8 Responses to Democrat Economy

  • Why “Democrat” economy? As Arlen Spector said, the Republicans essentially support this bill, but are afraid to put their fingerprints on it.

  • Arlen Spector, besides being a RINO, is a liar. This monstrosity is the Democrats’ gift to the nation. Besides Spector, and the Maine RINOS, the Republican party was unified in its opposition.

  • While one ought to roll eyes at superstition, I’d say that the Friday 13 passing of this trillion-dollar bag of pork-rinds is a bit of a morbidly funny harbinger. I am also glad it passed (first, because it was inevitable and second, because its inevitable doom may seal the ultimate downfall of the Left, even as the Left enjoys its shining little “moment,” at least right now).

    More horrific is the complete lack of innovation that surrounded this grand Democratic scheme to solve (or at least blunt) the crisis. Obama the new, new Visionary (for that is indeed the specific image he cultivated, sold, and rode-upon into office). Some “vision.” This bill is not only the most pedestrian, predictable, and typically uninspired Leftist folly right out of the tattered playbook, it is the fattest.

    This kind of “same old, same old” is far more ridiculous than the “past eight years same-old” that Obama, Pelosi, Reid and the other dwarfs have been whimpering about. Is anyone amazed at how the leftist imagination is so easily titillated and indoctrinated, en masse, by the most generic clouds of stardust? No. People may rightfully decry Bush and his myriad difficulties, but with the passing of this bill, the Obama Cult has officially become the greatest hoodwink in American history.

    None of that matters, now. We’re in for it. Obama plans to address the housing crisis on Wednesday. More drab policy-wonking and ineptitude. The horror is that so few Americans have even a shred of a clue that there is no solution to this largest segment of the crisis. Nothing can be done, short of having allowed (and continuing to allow) the big banks to utterly collapse and find a way to prop-up the smaller banks that did not have the means to engage in the pervasive lending abuses of the giants, and thus make it easier for the crashed banking infrastructure to reset itself even a tiny bit.

    That, at least, would put ~some~ sort of a dent in the fact that over 70 percent of those in the market for a house can never qualify for a loan now (even if 20 percent of that 70 actually DO qualify), with housing prices not even at the nadir, yet, and inventory all the way to the moon. Letting the offending banks and lenders fail and giving incentives to the smaller, up-and-coming banks would have helped put that 10-20% of qualified buyers back on the map. Even getting 5% of those who still truly qualify (but who cannot get a loan to save their lives) back on the map would have had a salvific impact. A superb pilot-light in the darkness. That would have been a real stimulus, right there. A genuine stimulus.

    But no one gets this. Few, at least. America doesn’t get it. I’ve been in lending and real estate for almost 20 years, in California. I can attest that Americans haven’t a proverbial clue and our representatives (touchy Republicans and dingbat Democrats alike) are evading the primary issue, on top of the Democrats’ execrable compounding of the issue. Everyone knows this stimulus is going to fail and that even its pithy scraps of assistance won’t register a blip for years. To secure their paradigm, Obama and the Democrats betrayed the nation and cobbled together this piece of garbage as quickly as possible (under the “we need it as swiftly as possible” mantle) at the expense of bipartisanship and the future. Certainly, a six-month attempt at coming-up with something truly innovative and potentially successful would have been wise. But that’s not on anyone’s agenda, in the beltway.

    How this administration can dare uphold even a mere pretense of being innovative and visionary is, at best, a joke, now. With the passing of this cobbled-together, typically uninspired-yet-exorbitant stimulus, the Obama presidency has already become an apocalyptic disaster. A massive failure. Truly: everything to come from him over the next four years is going to be so much fiddling amid the conflagration.

  • I’m not sure if the stimulus will help that much in the current economic environment. Economies go through cycles and recession is part of the cycle. I read a good article on the history of cycles at, I think,

    http://www.recessioninfocenter.com

  • I was looking at a chart of the DJIA for the last four years, it’s interesting to note that it was on a steady rise until November 2006… since then it has been declining.

    What happened in Nov 2006 that could possibly account for this?

  • What happened in Nov 2006 that could possibly account for this?

    Hmmmm,…., I seem to recall that there was an election that month,….,

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11 Responses to Against Moderation

  • One of the best features of the original plan was aid to cash-strapped state governments, which would have provided a quick boost to the economy while preserving essential services. But the centrists insisted on a $40 billion cut in that spending.

    This is the statement where I just gape. Either that, or call BS. Perhaps someone else can explain to me how giving money to the state governments that have run themselves into deficits will help stimulate the economy? Let’s see–the government employs people who will hopefully spend their paychecks and move the money back into the private sector, so I suppose that could have an indirect effect. But if that’s one of the hopes, you can accomplish the same thing with *gasp* tax cuts. But how are the state governments going to spend these handouts? If they’re running budget deficits, that money is just going to go to shore up the budget. How does that work back into the economy? How are the “essential services” going to help? And by essential services, we’re talking about government entitlement programs and government facilities like prisons. If we’re thinking that school upgrades and renovations are going to stimulate the economy, we must be counting on the economic pickup coming 5-10 years from now, when those students (assuming they receive a better education) will enter the workforce.

    I just don’t understand. Every time I try to figure out how giving this money away is going to stimulate the economy, I keep coming back to people having more money to spend. And you can just as easily give people more money to spend by cutting taxes. Am I missing anything?

  • Ryan,

    I think the argument runs as follows:

    1) We are trying to spend money to stimulate the economy;

    2) One of the difficulties with spending money is identifying worthwhile projects;

    3) State governments have already identified a number of projects they feel are worthwhile (and probably would have been funded if the economy hadn’t tanked);

    4) Ergo, if you’re going to hand out money, state governments would be a good place to start (and it would preserve existing services).

  • I hear you. Frankly, it’s beginning to strike me that the appeal of Keynsian economics is mainly that some people want to spent that money regardless, and Keynsianism essentially tells them, “Don’t worry. You can eat all those deserts and it’s good for you!”

    The bit in Krugman’s column that really struck me was, “Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.”

    It strikes me as fundamentally problematic to estimate that the downturn will result in a spending “hole” of 2.9 trillion and then turn around and simply borrow 2.9 trillion to spend thinking you’ll somehow “make it up”. Normally what that hole ought to do is result in getting rid of less efficient businesses and practices, thus eventually increasing productivity, creating wealth, and putting the economy back into growth. Simply pouring money out (and I’m not clear how borrowing in this way on the world scene is fundamentally different from printing more money) does nothing to sift out the bad and reward the good, it just slows the process down, so far as I can see.

  • John,

    Okay, I think that’s somewhat of an adequate answer, especially as it seems to play with subsidiarity. At least direct the money to local governments, since they have a better idea where the money would be better spent.

    Still, when you consider that Wyoming–because of its balanced budgets and reserve funds–doesn’t really need any of its portion of the stimulus bill (though apparently we’ll fight tooth and nail for our portion), and California–bankrupt because its poor budgetary practices–needs a sizable chunk of money just to balance their ledgers, it makes you wonder just how wisely even state governments will spend that money.

  • I quite concur with your line of reasoning, though not entirely with that of Krugman or Douthat.

    Most disheartening (but, let us face it, hardly surprising) has been the lack of bipartisan craftsmanship on this towering chunk of gristle we’re about to be force-fed. There hasn’t even been a pretense of bipartisanship (again, no shock there), and I see any attempt to brand portions of this stimulus bill as “too centrist” to be gallingly disingenuous, particularly coming from Krugman.

    I do like your line about moderation being, at times, overrated. How true. Especially the misconception of moderation, in Krugman’s case.

  • All irrelevant, as Porkapalooza bill passed 61-37 in Senate. Surprise surprise the GOP senators who joined the majority were my own Arlen Specter and the two Maine ladies. Now on to House-Senate conference committee for final round of sausage making. Will be interesting to see if final package includes provision for Ultimate Health Care Czar/Czarina. Great analysis on Bloomberg by former NY Lt. Gov. Betsy McCaughey on how this office will essentially set prices for any and all medical procedures. Surprise surprise out of hands of medical pros. So fans of Hope and Change don’t start crying if the real result of H&C is life-preserving surgery for Grandma. Coverage will get really really expensive for seasoned citizens. And my Spidey Sense tells me a bunch of Terri Schiavo cases around the bend. Thanks a bunch Obama voters. Hope you’re happy about this, Mr. Krugman.

  • Or lack of life-preserving surgery for Grandma. Maybe even the unborn. Could be a subtle form of FOCA. Stay on guard.

  • The Freedom of Choice Act is a way of energizing the base.

    I think the idea is to pass FOCA bit by bit. There is no way FOCA in its form could pass through either the House or the Senate. It’s too extreme and opposition would almost ensure political suicide for the Democratic Party.

    However, if you do it bit by bit, it hardly goes noticed. Why?

    I really support the anti-FOCA campaign going across the United States parish to parish. But why wasn’t this happening, in say, October?

    Not to mention, considering the improbable chances of FOCA which I believe many of us recognize, why did the pro-life movement not energize its efforts toward things that are likely: the Mexico City Policy being overturned and federal funding of embryonic stem cell research.

    In a post advocating letter writing to Congress, I pointed out a bill in the House H.R. 34, there is a push to delay Bush’s executive order for conscience clauses to protect health care professionals from being forced to perform abortions. Why? When Obama finally gets a Secretary of Health and Human Services, they can reverse the conscience clause and put the consciences of many pro-life doctors and nurses at risk.

    We’ve seen the fight over Title X funding which goes to health “clinics,” i.e. Planned Parenthood and public funding of contraceptives and abortifacents. If I’m not mistaken, Plan B is now an over the counter the bill.

    Losing all these little fights actually amounts rather quickly. We’re writing about FOCA in our parishes and are opening ourselves to a host of losses. We’ll win in the long run, certainly. I’d like more strategy and less casualities.

  • I’d rather have it all-out as well; let’s see what the consequences of this insane (from my point of view anyways) policy decision really are – and let’s remember the lessons this time.

  • Frankly, it’s beginning to strike me that the appeal of Keynsian economics is mainly that some people want to spent that money regardless, and Keynsianism essentially tells them, “Don’t worry. You can eat all those deserts and it’s good for you!”

    Well, Keynes did say “In the long run, we’re all dead.” (Keynes was homosexual and childless, and although it might be un-PC to say so, I imagine that influenced his outlook. I’m childless myself, and so I know you don’t immediately think in terms of future generations if you haven’t generated any yourself.) I’ve used that line of reasoning when I’m tempted by the dessert tray in a restaurant, but of course, you can get into trouble very quickly if you use it to justify eating chocolate cake for breakfast. This stimulus bill is chocolate cake for breakfast, lunch and dinner.

    Mark Steyn pointed out the essential difficulty with Keynesian economics – all socialist welfare states will run off the rails eventually because you need to keep the birthrate high in order to sustain the state’s spending. Sweden seemed to have the right idea back in 1970, when there were still a lot of young Swedes. Now things aren’t looking so hot. Who is going to pay for those cradle-to-grave programs when more citizens are closer to the grave than the cradle? Sarkozy has had a heck of a time trying to even modestly scale back the French welfare system. It’s ironic that we are about to expand entitlement spending on a huge scale in this country just as some European leaders are belatedly realizing that their own entitlements are becoming unaffordable.

    But hey, if you take the attitude that future generations can go to Hades and what’s important is “I’ve got mine, Jack,” than I suppose you can live with that.

  • I’ve heard speculation that the cost of this will start hitting at about the same time as it will start actually kicking in (1-2 years). The cost will be necessarily higher taxes, and higher inflation (stagflation). You can’t pump 1 trillion $ into a recessionary economy without incurring massive inflation.

Obama and the Stimulus Package

Tuesday, February 10, AD 2009

Has anyone ever wondered if it is possible that one can land in a financial crisis when one has a steady income, no debts, and a large reserve of money in case of emergencies?  Certainly, I suppose, if something devastating comes around, like an accident that requires weeks in the ICU, surgeries, and a long rehabilitation, that could bankrupt a person.  Yet such accidents, on a whole, are rare, and most people who live a financially responsible life never have to plead for a bailout.

When we look at our current financial crisis nationwide, I can’t help but wonder what people are thinking.  President Obama has promised us trillion dollar deficits for years to come in an effort to restore our economy.  Like most right-leaning folk, I’m under the impression that our current crisis has come from overspending, living beyond our means, and not being prepared for when we hit bumpy times in the economy (like $4/gallon gas, which drives prices up all around).  Perhaps, if this view is incorrect, someone will be willing to explain to me why it is so.  But my impression has been that first, people individually are consumed with buying, buying, buying, even when they don’t have the money to buy.   I have friends who, though they grossed over $60,000 a year, were still living paycheck to paycheck because of their deficit spending.  I’ve seen people who, upon receiving their government money, have gone and blown it on new cell phones (that are shut down after two delinquent months), on fancy steack dinners, and so on, instead of buying necessities or saving up what they can.  I’ve seen people struggling with hundreds of thousands of dollars of accumulated debt that came from student loans, house loans, car loans, credit cards, and so on.  This is just what I’ve seen.  What I’ve heard–word of mouth, or in the news, or on blogs–is even worse.

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18 Responses to Obama and the Stimulus Package

  • My personal feeling is that the dollar will die within the next 10-15 years. I just don’t see how it can survive all these pressures of printing and borrowing in order to pay for entitlement programs and foreign interventions.

    If Obama were really interested in rescuing the economy and preserving the nations ‘greatness’ while there is still time he would:

    1.) End our overseas commitments, whose cost is perpetually skyrocketing to the detriment of our blood and treasure; not to mention the liberty of those we are trying to “help”

    2.) Audit the Federal Reserve if you aren’t willing to abolish them. The Fed is a quasi-public/private cartel of banks that has control of our currency via manipulating interest rates. Who the hell are they to arbitrarily decide the price of money? Our fiat currency had been far too politicized, thanks to the removal of any kind of commodity standard. We need to know what the Fed has been up to in total. Its way past time Congress reassert its powers and responsibilities.

    3.) Create a long-term transition away from entitlement programs. It turns out the Great Society ain’t so great. While many people are now dependent on the state to survive, the costs we could save from ending foreign commitments could be moved towards these programs as we slowly close them down over time. Congress should be barred from raiding Social Security/Medicare and Medicaid funds for their pet projects.

    4.) Elimination of the Income Tax. The government could easily put money back in the hands of consumers instantly by simply not taxing the fruit of their labor. There are plenty of other tariffs and taxes that would maintain the size of government at about the level it was in the Clinton years. If you have to institute a consumption tax, fine… but it should eventually be phased out too.

    5.) Secure the border. If the Defense Department really needs something do, why can’t they defend our federal border from rampant illegal immigration? Immigration, particularly of educated individuals is crucial to our society’s resources, but that is a far-cry from the seemingly endless free-for-all occurring on the border with Mexico. If the Mexican government were ever to collapse, the U.S. has to be able to preserve its physical integrity. Entitlement programs in medical care and education that have an effect of subsidizing illegal immigration should be ended.

    6.) Allow the liquidation of assets to occur. If the banking industry, real estate industry, auto industry etc. don’t fail how can we ever rebuild on a better footing? We have to discover the price of their assets by rewarding the people who have saved their money. They are the ones capable of bringing on a genuine recovery and moral redistribution of wealth. What is occurring now is an attempt by the elite and politically-well connected to keep the status-quo afloat at the expense of taxpayers and responsible consumers. This process will undoubtedly be extremely painful. But quick and painful is preferable to slow and painful.

    The fact is for the last few decades we’ve been living in a fantasy world of cheap money, easy credit and an entitlement mentality. Thats NOT what this country was ever supposed to be about. We’re supposed to work towards lifting ourselves up so that the next generation could go even higher. Instead we chose the pleasures of today at the expense of tomorrow.

    We aren’t the first generation to ever act this way. Its something that can be forgiven and reversed if we are willing to endure the consequences of our bad decisions. There’s no easy or popular way out. Its time to freaking man-up and deal with it.

    At least thats the way I see it.

  • I’m usually just a lurker here and love The American Catholic writers and the in depth dialogue here – Thank you. … I can’t help myself in making this point to enough people… I believe the goal of Obama and whoever is behind him is to destroy this country and maybe that just means Democracy but I can’t help think it also includes Christianity.

  • Lee,

    I really hope you’re wrong.

  • I think it is inappropriate to accuse the President of wanting to destroy the country. After listening to similar accusations from Bush-haters for the last eight years, I think those on the right should be especially sensitive to this.

  • I don’t believe that the President intends to destroy this country. I think he sincerely believes that unprecedented deficits that our descendants will never be able to repay, an ever-expanding public sector, and enhanced government regulation are the path to prosperity. Truth to tell I would have more intellectual respect for the President if I believed that he did wish to destroy the country, instead of accepting the fact that he actually believes this snakeoil.

  • Lee,

    I would also caution against spreading that speculation. I’m more in the camp that Obama and his ilk are plunderers (cf Ayn Rand’s Atlas Shrugged), and they simply think they can keep plundering the wealth accrued by our hard-working, industrious citizens indefinitely.

    Part of the problem is that there’s a disconnect between viewpoints on the right and the left. The ideas of how economics work, how to stimulate job growth, how to make sure everyone has his needs met, are so divergent there is simply no middle ground to work with. To this extent, both sides see the other as being completely disassociated with reality. Frankly, I believe most of these people who are willing to plunder our nation–and they are on both sides of the aisle–are the ones who are truly disconnected with reality. The plundering occurs to score political points, and those points continue to put a person in power.

    Now, I don’t really see what Obama gains personally by being president, except that he gets to be the one directing the course of the nation. Now, most people are drawn to one party or another because they believe that party has a particular vision that agrees with their own view (even if that party hasn’t held that vision since 1960). I think Obama truly believes there are huge injustices working in our nation. Ask any Democrat, and you’ll get that kind of response. In some cases, those injustices are completely valid, and Republicans are remiss in failing to address them. In other cases, those injustices are trumped up, or are infantile railing against the natural order of the world. But just because they’re trumped up doesn’t mean that the person advocating fixing those injustices knows it.

    Consider the plight of having extremely wealthy and extremely poor in our nation (though, arguably, our poor are wealthier than most “wealthy” in many third-world nations). Democrats view this disparity as coming from free market economics, a system that plunders the poor for the advantage of the rich. (I’ve argue long and hard with my sister on this point, and she won’t budge an inch on the denunciation of capitalism as personified by the industrial giants of the late nineteenth century.) Republicans view the disparity as being derived from government interference, whose subsidies and favoritism to lobbyists create situations and loopholes that permit the plundering to occur. I believe the disparity comes in part because the free market permits people to get rich by working hard (and often being in the right place at the right time), and permits people to be destitute by not working hard, or having the wrong ideas, or being in the wrong place a the wrong time. But I also believe that governmental interference with the markets by and large has permitted the grossest of injustices to occur. So when I see someone calling for more governmental oversight, more governmental interference, more governmental control, I cringe and feel that the person calling for this is either off his rocker, malevolent, or making power plays.

    But you have to understand, that someone working with that opposite viewpoint things the same about me when I call for deregulation, for tax cuts, for more faith in the market, and so on. When Obama speaks about the “failed policies of the past eight years”, I really think he believes what he says. That doesn’t mean he isn’t flat out wrong, but I think he’s honest about it.

    But I also think he is plunderer, in the sense that he feels the hardest working and most successful have an obligation to subsidize those who aren’t as successful. Now, Catholics believe that a man’s excess wealth should by right be accessible to the poor, but that can be accomplished in more ways than just handing money out. But there’s a big difference between believing there’s an obligation on the part of the rich to help the poor, and believing that a person can only be rich at the expense of the poor, and therefore should have his possessions forcibly confiscated and returned to the “rightful” owners, which I think Obama believes.

    Have no doubt–I believe Obama’s economic policies will do much to ruin our nation. But I also believe he feels he’s doing right. But then, I believe no one willingly does evil. They simply convince themselves that what they want to do is good, and then feel justified in what they do.

    Of course, you could argue that Obama sees the destruction of this nation as a good he is fighting for, but I don’t think there’s much justification for that.

  • “Catholics believe that a man’s excess wealth should by right be accessible to the poor…” – Ryan Harkins

    I disagree. I do not have such a low opinion of Catholics as to believe that Catholics approve of envy, theft, and ingratitude.

  • Micha Elyi,

    Of course Catholics do not approve of envy, theft, and ingratitude. The principle I’m referring to is when a man has more wealth than he needs, and the poor person does not even have the essentials for survival. The right to private property does not outweigh the obligation to work towards the common good, especially when one can deliver needed sustenance to those who would perish without. The Catholic church does not approve of theft, and many of the arguments we tend to have concerning social justice is whether, say, governmental taxation and entitlement programs are thinly disguised theft, or if they are true genuine charity, the option that is least bad for helping the poor.

    The problem that we face is how much wealth one can possess before any more is truly excess, and how little one can possess before it constitutes to a desperate situation that permits the usage of another’s goods in order to survive.

    Context, Micha Elyi, should help resolve what I’ve said with what the Church teaches.

  • This stimulus plan is the old “wrong execution of the right idea”. The
    righy idea being something is needed to “kick start” the economy after a
    brutal loss of confidence. But piling on more debt after execessive debt will
    not work anymore than giving a heroine addict more heroine.

    We must do what Kennedy and Reagan did. Cut Taxes!

  • Ryan,

    The right to private property does not outweigh the obligation to work towards the common good, especially when one can deliver needed sustenance to those who would perish without.

    I think you’re comparing apples to oranges here. It is precisely because we have a right to private property, that we have a moral obligation to work towards the common good.

    The Catholic church does not approve of theft, and many of the arguments we tend to have concerning social justice is whether, say, governmental taxation and entitlement programs are thinly disguised theft, or if they are true genuine charity, the option that is least bad for helping the poor.

    While the state has an obligation to insure the barest needs of the poor are met, even when the state does step in, it is not out of charity in any Catholic sense. The state is incapable of theological virtues as far as I understand it.

    The problem that we face is how much wealth one can possess before any more is truly excess

    In our economy, the excess wealth is that which one keeps in one’s mattress, or uses to buy yachts. Funds invested in the markets, bonds, treasuries etc. is not excess, it is actually “working”, it is providing the needed capital for job creation, manufacturing needed goods, and in fact funding social programs. There is such a thing as excess consumption. The beauty of the fair tax is that it taxes consumption, not wealth.

    and how little one can possess before it constitutes to a desperate situation that permits the usage of another’s goods in order to survive.

    If they have cable TV, DVD, a car, cell phone, MP3 player, etc… then… I submit that their situation is not so desperate.

  • Good post, Matt. I would add that a free society means that one is free to behave selfishly. The miser who shovels wads of money under his mattress and the big spender who buys more houses and yachts than necessary are both guilty of being uncharitable, but that does not give the state the right to take their property away. Characters like Paris Hilton can momentarily make a Marxist out of even me, but then I remember that there have always been rich people who choose to lead selfish and self-serving lives. They will be judged, just as the rest of us will be.

    If charity is forced, it is not a virtue. And you are perfectly right that the state is not in the charity business, but in the business of expanding itself.

  • Donna V.,
    I would add that a free society means that one is free to behave selfishly.

    Quite right, I meant to be suggest that, to the extent that the state is obligated to provide for the common good, that it should be funded from excess consumption rather than by reducing the capital which is the engine of the economy.

  • Matt,

    I think you’re comparing apples to oranges here.

    Hardly at all. The crux of the question is how much wealth is enough, and how much is too much (or excess)? At what point does a person have so little that he has a right to appropriate my property in order to survive? Private property and working towards the common good go hand in hand. The common good upholds the notion of private property (for a variety of reasons, like making our work fruitful, like providing for our individual needs so as not to be a burden on others), but that does not mean that private property is inviolable, either.

    But keep in mind that you’re making way too much out of my statements. I’m not in the slightest an endorser of the massive lot of entitlements the government keeps handing out. What I do endorse is understanding two things. One, we Americans have by far more stuff than we need. Just think of all the things that you could do without (and maybe should, since wealth has this nasty tendency to get between one and God (cf Luke 16)). Two, while investments are good long-term strategies for both making sure one is provided for in old age and providing jobs for people, there are plenty of people who need some short-term solutions just to make it to the long-term solutions. I would hope that these are apparent. The question then is: how do we best help those who truly need an act of charity to make it through the day?

    The Catholic church does not approve of theft, and many of the arguments we tend to have concerning social justice is whether, say, governmental taxation and entitlement programs are thinly disguised theft, or if they are true genuine charity, the option that is least bad for helping the poor.

    While the state has an obligation to insure the barest needs of the poor are met, even when the state does step in, it is not out of charity in any Catholic sense. The state is incapable of theological virtues as far as I understand it.

    Keep in mind I just stated what the dilemma was here, and not a solution. You have proffered an understanding of the government that bars any true charity in governmental acts. I would counter, reluctantly, that the government is made up of people who are capable of charity, and who often enough believe that passing laws to force others to subsidize the needy is the only way to provide aid. But I say reluctantly, because Donna states it correctly when she says: If charity is forced, it is not a virtue. But you have to understand where the supposed charity theoretically lies in the case of the government–it is supposedly (and I say supposedly because too often I feel the government entitlement programs have nothing to do with charity, and everything to do with political power) on the side of the government officials who are wresting the money from one person to another. The absence of charity is, often enough, on the part of the tax-payer, because their tax dollars are an obligatory contribution, not a gift.

    Of course, if we look at charity–the love and willingness to give of oneself for another (even a stranger) because of one’s love for God–then we see that the government official fails in part because the wealth is taken from someone else, not the official. But then, you have to understand that a case could be made that the government official’s giving of herself is the giving of her time and talent to craft those laws that wrest the money from the rich man and redistribute it to the poor.

    Now, if it seems that I’m wishy-washy here, or waffling, or whatever, it is because I’m just writing arguments. I’m not arguing one side or the other; I’m merely presenting other factors to consider. I don’t think my case for the charity of the government worker is at all compelling, but it is an argument that can be made, and to someone in power, is a good justification for enacting massive entitlement programs. (That whole fallen nature thing I’m sure comes into play somewhere around here.)

    If you want my honest opinion, it is that most government entitlement programs enable sloth, breed envy, and in general make the situation worse. The principle of: if you subsidize something, you get more of it is at play. Sometimes love for our neighbors has to be tough love, but the only way to know if that is the case is to be intimately involved with our neighbors.

    Just some things to chew on.

  • Ryan,

    Ryan:The right to private property does not outweigh the obligation to work towards the common good, especially when one can deliver needed sustenance to those who would perish without.

    Matt:I think you’re comparing apples to oranges here.

    Perhaps I’m misreading, but in my understanding you are comparing the right to private property with the moral obligation of that owner to give of his excess to support the poor. The first is a right, the second is an obligation which flows (at least in part from the right), it is not a question of one outweighing the other.

    But keep in mind that you’re making way too much out of my statements. I’m not in the slightest an endorser of the massive lot of entitlements the government keeps handing out.

    I recognize this, just seeking to clarity.

    What I do endorse is understanding two things. One, we Americans have by far more stuff than we need. Just think of all the things that you could do without (and maybe should, since wealth has this nasty tendency to get between one and God (cf Luke 16)).

    Absolutely, and with regard to “stuff” this is exactly the argument in favor of the fair tax, which targets stuff.

    Two, while investments are good long-term strategies for both making sure one is provided for in old age and providing jobs for people, there are plenty of people who need some short-term solutions just to make it to the long-term solutions. I would hope that these are apparent. The question then is: how do we best help those who truly need an act of charity to make it through the day?

    Principally by letting those who have a right to those investments determine what portion ought to go to charity, it would be for God to judge them on their culpability for letting greed interfere, secondarily, by the state acting as an emergency backstop to take by compulsion what it is absolutely necessary (all the better based on consumption rather than income)

    Matt: While the state has an obligation to insure the barest needs of the poor are met, even when the state does step in, it is not out of charity in any Catholic sense. The state is incapable of theological virtues as far as I understand it.

    Ryan: You have proffered an understanding of the government that bars any true charity in governmental acts. I would counter, reluctantly, that the government is made up of people who are capable of charity, and who often enough believe that passing laws to force others to subsidize the needy is the only way to provide aid….The absence of charity is, often enough, on the part of the tax-payer, because their tax dollars arean obligatory contribution, not a gift…a case could be made that the government official’s giving of herself is the giving of her time and talent to craft those laws that wrest the money from the rich man and redistribute it to the poor.

    Excellent! This is the sort of precision I like (I recognize that you aren’t agreeing with these arguments).

    1. government people are capable of charity – absolutely
    2. government people believe that taking from the wealthy to give money to the poor is charitable – absolutely, but they are in complete error on this (the crux of my opposition)
    3. government people are charitable when they give their efforts to taking from the wealthy – they are in error, particularly when they are paid, it increases their power or furthers their ideology. They may be charitable to an extent when they give of themselves as part of their work to aid the poor, and/or they sacrifice potential for private sector wealth by working for government (great distinctions have to be made here, as this may be exceedingly rare).

    My definition of “government people” extends from legislators, to employees of government and non-governmental organizations (as well as those who support such) who’s practice it is to expand the role of government.

    If you want my honest opinion, it is that most government entitlement programs enable sloth, breed envy, and in general make the situation worse. The principle of: if you subsidize something, you get more of it is at play. Sometimes love for our neighbors has to be tough love, but the only way to know if that is the case is to be intimately involved with our neighbors.

    Amen! The amazing thing is that true Charity has a much better impact on the reciever and the sender because it is not seen as an entitlement or taking but a gift of love.

  • Matt,

    Just to clarify:

    Perhaps I’m misreading, but in my understanding you are comparing the right to private property with the moral obligation of that owner to give of his excess to support the poor. The first is a right, the second is an obligation which flows (at least in part from the right), it is not a question of one outweighing the other.

    I’m viewing this more as a weighted scale than a comparison. Our first obligation is to take care our of ourselves, and we are not called to give charitably when doing so harms our ability to survive. But as we accrue more wealth, the possibility of a contribution harming said survivability decreases, and eventually vanishes (save for being stupid about it…). At some point, we have so much (think scales dropping well below the equilibrium point) that we have a graver obligation to use that wealth for the benefit of others than for our own concerns.

    So it really isn’t comparing two unrelated objects (in my mind, anyway), but trying to determine where the tipping point comes, and what should be done when the scales tip.

  • Ryan,

    Our first obligation is to take care our of ourselves [, our families and those we have a special obligation to], and we are not called to give charitably when doing so harms our ability to survive. But as we accrue more wealth, the possibility of a contribution harming said survivability decreases, and eventually vanishes (save for being stupid about it…). At some point, we have so much (think scales dropping well below the equilibrium point) that we have a graver obligation to use that wealth for the benefit of others than for our own concerns.

    Now we’re on the same page, the apples-apples is obligations, to our own vs to others. I agree completely. Of course, using our wealth for the benefit of others is not necessarily direct help for the poor, it can include hiring workers or investing in businesses that do so.

  • using our wealth for the benefit of others is not necessarily direct help for the poor, it can include hiring workers or investing in businesses that do so.

    I might add, that growing our business is not charity, even if it helps others. No matter how many people we help through employment, we have a serious obligation to direct charity.

20 Responses to Res Ipsa Loquitur

  • A consistent pattern since the DC sanitation engineers swept up the trash from the Inaugural Hope And Change Bash. Market has pretty much said pfffft to this President since election. Seems to be the response from those companies whose executives did not arrive on Capitol Hill, tin cups in hand. Which is to say the majority of entities trading shares, Non Financial Services Division. Probably means panicked trips north on Amtrak to have heart to heart chats by new Treasury Secretary Timmy The Tax Dodger Geithner. As in c’mon guys get with the program. Doesn’t happen that way. To look at stock markets, take a rational view of the irrational. Fear greed worry over the future always mixed with the number. Any amount of jawboning by the Paragon of Hope and Change or his Tax Dodger/Treasury Secretary may not help. Meantime sit tight. Buy good Americano companies. The market always goes up and may do so around June. Regardless of any Porkapalooza Bills.

  • His Messiahness (PBUH) seems to have failed in ‘inspiring’ investors.

  • Don’t be fooled. 0bama likes what he sees. A slipping market means more government intervention is warranted.

  • Let me try this…

    …ipso facto mucho taxo…

  • I would agree with Henry (Karlson that is, not John). When the stock market goes up or down, there is a tendency for analysts to look around for some piece of news that might plausibly explain the change, and then assume that the news caused the change. A funny example of this is recounted in Nassim Taleb’s book. On the day Saddam Hussein was captured, Taleb recalls getting a news alert from Bloomberg News: US Treasuries Rise; Hussein Capture May Not Curb Terrorism. Half an hour later, he got another: US Treasuries Fall; Hussein Capture Boosts Allure of Risky Assets. So if bond prices go up, that’s because of Hussein’s capture, and if they go down, that’s because of his capture too.

  • Right, and then we just need to invent theories to explain why his capture either caused the bond market to go up or down. I would agree in principle; but when the market drops 4% on the same day as a significant financial event (or non-event based on the lack of specificity in the plan), I think there is a much stronger argument for causation rather than just correlation.

    If you are making the general observation that reporters can draw erroneous conclusions, I agree. If you think in this specific case that the announcement of the Banking plan had little to no effect on the market, despite a 4% drop, well, you are in a distinct minority. That minority may be right, but generally the minority (as with AGW) should produce a stronger argument than ‘maybe they aren’t linked’. Do you really think they are unrelated?

  • Here are some of the accounts I’ve been reading:

    Noah Millman (arguing the rollout of the plan was very poorly handled):
    http://theamericanscene.com/2009/02/10/might-not-want-to-bother-unpacking-tim

    McArdle (the same):
    http://meganmcardle.theatlantic.com/archives/2009/02/im_from_the_government_and_im.php

    Major financial news services linking the two:

    Bloomberg: http://www.bloomberg.com/apps/news?pid=20601087&sid=aC.r9M_1vPd8&refer=home

    Yahoo: http://finance.yahoo.com/news/Wall-St-tumbles-on-bank-plan-rb-14312204.html

    Reuters:
    http://www.reuters.com/article/ousiv/idUSTRE5160AM20090210

    Sure, reporters look for narratives to sell papers/attract traffic, and all these people could be wrong. But you’re tempting me to accuse you of armchair thinking. 😉

  • Semper ubi sub ubi.

  • John,

    In the case of global warming, the consensus is based on more than a bunch of people looking at the same single data point. If it weren’t, then I’d see no real reason to defer to it.

    If I had to guess whether the stock drop was related to the Treasury proposal then I’d say it was. But I don’t have to guess. And more generally, I think that trying to infer much about the wisdom of a particular policy based on the day to day (or even hour to hour) movements in the stock market strikes me as being a very bad idea.

  • “I think that trying to infer much about the wisdom of a particular policy based on the day to day (or even hour to hour) movements in the stock market strikes me as being a very bad idea.”

    Agreed. But if the plan is meant to reassure the market (which is one of its primary goals), it wasn’t initially successful. Many commentators have suggested this is because there was little detail presented in the ‘plan,’ which creates uncertainty and undermines market confidence. Maybe the details, when they come, will be brilliant. Maybe they won’t. But either way, the initial presentation did not go well.

  • I always where under where.

  • Blackadderiv,

    In the case of global warming, the consensus is based on more than a bunch of people looking at the same single data point. If it weren’t, then I’d see no real reason to defer to it.

    but if the globe stops warming and starts to cool almost 10 years ago, can you still say it follows that it’s man-made? If the warming was man-made, was the cooling necessarily man-made?

    Henry K,

    Post hoc ergo proctor hoc, is a question, it’s not an argument. Just because the thing follows doesn’t mean it is NOT causative. The market is not completely random, it responds to internal and external stimulus. These stimulus can be examined, after the fact and likely causes can be analyzed.

  • but when the market drops 4% on the same day as a significant financial event (or non-event based on the lack of specificity in the plan), I think there is a much stronger argument for causation rather than just correlation.

    Henry’s right about the fallacy employed here by both John Henry and some analysts. As a college philosophy instructor, I am particularly sensitive to the post hoc ergo propter hoc fallacy as it is raised repeated by those who really possess no real knowledge about the connections and correlations of data in a given field. That’s what we find here today in this post.

    The problem with the post is twofold: 1) Who here really is an expert on economic analysis and is equipped to interpret a few hour drop?; 2) As of 9:30am this morning, the markets are rebounding.

    So using the logic expressed in some of these comments, shall we conclude that the stimulus bill caused the rebound today? Probably a bit too hasty for that. I think Blackadder, who along with MM are better read on economics than anyone at Vox Nova and here (this is a belief, not something I can prove), nailed it. In a world of internet news and soundbites, it’s good to know that at least some people actually study this stuff before posting on it.

  • Post hoc ergo proctor hoc, is a question, it’s not an argument. Just because the thing follows doesn’t mean it is NOT causative.

    Of course, this is a trivial and obvious point. The fallacy (it’s not a “question”) was imputed because a causal relation was implied in some of the comments without sufficient evidence. No one argued that that there was NOT a causal relation, so your point here is rather irrelevant.

  • “The problem with the post is twofold: 1) Who here really is an expert on economic analysis and is equipped to interpret a few hour drop?; 2) As of 9:30am this morning, the markets are rebounding…In a world of internet news and soundbites, it’s good to know that at least some people actually study this stuff before posting on it.”

    A few responses:

    1) Your supercilious tone is unnecessary and unappreciated.

    2)It’s a stretch to call a .5% uptick after a 5% drop a ‘rebound’. But even a rebound wouldn’t disprove that the initial reaction to the plan was quite negative.

    3) If you think working as a financial analyst for five years, and having an MBA and extensive legal academic coursework in corporate finance topics makes me unqualified to comment, then I hope you hold yourself to the same standard. But since you obviously do not, perhaps you’ll be more generous to others.

    4) Please, cite one expert in the field who has stated the market drop was independent of the bank plan roll-out yesterday. Until then, hold fire on the “I’m a philosophy professor and an expert in logical fallacies” argument. Notice, everyone’s favorite nobel laurete is making the first part of the argument (i.e. the plan was unspecific and uninspiring). When an uninspiring plan is followed by a sharp drop in prices, we have a pretty good case for causation, as BA more or less conceded.

  • While it’s true that a short term (though very sharp) drop in the stock market isn’t an economic indicator in and of itself, there’s a sense in which the stock market as a whole can serve as a sort of informal predictions betting market. A broad sell-off can indicate an expectation that the economy as a whole will either not get better or will in fact get worse. Thus a broadly held expecation/bet of this sort right after a major financial policy announcement is essentially an prediction on the part of those holding securities that the policy will not do any good.

    It’s not something I’d take as armor-plated proof that something was a bad idea (for instance, it might be that there were widely held unrealistic expectations about the policy) but it strikes me as a moderately good indicator of lack of confidence.

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6 Responses to Defining a "Stimulus Package"

  • Also, one can’t help thinking that making promises to spend vast amounts of money _later_ will have the dual effect of not helping the economy now and making our debt load even worse.

    It’s ironic that just when the Bush administration (and the 2000-2006 GOP led congress) went on such a spending spree as to seemingly remove one of the GOP’s most popular issues (fiscal responsibility) the Obama administration and democratic congress should immediately go so far overboard with incurring more debt as to make it possible that in 2-4 years the GOP will come back with a, “These guys inherited a recession and took it as a license to spend money they didn’t have. Would you do that?” campaign.

  • What part of the word “pork” is difficult to understand? Only a small portion of this fire-hose of pork will create jobs, most of it is simply a massive expansion of the federal government. Anyone who thinks these spending levels are temporary is insane. This is like drugs, once cities, states and special interest groups get a taste of federal “crack” they will never give it up.

    Before anyone asks… yes, I am completely critical of the Bush administration’s expansion of federal spending.

  • This Wall Street Journal editorial is right on target: http://online.wsj.com/article/SB123310466514522309.html

    As a boomer I agree with Victor Davis Hanson:

    “If anyone wished to know what the baby-boomer generation would do when, in its full maturity, it hit its first self-created, big-time recession, I think we are seeing the hysterical results. After two decades of unprecedented economic growth, rampant consumer spending, and unimaginable borrowing to satisfy our insatiable appetites, we are suddenly going into even larger debt and printing trillions of dollars in paper money to ensure that someone else after we are gone pays the debt. As if the permanent solution to a financial panic and years of spending wealth we didn’t create were a government take-over of the economy in the manner we currently witness in Spain, Italy, and Greece—or the high-tax, high-spend ethos of a bankrupt California.”
    http://corner.nationalreview.com/post/?q=ZGRjZTJiZjlkN2UxMDEyYTkwZmIxMzc3YjYyZWU5OWM=

    The Great Bailout Swindle of 2008 is being followed by the Great Bailout Swindle of 2009. This is economic lunacy, and our great grandchildren will still be trying to repair the damage caused by this drunken sailor approach to public spending embraced by both parties.

  • Contra President Clinton, I think that the era of small government is over. It’s good to see that now that the GOP has been routed into being an almost significant minority it has rediscovered its fiscal sanity, but it’s a little too little, too late, for the party and for the country.

  • @ tito

    Tito I asked you a simple question about what you believe about excorcism please answer it to the best of your ability. To leave links that I may or may not understand is wrong. My question to you is really very simple please answer it on the thread over at unreasonble faith. Thank you mark.

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