Wednesday, April 21, 2010

Disturbing parallels between the U.S. and Argentina

I touched on this subject in a post last month, and return to it because creeping socialism (or American Peronism, if you will) is a very slippery slope with disastrous long-term consequences. I know Argentina and its history very well. In fact, I once had to take a high school equivalency exam that included a rigorous test and essay on Argentine history, and my first job as an analyst in 1981 was to prepare an extensive report on the outlook for Argentina. Additionally, I lived there four years in the late 1970s. My wife and I have countless friends and relatives that we have visited dozens of times over the years since. As much as I love the people, the food, and the wine, I detest the Argentine government for the unimaginable economic pain and suffering it has inflicted on its people. I've witnessed first-hand the destruction of Argentine living standards over the past 35 years.

I never thought I would see the day that counting the number of parallels between the U.S. and Argentina would require the fingers of two hands, much less just one. But Richard Rahn does just that in a very well-done article in today's Washington Times. Excerpts:


Argentina has extensive import bans and controls. The Obama administration has been advocating protectionist trade policies and has opposed the ratification of previously negotiated trade agreements.

Argentina has income tax rates roughly equivalent to those in the United States but also has a value-added tax (VAT) and a wealth tax. Officials of the Obama administration and some members of the U.S. Congress are flirting with a VAT.

Argentina has continued to run inflationary monetary policies while at the same time attempting to treat the symptoms through price controls. The U.S. Federal Reserve has greatly increased the money supply, which is likely to produce future inflation. Officials of the Obama administration, at times, have advocated price controls of insurance companies, medical suppliers, financial institutions and even fees for carry-on luggage on airplanes.

Argentina's largest bank is state-owned, as are a number of its other banks. The Obama administration forced a number of large American banks to become partially government-owned. The two largest mortgage institutions in the United States - Fannie Mae and Freddie Mac - are now largely government-owned-and-controlled.

Argentine courts are slow and corrupt. Property rights are not secure, and the government has willfully understated inflation statistics, causing foreign and domestic bondholders to lose much of their investments. The Obama administration unilaterally took away bondholders' rights in the GM and Chrysler cases and, in essence, took their assets and turned them over to the unions that had supported Mr. Obama.

Argentina has extensive labor regulations to favor unions, which greatly increase the cost of hiring. The Obama administration has supported costly labor regulations that the unions favor, which eventually will drive up the cost of hiring workers and result in higher unemployment.

Argentina has a long history of deficit spending, which, in turn, has made government debt burdens so high that the government refuses to pay the debt to the private domestic and international debt holders. Over the next 30 years, economists ... estimate ... that the U.S. public debt will rise to between 200 percent and 500 percent of GDP. (It is now about 60 percent.) Debt levels of 200 percent to 500 percent cannot be supported; hence, the debt holders will face erosion of their capital through either inflation or nonpayment.
We are clearly headed in the wrong direction, and it's now up to the people to demand change for the better come November. I think it can be done. If not, the long-term consequences are very disturbing.

30 comments:

Benjamin said...

Well, some high drama here. Maybe things are not so bad.

M2 is up 2 percent in last year, and the St. Louis Fed says MZM down in last year.

Property rights appear secure in America. Bondholders are taking over the Tribune Co, for example, with no government interference. GM was an oddball case. Too big to fail, at the bottom oa horrible recession.

Labor unions are just about dead in America--smaller fractions of the labor force ever year.

While payroll taxes are regrettably stiff, federal income tax rates are well below the highs of the 1940s-1970s, when they reached as high as 90 percen, and never less than 70 percent.

I do fear the growth of federal debt.

We have a huge outsized military, and many rural states--Wyoming, Alabama, Mississppi, Montana, Alaska, New Mexico etal--receive constant infusions of hundreds of billions of federal dollars, not for years, not for decades, but for generations. Each rural state has 2 Senators, meaning small areas (population wise) can more or less "shake down" the Senate for huge gobs of federal lard. A bloc of 30 rural Senators can command anything they want.

I see little hope the Red State Socialist Empire or our global military apparatus will be trimmed back soon.

Federal civilian and military pensions are another huge time bomb.

Our best hope is we can inflate out of debt. Sad, but true--but I see little inflation for many years.

Well, during the Clinto years debt to GDP went down, handsomely. Maybe that can happen again.

Paul said...

Scott,

As soon as I read your post, I knew Benji would weigh in with yet more of his "Red State Socialist" blather. He always feels he must change the topic away from criticism of his boyfriend, an actual socialist.

Benjamin said...

Paul-

Okay, you don't like Obama. I am not particularly enamored of him either.

That aside, what is the solution to a bloc of rural states every year receiving large net federal infusions of cash into the hundreds of billions of dollars, for generations?

I suggest rough parity--every state get back form the feds roughly what they send. This would also balance the budget, btw. Have you a better solution?

Or, what is the solution to a military-VA that has been growing at a 9 percent annually compounded rate since 2000, and will soon cost $1 trillion a year?

I suggest, along with the Cato Institute, roughly cutting military outlays in half.

What is your solution?

Personal attacks are fine, but how about some real solutions?

brodero said...

Oklahoma....New Jersey is calling
they want their 8 billion back.....

Bob said...

Let's pay our income tax to our respective states and let the states fund the federal government.

Oh, but that would be just to 10th amendment to do.

Paul said...

"Personal attacks are fine, but how about some real solutions?"

Not every post criticizing Obama requires you to re-write the same "Red State Socialist" non-sequitur.

"I suggest rough parity--every state get back form the feds roughly what they send. This would also balance the budget, btw. Have you a better solution?"

Well we had a chance to make a big dent in the problem in 2008, but the cult of personality won the day. Even the self-proclaimed True Economic Conservatives were giddy like school girls for Hopeandchange. Now it's exponentially harder to get our fiscal house in order.


And your solution falls apart as soon as you start to examine it. Alaska, for example, has a small population but hosts some very important military installations. Fort Greeley, for example, is the site of a major ground based missile defense system that might have to shoot down a North Korean or Iranian nuclear missile someday.
It's not difficult to see why a state might show an imbalance in the inflow/outgo, especially if Alaska's oil $ contribution is not counted in the equation, which I don't believe it is. So it's a case-by-case situation. It would be idiotic to hamper national security, or what have you, over a fetish for "balance."

Besides, I still don't understand how your idea would actually balance the budget when the nitwit you voted for is borrowing a trillion and a half dollars per year, much of it abroad. Maybe I'm missing something.

The best answer is to cut spending overall, like Chris Christie is doing in New Jersey. But you would have voted for Corzine since you have proclaimed the GOP a "confederacy of feckless poltroons."

John said...

Lauren LaCapra has a very good piece on the President on Wall Street and financial regultion at thestreet.com.

For those of you following the financial sector I recommend it as a pretty good read. I also think it is roughly relevant to this topic.

John said...

As some of you know I try to avoid political discussions but I read something this morning many of you may find of interest.

Bespoke Investment Group mentioned yesterday that according to Intrade(I believe a provider of futures data)the republicans have a 50.1% probability of retaking the House of Representatives VS 45% for the Democrats.

I realize it is still a long way from November but I thought it was noteworthy. Just sayin.

Public Library said...

Does anyone in this country really believe we are headed to an Argentinian ending or is this tea party propaganda surfacing?

Scott Grannis said...

Obama's contempt for Wall Street and Big Business come straight out of the Peronists' playbook. It is a real shame that we have to endure this.

Scott Grannis said...

Public: I'm not arguing that we are going to end up like Argentina, nor do I believe it. But we are doing an increasing number of the bad and stupid things that Argentina has done, no question. How much further down that road we go is the question, and it is worth asking.

Paul said...

We are facing something like $76 trillion in unfunded liabilities, not counting the Obamacare disaster. We may not end up like Argentina, but it won't be because Obamanomics pulled us out of the hole. Something like Paul Ryan's Roadmap, or Chris Christie's slash-and-burn method, is needed.

Benjamin said...

Forget the Republican Party, or the Dem. Party (although I was impressed when Clinton proposed and got surplus budgets from an R-Party Congress).

Think Ron Paul.

As to Alaska, those military bases are antiques. Cold War relics. Now we must maintain a military designed to fight the Soviet Union--the SU with 2 million men in uniform, thousands of tanks, blue water navy, air force, etc.etc etc to fight......some terrorists and N. Korea?

Think Ron Paul--we have to slash and burn military outlays, and subsidies to rural areas. There is no way to get to lower federal income taxes--and a truly lower federal profile--than that.

Civilian and military pensions have to be postponed to age 68--cut those pensions and you can cut your income taxes.

The entitlement programs are largely funded by payroll taxes

Bob said...

The pension system within the military is the relic, not the military itself. Given that there is always need for efficiencies, it is still and always will be incumbent upon the LEADER of the free world to maintain a military strong enough to defer any possible attempt to change that balance of power.

Ron Paul libertarians do not understand what leadership means. It does not mean equality of nations. It means carrying the yoke of responsibility as not only policeman but even nation builder when necessary. Ron Paul libertarians have some good economic ideas but fail miserably when it comes to foreign policy with there isolationist attitude.

Paul said...

"Think Ron Paul."

Presumably, you mean Ron Paul running as an independent. In other words, throw your vote away and effectively help re-elect Obama.

Brilliant.

Public Library said...

How much we want to continue subsidizing corporate centralization of the American economy is worth discussing.

We should not be slaves to a system controlled by 5 corporations in banking, 5 in food production, 3 in car production, and so on.

It's actually as un-American as Big.Gov. There is a tremendous fight going on exactly because both the private and public sectors have grown so enormous in size + concentration.

John said...

Public,

I can understand your anti big corporate feelings. I realize I'm not going to change your mind with this and that's OK. But sometimes big CAN be better for the most people. For instance, Wal Mart's size drives such incredible economies of scale that prices are just ridiculous on a lot of items. They are brutal to compete against, but that's free enterprise. I have family in rural areas of Alabama and they drive nearly an hour once a week to shop at the Wal MArt Supercenter nearest them. They LOVE it.

There has been a consolidation in the banking industry. However in nearly every community there is at least one small local bank that competes very well vs the big boys. An awful lot of people prefer the local banker they go to church with and see at funerals of local long time residents. The local boys can compete. Believe it. I see it in my old hometown and its real.

In car production I see more than three. I see GM, Ford, Chrysler, Toyota, Nissan, Mazda, Honda, Hyundai (sp?), Mercedes, Lexus, Volkswagen, and more. Plus there are used car dealers that can and do compete with the new car dealers. There are even new business models such as CarMax and others that are making life tough for the dealerships. If you think its easy, just go into the business. A very old investor once told me 'son, everybody's business looks good....until YOU own it." The car business is a PERFECT example.

I don't know much about the food production business but I have several good friends that work for the giant foodservice company SYSCO. You may see their delivery trucks around from time to time. They have literally HUNDREDS of suppliers. Now I don't know many may be co-owned or something but I really think food production is a very fractured industry. Also highly competitive.

I know I have not changed how you feel and I understand your frustration with big business. Just remember. They are NOT public charities. They are driven by the need to be relentlessly efficient abd cost competitive. And the public gets the benefit of low prices and virtually unlimited selection as a result. If you want to see government running business, go to Venezuela. I have. My son-in-law is from there. And he sure doesn't want to go back.

Thats it from me today.

Nite, Ya'll

Public Library said...

John,

I appreciate the thoughtful response. Obviously I do not agree but I still appreciate your insight.

Couple things to note. Despite local banks competing, they will never reach the size + concentration to cripple the American economy. See the 2008 insolvency crisis. It was not a credit crunch as some seem to believe.

If the banking system required a massive bailout, then by default it is too big and too concentrated to exist.

America subsidizes its food production so it can pump out .49 cent tacos, chicken, and hamburgers using high fructose corn syrup regardless of inflation, health, or the damage to Non-US food production in other countries.

Studies have shown Walmart actually decreases the standard of living in its surrounding areas. I would rather pay .50 cents more per item so I do not set foot in that monstrosity.

Instead of wasting billions on 2 crummy auto companies, America should have supported the growth of smaller companies with better technologies and dismantled the gluttony of the unions.

Again, if these companies are so massive they require bailouts instead of accepting market discipline, they are by default too big and concentrated to exist.

How many times does America need to bailout the auto and airline industries before we realize its not the cars, its the business models???

Same goes for banking. The business models in banking are designed to reap massive payoffs in the short-run while pushing even larger losses down the road.

All the while we glorify these people for their cunning capitalism. Forget about sustainability and the long-term health of our country.

We have fallen into the trap of believing low prices are 1) the best possible outcome, and 2)not a race to the bottom.

We just found out that cheap prices and cheap money seduce people into believing they can buy more than they can afford.

How much more of this nonsense do you want to keep shoving down Americans throat. You are the one paying for it anyway and so am I?

Maybe your burger is cheap now but your taxes and kids, kids, kids taxes will pay about $100 for that Big Mac.

America has it's priorities backwards. Expanding corporations and the government are not the answers I am looking for.

John said...

Public,

First the banks. I agree with your contention that large banks that are mismanaged and become a danger to the economy therby need to be regulated so the risk is reduced to the point it no longer is a problem. I don't like it any more than you. I think it is being addressed. But there is plenty of competition in the banking industry. I stand by my previous post on that.


On food subsidies: We have too much of it, I agree. I would prefer to see less. But I am not ready for our government to tell me I can't take my grandchild to McDonalds for a Happy Meal because a bureaucrat somewhere in Washington has decided there is too much (fill in the blank) in the hamburger. I agree there is a lot of poor nutrition in a lot of fast food but people should have the freedom to choose what they want rather than have a government tell them what they must have.

Re Wal Mart: I would like to see the studies you are referring to. People are not forced at gunpoint to shop there. They do so because they see value. Would you sat the same for Target or Costco? Or does your bias just extend to Wal Mart? Should the government declare that Wal Mart should close its doors because a study done somewhere says somebody's standard of living has fallen? You and I are free to shop where we please but don't presume to tell my cousins they can't go to Wal Mart because their standard of living will go down if they do. I mean no disrespect but in all honesty they would laugh in your face.

I understand your frustration with big business and big government. But we live in a democracy where everyone has to live with things they don't like. Everyone can't have their way. The drive for efficiency results in economies of scale and the public benefits. Government should be there to make sure the playing fields are reasonably level and everyone plays by the same rules, pays their taxes and obeys our laws, not to tell us what to eat or where to shop.

If things are so backward here to you, I would be very interested in knowing where on the planet you think they are doing it right? We have our problems but there are a lot of people all over the world that would leave family and whatever wealth they have to come live in this country. Which of them would you be willing to swap places with?

Public Library said...

John,

Banks:
The small banks are now insolvent because they leaped into CRE. Why? They couldn't compete with Citi, WaMu, or BofA on standard banking services. Our lust for economies of scale are one ingredient in the disaster pie.

I think we both agree bank regulation is necessary and in-progress. However, allowing any company (or group of a few companies), to scale up to the moon has unintended and disastrous consequences.

Food:
You don't want a bureaucrat telling you not to have too much but you are willing to have the same bureaucrat subsidize your cheap meal? That's a bit hypocritical.

You are a smart guy I can tell by your posts. You know our food industry overproduces exactly because bureaucrats pay for the difference. Kids don't even know what the names of vegetables are. Schools are shoveling out fried nuggets and pizzas using cheap corn based products. They end up obese by high school.

Is this what you want for America?

Additionally, we are all paying for the poor health of this country. You either pay-up for healthy unsubsidized food, or you pay for the health care costs of the morbidly obese eating their Big Mac and super sized fries. We need more localization instead of funneling our dollars to the center.

I would rather choose to pay for quality food and leave the government out of both pieces of the pie.

Walmart:
Ugggh. Maybe you should visit this website http://www.peopleofwalmart.com/
It's classic material. I bet the obesity ratio of Walmart shoppers to farmer market visitors is staggering. Is Walmart our shining beacon of light for what we can do and become as a nation?

What if your family members were putting their neighbors out of work because of the discounts at Walmart. Would they still be laughing at me?

If their neighborhood depreciates because the surrounding area succumbs to Walmart, is the Walmart discount really something to welcome? Education is always the key and ignorance is no excuse. I feel sorry for them if they cannot understand the damage they do to their own community and church going folk.

I did not say elsewhere was better but that is no excuse. I have lived outside this country and that statement is the most overused and misunderstood ever.

You've been brainwashed to believe out there is bad, people dying, starving, paying too high taxes, waiting in long lines, and that they must be clamoring to get into the US.

Sorry, but this is just not the case. Outside of these borders is beautiful, diverse, and in many ways, a better quality of life. But life isn't measured ion economies of scale or efficiency. It is measured in family, friends, and longevity.

Americans are overworked, over-divorced, shrinking in family size + values, and yet because we get to "choose" this somehow makes it right or where we want to go.

Sorry but I don't prescribe to the same pills. We should, could, and will do better and it won;t be because of government or corporations.

It will happen through people connecting and caring for one another.

John said...

Public,

I am all for people connecting and caring for one another. But my cousins shopping at Wal Mart are not the cause of the problems you see and want to correct (which is fine-everyone should be civic minded and involved in how they wish the country to evolve). We do however live in a competitive economy. There is no escaping that. You don't like it because it creates things you see as bad. Yet the competition brings out things that also are good (maybe not in your eyes but there are many diverse people living in this country who think so). They have the right build their businesses and provide the services as they see fit. We have property rights in this country. BTW you still have not answered if you feel the same way about Target, Costco, Best Buy, and other large discount department stores or if your feelings are especially reserved for Wal Mart. Should ALL these be closed because their customers are overweight? Whose responsibility is it anyway? Wal Mart's?? Costco's? Whose? Or maybe, just maybe there's some individual responsibility here. Lookit, I know Too many people are overweight. But don't lay the blame at the feet of Wal Mart. They sell veggies too.

You don't like government or corporations. But fella, they are WITH us. They are not going anywhere. I love this country, warts and all. And I believe in YOUR right to believe as you wish. I think we just see the world through a different filter. That's fine too.

Best Wishes to you. I'm sure we'll have another discussion down the road. I look forward to it.

Public Library said...

Walmart, Costco, Target, they are all the same. Throw-in Ikea too. Walmart just happens to be the bottom of the barrel on many levels.

Sadly the days of local artisans almost vanished but you can see them resurfacing in communities around the country. People are beginning to demand higher quality, better prepared, and more locally sourced products from people they know and trust.

We keep shoving this 1950s mass produce, mass market methodology onto people. It's outdated and damaging to our society and subsidizing is the only thing keeping it alive.

I 100% agree with you the responsibility lies smack square on the individual. The only issue is how can individuals best overcome the onslaught of corporations and government.

Each is growing faster than the universe.

Btw this discussion is not about love for this country. That is a GWB era tactic. My brother, father, and grandfather all fought in wars for this country and I respect every second of their service.

Its ridiculous to throw patriotism under the bus in economic debate. We are not discussing which country is better to live in or who has property rights. We are discussing the risk over too big to fail corporations and government entities.

John I have read your post and I find good value in them. You are a good guy I can tell. But you are drinking too much of that channel 7 news koolaid.

If you've ever lived outside the country and watched the news, you would see clearly who really lives in a nanny state. Ironically, Americans don't even realize it.

Bob said...

Nice exchange Public and John.

Scorecard: John4, Public 0

I am an amatuer cook, a hobbyist at best but I enjoy it. Locally I shop at Winn Dixie, Publix, and WalMart for grocery items. By far the most diversity( they have a great Mexican and Asian section) and best prices come from Walmart, especially their produce section. I don't know where else I can get Hass avacodos virtually year round for $.65 to $1.

The problem with corporations and their size, banks or others, is lack of enforcement of the regulations we have. To use an analogy, Public would have us reduce the size of highways to control traffic rather than enforce the proper speed limit.

The most recent financial crisis was caused not so much by Wall Street greed, although they are culprits, as it was government interference within freemarkets to create a specific outcome that was not within the scope of freemarkets at the time. Wall Street did what they do, what their reason for existence is, to exploit a given situation in order to make profit. Profit that is shared by those that own the company. Nothing wrong with that. The failure came by an almost complete breakdown of regulatory bodies and ratings agencies, from the SEC to SRO's to Congress itself. Back to my analogy, if you don't enforce the speed limits, many cars will go faster and faster.

I could on, but I've got a dinner party tonight and am off to Walmart. :)

Bob

John said...

Bob,

Thank you for your input. Sometimes I think I am alone with my discussion partner here except for Scott (who I am sure reads every post) and maybe Benj.

Public,

Sir, I also believe you are a good guy and I hope our differences have not soured our willingness to respect each other's point of view. I have a diverse family whose beliefs span an equally diverse political spectrum. I decided long ago I would never allow something neither I nor they had any control over to affect our relationships. It is why I try hard to avoid political discussions. I try hard to see all sides and respect all legitimate positions. I believe strongly in democracy and compromise as effective conflict neutralizers. I believe in diversity and respect for all people, even though my opinions differ significantly. I allow no political signs in my yard and no bumper stickers on my automobiles. I accept and live with the outcome of all democratic elections. I will pay all legal taxes, even those I disagree with or oppose, And I have VERY close friends whose political views are the polar opposite of mine.

Sometimes I can come on a little strong. If I have offended you, you have my apologies.

One last thing on Wal Mart, Costco, etc. I think it is fine for a community to discuss the issue of allowing large discount stores to exist in their communities. If the people of the community decide not to allow a Wal Mart or Target in their jurisdiction by a democratic process I think it is fine. No Problem. They stay out. However I do not think it is fair for a minority to block economic development because they fear others will be put out of business. I have serious problems with government protecting some from competition based on a big vs small criteria.

Finally, I do not watch network news of any kind. I have posted here on this blog before that the cable news outfits (ALL of them) are merely propaganda platforms for their respective political agendas. I go out of my way to stay away from the koolaid. I do subscribe to a premium global intelligence service called Stratfor and I read it regularly. It is geopolitical in nature and very politically neutral IMO. If you would like to read something about them, go to stratfor.com/ As I have said here before, I am not a shill for them but they are good. Very good.

I wish you the best in life. I hope we have the opportunity to discuss other economic topics on this fine blog.

CDLIC said...

Scott,

The following link is to an excellent Power Point presentation regarding the Parallels between the U.S. and Argentina's collapse.


http://www.authorstream.com/Presentation/soundmanjay-344588-dont-cry-america-obamacare-socialism-argentina-ppspap-business-finance-ppt-powerpoint/

Public Library said...

Bob,

Do you know why your avocados cost .65 to $1 year round? This is the debate we are having which you clearly missed.

You should do a little research and find out how much of our food chain is subsidized by the government. You might be so elated about the cheap produce your taxes are funding.

Although maybe you would rather have the government dictate your food supply, that I do not know.

John,

I am not talking about disbanding corporations, even large ones. I believe in capitalism and democracy. The problem with many of these discussions is they get easily side tracked into political and patriotic ranter.

It gets tiresome. I don't think you are coming on strong at all. However, I do think you moved this discussion off the original debate. Not purposely of course. I think it happens more often than not.

Here is my point.

Consolidation in any industry whether it be agriculture, banking, defense, governmental, etc, can reach a tipping point where it becomes dangerous, counter-productive, and risky to carry-on under the status quo.

Bigger is not always better and our forefathers knew it from the get-go. I trust my forefathers had a good idea about size + scope of government and the evils of subsidized corporations...

John said...

Public,

OK I get your point. I think we have some common ground here.

Bigger IS not always better. But SOMETIMES it CAN be. That was the essence of my Wal Mart example. Clearly you don't agree. That's perfectly fine. But we can't go back to the 1950s when everything looked like Cobble Hill in Brooklyn. These giants are with us and folks are just going to have to decide where they want to shop. Clearly the trends are toward Wal Mart, Costco, and their like. Maybe its not where the trends SHOULD be going but the answer lies in public education NOT in demonizing corporate America. They will respond to public wishes if enough people demand it. You gotta sell your point of view. Do it successfully and I am fine with it. Blaming everything from lost jobs to public obesity on Wal Mart and McDonalds just doesn't cut it with me. In a free country people have choices. Influence the choices, not the freedom.

You call America a nanny state. Maybe you have a point. I prefer to call it massive geopolitical advantages combined with a system of government that is conducive to freedom of expression that includes freedom to persue a better life. That persuit includes growing businesses. And growing businesses requires regulations to keep playing fields as level as we can and the competition as fair as we can make it. It has faults. We stumble and just flat screw up sometimes but we get up from our stumbles and do what we can to fix the problems. And we manage to do it without going at each other with AK 47s. You have to admit, there are a lot of places in the world that can't say that. I'll agree with you that patriotism should not be 'thrown under the bus' but I STILL say GIVEN A CHOICE there is a BIG percentage of the world's population would leave where they are if they had an opportunity to come here. Compared to the rest of the world the nanny state we are looks pretty good to an awful lot of people.

I agree with you that consolidation CAN reach a point where it becomes counterproductive. However we have laws on our books today that make monopoly illegal. Mergers that eliminate competition to the public's detriment are rejected by regulators and are not allowed. Our laws do not outlaw size for the sake of size. If it becomes a danger to society at large it is addressed (see the current financial reform).

We have subsidies. I agree with you that many of these are bad. I, like you, wish we could do away with many of them. We are approaching a time when every government expense is going to have to face a process of being justified. We have an unsustainable deficit. Spending will have to be cut. I will gladly stand side by side with you to eliminate much of our budget. We waste TONS of money in this country and its going to have to stop and stop soon or we're going to pi-- away the enourmous good will we have with the rest of the world and wreck out standard of living in the process. The sacrifice should be felt by all classes and sectors of the economy. No favorites. Everyone should take hits for the good of the counrty. Its going to be ugly but I'll be right there with you. Promise.

DouglasR said...

Scott, I am puzzled about consistent references to Obama's "Obama's contempt for Wall Street and Big Business" Goldman Sachs was Obama's largest Corporate contributor, and Wall Street was very generous generally to him. From my point of view it seems like these people, lauded by people frequenting this blog, and who are after all, investors knew what they were doing. They did not give their money to Obama because they were feeling magnanimous that day, they were investing expecting results. My guess is that if you look at the end result of Obama's engagement with this bill, by the time it becomes law, you will find that the bill as signed is much friendlier to Wall Street than it would have been without his input.

If these CEOs are the smartest guys in the room, as they like to think of themselves, they were probably comfortable that Obama will be watching out for their interest in the long run, with his stable of advisors from Wall Street. Don't you think? Or were they just dumb like the rest of us moonbats who voted for Obama. What do you think, Paul? Some fresh new calumny?

Scott Grannis said...

Doug: I think the Wall Street guys were looking for a quid pro quo with their donations. Goldman Sachs has always been the most liberal of the Wall Street firms, by the way. But I believe that Obama is very anti-business and anti-Wall St. He is a populist who will throw anyone under the bus if it serves his purpose.

In any event, I think this whole thing about Goldman Sachs is much ado about nothing. GS was doing what it always does: it will do anything to make money. And those who do business with GS should know that. Caveat emptor as they say.

Bob said...

Public,

I am not well versed in agricultural subsidisies, but I would line up with you in their elimination. I also agree with the notion that business will automatically try to consolidate itself away from competition and towards monopoly. The nature of business is to maximize profits and one way to do that is to minimize competition. But I can buy food at many places, as I can buy just about anything that Walmart sells from other sources. So just because Walmart is big doesn't mean all competition has been eliminated. So called capitalists at the highest economic level that contribute to and appear to support the socialist nature of our current leadership are doing no more than attempting to consolidate thier positions in the overall marketplace through what has been termed Crony Capitalism. In his farewell address Eisenhower warned of the military industrial complex. I think he had the right notion but where the real danger lies is the unfair collaboration between government and enterprise and government and education/research subsidy. So in reality most of the problems that occur are a result of over involvement of government.

The real reason I get avocados so cheaply year round is because of international trade and free markets. Most of the avocados come from Mexico and central America, as do so many of the fruits and veggies we now get year round. Only a Walmart could afford to purchase in such quantity as to make it affordable to ship and resell in America.

I'm not a big shopper, (leave most of that to the wife), but the other day I was in Walmart for some mulch and picked up a pair of Wrangler jeans, 2 colored tshirts with breastpocket, and a pair of tennis shoes for under $50 (not counting mulch). Nothing wrong with that.