Only Capitalists Create Jobs

[Revoltingest]

But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and Congress certainly isn’t going to blame themselves.”

Barry Ritholtz in the Washington Post calls the notion that the US Congress was behind the financial crisis of 2008 “the Big Lie”. As we have seen in other contexts, if a lie is big enough, people begin to believe it.





It's really this simple:

On the left, with zero taxes, there is (obviously) no government revenues. On the right, with 100% taxation, there's no revenue because no individual or company is going to work when they need to keep some money to live or stay in business. In 1932, in response to the Depression, the top income tax rate was raised from 25% to 62%, the worst thing they could have done. It went up from there in 1944 to 95%--an absurd but unsustainable rate justified by the war.

The only question is, where the top of the curve lies, T*, for maximum government revenues. Is it in the middle or to the left, or the right? If T* is to the left, government maximizes revenues, but its control/power is concurrently reduced. If it's on the right, bureaucratic waste and official corruption increase accompanied by a very steep and risky backside. With those factors involved, and with a populace the majority of which receives little to no economics education, how are we going to be able to get an honest/educated look at where T* is.

Jaiket:

The WP is only exceeded by the NY Times as a left wing tool. Forbes is usually less biased (the WSJ is better) are significantly less biased. The following is from your Forbes source, which references the WP source:

"But they (Congress) were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and Congress certainly isn’t going to blame themselves.

But somehow, throughout all this, he manages to completely ignore the Community Reinvestment Act, and the Affordable Housing Act. Those, from their misleading, euphemistic titles on, are the elephant in the room that's behind the Big Recession.

We should also remember that authors writing for newspapers are still just ordinary people giving their their own (or other people's) opinions. What they say isn't "true" just because they write for known sources. They're subject to error, limited experiences, biases, personal perspectives, & their own values just as is everyone else. The authority of what they say should stand on its own merit, & not be accepted as gospel.

 

[Monk Of Reason]

But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and Congress certainly isn’t going to blame themselves.”

Barry Ritholtz in the Washington Post calls the notion that the US Congress was behind the financial crisis of 2008 “the Big Lie”. As we have seen in other contexts, if a lie is big enough, people begin to believe it.





It's really this simple:

On the left, with zero taxes, there is (obviously) no government revenues. On the right, with 100% taxation, there's no revenue because no individual or company is going to work when they need to keep some money to live or stay in business. In 1932, in response to the Depression, the top income tax rate was raised from 25% to 62%, the worst thing they could have done. It went up from there in 1944 to 95%--an absurd but unsustainable rate justified by the war.

The only question is, where the top of the curve lies, T*, for maximum government revenues. Is it in the middle or to the left, or the right? If T* is to the left, government maximizes revenues, but its control/power is concurrently reduced. If it's on the right, bureaucratic waste and official corruption increase accompanied by a very steep and risky backside. With those factors involved, and with a populace the majority of which receives little to no economics education, how are we going to be able to get an honest/educated look at where T* is.

Jaiket:

The WP is only exceeded by the NY Times as a left wing tool. Forbes is usually less biased (the WSJ is better) are significantly less biased. The following is from your Forbes source, which references the WP source:

"But they (Congress) were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and Congress certainly isn’t going to blame themselves.

agreed and nothing in my posts have said otherwise.

 

[Revoltingest]

I think we spend too much on subsidies and war. I think we spend far less than we need in education and infrastructure.

I agree, even if we'll differ on details.
Tis interesting that you use the word "war" instead of "self defense".
I too consider them very different.

 

[Monk Of Reason]

I agree, even if we'll differ on details.
Tis interesting that you use the word "war" instead of "self defense".
I too consider them very different.

Self defense is anti-missile technology and the national guard. War is sending troops to a foreign country for oil profiteering. I think self defense is incredibly important but this false crusade against terrorism facade needs to end.

 

[Revoltingest]

Self defense is anti-missile technology and the national guard.

Self-defense is also much more, eg, hardened infrastructure, energy independence, distributed critical systems

War is sending troops to a foreign country for oil profiteering. I think self defense is incredibly important but this false crusade against terrorism facade needs to end.

"Oil profiteering" from mid-east wars is a myth. Oil production in the attacked countries actually drops. For better or worse, Americastanian foreign adventurism no longer gives us tangible benefits. Gone are the days when we'd conquer & annex a country like Hawaii.

 

[Monk Of Reason]

Self-defense is also much more, eg, hardened infrastructure, energy independence, distributed critical systems

This is true. Do you support a one payer system for healthcare out of curiosity?

 

[Revoltingest]

This is true. Do you support a one payer system for healthcare out of curiosity?

It's tricky. A premise....
Government provided health care is an inevitable consequence of a wealthy democracy.
This leaves us with the question...what possible forms could health care system take?
Consider Obamacare......
- It imposes subsidies, surcharges & penalties upon various people.
- It offers no tort reform.
- It's complex.
One of innumerable better alternatives.....
- Government provides a basic level of care for free.
- Rationing is not by price, but rather by limitation of service & waiting
- Consumers retain the right to pay for a higher level of service.
The above would simply things, without limiting anyone's rights.
(The long dead proposed Hillarycare made it illegal to get better than government provided care....except for politicians.)

 

[ThePainefulTruth]

I think we spend too much on subsidies and war. I think we spend far less than we need in education and infrastructure.

We've been throwing money in increasingly enormous amounts at education with little to nothing to show for it. One of the problems is that we're talking about government schools when we say public schools.

We should also remember that authors writing for newspapers are still just ordinary people giving their their own (or other people's) opinions. What they say isn't "true" just because they write for known sources. They're subject to error, limited experiences, biases, personal perspectives, & their own values just as is everyone else. The authority of what they say should stand on its own merit, & not be accepted as gospel.

I know. That's why we need to start, from scratch on the subject of Truth--what it is and how to recognize it, and learn to admit when we're lying to ourselves. As important as it is, academia and society have given it very short shrift--on the good days.

 

[ThePainefulTruth]

It's tricky. A premise....
Government provided health care is an inevitable consequence of a wealthy democracy.
This leaves us with the question...what possible forms could health care system take?
Consider Obamacare......
- It imposes subsidies, surcharges & penalties upon various people.
- It offers no tort reform.
- It's complex.
One of innumerable better alternatives.....
- Government provides a basic level of care for free.
- Rationing is not by price, but rather by limitation of service & waiting
- Consumers retain the right to pay for a higher level of service.
The above would simply things, without limiting anyone's rights.
(The long dead proposed Hillarycare made it illegal to get better than government provided care....except for politicians.)

Don't forget waivers, a built in double standard which is becoming the norm across the board.

 

[Monk Of Reason]

It's tricky. A premise....
Government provided health care is an inevitable consequence of a wealthy democracy.
This leaves us with the question...what possible forms could health care system take?
Consider Obamacare......
- It imposes subsidies, surcharges & penalties upon various people.
- It offers no tort reform.
- It's complex.
One of innumerable better alternatives.....
- Government provides a basic level of care for free.
- Rationing is not by price, but rather by limitation of service & waiting
- Consumers retain the right to pay for a higher level of service.
The above would simply things, without limiting anyone's rights.
(The long dead proposed Hillarycare made it illegal to get better than government provided care....except for politicians.)

Don't consider Obamacare. It has absolutely no weight on a single payer system. Even in a single payer system there is no government micromanagement of services. Doctors are still just as much in control as they were before. The only difference is that now insurance companies cannot give you the run around and you can always receive care. If there is government micromanagment it has nothing to do with the single payer system and all to do with other aspects of that government. In our current situation we are already pitted in a similar situation but instead of the government it is dictated by insurance companies.

 

[Revoltingest]

Don't forget waivers, a built in double standard which is becoming the norm across the board.

Yes....my list of Obamacare flaw was not exhaustive.

 

[Revoltingest]

Don't consider Obamacare. It has absolutely no weight on a single payer system. Even in a single payer system there is no government micromanagement of services. Doctors are still just as much in control as they were before. The only difference is that now insurance companies cannot give you the run around and you can always receive care. If there is government micromanagment it has nothing to do with the single payer system and all to do with other aspects of that government. In our current situation we are already pitted in a similar situation but instead of the government it is dictated by insurance companies.

I've never had the "run around" from insurance companies. Perhaps this is because I never expected coverage which I didn't purchase. How to design a good single payer system.....difficult.....I'd have to become more familiar with examples first. But I definitely would want government involved as little as possible.

 

[Monk Of Reason]

We've been throwing money in increasingly enormous amounts at education with little to nothing to show for it. One of the problems is that we're talking about government schools when we say public schools.

There is no other definition of public schools. changing the word to government schools doesn't make it a bad thing. And currently no... no we have not "dumped enough money into education". It is a statistical fact that schools that have more money spent per-student has higher grades and higher graduation rates than those that spend less on students. If money was not an issue then **** poor schools and upper-class schools would be equal in terms of preformance. This continues to not be so. There are obviously other factors but money seems to be a large one as well. There needs to be an overhaul of our education system and get it away from test based study and more comprehensive study. But this takes more money.

What we need specifically is not a bigger football field but more teachers that have master's degrees that can teach classes of only about 15-18 students rather than 30-35. That would be the single biggest improvement.

 

[Monk Of Reason]

I've never had the "run around" from insurance companies. Perhaps this is because I never expected coverage which I didn't purchase. How to design a good single payer system.....difficult.....I'd have to become more familiar with examples first. But I definitely would want government involved as little as possible.

What makes you think that governments are less capable than private companies? And as an extension why do you believe that companies that are intent on making profits will be more beneficial in the long run than a government program?

 

[Revoltingest]

What makes you think that governments are less capable than private companies? And as an extension why do you believe that companies that are intent on making profits will be more beneficial in the long run than a government program?

I regularly deal with both government & private companies.
Both can be imperious & incompetent, but there are differences....
- Government is more likely to be so.
- If a private company is that way, then I can choose an alternative.

To make a profit is all about personal enrichment, which is not unique to business. Government also fervently pursues revenue, & its aparatchiks will pursue power.

Real world example:
Let's say I want advice about a tax situation.

I call the IRS:
There is only a 40% chance they would even answer my call.
If they do, I'd be speaking to someone with minimal training, & no accountability for accuracy of the information.
(My experience with the IRS has been that they're massively incompetent. Tis not due just to poorly trained workers, but also their poorly designed automated system.)

I call my CPA:
He will answer my call, & give me counsel based upon extensive training & experience.
He will bill me for this, but it's worth it because the consequences are large.

 

[Monk Of Reason]

I regularly deal with both government & private companies.
Both can be imperious & incompetent, but there are differences....
- Government is more likely to be so.
- If a private company is that way, then I can choose an alternative.

To make a profit is all about personal enrichment, which is not unique to business. Government also fervently pursues revenue, & its aparatchiks will pursue power.

Real world example:
Let's say I want advice about a tax situation.

I call the IRS:
There is only a 40% chance they would even answer my call.
If they do, I'd be speaking to someone with minimal training, & no accountability for accuracy of the information.
(My experience with the IRS has been that they're massively incompetent. Tis not due just to poorly trained workers, but also their poorly designed automated system.)

I call my CPA:
He will answer my call, & give me counsel based upon extensive training & experience.
He will bill me for this, but it's worth it because the consequences are large.

Counter example.

I have a private health insurance. My doctor states that I need to have an MRI because I may need surgery. However the diagnosis doesn't fit exactly what they need and they deny my authorization request. Also they need authorization to preform tests. After fighting with the insurance company (while paying them vast amounts of money before having to pay my full deductible and then a percentage of my bill) I get the test only for them to drag their feet in approval of my surgery.

With medicare/medicaid I don't need an authorization so long as my diagnosis passes a board certified requirement which is usually easily met. Then I get my surgery. I have to pay a coins but I have a smaller or non-existent deductible and coins. I get my surgery done before the other me gets the MRI authorized.

 

[Revoltingest]

Counter example.

I have a private health insurance. My doctor states that I need to have an MRI because I may need surgery. However the diagnosis doesn't fit exactly what they need and they deny my authorization request. Also they need authorization to preform tests. After fighting with the insurance company (while paying them vast amounts of money before having to pay my full deductible and then a percentage of my bill) I get the test only for them to drag their feet in approval of my surgery.

With medicare/medicaid I don't need an authorization so long as my diagnosis passes a board certified requirement which is usually easily met. Then I get my surgery. I have to pay a coins but I have a smaller or non-existent deductible and coins. I get my surgery done before the other me gets the MRI authorized.

You could buy insurance from a different provider.
But if you got poor care from the government (like some vets I know), you can't switch providers.

 

[Monk Of Reason]

You could buy insurance from a different provider.
But if you got poor care from the government (like some vets I know), you can't switch providers.

You rarely get poor insurance deals from the government. I don't know of anyone that turns down the option for medicare. There is a reason for that. And medicaid covers everything 100%. Private insurances tend to suck in comparison and trust me this is what I did for a living for many years. Private insurances are far more expensive per person and almost always have higher deductibles and coins. The only time that private insurances beat out public options are usually in cases where someone gets an medicare hmo which takes all of the money that would normally be spent on basic medicare and then gets a premium from the person as well. They combine both of these and make a medicare replacement plan which is usually a bit better.

 

[metis]

Fannie and Freddie actually got into the sub-prime mortgage game rather late (2005, if my memory is correct), and part of them doing as such as they were getting their investment butts kicked, and their share had dropped from having around 90% of new mortgages down to around 40%. Also, a reminder that they moved in this direction during the Bush years, if I have the date correct. Either way, the fact of the matter is that the Bush administration did nothing to curtail this monster, and also a reminder that it was they who first proposed the "bailouts".

All presidents since Eisenhower have pushed for more easy mortgages because the housing industry is the single most powerful private stimulus to our economy. However, the problem was more systemic than just there as the use of derivatives became much more widespread and used in many other investment areas.

The bottom line: even though there are some who claimed and continue to claim that too much government regulation caused this meltdown, not only isn't that at all even close to being correct, it's not even remotely logical.

 

[Revoltingest]

You rarely get poor insurance deals from the government. I don't know of anyone that turns down the option for medicare. There is a reason for that. And medicaid covers everything 100%. Private insurances tend to suck in comparison and trust me this is what I did for a living for many years.

This comparison needs more info....
- People take Medicaid because they don't pay for it, & the only option is to take it or leave it.
This is similar to my becoming eligible for Social Security bennies this year. I'd rather not be in the program, but I had no choice but to pay into it. So now I plan to take money out as quickly as possible. This doesn't mean it's a great program...just that I want the money.
- Unemployment insurance is an example of a poor insurance deal imposed upon all employers.
- I buy a lot of different kinds of insurance from private companies. I shop for the best deal, & know what I'm getting. I'm not disappointed. But in my dealings with government, it'll impose things upon me without options, eg, the IRS, Selective Service, MESC, property taxes.

Private insurances are far more expensive per person and almost always have higher deductibles and coins. The only time that private insurances beat out public options are usually in cases where someone gets an medicare hmo which takes all of the money that would normally be spent on basic medicare and then gets a premium from the person as well. They combine both of these and make a medicare replacement plan which is usually a bit better.

Medicare can offer better prices because of taxpayer subsidy. It isn't cheaper....it just makes someone other than the consumer foot the bill.