Thursday, September 23, 2010

Recent Exchange with Some Tea Party Friends on Facebook

My friend Mark Rennie recently posted a Tea Party-inspired quote on his Facebook page. I felt obligated to respond and subsequently had a very intense conversation with some of his Tea Party friends who I do not know in real life. I love the fact that we were able to have such a civil and polite dialogue, as opposed to the insult-hurling and shouting you typically find on political blogs and forums.
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Mark Rennie: "If you would not confront your neighbor and demand his money at the point of a gun to solve every new problem that may appear in your life, you should not allow the government to do it for you." –William E. Simon


Tuesday at 7:35am ·

Niki-Nicole Mesco and 2 others like this..

Tuesday at 7:35am · Monte Collins: Amen Brother. Ready for some TEA?

Tuesday at 8:42am · Tom Freeman: Amen!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Tuesday at 9:38am · Eric Forst:  Mark, I like that you and I can have a very civil dialogue on Facebook around our political differences. The problem I have with the Simon quote is that it implies that taxation with representation, which is what we have in our democracy, is somehow the same as pointing a gun at someone's head and asking for their money.

Tuesday at 10:06am · Mark Rennie: I see what you mean Eric. However, in today's political climate, I can say that I interpret and posted Simon's quote in the context that taxes and death are a given certainty. But to do so in the name of redistribution of wealth is of a socialist idealogy to which I am adamantly opposed. In this case, I see Socialsm/redistribution as the pointed gun.

Tuesday at 12:30pm · Monte Collins: We do not have taxation with 'equal' representation. We have taxation with selective representation and progressive redistribution.

If you want to be part of the select that is represented, either join a public employees union or hire a corporate lobbyist.

Tuesday at 1:28pm · Eric Forst: We'll probably never agree on the extent to which we should have a safety net (Social Security and Medicare), welfare-to-work and strong public education that is equally funded in every district. I believe that not only can we have that, but we can also have market-based solutions for just about every other industry. In other words, I think we can have some social programs without become a Socialist country. In fact, the history of this country is limited government that steps up when needed and then dials it back. Here's a passage on this from a recent essay by David Brooks, a leading conservative commentator:

"The story Republicans are telling each other is an oversimplified version of American history, with dangerous implications.

The fact is, the American story is not just the story of limited governments; it is the story of limited but energetic governments that used aggressive federal power to promote growth and social mobility. George Washington used industrial policy, trade policy and federal research dollars to build a manufacturing economy alongside the agricultural one. The Whig Party used federal dollars to promote a development project called the American System.

Abraham Lincoln supported state-sponsored banks to encourage development, lavish infrastructure projects, increased spending on public education. Franklin Roosevelt provided basic security so people were freer to move and dare. The Republican sponsors of welfare reform increased regulations and government spending — demanding work in exchange for dollars.

Throughout American history, in other words, there have been leaders who regarded government like fire — a useful tool when used judiciously and a dangerous menace when it gets out of control. They didn’t build their political philosophy on whether government was big or not. Government is a means, not an end. They built their philosophy on making America virtuous, dynamic and great. They supported government action when it furthered those ends and opposed it when it didn’t.

If the current Republican Party regards every new bit of government action as a step on the road to serfdom, then the party will be taking this long, mainstream American tradition and exiling it from the G.O.P."

http://www.nytimes.com/2010/09/14/opinion/14brooks.html


Tuesday at 4:00pm · Monte Collins: Eric, not sure about the validity of your American history or the NY times article but to your last point, it's not just the Repulican party that regards with suspicion everything government is doing right now.... it's the whole country.

I left the Republican party last year because I'm even suspicious of their actions. I regard them all as narcissistic elitists who enjoy creating problems so they can ride in and be the legislative saviors.

I understand the need for ebb and flow in government oversight and governance. However I don't think anyone can justify the outrageous intrusion into our daily lives in this moment in time. They like to spout 'social justice' but in the end it's just robbery with a fancy name.

Tuesday at 8:33pm · Eric Forst:   Monte, I agree both the Democrats and Republicans are awash with special interest money that causes a lot of policy to be made that is not in the public interest. As broken and corrupt as our government is, I'd rather reform it than try to starve the beast. I agree that the Patriot Act passed under Bush in 2001 was an enormous intrusion by government into our private lives, but I'm not aware of an enormous intrusion of government into my daily life at this moment in time. What intrusion are you experiencing? Raising the income tax rate on the top bracket to levels that are still lower than under Reagan hardly seems like robbery in the name of social justice. Someone has to start paying for our multi-trillion dollar wars that were put on the credit card. Remember all the debt that Bush handed to Obama? The stimulus debt was necessary to keep the economy from spiraling into a depression. I do not see it as an attempt to implement permanent socialism. There is no evidence that is what Obama or most Democrats want. In fact what Obama has consistently stated and what the small-business tax credits recently signed into law by Obama show, is that Obama and the vast majority of Democrats want private industry to thrive. And we know that business can thrive even when tax rates rise on the top bracket, just as they did in the 1990s, when the economy boomed and Clinton was able to hand a large surpluss over to Bush.

Tuesday at 9:15pm · Monte Collins:  Redistribution = social justice = progressivism = theft. Plain and simple.

Yes, wars and social programs cost money. However, why is it the top wage earners are solely responsible? Last time I checked, the upper income earners pay the most but take the least when it comes to those services (excluding military).

Also, the stimulus package that just added 2 trillion dollars to our debt had nothing to do with any of the above. It was a nice slush fund for Democrats and their union sidekicks.

Lastly, I'm a small business owner that is responsible to meet payroll every week. I'm not one of those too big to fail guys so it's pretty much up to me to make sure we survive. As the years have gone by, we have been visited and audited by more government acronyms (EPA, CARB, EDD, OSHA, AQMD, SCAQMD, DOT, ETC, ETC, ETC) than you can possibly imagine. What do they all have in common? Layers and layers of paid bureaucrats with nice fat pensions that will never ever go away. What else do they have in common? Everyone of them shows up to our door with an invoice in their hand because I need to meet another criteria just to stay in business. Maybe to some this is just the price of doing business but to me it's excessive and it's 'intrusive'. It's also about time it stops...

Then when I do squeeze out a profit, I'm told that I need to contribute more because it's good to spread the wealth around.

Sorry but I stand with Mark and John Galt on this one...

Tuesday at 9:40pm · Eric Forst:  All that regulation is intrusive and costly and your politics naturally reflect your economic interests. I do not own a business or have all that overhead to deal with, so am not feeling the yoke of government as much. But, as a Democrat, I do have a natural tendency to believe that some groups of people in this country deserve social justice, even if that means I have to pay more for it than people in lower tax brackets.

Tuesday at 9:57pm · Monte Collins:  I hear ya Eric. I guess I just have more of a 'don't feed the strays' attitude than most. My philosophy is to teach the man to fish rather than give him the fish.... if you know what I mean. I think a man has more dignity when he has the opportunity to provide for himself rather than relying on someone else.

Yesterday at 8:41am · Eric Forst: I totally respect your point of view on that, Monte, and I agree with that point of view. I just happen to think that vision can not only co-exist with some limited social welfare, but is in fact supported by it, especially if we could refo...rm the teacher's unions and make big investments in public education. I get nervous when I see taxes equated with robbery or theft, even if you are only talking about the portion that might go to welfare programs, as it paints a picture of the Obama administration as illegitimate or socialist, which it is not. As corrupt and bad as both parties may be, I think we have one of the best political systems in the world. I just think that if you reduce government's role to simply defense and criminal justice, then the most rich and powerful interests will continue exploit and manipulate the middle class to the point where we become a feudalist country. During the Bush years, with low taxes and much more limited government regulation and oversight, the middle class saw real wages decline from 2000-2008 for the first time in the last 60 years while the richest 2% got massively wealthier.See More

Yesterday at 10:08am · Earick Ward: Nobody opposes a "safety net". It's only that some have turned it into a "hammock" Further, on the taxation issue, the current structure penalizes achievement, and promotes non-productivity. Classes (in America) are not FIXED. Incentivize achievement and you will get achievement.

7 hours ago · Earick Ward:  Eric - you make a couple mistakes in your "During the Bush years" discussion.

1) Your focus on "real wages" is a common mistake. While wages may have gone down, buying power went up. Cost of goods were less, relative to wages. This meant ...that for every dollar you earned you were able to buy more.

2) Also, while wages were down, SIGNIFICANTLY more people had JOBS. This is spreading the wealth. All classes benefit(ed) when more people are able to draw a paycheck.

3) The richest 2% got wealthier. Again, that richest 2% is not a fixed class. Many more citizens moved into the 2% class, as a result of wealth development. Further, the JOBS issue outlined above is, in part due to the wealth that was created, which created JOBs in the middle and lower classes in order to service the needs of the upper 2%.

4) You reference limited government regulation and oversight. The regulations were in place. Unfortunately, they were tweaked to mandate that banks and lending institutions make loans to people, who had no means to pay back their loans. Under the guise of "everyone has a right to own a home" I seem to recall seeing testimony by Barney Frank, that he wanted to "roll the dice" one more time. Well, snake eyes.

Incentivize achievement and you will get achievement.

7 hours ago · Earick Ward:   Eric - Respectfully, please obtain a copy of F.A. Hayek's: The Road to Serfdom. Non-politically, he lays out the fallacy of Collectivism.

7 hours ago · Eric Forst:   Earick,

We hardly have a hammock. We only spend 2% of our budget on social welfare for working-aged citizens as compared to 7% in Western Europe. And, I do not adovacte that level of welfare. But I do think we should spend much more on publi...c education and "teach a man to fish." As for your other arguments:

1) "Real wages" is an economic term that measures the hourly wage adjusted against the cost-of-living. Yes, the cost of some goods like electronics declined, but housing, energy, healthcare and education all went up significantly, and overall, the cost-of-living rose relative to wages in the US, which is what I mean by a decline in "real wages." (http://dictionary.reference.com/browse/real+wages?&qsrc)

Here is a good article on the real wages trend:

http://washingtonpolicywatch.org/2009/03/18/looking-past-the-banking-crisis-households-adjust-part-2-of-3/

It shows that Americans had to use credit cards and home equity lines of credit to maintain their standard of living during the 2000s and it also shows that real wages have declined and remained flat ever since the late '70s. So, I was factually wrong in stating that they declined for the first time in 60 years, rather they have been declining steadily since Carter, although they made a slight recovery under Clinton. Trickle-down economics of the past 30 years clearly hasn't worked.

2) While the unemployment rate was low in the 2000s, the underlying economy remained weak and job growth relative to other economic recovery periods was much weaker:

http://www.epi.org/publications/entry/bp195/

From the article:"In fact, the average job creation rate for 2006—6.7%—is the lowest annual rate on record going back to 1990". The underlying economy was weak as most job creation was related to the housing bubble -- construction and financial services industry jobs -- rather than to long-term sustainable industries like manufacturing, technology or alternative energy.

3) By all measures, the income gap in this country has been steadily widening since 1980:
http://www.parade.com/news/intelligence-report/archive/100411-income-gap-grows-during-recession.html

4) Fannie Mae and Freddie Mac were simply one part of very big problem that involved many irresponsible moves by the entire banking and financial services industry. Their purpose was to make loans available to lower income Americans previously shut out of home-ownership due to racist lending practices, and it was the responsibility of banks and homeowners to manage their own lending and borrowing practices. The subsequent lack of enforcement of SEC rules by the Bush administration, predatory lending practices, corruption within Moody’s and the ratings agencies along with the 2004 removal of limits on banks' asset-to-borrowing ratio:

http://www.nytimes.com/2008/10/03/business/03sec.html

all accelerated the housing bubble and financial crisis. If anything it was the Bush Administration that promoted the culture of irresponsible lending and borrowing with its "Ownership Society" economic policy, not Barney Frank.

We have plenty of incentives for achievement in this country as income tax rates continue to remain at their lowest levels in 80 years (except for 1988 to 1990):

http://en.wikipedia.org/wiki/Income_tax_in_the_United_States

The bottom line for me is that I think government can be too big and it can also be too small, and we are currently coming out of a period in which government was too small. While Obama definitely moves things to the left, none of the policies he or the Democrats have implemented could be considered socialist. The stimulus was Keynesian (not socialism) and the health insurance reform bill has no public option and no new government run services. A moderate rise in income taxes for the top 2%, to what can still be considered a historically low level, hardly smacks of socialism. I think we need to avoid both Libertarianism and Socialism as each would be equally disastrous in its own ways. I simply want mainstream economic policies that are based on the historical evidence of what is good for the average, middle-class worker. I do not want radical income distribution or policies that destroy incentives for entrepreneurs and private industry. I believe America is at its best when we have an effective balance between government and private-industry.

3 hours ago · Eric Forst:  Respectfully, on Hayek: He wrote his book at a time when the ills of the Soviet Union and mid-20th century socialism were ghastly and current. I agree that unfettered collectivsim can lead to tyranny, but I also agree with this quote by George Orwell:

"collectivism gives tyrannical powers to a minority...[yet a] return to 'free' competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the state."

That is why I think we need to avoid going to far to the left or the right.

2 hours ago · Monte Collins:   Eric, there is no way we are coming out of a period where government was too small. Just because it was the republicans in charge doesn't mean it was smaller government. Government has been growing more than the private sector for quite some time. Look at Sacramento over the last 10 years. I believe between our two idiot governors (Davis and Swarzanegger) government has grown 40%. That's astounding when you consider that unemployment in the state is well over 10% in the private sector.

Government needs to be cut and cut substantially. Not just a reduction in the amount of increases (which is what usually happens). Some agencies need to be phased out and the ones that remain need to be audited and put under a strict budget just like the private sector. Maybe easier said that done but a necessity nonetheless...

Pensions need to be reformed and regulations need to streamlined and, in some cases, eliminated. Tax rates should be equalized with a flat tax rate for all which raises some lower income earners up to the fair rates that the upper income earners pay. Additionally, we need to get away from the desire to model ourselves after these semi-socialist european countries. It is wrecking them and it will wreck us.

I'm not for the elimination of government just a government that works for all of us and not just someone who relies on grant money, welfare, subsidies, or the SEIU.

about an hour ago · Earick Ward:   On Hayek: Yes, the timing of his writing was relative to the ills of the (Collectivist) Soviet Union, and Germany and China. That that lesson appears to have not (still) been learned is disappointing (and frightening).

On Orwell: Hakek points out (and I'll paraphrase) that in a Collectivist society, you have to entrust that those who control the distribution of resources have everybody's best interest at heart. What is everybody's best interest? Well, there is no such thing. Therefore (the Planner) must decide who's needs they will serve, and therefore who's resources and how much another must contribute. In every Collectivist society (to date) the production of resources gradually and necessarily is reduced. In America, going back to Governor Bradford in Massechussets, within a close-knit Christian collectivist society, they determined that production didn't meet the needs of society. Upon providing and securing the rights to private property and following free market principles, production thrived, to the betterment of society.

Orwell asserts that society (collectively) is tyrannical. Two problems with this. 1) I tend to believe that most people (in society) are good. Republicans donate a significantly greater amount of their (remaining income) to charity. 2) Society doesn't act in a collective manner. Individuals spend their money on things that they deem important to them individually. Even if the most generous, smartest planner were placed in charge of collecting of resources from one, in order to provide for another, the production of [one] would necessarily and certainly diminish.

You can have equality of opportunity, or equality of results. You cannot have both.

Redistributive policies will certainly make things more equal, at the expense of everyone.

about an hour ago · Eric Forst:   Monte: The facts contradict this statement you wrote: “Government has been growing more than the private sector for quite some time.” Here are the facts on the growth of California’s GDP compared to the California state budget. From 2000 to... 2010:

GDP in California rose by 45% - from $1.29 trillion to $1.87 trillion
http://www.usgovernmentspending.com/downchart_gs.php?year=2000_2010&view=1&expand&units=b&fy=fy11&chart&bar=0&stack=1&size=l&title=USGrossDomesticProductGDPHistory&state=CA&color=c&local=s

California’s state budget and expenditures rose by 26% - from $78 billion to $98.2 billion
http://www.news10.net/news/local/story.aspx?storyid=61149


In 2010, state government is about 1/20th the size of private industry in California.

Where are you getting your information? If you look at some of the links I posted above, they show the history of our income tax rates, GDP growth and our state and federal spending and indicate that the size of government in this country is at a historical low-point.
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Earick: We hardly have redistributive policies in this country. In fact, we are in fourth to last place on spending on social services as a percentage of net national income, and we are in third place, only behind Mexico and Turkey, for having the most inequality in our society:

http://economix.blogs.nytimes.com/2009/05/14/reader-feedback-social-spending-and-inequality/

Notice Mexico has the lowest spending on social services and the greatest inequality. Chart indicates we should increase social spending slightly and try to reduce inequality similar to levels in Canada or Australia, where they spend only slightly more than we do and have much lower inequality with very high degrees of first-amendment style freedoms and social mobility. Instead, the policies you advocate will likely make us more like Mexico.

All of the countries on this list (China and Russia aren’t on list) are able to spend more than we do on social services without becoming tyrannical dictatorships. So, some spending on social programs does not necessarily lead us to socialism or put us on the “road to serfdom.” Rather, I believe serfdom is more likely when government invests too little in public education and some basic social services. Respectfully, I think the vast majority will be living like serfs if we try to implement a Libertarian utiopia. I think the role of our government should be to keep the pendulum from swinging too far one way or the other.

1 comment:

Miles932 said...

Eric, thank you! This is completely great. You're so precise and cogent here that it would be easy to fault on the side of biting, but you're also respectful and patient. Hats off; I'm not sure I could do the same given some of the responses you got!
P.S. the garage door needs a serious mural upgrade if we're going to continue to refer to it as "tart". Maybe an abstract version of this? http://bit.ly/8YC0CK

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