar spent creating jobs for infrastructure that's a dollar taken away from the taxpayers and whatever he or she would've spent the money on.

 

What about all the jobs that weren't created because the taxpayer wasn't able to choose how he spent the money? Because we spent the money on bridges and roads, we have fewer auto jobs, fewer TV technicians, fewer lanscapers, fewer computer technicians, fewer clothing workers, and fewer farmers. How is that helping the economy?

 

Many of these ideas were taken from Henry Hazlitt's book "Economics in One Lesson" if you haven't read it, give it a try!!

Calm down. You do not understand what AR said, or what infrastructure is at all. The infrastructure is something that companies not only do not own, but should never, under any circumstances own. Things like the electrical grid, the interstate systems. And at this day in age, infrastructure for internet. Most of these systems have not had real upgrades in more than 20 years.And the gov doesnt pay people directly for anything like this, they hire contractors.

 

You seem to think that businesses are the answer to everything, and deregulation is always a good thing. If your name does mean you are from CA, how did you like those rolling black outs, and high electrical costs? Direct effect of deregulation. The companies who own the systems like the high costs brought on by not having enough supply that the market demands, and will not build new power plants. In NE where the utilities are publicly owned, we dont have those problems. The idea that a total free market is the ideal, is exactly like the idea that communism works. They are the polar opposites, and both work on paper, and neither work in the real world, once you introduce greed and corruption into the mix. Look at the current economic mess. Yet another case of deregulation letting greed run amok. The trick is to find the balance.

 

First of all nobody said anything about owning infrastructure. I was merely making a point alluding to one aspect of our infrastructure, the interstate system. I'm well aware of the various systems that entail our countries infrastructure and understand the concerns about a private company owning any of it. The point was that government is the market's most inefficient actor, only looking at the short term effects of policies, that which will get them reelected, and never the long term. The more power bestowed upon them the less efficient society is. Just look at any socialist or fascist regime in history, they all have failed, history doesn't lie. As for the current mess, where do you get deregulation as the root of the problem? The problem is we spend too much money, consume too much, don't produce enough, don't save anything, prop up and fix prices, inflate our currency, reward bad busines practices and regulate too much. All faults of the government, not deregulation. As for the balance we are looking for, that is a free market. When supply and demand are allowed to operate freely without controls or intervention, prosperity will be at its highest, and individual liberties will be restored; then we will find balance and truly be free.

 

You seem to be knowledgeable about the energy industry so explain to me this. Yes, California has many problems with energy costs and services (you're right I do have firsthand knowledge), so what leads you to believe it all has to do with the greed of private companies and not the government? In fact, many of the problems can be directly attributed to the government. From subsidizing certain companies and mandating taxes to legislation and regulations that make competition and new construction nearly impossible, the government's intrusion into California's so-called private energy industry is borderline criminal. Name me one energy provider the government is not in bed with? I believe we, as citizens, should each have a voice to decide who we give our money, service or support to. This alone should be the deciding factor in what fails and what succeeds, not the government. The system we have running in CA obviously isn't working and most of the blame lies squarely with the government. Also, you trying to compare the energy problems here in CA with those in Nebraska have much more to do with the population differences and sheer land mass than it does due to any pitfalls with industry greed.

 

You also brought up a point, I think I have touched on before in another thread, when you mentioned free markets and socialism only work on paper. Once again I say look at history and see for yourself. Yes, Communism has been proven not to work but the free market never has. Show me a situation where the free market has failed and I will show you a situation that highlights government intervention in the free market as the root of the problem. You mention corruption and greed as downfalls, but in a free market the liberties and freedom granted to each individual enables them a choice to abstain from and voice that which a person is not pleased with or doesn't approve of. And like I said before, this alone makes each individual responsible for who or what succeeds and who or what fails.

 

As sad as it is to say, it doesn't appear as if we, as a country, are willing to take on the responsiblity that come with personal liberty and the free market. We have become so dependent on the government that we forget that our country was founded to escape the tyranny and oppression of government. I just hope that people realize this before it is too late and we are pledging allegiance to King Whoever!!

[rawhide]

Peter Kiewit comes to mind for huge construction projects on an international level. And used to be based in Omaha me thinks! Maybe the company still is, don't know.

 

 

GBR

 

 

ps my wife handles all the economic questions(cpa), nurses worry more about the trickle down effect. I can laugh I'm a nurse.

[strigori]

The one thing that President-elect Obama is advocating that makes a lot of sense is to have the government invest in infrastructure projects. Those are projects that simply won't be done if the federal government doesn't undertake them, and for which there is a crying need. Examples are repair/replacemet of the Interstate system, upgrades to water systems and the electrical grid, etc.

 

Invest in those, and you immediately give an infusion to the economy at the most basic level - job creation and disposable income. It has the double effect of putting money into the economy that would generate production in all sectors while also reducing expenditures for federal programs for aid to those who lost jobs.

 

Great, another New Deal!!

 

Who says that infrastructure jobs couldn't be done if the federal government didn't undertake them? Of course they would!! We don't live in the 17th Century. There are plenty of companies that could undertake any job the government does, get it done faster and for less money. One of the biggest fallacies about using government to provide unemployment is that they create jobs from nothing and that somehow it stimulates the economy. The truth is government intervention is flat out unnecessary and always causes more harm then good.

 

The problem with politicians is that they only see the immediate effects of the policies and not the big picture or the long term effects. They only see the jobs created and not the jobs that weren't created. They only see those who were helped by the policies and not those who were hurt. The government doesn't pay the workers with nothing, they use taxpayer money to cover expenses. For every dollar spent creating jobs for infrastructure that's a dollar taken away from the taxpayers and whatever he or she would've spent the money on.

 

What about all the jobs that weren't created because the taxpayer wasn't able to choose how he spent the money? Because we spent the money on bridges and roads, we have fewer auto jobs, fewer TV technicians, fewer lanscapers, fewer computer technicians, fewer clothing workers, and fewer farmers. How is that helping the economy?

 

Many of these ideas were taken from Henry Hazlitt's book "Economics in One Lesson" if you haven't read it, give it a try!!

Calm down. You do not understand what AR said, or what infrastructure is at all. The infrastructure is something that companies not only do not own, but should never, under any circumstances own. Things like the electrical grid, the interstate systems. And at this day in age, infrastructure for internet. Most of these systems have not had real upgrades in more than 20 years.And the gov doesnt pay people directly for anything like this, they hire contractors.

 

You seem to think that businesses are the answer to everything, and deregulation is always a good thing. If your name does mean you are from CA, how did you like those rolling black outs, and high electrical costs? Direct effect of deregulation. The companies who own the systems like the high costs brought on by not having enough supply that the market demands, and will not build new power plants. In NE where the utilities are publicly owned, we dont have those problems. The idea that a total free market is the ideal, is exactly like the idea that communism works. They are the polar opposites, and both work on paper, and neither work in the real world, once you introduce greed and corruption into the mix. Look at the current economic mess. Yet another case of deregulation letting greed run amok. The trick is to find the balance.

 

First of all nobody said anything about owning infrastructure. I was merely making a point alluding to one aspect of our infrastructure, the interstate system. I'm well aware of the various systems that entail our countries infrastructure and understand the concerns about a private company owning any of it. The point was that government is the market's most inefficient actor, only looking at the short term effects of policies, that which will get them reelected, and never the long term. The more power bestowed upon them the less efficient society is. Just look at any socialist or fascist regime in history, they all have failed, history doesn't lie. As for the current mess, where do you get deregulation as the root of the problem? The problem is we spend too much money, consume too much, don't produce enough, don't save anything, prop up and fix prices, inflate our currency, reward bad busines practices and regulate too much. All faults of the government, not deregulation. As for the balance we are looking for, that is a free market. When supply and demand are allowed to operate freely without controls or intervention, prosperity will be at its highest, and individual liberties will be restored; then we will find balance and truly be free.

 

You seem to be knowledgeable about the energy industry so explain to me this. Yes, California has many problems with energy costs and services (you're right I do have firsthand knowledge), so what leads you to believe it all has to do with the greed of private companies and not the government? In fact, many of the problems can be directly attributed to the government. From subsidizing certain companies and mandating taxes to legislation and regulations that make competition and new construction nearly impossible, the government's intrusion into California's so-called private energy industry is borderline criminal. Name me one energy provider the government is not in bed with? I believe we, as citizens, should each have a voice to decide who we give our money, service or support to. This alone should be the deciding factor in what fails and what succeeds, not the government. The system we have running in CA obviously isn't working and most of the blame lies squarely with the government. Also, you trying to compare the energy problems here in CA with those in Nebraska have much more to do with the population differences and sheer land mass than it does due to any pitfalls with industry greed.

 

You also brought up a point, I think I have touched on before in another thread, when you mentioned free markets and socialism only work on paper. Once again I say look at history and see for yourself. Yes, Communism has been proven not to work but the free market never has. Show me a situation where the free market has failed and I will show you a situation that highlights government intervention in the free market as the root of the problem. You mention corruption and greed as downfalls, but in a free market the liberties and freedom granted to each individual enables them a choice to abstain from and voice that which a person is not pleased with or doesn't approve of. And like I said before, this alone makes each individual responsible for who or what succeeds and who or what fails.

 

As sad as it is to say, it doesn't appear as if we, as a country, are willing to take on the responsiblity that come with personal liberty and the free market. We have become so dependent on the government that we forget that our country was founded to escape the tyranny and oppression of government. I just hope that people realize this before it is too late and we are pledging allegiance to King Whoever!!

You think businesses think long term? HA! They think by period or quarter, which ever one is the way the bonus structure works for that company. Make as much money as fast as possible, then the execs jump out with the golden parachutes. The current mess is a direct result of the loosening of rules for lending and next to no government oversight of the industry. Without anyone occasionally looking over the lenders' shoulders greed ran rampant and things imploded.

 

As far as free market goes, are you familiar with the Robber Barons? They are the perfect example of what happens when you have no government oversight or rules. Monopolies rule, and innovation comes to an end, as a very few use money and power to crush any competition by any means. Or lets take a look at the minimum wage. When it went more than a decade without an increase, did the free market keep wages up with the cost of living? Nope. Wages were stagnate, unless you were an exec, then you say your wages go up by staggering amounts.

 

CA power companies. What would make them want to build new power plants? By having more supply, and more overhead with having more property and equipment to maintain, their profits go down. They couldn't care less what the consequences of their greed is. Brown outs? Rolling Blackouts? Just raises the prices of electricity and puts more money in execs and stockholders pockets.

 

The central problem with the personal liberty and free market is it does not account for greed or the human element in general. Sure, in a perfect world the free market would work perfectly without any government involvement. But this is not a perfect world. How about Enron? Tyco? AIG? Make as much money as fast as possible, often pillaging the company in the process. What happens to anyone else is not important to them. An individual making something rise or fall? I again refer you to the Robber Barons. Without any government, those with the money make the rules. In any company does a worker have any say in how the operation runs? Not a chance, the execs do. In a world where there is no government to oversee things, you eventually get to more of a world of corperate slavery. Before the government instituted the 40 hour work week, you could expect to work 6 or 7 days a week for more than 10 hours a day. Sure the theory would say "then go find a different job", but if ALL jobs worked like that, what option would you have? Or if the company would penalize you financially for quitting, or blackball you in in an industry so you could never work for a competing business. Such was the reality under Robber Barons. Yeah, a total free market world is real appealing.

[SOCALHUSKER]

The one thing that President-elect Obama is advocating that makes a lot of sense is to have the government invest in infrastructure projects. Those are projects that simply won't be done if the federal government doesn't undertake them, and for which there is a crying need. Examples are repair/replacemet of the Interstate system, upgrades to water systems and the electrical grid, etc.

 

Invest in those, and you immediately give an infusion to the economy at the most basic level - job creation and disposable income. It has the double effect of putting money into the economy that would generate production in all sectors while also reducing expenditures for federal programs for aid to those who lost jobs.

 

Great, another New Deal!!

 

Who says that infrastructure jobs couldn't be done if the federal government didn't undertake them? Of course they would!! We don't live in the 17th Century. There are plenty of companies that could undertake any job the government does, get it done faster and for less money. One of the biggest fallacies about using government to provide unemployment is that they create jobs from nothing and that somehow it stimulates the economy. The truth is government intervention is flat out unnecessary and always causes more harm then good.

 

The problem with politicians is that they only see the immediate effects of the policies and not the big picture or the long term effects. They only see the jobs created and not the jobs that weren't created. They only see those who were helped by the policies and not those who were hurt. The government doesn't pay the workers with nothing, they use taxpayer money to cover expenses. For every dollar spent creating jobs for infrastructure that's a dollar taken away from the taxpayers and whatever he or she would've spent the money on.

 

What about all the jobs that weren't created because the taxpayer wasn't able to choose how he spent the money? Because we spent the money on bridges and roads, we have fewer auto jobs, fewer TV technicians, fewer lanscapers, fewer computer technicians, fewer clothing workers, and fewer farmers. How is that helping the economy?

 

Many of these ideas were taken from Henry Hazlitt's book "Economics in One Lesson" if you haven't read it, give it a try!!

Calm down. You do not understand what AR said, or what infrastructure is at all. The infrastructure is something that companies not only do not own, but should never, under any circumstances own. Things like the electrical grid, the interstate systems. And at this day in age, infrastructure for internet. Most of these systems have not had real upgrades in more than 20 years.And the gov doesnt pay people directly for anything like this, they hire contractors.

 

You seem to think that businesses are the answer to everything, and deregulation is always a good thing. If your name does mean you are from CA, how did you like those rolling black outs, and high electrical costs? Direct effect of deregulation. The companies who own the systems like the high costs brought on by not having enough supply that the market demands, and will not build new power plants. In NE where the utilities are publicly owned, we dont have those problems. The idea that a total free market is the ideal, is exactly like the idea that communism works. They are the polar opposites, and both work on paper, and neither work in the real world, once you introduce greed and corruption into the mix. Look at the current economic mess. Yet another case of deregulation letting greed run amok. The trick is to find the balance.

 

First of all nobody said anything about owning infrastructure. I was merely making a point alluding to one aspect of our infrastructure, the interstate system. I'm well aware of the various systems that entail our countries infrastructure and understand the concerns about a private company owning any of it. The point was that government is the market's most inefficient actor, only looking at the short term effects of policies, that which will get them reelected, and never the long term. The more power bestowed upon them the less efficient society is. Just look at any socialist or fascist regime in history, they all have failed, history doesn't lie. As for the current mess, where do you get deregulation as the root of the problem? The problem is we spend too much money, consume too much, don't produce enough, don't save anything, prop up and fix prices, inflate our currency, reward bad business practices and regulate too much. All faults of the government, not deregulation. As for the balance we are looking for, that is a free market. When supply and demand are allowed to operate freely without controls or intervention, prosperity will be at its highest, and individual liberties will be restored; then we will find balance and truly be free.

 

You seem to be knowledgeable about the energy industry so explain to me this. Yes, California has many problems with energy costs and services (you're right I do have firsthand knowledge), so what leads you to believe it all has to do with the greed of private companies and not the government? In fact, many of the problems can be directly attributed to the government. From subsidizing certain companies and mandating taxes to legislation and regulations that make competition and new construction nearly impossible, the government's intrusion into California's so-called private energy industry is borderline criminal. Name me one energy provider the government is not in bed with? I believe we, as citizens, should each have a voice to decide who we give our money, service or support to. This alone should be the deciding factor in what fails and what succeeds, not the government. The system we have running in CA obviously isn't working and most of the blame lies squarely with the government. Also, you trying to compare the energy problems here in CA with those in Nebraska have much more to do with the population differences and sheer land mass than it does due to any pitfalls with industry greed.

 

You also brought up a point, I think I have touched on before in another thread, when you mentioned free markets and socialism only work on paper. Once again I say look at history and see for yourself. Yes, Communism has been proven not to work but the free market never has. Show me a situation where the free market has failed and I will show you a situation that highlights government intervention in the free market as the root of the problem. You mention corruption and greed as downfalls, but in a free market the liberties and freedom granted to each individual enables them a choice to abstain from and voice that which a person is not pleased with or doesn't approve of. And like I said before, this alone makes each individual responsible for who or what succeeds and who or what fails.

 

As sad as it is to say, it doesn't appear as if we, as a country, are willing to take on the responsibility that come with personal liberty and the free market. We have become so dependent on the government that we forget that our country was founded to escape the tyranny and oppression of government. I just hope that people realize this before it is too late and we are pledging allegiance to King Whoever!!

You think businesses think long term? HA! They think by period or quarter, which ever one is the way the bonus structure works for that company. Make as much money as fast as possible, then the execs jump out with the golden parachutes. The current mess is a direct result of the loosening of rules for lending and next to no government oversight of the industry. Without anyone occasionally looking over the lenders' shoulders greed ran rampant and things imploded.

 

As far as free market goes, are you familiar with the Robber Barons? They are the perfect example of what happens when you have no government oversight or rules. Monopolies rule, and innovation comes to an end, as a very few use money and power to crush any competition by any means. Or lets take a look at the minimum wage. When it went more than a decade without an increase, did the free market keep wages up with the cost of living? Nope. Wages were stagnate, unless you were an exec, then you say your wages go up by staggering amounts.

 

CA power companies. What would make them want to build new power plants? By having more supply, and more overhead with having more property and equipment to maintain, their profits go down. They couldn't care less what the consequences of their greed is. Brown outs? Rolling Blackouts? Just raises the prices of electricity and puts more money in execs and stockholders pockets.

 

The central problem with the personal liberty and free market is it does not account for greed or the human element in general. Sure, in a perfect world the free market would work perfectly without any government involvement. But this is not a perfect world. How about Enron? Tyco? AIG? Make as much money as fast as possible, often pillaging the company in the process. What happens to anyone else is not important to them. An individual making something rise or fall? I again refer you to the Robber Barons. Without any government, those with the money make the rules. In any company does a worker have any say in how the operation runs? Not a chance, the execs do. In a world where there is no government to oversee things, you eventually get to more of a world of corperate slavery. Before the government instituted the 40 hour work week, you could expect to work 6 or 7 days a week for more than 10 hours a day. Sure the theory would say "then go find a different job", but if ALL jobs worked like that, what option would you have? Or if the company would penalize you financially for quitting, or blackball you in in an industry so you could never work for a competing business. Such was the reality under Robber Barons. Yeah, a total free market world is real appealing.

 

Who gave you that info, Paulson himself? Any business that plans on being successful had better think long term!! I'd like you to show me a successful company that is only looking at the short term and I guarantee you they won't be around for much longer? (That or they'll grow so quickly the taxpayers will be forced to bail them out.) Sure, you'll have a few businesses that will only be out for the quick buck but many times those types of practices and schemes involve criminal acts. When this happens, those that commit the crimes need to be held accountable.

 

You seem to think that the free market is without rules and regulations. The rules are the Rule of Law, in which one cannot commit murder, fraud, rape or trample another human's right to life, liberty or property. You mention the Robber Barons and yes, I won't argue that they displayed unethical business practices (much with the help of the government), but I also don't think Vanderbilt, Rockefeller or Gould ever killed anybody. How many people has the government killed to protect and influence its business interests? If you study the so-called entrepreneurs of the 19th Century, instead of letting the markets dictate their success the Robber Barons used the government to subsidize and influence regulation. Attached is an excellent article about the Robber Barons you may find interesting. It discusses the Robber Barons and the difference between market entrepreneurs and political entrepreneurs. Taken from the Mises Institution, an economics school based on the principles of Austrian Economics. The Truth About the "Robber Barons"

 

As far as the regulation in the market goes, that is left up to each individual. We each have a choice of: who we work for, who we buy from, who we boycott, and who we vouch for. That's the beauty of the free market; individuals have the personal liberty to decide for themselves what they like and dislike. So yes, when you mention that if someone is not happy with his or her job, why not find a new one? Hell, start your own business for that matter!! You think that by adding more regulation, you are going to stop criminals bent on greed that are already willing to break the law from breaking it again? What planet are you from? Maybe you feel the same about gun control and look at how that's worked out. Instead of punishing those you actually commit criminal acts with guns, they remove guns from the hands of honest citizens and before you know it the criminals are the only ones armed. Smart thinking!! How about we hold those who commit criminal acts accountable for their actions instead of punishing those who follow the already established Rule of Law.

 

By the government stepping in and creating more regulation they only harm those who follow the rules to begin with. You bring up Tyco, Enron, and AIG as examples of companies that did or attempted to defraud the public and look at the mess the government created. In these cases, you would know that instead of merely punishing those responsible for the criminal acts they created the Sarbanes-Oxley Act, and in the case of AIG bailed them out and are continuing to do so!! Awesome, instead of punishing the criminals that break the rules we force every publicly traded company to submit to government oversight and regulation and reward the crooks. Do you not see the problems that arise from that? First of all, companies are forced to spend money on something they normally wouldn't, which in turn forces them to A.) Raise the prices of their products B.) Ask the taxpayers for assistance C.) Cut other programs and jobs that may have been created, or D.) Go out of Business. So now, instead of fixing the problem of fraud in corporations, we subsidize the businesses that are able to afford the regulations, crush all the businesses that can't afford it, and make competition and the creation of new business nearly impossible. Please show me how this type of regulation is good for anyone except for those who directly receive and benefit from the government's help?

 

You keep saying that the current mess is a result of deregulation but that isn't the case at all. Our economic crisis has much more to do with the reckless spending and over consumption of our country than it has to do with any type of deregulation. Until we see that, we are never going to be prosperous. We can't continue to spend without saving and consume without producing, that's not the way prosperity works. Yes, greed has played a role in our current crisis but it has been the greed of the government and not those who wish to create a successful business. Take a look at who's at the center of the bailouts; you have Fannie Mae, Freddie Mac, and AIG. All businesses tied directly to the federal government. Coincidence, I think not. Our government is so bent on propping up a failed system that they are blind from the truth and can't see through their own mess.

 

The government would like you to believe, which in you they obviously have a fan, that our problems are result of the free market, corporate greed, and deregulation but in reality it is the regulation of the free markets and the government's own greed that has caused the mess. You can speak all you want on the robber barons of the past, the greed of corporations, and the so-called failures of the free market but the truth is, in each and every one of those situations it has been the involvement of government and the regulation of the free market that created the ensuing problems. Maybe we need to start holding those who break the current laws accountable before we start creating new regulations that only hinder progress and prosperity and prove no hindrance to those who don't abide by any laws to begin with.

[SOCALHUSKER]

I am thoroughly enjoying this thread, thanks!!

[tattooedhusker]

I'm gonna thoroughly enjoy a 2nd stimulus check if it happens

[The Ghost Of Henry David Thoreau]

A few general comments on the current thread:

 

Murray Rothbard, economist from the Austrian School, wrote:

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."

 

I find it completely absurd that individuals continue to confuse the corporatism of post-Civil War America/Industrial Revolution with Laissez-faire capitalism and the free market. Reconstruction in the South was a complete government controlled process of disenfranchisement and redistribution. Both industrialist and government officials saw the benefits from this, which led to the fascist practices in some industries, like factory tariffs and railroad subsidies, during the Industrial Revolution.

 

Tariffs and subsides are not free market capitalistic practices they are protectionist practices and market manipulation by the government. These so called “Robber Barons” were in fact risk takers and entrepreneurs that created hundreds of thousands of jobs that ensured America’s place atop the global economy.

 

Rockefeller and his consorts may not have been saints, but unlike government, I cannot find any evidence that they were ever responsible for the murder or deaths of anyone. On the other hand, in the 20th Century alone governments are responsible for the deaths of an estimated 360 Million People (http://www.hawaii.edu/powerkills/DBG.CHAP1.HTM), that is more than the current population of the US. Why aren’t these individuals who are so concerned about robber barons and the evils of capitalism advocating a complete end to immoral and corrupt government? Maybe you should be calling for an end to the State’s monopoly on the use of force.

 

So before you go wrongfully criticizing the free market and raising government, government officials and bureaucrats to noble and messianic stature, while enthusiastically awaiting your government welfare/bribe check (stimulus check) you must first climb yourself out of your state of ignorance or you can just remain silent.

[AR Husker Fan]

***SNIP***

 

So before you go wrongfully criticizing the free market and raising government, government officials and bureaucrats to noble and messianic stature, while enthusiastically awaiting your government welfare/bribe check (stimulus check) you must first climb yourself out of your state of ignorance or you can just remain silent.

And I would make two suggestions to you:

 

1. Read the threads before replying. At no point did any poster "[raise] government, government officials and bureaucrats to noble and messianic stature". Making that claim - absent any evidence - automatically brings into question any opinions you set out.

 

2. Take a moment and read the Board's rules against personal attacks on members. Coming in and on your first post alleging that posters are "ignorant" is a good way to earn a ban. If you want to claim that your allegation of "ignorance" was general in nature, then my response is that the burden of clarity rests with the person posting the statement - make certain that your posts are not, as was the case above, filled with ambiguities that permit the reader to make a reasonable inference that your insult was directed to other posters and not "in general".

[The Ghost Of Henry David Thoreau]

***SNIP***

 

So before you go wrongfully criticizing the free market and raising government, government officials and bureaucrats to noble and messianic stature, while enthusiastically awaiting your government welfare/bribe check (stimulus check) you must first climb yourself out of your state of ignorance or you can just remain silent.

And I would make two suggestions to you:

 

1. Read the threads before replying. At no point did any poster "[raise] government, government officials and bureaucrats to noble and messianic stature". Making that claim - absent any evidence - automatically brings into question any opinions you set out.

 

2. Take a moment and read the Board's rules against personal attacks on members. Coming in and on your first post alleging that posters are "ignorant" is a good way to earn a ban. If you want to claim that your allegation of "ignorance" was general in nature, then my response is that the burden of clarity rests with the person posting the statement - make certain that your posts are not, as was the case above, filled with ambiguities that permit the reader to make a reasonable inference that your insult was directed to other posters and not "in general".

 

Looks like a nerve was struck…

 

Had I meant to insult or make allegations against you or anyone else on the thread they would have been clear and concise. Hence why I started the post with the phrase “general comments.” So the covert threats are not needed.

 

The only other part of your response that merits a reply is your assertion of guilt until proven innocent with your statement, “the burden of clarity rests with the person posting the statement.” I say otherwise, one is innocent until proven guilty, therefore the accuser must present the burden of proof to the allegations made.

 

Regardless, I would rather discuss politics and economics and not he said she said diatribe.