Friday, February 27, 2009

Progressive Fear

One has to wonder why so many Progressives are so bent on complaining about every conservative, classical liberal, or libertarian commentary that disagrees with Obama's ideas and plans.

Since Obama and the Democratic Congress won so handily, there should be simple joy and a general ignoring of an opposition they say has been roundly defeated more or less forever.

Yet, they persist.

Could there be some unstated, unextinguishable fear among them that the American people, if they read commentators who believe in a positive correlation between freedom and prosperity, will become persuaded and decide once again to favor individual liberty?

One has to wonder...

How Progressives Debate

A not-so-imaginary scenario:

Proposition: Less freedom correlates with lower prosperity.

Laissez-Faire Advocate: "FDR's policies lengthened the Depression."

Progressive: "You can't know that. You weren't there."

(Get that? You didn't personally experience it, therefore you can't be sure.)

Laissez-Faire Advocate: "I was there in the 1960s and 1970s. I know what life was like then."

Progressive: "You can hardly be objective about it then."

(Heads I win; tails you lose. If you're personally affected by anything, you can't separate your reaction from the facts that occasioned it. Warmed-over Kant, anyone?)

Laissez-Faire Advocate: "Look at China during Mao and after."

Progressive: "See. It is possible for coercion to lead to prosperity."

Laissez-Faire Advocate: "Ok. Consider East Germany before reunification with West Germany and afterward."

Progressive: "Germany isn't a pure laissez-faire system and never has been."

Wow. And, yet, Progressives feel (I use the word deliberately) perfectly confident rattling off statistics about the results of FDR's policies, debating the Johnson-Reagan era, pronouncing on the economic systems of foreign countries, etc.

It would be nice to have an honest debate with a Progressive. But since their philosophy can only be supported by distortion, cherry-picking data, false alternatives, or outright lies, I'm not holding my breath.

Obama's Third World Budget

I guess Obama really is a warmonger after all.
President Bush never included the costs of the wars in Iraq and Afghanistan in his budgets but Mr Obama has inserted them. He is asking for $75 billion this year for both wars — on top of $40 billion already approved by Congress — and $130 billion in 2010. After that the two conflicts are being budgeted at $50 billion annually over the next several years.
Funny, I haven't read any howls of rage from the Left over this. No doubt, they will simply blame Bush for getting the U.S. into it (a valid complaint to a degree, given that Iraq was a less than ideal second target), and give Obama a pass for simply "undoing the mess Bush created." Ah, the excuse that keeps on giving.

The budget contains plenty for the Right to become enraged over, too. A few samples:
    Nearly $4 trillion in overall spending

    Includes $634 billion over the next ten years as a “down payment” on healthcare reform, paid for by tax increases on the wealthy, including lowering deductions for charitable contributions

    Creates a budget deficit of between $1.75 trillion and $2.25 trillion for the coming year

    Includes a “placeholder” request for $750 billion in further bailout funds for banking and car manufacturers

    Increases the Environmental Protection Agency’s budget by 34 per cent over 2009
All in all, I'd say we're well on our way to becoming a banana republic, thanks to Chavez, Jr.

Thursday, February 26, 2009

Misplaced Faith In Government Spending

All faith, if that word is taken literally, is contrary to reason, since it means adopting a belief without evidence or logic to support it. But even in the more colloquial sense of "confidence," the faith placed in government spending today is still horrifying. That latter meaning of the word soon devolves into the former as the absurdity of the government's plans becomes daily more evident.

Henry Hazlitt, emulating Bastiat and writing in Economics in One Lesson, illustrates one major reason for this form of non-thinking. He demonstrates, using the example of a bridge construction project, how people who argue in favor of government spending (particularly for the purpose of increasing employment) tend to look only at what is immediately visible and ignore what is not able to be created as a result. The first is easy to perceive; the second takes a little thought and imagination, characteristics not ubiquitous in our age.
There is no more persistent and influential faith in the world today than the faith in government spending. Everywhere government spending is presented as a panacea for all our economic ills. Is private industry partially stagnant? We can fix it all by government spending. Is there unemployment? That is obviously due to “insufficient private purchasing power.” The remedy is just as obvious. All that is necessary is for the government to spend enough to make up the “deficiency”.

An enormous literature is based on this fallacy, and, as so often happens with doctrines of this sort, it has become part of an intricate network of fallacies that mutually support each other. We cannot explore that whole network at this point; we shall return to other branches of it later. But we can examine here the mother fallacy that has given birth to this progeny, the main stem of the network.

Everything we get, outside of the free gifts of nature, must in some way be paid for. The world is full of so-called economists who in turn are full of schemes for getting something for nothing. They tell us that the government can spend and spend without taxing at all; that is can continue to pile up debt without ever paying it off because “we owe it to ourselves.” We shall return to such extraordinary doctrines at a later point.

Here I am afraid that we shall have to be dogmatic, and point out that such pleasant dreams in the past have always been shattered by national insolvency or a runaway inflation. Here we shall have to say simply that all government expenditures must eventually be paid out of the proceeds of taxation; that inflation itself is merely a form, and a particularly vicious form, of taxation.

Having put aside for later consideration the network of fallacies which rest on chronic government borrowing and inflation, we shall take it for granted throughout the present chapter that either immediately or ultimately every dollar of government spending must be raised through a dollar of taxation. Once we look at the matter in this way, the supposed miracles of government spending will appear in another light.

A certain amount of public spending is necessary to perform essential government functions. A certain amount of public works — of streets and roads and bridges and tunnels, of armories and navy yards, of buildings to house legislatures, police and fire departments—is necessary to supply essential public services. With such public works, necessary for their own sake, and defended on that ground alone, I am not here concerned. I am here concerned with public works considered as a means of “providing employment” or of adding wealth to the community that it would not otherwise have had.

A bridge is built. If it is built to meet an insistent public demand, if it solves a traffic problem or a transportation problem otherwise insoluble, if, in short, it is even more necessary to the taxpayers collectively than the things for which they would have individually spent their money had it had not been taxed away from them, there can be no objection.

But a bridge built primarily “to provide employment” is a different kind of bridge. When providing employment becomes the end, need becomes a subordinate consideration. “Projects” have to be invented. Instead of thinking only of where bridges must be built the government spenders begin to ask themselves where bridges can be built. Can they think of plausible reasons why an additional bridge should connect Easton and Weston? It soon becomes absolutely essential. Those who doubt the necessity are dismissed as obstructionists and reactionaries.

Two arguments are put forward for the bridge, one of which is mainly heard before it is built, the other of which is mainly heard after it has been completed. The first argument is that it will provide employment. It will provide, say, 500 jobs for a year. The implication is that these are jobs that would not otherwise have come into existence.

This is what is immediately seen. But if we have trained ourselves to look beyond immediate to secondary consequences, and beyond those who are directly benefited by a government project to others who are indirectly affected, a different picture presents itself. It is true that a particular group of bridgeworkers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $10 million the taxpayers will lose $10 million. They will have that much taken away from them which they would otherwise have spent on the things they needed most.

Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.

But then we come to the second argument. The bridge exists. It is, let us suppose, a beautiful and not an ugly bridge. It has come into being through the magic of government spending. Where would it have been if the obstructionists and the reactionaries had had their way? There would have been no bridge. The country would have been just that much poorer.

Here again the government spenders have the better of the argument with all those who cannot see beyond the immediate range of their physical eyes. They can see the bridge. But if they have taught themselves to look for indirect as well as direct consequences they can once more see in the eye of imagination the possibilities that have never been allowed to come into existence.

They can see the unbuilt homes, the unmade cars and washing machines, the unmade dresses and coats, perhaps the ungrown and unsold foodstuffs. To see these uncreated things requires a kind of imagination that not many people have. We can think of these nonexistent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. What has happened is merely that one thing has been created instead of others.
If people today, particularly those in the Administration, were reading Hazlitt instead of Krugman we would not be in the mess we are and still headed south.

[Hat tip: Not PC]

Congress Continues Thieving

Another huge blow to the economy, and the pocketbook of every American.

The House voted to spend another $410B.
Overall, the legislation would provided [sic] increases of roughly 8% for the federal agencies it covered, about $32 billion more than last year.

The bill is intended to allow smooth functioning of the government through the Sept. 30 end of the fiscal year. The Senate has yet to vote on its version.

After persuading lawmakers to keep earmarks off the stimulus bill, Obama made no such attempt on the first non-emergency spending measure of his presidency. The result was that lawmakers claimed billions in federal funds for pet projects — a total of 8,570 earmarks at a cost of $7.7 billion, according to Taxpayers for Common Sense. Majority Democrats declined to provide a number of earmarks, but said the cost was far smaller, $3.8 billion, 5% less than a year ago.

Among the earmarks was one sponsored by Rep. Howard Berman, D-Calif., who secured $200,000 for a "tattoo removal violence outreach program" in Los Angeles. Aides said the money would pay for a tattoo removal machine that could help gang members or others shed visible signs of their past, and anyone benefiting would be required to perform community service.
Where I come from this is called theft. At least, it used to be. Now I suppose there are more polite terms used to cover it up, like "earmark." Congress could teach the Mafia a thing or two about public relations.

Obama's Fantasy Economics

The Wall Street Journal has a first-rate editorial demonstrating how Obama's fantasy about cutting the deficit by taxing the top 2% is just that.
But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

Fast forward to this year (and 2010) when the Wall Street meltdown and recession are going to mean far few taxpayers earning more than $500,000. Profits are plunging, businesses are cutting or eliminating dividends, hedge funds are rolling up, and, most of all, capital nationwide is on strike. Raising taxes now will thus yield far less revenue than it would have in 2006.
So much for the view that robbing the rich is a practical scheme to help the poor.

PowerLine On Obama's Fantasy Rhetoric

Paul Mirengoff at PowerLine has a fine post pointing up Obama's exaggerated view of the value of his own rhetoric; it shows just how deep in his own fantasy world is the over-aged juvenile.

An excerpt:
Consider this statement.

"And dropping out of high school is no longer an option. It's not just quitting on yourself, it's quitting on your country -- and this country needs and values the talents of every American."

But dropping out of high school is obviously an option. There is no legal requirement that students complete high school, and for many Americans it may well make more sense to start working or to take care of their baby, than to walk listlessly through an extra year or two of "education."

Does Obama really believe that he can inspire/shame the youth of America into completing high school? You wouldn't think so, but then you wouldn't have thought he would have a Greek temple constructed for his convention either. Perhaps he truly believes he's the one high school drop-outs have been waiting for.

Now consider this statement:

"I will not allow terrorists to plot against the American people from safe havens half a world away."

But a safe haven can be any nook or cranny in the world (nor need it be half a world; it can be a living room in Luton or in Bay Ridge). Does Obama really believe he can "disallow" all plotting against Americans? And what is he prepared to do to accomplish this? If he is to believed, nothing by way of interrogation that isn't in the army field manual.
What Mr. Mirengoff does not say, because he is too polite and mild-mannered, is that the reason this sort of thing goes over well is that there are too many Americans looking for a wise and benevolent father to solve their problems. Still, the whole Magical Mystery series is worth reading.

Wednesday, February 25, 2009

The So-Called State of the Union Address

The title is an accurate representation of Obama's speech to Congress on Tuesday. The speech was the now drearily familiar mixture of lies, ignorance, fantasy, and bombast that characterizes not only Obama's continuing campaign talks, but his basic character.

A few examples will serve to illustrate the point.

There is his familiar one from the campaign season:
Because of this plan, 95% of the working households in America will receive a tax cut – a tax cut that you will see in your paychecks beginning on April 1st.
For all his deficiencies, Obama is not stupid. He knows this is impossible, since there aren't 95% of working households that even pay taxes. A check to some people making less than $75k per year is not a tax cut; it's welfare, plain and simple. In this case even that welfare is a laughable illusion, since it works out to about a dozen dollars per month.

I'm reminded of the scene in the 1983 film "Trading Places." The skin-flint rich-guy played by Don Ameche gives the men's club waiter a $5 Christmas bonus. His reply, dripping with sarcasm, is: "Thanks. Now I can go to the movies. By myself."

One of Obama's biggest whoppers comes early on:
As soon as I took office, I asked this Congress to send me a recovery plan by President’s Day that would put people back to work and put money in their pockets. Not because I believe in bigger government – I don’t.
Un-effing-believable. If this pretender doesn't believe in bigger government then Joseph Stalin was not a Communist. How else to explain his plans to have the Federal Government intervene in every critical area of the economy and the private life of every individual citizen?

He signed a bill that will put private medical records at the Feds' fingertips. He is dictating how much some businesspeople can be paid. He plans to coerce some taxpayers to subsidize mortgages for others. He plans even to become closely involved with the census. As he said later on:
I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity.
It's pretty clear that he does not see that role as limited (by the Constitution he blithely ignores) to the protection of individual rights. He views the government as an instrument for social engineering. That it can do so only by coercion, overriding and violating those rights, is a matter of complete indifference to this over-aged college student playing the role of head of the Executive branch.

His view of how the current economic recession came about is another standard left-wing lie, mixed with abysmal ignorance of economics.
A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market.
This is more of the usual egalitarian disdain of the wealthy, one that deliberately evades any distinction between those that earned what they have versus those who conned their way to riches. In short, it regards anyone who has wealth (defined ever downward) as being in the latter category solely because they have it.

More, assume that every single dollar not confiscated as a result of a lower tax rate was spent by said 'fat cats' on hookers not hedge funds. What bloody business of Obama's is that? Whose money is it after all? The answer, according to BO, is clear: the Nation's, the great collective.

Only someone who believes that all income belongs not to the individual but to the public as a whole could believe that taking less from one person constitutes transferring that wealth to them. After all, transferred from whom? The only possible answer on such a view is: The Group, to whom, in 'fairness', it belongs.

It also implicitly asserts once more the ludicrous myth that the current economic crisis is the result of deregulation or lax oversight.

The only substantial change to lessen financial regulation occurred in 1999 with the modification of the ruinous and unconstitutional 1933 Glass-Steagall Act which forbade commercial banks to engage in investment bank activities and which had nothing whatever to do with any of the current problems. In every other way regulations have only grown by leaps and bounds, some thousands of pages added to the Federal Register over the past 10 years.

It's just one more fantasy of the Left, whose perpetual irritant is that anyone should be able to exercise their individual economic choices without some Commissar's permission. That same lust for control is displayed in full view when Obama says:
[W]e will act with the full force of the federal government to ensure that the major banks that Americans depend on have enough confidence and enough money to lend even in more difficult times. And when we learn that a major bank has serious problems, we will hold accountable those responsible, force the necessary adjustments, provide the support to clean up their balance sheets, and assure the continuity of a strong, viable institution that can serve our people and our economy.
Set aside the question of how you build confidence by force. Apart from the obvious fascism this view entails, it presents one more fantasy: that somehow the bureaucrats are better bankers and that using a gun to shore up a balance sheet is a practical business strategy. The country is about to learn just how wrong is that belief.

One could go on at interminable length, examining his suicidal demand for Cap-and-Trade legislation, his desire to destroy the oil and coal businesses, his intention to put the health care industry on regulated steroids, etc., etc. The entire speech is filled with more lies like "we passed the recovery plan free of earmarks," more fantasies about using solar and wind power to replace oil, and more of the familiar litany of bombast that characterizes all of Obama's oft-repeated campaign nonsense.

But there's no point in examining all the details when the basic thrust is so clear. Like any Progressive, Obama's Fascist slip is showing and it's proving very unsightly. He will do everything possible to push the United States still further down that perilous path. If he succeeds, the American people will have only themselves to blame for letting it happen, by choosing to abandon a system based on individual liberty for an illusory federally-mandated economic 'fairness'.

Time for more than a mere tea party. It's time for a moral revolution.

Monday, February 23, 2009

Oscar Winners, Yawn

This list of Oscar winners is the best evidence one could provide for why contemporary films are irrelevant, morally and artistically.

Compare to this list of Oscar winners from 1939. Or any other year prior to 1965 pulled out of a hat.

Friday, February 20, 2009

Not Every New Invention Is Great

There's a commercial on for the Snuggie. It's a cheap, fleece blanket with sleeves. Selling for $60.

Er, why would anyone pay sixty bucks to wear a too-long robe on backwards?

Fan of capitalism that I am, objectivity compels me to admit that not everything that makes money creates value.

Thursday, February 19, 2009

Greenspan Suggests Nationalizing Banks

Continuing his descent into pragmatism-induced insanity, Alan Greenspan is suggesting that "temporarily" nationalizing the banks is the least bad option open for dealing with the credit crunch.

I don't know whether ex-Fed Chairman Greenspan is simply a morals-blind technocrat or trying desperately to cover up his blunders. I don't know whether he is vicious or simply senile.

I do know he is wrong.

Any other comment would entail a long string of obscenities, so I'll leave it there.

[Hat tip: Gods of the Copybook Headings]

The Chicago Tea Party

RealClearPolitics reports:
Santelli asked traders on the floor: "This is America! How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills? Raise their hand. (no hands raised, lots of booing) President Obama, are you listening?"
I've no doubt that he is, and fearfully chuckling the whole time. The chuckle comes from his knowledge that he and Congress are, for the moment, unstoppable. The fear results from his ever-insatiable need to be liked and the realization that the more he and his cronies interfere, the less liked they will be.

A few hundred more protests like that and we might actually start to turn the ship in a safer direction.

Wednesday, February 18, 2009

Obama's Housing Welfare Plan vs Justice

The insanity continues unabated.

Fresh from signing the largest legislative suicide pact in American history, Obama plans to intrude the Federal government still more into the housing market, amplifying the bad effects of the intrusions that led to the crisis by engaging in still more Federal welfare. According to a story in the International Herald Tribune:
To help distressed homeowners, Obama will create a $75 billion program to subsidize loan modifications that would reduce a family's monthly payment to as little as 31 percent of his or gross monthly income.
A second major component of Obama's plan is aimed at most homeowners who are not behind on their payments, but whose homes may now be worth less than the outstanding amount on their mortgage or no longer worth enough that the homeowners have sufficient equity to qualify for a refinancing. It could also assuage homeowners who angry that seemingly irresponsible neighbors are being rescued.
Obama's plan is aimed at propping up the mortgage market as a whole by having Fannie Mae and Freddie Mac step up their purchases of mortgages and mortgage-backed securities.
To make that possible, the Treasury Department will use its authority under a housing bill passed last year to provide more capital to both companies. The Bush administration had pledged to provide up to $100 billion to each company to keep it solvent. The Obama plan would increase that to $200 billion. The plan would also allow the two mortgage companies to expand the size of their mortgage portfolios.
In short, he plans to reproduce many of the very conditions that led to the crisis in the first place.
The plan has three basic components.

One would help homeowners who continue to make their loan payments on time, but are paying high interest rates and would otherwise not be able to refinance because they do not have enough equity or their houses are worth less than they borrowed.

A second would assist people who are at risk of foreclosure by providing incentives to lenders to alter the terms of loans to make them substantially more affordable to struggling homeowners.

The third would try to assure there is plenty of credit available for mortgages by giving $200 billion of additional financial backing to Fannie Mae and Freddie Mac, the two government-controlled mortgage finance companies.
Every one of these ideas will only make the overall economic situation worse for all but the recipients of this latest round of welfare. That is the key to why Obama wants to do it, and why it's wrong.

One could argue endlessly about how financially unwise this is, pointing out how impractical every one of these provisions is and how they have to result in an even worse housing market overall. Instead, let's cut to the heart of the matter: the idea that some citizens (through the government) should be on the hook to provide housing for others.

Obama clearly thinks so. He has never grown out of his community organizer mentality. The key moral hallmark of that mentality is one that is rarely mentioned in discussions by Left or Right: the willful abrogation of justice. In particular, the indifference to the rights of individuals to choose whether or not to help someone else.

Only a sociopath would enjoy the sight of people having their homes foreclosed. (And, note, half are not even at risk of that. About half under this plan are not even delinquent, but simply unable to qualify for refinancing to a lower rate because of low equity or poor credit.)

But whether those individuals lose their homes or endure higher payments through negligence and excess risk-taking or through simple misfortune, it is not the responsibility of the taxpayers around the country to provide them with a house or cheaper payments. Spreading the wealth always consists of spreading the misery and coercing millions to help the 5% or so who can't make their mortgage payments is simply immoral.

Unfortunately, explicit discussion of moral issues plays little part in public debates these days, even though it animates most of them. Instead, they focus almost exclusively on which route will maximize social utility and an abstraction called "the economy." They too frequently ignore that individuals have their own private economy and that should be the heart of their concerns.

Whenever moral issues do play a part in online debates, they tend to center around the personal motives of Congress and Obama himself. But it doesn't matter whether they are the accumulation of more power, as is likely, or simply a sincere belief that 'the strong' should help 'the weak'. It's irrelevant whether or not he and they are simply soft-hearted, to go along with their soft heads, or are just a bunch of calculating opportunists.

The effects will be the same regardless of their intentions and the first effect is to violate the right of dozens of millions who didn't default on their mortgage payments to choose whether or not to help the others.

That same "we are our brother's keeper at the point of a gun," welfare-advocate mentality is thick in the recently signed, ludicrously named American Recovery and Reinvestment Act. Whether it's billions for the stealth socialized medicine health care provisions, the undoing of mid-1990s welfare reform, $12 billion for retarded school children, or any other, it's clear that the Federal Government intends to put the welfare state on steroids.

The effort represents an enormous injustice against every citizen. The most egregious one is to transfer the freedom to choose from the individual to the Federal Government and thereby violate the most basic principle of justice in society.

That continuing injustice won't be stopped until enough citizens demand a halt to the erosion of liberty.

Those now acquiescing to the Feds' Big Brother acts must come to understand that there is no limitless pot of magic gold coins that appear from nowhere and flow into the Federal Treasury. Every dollar spent on government housing charity comes ultimately out of their wallets. The government has no money of its own.

They will also have to face the truth that to strip their fellow citizens of the power of choice and give it to the government instead is simply wrong.

Finally, they will have to face up to the inescapable end result: that to allow Federal control and injustice free rein, for whatever motives, will ultimately impoverish them all and lead to an end to freedom in America.

Time is running out. The time is now to choose between freedom and justice or ever more of the poverty that always accompanies slavery. Otherwise, before long, it will no longer be a matter of choice.

Tuesday, February 17, 2009

Jeff Jacoby De-Bunks Keynesian Bunk

Jeff Jacoby makes many of the same points as the previously posted Caroline Baum article. His take is well worth reading for the passion and clarity he brings to the subject.
There may be no reasoning on this subject with Obama, who has already raised the possibility of "trillion-dollar deficits for years to come." But reality is not optional: You do not become more prosperous by writing yourself a check. Economic growth is the result of creating new wealth, not redistributing existing wealth.

The federal government cannot conjure prosperity out of thin air. Any money it spends - whether on highways or Pell grants, Medicaid or tax rebates - it must first tax or borrow from somewhere else. A trillion dollars pumped into the economy tomorrow is a trillion dollars siphoned out of the economy today - a trillion dollars no longer available to the private sector for investment or consumption. Enlarging Washington's spending power will not enlarge the economy.
Best of all is the simple question he asks that explodes the whole myth, based on a very recent example.
Here is a question for Washington's Keynesians: If uninhibited deficit spending is the key to economic growth, how could the Bush administration's galloping budget increases and unbroken string of deficits have left the economy in recession? If Keynes was right, why didn't the enormous growth of government outlays stop the Great Depression in its tracks? Federal spending exploded under Herbert Hoover and exploded even more under Franklin Roosevelt, during whose first two terms the federal budget more than doubled. Where was the "stimulus" such furious expenditure should have produced?
Would that Larry Summers and Timothy Geithner had such a clear-eyed view of the subject and thought to ask themselves those questions.

Caroline Baum De-Bunks Keynesian Bunk

Yet another excellent column from the frequently fine Caroline Baum.

She explains in clear, accurate, yet simple language exactly why Keynesian stimuli are all bunk, the triumph of hope over experience (and logic).
When I first learned about fiscal stimulus according to John Maynard Keynes in an introductory economics course, it made a modicum of sense. The idea was that at times when the private sector isn’t pulling its weight, the government can step in and spend instead.

It doesn’t take an inquiring mind very long to find the flaw in the argument. How exactly does the government get the money to pay for its spending? Neither borrowing (today) nor taxing (tomorrow) increases aggregate demand. All they do is transfer the ability to spend from one entity to another and the timing of that spending from the future to today.

In the short run, the economy will get some boost from hundreds of billions of dollars in government spending. What about the long run? (Please don’t say we’re all dead.) One dollar of federal borrowing means one dollar unavailable for the private sector.


“Empirically, nobody can point to a single Keynesian episode that worked,” says Dan Mitchell, senior fellow at the Cato Institute, a libertarian think tank in Washington.

Attempts to spend their way out of a slump by Herbert Hoover, Franklin Roosevelt, George W. Bush, Japan (in the 1990s) and Europe yielded little in the way of results, Mitchell says. “The only thing Keynesians have ever been able to point to that worked was World War II,” which isn’t something we want to repeat.


Just to recap:

There is no Santa Claus.

The federal government can’t give something to one person without taking it away from someone else, either today or at some point in the future.

There is a tooth fairy. It’s called the Federal Reserve.

The Fed has pixie dust. It’s called a printing press.

Unlike the fiscal authority, the Fed has the gift that keeps on giving.

Saturday, February 14, 2009

Obama to Shift Focus to Budget Deficit

The post title is the same as that of a recent WSJ editorial. It reads, in part,
With a $787 billion stimulus package in hand, President Barack Obama will pivot quickly to address a budget deficit that could now approach $2 trillion this year.

He has scheduled a "fiscal-responsibility summit" on Feb. 23 and will unveil a budget blueprint three days later, crafted to put pressure on politicians to address the country's surging long-term debt crisis.
I'm beginning to wonder if Obama's Progressive pragmatism has led him to an actual psychotic break. Now, now he's worried about the Federal debt and the deficit? After pushing for the largest theft of future taxpayer wealth in history, only a little more than a third of which conceivably has anything to do with the economic crisis?

Even for a politician whose principles are not very well glued in behind his plastic smile, this simply stones credulity to a mushy pulp.

Friday, February 13, 2009

Ayn Rand's Birthday

Late to the party (she was born Feb 2, 1905), but here is one of my favorite quotes from Atlas Shrugged, spoken by Hank Rearden, one of the greatest heroes in literature, defending himself in court:
“I work for nothing but my own profit—which I make by selling a product they need to men who are willing and able to buy it. I do not produce it for their benefit at the expense of mine, and they do not buy it for my benefit at the expense of theirs; I do not sacrifice my interests to them nor do they sacrifice theirs to me; we deal as equals by mutual consent to mutual advantage.”
That one, simple — and unquestionably valid — paragraph, if understood and accepted, would alone wipe out 90% of the evils currently inflicted on us by the Federal and State governments, along with the underlying causes of them: the invalid moral views of most educators and the pundits in the chattering class.

Cure for Common Cold A Little Closer

Despite all the ugly events of today, and the uglier ideas driving them, there are still heroic actions by individuals making real progress. It's worthwhile to pause from time to time to celebrate them.

One recent item is a breakthrough in the discovery of some underlying elements in the rhinovirus that produces the common cold. Dr. Ann Palmenberg and Dr. Claire Fraser-Liggett and their teams recently published a report in Science discussing the work. (From the International Herald Tribune:)
A further obstacle to drug development is that colds are mostly a minor nuisance. So people will not pay for expensive drugs, the Food and Drug Administrations seems unlikely to approve a drug with any serious downside for so mild a disease and pharmaceutical companies have had little interest in investing to find new treatments.

A research team headed by Liggett and Ann Palmenberg, a cold virologist at the University of Wisconsin, may have broken this chain of problems with new insights into the rhinovirus's evolutionary strategy. With the help of Claire Fraser-Liggett, a leading genome researcher at the University of Maryland, they have decoded the genomes of all 99 strains of rhinovirus, they report in the issue of Science published electronically on Thursday.

The virus has a genome of about 7,000 chemical units. These encode the information to make the 10 proteins that do everything the virus needs to infect cells and make more viruses. By comparing the 99 genomes with one another, the researchers were able to arrange them in a family tree based on similarities in their genomes.

From the family tree it is evident that some regions of the rhinovirus genome are changing all the time but others don't change at all. The fact that the unchanging regions are so conserved over the course of evolutionary time means that they perform vital roles and that the virus cannot let them change without perishing. They are therefore ideal targets for drugs since, in principle, any of the 99 strains would succumb to the same drug.
Billions will owe a debt of gratitude to these two heroes and that is one more debt I will happily take on. Let this be considered a small down payment.

Wednesday, February 11, 2009

Geithner's Plan to Ruin Save the Economy

Henry Paulson's youthful clone, Treasury Secretary Timothy Geithner has floated the Adminstration's trial balloon of economic ruination recovery, Part II.

Details are sketchy, but it consists roughly of four parts:
    1) Provide up to $50 billion to help stem home foreclosures.

    2) Set up a public-private fund to absorb $500 billion of 'toxic' bank assets.

    3) Establish a consumer-lending facility to support up to $1 trillion in new lending. (Yes, that's one trillion in additional debt for a country already awash in it.)

    4) Create a "stress test" to determine if the bank is healthy.
There are a number of things, some of them unprintable on a public forum, to be said about this plan.

First, it's probably no accident that it's long on hope and sketchy on specifics. The Administration knows that the whole idea of the government 'fixing' the economy has been met with deep skepticism by the majority of the electorate. Even such typically biased polls as Pew and CNN show this.

The Feds have to keep the plan vague as long as possible to keep a lid on the simmering pot filled with people nearly ready to pull out the pitchforks and torches. Wall Street was not fooled. The market fell by nearly 5% from an already depressed state after Geithner gave his little talk.

Also, according to the Fortune story:
The administration said it will soon announce a comprehensive housing plan, which will lean in part on the Fed's efforts to drive down mortgage rates by buying mortgage-backed securities issued by government-sponsored mortgage companies Fannie Mae and Freddie Mac
Did you catch that? They want to make mortgage interest rates even lower. I.e. the plan will produce still more of the poison that has sickened the housing market, by putting still more people in still more houses.

Surely, one doesn't have to be an advocate of Austrian economics — and Geithner most certainly is not — to realize that cheap credit is at the foundation of the crisis. Then again, maybe one does and that's why the Feds keep stumbling over their feet month after month, regardless of the change of players, ever so much smarter than the previous crew.

Second, observe Item #1. Here we have the one element that most everyone agrees is a major part of the crisis and it gets, relatively speaking, a pittance. (That $50 billion can now be viewed as a pittance is a major part of the problem, too.)

Apart from everything else, this shows yet again what hypocrites these people are. They're not serious about addressing the problem as they themselves described it only months ago. But then, to pragmatists yesterday never happened and the future never arrives.

Third, the second item on the list at least does address some of the problem. Still, given how poorly TARP Part I worked out, as any honest person knew it had to, this will simply be more taxpayer dollars down the money hole.

Observe how it is to be done. By, "[c]reating a private-public partnership to take toxic assets off banks' balance sheets." This is exactly how fascism works in practice. The results will necessarily be similar to those of Italy in the 1920s or the U.S. in the 1930s. It is worse than explicit socialism, since it creates the illusion that a free market still exists, which will bear the blame when the whole thing turns out to be a disaster.

When that disaster comes, and capitalism is blamed once again, there will be increasing pressure for out and out nationalization of the banks, something to which this Administration is already far too philosophically inclined. (Some reports have them mulling it over already and, of course, to a degree, the implementation of TARP has produced that as a fait accompli.)

Observe, for example, the standard Progressive defense of the failure of FDR's policies (when and to the extent they're willing to admit they failed): it wasn't big enough. I.e. mixed socialism (fascism) fails, so we need the undiluted sort. The Italian socialists of the 1920s railed against Mussolini on exactly these grounds.

Why does Geithner believe this will work?
"Because the new program is designed to bring private sector equity contributions to make large-scale asset purchases, it not only minimizes public capital and maximizes private capital," the Treasury Department said in a fact sheet about the plan. "It allows private sector buyers to determine the price for current troubled and previously illiquid assets."
If he were serious about this, he would work to remove the barrier to private capital that exists now: the huge uncertainty created by TARP and other Fed actions in the first place. No rational businessman will move when he has no idea what the circumstances or rules are likely to be six months ahead.

But removing that uncertainty would require lessening government control of the financial markets, not increasing it. That is the one thing this Administration will never willingly do. Capping executive salaries is only the leading edge of the iceberg in this respect. The main body of destructive power is not far behind now.

So, instead, Geithner is relying — like any pragmatist technocrat — on some vague, hoped-for Rube Goldberg contraption to save his — and the country's — bacon. When it fails, he will be quietly dismissed with some excuse about his wanting to return to the private sector (where he'll rake in undeserved millions), and be replaced by an equally blinder's-handicapped technocrat with yet another 'plan'. And he will be ever so much smarter than Tim Geithner, according to the press.

Fourth, item number three is guaranteed to worsen the problem, a large part of which is the existence of too much debt that the Feds simply will not allow to be worked off in the only way known to succeed. As Vulcan Hammer quotes Tyler Watts explaining at
Capitalism depends on three highly complementary, yet distinct, institutions: prices, property, and "profit and loss." Classical-liberal economists have demonstrated the essential role of these pillars of prosperity for centuries. These fundamental institutions of the market economy are like legs of a stool. If we gradually weaken one leg, we will eventually bring the stool toppling down — economic collapse.

In this light, the implications of bailout are clear. Bailouts are designed to insulate people from the effects of bad decisions. When market prices change dramatically, exposing yesterday's poor investment choices, bailouts come "to the rescue," promising those left holding the bag that they won't have to endure the full cost of their errors...

...Bailouts, then, attempt to erase the effects of losses, or economic failure. But such efforts inevitably undermine the loss aspect of "profit and loss." Profit and loss go together — like up and down, left and right, good and bad. If we try to do away with losses, we'll wind up diluting the meaning of profits. After all, why strive for profits if Uncle Sam will cover your losses with a bailout? Why bust your butt to compete and succeed if you can just clamor for a handout instead? Bailouts destroy the profit motive — and all the benefits of a competitive economy." [Watts]

By removing the risk of failure, government inevitably creates an environment where crony-capitalism flourishes. And we end up with the same essential distortions in our economy that has led to the financial crisis. [VH]
I responded, quoting in part a previous post:
"It points to a much larger problem, one that reveals one of the root causes of the current crisis: the longing for the 'safety' of dependency, the desire to have an all-wise parent solve your problems."

When you surrender control of your economic decisions (or ask for the consequences to be modified by government) the economic results are bad for others, it's true. But the moral and practical consequences for you, too, are disastrous. It invites dictatorship via democracy, the hardest type to argue against or erase.

Apart from special circumstances, being an adult dependent is unhealthy for an individual. It's suicide for a culture.
But allowing individuals the freedom to succeed or fail is contrary to the entire mindset in Washington, as it is to much of the country on most points of the political compass. Many, far far too many, delude themselves — despite enormous evidence to the contrary — that government control of such matters is practical. This represents the (let us hope, temporary) triumph of large swaths of the Progressive philosophy, made possible in large part by unhealthy acceptance of Pragmatism over the past 100 years.

One result is item #4, the scariest of all. What Geithner can mean by a "stress test" we can only guess, but no reasonable interpretation bodes well for the banking system, and hence the economy. Major banks are still suffering from the arm-twisting performed only months ago.

Suffering from a free gift of billions of American taxpayer dollars? Yes. Free capital is morally corrupting and impractical, for many of the reasons discussed above.

It also furthers the popular view, only partly mistaken because it does occur, that this type of crony capitalism is the only type there is. (That this doesn't represent genuine capitalism, but is a misuse of the term, I leave aside for now.)

More narrowly, it also leads to questionable business decisions. As an example from a different area, Chrysler is in discussions with Fiat to offload a portion of their business, something Fiat would not have considered in the absence of the automakers bailout. It also means that the U.S. government is helping out an Italian carmaker, somewhat contrary to the foolish nationalism that, in part, justified the bailout in the first place.

Similar events are taking place in the financial sector, where M&As are underway that would not have taken place absent the infusion of government cash. It's been shown many times — for example, as far back as the botched railroad mergers of the 19th century — how an influx of government money distorts market decisions that generally have bad outcomes.

(Actually, Adam Smith discusses similar distortions resulting from government involvement a hundred years earlier, but that was prior to the useful experience of 100 years of a more or less full laissez-faire system.)

But, once again, the worst aspect of any such 'stress test' is the pernicious idea that the government should be in charge of picking winners and losers in the market, especially in the banking system. There are banks that need to fail in order to allow recovery to occur. As Spencer put it in the famous aphorism: "The ultimate result of shielding men from the effects of folly is to fill the world with fools."

Those bank assets, as has been pointed out many times by much more knowledgeable writers than me, do not disappear. They're absorbed by those who — one hopes, only time will tell — are better able to manage and deploy them. Witness, for example, how Wells Fargo snatched up WaMu from under the nose of the heavily subsidized and much better politically connected Bank of America, themselves suffering from the arm-twisting absorption of Merrill Lynch.

Finally, Geithner himself, discussing the plan said:
"Our challenge is much greater today because the American people have lost faith in the leaders of our financial institutions, and are skeptical that their government has — to this point — used taxpayers' money in ways that will benefit them,"
That "lost faith" is perfectly rational, given that it comes from the direct observation of the actions of our government now, and over the past few generations. Now, if only that skepticism would translate into broad resistance to the destruction of liberty — which is the real crisis, the hindrance of our rights to our freedom and property — then we could start to solve the economic one.

Tuesday, February 10, 2009

Senate Passes $838B Flaccidity Bill

By a vote of 61-37. That's 61 traitors, who should be tried and made to pay the bill out of their own pockets.

A small selection of the payoffs and outright waste this massive theft of taxpayer money is about to produce:
    * $2 billion earmark for FutureGen near zero emissions powerplant in Mattoon, IL
    * $39 billion slush fund for “state fiscal stabilization” bailout
    * $5.5 billion for making federal buildings “green” (including $448 million for DHS HQ)
    * $200 million for workplace safety in USDA facilities
    * $275 million for flood prevention
    * $65 million for watershed rehabilitation
    * $200 million for public computer centers at community colleges and libraries
    * $650 million for the DTV transition coupon program
    * $307 million for constructing NIST office buildings
    * $1 billion for administrative costs and construction of NOAA office buildings
    * $100 million for constructing U.S. Marshalls office buildings
    * $300 million for constructing FBI office buildings
    * $800 million for constructing Federal Prison System buildings and facilities
    * $10 million to fight Mexican gunrunners
    * $1.3 billion for NASA (including $450 million for “science” at NASA)
    * $100 million to clean up sites used in early U.S. atomic energy program
    * $10 million for urban canals
    * $2 billion for manufacturing advanced batteries for hybrid cars
    * $1.5 billion for carbon capture projects under sec. 703 of P.L. 110-140 (though section only authorizes $1 billion for five years)
    * $300 million for hybrid and electric cars for federal employees
    * $198 million to design and furnish the DHS headquarters
    * $255 million for “priority procurements” at Coast Guard (polar ice breaker)
    * $500 million for State and local fire stations
    * $180 million for construction of Bureau of Land Management facilities
    * $500 million for wildland fire management
    * $110 million for construction for the U.S. Fish and Wildlife Service
    * $522 million for construction for the Bureau of Indian Affairs
    * $650 million for abandoned mine sites
    * $75 million for the Smithsonian Institution
    * $1.2 billion for summer jobs for youth
    * $412 million for CDC headquarters
    * $500 million earmark for NIH facilities in Bethesda, MD
    * $160 million for “volunteers” at the Corp. for National and Community Service
    * $750 earmark for the National Computer Center in MD
    * $224 million for International Boundary and Water Commission – U.S. and Mexico
    * $850 million for Amtrak
    * $100 million for lead paint hazard reduction
Time to bring out the pitchforks and torches.

Saturday, February 7, 2009

WSJ On Flaccid Stimulus Bill

As the U.S. Senate/Congress Santa Claus finalizes its compromise social engineering recovery bill, it's worthwhile to try to explain to anyone with any sanity left why it can not possibly improve the economy overall. It's often difficult to explain complex things simply, but this Wall Street Journal editorial does it as well as I have seen to date.
So there it is: Mr. Obama is now endorsing a sort of reductionist Keynesianism that argues that any government spending is an economic stimulus. This is so manifestly false that we doubt Mr. Obama really believes it. He has to know that it matters what the government spends the money on, as well as how it is financed. A dollar doled out in jobless benefits may well be spent by the worker who receives it. That $1 of spending will count as economic activity and add to GDP.

But that same dollar can't be conjured out of thin air. The government has to take that dollar away from someone else -- either in higher taxes, or by issuing new debt in the form of a bond. The person who is taxed or buys the bond will have $1 less to spend. If the beneficiary of that $1 spends it on something less productive than the taxed American or the lender would have, then the net impact on growth will be negative.

Steyn on Stimuli

Mark Steyn, as he so often does, has written another witty, painfully accurate column, this time on the 'stimulus'. The whole thing is worth the time, but here's a taste:
The bloated nonstimulus and the undertaxed nominees are part of the same story. I'm with Tom Daschle: I understand why he had no desire to toss another six-figure sum into the great sucking maw of the federal Treasury. Who knows better than a senator who's voted for every tax increase to cross his desk that all this dough is entirely wasted? Tom and Tim Geithner and Charlie Rangel and all the rest are right: They can do more good with the money than the United States government can.

I only wish they followed the logic of their behavior and recognized that what works for them would also work for every other citizen. Instead, they insist that the sole solution to our woes is a record-setting wasteful government spending spree.
That simple idea alone - that I know better how to spend my money than the Feds ever will - would put a stop to 90% of the nonsense that comes out of Washington.

But it would be best to recognize the more important fact and moral point: it's my money and I have an inalienable right to do with it as I see fit. Even if D.C., contra all history, were filled with the country's highest geniuses who were at the same time moral saints, it wouldn't change that basic principle. Even if a bunch of pragmatic Keynesians and Progressives have what they think is a purchase that 'works better', that right is not morally dispensable. To do so is just one more step down the road to totalitarianism.

Friday, February 6, 2009

Facts About Freedom and Prosperity

Randall Hoven has written a fact-filled article at American Thinker comparing levels of government spending/economic control vs prosperity and freedom in various countries over the past century. It doesn't quite prove as much as he wants — that government is best which governs least — though it's a good start.

The flaws? He has nothing but an assumed moral foundation, for example, instead taking the pragmatic route that a good government is government that "works." He also doesn't support the implicit assumption that government spending as a percentage of GDP is a good proxy for the level of a nation's freedom or degree of government control of the economy.

That said, one can't prove everything in a single article and it's a valuable, simple-to-follow resource when confronted by Keynesians, Progressives, and other wannabe dictators.

Thursday, February 5, 2009

Wannabe Dictator Obama Pleads for Pork and Passivity

Obama published a whiny plea in the Washington post, whining because the Senate is debating the pork-filled 'stimulus' package and pleading that everyone stop questioning his judgment and do as he says. Here is the article in full:
By now, it's clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression. Millions of jobs that Americans relied on just a year ago are gone; millions more of the nest eggs families worked so hard to build have vanished. People everywhere are worried about what tomorrow will bring.

What Americans expect from Washington is action that matches the urgency they feel in their daily lives -- action that's swift, bold and wise enough for us to climb out of this crisis.

Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

That's why I feel such a sense of urgency about the recovery plan before Congress. With it, we will create or save more than 3 million jobs over the next two years, provide immediate tax relief to 95 percent of American workers, ignite spending by businesses and consumers alike, and take steps to strengthen our country for years to come.

This plan is more than a prescription for short-term spending -- it's a strategy for America's long-term growth and opportunity in areas such as renewable energy, health care and education. And it's a strategy that will be implemented with unprecedented transparency and accountability, so Americans know where their tax dollars are going and how they are being spent.

In recent days, there have been misguided criticisms of this plan that echo the failed theories that helped lead us into this crisis -- the notion that tax cuts alone will solve all our problems; that we can meet our enormous tests with half-steps and piecemeal measures; that we can ignore fundamental challenges such as energy independence and the high cost of health care and still expect our economy and our country to thrive.

I reject these theories, and so did the American people when they went to the polls in November and voted resoundingly for change. They know that we have tried it those ways for too long. And because we have, our health-care costs still rise faster than inflation. Our dependence on foreign oil still threatens our economy and our security. Our children still study in schools that put them at a disadvantage. We've seen the tragic consequences when our bridges crumble and our levees fail.

Every day, our economy gets sicker -- and the time for a remedy that puts Americans back to work, jump-starts our economy and invests in lasting growth is now.

Now is the time to protect health insurance for the more than 8 million Americans at risk of losing their coverage and to computerize the health-care records of every American within five years, saving billions of dollars and countless lives in the process.

Now is the time to save billions by making 2 million homes and 75 percent of federal buildings more energy-efficient, and to double our capacity to generate alternative sources of energy within three years.

Now is the time to give our children every advantage they need to compete by upgrading 10,000 schools with state-of-the-art classrooms, libraries and labs; by training our teachers in math and science; and by bringing the dream of a college education within reach for millions of Americans.

And now is the time to create the jobs that remake America for the 21st century by rebuilding aging roads, bridges and levees; designing a smart electrical grid; and connecting every corner of the country to the information superhighway.

These are the actions Americans expect us to take without delay. They're patient enough to know that our economic recovery will be measured in years, not months. But they have no patience for the same old partisan gridlock that stands in the way of action while our economy continues to slide.

So we have a choice to make. We can once again let Washington's bad habits stand in the way of progress. Or we can pull together and say that in America, our destiny isn't written for us but by us. We can place good ideas ahead of old ideological battles, and a sense of purpose above the same narrow partisanship. We can act boldly to turn crisis into opportunity and, together, write the next great chapter in our history and meet the test of our time.
In now-standard fashion, Obama displays his ignorance and his lust to remove all opposition to re-making America in accord with his philosophy.

The economy isn't anywhere near as bad as it was during the Great Depression and neither is "the crisis." Unemployment is up dramatically, to be sure. But at around 7.8% it's nowhere near the teens to 20s it was then. And, to pick another example, we are not dependent on hostile regimes for oil (though hostile regimes depend on oil to stay in power). The top six countries from which we import oil are (in thousand bbl per day, Nov 2008):

CANADA 2,028
MEXICO 1,296
IRAQ 476
Of these, only Venezuela is hostile and they are not exactly a threat to U.S. security. (Saudi Arabia is a mixed case since they fund Wahhabist organizations around the world, which are a long-term threat to the U.S.)

And if he thinks that what he's recommending is "swift, bold, and wise," ... well, I'll give him one out of three. It is bold to push for wasting a trillion dollars to engage in Progressive social engineering.

But the worst aspect by far is how it reveals the not-so-secret dictator wannabe that is Barack Obama. I translate:

"Senators (responding to citizens) who disagree: forget all you know of economics, based on 200 years of sound theory and experience, because I, Barack Obama, reject that theory and the electorate voted for me."

Truth is not arrived at by consensus and, consistent with his casual mistrust of the Constitution, he ignores that in this country's government there are checks and balances. The President proposes; the Congress debates and legislates. That's the way it's supposed to work.

What he's really asking is: "Allow the government free rein to spend enormous sums of taxpayer dollars wherever I, Barack Obama, think best, because you elected me."

I.e. forget your mind, your money, and your freedom because the American people elected Barack Obama dictator. I don't think so.

In any case, it doesn't matter a damn to me whether a majority voted for him. Individuals have rights, among which are the rights to their freedom and property. It is a violation of those rights to ask Congress to spend:
Department Of Agriculture

$44,000,000 - Agriculture Buildings and Facilities and Rental Payments; $209,000,000 - Agricultural Research Service Buildings and Facilities; $245,000,000 - Farm Service Agency Salaries and Expenses; $350,000,000 - Natural Resources Conservation Service Watershed and Flood Prevention Operations; $50,000,000 - Watershed Rehabilitation Program; $5,838,000,000 - Rural Development Programs, Rural Community Advancement Program; $22,129,000,000 - Rural Housing Service, Rural Housing Insurance Fund Program Account; $2,825,000,000 - Rural Utilities Service, Distance Learning, Telemedicine, and Broadband Program; $100,000,000 - Special Supplemental Nutrition Program for Women, Infants, and Children; $150,000,000 - Emergency Food Assistance Program" (This includes grants for Puerto Rico and American Samoa); $300,000,000 - Administrative Expenses ($150,000,000 each in '09 & '10); $650,000,000 - Forest Service, Capital Improvement and Maintenance; $840,000,000 - Wildland Fire Management

Department Of Commerce

$250,000,000 - Economic Development Administration, Economic Development Assistance Program; $1,000,000,000 - Bureau of the Census, Periodic Censuses and Programs (additional funding); $350,000,000 - National Telecommunications and Information Administration, Salaries and Expenses; $2,825,000,000 - Wireless and Broadband Deployment Grant Programs; $650,000,000 - Digital-To-Analog Converter Box Program; $100,000,000 - National Institute of Standards and Technology Scientific and Technical Research and Services; $100,000,000 - Industrial Technology Services

$300,000,000 - Construction of Research Facilities; $400,000,000 - National Oceanic and Atmospheric Administration, Operations, Research and Facilities; $600,000,000 - Procurement, Acquisition and Construction (includes not less than $140,000,000 for "climate data modeling")

Department Of Justice (DoJ)

$3,000,000,000 - State and Local Law Enforcement Assistance; $1,000,000,000 - Community Oriented Policing Services

National Aeronautics and Space Administration (NASA)

$400,000,000 - Science (not less than $250,000,000 "shall be solely for accelerating the development of the tier 1 set of Earth science climate research missions); $150,000,000 - Aeronautics; $50,000,000 - Cross Agency Support Programs (restoration and mitigation of NASA infrastructure and facilities damaged during 2008 disasters)

National Science Foundation

$2,500,000,000 - Research and Related Activities; $100,000,000 - Education and Human Resources; $400,000,000 - Major Research Equipment and Facilities Construction

Energy And Water

$2,000,000,000 - Army Corps of Engineers, Civil Construction; $250,000,000 - Mississippi River and Tributaries; $2,225,000,000 - Operation and Maintenance; $25,000,000 - Regulatory Program

Department Of Energy

$18,500,000,000 - Energy Efficiency and Renewable Energy; $1,000,000,000 - Advanced Battery Loan Guarantee Program; $500,000,000 - Institutional Loan Guarantee Program; $8,000,000,000 - Innovative Technology Loan Guarantee Program; $2,400,000,000 - Fossil Energy; $2,000,000,000 - Science

General Services Administration

$7,700,000,000 - Federal Buildings Fund; $600,000,000 - Energy Efficient Federal Motor Vehicle Fleet Procurement (no mention of buying only American cars)

Small Business Administration

$426,000,000 - Business Loans Program Account

Department Of The Interior

$500,000,000 - Bureau of Reclamation, Water and Related Resources; $325,000,000 - Bureau of Land Management, Construction (for priority road, bridge and trail repair or decommissioning); $300,000,000 - U.S. Fish and Wildlife Construction (for priority road and bridge replacement and repair); $1,700,000,000 - National Park Service Construction; $200,000,000 - National Mall Revitalization Fund (half of that requires matching private funds); $100,000,000 - National Park Service Centennial Challenge (signature projects and programs); $200,000,000 - U.S. Geological Survey for Surveys, Investigations and Research; $500,000,000 - Bureau of Indian Affairs, Construction; $800,000,000 - Environmental Protection Agency (EPA), Hazardous Substance Superfund; $200,000,000 - EPA, Leaking Underground Storage Tank Trust Fund Program; $8,400,000,000 - State and Tribal Assistance Grants ($6 bln, Clean Water State Revolving Funds; $2 bln, Drinking Water State Revolving Funds; $300 mil, Title VII, Subtitle G, Energy Policy Act of 2005; $100 mil, Comprehensive environmental Response, Compensation and Liability Act of 1980)

Department Of Health And Human Services (HSS)

$550,000,000 - Indian Health Service; $2,188,000,000 - Health Resources and Services; $462,000,000 - Centers for Disease Control and Prevention, Disease Control, Research and Training; $1,500,000,000 - National Institutes of Health (NIH), National Center for Research Resources; $1,500,000,000 - NIH, Office of the Director; $500,000,000 - NIH, Buildings & Facilities; $700,000,000 - Agency for Healthcare Research and Quality; $400,000,000 - Discretionary Funds; $1,000,000,000 - Administration for Children and Families, Low-Income Home Energy Assistance; $2,000,000,000 - Payments to States for the Child Care and Development Block Grant; $3,200,000,000 - Children and Families Services Program; $200,000,000 - Administration on Aging, Aging Services Programs; $2,000,000,000 - Office of the National Coordinator for Health Information Technology; $900,000,000 - Public Health & Social Services Emergency Fund (three parts for advanced R&D, prepare for influenza pandemic, improve IT at the Department of HHS); $3,000,000,000 - HHS Prevention and Wellness Fund

Department Of Education

$13,000,000,000 - Education for the Disadvantaged; $100,000,000 - Impact Aid (Title VII of the elementary and Secondary Education Act of 1965); $1,000,000,000 - School Improvement Program; $200,000,000 - Innovation and Improvement; $13,000,000,000 - Special Education (ref. IDEA, Individuals with Disabilities Education Act); $16,126,000,000 - Student Financial Assistance; $50,000,000 - Student Aid Administration; $100,000,000 - Higher Education; $250,000,000 - Institute of Education Sciences; $14,000,000,000 - School Modernization, Renovation, and Repair; $6,000,000,000 - Higher Education Modernization, Renovation, and Repair; $79,000,000,000 - State Fiscal Stabilization Fund

Corporation For National And Community Service

$160,000,000 - Operating Expenses; $40,000,000 - National Service Trust

Social Security Administration

$900,000,000 - Limitation on Administrative Expenses

Smithsonian Institute

$150,000,000 - Facilities Capital

National Foundation For The Arts And The Humanities$50,000,000 - National Endowment for the Arts

Department Of Labor

$4,000,000,000 - Employment and Training Administration; $120,000,000 - Community Service Employment For Older Americans; $500,000,000 - State Unemployment Insurance and Employment Service Operations; $80,000,000 - Departmental Management; $300,000,000 - Office of the Job Corps

Department Of Transportation

$3,000,000,000 - Federal Aviation Administration, Grants-in-Aid for Airports;$30,000,000,000 - Federal Highway Administration, Highway Infrastructure Investment; $300,000,000 - Federal Railroad Administration, Capital Assistance for Intercity Passenger Rail Service; $800,000,000 - Capital and Debt Service Grant to the Railroad Passenger Corporation; $6,000,000,0000 - Federal Transit Administration, Transit Capital Assistance; $2,000,000,000 - Fixed Guideway Infrastructure Investment; $1,000,000,000 - Grants at the discretion of the Secretary of Transportation

Department Of Housing & Urban Development

$5,000,000,000 - Public & Indian Housing, Public Housing Capital Fund; $2,500,000,000 - Elderly, Disabled, and Section 8 Assisted Housing, Energy Retrofit; $500,000,000 - Native American Housing Block Grants; $1,000,000,000 - Community Planning & Development, Community Development Fund; $4,190,000,000 - Neighborhood Stabilization Activities; Community Development Fund; $1,500,000,000 - Home Investment Partnerships Program; $10,000,000 - Self-Help & Assisted Homeownership Opportunity Program; $1,500,000,000 - Homeless Assistance Grants; $100,000,000 - Office of Healthy Homes and Lead Hazard Control, Lead Hazard Reduction
And that is just a partial list.

The idea that when the American people vote for the head of the Executive branch they thereby choose a CEO of Amerika whose judgment is never to be questioned is pernicious. Overthrowing that idea would be one giant step to removing the underlying cause of these recurring crises.

Tuesday, February 3, 2009

Liberals vs Conservatives on The Purpose of Govt

John Hawkins of Right Wing News has written a fine article about Why the Liberal View of Government is Wrong.

In part, he writes:
Liberals view the government as a force for good that should be used at every possible opportunity to reorder people's lives. This is an outgrowth of the liberal belief that most people are stupid and unable to ascertain what's in their own best interests without the intercession of their superiors (liberals) to show them what's best.

That makes government extraordinarily handy to liberals because they can use the power of government to force people to give up their money, force people to do things they don't want to do, and to try to reshape society into the utopian vision they have of how the world should work.

On the other hand, conservatives view the government as a necessary evil that should generally be used as sparingly, judiciously, and reluctantly as possible. This is not because conservatives believe people are angels, but because we believe Adam Smith was correct when he said, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."

Furthermore, the conservative view says that the government is slow, inefficient, inordinately expensive, error-prone, and as likely as not to create problems worse than the ones it tries to solve with its bungling efforts. Hence Ronald Reagan's classic line, "The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'"
This is mostly good. Sadly, as with so much that comes from the conservative movement, he makes a number standard errors.

There are such minor issues as the false alternative of calling government "a necessary evil" vs "Liberals view the government as a force for good that should be used at every possible opportunity to reorder people's lives." A necessary evil is a contradiction in terms. If it's necessary, it can't be evil; if it's evil, it certainly isn't needed but should be eliminated. Moreover, reordering people's lives can be exactly what is needed.

It's certainly true, further, for example, that government is a force for good when it kills jihadis or jails rapists or awards a just verdict in a civil case. In short, it's a force for good when it acts to protect individual rights, which often involves reordering some lives.

That points to the deeper problem here: the view that things are intrinsically good or evil. Something is good or evil only in so far as it furthers or thwarts an aim that serves some person's flourishing. An institution like government is morally neutral in this respect – it can be an instrument of good or evil, depending on how it acts, which is the result of the basic ideas that motivate those actions and the character of the men carrying them out.

It's also not inherently "slow, inefficient, inordinately expensive, error-prone..." It sometimes acts in haste – as TARP, the bailout frenzy, and thousands of other examples show. It can be frighteningly efficient, as the collection of taxes proves. It need not be expensive, relative to the overall size of the private economy which supports it. I have to confess, though, that it is error prone and often those errors are gigantic and heinous, as most of history shows, though if pressed I wouldn't label those errors.

The author makes another common conservative error — belittling or gainsaying "utopian visions." I can understand the cynicism, given where many such idealistic plans have led. But to aim for utopia is good provided ones ideals are right. That many utopians were content to seek the fulfillment of their plans by force, or that their goals were bad to begin with, does not disprove this. The Founding Fathers were certainly aiming, in the eyes of many, for a certain kind of utopia and they came very close.

When he gets down to more down-to-earth issues, he gets better.
A liberal loves the idea of forcing businesses to pay workers more than what they're worth through the minimum wage. Conservatives see the minimum wage as more meddling in the free market that will have negative consequences. If you force the business owner to overpay, he will surely change his behavior as a response.

Maybe he'll hire less people. Maybe he'll have less money to spend on equipment. Maybe he won't be able to give out Christmas bonuses to his best performing employees. Whatever the case may be, assuming a politician in DC can micromanage the salaries of a business owner better than he can seems to be incredibly arrogant.

A liberal looks at a failing business, usually one that has given quite a bit of money to liberal politicians, and wants to play the hero by "bailing out" that company with taxpayer money. That politician is making a determination that he is wiser than the market and can better decide whether a particular business should remain open.

A conservative looks at the same company and declines to bail it out on the grounds that if it were a viable business over the long-haul, some private company would have already loaned it the money it needs. Furthermore, when a company goes out of business, its more successful competitors can then swoop in, buy up its assets, and put those resources to better use.
What he's actually describing is a Progressive or socialist (of which modern liberals are the moderate version) versus someone who advocates a laissez-faire capitalism stance (on this one issue). But that's more a semantic issue than anything else. He's right on the money when he states that the modern liberal "loves the idea of forcing businesses." He could have stopped there. For it matters little to them what the outcome is and often not much who are the beneficiaries and losers.

That he or she gets to recommend or at least view but — best of all — wield force is a common theme in contemporary liberalism. They loath nothing so much as leaving individuals free to make their own decisions, and lust for nothing so much as making those choices for them.

That is what makes politicians and bureaucrats like George Bush and Henry Paulson the blood brothers of Barack Obama and Timothy Geithner or John McCain only somewhat less a liberal than Harry Reid.

This, in the end, is the fundamental difference between modern conservatives — for all their errors on particulars — and their contemporary opponents, the so-called liberals. With few exceptions, conservatives, while they compromise and contradict it often, value and trust freedom and the liberals do not.

It's as simple as that.