"When only a few continuously benefit, then the masses remain mired in poverty; thus they remain unhappy and are therefore easily provoked by "the rich" into doing all sorts of evil things like fighting wars and oppressing one another."

Didn't we see that in the USSR? And North Korea? And China, under Mao?

It's funny how 'spreading the wealth' seems to ensure most of it disappears, and only a few of the heirarchy end up doing well, while the rest drop to a subsistence level...

Some years ago I came to the conclusion that the economic policies espoused by progressives and liberals, and eventually enacted as government policies by the Democrats, were not based on the principles of economics, finance, or even common sense.

Wow, so long ago you had the epiphany that your political opponents' positions were not based on principles that you find agreeable. What a unique and deep thinker you are.

Instead they were based on the magical principal of fairness. ... But I wonder -- how many rank-and-file Democrats (or Ivy Leage elites, for that matter) truly have faith in these ideas?

Ah, so you invent some strawman ideas, attribute them to your opposition, expound on them (yourself... not by actually citing anyone in the opposition), and then criticize your opposition for not holding true to your invention.

Not one of your more cogent posts.

For more than 55 years I have been collecting paychecks from People richer than myself. The reason they kept paying me was because I was helping them become richer.
If a person is unable to describe how his or her efforts help their Employer become richer you should anticipate a layoff notice.

The Economy and an individual Household work differently from each other. A country has an Economy, a Household has a budget because it's income is fixed. However, if your Household has the potential to generate money, as does a country, then it might make sense to "charge up your credit cards." For example, that's why people take out student loans or, if you mow lawns for a living, you might buy a new lawnmower on credit.

"if you don't support tax increases then you hate the poor"

Progressive support tax increases....they just don't pay them. Examples: Jefferson of Louisana, Rangel of New York, Sec Treasury, the list goes on.

Mr Laprarie:

What Brian said.

Someday will have a serious discussion on economic theory and the difference between the free market and the fair market. Until then I feel pressure to come up with more zingers.

I'm thinking Brian is also an intellectual chickenhawk...

I hear you Mac. A long while ago, I tried to have serious discussions, or I tried to follow serious discussions, but then the trolls successfully highjacked the thread to a point where my first impulse is to zing. I don't like it, but that is the way it is.

Once in a while, DJ or JT or Paul would post and inform us that we must stick to the subject matter or be bumped out. This needs to happen more. The name calling gets old, even when I do it. ww

It's not the idea that the field should be leveled. It the idea that when the government takes actions, they shouldn't tilt the field more than it is already tilted.

It's interesting to note the conservative theme that if you give the poor money to subsist on, they will loose their motivation to work while if you don't give CEOs huge bonuses, they will lose their motivation to work.

"It's interesting to note the conservative theme that if you give the poor money to subsist on, they will loose their motivation to work while if you don't give CEOs huge bonuses, they will lose their motivation to work."

Apples and orange.

First case: giving something for nothing.

Second case: giving nothing for something.

Let me see, if I don't do anything, somebody will give me money. If I do all I can and go above and beyond (education, long hours, etc) I'll get less because now there are no bonuses.

Give me the free money and let me work under the table baby! How I love this new administration! Now I don't have to worry about my mortgage or gasoline.

A good discussion is definitely needed on economics. There are such things as motiviation, intelligence, ability and a multitude of other things that make 'fairness' impossible. You can never have a 'level' playing field.

Re-post. First attempt got swallowed.

The Economy and an individual Household work differently from each other. A country has an Economy, a Household has a budget because it's income is fixed. However, if your Household has the potential to generate money, as does a country, then it might make sense to "charge up your credit cards."

Ah, the Zimbabwean finance model.

Here we see the heavy weather liberals make of economics, starting with the premise. A country's finances do not differ in kind from a household's, but only in magnitude. A country cannot "generate money" - the very notion is laughable. Countries can generate pieces of paper that people make accept those as having value, but that's not the same thing as generating value, any more than the ones and zeroes representing your account in your bank's computer are money.

If a country "generates money," as you so blithely put it, people become chary of accepting your "generated money" and begin discounting it from its face value. It's called "inflation." Ask any Zimbabwean how "generating money" is working out for them.

"Charging up your credit cards" is fine...until the statement comes in.

Mr Engineer, you have a point.

What's outrageous is when corporate executives get huge bonuses while THEIR COMPANIES ARE LOSING MONEY. It's even more so when those same execs are slurping at the taxpayer trough.

When I was a restaurant manager, I never got a quarterly bonus if I failed to meet my food cost/labor cost goals. When I was a regional supervisor, in charge of 9 restaurants, I didn't get bonused unless my stores made a profit. And now that I'm a salesman, I get paid based on what I sell. If I have a good month, I get paid more than if I have a bad month.

It's not apples and oranges to ask why these CEOs should be entitled to obscene bonuses and golden parachutes if they ran their companies into the ground, especially if they are simultaneously accepting corporate welfare. In both cases, it's people getting something for nothing.

A lot of the failed CEO's are either in Barry's cabinet or advisers. Figures. ww

Mac Lorry and engineer,

You are both right with respect to 'fairness', and free market vs. fair market.

I think it was Milton Friedman who said that a 'fair' race is NOT a race where everyone crosses the finish line at the same time; rather, it is a race where everyone has the opportunity to start at the same time, and from the same place.

The best thing that a government can do is to ensure that everyone has as close to an even start in their life race as possible. Some will be champions and finish quickly, and run the race again and again. Others will run poorly or become injured. They will start the race again, and eventually succeed. Some will fall and be injured and not able to finish; for them, help should be available. Others will keep trying but never win big. And finally, some will become disillusioned or fed up with the whole process and simply drop out. There will be success and failure. Everyone can't be a champion. That is simply human nature.

It is when government tries to produce equality of outcomes, rather than ensuring an equal start and equal protection under the law, that problems arise. Governments are then forced to place obstacles in the way of the achievers in order for the less successful to catch up. Then the government must start carrying those who choose not to run. When racers refuse to obey, violence and coercion must be used in order to gain control. And when it becomes too much trouble to keep carrying certain people through the race, they are permanently eliminated.

I have a serious problem with the assumption that fairness will suddenly bring about prosperity. Fairness is a chimera. Its definition is arbitrary and constantly evolving. I am very skeptical of anyone who creates economic policy based on what are essentially religious beliefs and philosophy about "fairness" and "social justice" rather than proven principles of finance or economics or sociology. I am skeptical not because I am a heartless bastard, but because history has shown that the planned efforts of do-gooders to promote 'fairness' and 'equality' are far more prone to catastrophic failure than market-based solutions.

And right now I am very worried that we are headed not for recovery, but for a prolonged recession and high inflation due to reckless government spending and high taxes. Even if liberals' consciences are assuaged, how will that make America a better place to live?

"If you voted for Obama and don't support him with your own spending then you are an economic chickenhawk." -- Mac Lorry

This completely idiotic statement makes at least two foolish assumptions:

1. The only way you can infuse money into the American economy is through buying (no surprise, conservatives are into material things, e.g., "new cars, large screen TVs" just like Jesus, right?). Of course, if one so wishes, one can infuse money into the American economy through, say, donating to American charities, which in turn will spend the money.

2. Mac's idiotic statement also assumes that the primary reason liberals vote for Obama is his economic policy. The primary reason yours truly voted for Obama is that I wanted a strong change in direction in foreign policy, and I know I'm not alone.

The Fairness part of the equation is useless when there's the will to create entire classes of people who do nothing but take. That and complain.

(no surprise, conservatives are into material things, e.g., "new cars, large screen TVs" just like Jesus, right?).

You bet. That's why you'll find nary an Obama voter out looting big screen TVs when civil order breaks down.

Sheesh.

Are nearly all Wizbangers in denial of the realities or paradign shift of what has taken actually place in the last year. This may be news for some; Wall Street has collapsed.

But the Rip Van Winkle commentators here still tout less taxes, greed, self-interest, less regulation and the mantra of "the free market", as their panecea for every problem.

It might be instructive to actually read why AIG and Wall Street/the free market have so completely failed...or don't you think it is topical?

In short, the Obama administration and the American taxpayer have been forced to save the world banking industry from collapsing.

'Credit default swaps" dreamed up and promoted by McCain's chief economic advisor Phil Gramm, who McCain called a "economic genuis", are a large part of the reason AIG has the world financial industry by its throat.

"Yet the government feels it has no choice: because of A.I.G.'s dubious business practices during the housing bubble it pretty much has the world's financial system by the throat."

It nothing to do with socialism or liberalism. This is a staggering capitalist crisis in which the free market has all but crashed, not that anyone exclusively reading this blog would have noticed.

Herman,

The only way you can infuse money into the American economy is through buying (no surprise, conservatives are into material things, e.g., "new cars, large screen TVs" just like Jesus, right?). Of course, if one so wishes, one can infuse money into the American economy through, say, donating to American charities, which in turn will spend the money.

Actually "buying" is spending and it's the spending that stimulates the economy. If you don't believe spending stimulates the economy then you are at odds with Obama. I see you need someone to connect the dots for your. As hard as it may be for you to grasp, donating money to a charity that will spend it is "spending" just like given money to your kids is "spending".

Mac's idiotic statement also assumes that the primary reason liberals vote for Obama is his economic policy. The primary reason yours truly voted for Obama is that I wanted a strong change in direction in foreign policy, and I know I'm not alone.

If Obama's "all in" economic bet fails, he and other democrats will be swept from office according to Obama himself. Regardless of why you voted for Obama, if you want him to stay in power then you need to help his economic plan succeed. If you don't then you are an economic chickenhawk.

So much for your idiotic criticism.

Steve Crickmore,
If Wizbang is such a baleful place for reading
or commenting, let me encourage you to
MoveOn.org.

It might be instructive to actually read why AIG and Wall Street/the free market have so completely failed...or don't you think it is topical?

It's not that it isn't topical, it's that it's old news. If you follow the trail back to the original source you will find government guaranteed mortgages. You will also find a change in regulations that allowed Wall Street banks to get into the mortgage securities business and that deregulation was done during the Clinton administration.

I'm not saying we shouldn't have government guaranteed mortgages, but where lenders are not at risk there has to be regulation. Government guaranteed mortgages are not part of the free market, so regulating them doesn't impact the free market, but protects it.

'Credit default swaps" dreamed up and promoted by McCain's chief economic advisor Phil Gramm, who McCain called a "economic genuis", are a large part of the reason AIG has the world financial industry by its throat.

Credit default swaps are just an insurance policy. The problem was that AIG nor anyone else understood the real risk of subprime (government guaranteed) mortgages. There are many others to blame for the subprime mess including democrats. Both McCain and Bush sounded the alarm when there was time to make a soft landing, but congress took no action because of Barney Frank and others.

In a way Obama was lucky last summer's high energy prices triggered the housing bubble burst. Otherwise, McCain might have won, or worse, the bubble would have burst on Obama's watch.

This is a staggering capitalist crisis in which the free market has all but crashed, not that anyone exclusively reading this blog would have noticed.

Capitalism is not the problem. The problem is government guarantees that warp the market and then having a government that doesn't understand or care about the effects.

Michelle,

You are 100% right! We should start with ending public (free) education. Only people who can afford to pay for kindergarten through highschool should get an education. Anything else would be socialism designed to level the playing field.

Michael,

If you read my last post (sorry for spelling your name wrong) you probably agree some leveling of the playing field benefits our economy. If you truely want to understand a liberals perspective on capitalism I suggest this article.

America's economic policy has been guided from colonial times to present by two principles. One is a respect for capitalism. The second is a belief that all men are created equal. It is the combination of these policies that has made America's economic system unique for it's time and successful over time. America's egalitarian economic policies have encouraged the distribution of wealth and the rise of the middle class as much as the Industrial Revolution. In modern times this policy has been further optimized using the mathematical modeling of game theory. Game theory views economic activity as a game with players in categories defined as consumers, labor, investor and business. Each player takes on individual strategies to optimize their game performance. Game theory modeling proves the principle that equal economic players operating on a level playing field have the highest long term economic growth. Liberal Capitalism is the philosophy that government must be proactively involved to keep the playing field level, to act as an impartial referee if you will. Government's goal is to keep the minority of players from pursuing predatory strategies with minimum interference with the majority of players' normal competitive strategies.

Smiles,

You are right, of course. There is necessity for government in the economy -- to ensure that laws are on the books to protect the weak from the extremely powerful, and then to justly enforce those laws.

I don't think that anyone has ever successfully implemented (or even attempted) true libertarian laissez-faire capitalism. A completely unregulated market would probably fail as spectacularly as a fully planned economy.

As I wrote in a previous comment, government has the responsibility to make sure that everyone has roughly the same starting line from which to run the race of life. The problem arises when the government subsequently decides that a better goal is for everyone to cross the finish line at the same time. The only way that they can do this is to destructively interfere with the race.

Mac Lorry...I don't think it was the govenment guarantees...83-84 percent of the subprime loans were made, without Freddie Mac and Fannie Mae government guranteess, through private lenders. 'Private sector loans, not Fannie or Freddie, triggered crisis",

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group (Bush's) on Financial Markets reported Friday (in October).

No what drove the crisis was greed and hubris..The executives weren't even concerned about their shareholders to the surprise of Alan Greenspan...THE EXECUTIVES WERE CONCERNED ALMOST Exclusively ABOUT PRIVATIZING ANY GAINS not about the medium or long term welfare of their companies..any losses would be picked up the shareholders ....or down the line creditors or the govenment/taxpayer.. They would be long gone in any event with their golden parachutes.

Merrill Lynch recently in December 2008 gave something like 325 employees a million each, as beginners for performance bonuses for 2008 and the company lost something like 45 billion dollars. Some of the executives got over 100 milion dollars each and Bank of America their new owners approved it.

It was a doomsday machine (WELL WORTH READING) built by Wall Street without effective government supervison even by the SEC ..certainly not a free market, unless you consider a free market is fleecing marks which is what it was doing.

I suppose a related corollary would be that we have never had continuous prosperity simply because the free market is set up so that only a select few ("the rich") continuously benefit. When only a few continuously benefit, then the masses remain mired in poverty; thus they remain unhappy and are therefore easily provoked by "the rich" into doing all sorts of evil things like fighting wars and oppressing one another. So it should follow that if fairness is established, then unpleasant things like violence, hatred, racism, intolerance, etc. should also come to an end. (Of course "the rich" will desperately fight this reform because they want to keep both their money and their control over the working class. Their main weapons in the war to preserve evil are the the "military-industrial complex," the Republican party, and talk radio.)

Since the free market is actually controlled by "the rich" it can never "fairly" distribute wealth to everyone. So ultimately "fairness" becomes the primary responsibility of the government.

That's exactly what some of their "best and brightest" believe.

When b. hussein, pelosi, and reed are voted out in their next come-upance I am (reasonably) sure that they will be able to state the following:

"You want fries with that?"

SC,

Mac Lorry...I don't think it was the govenment guarantees...83-84 percent of the subprime loans were made, without Freddie Mac and Fannie Mae government guranteess, through private lenders. 'Private sector loans, not Fannie or Freddie, triggered crisis",

The article you linked is overly simplistic. Here's an article from July 2007 that shows Fannie Mae and Freddie Mac were getting deeply involved in the subprime market.

Here's another article showing that HUD also got involved and "From 2004 to 2006, the two [Freddie and Fannie] purchased $434 billion in securities backed by subprime loans, creating a market for more such lending." Thus it's irrelevant what lender originated the subprime loan as Freddie and Fannie were buying them up as fast as they were being made. And we haven't even got into FHA and VA guaranteed loans.

Without the ability of Wall Street banks to get involved with securities backed by mortgages and government direct or indirect guarantees, there could be no subprime mortgage mess. The enabling law was passed during the Clinton administration and the "homes for the poor" mentality of democrats was just as responsible as the "greed is good" mentality of Wall Street for producing an unsustainable bubble.

As long as the government is in the business of giving loan guarantees there has to be regulations and those regulations were in place. Clinton, Dick Army, Barney Frank and many other politicians are every bit as responsible as the greedy SOBs on Wall Street.

...but it's the greedy SOBs on Wall Street who prance around pretending to be free marketeers, whilst bilking the taxpayers for billions of dollars that are funneled directly into their private savings and investments.

21st century American capitalism shall be defined as such: the privatization of profit, and the socialization of failure.

...but it's the greedy SOBs on Wall Street who prance around pretending to be free marketeers, whilst bilking the taxpayers for billions of dollars that are funneled directly into their private savings and investments.

They might be SOBs, but they are within the law and doing only what should be expected of them. It's the politicians who are responsible for protecting taxpayers, and when they are asleep at the switch, behind the curve, out of touch, and out of their league the SOBs on Wall Street take advantage of the situation. That's what they do and they do it well.

21st century American capitalism shall be defined as such: the privatization of profit, and the socialization of failure.

Once the bottom is found the days when the SOBs on Wall Street can privatize profit, and socialize failure will be at an end. Well, at least until a new generation of politicians forget the purpose of regulations from this era and opens the door for Wall Street to once again take advantage of public money.