We are living in exciting times, especially as the healthcare bill approaches a faux-vote in the House this weekend. Obama has staked his presidency on this bill, and it is an abomination. Every poll I've seen says that the public is clearly against the bill. As this chart shows, 44% of the people "Strongly Disapprove" of the job that Obama is doing. I have to believe that the majority believe that passing this bill using the "deem and pass" strategy is not only wrong but unconstitutional. Obama himself said that this is not the way to govern, but when push comes to shove it looks like he will do anything and contradict himself without qualms.
I still don't believe the bill will pass, and even if it does it will be immediately challenged. If it passes it will become the focus of a referendum in the November elections. It's very likely that if this passes, it will be the last major bill that the Democrats pass in a very long time.
I think the people are outraged, and the outrage is spreading and building. The expansion of government contained in this this bill is gigantic. The bill will vastly expand the reach and intrusiveness of the IRS, which by the way will only need $10 billion to implement. This is Big Government writ large. It is a crazy quilt of rules and bureaucracies that is nightmarish in scope. It is almost inconceivable that our president would stake his administration, and the Democrats their Party's reputation, on a bill that is so complex and controversial; that they would sell it as a deficit-reduction measure when it obviously will end up costing hundreds of billions more than the CBO is projecting (if not trillions).
If there is anything good about this bill, and about Obama's decline in the polls, it is that the people are seeing what Big Government is really about, and it is not pretty. It is becoming scary. I have faith that the American people will not stand for this. I believe we are living in a time of great political change, and it will end up being for the better: for a smaller, less intrusive government. If not now, then we are doomed. But I'm not ready to give up on America, individual liberty, or free markets yet. Are you?
If you like our agriculture sector, if you like the Defense Department, then you will love nationalized health insurance.
ReplyDeleteOT, but worth considering:
ReplyDeleteMarch 19 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said the central bank and other U.S. regulators “failed” during the financial crisis because they became too complacent about risks.
“Even with the breakdown of private risk-management, the financial system would have held together had the second bulwark against crisis -- our regulatory system -- functioned effectively,” Greenspan said in the text of a speech at a Brookings Institution conference today. “But, under crisis pressure, it too failed.”
This somewhat alarms me. Greenspan is not a layman. He is saying both private risl management and the state back-up failed--and what have the same system in place today.
I contend this uncertainty concerning the soundness of our financial system is holding back investment. Why build a business up, why buy equities, if our financial system is a house of cards endangered by kids bettings billions (leveraged 100-to-1) on their computer screens?
If Al Queda had any brains, they would go into financial management.
If not now, then we are doomed. But I'm not ready to give up on America, individual liberty, or free markets yet. Are you?
ReplyDeleteHell no. Like John Paul Jones said, "I have not yet begun to fight."
This thing isn't over by a long shot.
If you like our agriculture sector, if you like the Defense Department, then you will love nationalized health insurance.
ReplyDeleteIt will combine the fiscal health of Medicare with the efficiency and effectiveness of the USPS, Amtrak and the TSA.
Agricultural subsidies are an abomination. Healthcare reform, however, is even worse. Defense? I like my security, and I think our armed forces are the best in the world.
ReplyDeleteScott, I think we are all dreaming. The Left is dreaming and the Right is dreaming. The Left... well it beats me what the left is thinking right now. I think the left is thinking that the Bill(s) are the biggest transfer of wealth into the private sector (the Insurance Industry) ever without much in the way of cost control, etc., and the Right thinks that this will be the downfall of Obama and the Democrats and that will usher in the long awaited shift to "smaller less intrusive government."
ReplyDeleteGood luck with that!
Our military may be the best in the world, but we have taken that military and stuck it into two third rate countries with next to no military of their own and hung it out to dry... and a Republican did that, don't forget. Our Military/Industrial complex is so bloated it reminds me of the name of a move in Tai-chi: Crushing an egg with Mount T'ai.
Talk about a country that has lost its way... so many of our compatriots don't have the slightest idea what to think about the world without listening to FauxNews or CNN or NPR. Good grief. And the political establishment will coopt any movement that begins to look popular, even the Tea Party. Brand Obama was the biggest sell of a product rebranding without changing much ever seen. It is laughable to think that there will be any fundamental change in either direction. The status quo has way to many entrenched interests behind it and they are perfectly happy to let the Left v. Right political theater play itself out... keep the plebs just happy enough to keep revolt in check and give them the illusion of an outlet for their frustrations. Feh!
And all the while we put the pedal to the metal and head ever closer to the brink.
I agree with DougR. You are fooling yourself to think the downfall of Obama will usher in a new era of small government.
ReplyDeleteThe right is not talking about small government. Their drum is stopping health care and Obama. Agriculture and Defense are pathetic abominations. exactly what is wrong with this country and it trickles right into health care.
And how can you be so fooled into thinking we are safer because we spend more and fight worthless wars? We are now more likely to be attacked than ever before. All of this was created on the rights clock and the bill just keeps getting larger and larger.
It's not wise to mistake activity for security and anti Obama for smaller government.
Call it what it is and lets start taking a hatchet to it instead of a scalpel.
Scott-
ReplyDeleteIt may surprise you that a single Chinese sub surfaced recently in the middle of our Seventh Fleet. It had been undetected. In fact, it surfaced to make itself known and make a point.
It could have sunk many ships, including the new $13.7 billion aircraft carriers we have underway.
We have the most expensive military ever created, a federal bureaucracy in full flower, with all the ossified lard and calcified fat that entails. It may be the best, but at what cost? And just who is interested in invading the US at this point? You should listen to Ron Paul.
Cato Institute (the libertarian outfit) says cut defense spending in half. I would go a bit further.
Surface ships are now an extremely dubious proposition in any shooting war, as they can be sunk by both torpedoes and missiles, rather easily--and this is the view of Paul Cohen a senior Navy man, who suggested an all submarine navy.
There are many realities such as this--war games in which guys on motorcycles armed with RPGs proved superior to our tanks. The games were halted, rules changed, then ended. Huge bases on S. Korea, a nation with an economy 40 times that of N. Korea (and a complete validation that freedom and free enterprise prove superior to communism and socialism).
Like all federal bureaucracies, the Defense Department concocts extravagant claims and stories about its vitality, necessity, mission, honor, virtue and so on and so on, and has a full-fledged PR department to spread the word.
We hear the same thing from teachers unions, social welfare workers, cops, firefighters and so on.
The DoD can spend money like water in a Congressional district--enough to make a "patriot" out of even Sen. Barbara Boxer (D).
The left-wing loves welfare spending, and the right-wing loves military spending and rural subsidies.
Still, if you want to cut federal income taxes, remember that 70 percent of income taxes are eaten up by DoD, USDA, the VA, debt, Interior and Homeland Security. Start cutting.
The huge (and lamentable) entitlement programs are largely financed by payroll taxes.
That is why we have two parties: The Red Ink Republicans and the Deficit Democrats.
If the experience of 2000-2006 was not to convince you of this, then I don't know what to say.
In defense of both parties, we live in a representational democracy. Every Congressman wants more federal spending in his district or state, and less federal taxes. And we voters want that too. It is a system designed to promote deficits.
The Red States have won this game--check out federal spending by state compared to federal revenues. There is a solid block of about 20 Red State Senators who are just fine with the federal budget ballooning forever--the extra money flows into their states. Most of rural America would dry up and blow away without federal infusions of lard.
Starting with LBJ and FDR, we have created the Red State Socialist Empire.
Frankly, I see no immediate solutions to this. I would support a balanced budget amendment, or something to that effect, or a law limiting federal outlays to 17 percent of GDP etc. But what I support and what will happen....
I am very ready to give up on America. I'm too old, but I'm telling my kids to plan on moving to a freer country after they graduate from college.
ReplyDeleteWe've hit the tipping point where we're all pirates ("Take what you can, give nothing back") or sheep. If you don't want to be either of those, it's time to move on.
The best part about this bill is it brings to light that 50,000,000 very highly paid people work for government or a primarily government funded health care system.
ReplyDeleteNow that government is running a $2 trillion dollar deficit as a result of tax receipts evaporating and increased spending.....there simply is not enough money to pay these people unless we start double the tax of the 10% of income earners, which primarily happen to be government and health care workers.
The crazy part is by over paying these workers and providing them with generous pensions, Wall Street make massive amounts of money managing their retirement and selling them often toxic products.
It is strange times when Bill Black, the country's leading expert on banking fraud calls our entire system basically a Ponzi Scheme and no one wants to listen.....but it was the same when Markopolis complained about Madoff or Chanos raised the Enron issue.
What is it with all these Greek guys spotting the fraud....could it be the Ouzo?
Scott,
ReplyDeleteSigh. A year ago I got SO MUCH out of your informative and upbeat blog about the state of the economy - it was a terrific antidote to all the "doomers" who were wailing that the sky was falling.
But now, you've turned in to quite the doomer yourself - good grief, this health insurance reform is a very modest reform that CBO's analysis says will cut the deficit. This is certainly much less than the liberals were hoping for. Obama is actually right in the center of the political spectrum, notwithstanding the GOP grandstanding and tea party screamers. (By the way, tea parties are for little girls with imaginary friends - heh!)
The left is actually concerned he's "selling out" to corporate interests. Any chance you could calm down your political rhetoric? Just a suggestion.
Well, txsaddletramp, I am glad you rode in. I have been impressed by some of the political venom, and I confess that I will post when I feel like some of the right-wing echo chamber needs a counterweight, so I am probably guilty of contributing, but I agree with your political assessment. Some voices here notwithstanding Obama is anything but left-wing (!) and he is certainly not a radical socialist, he is thoroughly status quo all the way, with some variations on the margin.
ReplyDeleteThe new Gerald Ford-class of aircraft carriers cost $14 billion each--before airplanes, some additional hardware, and salaries, pensions etc. And only $14 billion if there is not inflation in military hardware costs--oh, that never happens.
ReplyDeleteThis is a gorgeous and ferocious vessel, unfortunately it can be sunk by missile or torpedo, and submarines, armed with both, are very hard to track.
In a real war, it would likely retreat to harbor or be sunk, or (most likely) both.
Now, tell me about balancing the budget.
"Now, tell me about balancing the budget."
ReplyDeleteWhy? You'll just go and vote for the candidate with the most glitz and celebrity endorsements anyway.
"..good grief, this health insurance reform is a very modest reform that CBO's analysis says will cut the deficit."
ReplyDeleteWhat a joke. We're talking trillions poured down a rathole on a massive new entitlement. Perhaps that's modest in the age of The Messiah. In saner times, it would scare the crap out of responsible people.
The Obami rigged the bill so that "cut the deficit" talking point could be bandied about. Looks like they were successful on the propaganda front, but only a fool would believe a new staggeringly expensive program would cut the deficit(by less than the monthly deficit total we now run in the age of the Great Moderate Messiah.) They do this in part by levying 10 years of taxes for 6 years of benefit.
Don’t really think Grannis is being negative. More like he is pointing out the progressive movement.
ReplyDeleteFrom Roscoe Pound and Woodrow Wilson to today , the progressives chip away at the concept of the individual and the concept of individual liberty. Progressives are those anointed intellectuals whose arguments are based not upon empirical fact, rather arguments based on “the way thinks ought to be” aka “the right thing to do“.
Progressives are very insidious and have an agenda just for you as progressives know what is best for you!
However once progressives get in power, people quickly see their liberty is threatened. Progressive policies always fall flat on their face as the policies are not based on fact. Policies based on creating things in the progressive self image always back fire as their policies are based on “notions“ and not empirical facts.
Hence the rapid decline of Obama.
Also, the bogus claim Obamacare cuts the deficit is derived in large part from massive new taxes and hiring thousands of bloodsucking IRS agents.
ReplyDeleteHail Obama the Moderate!
Benjamin: concerning the Chinese sub that surfaced near a US aircraft carrier. It wasn't so recent, as it happened in Oct. '06; the sub surfaced a few miles from the carrier; the carrier was not even trying to engage in anti-submarine warfare. I think you exaggerate a bit. Regardless, it should not be surprising that other nations will engage in one-upmanship when it comes to the military capability. Is that a reason to unilaterally throw in the towel?
ReplyDeletehttp://www.sinodaily.com/reports/Chinese_Sub_Approached_US_Aircraft_Carrier_Undetected_999.html
Bret: regarding whether we are all pirates or sheep--I think you left out a sensible middle ground, which might be labelled "patriot." I'm willing to bet (which is why I am still bullish) that the majority of Americans are patriots. Come November, we will find out who is right.
ReplyDeletetxsaddletramp: I really appreciate your comments, and the comments of the vast majority of readers, as I think this leads to constructive dialogue and at the very least keeps me on my toes. But I must say that I think politics is an extremely important subject when it comes to analyzing economies and markets. If not THE most important subject. If I thought that Obamacare had a decent chance of prevailing, that the US government would succeed in taking over yet another major industry (e.g., cars, banks, student loans), I would find it very hard to be optimistic about the future of our economy. I think free markets and limited government are essential to a vibrant and healthy economy. You just can't ignore the power of politics to improve or destroy an economy. I've seen too much politically-caused economic destruction in other countries in my lifetime to accept your suggestion.
ReplyDeleteAnd in any event, let me be clear: I am not a "doomer," as I think we are at a very important and positive turning point in our politics. I think Big Government is going to be the target of fierce political opposition for some time to come, and not the goal.
This comment has been removed by the author.
ReplyDeleteWell, this is very interesting. Scott has had an interesting effect on me over the last few years of our acquaintance. I gave up on the whole Left-Right thing a while ago but I wouldn't be mistaken for somebody on the right, for the most part. I think economists made a big mistake when they stopped calling economics "Political Economics" As if the ideology of the economist... the politics... had no effect on the theories and models of the world the economist adopted.
ReplyDeleteThe idea that progressives base their worldview on "notions" while conservatives are empirically based is an example. I could give you all kinds of empirical facts about resource depletion and the 2nd Law of Thermodynamics wall we are all heading for, but do you think that would trump your notions? Do you think that literally thousands of studies showing the changing climate and man's role in it will trump your notions? I doubt it. You will believe what you want to believe because your political/economic models and your entire worldview are geared in a different direction.
I just don't understand what kind of vision of the world you hold. Just how is a nation of 300 million people going to be sustained with a government that is small... except of course for the military... and poorly funded. Just what kind of political force do you imagine will be unleashed when the level of "services" rendered by the government is reduced and reduced and reduced, while wealth concentrates more and more in the hands of a few. Just what do you imagine would be the real result of enacting all the small government dreams?
Do you really imagine that economic growth can continue indefinitely? what happens when growth stops? What happens to finance in a steady state world? You may understand a lot about the abstruse details of the machinery of The Economy, but what happens if the geologists are right about energy resource depletion and rare earth depletion? How much throughput is necessary to keep it all going and what are the consequences of declines of certain critical feedstocks? Cantarell oilfield in Mexico is crashing at an astonishing rate, most of the oil producing nations on the planet are in decline. The reserve numbers out of Saudi Arabia are clearly bogus, and yet governments and economists still base their projections on fantasies.
Well I just don't understand whether you even have a vision of the future, and what kind of society we will have if the government becomes the way Grover Norquist wants it: small enough to drown in the bathtub? I am not so keen on the left vision either... mostly because I don't think they have a clue either. They want it all, and they can't have it all. In this world we will still need a military for a while longer, and like it or not we will have to fund it. Benjamin goes on about the Rural Socialist state, he obviously lives in a city and has forgotten where his food comes from. I have lived in small villages most of my adult life, most of that in New Hampshire, so I understand about rural, and low levels of funding and individual liberty and how important it is. I heat with wood, and we grow much of our own food. We wish we were further away from population centers, but trade-offs must be made. This is the land of Shay's Rebellion, but that was a long time ago. If resources begin to be constrained, as the eventually will, if not this generation then in the next, what kind of a democracy will there be? Can you simply keep extracting the resource base and still expect your grandchildren and great grandchildren to think it was a good idea.... "Thanks for nothin' Gramps!" This is not logical.
Just what kind of world do you think we will leave behind? Do you ever think about that?
Douglas R,
ReplyDeleteJust how much more massive debt will the non-oil drilling, coal industry bankrupting Messiah leave behind? Do you ever think about that?
Scott--
ReplyDeleteThere is extensive literature out there regarding the vulnerability of surface vessels to submarines. As long ago as the early 1970s, naval theorist Paul Cohen suggested an all-sub navy. It makes sense.
Far from throwing in the towel, this would provide us with a potent and lethal navy, almost invulnerable to counter-attack--and yet far less expensive.
Our military should mimic private-sector enterprises and try to reach goals for the least cost possible. There are some trade-offs, just as in the private sector.
My stance is not that we have no military, but that we have one more effective for far less money. We basically have the same military we had when the Soviet Union was high--and even then (the 1980s) our force structure was lamentably outdated--but in the military, as in any federal bureaucracy, turf and ossification outweigh thrift and enterprise.
BTW, the Cato Institute agrees with me.
However, have no worries--we will trim our military about the time the USDA gives up subsidies, the homeowner's mortgage interest tax deduction is eliminated, and Fannie and Freddie are wiped out.
In shot, not in our lifetimes.
DouglasR said...
ReplyDelete“The idea that progressives base their worldview on "notions" while conservatives are empirically based is an example. I could give you all kinds of empirical facts about resource depletion and the 2nd Law of Thermodynamics wall we are all heading for, but do you think that would trump your notions? Do you think that literally thousands of studies showing the changing climate and man's role in it will trump your notions? I doubt it. You will believe what you want to believe because your political/economic models and your entire worldview are geared in a different direction.”
“I just don't understand what kind of vision of the world you hold. Just how is a nation of 300 million people going to be sustained with a government that is small... except of course for the military... and poorly funded. Just what kind of political force do you imagine will be unleashed when the level of "services" rendered by the government is reduced and reduced and reduced, while wealth concentrates more and more in the hands of a few. Just what do you imagine would be the real result of enacting all the small government dreams?”
Doug:
Political-economy is a sub discipline of economics. You can study for and receive an MS in political-economy at about any division one university.
Regarding “notions”, the anointed/intellectual view vs. the tragic/objective view goes back over 300 years. “Notions” are non-empirical arguments based
'on the way things ought to be" filled with verbal virtuosity. Try writings/books by Thomas Sowell and Walter E. Williams.
Your argument regarding size and scope of government is an argument based on “government as the solution”. That reducing size and scope of government somehow reduces solutions.