More Than Zero

Why won’t people who love to make zero-sum arguments about the economy apply their own lessons to government spending?

Anyone who has expended energy arguing for free trade, market competition, and the open exchange of ideas has repeatedly encountered the same obstacle: zero-sum assumptions misapplied to dynamic, nonlinear phenomena. Almost anywhere you see statism advancing— in economic policy, national security, even the basic conditions for free speech—you can bet that underneath there’s a faulty zero-sum argument. All complicated matters of life, according to this way of thinking, can be reduced to a simple binary scale: Press your thumb down on the bad end, and the good one will go up.

So when President Barack Obama slaps a 35 percent tariff on Chinese tires, as he did on September 11, he does it in the name of ensuring that (as he put it in a campaign promise) “China is no longer given a free pass to undermine U.S. workers.” In this yin-yang formulation, there is a single pie of domestic American tire consumption, and China’s slice is growing bigger at the expense of domestic producers. Forget the overall U.S. economy, with its 99.9 percent non-tire-industry workers (and its government-owned, money-hemorrhaging auto companies), all of whom are happy to take advantage of cheaper tire prices. And forget a once-starving country that has catapulted more human beings out of poverty within a generation than any nation in the history of the world.

Most of all, forget the famous formulation by Adam Smith, dating back to the Declaration of Independence: “If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage.”

You might have thought that the New Democrats routed those zero-sum arguments years ago, perhaps when then–Vice President Al Gore eviscerated Ross Perot while debating the North American Free Trade Agreement on Larry King Live. But Old Democrat economics made a rousing and depressing comeback during the 2006 congressional elections, to the point where Hillary Clinton felt the need to actively campaign against the policies (including NAFTA) of her husband. Ideas long marginalized to the Ralph Nader slice of the left are back in vogue in the mainstream, and everywhere you look you see a pie.

“The truth is,” first lady Michelle Obama said in April 2009, “in order to get things like universal health care and a revamped education system, then someone is going to have to give up a piece of their pie so that someone else can have more.”

It’s an alluringly simple vision, this notion that public policy challenges can be solved merely by lifting some gold off one end of the scale and plopping it down on the other. You see it every day, for example, in California, where for decades the conventional wisdom has held that the proximate cause of the Golden State’s periodic fiscal meltdowns is Proposition 13, the 1978 ballot initiative that caps annual property tax increases. If only those greedy homeowners gave up a bit more of their pie, presto! No more budget problems.

There are three fatal flaws in this line of thinking. The first is that it fails to acknowledge, let alone explain, the fact that we keep placing more and more gold on the “government services” end of the scale without seeing anything like a commensurate increase in results. If the fiscally troubled 50 states had simply limited the growth in their budgets to the growth rates of population plus inflation in the good times of 2002–07, they’d be sitting on surpluses instead of lobbying Washington for a second round of federal bailouts.

President George W. Bush increased federal education spending by 58 percent in real terms, and Obama is on track to at least double that record. How much gold can the education establishment consume before the current crop of governing Democrats begins to entertain the notion that the root problem of public schooling isn’t a lack of funds?

The second flaw in zero-sum economic logic is that by consciously whittling down issues to a single, hermetically sealed scale, policy makers overlook the complexity of consequences, whether intended or not. Who could have predicted that, as Veronique de Rugy points out in “Who Wants to Tax a Millionaire?” (page 16), a 1969 tax aimed at just 155 of the country’s richest people would end up affecting 4 million Americans 40 years later? Certainly not those who proposed and passed the tax at the time, nor those who are acting on similar impulses today.

Nor do soak-the-rich types entertain the idea that their high-value targets might respond to new incentives in ways that could have negative side effects. The rich are so different from you and me, the thinking goes, that their behavior won’t change. In March 2009, when the president was pushing to jack up taxes on charitable contributions by the well-to-do, he pooh-poohed the possible negative impact on charities. “Now, if it’s really a charitable contribution, I’m assuming that that shouldn’t be the determining factor as to whether you’re giving that $100 to the homeless shelter down the street,” he said. “I think it is a realistic way for us to raise some revenue from people who’ve benefited enormously over the last several years. It’s not going to cripple them. They’ll still be well-to-do. And, you know, ultimately, if we’re going to tackle the serious problems that we’ve got, then, in some cases, those who are more fortunate are going to have to pay a little bit more.”

Back when New Democrats still held sway—and both the stock market and economy were humming along—auto-abusive ideas such as taxing every stock transaction were limited mostly to Ralph Nader’s presidential campaigns, where corn-pone wag Jim Hightower was fond of saying things like, “Yeah, Wall Street’s whizzing all right—it’s whizzing on you and me!” Nowadays such sentiments are being translated into new legislation from the majority party in Congress, such as the Let Wall Street Pay for the Restoration of Main Street Act of 2009. The idea that Wall Street is utterly unconnected to Main Street (whose adult residents typically own stock and occasionally work for companies who have taken advantage of initial public offerings) would almost be funny if so many people in power didn’t actually believe it.

The third and most infuriating aspect of zero-sum economics is that its practitioners suddenly forget to apply the same standard to one of the few entities that can accurately be described with a pie metaphor: government budgets—especially on the state and local level, where printing money is not an option and sometimes you aren’t even allowed to run a deficit.

This issue of reason is filled with infuriating stories, including cops legally stealing from people who haven’t been charged with crimes (Radley Balko’s “The Forfeiture Racket”), a college student getting punished for reading a book criticizing the KKK (Greg Lukianoff’s “P.C. Never Died”), and a chilling look at the drug war’s death toll (Brian Doherty’s “War in Juarez”). But one that should get your blood boiling every time you see a zero-sum argument is Steven Greenhut’s cover story on the “Class War” being waged by government workers against the rest of us.

As Greenhut details, public-sector unions are not just growing the pie of government on all levels; they are brazenly gobbling up two, three, and even 20 times the amount that they were taking just a few years ago—on guaranteed contributions to their pension plans alone. Wherever you see a politician or public servant warning about “draconian” cuts to public services, you almost certainly are witnessing an agency whose employees have negotiated a sweetheart pension deal within the last decade. It’s awfully hard to balance a budget, let alone improve public services, when you’re tripling a major line item. When will Michelle Obama talk about that pie?

Matt Welch (matt.welch@reason.com) is editor in chief of reason.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • the other alan||

    this is good stuff, but we can get a bit more comic relief or something? Seriously, I could feel my blood pressure rising through the whole article - and that last paragraph gave me a headache all by itself. Its Friday for goodness sake!

  • ||

    What do you want, more Jar Jar Binks?

  • High Everybody!||

    You rang?

  • nutter||

    Just hearing that name makes my blood pressure shoot through the roof.

  • k||

    It's coming. Just read further down.

  • Kroneborge||

    Some great points here.

    One quick comment on trade though. Trade requires both sides exchanging something, not one side doing the majority of the making, and the other the majority of the consuming (see Ricardo's orignal example of compartive advantage).

    Thus for the most part what the US has been doing for the last number of years isn't trade at all.

  • Old Mexican||

    Re: Kroneborge,

    Thus for the most part what the US has been doing for the last number of years isn't trade at all.

    No, it is trade, except the US commits fraud by artificially inflating the money that is using to pay for the goods. THAT's the bad part.

  • ||

    Are you trying to say that my buying almost all of my groceries from Shoppers, yet them not having bought anything from me, is somehow bad for me?

  • ||

    Investment is trade too. That people in the US (not the US itself, except to the extent it sells government debt outside the US) maintain an investment surplus with people outside the US is not in and of itself bad.

    What did you trade to get the house you live in? Maybe you were fortunate enough to have something to trade for it. Most people aren't.

  • ||

    The most obvious example of this is the so called Keynesian "multiplier effect".

    Somehow, government spending is supposed to magically produce extra weath, but private industry spending the same money doesn't.

  • Gilbert Martin||

    Yes I was thinking that myself.

    It is the most glaring example of the leftists refusing to apply zero sum logic.

  • The Libertarian Guy||

    Leftists look at wealth like a pizza: There's only X amount, it has to be sliced thin enough so everyone gets a piece... and we have to eat the box.

  • Bill Clinton||

    Hey, man... my alarm went off. Is someone talkin' about munchin' on a box? Does anyone know how to get hold of Monica?

  • Hillary Rodham.||

    WillIAM!!! WILLIAM JEFFERSON BLYTHE CLINTON III!!! Put down the bimbo and get your worthless ass back to Chappaqua right this fucking instant, meal ticket!!!!!

  • Mon||

    It's been over ten years. Don't you think these Clinton jokes have gotten a little old and tired by now? (btw, I was no fan of the man)

  • The Libertarian Guy||

    There are still Reagan jokes, Carter jokes, and there will no doubt be Bush Version 2.0 jokes for decades to come. Someday, there will even be Obama jokes, just as there are today.

    Besides... it's a great thing to be able to make fun of past and current politicians. People in some countries are put in prison - or worse, shot - for less.

  • Mon||

    Of course I agree that it's a great thing to be able to make fun of presidents. I'm just saying that it's getting old, especially on every other thread here, as though the jokes are original. Okay, wake me up when they've been put out to pasture..zzzzzzz

  • JoshInHB||

    It's been over ten years. Don't you think these Clinton jokes have gotten a little old and tired by now?

    Nope

  • ||

    I don't really think leftists actually care whether things are zero sum or not. All they care about is that it gets redistributed. All arguements are simply contrivances intended to get to that point. In that sense, Keynesian economics is just a tool. A useful way of getting weath seized from the rich and given to the poor. They don't actually care whether it works or not.

  • JoshInHB||

    Next you'll say the proletariate really wasn't better off in the Soviet Union.

  • ||

    One entirely perspicuous flaw in the idea of a greater than unity economic multiplier from government spending is that the government will spend more efficiently than someone who earned the money.

    More generally someone who steals or is given resources is always less interested in efficient use of resources than someone who had to work for them. Why should they be? There was little or no effort in acquiring them?

    The entire history of governments shows this.

    The strong correlation between unemployment and government spending just tells us what we already know.

  • Old Mexican||

    Almost anywhere you see statism advancing— in economic policy, national security, even the basic conditions for free speech—you can bet that underneath there’s a faulty zero-sum argument.

    The zero-sum argument being used to justify the zero-sum game that is government spending.

    Statists will accuse their cherished enemies of committing the very same crimes the State commits:

    - They will argue that rich people "take" from their communities, to justify the State taking from everybody.
    - They will say economic progress is a zero-sum game to promote the truly zero-sum game that is government thievery and spending.
    - They will accuse people of not self-regulating to justify a non-regulated government regulating everybody else.

    And so on. It's Orwellian-speak.

  • JB||

    If it was really a zero-sum game (only retarded fetuses believe this), then we would still be living in caves.

    Game. Set. Match. Any fuckbag that doesn't understand that simple statement isn't human in my eyes.

  • ||

    Uhm, "fuckbag", your use of "it" has no determinable referent. You might want to hire a retarded fetus to copy edit for you.

  • JB||

    I think you might need to get a refund on your education and learn how to read.

    "It" refers to human life and the world.

  • ||

    Hey, I paid for his education -- I should get the refund.

  • Rudd||

    Where can I order a fuckbag and how much are they going for?

  • Eliot Spitzer||

    I may be able to help you with that, Rudd...

  • Tim2||

    Not all government spending is zero sum, some of it is positive sum, and a great deal is negative sum. Just the deadweight cost of taxation makes a formerly zero sum transaction negative.

    It is important to note that some things like the police, the courts, and the military actually create value; when justly used of course.

  • prolefeed||

    It is important to note that some things like the police, the courts, and the military actually create value; when justly used of course.

    But do they create as much value compared to if they were privatized?

  • Tim2||

    That's a reasonable debate, I tend to think at the least they do; as I am of the opinion that private security firms would evolve into a state. There are some pretty big economies of scale, free rider problems, and network effects here.

  • Zenmaster||

    Privatizing the military is a bad idea.

  • JoshInHB||

    "It is important to note that some things like the police, the courts, and the military actually create value; when justly used of course."

    How do they create value?

    At best they are necessary evils.

  • Kroneborge||

    To be fair to Keynsian theory, it posits that in the abesence of sufficent private demand, the government can temporairly increase demand to prevent a demand spiral.

  • J_L_B||

    Indeed, but it presumes that consumption must always be above a certain level and consumption below that level is unacceptable. Instances where consumption drops, as in all other economic situations Keynesians view as non-deal, leads to them questioning the wisdom of consumers’ reasons for the decrease and a call for corrective actions by their betters in government. What I always found fascinating is how Krugman, and the link-minded, were deriding rampant overconsumption during the last decade (SUVs, McMansion, and cheap Chinese crap right Chad?), demanding the government action to reduce consumption they viewed as wasteful and unnecessary, but now urge government action to return us to a level of consumption they once viewed as unsustainable. If the people did over consume during the last presidency, then what we’re seeing is a market-induced return to more normal and sustainable consumption levels. The overconsumption they felt the market brought us, and government had to correct, is now being corrected by the market. Of course, government action is also needed to mitigate a market correction as well.

  • Tim2||

    Consistency doesn't matter to them, they are pragmatists in the ultimate sense. They use whatever logic "works" to sell big government, even if it blatantly contradicts everything else they have said.

  • Paul Krugman||

    Hey! Trade secrets, bub!

  • ||

    You guys are so funny to read with your fantasies about a magical bottomless pit of wealth that need only be tapped by allowing "free markets" to reign supreme. What starry-eyed amateur economists you all are and if you weren't so terribly destructive we could put you all on late nite comedy for a good laugh. No limited "pie" which has to be shared but a magical pot from which everyone can binge to their hearts content. Only one catch, the already wealthy should get the first shot at the pot(or pie) and we'll all just pretend we don't know why it is empty when our turn is supposed to come. What utter BS.

  • ||

    David, assertions need reasoning. Welch provided that. Try it sometime, eh?

  • ||

    Nic, Welch has unlimited space to flaunt his ignorance. I have a few words. I can back up every word with reality and logic not the fantasy of contradictory reasoning and economic magic.

  • K-Y||

    I can back up every word with reality?

    You made milk come out my nose!

  • The Libertarian Guy||

    That would be even more amazing if you weren't drinking milk...

  • Milk bored||

    Are you sure it was milk?

  • K-Y||

    not 100%

  • K-Y||

    not 100%

  • ||

    I'm sorry, Davy. We're all full up right now on dumbass trolls who don't know what they are talking about. Maybe if you were gay or a woman or handicapable, you might qualify for consideration under our dumbshit diversity program. But since your initial whiny outburst is the same tired, specious shit we always hear, you're just not diverse enough for us to really consider at this time.

    Have a nice time fucking your mom's corpse.

  • Colon Bowell||

    +1

  • ||

    So, where do you think your "pie" comes from?

  • ||

    I am going to disregard the personal insults because they are even funnier and more illogical than your economics. All free enterprise theory depends on a scarcity of resources, labor and finished products. This is what zero-sum means, you have a philosophy that is contradictory from the start. Now if any of you were smart enough to see that, you wouldn't resort to name-calling. Talk about specious shit, you're the experts.

  • ||

    I am going to disregard the personal insults

    Which is a lie...

    Talk about specious shit

    Because you subsequently quote them.

    They make a cream for when you get all butthurt. Maybe the government will buy you some.

  • ||

    So answer my question. If you are so sure that there is a fixed "pie" of wealth, then you should be able to tell me how big it is and where it comes from.

  • ||

    Now you have gained the intelligence to ask a good question. I salute you. Wealth comes from labor and materials only, capital is money and like all money it measures and facilitates the use of labor and materials to create wealth. Each year, a limited amount of goods and services can be produced by the labor and sweat of real workers and materials that they dig, cut or otherwise produce by physical effort. Food, product and services are all limited by labor and material capital. It will always be a zero sum game unless you can find a way to produce something by magic. Money is not magic.

  • ||

    But real life is not restricted to one year, and the productivity of workers does not remain fixed. It can be improved through the intelligent use of capital; a use which is choked off when the government steals it.

  • ||

    You guys are really dense or so caught up in you political ideology that you can't see real life at all. At a point in time or any chosen time period there is a limited pie, like it or not. Right now it's a shit pie but doesn't matter. You can't steal from the past or borrow from the furure unless you have becaome a (gasp) liberal.

  • ||

    "Wealth comes from labor and materials only"

    So now we're back to the labor theory of value?

  • ||

    Hey, nothing like 1850s economics to demonstrate ones superior and sophisticated knowledge of the field.

  • ||

    Clearly, this is the case, because no combination of labor and material is better than any other. We would be just a rich if only we spent all of them forming pyramids, having saved ourselves the trouble of worrying about what people value!

  • ||

    I just finished carving a bunch of spears myself, I figure the amount of material and labor I got into them ought to fetch me a high price from the D.O.D.

  • ||

    no combination of labor and material is better than any other.

    Of course not! Using a hand rake to till the ground isn't more productive than a modern combine!

    You are being snarky, right? A person simply couldn't be so stupid as to actually believe such a moronic thing, could they?

  • ||

    Of course I am. Did you bother to read the rest of the comment?

  • ||

    Of course I am. Did you bother to read the rest of the comment?

    I was responding to the troll. I gave a chuckle at the pyramid shot, good one.

  • Thomas||

    Nailed it.

  • Thomas||

    My last comment was supposed to be in reply to Josh Lyle's 2:31 comment.

  • Butts Wagner||

    That "magic" you talk of is human ingenuity. When the assembly line was invented and lowered the cost of goods, it didn't create new money, but it freed up money to be spent elsewhere. Ideas generated in the brains of men allow more and different natural resources to be utilized in the production of goods, creating more goods. Certainly, the number of people available to perform various jobs has not changed, assuming a rapid, efficient change in production methods, but the availability of each person has changed. Just as the amount of resources contained on Earth is finite, the amount of resources that can be put to useful ways in production of goods is ever increasing due to human ingenuity. To limit the pie to the here and now is short sighted.

  • ||

    Marxism alert.

  • John Maynard Keynes||

    Even in ghostly protoplasm form, I still manage to bugger the gullible!

  • Paul Krugman||

    Thank you, sir! May I have another?

  • ||

    +100

  • Big John||

    Additional bonus: +100

  • Kevin Bacon||

    I do NOT want to be involved in this six degrees shit right now.

  • JoshInHB||

    David-"Wealth comes from labor and materials only"

    Stop channelling Marx.

  • anonymous||

    "All free enterprise theory depends on a scarcity of resources, labor and finished products. This is what zero-sum means"

    No.

  • ||

    YES.

  • Zeb||

    No, you really don't know what "zero-sum" means. Please stop.

  • Inigo Montoya||

    You keep using that word. I do not think it means what you think it means.

  • Old Mexican||

    Re: David Hennessey,

    All free enterprise theory depends on a scarcity of resources, labor and finished products.

    it doesn't depend on that.

    This is what zero-sum means, you have a philosophy that is contradictory from the start.

    You are unaware of what "zero-sum" means.

    Now if any of you were smart enough to see that, you wouldn't resort to name-calling.

    Oh, if only people were as smart as me, they would not envy me so much! This is the burden I carry - I am too precious!

  • ||

    Again, no real answer is possible but your adamant denial without the use of reason is standard behavior for people who believe based on faith. I still find this article just as hilarious as I did when I first read it. The personal attacks just convince me that I have struck a nerve.

  • Old Mexican||

    Re: David Hennessy,

    Again, no real answer is possible but your adamant denial without the use of reason is standard behavior for people who believe based on faith.

    Because you do NOT base your unsubstantiated and unexplained assertions out of faith, right?

    I still find this article just as hilarious as I did when I first read it. The personal attacks just convince me that I have struck a nerve.

    Yes, because nothing more strikes a nerve than writting an answer to assertions that contains no counterarguments, and then leave saying "I am so clever and you are not!"

  • ||

    I didn't leave, I would write a book for you if I thought it would help but what questions do you need answered that are not already quite clear? Wealth is a real good (raw or finished) or a service rendered which requires real labor. Wealth is not money. I know most of you can't see this because money seems to equal wealth in non-economic definitions. Money which has been accumulated by robbing a bank is not creating wealth like money which is accumulated by labor. Money can be stolen or created magically by the Government but it does not increase the wealth, it just devalues the money. Money is not a zero-sum game and that may be your game but it has nothing to do with wealth or the creation of wealth. As another poster pointed out, trading real goods from China for plastic money is not trade and creates no wealth for America but it does create a lot of money for a few non-producers in Government and industry.

  • Tim2||

    Again you show your amateur and uninformed nature, accumulating wealth through trade does not require money, and is not a zero sum game.

    I'll use apples and bananas again, I can trade my bananas to someone who likes bananas more than apples for apples which I prefer to bananas and we are both better off; our wealth has increased because we have more of what we value.

    The reason that we have money and people like to accumulate it is that it is easier to just trade all goods for money than try to barter for everything. A school teacher can't do much with the labor of an autoworker. A childless auto worker has no need of a school teacher. Either they think up some really complex barter scheme involving a third party who both has a kid and needs the labor of an individual autoworker, or we simply use money. This has to of course happen for every good or service the teacher or autoworker may require. Thus money has value because people will trade things for it, and people will trade things for it because to do so is easier than barter.

    Wealth isn't created robbing a bank, what a profound insight! Worker's produce can be stolen right out of the factory too but that doesn't mean it isn't valuable. The fact that government has seized a monopoly on the production of money and that it has created easily printable fiat money does not negate that money has value.

    Money is just another good, it arose independent of government, as all money is any substance that is generally accepted as payment for goods and services. You clearly have never touched an economic textbook with the garbage you are spouting.

  • Chad||

    Yes, Tim, there are non-zero-sum swaps out there that can make everyone better off. Does anyone deny this? However, if markets are efficient, there can't be too many of these opportunities out there...and surely not enough to solve all our problems.

    Here in reality, we have lots of zero-sum choices to make. Do you want to participate in the discussion like an adult, or sit on your pile of gold with a shotgun and just complain?

    Do we need more cheap shit from China, more over-sized houses, and more over-sized vehicles? Absolutely not. We need a rational health care system, better K12 education, and to rebuild our infrastructure.

  • Tim2||

    I put my money into a bank that lends that money out to other people, so when you tax me more to pay for stimulus packages you are decreasing the amount of money I spend and invest by that same amount. That's what distinguishes Keynesian stimulus from things like infrastructure.

    We will only run out of net positive trades when people stop shifting their preferences and when we stop inventing new goods and services all together.

    Do we need more "cheap shit from China, more over-sized houses, and more over-sized vehicles"? Probably not, but then again value is subjective and you don't get to inflict your preferences on everyone else. Some people work very hard for their McMansions and over-sized vehicles, and it isn't clear that your social programs will benefit them more than they cost in taxes the way things like a justly sized military and police force would.

    Individuals have natural rights that protect them from arbitrary infringement by people who claim that what "we" want is more valuable than their own desires, especially when "we" picks out the most ridiculous desires and juxtaposes them to the most noble community needs in a way that defies reality. The irresponsible rich aren't the only ones who will get taxed, and the needy aren't the only ones who will get handouts. When you reform K-12 education in a way that makes it accountable for all the money it already has, then I'll consider paying more for it.

    Adult conversation keeps the insults to a minimum and tries to address logical arguments rather than caricature their opponents as "sitting on a pile of gold with a shotgun and complaining". I just love it when Chad calls us childish after throwing around insults and whining about how it isn't fair.

  • anonymous||

    "Yes, Tim, there are non-zero-sum swaps out there that can make everyone better off. Does anyone deny this? However, if markets are efficient, there can't be too many of these opportunities out there"

    [citation needed]

    No matter how many times I indirectly trade my skills for groceries, I still keep getting a good deal, from my perspective. Either I'm a lucky bastard, or you're a moron.

    "Do we need more cheap shit from China, more over-sized houses, and more over-sized vehicles? Absolutely not. We need a rational health care system, better K12 education, and to rebuild our infrastructure."

    Well, I personally would like a larger house, so I have a place for more cheap shit from China. Of course, I don't claim to know what you need, which is more respect than you show anyone else.

  • Chad||

    No matter how many times I indirectly trade my skills for groceries, I still keep getting a good deal, from my perspective. Either I'm a lucky bastard, or you're a moron.

    No, you just aren't understanding my point. I am talking about new swaps, not repitition of old ones. The world does not progress if you and I simply swap apples and bananas every week.

    And yes, like most people, you want the bigger house (for what reason, I don't know), but you sure in the hell don't want to pay for all the costs that it puts on everyone else.

    Yes, we all want the huge mansion on 80 bucolic acres, surrounded by a national park on the west, the ocean on the east, and a metropolis just down the road. Obviously, our goals are conflicting, and we wind up with suburbs, which are the worst of all worlds.

  • SKR||

    No, you just aren't understanding my point. I am talking about new swaps, not repetition of old ones. The world does not progress if you and I simply swap apples and bananas every week.

    Actually, it does. Now that I know where I am going to get my apples, I now have time to spend inventing new uses for my time.

  • Tim2||

    I thought your point was to denigrate the concept of efficient markets by pointing out useful innovations and changes in preferences that haven't come about yet.

    "if markets are efficient, there can't be too many of these opportunities out there"

    What costs are McMansions placing on everyone else? Other than the "opportunity costs" of rich people not giving their money away. I'm fine for regulating them if they pollute btw, and I don't want them getting cheap money from the fed or special tax incentives and transfer payments no one else gets. However provided that they earn the money themselves they aren't hurting anyone, which comes back to the point that Chad doesn't believe it is their money in the first place; because of vague notions of living in society, where such people already pay lots of taxes for a great deal of things besides the military/police/other traditional public goods and a social safety net and they get other wealth through mutually beneficial trade. Homeless people should be happy that such rich people invented a computer so that Chad can blog about giving them more money.

  • Chad||

    What costs are McMansions placing on everyone else?

    1: Environmental effects, which you aren't paying for.

    2: The fact that everyone else has to drive that much farther to get around your property. One 2.3 person house per acre is sprawl, and creates all sorts of transportation issues.

    3: Psychological effects, as everyone else tries to buy an even bigger dick than their neighboring McMansion-owner is flashing to the world.

    Libertarianism doesn't even acknowledge that conspicuous consumption (which is negative sum) exists, which is why, of course, that you present no solution to it.

  • pointing out the obvious||

    Well, it looks like this administration is going to 'solve' the problem of conspicuous consumptions.

    Make everyone poorer.

  • Tim2||

    1. I have stated that I'm not opposed to regulating against environmental pollution that negatively impacts people. This isn't an issue unique to conspicuous spending.

    2. Allocation of scarce land resources is solved by the market, and the government can eminent domain land for actual public uses as opposed to just increasing tax revenue.

    3. Yes it is true that conspicuous spending can be negative sum, but large houses, SUVs etc have utility as well; you may not like them, but not everything that seems lavish and unnecessary to you is "conspicuous spending". I like boats, and would love to have a Yacht, am I just trying to "buy a big dick" or do I just like boating? Further, it is their money and they can do with it what they damn well please; people don't have a property right to their social status. Otherwise basic upward mobility should be reduced accordingly to whatever half brained negative externality you can come up with due to such people making being rich worth less. I fail to see how simply taking some of rich people's money away will solve this issue and make them better off, while losses of utility on items bought for that purpose and not just status will actually make the rich worse off; and that's the kicker. Chad's not out to solve the problem of rich people getting into negative sum status wars; but to use them to justify wealth redistribution.

    So I don't present "a solution" to it because I'm not arrogant enough to try and distinguish between what spending is status based and what is other preference based, and because people don't have a property right to their social status. People aren't slaves to society such that we ought to just maximize societal utility; the only coercive actions that could potentially be justified are those that make everyone better off or at least don't make anyone else worse off. Perhaps in a world of perfect information we could address conspicuous spending, but in the real world where you claim to live we are going to inevitably hurt people who aren't engaging in it. I don't see how the wealthy are better off being taxed more, if we were actually addressing conspicuous spending we would be attempting to prevent them from engaging in meaningless status bidding wars with each other so they had more money to spend on other preferences.

    Instead, Chad wants to raise this potential negative sum game to condemn people for buying things he doesn't like and cloak his desire to redistribute wealth under the guise of conspicuous spending. He's attempting to demonize the rich for purchasing things he doesn't like in possibly a wasteful way not even to protect them from themselves but rather just to seize their assets to spend on his pet projects. Markets aren't perfect, but in this highly subjective case of what counts as "conspicuous spending" there is no government solution to it that will do more harm than good. Some items some people buy for status will be bought for others for another reason, negating any ability to pass a hard and fast rule, with the only other solution being to violate the rule of law and just have a bunch of government bureaucrats who "know it when they see it" who will be heavily influenced by personal preferences and have every incentive to seize wealth to merely to justify their bureaucracies existence and to fund the pet projects of those who select them.

  • Tim2||

    After reading more of Chad it is important to note that the benefit of such bidding wars is that people work harder, scroll down and see for yourself where he admits people in societies with more coercive wealth redistribution work less; and thus on the benefit side to "conspicuous spending" we should add increased productivity.

  • ||

    "I'm fine for regulating them if they pollute btw, and I don't want them getting cheap money from the fed or special tax incentives and transfer payments no one else gets."

    OOPS! The true belief of every libertarian slips out. Government is great as long as it does MY bidding. What is pollution? How much Govmint will fix it? Will it be national, state or local legislation? Who will write the legislation and decide who is harming the environment? Presto!You just became a progressive.

  • Tim2||

    If you have studied economics rather than just read the cliff notes of Das Capital, you would know that pollution is a form of a negative externality where a third party is harmed by a transaction between two other parties.

    Regulating against this is perfectly consistent with libertarian economics and moral principles, the libertarian critique of environmental regulation comes about when government regulates things that don't hurt people or degrade common resources. Or when the inappropriate level of government does so, most environmental regulation is appropriately left to the states unless the damages can be transmitted across state borders.

    You don't deserve a response, but maybe by reading them you might actually learn something. I'm a nice guy, so I wouldn't want you to go through life believing in your above absurdities.

  • ||

    I only respond to absurdities and most libertarians on this site don't seem to agree that Government does any good, is vital to civilization, in fact, it is the key to all civilized existence. You flay progressives if they want to have the Government do even one thing even if the vast majority of citizens want it. However, if it is something you like, protecting your private wealth. It's great. All we are arguing is how much and what should Government do. That's why I USED to be a libertarian, I didn't realize that many are extremists and anarchists. There is no agreement by libertarians that pollution control by the Government is good. Many believe that property rights are absolute and the correct solution to pollution is private lawsuits. Don't try to speak for other libertarians, speak for yourself.
    If I don't deserve a response, don't respond, I didn't ask you to.

  • The Libertarian Guy||

    So, Chad, should we all live in hovels and drive boring cars, just to satisfy your wealth-envy tendencies?

  • JoshInHB||

    Chad -"We need a rational health care system, better K12 education, and to rebuild our infrastructure."

    Finally something from Chad that i agree with.

    But the only way to achieve those results is by getting government out of those areas.

    Whether you like it or not, we have 50 years of experience that shows conclusively that more government spending produces worse results.

  • ||

    Your idea of a creating wealth through trading bananas and apples is great. I trade you my apples for bananas and we are both wealthier but our tastes change so I trade my bananas back and we both come out ahead again. At the rate we're creating new wealth now we can retire after a few more trades.

  • Old Mexican||

    Re: David Hennessy,

    I didn't leave, I would write a book for you if I thought it would help but what questions do you need answered that are not already quite clear?

    Please, shower me with your knowledge, oh sage one!

    Wealth is a real good (raw or finished) or a service rendered which requires real labor.

    Sure! I mean, a shit pie is real, so it must be wealth . . . right?

    I am guessing you subscribe to the Marxian Labor Theory of Value.

    Wealth is not money.

    That much we can say.

    I know most of you can't see this because money seems to equal wealth in non-economic definitions.

    Don't presume to know what others can or cannot see - you would have to ask everybody else. I *know* money is not wealth, it only represents wealth.

    Money which has been accumulated by robbing a bank is not creating wealth like money which is accumulated by labor.

    Well, robbing a bank is an example of a zero-sum game.

    As another poster pointed out, trading real goods from China for plastic money is not trade and creates no wealth for America

    You misunderstood the other poster's point. Wealth is being created and that is what the Chinese are doing - exchanging goods for payment. The wealth destruction process is the government devaluing the currency, which is a way of stealing value from the Chinese, another example of a zero-sum game. But all other things being equal, the Chinese obtained what they wanted and the Americans obtained what they wanted - that is NOT a zero-sum game.

  • ||

    I didn't want to make it too complicated for you, but a "good" implies something that the owner of it thinks is "good." I would give you my shit sandwich for free if I was stupid enough to make one. Sophomoric argument. You seem to agree with everything else I said except the point about China which is vital to understand. You think we came out ahead by trading useless money for valuable goods? The trade is not complete when any non-valuable, non-real entity like money or promises is traded for something real. The trade will be completed when we produce and ship some real goods that China wants. We won't get anything additional for all that stuff that we owe to China because we already got paid with real stuff. now we have to pay back and that, my friend, is a bitch.

  • ||

    Someone else already wrote the book you got your economics from. It's called Das Capital and no economist takes it seriously anymore.

    One of the most annoying things in academia is the way people who read Marx insist on believing they are smarter than everyone else, all evidence to the contrary.

  • Kolohe||

    Das Kapital is OK, there are some worthwhile anaytical insights to even the modern reader.

    It's the Communist Manifesto that's a load of horsehockey with totally wrong conclusions.

  • JoshInHB||

    Das Kapital is OK

    Its great for insomniacs.

  • Sean W. Malone||

    "I know most of you can't see this because money seems to equal wealth in non-economic definitions. "

    Wow, you haven't the slightest clue of what most us around here think, do you? You realize, do you not David, that it has been consistently the libertarian community pointing out that *money* is not the same thing as wealth, and thus printing massive amounts of it without actually expanding the amount of available goods in the world does nothing but inflate the price of those goods - which ironically serves to make it more difficult for the poor to have decent lifestyles. Additionally, since most massive Keynesian-approved printings of money get filtered through the investment banks (since that's how the central bank concept works), it is the already rich who benefit most from the government's counterfeiting.

    Now... That said, you have to be the most retarded sumbitch on the planet not to realize that the wealth in the world available to people is *not* zero-sum! If there was a fixed pie of real wealth (as you yourself noted, this means tangible goods like housing, food & clothing), then we'd have never made it into the 21st Century, much less seen the human population expand to 7+ Billion people.

    When new ideas and innovations are discovered, like better supply-chains, assembly lines and automated production processes, more of that real wealth is produced per capita - thus the "pie" grows. If the money supply stayed the same (i.e. if the Fed wasn't busy printing a shitload of money every year to fund whatever the current pet project of government is), then the increase in supply of available goods means that *everything* gets cheaper.

    It's pretty simple actually...

  • The Gobbler||

    Good day fine sir!

    What was silica sand worth 10,000 years ago and how was it used. What is it worth now and how is it used? Do we now have more or less silica sand than we did 10,000 years ago?

    Here's some study material for you.

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

    Show your work.

  • ||

    15 years ago I planted tweny-four fruit trees on my property (apples, pears, peaches, cherries, apricots, etc.). I'm not making this up, I really planted them. On the day I planted them, I could not make any pies. But now, 15-years later, I have more fruit than I could ever use for pies so I share it with my neighbors (to be fair, they have to pick it).

    So given your economic perspective how the fuck could that have even happened?

  • K-Y||

    I want to be your neighbor.

  • ||

    I live in Minneapolis so you might want to reconsider. It's damn cold.

  • Tim2||

    Economics being a zero sum game is not proved by there being a finite amount of matter in the universe, or at least within man's reach.

    The value of various goods and services is subjective to the person consuming them, and therefore people can trade finite amounts of goods and services in a way that increases the goods and services' value to the participants in trade. Social welfare is thus increased by allocating finite resources to those who value them the most. If I like apples more than I like bananas, and someone else likes bananas more than they like apples we can trade and both be better off.

    There are some circumstances where government can intervene to promote social welfare because characteristics of certain goods prevent markets from functioning or functioning well; but those circumstances are the exception, not the rule, and often, especially as technology progresses, the costs of government intervention outweigh the gains in efficiency that government could theoretically create.

    You are the amateur economist.

  • ||

    You are the amateur economist.

    No, he is an idiot troll and nothing more.

  • Old Mexican||

    Here are the answers, David:

    All free enterprise theory depends on a scarcity of resources, labor and finished products.

    Free Enterprise is based on detection of opportunities whenever there is a situation of higher scarcity (high demand) for a certain good. Economics is the science of how man deals with scarcity. You are just conflating two different things.

    PRODUCTION is what creates wealth. Wealth is allocated through free markets, through free exchange which satisfies needs and wants.

    This is what zero-sum means, you have a philosophy that is contradictory from the start.

    Again, you are totally misunderstanding the concept of zero-sum. A Zero-sum game is when two parties do not exchange (i.e. one takes from the other, or none do anything). Instead, when there IS exchange, both parties obtain something that was MORE desired than the good they parted with.

    You think of resources as something that is constant and non changing. This only shows your utter lack of knowledge in economics. Only something that is valued is a resource. Value is subjective, depends on the eye of the beholder. So, only people that value the resources consider them as resources. This means that ANYTHING, at ANY TIME, can be a resource. A long time ago, fish sauce was a resource for tasty meals for the Romans. People do not deal as much on fish sauce, for the simple reason that people do not value the good that much.

    The idea of a limited pool of resources is childish - it indicates a total misunderstanding of how people value things. You would have to start from zero in order to understand, because you lack knowledge, and I am saying this as a matter of fact, not to insult you. There are ample resources on economics that are free, but I would suggest you read "I, Pencil" by Leonard Reed, which you can download for free.

    Now if any of you were smart enough to see that, you wouldn't resort to name-calling.

    If you did not start your posting by saying that everybody here is a fool, maybe you could have started a conversation and learned something.

  • SKR||

    This is definitely the most funny thing I read all day.

  • ||

    The argument here isn't that a free market creates a utopia. The argument is that the market will act in uncontrollable ways either way, but at least a true free market respects individual property rights. To me it's a bigger problem when institutions screw up then when individuals screw up.

    Yes, the free market can do a lot of good, but that also involves patience through rough spots and an understanding that more output requires more input. Neither the government or free market can create wealth on its own. Individual actions are required to make it all work. However, the government is great at crushing the individual for the power of the state, which deters individuals from building more wealth.

  • Old Mexican||

    Re: David Hennessy,

    You guys are so funny to read with your fantasies about a magical bottomless pit of wealth that need only be tapped by allowing "free markets" to reign supreme.

    They're not "bottomless" - the pits have a bottom and wealth appears magically after people say the magic words: "Let's Trade."

  • ||

    Again, nice try but the wealth has to already exist in order for anybody to say, "Let's Trade" Trading does not produce the wealth, it redistributes the wealth and gives "traders" a chunk for their role in the exchange. The "traders" like to pretend that they have actually created the products or services but that was done by workers. I know some of you are a little sensitive because you live off the labors of others so workers, who know that we are the actual producers of wealth, have to be put down and kept down. Won't work.

  • ||

    You know, history isn't on your side. Nor are most economists. You're getting annoyed with people attacking you, but you're only making bald assertions based on assumptions that are wholly not of this world. Otherwise, you're not making much sense.

  • Chad||

    90% of economists support some sort of price on carbon...why don't you listen to your gods when they don't toe the conservative line?

  • anonymous||

    Presumably they're taking the question of carbon (dioxide) as a pollutant as a given, as it's outside of their field of study.

  • Chad||

    Naah, they take the odds given to them by science.

  • anonymous||

    Was that supposed to be a rebuttal? Because it sounds like you said the same thing as me, only with different (to be fair, perhaps clearer) language.

  • Tim2||

    People might be more receptive if you were less of snarky a-hole. Would it really kill you to drop the accusations of childishness, shot gun and gold hoarding, and the needless adding of words like naah before your posts.

  • Chad||

    I would reply that I am less snarky when debating adults, but that would be snarky. Or I could reply that religious zealots deserve a little snark, but that would be just too much fun.

    I understand your keen belief that markets would just be the best thing ever if only the government got out of the way. I thought so too, when I was a dumb teenager. Then I grew up, and realized neither real people nor the real world come anywhere near matching the assumptions of your theory.

  • JoshInHB||

    Chad-"I thought so too, when I was a dumb teenager. Then I grew up..."

    "I thought so too, when I was a dumb teenager. Then I grew up went to work for government..."

    You had a typo that i fixed for you.

  • Chad||

    I work in the private sector, silly goose.

  • Tim2||

    So basically you can act like a child because you perceive your opponents to be children because they consider that they have a right to keep what they earn and don't want to submit to a coercive authority that gets to arbitrarily determine what constitutes fairness? Of course, your definition of a child is anyone who disagrees with you; thats pretty convenient isn't it? In others words, you aren't bound by any rules of respectable debate unless the people you are debating agree with you, in which case it isn't really a debate.

    Thats sounds pretty childish to me. Don't let me stop you from hurling insults, talking down to people, bullying those who you disagree with, and then running to mommy government to because you see something that isn't fair! Adults realize that in the real world outcomes aren't always equal and in that sense it will never be "fair". The real world can never produce true equality of opportunity either, some people will always be as you say "lucky"; the problem is that when it tries to it inevitably reduces opportunity by stifling growth and innovation as it destroys the incentives for those who would otherwise be lucky to take advantage of that luck which can rarely be done without hard work which is far from costless. You don't even restrict yourself to minor amounts of redistribution, instead you want to actively micromanage the economy and peoples' lives because you think you know better than they do; and that has nothing to do with fighting against established privilege or circumstance. You just throw up a million issues hoping that one will stick and give you the power to do everything you want which often has nothing to do with the problems you suggest or helping the people you claim are suffering from such problems.

  • Chad||

    they consider that they have a right to keep what they earn

    No, I consider you childen because you think that you have "earned" everything you manage to get your hands on, when in fact, what you get hold of is intimately tied with innumerable factors beyond your control, and the very structure of society and your place in it.

    The real world can never produce true equality of opportunity either, some people will always be as you say "lucky"; the problem is that when it tries to it inevitably reduces opportunity by stifling growth and innovation as it destroys the incentives for those who would otherwise be lucky to take advantage of that luck which can rarely be done without hard work which is far from costless

    And now you re-iterate the second core mistake of libertarianism. In this case you are qualitatively correct but quantitatively wrong. Yes, higher tax rates and a broader re-distribution of incomes does de-incentivise success. But how much? The evidence suggests not much at all. People who are innovators do so intrinsically, and extrinsic financial rewards are not highly motivating to them, and may indeed muddle their thinking.

  • MJ||

    Most forms of carbon which I have a use for have a price.

    The economists you touting are advocating an arbitrarily determined cost to my use of said carbon products, which has no relation to my use of them.

  • Old Mexican||

    Re: David Hennessy,

    Trading does not produce the wealth, it redistributes the wealth and gives "traders" a chunk for their role in the exchange.

    You're only thinking in terms of middlemen, David. This is very limited - your limited knowledge or bias does not let you see that trade is between two parties.

    When a person trades, be it his goods or his services, he is trading something he values LESS than the item or service he expects to receive, otherwise he would NOT trade. The other party also expects to gain from the exchange. Both parties are better off because now they both have something they desired.

    The "traders" like to pretend that they have actually created the products or services but that was done by workers.

    Who is talking about workers? Trade is not necessarily between a person and a trader. Besides this, laborers trade their labor for pecuniary compensation.

    You also totally misunderstand what "wealth" means. For something to be wealth, it has to be wanted, to be valued, by someone. Laborers working day and night making things that people do not want are NOT creating wealth.

    I know some of you are a little sensitive because you live off the labors of others

    Sure, we're angry because you called us out as slave holders! Yeah, that's the reason - NOTHING to do with your own ignorance and arrogance - nah.

    [S]o workers, who know that we are the actual producers of wealth, have to be put down and kept down. Won't work.

    Indeed! Because the workers already KNOW what it is to be produced, but these greedy capitalists just take the fruits of their labor!

    Yep - workers know how to build cars and stoves and toilets because they know everything. Oh, don't mind the designers and the salespeople and the investors that buy the machines . . . they are not wealth creators.

  • ||

    I didn't know you were all non-workers, or slave holders as you describe yourself. Perhaps the discussion wouldn't be so acrimonious if you didn't despise workers so much. I don't despise traders, their chunk of the wealth is appropriate but their claim that their chunk of the wealth can be unlimited without limiting the wealth that others can possess and use is the ridiculous part of the argument. I only point out the failing in logic. I don't argue against free enterprise, it is unassailable, just for it to be honestly and logically discussed. The point of this article was to suggest that we (or liberals)use the zero-sum argument for Government spending which is totally opposed to the rest of the article which says there is no such thing. So, logically, unlimited Government spending should create more wealth just like private spending. Is it zero-sum or not? Government spending may be wrong if it doesn't produce the "right" goods and services while unchecked free markets do a better job. Your logic then is that the democratic choices of free people should be ignored while the theory of magical free markets should prevail. I trust the American people, if given a free choice, should decide how much of the nations wealth should be spent on things we agree to value highly (whether welfare or highways) and that and the rest (the majority) should be left to those who have some to spend as markets decide. Simple democracy.

  • Old Mexican||

    Re: David Hennessy,

    I didn't know you were all non-workers, or slave holders as you describe yourself.

    You better dust off your sarcasm-detector, David, otherwise you can be taken as a person with no sense of humor.

    Perhaps the discussion wouldn't be so acrimonious if you didn't despise workers so much.

    Yes, that's right - we hate workers. That must be it - good theory there, Sherlock.

    I don't despise traders, their chunk of the wealth is appropriate but their claim that their chunk of the wealth can be unlimited without limiting the wealth that others can possess and use is the ridiculous part of the argument.

    It is indeed ridiculous in the sense that nobody has made that argument. Traders can only trade what they possess, so they cannot presume (nor can you) that they can achieve unlimited wealth - that term is meaningless.

    The point of this article was to suggest that we (or liberals)use the zero-sum argument for Government spending which is totally opposed to the rest of the article which says there is no such thing.

    You totally misinterpreted the article and the points. The argument is not that there is no such thing as a zero-sum game, the argument is that people that say the market is a zero-sum game fail to recognize the ZERO-SUM game that is government thievery and spending.

    So, logically, unlimited Government spending should create more wealth just like private spending.

    Private spending does not create wealth, so logically the argument is wrong. It is PRODUCTION that creates wealth, not spending.

    Is it zero-sum or not? Government spending may be wrong if it doesn't produce the "right" goods and services while unchecked free markets do a better job.

    You totally miss the point - the government cannot PRODUCE wanted goods. If the government MAKES you buy their goods, then they cannot be said to be "wanted."

    The term "Unchecked Free Markets" is meaningless, since it conveys a false idea that markets are wild and unpredictable, when in fact they operate on the base of well determined rules: You only trade when you do so freely, and you only trade that which is yours.

    Your logic then is that the democratic choices of free people should be ignored while the theory of magical free markets should prevail.

    The choices in a market are democratic - people vote with their wallets. I do not understand why you think markets and democracy are mutually exclusive.

    I trust the American people, if given a free choice, should decide how much of the nations wealth should be spent on things we agree to value highly (whether welfare or highways) and that and the rest (the majority) should be left to those who have some to spend as markets decide. Simple democracy.

    Giving people the choice to determine what to do with things that do not belong to them cannot be a fair nor a just system. It that is your idea of what "democracy" means, I don't want to participate in your private hell.

  • Tony||

    people vote with their wallets. I do not understand why you think markets and democracy are mutually exclusive.

    As people have differing amounts of money in their wallets, this form of voting is inherently undemocratic. Perhaps you meant plutocratic?

  • Old Mexican||

    Re: Tony,

    As people have differing amounts of money in their wallets, this form of voting is inherently undemocratic. Perhaps you meant plutocratic?

    Aboslutely correct! I mean, rich people get to hoard all the cheese puffs with their purchasing power, so how can we the teeming millions change the production patterns of the Cheese Puffs factory?

    Since people UNIFORMLY buy the SAME products regardless of tastes, regions, wants or desires, people with MORE money get more production-deciding power! Right! See, makes sense, Tony! Gotcha!

  • Sean W. Malone||

    Incidentally Tony, let's just look at two concepts of products - the infamous "Cheese Puffs" and a diamond encrusted watch.

    Only the plutocrats can afford the watch, but their buying power is much greater - so by your statement above, we should assume that the market would be flooded with diamond-encrusted watches... That's what rich people want, right?

    Strangely, that's not the case. It's the Cheese Puffs that sell for $2.00 a bag that are widely available.

    Why would that be?

    Could it possibly be that selling a product cheaply ($2.00/bag) to millions of people would produce a lot more end-benefit to a producer than selling a few thousand really expensive products per year? Oh, I think so.

  • Zeb||

    Oh for fuck's sake. The Nation doesn't have wealth. Individual people who live in it do. The democratic choices of free people to do things with other people's money should damn well be ignored.

  • Banjos Kick Ass!||

    Generating “wealth" alone means nothing if there is no value to said "wealth". Wealth does not become wealth until someone values it as such. There is infinite wealth, even in a primitive society, as long as individuals value things. If I value the pointy stick you picked up in the forest and wish to have it, well dag nabbit, that be wealth! So your laborers can labor all day, but what they create does not become wealth until someone else values it.

  • Tony||

    This uber-relativistic notion ignores the fact that in a society it is generally agreed-upon what constitutes wealth, and also that certain things are basic necessities that aren't valued merely on whims.

  • Old Mexican||

    Re: Tony,

    Society agrees nothing - it is individuals who decide what are resources and goods for each of them based on their own "whims", as you say. If many people agree that they value certain goods more than others, then you have a convergence of tastes or wants, but that does not mean those goods are wealth by their own virtue.

  • Tony||

    The value of, say, potable water to human beings isn't dependent on a convergence of tastes. It is absolute.

  • Old Mexican||

    Re: Tony,

    The value of, say, potable water to human beings isn't dependent on a convergence of tastes. It is absolute.

    Of course it is! You're absolutely right! I mean, it is not like water along the Great Lakes doesn't have the same high value as in the middle of the Sahara! NO! Its value is A-B-S-O-L-U-T-E!

    Absolutely.

  • Colonel_Angus||

    If I had possession of all the potable water on earth sealed in some humongous tank, which I obtained without coercion, it is my right to decide whether I exchange any of it for anything. It is not my failure to give you water that caused you to die of thirst, it is your failure to come up with anything that I would be willing to exchange the water for that killed you.

  • Old Mexican||

    Re: Colonel_Angus,

    If I had possession of all the potable water on earth sealed in some humongous tank, which I obtained without coercion, it is my right to decide whether I exchange any of it for anything.

    Would that be assuming you had IP protection from the government so that nobody tried to copy your idea and made their OWN potable water?

    Just to know, so that we can have the complete picture here . . .

  • Colonel_Angus||

    Whatever unpotable water is made potable, I just buy up immediately and transport it to my libertarian colony on Mars. Tony can have some if he goes to Mars, but he gets to figure out how he survives the long trip without water.

  • Banjos Kick Ass!||

    If water became so rare, then I am sure the #1 priority of all humans would instantly become ways to create water. So scientists would find it quite profitable to combine oxygen and hydrogen or find other scientific means to extract/create water, or discover ways to survive without water (hey if you get to create an outlandish scenario, then the answer is allowed to be an equally outlandish).

  • pointing out the obvious||

    Indeed. We must have a UN convention on this. UNPEWTM.

    I'm sure it would prevent such abuses.

  • Tony||

    If you did possess all the potable water, it is highly unlikely you acquired it by any means that would make it morally justifiable for you to keep it. Libertarians love to conveniently ignore all the ways people have and get wealth that isn't personal ingenuity.

  • ||

    Boy, you are the biggest dumb-ass to ever walk the earth if you think I won't come and get MY water. The fact that you were stupid enough to pay money for it when you know that I'm not gonna let myself die because you have some bogus deed to water blows me away. I die to protect your right of private ownership? You have no values at all.

  • Zenmaster||

    ...and the Straw Man comes dancing in...

  • Ska||

    Do you really think the value of water is absolute? That it isn't more valuable in some places when compared to others?

  • Ska||

    That's what happens when you don't refresh.

  • Tony||

    I mean absolute relative to any individual. A certain (more or less) fixed amount is needed by each person per day. It's not something people can decide to stop valuing.

  • Old Mexican||

    Re: Tony,

    I mean absolute relative to any individual.

    If the value is absolute, you don't have to see it relative to anything - it is absolute.

    A certain (more or less) fixed amount is needed by each person per day. It's not something people can decide to stop valuing.

    That's not the point - you have not understand anything. People value things at the margin. Watre may be more valuable to a Beduin than to a person living near an almost limitless supply through a creek. There is no such thing as an absolute value in economic terms.

  • prolefeed||

    I mean absolute relative to any individual. A certain (more or less) fixed amount is needed by each person per day. It's not something people can decide to stop valuing.

    So people don't stop watering their lawns when the price of water increases, or buy more water-efficient washing machines, or wash their cars less, or any of the multitude of uses of water that swamp the tiny amount used for drinking?

  • prolefeed||

    The value of, say, potable water to human beings isn't dependent on a convergence of tastes. It is absolute.

    Because the only possible use of water is to drink it. Nobody has alternate uses of this scarce resource, such as irrigation, laundry, swimming pools. No, the only possible valuation of water is the value placed by drinking it -- and people in the middle of the Sahara have the exact same valuation of drinking water as rich people who have cases of Perrier in the house.

    And tap water is exactly the same value as Perrier ...

    And ... (repeat Tony's ignorant economic assumptions as needed)

  • Tony||

    You're twisting my point all around. I'm trying to say that value is not always 100% relative or whimsical in every circumstance. Of course, water is a resource like any other and its value is thus effected by its supply. But that's only so after you have enough to survive on, until which point it's exactly the same value for everyone (which is to say priceless).

  • Old Mexican||

    Re: Tony,

    You're twisting my point all around. I'm trying to say that value is not always 100% relative or whimsical in every circumstance.

    And everybody is trying to tell you that value is subjective, that is, 100% whim. Things do NOT have intrinsic value, Tony.

    Of course, water is a resource like any other and its value is thus effected by its supply. But that's only so after you have enough to survive on, until which point it's exactly the same value for everyone (which is to say priceless).

    If what you're saying is that one glass of water is not the same as 100 glasses of water, then you're right - and that is the exact point everybody has been trying to put through your thick skull: That people value things at THE MARGIN.

  • anonymous||

    The labor required to produce potable water isn't a constant from place to place, so even by the labor theory of value, the value of water isn't absolute.

    Certainly the subjective value of potable water isn't fixed for even one person -- otherwise, any one person would be willing to buy as much water as you could sell them, so long as you kept the price below that amount. The curve of marginal utility gain versus marginal decrease in thirst might be similar for most people, but that's a different matter altogether -- the price would still fluctuate based on supply and demand in such a case.

  • Banjos Kick Ass!||

    "certain things are basic necessities that aren't valued merely on whims"

    Just because something is a necessity still does not make it wealth. We need air to breath, but we are not trading air because it is so plentiful. If a society generates more food than the world wants or needs, than food no longer becomes wealth as it is so plentiful. If we have more homes than people, then a home no longer becomes wealth. Just like how having air is not considered wealth. We might agree upon what our bodies need to survive, but just because it is a necessity does not make it "wealth".

    "society it is generally agreed-upon what constitutes wealth"

    Right, but laborers do not know what to produce until there is a want for it, a value for it. And how do we as a public value something as wealth? Not because laborers produce it, but because we value it. The internet was created by the government back in 1957, but it did not become useful or valued (wealth) until we as a public found a use for it.

    And you are ignoring ebay. Someone's junk is another man's treasure and what not. I promise you that what I am willing to pay for something is drastically different from what you are willing to pay something as we value different things, unless you treasure banjos, then we might be in agreement.

  • The Gobbler||

    "I know some of you are a little sensitive because you live off the labors of others so"

    Righto! I live off of the wealth (and labor) that a man accumulated back in the 19th century. And let me tell you, it is fucking awesome!

  • ||

    I don't care who you are - that's funny! Two thumbs up, TGob

  • Sean W. Malone||

    Oi, you're dense, David. The "workers" aren't the ones who come up with the idea to produce the goods, generally speaking, nor are they the ones who come up with the initial development capital to put together the necessary resources and they're also not the ones who provide direction for the company.

    You're just getting into Labor Theory of Value shit now, and it's pretty ridiculous.

  • ||

    Your definition of "worker" needs some serious rethinking. An entrepreneur, a self-employed individual and a ditch digger are all workers. The ditchdigger doesn't expect or demand that he get as much as the owner because the owner probably works harder, has more risk and responsibility and is putting in raw materials. I want the workers, both management and labor, to share the rewards. I don't know what Labor Theory of Value is but it probably is ridiculous. Perhaps some old school communist still has you bogged down in a discredited definition of "worker". It's not mine. You are absolutely wrong, the "workers" (who started the business), did come up with the idea, the resources and capital. The "employees" ARE the "employers" in many small businesses. The reason most small businesses don't have the ability to pay their workers, including themselves, as much as market forces should allow is the corporate welfare that gives big businesses with lobbyists a huge, unnatural edge. A ditorted market is not a free or effective market.

  • Sean W. Malone||

    Ugh... David... The fact that you don't realize that the thing you're arguing is essentially labor theory of value, and that that makes no damn sense (and that it was a major platform of Marxian economics) makes you basically ineligible to have a real conversation on this playing field.

    You're arguing the discredited idea that you *suggest* above, rightfully, has been discredited without realizing that that's what you're doing.

    And for the record, the reason I put "worker" in quotation marks is precisely BECAUSE I realize that management, CEOs, entrepreneurs & investors are all workers too! The free market system DOES reward all players - that's the whole point!

    Investors and innovators, entrepreneurs, management... All these people are doing important jobs that the Marxist position discounts entirely favoring the idea that the "real" workers are just those on the ground - the ditch diggers.

    And as for the corporate welfare bit - YOU NAILED IT!

    Well done, David. Now you've discovered what it is that libertarians have been saying for decades! But now all you need to do here is to figure out that it's not the free market that hands out special deals backed by law - which lobbyists lobby for - but it is, in fact, GOVERNMENT!...

    Don't you realize that everything in your above post is exactly what most of us have been saying to you? A distorted market ISN'T an effective of free market. And a distorted market is only possible when government is allowed to write and pass legislation effecting what people are allowed to do with their own time & money. We don't have a free market in the US, and we haven't had anything resembling one for around 100 years. But that's a direct consequence of increased government power - and yes, corporations often lobby for this government power because it tends to benefit them. That's why prominent libertarian and Nobel economist, Milton Friedman said (in 1978):

    "Business corporations in general are not defenders of free enterprise. On the contrary, they are one of the chief sources of danger....Every businessman is in favor of freedom for everybody else, but when it comes to himself that's a different question. We have to have that tariff to protect us against competition from abroad. We have to have that special provision in the tax code. We have to have that subsidy."

    I'm not sure what strawman you're debating, David, but it certainly hasn't reflected libertarian philosophy, sound economics or... notably... anything I've said.

    What's all the more impressive is that you readily admit to being woefully ignorant of the subject on which you are debating, and yet that still doesn't deter you from acting like you are smarter than everyone else. Kind of hilarious really.

  • anonymous||

    Trading takes effort (labor), which means that, according to you, trade itself is a form of wealth, created through the labor of merchants.

    Without the "trade" product, the good produced by the worker is just sitting in his shop or factory. Unless he built it for personal use, that good is useless without the final piece.

  • pointing out the obvious||

    I suggest you try to make something, and on principal, not get a phone, any advertisements, or anyone to sell what you make.

    Come back in a year or two and tell us how you did.

    And as for trade, have you ever looked at the financial health, working conditions, job opportunities and the like of any protected industry? You will see the total opposite of what you seem to intuitively believe.

    As for the US gutting their industrial base and moving it to China, I suggest you try to drum up investment, buy land, build a plant, etc. to make something in the continental US. California, for example. And you will see why it happens.

    Dk

  • High Everybody!||

    "one catch, the already wealthy should get the first shot at the pot(or pie)"

    Can I get a pot pie?

  • ||

    Okay, everyone... Here's the 'magic' we've all heard about. (Fortunately, it only takes a knowledge of third grade math to follow along.)
    Say I produce 10,000 widgets per year, and it costs me $1M to make them. I sell them at $120 each clearing a nice, tidy $200K profit. One day I figure out that by by merely rearranging my workers more efficiently I can produce 10,500 widgets each year. I have effectively created an extra $60K per year out of NOTHING -- No extra labor and no extra raw materials. How is that possible?
    It's called, "innovation" and just as the sun continually adds value to the economy by transforming valueless seeds into valuable foods, our minds (when freely allowed to) can create wealth without taking anything away from anyone.

  • ||

    Um.. I think you meant kindergarten, not third-grade. You have just devalued your own hard labor to "NOTHING". "No extra labor, no extra raw materials." A third-grader would ask how you rearranged a 200 million dollar a year business by thinking. We all have wonderful ideas and some of them are even good but not until you put an enormous amount of real labor of your own and of many others to put the ideas into practice. Innovation, if put into practice, is work and it is a source of wealth. It is not 'magic'. You must define work as something that only hourly workers do, not so.

  • ||

    I happen to have children in first and fourth grade right now, so I think I know what math they're doing. Also, since you have multiplied 10,000 by $120 and ended up with $200 million, it's evident you dozed through those years yourself.

  • Sean W. Malone||

    Funny thing about that... Rearranging a business by thinking is pretty much how it's done all the time, David. You're not going to rearrange a business successfully *without* thinking, and the fact that you seem to believe that it's just the "labor" that does these things, or that Sean L's scenario would just require workers to put in extra hours just goes to show how little experience in this world you have entirely.

    If I create an auto-manufacture business and am building 10 cars a week with a production and an assembly line of 50 people, and I'm making some profits, then I have some options with those profits...

    I could just give it all away in bonuses... Or I could buy back equity in my company from my investors... Or I could blow it on an end-of-the-year party (as many of the companies I've worked for have done, depressingly enough)... Or..... I could invest in some new capital machinery - like a robot. So that next year, I still have 50 workers, but now we're making 10 cars a day.

    The workers don't have to work any harder... But we're making more product, which means that there's more available for people out there in the world at cheaper prices... More wealth, no extra work. As a result of thinking, and determining a more efficient way of producing goods.

  • ||

    Funny thing about you, you either never worked for a living or have forgotten just how much work it is to take a business that is running on one model of production and shifting to some better method. You might only do the inspiration part, that's what I like to do also, and that is work also but putting it into practice is risky and requires more labor. It is no different than the initial start-up, it is not guaranteed success and money in the bank, wake up to the real world.

  • Sean W. Malone||

    "Never worked for a living"... HA...

    My first paid job was detassling corn when I was 15... I haven't stopped working for a living since, jackass.

    The point is that without the idea the labor is meaningless!

    What I do for a living now, fortunately (and after years of study), is compose music and produce multimedia - and like anything, it's always the idea development part that's the really difficult part. Once the ideas are down correctly, the production part is relatively easy.

    Yes, labor is required to do things... Shocking. But without the initial idea, and subsequent planning, labor either has nothing to do - or acts wastefully, carrying out meaningless projects. No one's saying that it's not important, but the *thinking* part is actually the key that starts the engine and without it, nothing else takes place. Undirected labor is largely useless.

  • ||

    Jackass yourself! I like the idea of exchanging insults along with each response. It's kind of like the free set of steak knives. Useless, but free.
    Sorry we can't send you back to the fields...oops... that's what Stalin did. Of course, we wouldn't do that but the reason why some have wanted to is extrememy evident by your response. I KNOW about detassling corn and you only did it for a short time while you were very young, strong and limber. It's easy to devalue the work of those children when you will never have to do it again. Some people do jobs like that all their lives, twelve hours aday without bathrooms or breaks. That why some recommend that elitist be forced to experience what competition for labor means in the absence of labor laws. Anyone who proposes laws or deregulation should EXPERIENCE the real results of libertarianism. You sitting around having ideas and others sweating and suffering to bring them to life. Of course, your work is the hard part, no one would think of leaving their factory job or fields to trade jobs with you. Come on, get serious.

  • Sean W. Malone||

    That whole post was entirely irrelevant.

    I'd suggest you watch Free to Choose... You can see the difference more libertarian policies make compared to more totalitarian ones. Hong Kong vs. China, for example. I don't really understand how you don't realize that you're actually the elitist, supporting policies that tell people what to do for what you perceive of as for "their own good".

    Oh well.

    And btw, I do 100% of the physical work to carry out my "ideas" as well. I was merely pointing out that the ideas are the difficult part of the job, and the labor, while sometimes tedious and even boring in some ways - cannot happen until the ideas are in place. No one "suffers" to bring my ideas to life. The worst that happens is someone has to play some music they don't really like. OMG! But since I am pretty much a one man show even that doesn't happen.

    Part of your problem is that you only perceive of labor as being physical toil - most American labor doesn't remotely fit that category in any case, a lot of it having been replaced by machines (another way that intellect has overcome brute force as wealth has grown, allowing people to have much cushier, more comfortable gigs here in the states). But to paraphrase Milton Friedman, where you find the most misery and grinding human poverty is precisely in those places that depart from recognizing private property and a relatively wide amount of liberty.

    Maoist China, Russia, North Korea, Cuba, Venezuela, Iran, Saudi Arabia, Pakistan... These are the places people are worst off. Wherever trade is embraced, people's standard of living improves... Modern China, Estonia, Hong Kong, South Korea, Japan, Singapore, post 1991 India, and on and on...

    The people who experience the real results of more freedom are consistently immensely better off than they were previous to that. History has vindicated the basic libertarian position a thousand times over.

    It's observable on every continent, in every culture, every country, state & township. There are as good side-by-side comparisons as you will ever get strewn about history. East vs. West Berlin, North vs. South Korea, Venezuela vs. Costa Rica, Estonia vs. Latvia... Etc.

    Your ignorance of economics notwithstanding, your ignorance of the modern world is equally astounding.

  • Patriot Henry||

    "No limited "pie" which has to be shared but a magical pot from which everyone can binge to their hearts content. "

    It's not a pot. Society (people + the world's resources) is a system which can grow pots, food, stoves, etc. Everyone can't merely binge because the system requires work to gain the increased resources.

    "Only one catch, the already wealthy should get the first shot at the pot(or pie) and we'll all just pretend we don't know why it is empty when our turn is supposed to come. What utter BS."

    The wealth of one man never impedes another from gaining wealth unless the wealthy man uses the wealth to support acts of fraud and or force to steal from those who seek wealth.

  • ||

    Only one catch, the already wealthy should get the first shot at the pot

    No that's what you want. The already wealthy are the ones that want bigger and bigger government to protect them from the unwashed. Your entire statist system is designed to keep the rich rich and the poor poor.

    We tax hard work and the harder you work the more the rich take, via their favorite agency, the government.

    We give little pittances to people who capitulate and become electoral slaves.

    The history of government growth is the history of income diversity.

    Without their tool the government the rich can only get me to do something by paying me. That's not good enough, of course, they want more, and ignorant rubes like you are willing to cede more power to the Soros and Rockefellers of the world because this time government power will be used for you.

  • ||

    refer back to JB. if it were a zero-sum game, we'd still be in the caves. i like to call that "magical pot" resources, buddy. and i have a better word for your "pie" too. excuses.

  • boobs!||

    ''Somehow, government spending is supposed to magically produce extra weath, but private industry spending the same money doesn't.''

    Don't they argue that the problem is lack of spending/production by the private sector thus requiring the government to spend and emulate private sector activity?

  • ||

    The government is too moralistic to emulate private sector activity. When I say moralistic, I didn't mean virtuous, as a moralistic government will segregate schools based on the moral concept of seperating the tribes. The free market has no feeling one way or the other.

  • Old Mexican||

    Re: tkwelge,

    The government is too moralistic to emulate private sector activity.

    You mean it is too divisive? Because what I found is that government types are too assholian.

  • ||

    No. Government only consumes. It does not produce. It is worth much of the spending on police and military because these institutions protect more wealth than it consumes.

    Also, if there is no private demand for widget X, why would you want the government to tax non-producers of widget X, then use that money to subsidize widget X? This is just a transfer of wealth from non-producers to the producers. That is the very definition of inefficiency because the non-producers won't pay for it on their own, i.e., they don't find it worth it to pay $Y for widget X. No problem, say the producers, we'll get the government to FORCE non-producers to buy widget X. Do you really consider that "[emulating] private sector activity"?

  • ||

    Your response was much better than mine.

    Really, the free market represents the values that we actually have, and the pubic sector represents what a political elite believes we "Should" be spending our money on.

  • ||

    Oh, I am beginning to catch on now. The spending which all of us decide is of high value through Democracy is illegitimate. I agree to some extent and I am not a lover of political elites but you are arguing for anarchy. Seriously? Oh, no wonder I have such illogical responses. Radicalism, including anti-democratic radicalism will not lead to reason. We have rules about money because economies without sensible rules fail miserably. Unfettered free markets may work for a minority over the long-term but, as you know, we are all dead over the long-term and most of us are in the majority.

  • Old Mexican||

    Re: David Hennessy,

    Oh, I am beginning to catch on now. The spending which all of us decide is of high value through Democracy is illegitimate.

    Only if the funds come through thievery. If the funds were given voluntarily, then it is not illegitimate.

    Radicalism, including anti-democratic radicalism will not lead to reason.

    Why not?

    We have rules about money because economies without sensible rules fail miserably.

    You're begging the question. Oh, thats a logical fallacy that can be translated as "circular reasoning."

    Unfettered free markets may work for a minority over the long-term but, as you know, we are all dead over the long-term and most of us are in the majority.

    Wow - argument by posing a "Us vs Them" mentality. Genius.

  • Jersey Patriot||

    The spending which all of us decide is of high value through Democracy is illegitimate. I agree to some extent and I am not a lover of political elites but you are arguing for anarchy. Seriously?

    Yes, seriously.

  • Sean W. Malone||

    "Unfettered free markets may work for a minority over the long-term but, as you know, we are all dead over the long-term and most of us are in the majority."

    I think you have this backwards dude... As Mises said: Markets are mass production for the masses.

    The MAJORITY of us get cheap cars, housing, computers, clothes, beds that are set off the floor and away from rats, indoor plumbing, internet and all kinds of other cool stuff purely because market success is about finding a need an filling it to the standards of your customers, more cheaply than your competitors.

    When there is high demand for a good, price goes up - when price goes up, producers enter the market and increase their levels of production - when that happens, innovations occur, and suddenly production booms and prices plummet.

    Any of the things I mentioned above are fine examples. Indoor plumbing is possibly my favorite, since even the richest people in the world were not privy to such luxury over 100 years ago.

  • ||

    "were not privy to such luxury" - no pun intended :)

  • Sean W. Malone||

    Maybe a little intended...

  • Chad||

    The MAJORITY of us get cheap cars, housing, computers, clothes, beds that are set off the floor and away from rats, indoor plumbing, internet and all kinds of other cool stuff purely because market success is about finding a need an filling it to the standards of your customers, more cheaply than your competitors.

    And the MAJORITY still get all these goodies in places such as France or Norway, which put a lot more fetters on the market. They also get a society where incomes are much more even, no one goes broke because they get sick, and people don't have to work so hard to keep up with the Joneses.

  • k||

    Please, you are spouting nonsense.

    Norway gets it's wealth from oil extraction in the North Sea. France figures a good New Years Eve is when only 1200 cars are burnt in the streets.

  • Sean W. Malone||

    Have you ever been to Norway, or France, Chad?

    I love your little myths about how they're perfect little societies and all, but that's all they are... Myths. People still try to keep up with the material wealth of their neighbors, there's still crime and there's a damn lot of medical tourism of people who actually want to get treated somewhere where they don't have to wait 6 months to see the doctor they need.

    You really need a new playlist though.

  • Chad||

    I have never had the pleasure of heading to Norway, but I have lived in both western Europe and Japan...where the people have lives every bit as good as ours, if not more so.

  • ||

    Medical Tourism? Let's look that up on the internet. Oh I see...Americans going to Mexico to get cheap dentistry. Here's one for Belize..I can take the vacation and get an operation for less than the operation alone in the USA. There are dozens of ads for medical tourism from the US to other countries, wonder how they can make money when everyone wants to come here for medical care? Must be a messed up market. Wonder if there are companies advertising in Norway for medical tourism to the US? Anyone?

  • Sean W. Malone||

    And shockingly, medical care in the US is every bit as socialist (or more so, fascist) as it is in Europe... But actually people go to Mexico for cheap *drugs*, because unlike in the US, it's not illegal to import drugs from all different sources in Mexico. That particular medical tourism wouldn't happen if the US Government would stop giving US Drug manufacturers legal oligopolies and protections against foreign drug manufacturers.

    Also, I should note that since you're using google in the United States, you're going to get information *related* to the US... Google's cool like that. Now go try the same search from www.google.uk.com ... You'll get all kinds of fun facts about going to India to get medical treatment.

    Here, let me google (UK) that for you...

    Lesson of the day: Knowing something about how teh interwebz work can prevent you from coming up with bullshit arguments.

  • ||

    So now we find out that medical tourism in the UK is to India not the USA as you point out. Thats' what I said, the myth that people are streaming to the USA to take advantage of our superior medical system is completely opposite of the truth. People are streaming to India, Mexico and Belize who all have socialized medicine. Same with drugs. Your analysis of why is spot on. Now our Government is trying to make it worse with this latest abortion of health "reform." Read my post again, I think we are in total agreement.
    Lesson of the day, read carefully first.....then type. You have to disagree with me before you can correct me.

  • Sean W. Malone||

    You're missing the point though in a massive way David. India, Mexico & Belize have socialized medicine for their OWN citizens, sure... So do we (it's called Medicare & Medicaid and covers about 50% of the market). Big deal.

    The tourism is to private clinics!

    The Mexicans are far more free in their purchase of drugs (from whichever companies, from whichever countries) than we are. The Indians have a glut of private clinics that cater to the medical tourists.

    None of the medical treatment that people are visiting these other countries for are paid for by the government! So no, we are not in agreement. You remain an idiot. It's not the socialism that is making things better, but the comparatively larger amount of freedom and lower prices due to labor arbitrage that provides the incentive for people to *pay* (privately, out of their own pockets) to visit these other countries.

    India, as I noted above, has only experienced the economic growth and increases in standard of living it's seen over the last 20 years precisely because they finally ABANDONED fabian socialism... Hell, you can even wiki something called "the hindu rate of growth", which was what people in the region termed the laughable economic growth socialist India had experienced until the early 1990s when they finally began liberalizing their markets.

    India is a HUGE vindication of the basic tenet of libertarianism: More freedom = better living.

  • Tim2||

    I thought people would keep working even if you took their incentives away, isn't wealth created to "keep up with the Jones still" wealth? If someone creates some new product everyone likes just to get into some stupid status bidding war then doesn't that innovation offset the costs of such a bidding war.

    On the one hand you are arguing that Warren Buffet and crew will keep working and investing no matter what, on the other hand you claim that they won't. Which is it? Why is not having to work so hard a benefit if people are just going to work as hard anyway?

    Again you reveal yourself as hopelessly contradictory, completely dishonest, or just naive; throwing up whatever sticks to get people to support your policy preferences.

  • Chad||

    If someone creates some new product everyone likes just to get into some stupid status bidding war then doesn't that innovation offset the costs of such a bidding war.

    Only on his side of the ledger. His competitor how has to work even more just to get back to where he was. In the end, both people are worse off. In principle, some third parties would have made some marginal profits on whatever the two bidders were creating in order to have money to bid. However, these are precisely marginal, and much smaller than the almost complete loss the two bidders experience.

    On the one hand you are arguing that Warren Buffet and crew will keep working and investing no matter what

    What is it with libertarians with black-and-white absolutes? The funny thing is that with Buffet, it actually comes pretty close to absolute. I would bet he would go right on playing the game even at 100% tax rate. Hell, I bet he would play even at 200%, just for the fun of it.

    However, most people are not in the same position. There is some extreme at which they will quit, but nothing that lies within the bound of rational public policy would cause that. When you look at European nations with much higher net tax rates than the US, you find fairly similar employmnent patterns and net employment, though with a lot more vacation.

    When you knock back the big winners and tighten the distribution of incomes, it reduces the ability and propensity to conspicuously consume. Life gets easier for all around.

  • Sean W. Malone||

    Chad, you made the dumbest argument I've ever seen just now...

    Well done.

    I'll let you figure out why.

  • ||

    I think he must be posting drunk.

    Hell, I bet he would play even at 200%, just for the fun of it.

    That was fantasyland even for Chad. He can't be stupid enough to believe that.

  • Sean W. Malone||

    Yeah, and that wasn't even the argument I was talking about being the dumbest.

  • ||

    democracy IS radicalism. we have a constitutional republic here. majority rule leaves the minority at the whim of fads. and...it's only anarchistic if we take out the laws against theft and fraud. those are economic-based laws after all.

  • ||

    Don't they argue that the problem is lack of spending/production by the private sector thus requiring the government to spend and emulate private sector activity?


    Not really. The Keynes argument is basically that they should waste money (on useless things like digging ditches and filling them back up, not producing anything of economic value) to put money in place to be spent on produced goods.

  • Tony||

    I think it's much better for such spending to be done on useful things, like building infrastructure (things that the market won't do in an efficient manner anyway). This helps grow economic activity above and beyond merely putting dollars into the economy. No reason the work has to be useless.

  • Tim2||

    That's not Keynes though, the entire theory is that what you spend money on doesn't matter; which was found politically useful because it lets politicians spend on whatever they want.

    Infrastructure spending that is actually needed is a good idea regardless of the macro economic situation. As such, the argument that we should spend money on infrastructure doesn't prove the argument that we should waste money on fictitious stimulus packages.

  • Tony||

    Keynes specifically cited infrastructure and other public goods as the appropriate targets of stimulative spending. Sure, providing wages for useless labor will have a stimulative effect, but spending it on useful things adds to the long-term potential output.

  • Old Mexican||

    Re: Tony,

    Keynes specifically cited infrastructure and other public goods as the appropriate targets of stimulative spending.

    And he knew that because he was a genius! Right, Tony? The guy that could not get tenure as a mathematics teacher despite his daddy's efforts, he was an economics genius!

    Sure, providing wages for useless labor will have a stimulative effect, but spending it on useful things adds to the long-term potential output.

    Sure, because there is nothing more useful than a thing built with stolen money. Check. Makes sense.

  • Tony||

    You are so tiresome. We will never agree that taxation is the same thing as theft, so until you come up with something other than this idiotic catchall argument, I don't have much use for the things you say.

  • Old Mexican||

    Re: Tony,

    You are so tiresome. We will never agree that taxation is the same thing as theft,


    Just because you do not agree does not mean the argument is not sound, Tony. Taking another person's property by force is theft. If taxation is takijng people's property by force, then taxation IS theft.

    so until you come up with something other than this idiotic catchall argument, I don't have much use for the things you say.


    I surmise that the idiocy lies soemwhere else, Tony, like in "putting your hand on the sand and ignoring reality" kind of idiocy.
  • Tony||

    Ignoring reality is what you're doing... the reality that every society on earth levies taxes and nobody except a few fringe anarchists view it as morally equivalent to theft.

  • Old Mexican||

    Re: Tony,

    Ignoring reality is what you're doing... the reality that every society on earth levies taxes and nobody except a few fringe anarchists view it as morally equivalent to theft.

    Just because "societies" [I love it when you equivocate and replace "societies" for "government"] tax does not mean that, in REALITY, the taxation is theft. People are made WORSE OFF when the result of their productive efforts is being taken by force. It is YOU who places his head in the sand and not see this.

  • Old Mexican||

    Sorry - just because it is societies that tax does not that taxation is NOT theft.

  • Chad||

    But you are made hundreds of times BETTER off when we provide you with roads, language, and the internet.

    Suck it up, and pay your fair share. Or go ahead and renounce society, give up everything we gave you, and see how long you last freezing and starving in the dark.

  • ||

    Fuck you shit head! You are not "society" and you have done nothing for me. You so deserve to have Warty come to your house and tell you how "we decided that you needed to be raped all night long".

    Educate yourself. I have a cousin who is mentally retarded who has a better grasp of politics and economics, not to mention human nature, than you do.

  • Tim2||

    You assume that government does such things better than private markets, government certainly didn't create language and many roads could be privatized.

    Just because we live in society doesn't mean that government has some kind of unlimited claim upon our wealth, we pay taxes for things like military and the police and engage in mutually beneficial trade for the majority of other goods.

    You also don't seem to realize that government wastes tons of money doing things not remotely related to any concept of the public good. That's anything it does not justified by a collective action problem, asymmetrical information, or externalities. Why in the age of email and Fed Ex do we need a post office? Why do we pay for the education of middle class and rich kids? Why do rich people get Medicare and Social Security? Why do we fight a war on drugs? Why do public sector unions get to rake in the pension benefits by effectively being on both sides of the negotiating table? And so on.

    The moment you can restrict government to a reasonable size you can start making claims about "fair shares". No one here however wants to pay you more money for more bridges to nowhere. No one here wants to give you more money to satisfy your arbitrary conceptions of fairness that have little to do with paying for one's share of the actual public goods that government did provide. Society is not the same as government.

  • Chad||

    You don't seem to understand that the private sector wastes tons of money doing things not remotely related to any concept of the public good.

    The problem is not that I think the government is perfect (I don't). The problem is that you think the market IS perfect. However, as long as government exists, it is impossible to disprove your thesis, because you can *always* blame the nearest government program for every market screw up.

  • ||

    Sorry Chad. FAIL.

    You've spent enough time around here to know that nobody here thinks that markets are "perfect." They do, however, provide the best for the most in the most virtuous of ways: voluntary transactions. Full stop.

    That's the progressive strawman and for you to use that shows either deliberate ignorance on your part or just plain old dishonesty.

  • Chad||

    You are just arguing semantics, JW. By "perfect", I mean that it can't be beaten by any other system, and will always come up with the best possible answer. Of course, the market does not do this. Indeed, it gets wildly wrong answers all the time. This is why the entire planet has adopted a multi-tiered approach to decision making, of which markets are just one.

  • ||

    actually, chad, markets are not "policies" they are barometers and to put government regulations on them is like bending a level to make it fit your wall, instead of building the wall to fit your level.

  • ||

    Hey, pal, the deal is that as a free individual, I will decide what is a "waste" of my "private sector" money. And I'm not obliged to put any of it to your, or anyone else's "public good".

    Although the city seems to think it's a good idea I spent money at the local boat dealership, which pays their salesmen and mechanics, and the boatbuilders...all of whom, along with me, pay the King's Taxes that fund..."the public good" of which you speak.

    But some people seem to think owning a boat isn't as much a "public good" as, I don't know, giving that money directly to the gummint? Me - not so much.

  • Chad||

    Mine mine mine! It's all mine! MY money MY money MY money! I don't wanna share. It was all CREATED SOLELY be ME! I don't owe society NUTTIN! MINE MINE MINE MINE! Whaaahhhh!

    Ahh, the libertarian creed.

  • Mr. FIFY||

    Chad|1.9.10 @ 1:04AM|#
    Ours ours ours! It's all ours! OUR money OUR money OUR money! We don't want you to keep the fruits of your labor. It was all CREATED SOLELY for US! Society is owed EVERYTHING! OURS OURS OURS OURS! Whaaahhhh!

    Ahh, the libertarian creed.

  • ||

    well, who elses? and what do i owe society and exactly what logical argument to you have to show that i owe society anything? i INTERACT with society for my own benefit. no human being is purely altruistic. we may occasional feel the urge to help. but does any human being truly ever give over his own ends for the ends of another? rhetorical question by the way, if you answer in the affirmative, i'll know you're lying. human nature is human nature.

    and, no, this is not proof he should be forced. it is proof that such selfless living is unnatural and contra human condition. not to mention extremely damaging to a cognitive psychology with self-awareness and a need to feel in control of one's own fate.

  • Tim2||

    You assume that rewards to innovation and the satisfaction of other's desires aren't serving the public good. Rappers get lots of bling because people like to listen to their music. It may seem wasteful to you, but how much rap would there be if there was no money in it; discussions of IP aside money can be made in music in numerous manners besides cd/mp3 sales.

    In competitive free markets where buyers and sellers bear the costs and benefits of their actions people don't get rich in the long run by screwing over others. Rich rappers and ballers spending ridiculous amounts of money on pretty frivolous stuff may not be advancing your concept of the public good, but they are getting rich by giving people who work for money and voluntarily give it up what they want. It's not my fault the public wants more rap and sports and less opera and universal pre k. Its easy to arrive at your conclusion when you have the arrogance to try and define what is in the public interest.

    General observation shows that the government often picks things that are very questionable as to whether or not they are in the public interest and even when they pick something like education they run it very poorly, while who is to say how much education and on what constitutes what people should learn. People spending their own money make such decisions much better for themselves than Chad could ever hope to make for all members of society.

    Or "the arts". Most people aren't that interested in most art and many who are spend boatloads of money on it, yet we still have government funding for them.

  • Chad||

    Rich rappers and ballers spending ridiculous amounts of money on pretty frivolous stuff may not be advancing your concept of the public good, but they are getting rich by giving people who work for money and voluntarily give it up what they want

    Imagine that tomorrow all the "rich rappers" died in a fiery plane crash. Guess what would happen. By next week, the markets would somehow find a bunch of poor rappers, indistinquishable from the last, and make them rich. Consumers would go on spending just as much as before, which implies that the dead rappers had little added value. The same is true of CEOs or anyone else at the top. Their position is what creates value. Many people could fill it.

    General observation shows that the markets often pick things that are very questionable as to whether or not they are in the public interest and even when they pick something like finance they run it very poorly.

    And you still keep bleating that people make good decisions with their own money, despite oodles of evidence that they make idiotic, short-term, contradictory choices all the time.

  • Tim2||

    No, I contend that people on average make better choices for themselves than governments do for them. I contend that the same "dumb people" in the vote for the people in government, and that often government faces clear incentives to screw the people at large to pay off some small interest group. Public choice economics, regulatory capture, have you heard of it? What about being able to vote yourself "free money" paid for by higher taxes on others and debt piled on future generations?

    Further, I don't let my own personal desires filter in when judging whether or not people making stupid decisions merely because they make a decision I wouldn't make or don't agree with. I would never go to a Hannah Montana concert, for example.

    Your comment on rappers is assinine, I bet you would think that if someone went back in time and offed Bach or Beethoven you would say that someone else would have written their music. Your personal preferences are seeping in, you don't like rap that much and see it as all the same; because that's the only way you can make such a statement. This underlines your entire worldview, because with out it you would have to recognize that individuals actually create things of value and trade them for forms of durable wealth they are entitled to keep. Even if they spend that wealth in ways you find wasteful, its theirs to waste; and unless you can come up with a way to change their behavior such that it makes them on net better off rather than just saying they spend money on silly things I can spend it better, you have no claim to their resources. That is the difference between coercive taxation for the police and coercive taxation for an expansive welfare state concerned with "equality" rather than any real market imperfections justified by made up public goods like "people will have to work less hard to keep up with the Jones" which assumes a set of subject prefernces and contradicts your own assertion that taking more of what people earn won't affect their desire to work hard and innovate in a manner that produces more wealth available to everyone.

  • ||

    so, since we tend to make contradictory choices regarding our own lives, we should give up our decision making process to other human beings with the same weakness and no dog in the fight?

    i'm sorry, but, i like being able to make my own mistake and i'll be damned if other people become harmed because of my stupid decisions.

    how about, for the public good, we don't allow people to make mistakes OTHER people will have to pay for?

  • Sean W. Malone||

    I'm always perplexed when you make that argument Tony. For most of human history, slavery has been widely regarded as A-Ok, and every society on earth practiced it. Hell, a few still do!

    Does that make is morally acceptable?

  • ||

    "providing wages for useless labor will have a stimulative effect"

    No, it doesn't. Where did the money for those wages come from? Either from a tax, which means it wasn't spent by its original owner, or it was printed, which means every other dollar in existence was clipped a little: http://en.wikipedia.org/wiki/Coin_clipping

  • Tony||

    What if the tax is money people would otherwise save?

  • Old Mexican||

    Re: Tony,

    What if the tax is money people would otherwise save?

    So what if people save? What's the problem with that?

  • Tony||

    If the money would otherwise be saved, then it would indeed be stimulative if used as a tax to fund labor.

  • Old Mexican||

    Re: Tony,

    If the money would otherwise be saved, then it would indeed be stimulative if used as a tax to fund labor.

    You mean that if I just gave my savings away to some laborers, that would be in itself good?

  • Sean W. Malone||

    Tony, "saved" money, typically gets saved where again? A bank perhaps?

    You know what banks do with saved money?

    They loan it out. To people who employ other people... And without government (which is not how it works in 21st Century US unfortunately), propping them up - banks actually have incentive to make good investments. Government doesn't. And government sponsored banks don't either.

    Thus the massive losses.

  • ||

    then it would be saved and draw interest to be used as a future investment.

  • hmm||

    When I save money, it's still mine.

    true fact.

  • Old Mexican||

    Hey, Hmmm, Tony does not believe that your money is yours - which is implied from his belief that taxation is not thievery.

  • Tim2||

    When people save in capital markets that money gets loaned out to someone else, and when they hoard money they are just hoarding useless paper and not actual resources. The price of goods and services will then fall to where people will actually be willing to pay for them. Then they start getting bid back up to a new equilibrium. Demand death spirals don't exist, and "deflation" often occurs because the money supply was inflated in the first place. If you want a smooth business cycle, try sound money.

  • Chad||

    Yep, the market would just be utterly perfect if it weren't for the nearest government policy.

    Ahh, the wonderful catch-all that makes libertarianism un-falsifiable.

    Please explain how unsound monetary policy caused the comic book bubble that my little brother and his friends all got caught up in when we were kids.

  • The Libertarian Guy||

    Who put guns to your brother's head, Chad? His friends? Comic Book Guy from The Simpsons?

  • Chad||

    You are right, LG. No one put a gun to his head, yet the market suffered a huge bubble. But according to your theory, bubbles are IMPOSSIBLE without government intervention.

    So please explain how the government forced a bunch of kids to play the "greater fool" game. Come on. Do it!

  • Sean W. Malone||

    I'd love to hear more about this "huge bubble", Chad... Since unless you had an unlimited or expanding source of money or other comics (assuming your primary means of trade are those two things), there's a pretty obvious cap to how much any of the comics can be worth.

    If you had 5 friends, each with 10 comics and $20 and one of your friends had that coveted Uncanny X-men #2, the maximum amount that you could bid for said comic was $20 + 10 Comics, no?

    So in the event that that was the one everyone else wanted and you were the only one willing to trade your whole stash, then the remaining 4 people would just trade out all of the remaining comics and money... Unless somehow each of your friends valued a different comic... But that wouldn't cause a bubble, since it'd be easy enough to get things swapped around til everyone got what they wanted.

    Regardless, unless you had a way to balloon the money supply (both in dollars and tradeable comics), then you couldn't have had an actual bubble.

    Did you steal your dad's wallet to increase the pool of money available?

  • Chad||

    No, Sean, there was no magic expanding money supply. Yet the bubble happened. Prices went up, and kept going up. The kids were buying comics for much more than face value, not because they wanted them, but rather to stuff them in a plastic bag and sell them for double next year...until the panic came when they had far more comic books than the supply actually justified. Then prices dropped.

    It was a very classic bubble and had ZERO to do with money supply. I am sorry that children have proven your entire economic worldview wrong, but you are just gonna have to suck it up.

  • Sean W. Malone||

    That makes no sense, Chad. Prices can go up with increased demand, but that doesn't necessarily make something a bubble... Much less, a "classic one".

    Regardless, there's a *limit* to how much prices can go up in a market without an unlimited increase in the money supply.

    So prices go up "more than face value" (should I really explain to you that the sticker price and the price people are willing to pay aren't necessarily - or even often - the same thing?)... So what?

    Without the issues of money supply, then whatever "bubble" happens is quickly mitigated when the limit of money & resources has been reached. So prices can't go up indefinitely and they reach their peak much more quickly and fall appropriately... On the other hand, if the government expands the money supply significantly, these bubbles last for years, grow to huge levels, and then eventually collapse on hundreds of millions of people.

    Your comic book example (which still lacks an immense amount of detail and is thus hard to discuss) doesn't have anything to say about that.

    The fact that you don't realize the differences in your example of children compared to the overall economy, or the difference between a situation where a small group of kids voluntarily bids up the price of a certain good, risking their *own* money, versus a government inflating the currency and directing money into certain sectors via legislation doesn't make you a genius, Chad. It makes you a fool.

    Your comic book example is also fraught with holes of all sizes. For example, as I already noted, the price of an individual comic - whichever was determined to be the most valuable (Uncanny #2, I believe I said) - cannot exceed the highest total trade someone can offer... As I said before, it cannot exceed $(total available to 1 individual kid) + all comics owned by that kid. If all you have is 10 comics and $20 - then you are able to trade only that much for that most prized comic.

    Problem is - you've given up 100% of your existing resources for 1 comic. Now maybe that one comic was worth it to you - and apparently everyone else was bidding the price up as well, so it was obviously worth it to everyone else in the group. HOWEVER... Once that highest prized comic has been purchased - the purchaser has no more assets and obviously won't give up his newfound prized possession. So that kid is out of the bidding for any other comic.

    Then what? All the other comics are less valued, presumably, and prices drop for each successive trade.

    Another big problem is that unless your friends were all incredibly stupid (which... I suppose is possible, knowing how you turned out, Chad), most kids realize that instead of bidding the price up way past "face value", and overpaying for an available comic - they could just go down to the comic book store and buy it for whatever the sticker price is and save a ton of money.

    There are so many flaws in the whole concept of this thing as a bubble, and all you're doing in defense of that is telling me that I have to trust you that it was a bubble. Well, Chad... I don't. It makes no fucking sense and there are a dozen pieces missing.

    Another piece missing is time-preference and future value speculation... Uncanny X-Men #2 might be bid up to a high price under the assumption (whether correct or not) that the future value will increase significantly.

    I wish you realized, at some point, that you have no clue what you're talking about with respect to economics - but that doesn't seem very likely ever.

  • ||

    doofus, that's not a bubble...that's immediate demand based on a fad followed by lack of interest.

  • The Libertarian Guy||

    Oh, so now government forced your brother to buy comic books.

    I thought you loved government, Chad. Tsk.

  • Chad||

    You just don't get it, do you LG. The bubble happened WITHOUT force. That is my whole point.

  • The Libertarian Guy||

    You're the one who brought it up, Chad, so the onus is upon you to answer your own question.

  • Mr. ?||

    Obviously, Chad would have supported some kind of Comic Book Czar back in the day, to prevent his nimrod brother from buying overpriced comic books.

  • ||

    That's a father or mother, I think you mean. Perhaps parenthood is too authoritarian for an anarchist. We should do away with those nasty parents and let the kids go for it. Where did the kids get the money anyway, from a libertarian?

  • The Libertarian Guy||

    No, David, that would be the liberal dream... just let the state raise kids.

  • ||

    i love progressive and their snarky comments. they're so good at them that they substitute them for actual arguments.

  • Mr. ?||

    Nobody forced them, Chad, but that doesn't mean government had a duty to follow your brother and his idiot friends around to prevent them from buying comic books.

  • ||

    explain to me why the government should have stepped in to stop that bubble, chad?

    liquidation of unsound assets is a nasty, but real function of markets whether you put bandages on them or not. with gvmnt intervention, it would have still happened. it just wouldn't have looked like it did.

  • ||

    there are sound libertarian economic policies that don't add up to unregulated markets.

    that's the law against theft and fraud.

  • anonymous||

    He forgot that his target audience was politicians.

  • Mr. FIFY||

    We're too stupid to spend our own money.

  • MJ||

    Which presumes that infrastructure spending decisions made the in pursuit of the stimulating effects of government spending will be useful rather than bloated make work.

  • ||

    And what the private sector would spend the money on isn't "useful" ?

    Considering the fact that it is responding to actual consumer demands, it's probably being put to better use (as measured by the satisfaction of real human desires), than the government would.

  • Chad||

    We have bankrupted our nation buying cheap shit from China and trying to make up for our short limp dicks by buying bigger houses and trucks than our neighbors, you still believe that we aren't wasting money.

    Btw, conspicuous spending is *NEGATIVE SUM*...and life is full of it. I just saw a paper the other day on how showing men pictures of hot chicks and asking them to imagine dates with the girls caused them to change how they allocated money. Goodbye savings, hello compensating-for-tinywilly-and-baldspot-mobile.

  • ||

    What? This is just stupid - no more reading Chad comments for me lest the dumb start to wear off on me...yuk...

  • SKR||

    You do realize that money isn't wasted just because it wasn't spent on the things that you value, right?

  • Chad||

    Why would showing the men pictures of attractive women and priming their thoughts about dating affect their purchase decisions? Surely, these men already knew that hot women existed, and didn't need to be reminded.

    How did pictures of hot women suddenly make buying a limp-dick-compensator more rational?

  • Mr. ?||

    To paraphrase the pro-choice mantra:

    Their money, their choice.

  • ||

    Sure, but at least when you misallocate your own resources, you are only misallocating YOUR resources, not a whole bunch of other people's resources that you have expropriated for the purpose.

    Governments are just as irrational as individuals Chad, but they have far more power at their disposal. They are the ones with the guns, and they are just as subject to dick-size-comparison based reasoning.

    I see no reason to think that the state is going to make more rational choices on my behalf than I would.
    Maybe if it were run by a despotism of artificially intelligent machines it might, but not if it's a democracy, subject to all the irrational whims of the electorate and the politicians that cater to them.

  • Chad||

    As always, Hazel, the problem is that when you mis-allocate resources, it affects me. For example, when you buy an SUV rather than say, a Civic, it drives up MY gasoline price and MY commodity prices. It creates more damage to OUR roads and OUR environment, causes more noise on EVERYONE'S property, puts other drivers and pedestrians at risk due to its large mass. It also decreases visibility for other drivers who can't see over or around such large vehicles, again increasing danger. It requires larger parking spaces and therefore larger parking lots, which in turn further spaces out destinations, requiring ME to drive farther and all but ruling out walking. Likewise, the wider lanes become necessary as well, causing the same issues.

    In theory, the government could attempt to calculate the damage each of these factors cause, and build it into taxes, so the "market" could sort it out. But obviously, there are so many factors that it is unlikely they would get any closer to the true answer by this mechanism than just using common sense.

  • ||

    Get the turd out of your mouth. Your eating food makes it cost more for me so you need to kill yourself.

    I have taken shits with both more intelligence and more integrity than you posses.

  • Sean W. Malone||

    A butterfly flaps its wings in the Amazon, and ruins Chad's day. Stop the presses!

  • ||

    If I misallocate MY resources, it affects you FAR FAR less than if the government misallocates billions of other people's resources. Moreover, at least you GET to choose the right decision for yourself, instead of (say) me forcing you to buy an SUV, even though you don't want one.

  • ||

    Prove it. If YOU, my neighbor, misallocates his resources it can affects me much worse than the Government. Example, he pollutes his stream which flows to my property that harms me far more than the little bit of taxes I pay to have an EPA. This scenario was repeated millions of times across America before the first Clean Water Act to the point where rivers literally burned. Your solution, we should all have to go sue our neighbors and make the lawyers rich. What "billions of other people's resources" are you talking about and where is the misallocation? Your just making stuff up.

  • ||

    David, that's not a misallocation of resources. It's a different problem, a failure to properly define property rights. If i pollute your land, you should be able to sue me for property damage.

    This is standard coasian bargaining.

    However, if we go back to the irrational choice issue. If I waste a bunch of money buying immediate candy instead of next-day candy, i may be misallocating my resource but not yours.

    On the other hand, the government is currently engaged in buying a shitload of "immediate candy" in the form of deficit spending and entitlement programs. The voters, as a whole, have irrationally voted to get lots of free shit from the state today, instead of saving the money for the future.

    And guess what, that affects ME, whether I choose to save for my retirement or not. I have NO CONTROL over the fact that the money put into social security gets blown on "green energy" projects ro whatever. Ergo, I am deeply negatively imapacted by the irrationality of the state, but NOT by your personal desire to borrow today and blow your own money.

  • Sean W. Malone||

    That's asinine, David. A single government regulation in the United States has the potential of effecting 300,000,000 people. Your one neighbor effecting *you* is a very small scale problem - so while valuable to you, for sure, doesn't remotely mean that it's a net positive for everyone.

  • ||

    Again, here's an asanine back to you and a bonus of jerk. Potential harm? What harm? Who decides property rights? When a problem is systematic it requires a sytematic solution and if NO EPA and private lawsuits worked we would never have faced the problem at all. The EPA was created precisely because lawsuits had been tried and failed. If it had been just me there would never have been an EPA. Actually I never personally had that happen. It was corrected because it was affecting rich folks like you who went to their favorite trout stream to find no fish. Come on, though, be serious, most regulations and laws affect a very small minority of people not all 300,000,000 of us. It affects only those who were engaging in the pollution before the law took effect. Laws are not for people who respect others without being forced. It was a net positive for everyone because everyone had an equal chance to elect the politicians that passed the law and petitioned their Government as they have a Constitutional Right. It is the Constitution that decided whether it was a net positive not you or me. Your fight is with Democracy not me.

  • Sean W. Malone||

    You know that would be marginally true is all the laws that were ever written existed purely to protect people from those individuals who engaged in fraud, violence and other crimes. That is to say, if all laws protected you *from* harm, your statement might be correct.

    Sadly, the vast majority of laws are written with precisely the opposite result. Most laws are written not to prevent people from taking advantage of others - but rather to give special advantages! Laws eliminating foreign or smaller competitors in business, laws preventing people from engaging in harmless activities or personal lifestyle choices, laws designed to zone out "unwanted" people or to prevent immigrants from finding homes and jobs. Laws to prevent employers & employees from agreeing upon compensation voluntarily in order for one or the other party to have special advantages... No, David, the vast majority of laws have nothing to do with protecting individuals from actual harm - and quite a bit to do with redistributing some wealth, resource or other advantage to a favored friend of the legislators.

    The more the power of government grows, the bigger incentive businesses have to lobby for those special favors and the less incentive they have to actually compete in the market honestly. WalMart supporting an employer mandate for health care is a great example of this recently - it's quite clear that WalMart would have little trouble complying with such a mandate, while many of their smaller competitors (and perhaps even some of the big ones like Target) would have been very hurt by such a thing, thus giving WalMart a legislated advantage over their competitors - without ever having to do a better job for their customers.

    Another local example that I like to use is in the town I went to college in, a law was written when I was 18 or 19 that simply said that in the downtown area, a total of 14 movie theatre screens could be built. "Coincidentally", the largest local theatre chain had just built a 14-screen multiplex right in the middle of downtown.

    The deal they made was essentially that they'd build that one theatre there on the condition that the city disallowed any competitors from opening rival theatres anywhere nearby.

    There are thousands upon thousands of these examples, David. Most laws have nothing what-so-ever to do with protecting anybody from actual crime and everything to do with giving the elite friends of government some freebies. What are friends for, right? Especially when they have the power to shape policy and back their decrees with guns & jail.

  • ||

    yep, david, my fight is with democracy. and don't get all constitutional on us. first, a democracy renders a constitution null and void, as the system of democracy replaces constitutional rule of law with the rule of masses.

    second. the right to vote does not preclude the right to not participate. nor does it preclude the right to property. read AMENDMENT IX: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

    the people here is not the "working class" it is the citizenry and, according to the Founders own writings, meant the individuals that make it up. furthermore, as adherents to Locke and Bastiat, they believed liberty was FOUNDED upon property rights. the whole purpose of the constitution was to protect our bodies and our property from force. this was the Lockean definition of liberty - one's right to his property and the use of it. and the Founders' intent for our society was to protect our Lockean liberty.

  • Tim2||

    Any economic action increases supply or demand, I suppose you feel that it is perfectly okay to restrict entry into a particular industry because new entrants would violate existing industries fictitious property right to a certain selling price. Why is it any different when consumers bid up the price of a good you also like, or use land in a way you don't agree with. You don't have a right to a certain price level, nor do you have a right to how far you have to drive to work.

    You are really revealing yourself as a hardcore, naive and as you would put it childish statist. You want the world to revolve around you, and when it doesn't fit your preferences you think that you can violate the rights of others to make them live how you would like to them. Of course being an progressive pseudo intellectual, you make up some bullshit argument about everything being due to chance such that if some random innovator died someone else would be given the chance to make exactly what he did in exactly the same amount of time exactly as well. Otherwise, that person has a clear claim to what they made; and even if he did get a lucky break he had to work hard to take advantage of it. You're even worse than I thought, you're not just some arrogant pseudo intellectual that thinks that you can run the world better; but you don't even believe in individual rights or that they even earned what they have. I can at least understand why someone might think they can make better decisions than people acting voluntarily in markets.

  • Chad||

    Any economic action increases supply or demand, I suppose you feel that it is perfectly okay to restrict entry into a particular industry because new entrants would violate existing industries fictitious property right to a certain selling price.

    You suppose incorrectly. Assuming there are no externality-related concerns (a very BIG "if" when talking about cheap Chinese shit), then it is presumable that the new entrant has found a more effective way to provide the product or service. That would be a good thing on net, but would indeed create many losers who most libertarians don't give a shit about (and don't think throwing your pennies in the Salvation Army bucket at Christmas implies you care).

    Why is it any different when consumers bid up the price of a good you also like, or use land in a way you don't agree with.

    Qualitatively, it isn't. Quantitatively, the externalities are widespread and conspicuous, negative-sum consumption the norm.

    You don't have a right to a certain price level, nor do you have a right to how far you have to drive to work.

    I never said anthing about rights, now did I? They are a loaded and useless concept, and I generally avoid using it. Rights to me are simply tools, and by no means are they binary, as libertarians tend to see them. When I do say that someone has the "right" to something, I merely mean that it should be afforded high, but not infinite, protection under the law. I have no problem with shades of grey, or navigating among the many possible conflicting rights, both positive and negative. Libertarians, on the other hand, just claim that positive rights don't exist and that negative rights can never conflict, then bury their heads in the sand.

    to chance such that if some random innovator died someone else would be given the chance to make exactly what he did in exactly the same amount of time exactly as well

    Give me an example of something that was invented that would not have been invented soon after by someone else. Note that I am not asking for "proof", because you cannot prove a negative. I am asking for evidence. When you look back at the history of innovation, you find that there was always someone else (usually lots of people and organizations) working on the same problem. The people who got their manuscript or patent in the mail first are the ones who are remembered.

  • Sean W. Malone||

    I really don't get why you always assume externalities are always massive and bad?

    Most of the time they are minuscule, and are often just as likely to be positive as negative. Hell, most of the time they don't even exist compared to what you're always yapping about.

  • ||

    Rights to me are simply tools

    I have no problem with shades of grey, or navigating among the many possible conflicting rights, both positive and negative.

    Mussolini much?

  • Colonel_Angus||

    The market won't build infrastructure in an efficient way? How about railroads, many successful ones were built with private money... and then the government began to subsidize construction to anyone who wanted to build one, leading to an overbuilt network and a bubble that burst at least twice.

    Was the overbuilt highway system an example of efficient government spending?

  • Chad||

    The passenger rail industry was killed by a combination of government policy and anti-competitive practices of the auto industry.

    The government should undo what it has done, and massively build out public transportation infastructure. The scale which we are talking is around $50-100 billion per year, beyond the scale of industry.

  • Colonel_Angus||

    I wasn't referring to specifically passenger service, but private railroads in general whose main business has always been freight. The most successful ones relied very little on handouts and are still strong.

    What anti-competetive practices are you referring to? The streetcar conspiracy is a discredited urban legend.

    Pouring $50 billion per year in to public systems won't undo anything, it will just create a new, unfundable entitlement like the highways already are.

  • Chad||

    Your right...it will take more than $50 billion a year. We will also need to quit subsidizing road traffic so much.

    Ironically, fuel and excise taxes are now covering less than 50% of the costs of building and maintaining our road system. "Public" transportation has consistently brought in more than half of its revenue at the fare box. So I guess our roads are more public than public!

  • Colonel_Angus||

    You didn't even respond to what I said. "More than half" revenue recovery isn't good enough to sustain a business. If dumping $50 billion per year in to unfundable entitlements is a bad idea, how is $100 billion per year even better? You agree that government historically has been horrible with infrastructure, what the fuck has honestly changed?

    How about de-subsidize and de-regulate all transporation and energy and let the market bring us back to something like the private and profitable infrastructure we had before it was subsidized and regulated to shit.

  • Chad||

    Yet "less than half" is enough to sustain our current road system, apparently.

  • SKR||

    anti-competitive practices of the auto industry

    I think that may refer to lobbying the government to build the national highway system.

  • Chad||

    Yes, that too.

  • ||

    Disagree. Automobiles won out because people want door to door transportation for themselves, and the freedom to travel to any destination they choose without having to rely on other people's schedules and routes.

    There are not bus or train routes extensive enough to drop you off in the middle of a national forest. And once you own a car, even if you bought it purely for vacation travel, it's usually more efficient to use the car.

  • Chad||

    Actually, there is train service to some pretty obscure national parks (Glacier comes to mind). And I sure remember taking buses and planes for all the hikes I did in Japan. It's actually MORE convenient than a car, because you aren't forced to do in-outs, loops, or lollipop hikes.

    You are right in that good public transportation does not eliminate the need for a car in most cases. However, it often reduces the NUMBER of cars a family needs. Most Japanese families have just one, and save a ton because of it it.

  • Tim2||

    Population density makes passenger rail more feasible, although I don't deny that federally subsidized highways would have a strong effect on long distance passenger rail.

    As for conspicuous spending being negative sum, its not if people value conspicuous spending more than they value their lost net worth. Such preferences may seem foolish to others, but so do people who went to see Hannah Montana. You are projecting your values onto other people to try and prove your point, but that can't be done because value is subjective to the individual's tastes.

  • Chad||

    And we have high enough population density along both coasts to support public transportation. No, we are not going to build a high-speed rail link to Bismark. But we darned well can build one from Miami to Boston, or San Diego to Vancouver. In any case, you completely ignore the fact that good public transportation causes density in a virtuous feedback. If you look at our cities with the best transit systems, such as NYC or DC (or many foreign cities) you see that land near stations is enormously valuable and that many people want to live and work within walking distance. This contrasts with interstates, which lower nearby property values.

    As for conspicuous spending being negative sum, its not if people value conspicuous spending more than they value their lost net worth

    The problem is that while each individual decision increases THAT person's net value, it decreases that of all of their "competitors". When I buy the biggest-dick-mobile on the block, I feel manly, not because I am really happy to own a BDM, but because my BDM is bigger than yours. That only lasts until you buy an even-bigger-dick-mobile, at which point, I am right back where I started relative to you...and a lot poorer for it.

    There are countless studies that show that much spending and behavior is about bigger willies, not about actual value. Every one of these purchases is negative sum.

  • JoshInHB||

    Why do progs love public transportation so much?

    Where ever people have the option of private cars vs public transit they always choose the private cars. Yet progs love to waste money on PT systems that are always under utilized.

    Of course the progs don't use the PT themselves. Queen Pelosi or the Prophet Algore won't even fly first class. Nope its private jets and limousines for them.

  • Chad||

    Where ever people have the option of private cars vs public transit they always choose the private cars.

    Really? Try living outside the US for once and get back to me. Particularly, I would recommend Japan, because you would learn a lot. If someone had offered to lend me a car while I was living there, I would have turned it down. A parking space would have cost more than everything I spent on trains and buses, and then some. Not that public transit was expensive. I figured I spent about $130 a month, which was cheaper than the gasoline alone I was buy here in the US.

  • JoshInHB||

    "Try living outside the US for once and get back to me"

    Because the US is the only country that manufactures automobiles, right?

    Except for Japan, Korea, China, India, Brazil, France, Germany, Italy, Sweden, UK. I'm sure I'm forgetting a number of other countries.

    What you really mean is that the US is the only country wealthy enough for auto ownership to be practical for almost everyone.

    Or are you saying that public transit in Europe and Japan is full of rich people and it's the lower classes in those places that chose to drive.

  • Chad||

    JoshInHB|1.9.10 @ 8:19PM|#

    What you really mean is that the US is the only country wealthy enough for auto ownership to be practical for almost everyone.

    We are by no means the richest country on earth (per capita).

    Or are you saying that public transit in Europe and Japan is full of rich people and it's the lower classes in those places that chose to drive.

    Where the public transit is good, people of all classes use it. This includes teens, the elderly, those who have been drinking, and the disabled, who can't drive.

  • ||

    People choose private automobiles primarily because they are subsidized as a transportation choice by the Gummint. Before we spent massive amounts of tax payer money on the interstate highway system and all the state and local highway projects, trains or buses were often the choice. I think it is certain that automobile companies weren't going to provide their own streets for us. Rairoads, however, provide both the trains and tracks they run on. The tracks are more expensive than the trains. There's no fair market between public and private transportation.

  • ||

    Science, you surpass even your previous stupidity here. A feat I considered humanly impossible.

    If I am able to obtain a house I am more wealthy than if I have to live in a tent. If you purchase a larger house, I am not forced to go live in a tent. We both have more. Your comparisons are imbecilic.

    A negative sum would indicate that someone had lost something. Being #1 in the havin' shit area isn't really considered wealth. Just because envy is the basis for your beliefs it is hardly the definition of wealth.

    By your definition you have absolutely nothing, because Bill Gates has so much. His wealth actually has very little to do with yours.

    Now go fuck yourself.

  • Chad||

    A negative sum would indicate that someone had lost something. Being #1 in the havin' shit area isn't really considered wealth.

    Oh, so all the vague, unquantified intangible benefits people get when swapping apples for bananas, or horses for cars, as we were all arguing about earlier, are not real wealth either then I suppose.

  • Sean W. Malone||

    No Chad, what we were talking about earlier IS precisely "wealth".

    Value is subjective - even you can't deny this simple fact - so, wealth is the total tradeable goods & services which are valued by the individual. The tangible stuff is a close enough approximation for the most part, and it's easy to say that Bill Gates controls more wealth than I do, for instance, but Gates' wealth doesn't remotely impede on my wealth in the slightest - because the "stuff" available is for all practical purposes, quite expandable. Each year, new cars are made, for instance, and thus each year more cars are available to members of the human population of the world.

    And this is where you need to learn about prices, profits & losses... Though I know you will never actually do this, Chad.

    The goal of being a producer is to make enough of product X to meet 100% of the demand for product X, and do that better & cheaper than any of your competitors, thus capturing more of the market than anyone else. The way they can tell what products are in high demand is that when that is the case, prices go up and profits are high... Then, given a market without too many barriers to entry (typically government imposed), other producers will jump in to pick up the slack, trying to cut into those profits, raising the available supply of goods and thus lowering the price.

    It's pretty simple, and you can see it at work almost everywhere you look at any time.

    This increases the overall wealth (as people are getting goods they want and are demanding as evidenced by their bids for the good) of the world is increasing. Thus - economy isn't zero-sum! Side effect is: Bill Gates can buy 100,000 computers if he'd like and yet it hasn't effected my ability to also own one. He has wealth, I have wealth. From a tangible standpoint, he has more than I have, but that hasn't remotely stopped me from getting wealth of my own, up to the level I can trade for.

    Swapping bananas & apples, horses & cars are all perfectly fine examples, but only because it's what people *value* in the example. Having 200 bananas, just to have them, is *not* a good example of wealth because the surplus is basically useless if I can't trade them.

  • ||

    "Being #1 in the havin' shit area isn't really considered wealth" Actually, according to libertarian philosophy, it is the very reason for the existence of trade. I have been instructed that this "extra value" of unmeasurable, transient satisfaction is the non-zero-sum portion of the whole transaction. It doesn't look like much compared to the value of the houses so I agree with you.

  • Sean W. Malone||

    Thanks for failing miserably to understand basic points of libertarian philosophy & economics.

  • Tim2||

    I made my point better in a response to you above, but what I'm getting at is that not every you claim is a BDM is one for every person that buys one. This is where you project your preferences on other people, by believing that such items don't have any value other than status.

    In the case of SUVs though one reason they are prevalent is due to the light truck emissions loophole and because they offer more passenger space and cargo capacity while not looking as stupid as vans. An SUV is more ascetically pleasing than a van, and it is also more suited to some people's needs who want the extra cargo space and safety relative to smaller cars with the cool look. I'd like to see your studies that can prove for all people a single good is nothing but status based, because without that as I point out above you can't set a rule and just have to have the policy pursued by bureaucrats who "know it when they see it" with the incentive to take more to expand their power or to fund pet projects while ruining the predictability that the rule of law provides. Then there will be the line of lobbyists who will want to get certain goods declared not BDMs.

  • Chad||

    Tim2|1.10.10 @ 4:01AM|#
    I made my point better in a response to you above, but what I'm getting at is that not every you claim is a BDM is one for every person that buys one.

    Surely, there are people who "need" big trucks (perhaps farmers) or McMansions (people with six kids). But they are a small fraction of the people who own them. Most people, however, buy them because everyone else does, and they think they need to keep up. It is all massively wasteful.

    This is where you project your preferences on other people, by believing that such items don't have any value other than status.

    I never said they have no value. I, too, would like granite countertops. But why? Do they really making preparing my dinner any easier? Of course not. Fundamentally, the motivation comes from keeping up. I am just one of the rare people that realizes this.

    For years, I drove a beat up old pickup truck despite having the income to afford a nice new car of my choice. I couldn't tell you the number of times people asked me why I was driving that old piece of shit. These social expectations and games of one-upmanship are powerful drivers for our behavior. These aren't just little negative-sum games I am talking about. They may well constitute the majority of the spending of people with above average incomes...and virtually all of the spending of the very rich.

  • Sean W. Malone||

    It's not your goddamn decision to tell other people what they "need", or what they can spend their money on, Chad.

    I'm so sick of seeing your wannabe-dictator screeds... It makes me really sad for the sake of everyone else.

  • Chad||

    Perhaps I am sick of your inability to describe why everyone (or anyone) needs a McMansion full of cheap Chinese shit and an SUV in the garage, or even how this stuff makes them happy. All you do is complain that it isn't your responsibility to explain, which implies that you can't.

    Perhaps I am also sick of your claims that what one person does has little effect on third parties, or that markets, which have a "long-term" time horizon of three years can somehow make rational plans for things that will affect our great grand-children.

    Unfortunately for you, though, I still love prodding you.

  • Sean W. Malone||

    I don't *need* to explain it, Chad.

    Some people like big cars, big screen TVs and big houses. Some people don't. I don't, really. I have a small car & an apartment, and aside from one day wanting to have a high-quality recording studio attached to my home, I don't ever envision owning anything very big house-wise. I do value the home theatre though, with the kind of TV the state of California doesn't think I should own.

    But it's entirely irrelevant what I think about that for other people, because it's not my property, or my money!

    I don't give a shit what you trade your time for, provided it's voluntary and you're not taking money from people by force. Neither do I care what you subsequently spend that money on - provided again it doesn't involve violating other people's ability to do the same.

    It's really that simple.

    Neither you, nor I, has any right to tell people what to do with their voluntarily acquired means. As someone noted up thread, in taking this position I'm showing infinitely more respect for you than you will ever show for me. In my world, you get to do exactly what you want, regardless of whether or not I think you're an idiot. In your world, anyone who doesn't behave exactly as you think is best, they should be forced to do things your way.

    You are nothing but an embarassingly pitiful wannabe-dictator. Your world view is primarily based on bitterness and envy, and some bizarre need to assert your sense of control on anyone and everyone who might not value the same things you do.

    And I markets have an obviously much longer "long-term", since people regularly purchase houses with 30 year mortgages... None of that matters, the thing that's really going to fuck our grand children is the massive debt burden your idiotic ideas on government are imposing on them.

    Thing is, without government manipulation and printing of money, that debt burden would have been impossible. Savings would have been encouraged as interest rates rose naturally, instead of getting held at artificially "record low" levels by guys like Greenspan & Bernanke, and then as savings went up and generated a legitimate surplus of stored wealth, our grandchildren would have all been much better off. Capital, investment and most everything generative about economic activity comes from surplus, Chad. That's something that the "progressive" governmental policies of both parties irrevocably prevents.

    So I'm pretty sure you're the last person I need moralizing about "the children!" It's your dumbass positions that are ensuring limited future wealth and a more difficult means of dealing with any future problems. When you talk about things being low-profit, you're talking about things generating low surplus wealth... And that just means less money available for other investment, R&D and other innovations. It just means people are poorer.

    Why do you want that so badly?

  • Sean W. Malone||

    Oh and... Fuck you, Chad.

    What I do doesn't have any effect on you. Hell, you don't even know what I do.

  • ||

    Work is useless if it's not needed. That's the whole problem with Disney Economics.

    How can government possibly decide what 'infrastructure' is needed better than the people who need it?

    You can build roads and bridges to nowhere, and eventually economies might reshape to take them into account. You can build boat launches and dog paths and eventually economies might reshape to take these into account.

    But it's asinine to think those were efficiently spent. Left in the economy those resource would by definition be used in the best way according the the free choice of the populace.

    Private roads get built all the time.

    Private roads to nowhere never get built.

    Only government can waste resources reliably.

  • ||

    Yes, but this argument presumes that the private sector would not spend the money that is being taxed.

    This is demonstrably not the case in today's economy. There aren't piles of unused capital languishing in bank accounts. The opposite is true.

  • Tony||

    That's why you tax the rich, who don't spend all their money. They still exist. Of course you shouldn't burden the working class with more taxes during a recession.

  • Tim2||

    The rich invest their money in capital markets, which means that taxes on them are just taking money out of one pocket of the economy to give it to another. There are also laffer effects involved.

  • Chad||

    How high would Warren Buffet's capital gains taxes have to go before he quit investing and instead blew the money on the world's biggest orgy in his newly minted castle? Whatever that number is, it is a hell of a lot higher than the 15% he pays now.

  • Tim2||

    He might invest it some place else with lower tax rates. However in the context of Keynes he is investing the money anyways therefore taxing it away and spending it isn't going to increase on net the total level of spending. However, Warren Buffet can probably spend his own money smarter than you can spend it Chad.

  • Chad||

    What do you mean by "invest in places with lower tax rates". The tax rates are determined by his citizenship, not where the investments are located.

    You do have a point, however. Most of the "Laffer curve" type effects that exist in the real world are rich people dodging taxes by changing the jurisdiction where they are taxed. Most of the rest are people shifting the accounting so that they pay one type of tax rather than another (say, capital gains vs income). The latter is not a big deal, as most of the "lost" revenue is made up in the other tax. The former is a problem now, but has a solution that is slowly being implemented - a gradual synchronization of tax policy around the world. The "real" Laffer effect - people choosing to sit on their asses rather than make *some* money - is largely a myth.

    In any case, the ultra-rich aren't motivated by money. Hell, studies show *most* people aren't, actually...and we tend to perform worse when money is at stake. Rich people are largly motivated by winning. Even if you chop all the peacock tails in half, the peacocks keep the same relative pecking order, do they not? Warren Buffet would still have the biggest pile of cash regardless of the tax rate, and Larry Ellison would still have the biggest boat. They would be just as happy if they were paying twice the taxes.

  • Mr. ?||

    Most of the "Laffer curve" type effects that exist in the real world are rich people dodging taxes by changing the jurisdiction where they are taxed.

    Like Joe Kennedy did decades ago with the family fortune?

  • Mr. FIFY||

    Bono and the other guys in U2 moved from Ireland to the Netherlands to avoid paying higher taxes:

    http://www.bloomberg.com/apps/.....refer=home

    Defend that, Chad.

  • Barack Obama||

    Let's not even bring up Li'l Timmy the Tax Cheat... er, I mean, My highly-needed and efficient Treasury guy. Rest assured, I will be standing next to him with My Healing Hand upon his unworthy, thieving shoulder, and stand ready to pluck the knife from between his fetid shoulder blades.

    Eventually. Gonna let him squirm for a bit.

  • Chad||

    I don't. This is precisely why we need a world government and a global tax policy.

    Thanks for making the argument for me.

  • The Libertarian Guy||

    Now we KNOW you're insane, Chad.

  • Tim2||

    Still no response to the main point, which was that Warren Buffet's money during a recession is going to be put to use regardless of whether or not it's been taxed and spent by the government.

    I don't doubt that if the world had a synchronized tax rate at around 50% for top earners people would still work, however there still is the cost benefit analysis that working takes time and effort such that the higher the rate goes the more likely they are to just play golf. They won't just sit on their butts, but they might not take that big risk where they stand to lose a ton of money but where a large fraction of the gains are taken away.

    The real question there is what is government going to do with all that money, and why is it ok that when allegedly all of society benefits from government that most of society pays virtually nothing for it; and what incentives such a system creates when the people realize they can just vote themselves Warren Buffet's money. Don't poor folks benefit from living in a society where people like Warren Buffet create innovations that allow poor Americans to get fat and have cars and cell phones? Of course not, they don't owe anything to society; and we owe everything to them despite the fact that many are hardly contributing.

  • Chad||

    Tim2|1.9.10 @ 1:39AM|#
    Still no response to the main point, which was that Warren Buffet's money during a recession is going to be put to use regardless of whether or not it's been taxed and spent by the government.

    Why do you believe that the velocity of money is not a constant?

    How can we have roughly doubled the money supply without doubling prices?

  • Tim2||

    I'm not talking about the velocity of money, just that Warren Buffet's money isn't sitting idle such that we would have to tax it to prop up some arbitrary level of consumption. You seem to suggest that there are a bunch of malefactors of great wealth sitting on unused capital who need to have said capital taken away by government so it can be put into the economy. Your attempts to obfuscate don't deserve a response, just respond to the point. Yes there are conditions where the money supply could double without doubling prices.

  • The Libertarian Guy||

    It's Buffett's money, Chad... not yours.

  • Chad||

    I disagree at a fundamental level. What makes it "his", other than the fact that the government says so?

  • The Libertarian Guy||

    Because he earned it, Chad. It wasn't given to him.

    Much as I view Buffett a fool, it's still his money.

  • anonymous||

    Justice.

  • ||

    Justice is the liberal argument for taxation and welfare. One man's justice is another's theft. Who decides? We do that through representative democracy here. Go elsewhere if you don't like it or get the votes to change it.

  • Sean W. Malone||

    How about, that through his wits, ingenuity and understanding of a particular field, he EARNED IT!???

    You fucking asshole, Chad.

  • Sean W. Malone||

    SLD: Except the money he got in the form of special deals... I don't know that I should have to say the SLDs, but Chad is pretty stupid, so whatever.

  • The Libertarian Guy||

    Chad cemented his lunacy with the line we need a world government and a global tax policy.

    Disgusting.

  • Mr. ?||

    Usually, liberals scoff at the idea of one-world government... but Chad, here, embraces the concept. MOST puzzling.

  • The Libertarian Guy||

    More to the point, ?, liberals like to refer to right-of-centerists who worry about one-world government as "conspiracy nuts"... yet, here we have a liberal hoping for one-world government.

    Good points to you, Hazel. Plus Two.

  • Chad||

    Yes, LG. I believe that there should be one world government and a global synchronization of policy in order to prevent races to the bottom.

  • The Libertarian Guy||

    You just crossed the line from harmless crank to traitor, Chad.

  • ||

    Yeah, well, according to Leninism-Stalinism, the only true communism would be global in extent. That's why the USSR had global ambitions. They recognized that people and capital would flee to non-communist countries unless they had nowhere else to run.

  • Chad||

    LG, what is inconsistent between libertarianism and a world government?

    What part of the libertarian ethic stops at the water's edge?

  • The Libertarian Guy||

    Why have 50 separate state governments, Chad? Would you have just one huge country governed from Washington DC?

    If your answer is yes, then you are a lost cause. Whatever traumatic event turned you into this kind of creature, I cannot imagine.

  • ||

    If the answer is NO, then I guess you believe in multiple, redundant Government not just Big Government. Seems a total waste of valuable resources to me.

  • The Libertarian Guy||

    No, I believe the Tenth Amendment actually MEANS something, David.

    My God, you are one stupid cocksucker.

  • ||

    The fact that we have a multiple state plus federal government is purely an accident of history. This is virtually unheard of elsewhere in the world. If we had created a single country like most in the world then the rights that states have would be combined into the Federal Constitution. There would be no need for the Tenth Amendment. There would have been no civil war. There would be no Senate. You are the stupid cocksucker.

  • ||

    Actually it was as far from an accident as you can get. The states created the federal government by coming together to write and ratify the constitution. The intent was for individual experiments of multiple republics within a loose alliance. Just in case morons like you got a hold of some of the states, we could watch you demise and reflect on the stupidity of your philosophy in action. This is also why the Statist philosophy requires universal and inescapable conditions with the guns turned on its own population - because it sucks so bad people will try to escape and that would make you look like morons with no cattle to order about. Also, any close example of liberty and free markets reveals your system as the turd that it is.

    Oh, and as an up to now, silent third party observer to this string of posts, let me just weigh in. Both you and Chad are stupid cocksuckers.

  • Chad||

    By what measure did he "earn" it. At least with my plumber, I know what I am getting, though it is difficult to know if I got a fair price. What, pray tell, did Buffet give the world in return for his billions? And how much would have he "earned" if it weren't for the education and economic system that he thrived in? How much was due to dumb luck? Being a whale know, he makes the market and couldn't lose if he tried. What would his life be like if a couple bets he made went sour decades ago? What if he had met a different set of people, and decided to be a doctor or a dancer?

    Luck, circumstance, and connections all make a huge difference in our lives. So does the very core of our economic system, which currently is set up to create fewer big winners rather than lots of smaller winners. Do you honestly believe that CEO's are ten times as smart and hard-working as the CEO's of a couple generations ago? Or will you admit the obvious - that they are no different in these respects. Nor can they as a whole be luckier. So what could be the difference? The answer is that our system has changed, and as I noted above, the winners win bigger now.

  • The Libertarian Guy||

    There is no equality of outcome guarantee, Chad.

    BTW, what is your time worth? Do you feel guilty about the number of digits in your paycheck?

  • Chad||

    Yes, LG...which is why I give far more of my paycheck away than normal, and even make a voluntary donation to the government every year (via not claiming all the charitable deductions that I am entitled to).

    It's a win-win, because the government saves hundreds of dollars with respect to my tax return, and I am saved the bother of tracking dozens of $25-$200 checks and payments.

    I am sure you wouldn't know anything about it.

  • The Libertarian Guy||

    You're not saving the government a damned thing, especially with the two big spenders we've had in the White House lately.

    IOW, you're a useful tool for the current occupant. You're exactly the kind of person he depends upon, and I don't say that kindly.

  • Tim2||

    Yes, clearly no one earns anything; we are all mistaken. The fact that luck or circumstance gives someone an opportunity totally refutes all the subsequent work following that opportunity. Or maybe we aren't entitled to our inborn talents and abilities, from each according to ability, to each according to need right?

    Of course, big government "removes" the influence of luck by stifling opportunity by reducing the reward to hard work and gumming up the works in a maze of red tape. Instead of having to network and hope that businessman gives you a chance to show your stuff, you have to hope you are granted your certificate of need to open a new clinic. Instead of private allocation of capital one has political allocation of capital, start lobbying your Senator!

    Again I point out that our current system is not free market, especially with regards to your point on education which is run quite poorly by an inept government. Lots of people have gotten lucky by getting government privileges, while the tax code, government regulations, and concepts like too big to fail heavily favor things like large corporations. Small business have higher costs of capital, are less able to cope with regulations, and get far fewer goodies from the government than big ones do.

    The libertarian critique of government is that it doesn't know how to manage an economy better than markets, and it has little incentive to do so even if it did; thus even if there is a small theoretical case that might justify some government intervention the regulators often get captured by those they are regulating. Then such business proceed precisely to squash opportunity for their competitors all while retaining the guise of expanding it to the little guy.

  • Chad||

    I am glad to see you are starting to crack. Once you concede that there is a "small theoretical case" that the government may outperform markets, you have turned the argument from the standard holier-than-though libertarian moral system to simply a utilitarian argument.

    Given that a number of European countries have similar worker productivity numbers as the US, despite much higher tax rates, your screams and cries that tax rates just kill the rewards necessary to motivate people to do a good job are simply proven false. Indeed, a number of psychological studies have shown just the opposite - people perform WORSE when there is money explicitly on the line.

    It is interesting that you bring up inborn talents and abilities, which are, in fact, luck. Take me and my brother, for example. I earn about triple what he does. I do work a bit more, maybe 10%, but that is defined by our jobs. If his place was busy, I am sure he would be working over-time and matching me. So why do I earn more? It pretty much boils down to that I was born good at math, and that unlike him, I have been blessed with good health. (Note that we are both "in shape", him even more so than me). So the difference between us boils down to luck, more than anything. Is this fair? Is it desirable? If you didn't know which one of us you were going to be, wouldn't you buy "insurance" against being my brother? Libertarianism is the lottery winners sitting around claiming that they wouldn't have.

  • Tim2||

    I consider myself more of a classical liberal like Hayek, I have never relied solely on the non aggression principle; as that can't even justify a night watchman state. So I haven't cracked, I merely disagree with you on the extent to which you think government can run things better. Further, I'm not a utilitarian in the sense that we should just maximize net utility; but that we should only undertake actions that leave all individuals better or no worse off. Again, by saying I "cracked" you further show your inability to debate anything like a rational adult; but that's right I don't deserve to be debated as an adult because I'm not an adult since you have defined being an adult as being someone with whom you agree.

    Yes some people are born smarter and healthier, but its more like a lottery system where you have to walk two miles in the snow uphill both ways to get the payout. People can and often do squander the talents they are given; and do so more frequently when they aren't rewarded for such talents or can just sit around and get money for doing nothing. The fact that some people are born more talented than others doesn't mean that they don't have a claim to what they do with those talents. Those talented people create the innovations and wealth that make everyone's lives better, because in free markets they generally can't apply those talents in any way other than to provide others with what they want. Work is work, and you can't reduce the sum of a person's effort to just being born better at math or catching a lucky break.

  • Chad||

    but that we should only undertake actions that leave all individuals better or no worse off

    Then we will never do anything, ever. This is an impossible standard. Any choice the government makes will create winners and losers, and so will any "indvidual" choices that you make. I have already listed a host of ways that I am negatively affected by your choice to purchase an over-sized vehicle or home, for example. So I guess that such choices should be banned? But that would lead to the absurd conclusion that all choices should be banned, because someone somewhere will be negatively affected (or at least think they are...but is that any different)?

    Yes some people are born smarter and healthier, but its more like a lottery system where you have to walk two miles in the snow uphill both ways to get the payout. People can and often do squander the talents they are given; and do so more frequently when they aren't rewarded for such talents or can just sit around and get money for doing nothing.

    Yes, I agree. Life is a combination of earned and unearned bounty...pretty much in equal proportions. But the odds are that someone who has little was unlucky, and likewise, someone who has a lot was lucky. You won't find a billionaire who was unlucky in life.

    Those talented people create the innovations and wealth that make everyone's lives better

    See my point below. We don't reward "innovators". We reward those who control the system. Innovators are more likely than the average to gain control of large system elements, but it is still a lottery. Most innovators are paid very boring salaries. I would be surprised if the average earnings of the Nobel Prize winners in Chemistry and Physics in their last full year of employment was more than $200,000 (in today's dollars). That's right about what the "base" salary of your typical Goldman Goon is. I wonder how many more innovations the Nobel winners would have come up with if they had million dollar bonuses on the line?

  • Sean W. Malone||

    Chad, failing to understand what purpose investors serve in terms of the overall economy, believes they have no purpose.

    Yes, he can understand what the plumber does - cause that's obvious and easily visible. But the minute something becomes a little complex, it's too damn hard to visualize for our resident "genius" and suddenly it's all dumb luck.

  • Chad||

    Chad, failing to understand what purpose investors serve in terms of the overall economy, believes they have no purpose.

    No, I fail to see the purpose of all the middle-men that capture most of the benefits of the trade opportunity created when I have a hundred grand in spare capital, and some company would like to borrow it. Banking should be boring, low profit, and provide incomes consistent with any other professional job.

  • Mr. ?||

    Chad, to you EVERYTHING should be "low profit".

  • Chad||

    Banking should be low profit because it is a commodity service that has been practiced for ages. It requires no particularly arcane talents and no physical work.

    The only "innovations" these people have been coming up with were clever ways to pad their own pockets by obscuring what the hell they were doing. Either that, or you honestly believe that THEY believed if they sliced, diced, and trade piles of steaming shit enough times, it somehow managed to turn into gold.

  • Sean W. Malone||

    ...Chad, you've already clearly exposed that you have no clue what investment bankers & stock brokers do.

    The fact that you view them purely as middlemen and don't grasp that good ones serve generally very important functions as to direct capital to profitable projects, which subsequently generates new wealth and provides returns (rather than losses) to millions of average, middle or working class people who have money saved in banks & 401ks... I can't really even go into all of this as it's exceedingly complex, but I just get so tired of seeing you whine about stuff you clearly don't have a clue about, Chad.

    It's asinine.

    Furthermore, so what? If a middleman picks up 10% of your hundred grand, that's 10,000 that will go into their bank - which will then either be spent or invested. So it goes to building a McMansion... Ok... Who built that McMansion? Who furnished it? Who installed the expensive A/V system? Who cleans it and does its landscaping?

    Either the money goes into paying for stuff - or it goes into investments.

    The fact that you don't actually understand banking is about the best evidence that you should have nothing what so ever to do with any decisions ever involving controlling it.

  • Chad||

    The fact that you view them purely as middlemen and don't grasp that good ones serve generally very important functions as to direct capital to profitable projects

    No, that's what they SHOULD do. What they really do is direct most if it to their own pockets. In case you haven't noticed, these brilliant bankers have somehow managed to make trillions in the last couple decades, despite being unable to beat the time-honored strategy of hiding shiny rocks under one's back porch. Frankly, I can't think of a single thing that demonstrates more strongly that how much you get paid can have little relationship to how much value you bring.

    What's your explanation for the explosion in executive pay the last few decades? Do you really believe they are just that much smarter and hard-working than their predecessors?
    Or are you willing to admit that changes in the system and its rules have allowed the people at the top to keep a larger fraction of the wealth we create.

  • Sean W. Malone||

    The explosion of executive pay is precisely a result of a continually expanding money supply which goes first through the hands of major investment banks. It's an issue of collusion with government and having a Federal Reserve system printing trillions of dollars in new currency, devaluing everyone's money which is the cause of the thing you complain most about.

    It's something I have repeatedly argued against, it's something that has been opposed by most of the libertarian community for decades, and something which - if you understood it at all - would possibly get you to shut the fuck up occasionally.

    It was an inevitable consequence of the loss of the gold standard, and one that was expressly warned about. For fucks sake, the collusion of bankers and government was a reason Andrew Jackson opposed the Second National Bank in the 1830s... This isn't a new phenomenon, but your ignorance of history & economic pervades your thinking on the subject, thus leading you to believe it's somehow a random result of greed and freedom. There is no meaningful freedom when a central authority is the one in charge of controlling interest rates & the currency itself, Chad. It's pretty simple. So when the Fed - a largely secret conglomeration of bankers - has the power to create money out of nothing, and then most of that money goes directly into the pockets of those very same bankers and their upper echelon executives, WHY THE FUCK ARE YOU SURPRISED BY THIS???

    It doesn't make the function of speculation, investing, or stock-brokering any less valid, it just means that you're being fucked by central control of the currency and misplacing the blame on people down the line. No, I don't think they're any smarter than they were 30-40 years ago... So I'm going to turn the question around. When Bretton-Woods finally collapsed officially in 1971 - why do you think it's coincidental that the following things have happened:

    1. The US has gone from the worlds biggest creditor to the world's largest debtor.
    2. A huge salary disparity, primarily between banking executives and everyone else, has developed.
    3. Government has expanded tremendously.
    4. We've been in states of perpetual warfare.
    5. The value of the dollar has tanked substantially, thus lowering our overall standard of living as compared with what it otherwise would have been.

    Why do you not see the fucking connection, Chad? It's not rocket science.

    Learn to understand the goddamn cause of the things you're arguing against for once, would you?

  • Sean W. Malone||

    Chad, your continual failure to understand the big picture of these things and make the basic logical connections will always keep you in the dark about reality - and I suspect will perpetually result in a state of bitterness and envy as you constantly direct your rage on the unfairness of wealth at individuals, instead of placing it on government force, where it belongs.

  • Chad||

    What's next? Are you going to blame global warming and the Macarena on the expanding monetary supply, too?

    And I noted earlier, government hasn't been expanding the last thirty years, nor has warfare for that matter (it has been decidedly shrinking). The dollars value has steadily declined vs other currencies, but this was inevitable and continues to be so without a radical reduction in the amount of currency available. The dollar has to fall until prices and wages are similar around the world. You may as well get over it. I have no idea what connect you see between executive pay and money supply. Can you show me some peer-reviewed evidence showing the correlation (international in nature, please).

  • Sean W. Malone||

    HAHAHAHAHAHAHAHahahahahah...

    Government hasn't been expanding the last 30 years?

    I can't even take that post seriously.

  • The Libertarian Guy||

    That IS quite the punny Chad put out, no?

  • ||

    The explosion of executive pay is precisely a result of a continually expanding money supply which goes first through the hands of major investment banks.

    Bingo.

    Income diversity is a product of government.

    It's pretty obvious unless you are brain dead.

    Wealth can occur 'serendipitously'. Someone can invent something. Someone can find a gold deposit.

    But for income, the rate of wealth acquisition over time, to be steadily diverse requires a continual use of government force. Doctors. Lawyers. CEOs. Bankers. etc.

    If you win the lottery you will hire people to do stuff or buy stuff other people make. You had an increase in wealth, but is your income likely to change? Likely the opposite in fact. You could invest and in the sort term you might make more money than previously in the stock market, but that in itself is a product of government intervention. A continually rising stock market is a result of fiat currency and, as we should now clearly understand really isn't continually rising.

  • SKR||

    really, positivism?

  • Old Mexican||

    Re: Tony,

    That's why you tax the rich, who don't spend all their money.

    Sure, absolutely right! Those rich people, unwilling to spend their money! Of course, they are taxed BEFORE they get to spend their money - wouldn't they spend even MORE if they were taxed LESS before they get to SPEND their money?

    They still exist. Of course you shouldn't burden the working class with more taxes during a recession.

    Indeed, we should tax the UNworking class - like the welfare moms and the pensioners.

  • The Libertarian Guy||

    Tony is using the Scrooge McDuck template, wherein rich people have huge vaults full of money which they jump into off of diving boards.

  • ||

    They do use all their money. They either spend, and thus employ, or save and thus make resources available for other people to borrow.

    Yet you suppose that the government who has no personal stake in using the resources efficiently would ever do so. History shows the opposite.

    Your scenario is a fantasy. They don't sit on their money.

    Even if they did 'hoard' currency (buy gold and bury it) that would merely cause existing currency to be worth more. So if the rich actually did what your fantasy proposes it would merely make your money worth more.. as the previously rich people became effectively penniless.

  • JB||

    I say we start by cutting out pieces of Mrs. Obama's pie.

  • ||

    Racist!

  • The Piefucker||

    Where is this pie of government?
    Too big? Too small? All I want is acquiescent.
    I hope it was made with the bluest of blueberries
    or reddest of strawberries or cherries.
    No pie is too good for fucking, nor too poor.
    But to fuck the best pies is what I am here for.

  • hmm||

    Excellent article.

    My nipples are still hard from reading it.

    No I do not want a fucking hot apple pie.

  • ||

    How many nipples do you have?

    Be honest. No one will judge you. In Asia, a 3rd nipple is a sign of virility.

  • hmm||

    sadly only two. But hey are huge!

  • ||

    Mine are quite small. I often lose track of them. :-(

  • The Gobbler||

    I got me some puffies.

  • Bill Clinton||

    That's okay, sugar-booger... I still like 'em!

  • Tim2||

    The contradiction in the progressive rhetoric is more basic than that; if economics really is a zero sum game, how is it that we can put some tiny tax on rich people to fund "green jobs" and usher in some new era of eco-friendly prosperity? The same goes for education. Progressives generally imply gains to things like green jobs and education in excess of costs imposed on rich people. It's just supply side in reverse, they are arguing that some uses for money are more productive than others and that allegedly these benefits will trickle up to the rest of society.

    The zero sum contradiction is similar to two other major progressive contradictions as well. One being that no matter what government intervention a libertarian can point to, it is always the free market's fault because the intervention no matter it's size is small by comparison. However these same people go out and write a book called nudge where minor tweaks in the "choice architecture" and minor taxes on things like carbon, smoking, alcohol and fatty foods can solve major social problems resulting in major social benefits. I actually like libertarian paternalism, provided that ever important "opt out" is maintained; without that it is just paternalism.

    The final and most important contradiction is that the people allegedly too stupid to take care of themselves by reading complex documents like health insurance contracts are expected somehow to make the right choice on even more complex issues like who should regulate health insurance contracts while fighting wars, maintaining domestic order, and regulating the rest of the economy. Voters' ignorance isn't distributed equally across ideologies so they can't cancel each other out, laying waste to the progressives' only claim to government; that they are smarter and more moral than everyone else enabling them to make all the right decisions. How else could they know how much health insurance should cost, what it should cover, and have the willpower to resist the special interests seeking to capture their regulatory body? How can such progressives expect to be elected, and how can they draw upon any sort of democratic legitimacy when they implicitly assume that the will of the people is formed out of ignorance and they are required to regulate it? Remember, progressives don't need federalism or a constitution of enumerated powers, we should just give all power to them, they'll decide how much we should get back, and they will use the rest of it to take care of us.

    So basically society has a fixed pool of wealth until progressives come along to re allocate it, by means similar to other government interventions progressives claim couldn't possibly affect the economy, enacted by enlightened progressive bureaucrats chosen on the basis of "the public interest" by people who they think can't even understand the things the progressives are supposed to regulate. My gosh, after thousands of years of human history we have finally progressed to a system that works!

  • Chad||

    It's funny how hard you guys are beating on this strawman, when it is the RIGHT who keeps screaming that stimulus can't possibly work, because any money the government spends must come directly out of private investment.

    Ahh, the irony of partisanship...

    Actually, the bigger irony is that you see the concept of "zero sum" as black-and-white. Most things are not strictly zero-sum, but fairly close to it. If the government spends money on X, it can't spend it on Y. However, spending on either X or Y (or returning the money to Z) all have a series of tangential effects which affect the total available. Hence, it is not strictly zero-sum. However, these tangential effects usually are much smaller than the primary effects, so it is *close* to zero-sum.

  • Mr. ?||

    So... if we spend all available money on government projects... and none in the private sector... we'll all be fabulously farting-through-silk wealthy. Got it.

  • ||

    Mr? Excuse me, but I think that is the whole point of free enterprise and competition. The dealer with the lowest profit margin gets the majority of the sales, all other things being equal, and makes it up on volume. This is the mass-production economy.

  • ||

    Government spending is less than zero sum. The forces which create efficiencies are absent from government. If you spend your budget you get a larger budget.

    Private spending has the potential to be greater than zero and rewards greater than zero sum. If you overshoot your budget you lose the contract or lose your business.

    This is why throughout history the more government spends the higher unemployment is.

    There is no zero sum.

    Government spending is decreasing sum.

    Private spending is increasing sum.

  • vince||

    You've done it, Matt Welch- I'm ordering a subscription. No, I'm going to pay full price for each issue at the news stand. My journey from leftist to libertarian is complete.

    A few years ago I was writing letters to my congresswoman demanding single-payer health insurance, railing against free trade, demanding higher business taxes, and voting for Ralph Nader. Today my eyes are opened, thanks in large part to Reason. In the words of Michelle Obama's Princeton thesis, Thank-you.

  • Ted S.||

    Who could have predicted that, as Veronique de Rugy points out in “Who Wants to Tax a Millionaire?” (page 16), a 1969 tax aimed at just 155 of the country’s richest people would end up affecting 4 million Americans 40 years later?

    That was the point. These people don't have good intentions.

  • K-Y||

    I also wondered that it could have been so innocent.

  • Chad||

    When it wasn't adjusted for inflation, it was easy to predict.

  • The Libertarian Guy||

    Which makes it a bad idea in 1969 AND now.

  • ||

    George W. Bush had the answer all along: make the pie higher.

  • ||

    Did a great job of that, didn't he?

  • hmm||

    I thought Bill Clinton was the fan of large pie?

  • Bill Clinton||

    I'm not a fan of large pie. Why do you think I fucked around on Hillary all these years?

  • kodiac1221||

    David:
    the pie does grow magically, if I trade you my car for your horse it cannot be zero-sum. I would not trade my horse unless I am sure that it is more valuable to ME than the car, likewise you only buy the car because it is of more value to you than the horse.

    If the trade were zero sum the trade would make no net gain or loss, with no net gain I have no incentive to buy your horse...

    Thus the VALUE WE ASSIGN things comes and goes, moves, and sways. Unless I think I am getting a higher valued object I will not make the trade and neither will you.

  • ||

    Ah, great example, a zero-sum game means that we have a horse and a car before we make the exchange and we have a horse and a car afterward. How much people "like" their horse or car hasn't changed. You can say they are now both more valuable because the people like what they have gotten more than that which they have given. This is a totally unproven assumption and can be easily refuted. Ask the person with the horse to give a horse and a goat instead if they think the car is more valuable to them than the horse. Not happening, right? The economic truth, no imaginary emotion but real value, is that the two are completely equal before the trade and equal after or no trade would occur. In practice, of course, both parties may feel cheated or feel victorious after the trade but that doesn't make it true or false. There could just as well be a reduction of wealth instead of an increase and the only thing that can be assumed is that the trade was equal. Zero-sum.

  • Jersey Patriot||

    This is colossally stupid. I can value a car as worth more than a horse, but less than a horse and a goat combined. The fact that I made the horse/car trade, but not a horse+goat/car trade, tells me I value the car between H and H+G.

  • Bad Joke Setup Guy||

    A horse and a goat go into a bar, and... uh... stuff.

  • Reformed Republican||

    The economic truth, no imaginary emotion but real value, is that the two are completely equal before the trade and equal after or no trade would occur.

    No. You have it backward. If the horse and car were valued equally by both individuals, there would be no trade.

  • ||

    You really don't understand even the most basic concept of trade.
    How can you explain the stock market, then? Millions upon millions of trades happen there every day. If, as you say, all trades are zero sums, why the fuck are all these people trading? Each trade comes with a cost (commissions) so are they all just jerking off and paying for the privilege? NO! Each person who buys a stock thinks the stock is worth MORE than the price they're paying. (Or will be at some point in the future.) At the same time, the seller on that same deal thinks the price is too high. Both interests are satisfied by one single trade.
    This is really basic stuff.

  • ||

    Applied to the stock market this is even more obvious. There is an immediate satisfaction and hope of future reward but it is clearly zero-sum. As soon as the next ticker comes through they will each begin to find out whether their trade was a success. As each stock rises or falls it will be easily measurable whether one or the other got the better deal. As long as both still own their new stock we can check from time to time and see how they are both doing. One stock will outperform the other and that trader is the one that won. The other stock may also go up but the lost opportunity of selling the better stock means one guy lost. I don't think the guy gives a damn that he was satisfied with the trade at the time it was made, do you? The win on one side exactly matches the loss on the other side. The people are satisfied with the trade because they both thought they were going to win. Not understanding reality doesn't mean they both got something extra of value.

  • ||

    How much people "like" their horse or car hasn't changed.

    (1) I don't know why you would say that an exchange that has increased the happiness of both parties is zero-sum.

    (2) Even if you think we shouldn't count subjective preferences at all in our thinking (and be careful, as ditching subjectivity kicks the pins out from under most redistribution arguments), why shouldn't the exchange make us both better off in a more objective sense because we can each put our new thing to better use?

    I had a car, but needed a horse to plow my field. You had a horse, but needed a car to drive to work. The economy has gained from our exchange, hasn't it?

  • ||

    It's really not that complicated and it's really mainstream economic analysis. Do you understand what this means, "The potential future benefits of a trade or purchase are already reflected in the transaction price." Or to go back to third grade:

    I have a horse which I want but I will produce nothing tangible with it. The horse could be used by a guy down the street who will double his income with it. If I want the horse, I have to pay for the horse and extra for the pleasure I expect to get. No free steak knives. But that's not all, I have to pay for the additional income that the guy down the street could make off the horse or he'll outbid me. In a transaction, you always pay for an item based on it's highest potential earning power, not actual use. You pay for it up front, therefore, if you don't get the pleasure or income potential you expected you lose. If it does pan out as planned, which is a real big if, the best you can do is come out even because you already paid based on maximum potential benefits. No free lunch, zero-sum, you get what you paid for. Now that I have a horse, I might take that resource and add some ideas and work and come up with a way to make lots of money but now I'm adding extra resources to make the extra goods or wealth so it's a new ballgame. If you are happier or wealthier after a single transaction then you paid for it.

  • Jersey Patriot||

    It's really not that complicated and it's really mainstream economic analysis. Do you understand what this means, "The potential future benefits of a trade or purchase are already reflected in the transaction price."

    It means someone believes in the myth of perfect information, which means that someone has little grasp of the real world.

    In a transaction, you always pay for an item based on it's highest potential earning power, not actual use.

    What is the highest potential earning power of a carton of eggs?

  • ||

    FAIL, FAIL, FAIL...Class over. If making serum for vaccines is a more profitable use of that carton of eggs then you pay for it based on that use, not eating. In the case of eggs, the highest potential earning power is eating.

    In the case of corn, however, the potential use of corn for ethanol became more profitable and the price skyrocketed.

    Remember supply and demand.

  • Old Mexican||

    Re: David Hennessy,

    If making serum for vaccines is a more profitable use of that carton of eggs then you pay for it based on that use, not eating.

    You seem to forget that people value eggs for different things - including egging your house. And the price WILL reflect this, promise.

    In the case of eggs, the highest potential earning power is eating.

    Yes, I earned my omelet.

    In the case of corn, however, the potential use of corn for ethanol became more profitable and the price skyrocketed. Remember supply and demand.

    Never mind the subsidies - still, you got it exactly BACKWARDS. The demand for corn INCREASES, and THEN the price of corn goes up, making it more profitable COMPARED to other agricultural products.

    We'll get the soul transplant, Dave, if you promise to take those economics lessons you sorely need.

  • ||

    "You seem to forget that people value eggs for different things - including egging your house. And the price WILL reflect this, promise."
    You are a total moron, Mex. All you did was give another example of an alternate use for eggs. That just helps prove the point.

    "Never mind the subsidies - still, you got it exactly BACKWARDS. The demand for corn INCREASES, and THEN the price of corn goes up, making it more profitable COMPARED to other agricultural products."

    No, you have it BACKWARDS because you didn't notice the word "potential". Demand increased because a potential use that would be more profitable was seen by farmers trying to maximize their profits. Most guessed wrong but we pay for percieved potential whether or not it pans out. You see, in farming, which I have done, the seeds have to be planted long before the level of demand for the product is known. Same with any start-up business. You can do all the studies you want about how much demand there might be for your new product but you are most likely wrong. You invest, start the business, arrange the marketing, pay for shipping and put in on the shelf BEFORE you actually KNOW if there is a DEMAND. That's why it is so risky and why most start-ups fail. It is also why the reward is so great for those who succeed.

    It's a little more complicated than either of us could fully explain in a short post but I think you understand about the futures market which is where percieved potential is monetized.

  • Old Mexican||

    Re: David Hennessy,

    Ah, great example, a zero-sum game means that we have a horse and a car before we make the exchange and we have a horse and a car afterward.

    David, you are confusing wealth maximization with conjuring up goods. The two traders ended up WEALTHIER because they each now have something they value MORE than before.

    How much people "like" their horse or car hasn't changed.

    Yes, it has - a person that did not have a HORSE before NOW has one. Another person that did not have a CAR before NOW has one. Things DID change. Again, you think that wealth maximization is simply conjuring up goods from the ground, which is simplistic.

    This is a totally unproven assumption and can be easily refuted. Ask the person with the horse to give a horse and a goat instead if they think the car is more valuable to them than the horse.

    If the man with the CAR does not WANT a goat, certainly the person with the HORSE does NOT have to offer a goat. Where does your refutation reside, David?

    The economic truth, no imaginary emotion but real value, is that the two are completely equal before the trade and equal after or no trade would occur.

    David, they are not equal goods. If the person with the car values a horse MORE than his car, he WILL trade with the man that values his horse LESS than the car. The goods do not have EQUAL value - they have DIFFERENT values, for each of the new owners. Yiu're thinking in terms of medium of exchange.

    In practice, of course, both parties may feel cheated or feel victorious after the trade but that doesn't make it true or false.


    Huh . . . what?

    There could just as well be a reduction of wealth instead of an increase and the only thing that can be assumed is that the trade was equal. Zero-sum.



    But the trade WAS equal, David - equally free. Both parties left the trade better off. If YOU believe they were not better off, that only constitutes YOUR opinion, since you cannot presume to either read minds or be in the shoes of both traders.
  • ||

    You guys have made me laugh my ass off today, I haven't been at all offended or angry. Put a few amatuer economists in a room and nothing but absurdities can arise. Some of you are quite eloquent in affirming my points, thanks. And for you Old Mexican, an equal trade cannot lead to unequal value no matter how hard you try to make it so. Whether it is a goat or a penny, the value of both items is still equal or the extra amount would have been negotiated in a perfect theoretical world. The only "wealth" will be produced later as the horse and car may be used in different ways by different people. You make the assumption that both will create wealth when you don't know whether that will be the case or not. As a famous professor once said, Assumptions make an ASS out of U and ME. I'm not the ass because I don't buy the assumption. Gotta go for today, gotta go read my Marx or do some unspeakable act to a farm animal. I will be back, too much fun not to.

  • Gilbert Martin||

    This guy seems to have a joe-like habit of celebrating imaginary victories.

  • SKR||

    I thought we had already established that value and money weren't the same thing.>.

  • ||

    Value is part of the economic system when it is monetized, otherwise you would just have to take a guess. Money and value are not the same thing but at a point in time when a trasaction occurs, it is equivalent. In fact, a transaction measures the real value of money. Next transaction it might be different.

  • Sean W. Malone||

    More or less correct. Money is just one way of *measuring* value at the point of a trade.

    But value in and of itself is subjective & ordinal, so outside of a trade, there's no way to measure it.

  • ||

    And for you Old Mexican, an equal trade cannot lead to unequal value no matter how hard you try to make it so.

    He never said that. If you're so confused you have to make false claims you might do better arguing with a conservative. They might be babmoozled.

    The only "wealth" will be produced later as the horse and car may be used in different ways by different people.

    He never said otherwise.

    You are seriously confused.

    Wealth may, or may not be created as a result of the transaction. At the point of the transaction both parties judge it to likely be advantageous or they would not have made it.

    If one or both have a capacity to more efficiently use what they traded for than what they traded then indeed wealth is created. There is more stuff than there would have been otherwise.

    This may or may not occur. But both parties are certainly motivated to make it occur.

    This process of course never occurs in the government. If you make efficient use of resources you will receive fewer resources. If you make inefficient use of resources you will receive more resources.

    Which is just one mechanism whereby government destroys wealth.

    Another way is intervening in markets so that people make bad choices. Mortgagees and mortgagors both were pushed to make bad choices by government policy. Health care market interventions encourage people to make bad choices. The entire fiat credit system encourages early production development (risk forcibly priced too low) which of course causes massive disruption when the correction occurs, as we see. Resources are wasted or a huge scale as production capacity is much higher than the market demands. 'Stimulus' can't help because it cannibalizes the genuine productive bits of the economy that are extant to temporarily extend the lifespan of the bits that do not address real market demand.

    You can subsidize buggy whip production but it does nothing to help a sustainable economy.

  • ||

    What, so a world where the guy who WANTS the horse gets the horse, and the guy who WANTS the car gets the car has no added value beyond the situation where neither has what he desires?

    Quit reading Marx. Idiot.

  • ||

    One more time, idiot. The man had the horse because he valued the horse and still does. It wasn't worthless to him and I'm sure he wants both the horse and the car. Sure, there is an expectation(hope) on both sides that there will be a tiny, incremental percentage of perceived increase of wealth. In mathematics that resolves very quickly to zero as you ask "How much more would either of you give?" A goat? NO. A chicken? NO. A penny? NO. Therfore the difference is less than a penny or zero for all practical purposes. No wealth creation! Third-grade math.

  • Sean W. Malone||

    David, it's really amazing how poorly you grasp such basic ideas as subjective value... If I value a car equal to a horse, and I already have a car, then I don't trade. There'd be no point! Going back into monetary terms it'd be like me trading a $20 bill for... Umm... ANOTHER $20 bill!

    What the hell use is there for that?

    The only way I'd trade you my car for your horse is if I *value* the horse more than I value my car.

    You're trying to make this an equation, as if you can input an objective valuation for a car and a horse - and you simply can't. What you value and what I value are entirely different both in type and in level... Another example: I know plenty of vegetarians - I'm not a vegetarian. So... For me, BBQ Ribs have a value that is typically greater than 0. Up to, I dunno... $20 or more in some cases.

    However, to my vegetarian friends, the BBQ Ribs do not command $20, or even $1... For a vegetarian, ribs have 0 value. In fact, some of them are offended by meat, and thus place even negative value on it (i.e. if they had some meat they would give or throw it away just to be rid of it).

    Value is entirely in the eye of the beholder. But it's absolutely NOT true that there is "equal" value for trade to happen - in fact, quite the opposite, I must value the thing I'm getting more than I value the thing I'm giving away. And in return, the person I'm trading with must do the same. So going back to the horse/car. You must value my car MORE than you value your horse, and I must value your horse MORE than I value my car. When that happens, we trade. Then we each walk away having happily acquired the thing we desired more than the thing we already had - thus making us both wealthier in the process.

    It's not really that complicated, but having read through these comments kind of after the fact, your strange condescension about economics as if you have the slightest clue what you're talking about is definitely getting old.

  • ||

    I have some subjective value in my toilet that I'd like to sell you. No one else thinks it's worth shit. The value you talk about is an illusion and until it resolves into something real, it is nothing but what Obama sold us, "Hope". It is extremely valuable and worthless at the same time. It just depends.

  • ||

    I'm a little tea pot,
    Short and stout
    Here is my handle
    Here is my spout
    When I get all steamed up,
    Hear me shout
    Just tip me over and pour me out!

    I'm a clever teapot,
    Yes it's true
    Here let me show you
    What I can do
    I can change my handle
    And my spout
    Just tip me over and pour me out!

  • Sean W. Malone||

    Yeah, David. See, you've figured out the lesson here, yet again unwittingly. Value is only knowable at the point of trade. It's subjective, in that it's different for all parties... And that's fine, but things are economically valueless until a trade happens - if you can't find someone to trade with you, because you're trying to sell... Well... Shit, then I guess your shit isn't worth anything.

    Too bad.

  • anonymous||

    "The man had the horse because he valued the horse and still does."

    Horses are a product of nature, not created through the labor of the workers. Therefore the horse had no value in the first place. Looks like the guy with the car got hosed.

    'Sure, there is an expectation(hope) on both sides that there will be a tiny, incremental percentage of perceived increase of wealth. In mathematics that resolves very quickly to zero as you ask "How much more would either of you give?" A goat? NO. A chicken? NO. A penny? NO.'

    That isn't a fact, it's an assertion on your part. Just because we didn't add pennies, goats, or chickens into the story doesn't mean that one of two wouldn't be willing to give a goat, chicken, or blowjob to get what the other guy has.

    If it was truly equal and zero-sum, then it wouldn't favor any direction. If you're starving and have a backpack full of penicillin, and another guy is sick and has an ice chest full of food, it's obvious that the sick guy will give food to the hungry guy in exchange for medicine. According to your economic theories (let's call them "Downsbabianism"), the hungry guy would be just as willing to trade his new ice chest worth of food to the sick guy in exchange for the sick guy giving up the life-saving pills.

    No wonder so many people died under Communism. It's like the world's largest Darwin award.

  • ||

    You're entertainingly ignorant.

    What you are attempting to comprehend is the price mechanism. You are not succeeding very well.

    Both parties make the trade voluntarily because they think they can better utilize what they get than what they gave. If one or both people choose correctly wealth will be created than if the transaction had been made.

    Zero sum would result from no deal.

    I am a rancher and you are a tanner. Had we not traded you would eat more poorly and perhaps less and I would be less well outfitted than I could otherwise and not be able to work in inclement weather.

    The exchange doesn't create wealth at the point of exchange, however it is the necessary prerequisite for wealth creation.

    We can both work more and create more than than had we not traded. This means prices go down, and this benefits everyone else who needs leather goods or beef to eat.

    All those everyone else's are
    doing the same thing.

    Except the parasitic class in government.

  • ||

    Point of order: Is making a "someone certainly read his copy of Marxism for Dummies a few times" joke redundant?

    Davy is either pretending to be a Marxist or is a Marxist. Either way, he's not worth another keyboard click or pixel.

  • Citizen Nothing||

    Actually, SF, isn't the very title Marxism for Dummies redundant?

  • Warty||

    CORPRORATE STOOGE FREE YOR MIND

  • ||

    Davy is either pretending to be a Marxist or is a Marxist. Either way, he's not worth another keyboard click or pixel.

    Not true. If nothing else he can be a shining example of how stupid, how utterly nonsensical the Leftist is. While I admit his trolling to date has been pretty weak, we have lost Joe, and Chony/MNG can't be expected to carry all of the trolling duties themselves.

    I give him a week.

  • ||

    Hey, when I first came here some called me a troll.

  • ||

    And your point is?

  • ||

    You were. We cured you.

  • ||

    I think I'm actually stupider from reading only a few of it's posts.

    It's like virulent, unyielding and limitless stupidity, all smeared on a sphere of neutronium and dropped into a super-massive black hole, only to have it exit at the extact center of the universe, explode and expand at near infinite velocity outward at a point in time prior to it falling into the black hole.

    It's stupidity, so densely stupid, that it violates causality.

  • ||

    Agreed. He's like someone who just put down his abridged copy of Das Capital and has run off with all the ferver of a new convert to spread the good word to the heathens.

    Very similar to Chad, but with more "I have seen the light!" zealotry.

  • Warty||

    Newtroll has some promise. He's got enough smugness and impenetrably confused language, but his insults are sadly flaccid. I hope he sticks around long enough to get better at his faggotry.

  • ||

    I love the name Newtroll and will wear it proudly but I wonder how many other nice people have been blasted by the old trolls for not toeing the party line. Lot of ingrown arguments here, maybe the guy who told me to fuck my mother has a point. Isolation of ideas leads the same result as relatives having sex - a guy who plays wonderful banjo and drools on himself. My insults are unecessary when a guy named Warty calls me a troll.

  • ||

    Isolation of ideas leads the same result as relatives having sex

    From your posts to date, you seem to have experience with both.

  • ||

    The answer to the question you posed this morning in another thread is:

    No, I am not Alex Jones.

  • ||

    No? Too bad. It would be really cool if you were a world renowned conspiracy theorist.

  • Banjos Kick Ass!||

    Well said Davey, an open and free debate of ideas only makes us all grow.

    And FYI, I'm a chick, and I don't drool on myself (well not anymore at least).

  • Bela Fleck||

    Indeed, banjos DO kick ass.

  • Warty||

    LOLOLOL YOU MADE FUN OF MY ALIAS LOLOLOL

    Seriously, newfag. Get better.

  • K-Y||

    The pie is a lie.

  • hmm||

    But I like pie.

  • ||

    There is no pie.

    Once you understand that, it's all very simple.

  • Eric Cartman||

    No... more... peh...

  • Dr Saussed||

    I will not accept this lie.
    This lie that the pie is a lie.
    For I just had pie, pie that I held quite high.
    Pie that was neither far nor nigh.
    And I did like this pie.
    This pie that was not a lie.

  • Eric Cartman||

    I could not possibly eat one more bite of this delicious pie.

    Oh, wait... yes, I can.

  • Jason||

    Would it be possible to make those references to other articles into links?

  • Sam Grove||

    why won't people who love to make
    zero-sum arguments about the economy apply their own lessons to government spending?

    Because it doesn't suit their agenda of deciding who gets pie.

  • Ska||

    Punch and pie....

  • Old Mexican||

    The discussion with Ignoramus Maximus continues:

    Re: David Hennessy,

    And for you Old Mexican, an equal trade cannot lead to unequal value no matter how hard you try to make it so.

    Indeed, because obviously, a horse has the same value as a car. It was a miracle that the trade happened at all!

    Whether it is a goat or a penny, the value of both items is still equal or the extra amount would have been negotiated in a perfect theoretical world.

    Well, sure, but since the owner of the car traded for only the horse, it is logical to conclude that the guy only wanted THE HORSE for HIS CAR, so why assume that the car could have been traded for more if the guy did not ASK for more? Who's doing the trade, you or the owner of the car?

    The only "wealth" will be produced later as the horse and car may be used in different ways by different people.

    Again, you are confusing "wealth" with conjuring up goods. Production of goods serves to make MORE TRADES and the producer can certainly increase HIS wealth by producing something HE desires. But wealth maximization is achieved through trade as well, which means you can trade your crap for someone else's crap and now both of you will have crap that each of you value MORE, thus you feel more wealthy.

    You make the assumption that both will create wealth when you don't know whether that will be the case or not.

    No, you dimwit - I don't assume they will create wealth in the future. They are wealthier as the RESULT of their TRADE! If the car owner gets a horse HE desired and the horse owner got a car HE desired, they are both wealthier, because now they both have things the value MORE.

    You (again) are confusing "wealth" with just conjuring up goods. The production of goods can lead to more future trades or satisfy the producer's needs or wants, but wealth is mostly obtained by TRADE, not by production alone.

    As a famous professor once said, Assumptions make an ASS out of U and ME.

    You said it, baby! You made assumptions galore - like assuming you understood economics!

  • Jean||

    According to the Piagetian theory of the development of human intelligence, only around 30 percent of the population actually makes it to the last stage of intellectual development - "formal operations." This could explain why people like David (and there are legions of them out there) simply cannot grasp elementary logic and economic reasoning, no matter how well or thoroughly you try to break these concepts down for them. I suppose it's worth a shot, but if David is in the 70 percent group - and it appears likely that he is, it's a shot in the dark.

  • Chad||

    There are a lot of things one could quibble with in this article, but this one bothered me the most.

    "The first is that it fails to acknowledge, let alone explain, the fact that we keep placing more and more gold on the “government services” end of the scale without seeing anything like a commensurate increase in results"

    Actually, government spending vs GDP had been flat for about the last thirty years (obviously, through both Democratic and Republican control), until the recent near-depression caused a spike. Once TARP winds its way down, we will be right back to the trendline.

    http://www.usgovernmentspendin.....chart.html

  • Old Mexican||

    Chad,

    Actually, government spending vs GDP had been flat for about the last thirty years[...]

    I don't see how this contradicts:

    [T]he fact that we keep placing more and more gold on the “government services” end of the scale without seeing anything like a commensurate increase in results.

    If government spending has bene flat vs GDP this may be explained by the fact that the US has been more productive over the years, or at least, PEOPLE have been spending more over the years. What Matt is saying is that there are no palpable results of all this spending from government.

  • Chad||

    What part of "more and more" confuses you?

    In fact, spending staying flat while experiencing vast increases in health, social security, debt interest, and military spending (due to the wars) tells you a hell of a lot about how little we are investing in everything else.

  • Sean W. Malone||

    Chad, you realize that debt/spending as a percent of GDP is a worthless measurement right? You see, funny thing about GDP, is that it *includes* government spending, and is entirely related to the quantity of money. So if government prints a shitload of money, and then spends a shitload of what it printed, and that figure goes into GDP calculations, thennnnnnnnnnnnnn.......... guess what, it's pretty likely to stay "flat" as a percent of GDP.

    Doesn't mean a damn thing.

  • Mr. ?||

    "Investing" = "higher taxes"

  • ||

    Chad you do know that GDP includes government spending. All you are saying is that the economy has some resilience to compensate for government poaching. All recent events show is that that resilience is not infinite.

  • Old Mexican||

    Re: Chad,

    But you are made hundreds of times BETTER off when we provide you with roads, language, and the internet.

    What's with this "we" business, Kimosabe? The language was provided to me by my mommy, certainly not by YOU.

    Suck it up, and pay your fair share.

    You mean the 33% you think I "owe" society?

    Or go ahead and renounce society, give up everything we gave you, and see how long you last freezing and starving in the dark.

    Yes, you are a good provider, Chad - the bullshit you fling has kept me warm.

  • ||

    Who says the stats/charts upon which he relies in making his point are accurate?

    The reality is that the real, true total ecomomic output of the United States of Socialist Amerika has never been measured. For good reason:

    Its impossible. I know this even though I flunked econometrics.

  • Chad||

    This is publically available data. If you believe it wrong, refute it.

    www.omb.gov

    I bet you have never even looked at a federal budget before.

  • Sean W. Malone||

    You realize that you're missing the point, right Chad?

    There's no way to truly quantify wealth because it's impossible to look inside the minds of hundreds of millions of people and objectively evaluate how much that like different things.

    That and, the measurement of GDP makes very little sense. Private Product Remaining makes far more sense, but whatever...

  • The Libertarian Guy||

    Oh, but liberals DO quantify wealth, Sean... they start the counter the moment one earns one thin penny over some arbitrary amount of dollars.

  • anonymous||

    I'll bite.

    I believe the OMB data does not reflect the "real, true total ecomomic (sic) output of the United States of Socialist Amerika", because the only economic output that can be measured is some portion of that which is traded -- even then, the "prices" might not truly reflect the value of that portion, particularly in cases of government intervention.

    But everything that people do to better their lives (sports, washing dishes, raising children, social interactions, walking their fat ass to the fridge, going to the store to pick up more cheap Chinese shit, playing World of Warcraft) is technically economic output, whether we're considering the labor involved or the subjective value produced (interestingly, the word economy is derived from the Greek for "household management")

    If, in producing more trade goods, people sacrifice unmeasured economic outputs that nevertheless would have produced more subjective value in people's lives, we're worse off for it, but the GNP suggests that we're doing better, and the people who successfully made us worse off will be lauded as bringers of prosperity.

  • ||

    They are so hard to read, what with all the red ink stains.

  • The Libertarian Guy||

    Notice how he slipped in this line of shit:

    give up everything we gave you

  • Old Mexican||

    Re: Chad,

    If the government spends money on X, it can't spend it on Y. However, spending on either X or Y (or returning the money to Z) all have a series of tangential effects which affect the total available. Hence, it is not strictly zero-sum.

    Of course! Makes sense, Chad! If for example, a thief steals my car and uses it to drive his mom or uses it to drive his wife, well, that has a series of tangential effects which may not appear as a zero-sum game to the thief! Of course, I am WITHOUT my car and NO WEALTH was produced, so that would be taken as a zero-sum game . . . But that's just crazy talk! You are right, Chad. You are right.

    However, these tangential effects usually are much smaller than the primary effects, so it is *close* to zero-sum.

    Sure! That would appear to be so for the thief's wife! I am still without a car, though . . .

    Oh, I like you Chad! You're silly.

  • Old Mexican||

    Re: Chad,

    Please explain how unsound monetary policy caused the comic book bubble that my little brother and his friends all got caught up in when we were kids.

    You read?

  • Old Mexican||

    Re: Chad,

    90% of economists support some sort of price on carbon...

    Carbon already has a price - take my pencil, for instance. The graphite is quite costly, you know.


    why don't you listen to your gods when they don't toe the conservative line?

    You mean you can actually hear 90% of those gods? What's that they call it - schizophrenia, perhaps?

  • Old Mexican||

    Re: Chad,

    [T]here are non-zero-sum swaps out there that can make everyone better off. Does anyone deny this? However, if markets are efficient, there can't be too many of these opportunities out there...

    There is no such thing as an "efficient market". That's a myth. As long as people's wants are not satisfied, there cannot be "efficient markets."

    Here in reality, we have lots of zero-sum choices to make.

    For instance, paying taxes and expecting to have a lousy bridge in return.

    Do we need more cheap shit from China,

    No, of course not! We need EXPENSIVE shit from America, done with unaffordable Union wages! America, fuck yeah!

    We need a rational health care system, better K12 education, and to rebuild our infrastructure.

    That is probably what YOU want, not what we need, and also, that somebody else pays for it.

  • Bill Ross||

    When you get down to basics, this and virtually all conflict are proxy issues in the eternal WAR between the productive (those who produce more than they consume) and the greedy (those who consume more than they produce). This is the root cause of the rise (honesty in control) and fall (predators in control) of civilizations, for all of history, including NOW. Easily proven:

    http://www.cli.gs/MathematicsOfRule

    Civilization was once protected by the "rule of law", now rationalized away by predators on the bench:

    http://www.cli.gs/RuleOfLaw

  • ||

    I've heard a lot of loose talk on this site about Marx and I was even accused of stealing his material. I'm not sure but I think you mean Karl Marx whom no one in their right mind would ever call an economist. He said. "to each according to their need, from each according to their somethin or other". That's all I know because I quit reading when I realized that it was philosophy or religion but not economics. On the other hand, there was a guy named Groucho Marx who said, "Never give a sucker and even break." and "There's no such thing as a Sanity Clause". I steal his material all the time. He's a better economist and funnier too.

  • ||

    If you havn't read Marx you should, because your ideas about economics are deeply inflenced by Marx, and you should be aware of the leading thinkers that influence popular thinking, so you can understand where those ideas come from, and the basic flaws associated with them.

    Marxism, unfortunately, abslutely permeates leftist popular conceptions about economics. The labor theory of value and the 'surplus value' notion about profits in particular are esssentially unstated (and largely unrecognized) assumptions underlying a vast array of other arguments.

  • ||

    After all the wonderful humor I've had making fun of you guys, I think it's fair to finally let you take a shot at me. I'm going to be totally honest, I'm not an economist and I'm damn proud of it. I took several years of advanced math, accounting and business so I'm not ignorant. I'm not an economist because it's a religion, not a science.
    All current economic theories have already been proven wrong or so badly flawed that they have no practical purpose. A economic model is designed using data and policies from past decades and by applying logic to emulate the real economy and allow predictions to be made about many variables in the future economy. It can never be expected to approach perfection but it has to be able to prove its worth objectively by making predictions that hold water. Now, if I were the arrogant sumbitch that some of you think, I would tell you I've got the right theory but I don't. If any of us did we wouldn't blog about it we'd use our knowledge to go make a killing. Knowledge is power but not if you give it away. The big joke to me is that Libertarians think they can use reason to understand something that is primarily emotional. Not just libertarians, green eye-shade economists actually think that people act according to reason and their own best interest. Hell, most people can't balance their own checkbook. Most sales are made on impulse. I think there is an economist working on an emotional theory of economics which I think is great but I'm not sure that it is possible to have any "right" economic theory. Each theory, however, reflects something very important that is not economic in nature. Most capitalist market theories extols the virtues of selfishness, greed, envy, and fear. I suspect these are the motivating forces in the minds of those who support this theory. No surprise they would assume that everyone else acts out of these emotions. Communism assumes everyone (if properly educated)wants to make sure that we all share the wealth and no one gets left behind. If you don't agree we shoot you though. Your economics tells more about you than you realize. I am an economic agnostic, so that's why I can only criticize your logic but I don't have the answers to the world's problems. After just a day listening to you folks, tho, I am close to becoming a communist because I don't think most of you can play nice with money so you probably shouldn't be allowed to have any. Perhaps a test to see if someone is mature enough to handle money before we let them participate in the economy.
    2008 was a turning point for economists because most of them never saw it coming. Not being able to predict the stock market consistently is understandable but to be totally blindsided by the biggest bust since the Great Depression is proof that something basic is wrong with all of the theories. Now think about it, ladies and gentlemen, if people acted according to their own self-interest would they elect the scum we have in Washington DC? Wouldn't a majority of them vote Libertarion? Just askin'why the people think it's in their self interest to keep your kind out of office. Maybe they don't like trolls.

  • lou||

    You have a lot of assumnptions and you make a lot of assertions; but they are a mixture of half-truths, outright falsities, and misconceptions.
    Just one example. Most economists 'never saw' the economic crisis coming? Well, Austrian economists had been predicting such an event for quite a long time. As for all your other false or half-baked assertions, I haven't the time to pick them off one by one. But maybe you should check out some economic literacy sites (like "Ideas on Liberty") to challenge your own assumptions. Go ahead, it won't kill you, and it might actually lead you to a refreshing change of mind.

  • Chad||

    Austrian economists are perma-bears, and will ALWAYS predict EVERY recession, by design.

  • Sean W. Malone||

    And yet their predictions were explicit, accurate, and provide a step-by-step account of where things were headed from 2002-2009 exactly as events unfolded.

    It's not their fault that the responses to the economic problems in America engaged in by politicians are continually rehashed Keynesian horse-shit... When the economic policy changes, then the Austrians will stop pointing out the bad consequences to come.

    Go read Mark Thornton from 2002-04 and tell me that he wasn't quite clear on how & why the housing market would crash?

  • Chad||

    Can you give me some peer reviewed evidence as to the predictions of Austrian economists, and how that stands up against other theories? Or are you, as I suspect, just remembering what you want to remember and ignoring it when they get it wrong.

  • Sean W. Malone||

    Incidentally, I can, Chad - although this is for the asset bubble of the 1990s, I have Mark Thornton's paper, "Who Predicted the Bubble, Who Predicted the Crash?" from Independent Review, Vol. 9, No. 1 (Summer 2004) pp. 5-30. which discusses methodology... It's pretty uncommon to see such a review of economists predictions, actually, but that's a good one.

    On the other hand, I'd invite you to find me an example where the Austrian school has seriously gotten anything big wrong. The rules of this little game are as follows: They have to be wrong *in principle*, not merely wrong about what month the actual crisis would occur in.

    Ludwig von Mises once put his money where his mouth was and rejected a lucrative job from a Viennese bank in 1929 citing ""A great crash is coming, and I don't want my name in any way connected with it."

    Keynes, however, lost his shirt.

  • Sean W. Malone||

    Likewise, if you want to talk 2000s, I have Mark Thornton again from 2004 in "Housing: Too Good to be True" from 2004, and here's Frank Shostak on "The Housing Bubble: Myth or Reality" from 2003... There's obviously Peter Schiff all over TV for the past 8 years...

    I guess I don't really know how much deeper you can stick your head in the sand when all of the people who spout economic nonsense even remotely similar to the shit you post here (Krugman) failed horrendously to predict a damn thing and in fact were actively advocating the very policies that led us to where we are today.

    You can easily go back from the pre-Great Depression predictions of Ludwig von Mises and F.A. Hayek and follow various Austrian school folks all the way up to today and you find them on the winning side of history repeatedly... And more importantly, their analysis is clear, and their reasoning is sound, so it's not just that the "say" X is going to happen, but unlike guys like Krugman in the NY Times, even in their popular articles, they actually show their work.

    Keep pretending you're not retarded though, Chad.

  • Sean W. Malone||

    Also, apparently Hit & Run won't let me post more than 2 links per comment, which is annoying. Something should be done about this...

    At any rate, there's dozens more articles & links available, from videos, to articles in economics journals & in newspapers, at the Mises Institute homepage, and of course, you could just do yourself a favor and buy "Meltdown" by Tom Woods.

    Hell, if you follow that up with the books on the housing crisis by Johan Norberg, who tackles the more global aspects of it, and Tom Sowell, who covers the policies in place directing the Fed created explosion of currency into the housing sector... All will be very clear.

  • Chad||

    Sean, lots of people predicted the housing bubble, me included. The reason I didn't purchase a house in 2006 (despite having ample reason to given my personal life circumstances) was because I believed prices were going to come down. However, I didn't know that the banking system was so heavily leveraged, and therefore never really thought about how that would cause their house of cards to crumble.

    Reading through the links you cited, I see as many wrong things as right. They don't seem to be any more or less right than the random guesses of random people. And in any case, you are likely citing perma-bears. What were these people saying in, say, 1993?
    From the studies I have seen, the people that guess market moves right this week are no better than anyone else when it comes to next week.

  • Chad||

    And btw, Sean, I also had the majority of my 401k and personal savings in bonds during the collapse. I am about even for the last two years. I like to think I am smarter than the average bear, at least until I am not.

    In any case, long-term prediction is easy. I have around three decades until retirement, and there will be a couple of busts and probably one nice long run during that time. Good luck hitting them.

  • Chad||

    One more thing, Sean: Shiller is by no means a free market zealot.

    "The economics of the textbooks seeks to minimize as much as possible departures from pure economic motivation and from rationality," Akerlof and Shiller write. "Our book marks a break with this tradition. In our view economic theory should be derived not from the minimal deviations from the system of Adam Smith but rather from the deviations that actually do occur and can be observed."

  • Sean W. Malone||

    Chad, the percentage of people who either are Austrian school economists, or those who's analysis relied on the Austrian methodology & Austrian Business Cycle Theory vastly outweigh any of the neo-classical guys or Keynesians in the "who predicted it" thing.

    Again, you can go back and actually read what these people were saying in 1993 if you want - and you'll find that the analysis is very consistent.

    You can call the Austrian school folks "permabears" if you want, a term easily picked up from CNBC, but the fact of the matter is - my people loudly warned of the crisis, and explained clearly why it would happen. The analysis is comprehensive, logically consistent, and has proven correct repeatedly since the 1920s... Most people did get things horribly wrong because they, like you, have failed to understand that basic economic principles actually do apply to the macro economy.

    And frankly, your "I predicted the housing bubble too", is one of those ex post facto kinds of claims that make the rest of your point kind of meaningless. On the one hand, you're willing to say that the Austrians don't know what they're talking about and that it's completely random whether or not their broken clock is right twice a day - and on the other, you're saying that you, using what I assume was some basic common sense (which is how I recognized the housing market as a bubble before I fully understood the Austrian position), did get things right.

    Well which is it? Does logical reasoning and common sense allow people to understand why things went wrong, or doesn't it?

    The fact of the matter is that you have no desire to actually read and assimilate any of what I've tried to explain to you over the last several months on this topic. You can easily look up what people wrote, you can analyze their work... You claim to be good at math, go check Mark Thornton's papers... You claim to be good at logical reasoning (not actually true, but whatever), so you should be able to strike up a debate with Bob Murphy, Joe Salerno, Bob Higgs, Walter Block or any of the other dozens of professors of economics who subscribe to the Austrian position and get at where their arguments have actual flaws.

    You NEVER do that.

    You don't even try. The best you do, is pretend that these are people who's positions aren't based on any logical reasoning or evidence at all, but instead they only got everything right this time (and last time, and the time before that, and the time before that, and the great depression...etc.) because they always have a negative outlook.

    Well, Chad, that's bullshit, and if you actually read what they were writing occasionally - you might actually know that.

    Their theory is sound. Their evidence is overwhelming. Their methodology actually makes sense... The Keynesian theory is a pitiful failure and has only one benefit: Politicians, totalitarians and douchebag "useful idiots" like yourself love it because it gives them license to kick problems down the road, print tons of money, balloon government spending and pretend it doesn't matter.

    So either debate the theory & the evidence, or don't. I don't care. I already know what you are. I just don't feel like it's my duty to keep providing you article after article to support my point when you don't really care enough to think about them with any honesty anyway.

  • Sean W. Malone||

    Additionally, Chad.

    It's remarkably disingenuous to talk about whether or not a person can predict *why* an event will happen, and say that it *will* happen given a set of conditions as if that is the same thing as that same person being able to predict precisely *when* an event will happen...

    Predicting that the massive increase in the supply of money will eventually lead to inflation, for example, is an easy claim to make. There are too many factors in play for me to know exactly when prices will start to rise significantly - that will be determined as a matter of when bankers decide to start distributing the newly printed money they've been floated by the Fed. It could also be disrupted by the Fed raising interest rates significantly (although, only at the cost of sending the economy back into severe decline).

    The economy involves hundreds of millions of people in the US and realistically, billions of people around the world. There is no way to have enough knowledge to "time" the market except within very narrow conditions. Successful speculators and short-sellers do this constantly. But being an economist and being an investor are entirely different things!

    You conflate the two as if they have anything meaningful to do with each other, and they really don't.

    To give you another analogy, I might say to you, "Chad, if you keep having sex with tranny hookers, you're probably going to get a disease". When you actually get syphilis is still unknowable, but the fact that you will probably get it is still very likely.

    Do you see how this works? Some things are knowable: Certain actions will have predictable results. Some things are not knowable: In a hugely complex system, timings are hard to predict, period.

    That has always been the Austrian position on prediction. Ironically, their predictions have consistently been superior to that of the "planners" who, when advocating the creation of the Federal Reserve, suggested that they could stop all market downturns from ever happening again.

  • Chad||

    Sean, if your vaunted economists can't predict when the bubbles are happening, then their predictions are no better than simply extrapolation of the past (which was full of bubbles) into the future. The Austrians never quit predicting bubble collapses, so it ain't much to crow about when they get one right. It surely ain't very impressive when they gloat about getting the easy question right (will their be another bubble someday?), but scream "unknowable" to the tough question (when?). That's a total cop-out.

    Some more fun links for you.

    http://leiterreports.typepad.c.....omics.html

    http://dissentmagazine.org/article/?article=992

    Schools of economics are like religions - partially true, partially false, partially contradictory, and useful except when they aren't. Austrian economics is a hard-core fundamentalist religion, much like libertarianism, that defines the world in such a way everything is "self-evident" within the bounds of its assumptions. Outside in the real world...well, that is a different story.

    Well which is it? Does logical reasoning and common sense allow people to understand why things went wrong, or doesn't it?

  • Sean W. Malone||

    Oh c'mon Chad.

    The weatherman has told me that it's going to rain in Los Angeles on Wednesday. But somehow he wasn't able to tell me that it was going to start at 9:47am and the first drop would fall on the Gene Autry star on the Hollywood Blvd. "Walk of Fame".

    You're just being an idiot if you think it's reasonable to expect to get predictions down to the day in a system as complex as the economy.

    And by the way, your Cochrane link is silly, Bob Murphy already covered that... But I'm not a big fan of the Chicago school overall, so I'm not sure what you're trying to say regardless. The Chicago guys use a lot of the same bad methodology that the Keynesians do. It just so happens that they understand the limits of knowledge a bit better than the complete government shills lusting to control the economy found in some of the other schools.

    The Hayek article is too long and it's too late for me to comment on in depth here, but I believe the author misunderstands the way Hayek used the term "collectivism", as that doesn't refer to group "bargaining rights" in the sense of voluntarily organized unions, but rather reflects the subjugation of individuals into group identities - such as the reduction of individuals into the category of "The Jews" or "The Blacks" or "The Gays". Individuals are certainly free in Hayek's worldview to form mutually beneficial organizations to protect their property and rights... And I generally take umbrage at the idea that small villages are "communes", since they almost all invariably were money or barter-based trading societies which respected property rights and *did not* just dump everyone's stuff into one big pot and distribute "evenly". Most of those kinds of societies were spontaneously ordered and lacking any real government just as Hayek talked about in some of his other works - except of course, the feudal lords who used force to take tithes from the people and claimed ownership of the land, again backed often by armies and state authority. Talking about Russian serfs in the 15th Century which came about as the result of an oppressive state lending it's power of force to the rich, well-connected estate holders is precisely what Hayek was talking about anyway, so it largely confirms, rather than disproves, his points.

    The Road to Serfdom is largely just the story of the rise of Hitler anyway... And not surprisingly the rise of every other dictator as well. It's also not a bad description of the direction America has been heading for a while.

    At any rate, I don't see what relevance it has to this discussion. Unless you want to talk about the limits of knowledge and Hayek on economic calculation... But that's not the article you linked, so I guess not.

  • Sean W. Malone||

    And obviously they did predict when the bubble was happening - ruminations started upon the outset of Greenspan's policies in 2002, and Thornton, as I linke above, was quite clear on the bubble by 2004, and Schiff was on TV all the time by 2006-2008 going up against guys parroting Bernanke's "Everything is fine!", and of course, Ron Paul's campaign spent a great deal of time talking about it.

    The point is that there was no way to know in advance that the bubble would actually pop on October __, 2008.

    They could, of course, make a guess at the date, and I'm sure some people had their own betting pools going, but it's pretty unreasonable to expect them to know an exact time.

    Consider 1929. How would someone like Mises have known what the Fed reaction to the first bank failure would be? When the National City Bank of New York experienced a run, the Fed didn't support them by backing their deposits, causing the collapse of the bank, which was basically the first domino to fall. The overall collapse of the bubble (again, created by a large increase in the money supply throughout the 1920s) was inevitable and Mises knew as much. But if the Fed had acted differently, they might have staved off the collapse for another month - or more.

    It would have been remarkably foolish for Mises to arbitrarily select a specific date that the New York Bank was going under. How would he know that?

    If you're expecting that kind of prescience, you're expecting the paranormal.

  • Sean W. Malone||

    Oh, additionally, in 2004, if you'd actually read the articles I linked and dug around for the rest that are out there, you'd know that the Austrians weren't predicting a bubble "collapsing" at that time. They were merely pointing out that a bubble was being created and could get deflated naturally if there interest rates were raised and M2 stabilized. As interest rates continued to be held to "record lows" and M2 continued to grow, their warnings became more pronounced... Thus you had the Peter Schiff business from 2006 on.

    Again, not my or their fault that the policies that caused the bubble never changed to something more sensible.

  • The Libertarian Guy||

    You intentionally give more to the IRS than you need to, yet you are "smarter than the average bear".

    Howls of derisive laughter.

  • Soonerliberty||

    David and Chad remind me of the American communists I have met all over Europe while living here. One was looking out over the rubble in St. Petersburg better known as Krushchovki and talked about a better tomorrow under communism. I wish I could've taken a picture of the absurdity. These types of people suffer from the "better king syndrome." If we only had better planners, things would finally work. Of course, they would be part of the planners and experts. They would put in a plan to fix the old plan that was put into place the fix the initial plan that didn't work. There's only one thing we can count on. There is no end to the arrogance of those who think they can live our lives better than we can. The unfortunate thing is that they do not care about the havoc they wreak upon society and the poor.

    They also have no idea what values libertarianism extols. They bash the greedy and assume everyone is greedy except the high-minded bureaucrats. They claim we are motivated by greed, selfishness, etc. Yet they fail to realize that their own plans are the most greedy, selfish, despicable, and anti-humanitarian philosophy known to man. They cannot understand systems that are not designed by humans, which is probably why the free market functions so well. If it had been planned by Chad and David, well, we'd probably not have internet. Libertarians do not lay claim to others' money or property. We do not presume to teach them how to live properly. We also know that free markets favor the poor. Of course, to realize this, one would have to understand that we don't even have capitalism in America, which is a gargantuan hurdle for statists to get over.

    As Erich Fromm put it, there are those who can deal with freedom and those who cannot. Those who cannot normally turn to sadism and masochism. The sadist wants to run everyone's life and create order, because without it, his life has no meaning. The masochist wants his life to be run by a higher power. He, too, needs it to give his life meaning. The worst, however, is the positive sadist who enjoys helping others to show his own superiority. We should pity such people as David and Chad. In their eternal quest to return to mommy and daddy's cradle of innocence and security, they seek power to compensate for their insecurities. It is they who make authoritarianism possible.

  • Old Mexican||

    A lot of words from someone that confuses "value" with "market price", which is why you were not able to detect the error in your assumption that a straight trade of a horse for a car is a trade of things of "equal value."

  • Old Mexican||

    Here's the example of what I am talking about:

    Re: David Hennessy,

    The man had the horse because he valued the horse and still does. It wasn't worthless to him and I'm sure he wants both the horse and the car. Sure, there is an expectation(hope) on both sides that there will be a tiny, incremental percentage of perceived increase of wealth. In mathematics that resolves very quickly to zero as you ask "How much more would either of you give?" A goat? NO. A chicken? NO. A penny? NO.

    David, you are confusing market price with value. Value is an ordinal concept, not quantitative. People do not say: My value for this is five. People instead value things in an ordinal way: I value A more than B, but value B more than C, and so on.

    You cannot use math to quantify the value each person assigned to the item they exchanged, that's impossible - YOU CANNOT READ MINDS!

    The exchange existed because the horse owner valued the car more than the horse, at the margin, and the car owner valued the horse more, at the margin. HOW MUCH they valued, it cannot be determined.

    The PRICE you see for items in the market is only an approximation, a proxy, of how much people value certain things they exchange, through the use of a currency (money) or INDIRECT trade, and only after the market for goods A, B, C, etc. have cleared. The average exchange quantity of money for goods A, B, C. etc is their market price. But you cannot apply the same comparison when it comes to direct trade (barter) which is the case with the car and horse.

    The two participants indeed did not create anything, but both ended up being WEALTHIER because both obtained goods they valued MORE than what they had before. The fact that YOU do not value those same things in the same manner is only evidence of your OWN subjective valuation and NOT of any OBJECTIVE value the two goods may have (which they don't - NOTHING has an objective value.)

  • Mr. ?||

    I am close to becoming a communist

    Close? Hell, David, you're within a curly pube of the finish line.

  • ||

    I am an economic agnostic, so that's why I can only criticize your logic but I don't have the answers to the world's problems

    Don't underrate yourself. You're a True Believer in Disney Economics. You believe despite it always fails, you have Hope, for the Change that will result from government.. as Bullwinkle said "This time for sure!"

    I am close to becoming a communist because I don't think most of you can play nice with money so you probably shouldn't be allowed to have any.

    And there's your god, as if we had any doubt in your faith. The guns that you think the state will use as you see fit. How's that working for you?

    A century of collectivist policy and growing government and income is more diverse than ever before.

    I wonder why that is hmm? Don't worry, that's rhetorical. The answer would require you to question your god.

    Freedom is your devil, and you must exorcise the heretics who would speak out against your god.

  • ||

    David Hennessey-

    shouldn't be allowed to have any?

    Is that "playing nice?"

  • ||

    Oh, Don't worry Chad is going to make sure that you get all your basic needs met with the taxes that you won't have to pay. Then we'll let you have a little and see how you handle it.

  • Mr. ?||

    Who are you to "let [anyone] have a little", David?

  • ||

    I'm the majority of Americans who don't buy bullshit and will never vote someone like you into office. You can pretend to be libertarian but, in fact, you are economic anarchists. I was a long time member of the Libertarian Party but it will always be an abject failure rejected by every intelligent voter in America and the world. A bullshit minority of whiners who want everything and want to pay nothing. A blight on humanity. You don't need economics lessons, you need a soul transplant. Then you need to go back and ask your mother to repeat your kindergarten lessons because you failed them before you failed economics. But you can't, your mother is a liability to our nation now that she produces nothing and has become a leech, you must have knocked her off long ago. You are weak, dependent children pretending to be survivalists but you are the first to run to the nanny state to protect your stuff from the unwashed, lazy masses. If you got your way, America would be a failed state like every other nation that has no strong central government to maintain order. If having a weak Government or none at all is so great there are a few countries you should be happy to invest in - like Afghanistan. Move there and try to make a living. Try Somalia, you can be a pirate. Just get the hell out of America and leave it for those who love it here, flaws and all.

  • twiddle dum||

    Either you've just escaped from a mental institution or this is good parody. In the case of the former, you need to upgrade your prescription. In the case of the latter, where can I get some of that?

  • Old Mexican||

    Re: David Hennessy,

    You can pretend to be libertarian but, in fact, you are economic anarchists.

    Give the man a cigar! And what do we have for this contestant today, Johnny?

    A bullshit minority of whiners who want everything and want to pay nothing.

    Those are called SOCIALISTS - look it up:

    "People that want everything but want somebody else paying for it"

    You don't need economics lessons, you need a soul transplant.

    Ok, we'll get the transplant - YOU get the lessons, because David, baby, you're lacking!

  • ||

    I was a long time member of the Libertarian Party

    Ok now you're just lying.

  • Libertarian Gay Guy||

    I gotta say, guys, that this has been one of the best discussions I've read on reason.com in quite a while. David H. is a fool but he's been a useful one.

    I think I have a little crush on Old Mexican and Hazel.

  • Mr. ?||

    Lame.

  • Mr. FIFY||

    A gay guy likely wouldn't have a crush on a female. Generally speaking, that is.

    -147 points. The worst Chip Bok cartoon is better than that post up yonder.

  • ||

    Sorry, dude, but you will have to apply those negative points to yourself.

    Hazel Meade is a character in a book and the poster IS a guy, IIRC.

  • ||

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

  • Mr. FIFY||

    That's beside the point, Marshall. It was still a lame gay-bash troll attempt.

  • Old Mexican||

    Re: Chad,

    What costs are McMansions placing on everyone else?

    1: Environmental effects, which you aren't paying for.

    He would not be paying for because they don't exist.

    2: The fact that everyone else has to drive that much farther to get around your property. One 2.3 person house per acre is sprawl, and creates all sorts of transportation issues.


    This is pure mental handjob: so people now LAND their McMansions in the middle of the road, overnight? I love how you decided the exact acreage to call "sprawl" - you know everything.


    3: Psychological effects, as everyone else tries to buy an even bigger dick than their neighboring McMansion-owner is flashing to the world.

    You mean they would be envious? Isn't that the sole problem of the envious? Why would people's hangups be the responsibility of others?

  • The Libertarian Guy||

    Chad upthread tried to make a case for one-world government and a global tax, claiming we libertarians should be in favor of such. So, right there, Fail is in effect for poor, brain-damaged Chad.

    I guess national sovereignty and self-determination don't fit into Chad's Plan - we have to be under the thumb of an even-huger bureaucracy and crushing tax rates to fulfill his vision. Fuck if I'm gonna answer to the UN... Chad can bow to them all he wants and pay his extra taxes that he thinks will do some good, but he's only cheating himself out of his own money and his own individuality.

  • Old Mexican||

    Re: The Libertarian guys,

    I also loved his argument from envy - you should not have a McMansion because people get envious.

  • The Only Libertarian Guy||

    There's just the one, OM. Some doofus created the "Libertarian Gay Guy", an obvious Fail as it is politically-incorrect for liberals to use sexual preference as an argument weapon (unless they feel like using it, showing the hypocrisy of their supposed aversion to insensitivity).

  • Chad||

    Again, LG, please explain why the libertarian ethic that you crow so much about stops at the water's edge. Aren't nations just arbitrary lines in the dirt?

  • Old Mexican||

    Chad, people do fence up their property.

  • ||

    Old Mex again I should have guessed. Whose property? I thought only private people were supposed to own the country. Shouldn't the people who own the land on the border get to choose whether they want it fenced. There's a bunch of them libertarians down in Texas raising quite a storm about that big wall going right through their property. Must be those dirty liberals that want the border fenced, eh Mex. That is your name? Where ya from Mex?

  • Old Mexican||

    Re: David Hennessy,

    Whose property? I thought only private people were supposed to own the country.

    You mean they don't?

    That is your name? Where ya from Mex?

    Fuck you! I'm not giving you shit!

    See the advantages of being free?

    By the way, yes, I am from Mexico.

  • ||

    Guess us liberals were a little late getting that fence built. Lucky for you, I believe in open borders and completely free movement of people to wherever they want to live. I'm not afraid of Mexicans or any other immigrant group. Once you're inside, however, there is a tendency to want to prevent others from getting in.

  • Sean W. Malone||

    Except that I don't think a single libertarian anywhere supports "closed borders". OM is an anarcho-capitalist, as well, which means that aside from fencing off his own property if he so chose, if he had his way, there'd be no government to enforce anti-immigration policies like building 700 mile walls along the Rio Grande.

  • The Libertarian Guy||

    Chad, you're the one who wants, quote, one-world government and a global tax, unquote. So STFU and keep your dangerous ideas out of the public-policy arena. They have enough bad ideas as it is.

  • Mr. ?||

    Being envious is Chad's whole meaning of life.

  • Old Mexican||

    Re: Chad,

    Given that a number of European countries have similar worker productivity numbers as the US, despite much higher tax rates, your screams and cries that tax rates just kill the rewards necessary to motivate people to do a good job are simply proven false.

    Taxes do not stifle productivity, Chad, they stifle investment - which explains the high rate of unemployment in those European countries. What stifles productivity is Unionization and salary caps.

    Indeed, a number of psychological studies have shown just the opposite - people perform WORSE when there is money explicitly on the line.

    Cite, please - otherwise you are committing the same sin as the talking heads in talk shows who argue that "study after study has shows . . ."

    It is interesting that you bring up inborn talents and abilities, which are, in fact, luck.

    Wow! Give the man a cigar! People are born with different traits, at random! What a realization!

    Take me and my brother, for example. I earn about triple what he does. So the difference between us boils down to luck, more than anything. Is this fair? Is it desirable?

    Is this fair for whom? If you feel so guilty, why not subsidize your brother?

    Oh, I get it - you want the rest to subsidize him just so YOU don't feel guilty.

    Tell me, don't you think that his income and his current situation is a result of his choices?

    If you didn't know which one of us you were going to be, wouldn't you buy "insurance" against being my brother?

    I don't need such insurance - I simply make different CHOICES.

    Libertarianism is the lottery winners sitting around claiming that they wouldn't have.

    Nice strawman. Hey, it's beginning to be your specialty - attacking spurious arguments that you yourself invented! Good going there, Chad! Atta boy!

  • ||

    Damn you did a great job, you chose not to be Chad's brother, what foresight you had. Wait a minute...being Chad's brother is great, Chad wants to give him stuff for nothing but you decided to be healthy, strong and intelligent. Stupid you. You surely don't need insurance cause you have additional abilities in prophecy so you know you will never need the care of others. Can I wear your rose-colored glasses... oh that's better now I can see that you're just an ass. Thought you were human for a moment.

  • Old Mexican||

    Wow, David - nice way you addressed my points! You sure deserved that debate 2nd place trophy you got in 9th grade.

  • ||

    Thanks, I'd be nicer about it but I've taken all the libertarian double-speak I can handle so if I have to be a little blunt-tough beans. I'll say the same thing that my Dad told me when I was nineteen, full of my own indestructibility and fresh off reading "Atlas, Shrugged". It hurt at the time but I needed to hear it. He said, "I hope someday something happens to you that leaves you dependent on others for your survival." It won't hurt you, probably, but for my own father to wish harm on me for my inability to learn compassion was eye-opening and thought provoking. It took me many years to really catch his full meaning but if you are ever so lucky to lose all your ability to produce but keep all your need to consume you won't be spouting nonsense so much.

  • Old Mexican||

    David, spare me the mental handjobs. You haven't addressed the first issue which is that trade is NOT a zero sum game. You said it was by confusing a market price with value, which means you do not understand economics. Now you get to spill all this useless verbiage on everybody, totally flying off tangents hither and thither.

  • jean||

    Okay, the source of all this vitriol and half-baked nonsense is all clear. Guy gets wound up by Atlas Shrugged, temporarily embraces libertarianism (and quite likely the worst aspects of Ayn Rand), but doesn't really grasp the economic reasoning. Then he gets shamed into rejecting it by important people in his life - partly because he doesn't really understand the theories and so can't defend himself properly and partly because he's embraced a twisted version of libertarianism and feels so guilty for his own personal weaknesses in embracing a wrongheaded and twisted version of something he never really understood. So someone who reads Atlas and thinks that says everything about libertarianism and walks away feeling smug saying "yeah, she's right..fuck the poor" has only got himself to blame for his own personal flaws. Easy to project that onto everyone else though.

  • ||

    Now I not only have to defend my economic views but also get an amatuer psychonalysis. That took some real insight, one story of a 58 year old man from his childhood and jean's got it covered. I have about a half hour next wednesday, should I make an appointment? OOPS? I was laughing and drooled on the keyboard, really! I think the libertarians should lighten up, your ideas on everything are so far out of the mainstream that you can't expect the majority of us to try to unravel your obscure reasoning. You have to at least understand the people who disagree with you. Really. I don't know how to say this, most people don't want change at all, left or right. You talk all radical and they get scared. For God's sake don't tell people you want to take away their bennies. I know you want to be honest but politically you have to ask people what they want, not tell them you know what's best. That's what the liberals do and it torks you, right? You get a non-believer in your midst and you berate him or her for not agreeing. Ironically, I agree with about 75% or more of the libertarian platform. I just left the Democratic Party over the corruption and unnecessary spending of the health bill. I am probably going to join the Greens and one reason is the radicalism of libertarians. It has become very close to anarchy. I want to smoke what I want, drink where I want, have privacy, gun rights and other things but not to send my country into lawlessness. I certainly don't want old people on the street with no income, sick and mentally ill people uncared for and endangering public safety. There are areas where many progressives and libertarians could agree but neither want any allies that are not 100% on board with their most extreme positions. You have purity and no influence. Sure you're crying, you see the country cheer wildly for the most progressive President you've ever seen. Shouldn't that make you think that most people don't understand you are saying or don't agree or both? Either that or they can't act in their own best interest. That is the biggest problem, people are sheep, they don't act out of individual enlightened self-interest. That doesn't mean we should end democracy and institute communism or abandon "free" markets and capitalism. It means we have to keep it in mind and shape policies appropriately. Appropriate to who? Well....the Gummint, whether you like it or not. We have a Republic, if we can keep it. I don't like to be an asshole but I've been on the equivalent of an economic gangbang on this site so I told you what I think. I'll get kicked off soon, I can't believe I'll be allowed to continue to expose the stupidity of radical libertarianism for long. The progressives are no more open, as I said. Of course, if I do quit answering I will then be pilloried and you will all boast how you drove that communist off the site with your superior reasononing. Not in such nice words.

  • Old Mexican||

    Re: David Hennessy,

    I think the libertarians should lighten up, your ideas on everything are so far out of the mainstream that you can't expect the majority of us to try to unravel your obscure reasoning.

    Yes, Reason and Logic have the effect of humbling the intellectually lazy. You don't need to excuse yourself, Dave - we understand.

    I know you want to be honest but politically you have to ask people what they want, not tell them you know what's best.

    Don't be so harsh, David - where would we place all those highly paid technocrats that populate the government, if they cannot tell us what to do, what to think, what to eat, what to buy, what to . . .

    Because Libertarianism is NOT about telling people what is best. Libertarianism is about LETTING people decide what is best for each individual.

    Ironically, I agree with about 75% or more of the libertarian platform.

    You just don't agree with the Personal Freedom part - gotcha. Good to know.

    I am probably going to join the Greens and one reason is the radicalism of libertarians.

    First I heard the Greens were mellow.

    I want to smoke what I want, drink where I want, have privacy, gun rights and other things but not to send my country into lawlessness.

    Yeah, that's our platform - have freedoms and at the same time NOT have them. Sure.

    Chad, meet Dave - he also makes a whopper of a strawman.

    I certainly don't want old people on the street with no income, sick and mentally ill people uncared for and endangering public safety.

    Yes, well, charities DON'T want them there either, but I guess you are talking about government taking care of them through wholesale plunder and huge budgets.

  • Jean||

    David Hennessey:
    "You get a non-believer in your midst and you berate him or her for not agreeing."

    Your very first comments on these boards were full of insults - then you complain about personal attacks. Mr. Pot, meet Mr. Kettle. If you had actually wanted an honest dialogue you would have made assertions and asked pointed questions, sans the insults. But considering how you started, it's obvious that hasn't been your goal here - your goal is merely to shed off that early shame for embracing a poorly understood and twisted version of libertarianism by attacking a bunch of strangers on a blog whose worldview is different from your own. Has it worked? Feel better about yourself now? You call it amateur psychology but you walked into it by admitting you had been an early and smug libertarian (full of "indestructibility"...no wonder he so easily shamed your royal smugness) "fresh off of reading Atlas Shrugged" but was struck dumb by a shaming comment your father made. Hey, I get it; parents can be a powerful influence, especially if you look up to them and they tell you they don't approve.

    "I certainly don't want old people on the street with no income, sick and mentally ill people uncared for and endangering public safety."

    I'm a libertarian for two reasons: one I dislike the use of coercion. Two, I think there will be less of what you describe above under a libertarian or limited system of government. You can offer honest arguments, disagreeing with the utility of libertarianism but don't insist that what you describe above is actually something that libertarians "want" (even if you thought the conditions you describe above were a-okay when you were a self-satisfied 19 year old libertarian).

    "you see the country cheer wildly for the most progressive President you've ever seen"

    I think Johnson was more "progressive" and certainly more popular in 64 than Obama is now; Obama's numbers seem to be dwindling. I don't dislike the man, but I do disagree with many aspects of his program.

    "I'll get kicked off soon, I can't believe I'll be allowed to continue to expose the stupidity of radical libertarianism for long."

    Relax, Reason has tolerated far more obnoxious windbags than yourself. I don't think people get kicked off; at least certainly not for insulting others, hypocritically complaining about then getting attacked, making a lot of poorly constructed arguments through straw filled teeth, etc.
    The irony is that libertarians, in allowing you to continually insult us and make idiotic arguments, are much more tolerant than a lot of other folks who run so-called "progressive" sites, where you must register and agree to follow speech codes, etc.

    "enlightened self-interest"
    Well, I do believe people 'generally', baring a mental problem of self-destruction, follow their self-interest, though how enlightened it is, I'm not sure. But I doubt it's the only influence - the genes seem to have something of an influence as well.

    'We have to "shape policies appropriate.... to the Gummint"'
    ? You do realize how muddled that is, don't you? Who does the government represent afterall?

  • Jean||

    I think self-interest is often misunderstood because a lot of people assume it means self-interest isolated from everyone else's interest. But my self-interest more often intersects with others - hence the use of "enlightened". This gets mocked because it doesn't always happen, as though failure to produce 100 percent examples of intersecting interests negates the concept as a whole.

  • ||

    Paragraphs.

    I will then be pilloried and you will all boast how you drove that communist off the site with your superior reasononing.

    You're kidding right?

    Without new blood willing to display their ignorance and prejudice how would we make out points?

    Hell I read this site in large part to eviscerate ignorant idiots. We could all talk about economics and freedom with each other but that wouldn't get the casual reader to read as well as the prurient attraction of watching a moron being pummeled.

    And yes we also like it when you resort to name calling, it gives us cause to do the same.

    Dave you're gold to us.

    We don't want to run you off.

    We want you to stick around and keep bending over for us.

  • Old Mexican||

    Jean, you nailed it.

  • Sean W. Malone||

    +1

    Also David, you're a lightweight compared to some of the trolls seen on Hit & Run in the past and no one's ever been banned. Not even Joe, or LoneWacko - and LoneWacko has used a half a dozen aliases and regularly pesters the staff trying to get them to video tape politicians while asking them "ToughQuestions"... You will not be banned.

    But to add to Jean's point; the libertarian community's complete openness of speech comes with the very drawbacks totalitarian governments assume will happen if they allow free speech in their midst: People disagree with us. And we tolerate it... Because freedom is actually important to us. That gives you an advantage though in a sense - because our views aren't always tolerate elsewhere, so while our positions will be culled from HuffPo or DailyKoz, thus giving the appearance that we don't exist, you won't be culled from Hit & Run, thus giving you much more airtime to espouse your ridiculous nonsense than we'll ever get in return.

    On the other hand, we're infinitely better off because our ideas are regularly challenged whereas you will largely live in an echochamber.

  • JB||

    I wonder if Chad recognizes how much the US subsidizes Europe. Defense and health care are heavily subsidized by the US.

  • Chad||

    I think that European diplomacy subsidizes our stupid asses as much as our bloated military subsidizes them...and it costs a hell of a lot less.

    Big Pharma is completely global now, and in case you missed it, they have completely slashed US-based R&D and farmed it all out to China and India. To the extent that we still lead, it is more because of our incredibly generous NIH budget and the university system that feeds off it.

  • Old Mexican||

    Re: Chad,

    I think that European diplomacy subsidizes our stupid asses as much as our bloated military subsidizes them...and it costs a hell of a lot less.

    Yes, because diplomacy with a big and musculous boyfriend protecting your back tends to be VERY cheap.

  • Chad||

    Cite, please - otherwise you are committing the same sin as the talking heads in talk shows who argue that "study after study has shows . . ."

    Deci et al would be the standard response.

    http://home.ubalt.edu/tmitch/642/Articles syllabus/Deci Koestner Ryan meta IM psy bull 99.pdf

    There is a lot of argument back and for on this topic. However, a large number of studies have found that performance, particularly on mental tasks, becomes worse when extrinsic rewards are offered. Depending on the situation and precisely how the rewards are structured, however, rewards can produce mildly positive outcomes. In general, though, its pretty close to zero effect either way.

    Is this fair for whom? If you feel so guilty, why not subsidize your brother? Oh, I get it - you want the rest to subsidize him just so YOU don't feel guilty.

    I do subsidize my brother, both directly and indirectly through taxes...and I don't begrudge a dime of it. What I want, however, is all people like me to subsidize all people like him, because not all people like me have a poor brother, and not all poor people like him have a brother like me.

    Tell me, don't you think that his income and his current situation is a result of his choices?

    Partially, yes, wholely, no. The same is true for everyone. We are all products of chance and choice.

  • Old Mexican||

    Re: Chad,

    Partially, yes, wholely, no. The same is true for everyone. We are all products of chance and choice.

    For the problems we face because of chance, we have ingenuity. Trying to excuse wholesale and perfidious plunder of productive people's earnings just to satisfy your sense of envy or guilt is immoral. Your brother would be better off making different choices and facing his problems than receiving unsolicited help.

  • Chad||

    When you get really sick, please get back to me about how your used your ingenuity to get around all the roadblocks it put in your life. Don't expect any sympathy, of course.

    You really don't understand the working class at all.

  • Old Mexican||

    Re: Chad,

    When you get really sick, please get back to me about how your used your ingenuity to get around all the roadblocks it put in your life.

    Sure, Chad - it is not like I cannot purposefully act.


    Don't expect any sympathy, of course.

    I don't act to seek sympathy, Chad - that's irrational.


    You really don't understand the working class at all.

    Please don't let me into your mental handjobs, Chad - I AM working "class."

    What YOU don't understand is principles and economics. It took me a while to shed my socialist skin, after learning the detrimental effect my beliefs had on people - the whole 150 million that died last Century.

  • Ama l Gam||

    "It took me a while to shed my socialist skin" I knew you were a snake.

  • The Libertarian Guy||

    Chad hates working-class people, who are only good for exploitation by the liberal ruling class.

  • Tim2||

    I don't know your situation, but for every case of genuine sympathy there are loads of people who want to game the system to get free handouts or "get theirs" in the name of helping your brother. Politicians get far more votes providing handouts to such groups than they do helping genuine sick people, and they get a lot more by paying off various special interest groups who may or may not have him in mind; but will use him to claim the need to fund their pet project. This leads to a political allocation of capital and a punishes those who innovate and produce the kinds of things that could make your brother's life easier. The government also crowds out charity by providing it instead, so it isn't clear that people will just starve on the streets without government; family and civil society can meet such needs by many don't feel the need to form such organizations because the government is doing it. Government has no special knowledge to make it better at caring for your brother than people in the market, and little incentive to do so or do it well. In a free market there will be private charity available, more wealth, and more people creating innovations that raise everyone's standard of living.

    Libertarians shouldn't always be so quick to judge, some people are disadvantaged; but that doesn't mean government is able to help disadvantaged people in general any better than the voluntary actions of individuals can. Most certainly not a distant centralized bureaucracy in D.C.; if government has any role in social welfare it should be devolved to communities and states where individuals are more able to understand and affect what is done in their name and able to vote with their feet if government does something wrong. The problem with progressivism is that it just assumes that government knows the problem, how best to address the problem, and has the incentive to do so; and progressives make up for it by moralizing against libertarians who believe that voluntary action can do better. They won't accept from us anything less than names and phone numbers of who will take care of the poor, but demand from us blind assent based upon their good intentions and narrow focus on a handful of visible individuals, goods, and services at the expense of the numerous unintended consequences basic logic and sound economics predict will take place.

    Drug innovation is one case, where Chad ignores that the reason for this is that any company worldwide can develop a drug and earn a return in the U.S. market such that pointing out that some drugs are made in price controlled countries is meaningless when they have a sufficiently large non price controlled market in the United States. I've yet to see a study that can refute this point; while no study can ever encompass the still births of innovation due to economic interventionism. The so called intellectuals on the left can't recognize their own fallibility; and claim anyone who points it out is just conveniently using unfalsifiable arguments or is anti-intellectual.

  • Tim2||

    I say in help the disadvantaged in general because government is only going to pursue what people vote for, generally helping out whatever disadvantaged group is popular. Such as breast cancer patients. People who don't have a voting constituency are only costs, there is no political gain to treating them; the rest of the population has little incentive to even get informed and will just wonder why they paid all this money and it didn't go to breast cancer.

    Whereas in markets innovators will pursue anything that is profitable even if only a few people have the disease, at the very least they have more incentive to pursue such things than a national bureaucracy where rationally ignorant people are voting for leaders on a host of issues where medicine and transfer payments are one of many. The same "stupid people" that Chad doesn't trust to read a health insurance contract have to vote on the leaders who handle issues thousands of times more complex, how will they make an informed choice; and thus how will we get our super smart leaders like Chad? While what will happen if super smart Chad thinks up an enlightened scheme the plebs don't perceive to be in their interest?

  • Chad||

    I don't know your situation, but for every case of genuine sympathy there are loads of people who want to game the system

    Yes, all systems can be gamed, including markets. I have no idea how one could even begin to define whether the government or markets are "gamed" more, but at least in the case of the government, the rules can and are changed to prevent gaming. In the market there are no rules, and we just have to try to counter-game the gamers, and hope the system doesn't go bust while we are doing it (as it just did).

    I find how you guys keep using the word "innovate". I am an innovator, a scientist. I invent things. You know what, we don't get paid a hell of a lot - just a reasonably comfortable professional wage (scientists start in the 70s or 80s and finish around the 110s, typically). The "innovators" aren't the ones reaping the big rewards. Rather, those who control the capital and various parts of the system are. So quit yapping about "innovators" being discouraged by higher taxes. I wouldn't quit my job if my taxes went up a few grand, and neither would any of the hundreds of scientists and engineers that I know. Indeed, we would probably work for an extra year or two because we wouldn't be able to retire so early. I doubt it is any different in whatever field you work in. How high would your taxes have to go before you quit and ran off to the beach to sip Mai Tai's until the end?

    Can you give me some evidence that the private sector handles poor elderly people well? Where in the world have they tried that in a modern society? Or do you expect all the women to quit their jobs so they can stay home with grandma, like it used to be in the good old days?

    Government has no special knowledge to make it better at caring for your brother than people in the market

    It doesn't need any "special knowledge". The government provides him with a tremendous number of services, for practically no cost to him. His social security and medicare are subsidized by me and those like me, and so will his medicaid if/when he qualifies. I also pay for everything from the roads outside his door to the soldiers that protect his home...and I don't begrudge a dime of it. How can you argue that this doesn't help him? Why do you believe that the government needs some "special knowledge" in order for me to pay for my brother's police protection or his childrens' education?

    little incentive to do so or do it well

    Again, I refer you to my citations of intrinsic vs extrinsic rewards. You vastly over-estimate how much cash has an effect on peoples' behavior. It is not a good motivator at all. You are making the incorrect libertarian assumption that if someone doesn't have a direct financial stake in something, they will do a poor job.

    Drug innovation is one case, where Chad ignores that the reason for this is that any company worldwide can develop a drug and earn a return in the U.S. market...

    You are living in the 80's. The market is global now, and we are down to only about 40% of the market. Whatever lead we have in R&D is largely because of the expertise we have in NIH-funded clinical trials. That too will change as Big Pharma finds it is cheaper to test on Chinese and Indians. I do, however, love how you are arguing that we should continue to overpay for drugs. Gotta love our system, eh?

  • MS||

    "The government also crowds out charity by providing it instead, so it isn't clear that people will just starve on the streets without government; family and civil society can meet such needs by many don't feel the need to form such organizations because the government is doing it. " I often wonder if the person writing this absurdity actually believes their own words. The libertarian idea that charity will/can be the end all is just naive. Charities can barely handle the load they have with the declining economy. Libertarians will never be taken seriously when it comes to this issue till they have a better solution than the Santa Claus principle.

  • ||

    Chad, at least in the market, one of the gamers does not HAVE GUNS backing them up, and jails, and police forces.

    Yes, in a free market, you game back the gamers, because the rule are the same for you and for them. Because they don't CONTROL THE RULES OF THE GAME. Only the government controls the rules of the game, and the whole point of gaming the government is the game the rules of the market, with guns, backed by force. If you take government OUT of the equation EVERYONE IS EQUAL, because NOBODY controls the rules and can use force to make people obey them.

  • Chad||

    Everyone is equal? Really? What was alll that crap about talent you guys were blathering about?

    You guys sure do live in a fantasy world.

  • Sean W. Malone||

    You do understand the difference between political & legal equality (good) with outcome equality (impossible to do without annihilating legal equality), right?

    No... Of course you don't.

  • The Libertarian Guy||

    No, it's you who are living in said world, Chad. There is no way to force people into that equitable paradise you seek. Even if we got anywhere near it, there would STILL be people "at the top" - but this time, they would be politicians living the good life while we toil about making the same money as everyone else and nobody has more stuff than the next guy.

    Much as you try to say otherwise, that is EXACTLY what you want. It's horseshit and it's no more tasty than bullshit, one with common sense would surmise. So stop trying to feed it to us.

  • Sean W. Malone||

    What's kind of bizarre is how this model is exactly what we've had for thousands of years, and the one that Chad advocates is just more of the same.

  • Josh Fulton||

    Saudis fire 1400 rockets into Yemen

    http://joshfulton.blogspot.com.....yemen.html

  • Old Mexican||

    Re: Chad,

    [T]he problem is that when you mis-allocate resources, it affects me. For example, when you buy an SUV rather than say, a Civic, it drives up MY gasoline price and MY commodity prices.

    It is not YOUR gasoline, and buying an SUV is not misallocation of resources - you do not understand the concept. If gasoline prices go up, they generate an incentive to produce MORE and reap the extra profits - only hindrances like, oh, THE GOVERNMENT, would keep the prices of gasoline UP despite market forces.

    It creates more damage to OUR roads and OUR environment,
    causes more noise on EVERYONE'S property, puts other drivers and pedestrians at risk due to its large mass.

    Yeah, that's the problem with SUV's - they are so wide.

    It also decreases visibility for other drivers who can't see over or around such large vehicles, again increasing danger.

    Yep - forget about 40 ton rigs and RV's: the biggest driver-blinder are SUVs.

    It requires larger parking spaces and therefore larger parking lots, which in turn further spaces out destinations, requiring ME to drive farther and all but ruling out walking.

    Just imagine what would have happened if everybody was still driving Chevy Impalas and Packard Super Eights. Oh, the humanity!

    In theory, the government could attempt to calculate the damage each of these factors cause, and build it into taxes, so the "market" could sort it out.

    In practice, Socialism cannot calculate. How do you obtain the cost of something if you can only know a COST by looking at forgone opportunities, which cannot be guessed?

    But obviously, there are so many factors that it is unlikely they would get any closer to the true answer by this mechanism than just using common sense.

    You mean by guessing?

  • Chad||

    You mean by guessing?

    Yes, guessing - which is better than the libertarian reponse of throwing your hands in the error and just assuming zero, no matter how bad of a guess zero is.

  • Old Mexican||

    Re: Chad,

    Yes, guessing - which is better than the libertarian reponse of throwing your hands in the error and just assuming zero, no matter how bad of a guess zero is.

    You don't get it, Chad - if you have to guess the cost of a problem, the problem doesn't exist. A Cost is the value of the best foregone opportunity compared to the chosen course of action or good, but those have to be known and only individuals FACED with those choices can know them.

    Quickly, guess! What's the color of my dragon?

  • Chad||

    This might be the stupidest thing you have ever said...and that is saying a lot.

    Hmm...how much would it cost if I got hit by a bus? Hmmm...not exactly sure, so I guess buses can't hit me and therefore the cost is zero!

    An educated guess is better than sticking your head in the sand. Get over it. Seriously.

  • ||

    Because nobody in charge of the guessing would have any interest in making up a guess that is to their political, economic, or personal advantage.

  • ||

    First fatal flaw, Government is inefficient. So what? This has nothing to do with his point so why is it a flaw? Three solutions, improve the efficency of Government, make it smaller, eliminate it.
    You say it won't improve, history proves it. I say it can't be made smaller, no one will vote for it, plus history. We both know it's stupid to talk about anarchy.

    Second fatal flaw, Government overlooks complexities and unintended consequences. Again, he doesn't attempt to link this to the slice-of pie or zero-sum except, I guess, alluding that his zero-sum idea is one of the unintended consequences that is overlooked. There is no reason to believe that the unintended consequences will all be negative and if they can't be measured or predicted then why worry about them? Again, your solution: Make Government smaller. Mine: Pay attention to unintended consequences and never elect Republicans because they can't govern or manage an economy. Anarchy, no solution.
    Third and final fatal flaw is that Democrats don't follow their own advice. That is not a flaw of the zero-sum theory, it is an encouragement to use it and not even sarcastically. If zero-sum is right then we need to rein in spending but if, as Bush and you argue, the pie just grows and grows and never shrinks then we can grow our way out of our deficit. Thus deficits don't matter, Democrats are stupid to apply pay-go or include the war in the budget.
    I don't see where any of these arguments pertains more than tangentially to the economic consequence of zero-sum thinking and on the last one it supports it.

    Sorry if I found this article hilarious and not worth refuting point by point but I'll respect you enough, Old Mex, to waste my time on an article that was alot of verbiage and little substance.

  • Old Mexican||

    Re: David Hennessy,

    First fatal flaw, Government is inefficient. So what?

    It is inefficient in the way that government cannot allocate resources where people want them - only the market achieves this by way of supply and demand.

    We both know it's stupid to talk about anarchy.

    Don't presume to know what others know. It may be stupid to you because of your intellectual sloth, but don't assume that the rest of humanity is just as slothful as you.

    There is no reason to believe that the unintended consequences will all be negative[...]

    There is no reason to assume that they will NOT be negative.

    [...] and if they can't be measured or predicted then why worry about them?

    You are right - if you are fixing your heater without knowing what you're doing (the same way the government types don't know what THEY are doing) and you cannot predict that the heater will do eventually, why worry? Right?


    Third and final fatal flaw is that Democrats don't follow their own advice.

    No, they follow it quite closely - that was the problem back in 1933-1945, as it is now.

    If zero-sum is right then we need to rein in spending but if, as Bush and you argue, the pie just grows and grows and never shrinks then we can grow our way out of our deficit.

    Bush argued this? Interesting, because I certainly did not, nor have I read any Austrian economist argue this.

    Thus deficits don't matter[...]

    Not until the collectors come after you . . .

    I don't see where any of these arguments pertains more than tangentially to the economic consequence of zero-sum thinking and on the last one it supports it.

    You misunderstood the article - go read it again. The author points out at the irony of anti-market ideologues accusing the market of being a zero-sum game when at the same time IGNORING the TRUE zero-sum game that the government plays.

  • ||

    Government overlooks complexities and unintended consequences.

    You suppose that governments keep doing the same things with the same results and these are unintended consequences?

    You spend your xmas eve waiting to see Santa Claus too?

  • ||

    One more thing, the article is badly misleading in saying that Democrats, like Michelle Obama are applying the zero-sum logic to the economy.
    "Why won’t people who love to make zero-sum arguments about the economy apply their own lessons to government spending?"
    They are not, they are applying it to the budget which is exactly where he wants them to apply it. They say that the budget doesn't have enough in it's limited pie to give slices to war, corporate welfare, infrastructure, education etc. without someone giving up something. Her "giving up" would be done by someone with money because, for some strange reason, those are the people the Government taxes. Hard to get taxes from unemployment benefits. Democrats don't necessarily believe that zero-sum applies to the economy, at least, I haven't heard it. I think it's a straw man.

  • ||

    Oh yeah, I forgot to answer the free trade argument. A forestry company in Northern Minnesota cuts trees, loads them on ships and sends them to China. There they are made into windows which are shipped back to Minnesota to be sold in a Home Depot. Really. Real oil is burned to ship it. Real time and effort is expended to move the lumber and products around. A foolish non-ecomnomist would say, "Look at all the waste and pollution and my father made those right here ten years ago, and now he works in a Hardees." All so that we can imagine that we have free trade or free competition and we reap some unseen, unmeasureable, increase in wealth. That's just like the fundamentalist Christians who insist that the earth is 6.000 years old in the face of visible, tangible scientuific evidence to the contrary. You ignore the facts in front of your noses if you say free trade is more efficient because your theory says so. In addition to ignoring what a third-grader can see you also cling to a belief that there is such a thing as free trade. Or that we should want it if it existed. You ignore history completely, China will never engage in free trade and neither will any other responsible country. They also will never have a floating currency and you know what that means to us. I don't blame them, I'm glad they are doing so well but I wish the so-called "free trade" had really been free trade not just unilateral economic disarmament on the behalf of W. The tariffs are just the right beginning because that is the only realistic way that we can undo the damage and negotiate real free trade that helps both countries. Does the author think that we should just politely request that China let us out from under her thumb? When does he expect them to open their markets and fix their currency and abandon their heavy obstacles to free trade? Do you folks have a Libertarian Party in China? Maybe someone there could go chat with the Comrades. If not, I'd like to hear a solution.

  • Old Mexican||

    Re: David Hennessy,

    Oh yeah, I forgot to answer the free trade argument. A forestry company in Northern Minnesota cuts trees, loads them on ships and sends them to China.

    God forbid they trade their own property! Shocking, shocking behavior!


    There they are made into windows which are shipped back to Minnesota to be sold in a Home Depot. Really. Real oil is burned to ship it. Real time and effort is expended to move the lumber and products around. A foolish non-ecomnomist would say, "Look at all the waste and pollution and my father made those right here ten years ago, and now he works in a Hardees." All so that we can imagine that we have free trade or free competition and we reap some unseen, unmeasureable [sic], increase in wealth.

    David, seems like we found the only person ON THIS EARTH that has YET to understand the concept of "Comparative Advantage."

    Let's give David an applause - he has managed to ignore something as basic as that.

    [I totally ignored your rant against Christians, since I am an agnostic and I don't care.]


    You ignore history completely, China will never engage in free trade and neither will any other responsible country.

    Indeed, because only responsible countries blockade each other as if in wartime . . .

    They also will never have a floating currency and you know what that means to us.

    Let me let you in a little secret:

    Economically, it does not matter. Eventually, the country committing economic suicide (a concept that can be translated as "Obamanomics") will succumb first, the other eventually not having a reason to peg her currency.

    [I had to pass over the anti-free trade rant because it's too preposterous and disjointed to comment on it.]

  • Sean W. Malone||

    Seriously David, you persistently fail to understand really fundamental concepts of economics, and you have already admitted that you don't know what you're talking about - and yet here you are pretending you do.

    Either start paying attention, go read a few books (I might suggest you start with Bastiat, George Reisman or Henry Hazlitt) or give it up. Your ignorance is nothing but a sharpening stone for the rest of us. And also, what OM said.

  • ||

    Mr. Hennessy:

    I suggest you read a book or article about libertarianism, because you obviously don't know what it is, despite your previous membership in the Libertarian Party (which doesn't automatically make you a libertarian, just a Libertarian). Sure, you can argue, or at least try to argue the consequences of libertarianism, the economic results of the system. And even if you somehow could prove that libertarianism will make the world worse in some way (which I think Old Mexican and Sean and everyone else here have thoroughly shown is not true), I wouldn't give a damn. Because I know that, no matter how bad you think the ends would be, the means of libertarianism are the only justified means. You cannot justify the use of coercive force against anyone for any reason. You cannot sit here and tell me that society has a right to take away property that I earned, or that my parents earned and gave to me, in order to give to the poor, or build a road, or pay a government worker's salary. Now I know your parents and teachers and clerics have taught you since you were young enough to understand them that you have a responsibility to sacrifice for others, but I am telling you that you and your parents, teachers, and clerics are WRONG. I am a human being, damn it, and I have a right to what I own. I would still have a right to what I own even if everyone in the world voted that I didn't. That's what your Great Democracy, your Benevolent Majority Rule means to me: NOTHING. So before you open your mouth and try to convince people that we NEED a government to take our property and use it "for the public good," think about what that means. Think about how you can justify taking away my property against my free will for whatever end. And once you have a justification, don't hesitate to tell me. But until then, SHUT THE FUCK UP AND LEAVE THOSE WHO WANT TO LIVE WITHOUT BEING COERCED AND WITHOUT COERCING OTHERS ALONE.

  • ||

    Well said.

    But what you said also applies to defense spending and the national security state and worshipping those who show the great courage and independence of thought by joining a state sponsored military or para-military orgainization.

    If we are committed to liberty, then we cannot be cheering for the United States and its communist ways.

  • ||

    I wouldn't have anything to say against the military if it was staffed and funded voluntarily. If a bunch of guys want to go off to North Korea to help get rid of a coercive government, I won't stop them (as long as they don't harm any innocent civilians). If some guy wants to pay some money towards national defense, why not? There's nothing communist about voluntarily paying for security.

  • The Libertarian Guy||

    IMO, Hennessy is no "former Libertarian Party member".

  • ||

    ORLY?

    "I was a long time member of the Libertarian Party but it will always be an abject failure rejected by every intelligent voter in America and the world." -David Hennessey

  • The Libertarian Guy||

    Missed that one. Another brain-damaged pretender, it seems, is in our midst.

  • ||

    Yes, I also find that incredibly hard to believe, but I'll assume that he was telling the truth. It just shows you that the Libertarian Party doesn't stand for anything principled anymore.

  • The Libertarian Guy||

    On the local level, we vet our new members. I suggest something similar farther up the LP chain.

  • ||

    I read it but I don't believe it. He writes poorly and incoherently. An ex Libertarian would at least be conversant with the various libertarian philosophies.

    He writes like a typical koolaid drinking statist.

  • RCTL||

    "I am a human being, damn it, and I have a right to what I own." Heller, you are writing my book for me.

  • ||

    Go read Atlas Shrugged.

  • The Libertarian Guy||

    I'd suggest The Road to Serfdom instead. Much better and clearer than Rand.

  • ||

    Good call.

  • MNG||

    Er, isn't it circular to say "I have a right to what I own?" I imagine by "own" you mean what is and should be thought to be yours. So you're saying should have what you should have...Rand had a silly quote like this, something like "people have a right to what they earn" that I explained seemed circular a while back...

  • MNG||

    Er, isn't it circular to say "I have a right to what I own?" I imagine by "own" you mean what is and should be thought to be yours. So you're saying should have what you should have...Rand had a silly quote like this, something like "people have a right to what they earn" that I explained seemed circular a while back...

  • ||

    It isn't circular to say I control what I have earned or what has been given to me. It would only be circular if property was defined in this way by everyone, but obviously it isn't. Non-libertarians believe that you have partial or no control over what you have earned or received.

  • bleephole||

    Read - "Gone with the Troll"

  • ||

    You really should have few rules on your site so you don't have to read things that upset you and make you shout. I feel sorry for you...NOT! You are nothing more than an animal, no laws, take what I please, break what I don't want and give a damn about anyone else. Find a country that welcomes people like you and you'll find no reason to BITCH, BITCH, BITCH about your precious infinite rights that you invented and want everyone else to adopt. Go back to your cave with the rest of the Neanderthals. Since the first tribe in an African jungle people have made collective rules that forced some to give up something for others. There's a good reason why everyone in your life has been telling youi that you are wrong. Because you ARE! I don't know what to say to people who claim that they are right and the rest of humanity are stupid idiots.

  • ||

    On the contrary, I enjoy reading the misguided views of statists such as yourself. If not for you people, I would have nothing to talk about on this site.

    What an interesting point of view. I am an animal. You know better, so you should have control over my free will. That's right.

    I don't take anything from anyone, that's what you advocate. I advocate free, voluntary trade between individuals. You advocate forceful theft in order to reach your goals.

    The libertarian way of life allows everyone to live with maximum freedom. What you want is a system in which certain people have coercive power over others.

    I don't think there is a way that I can make people like you understand that you, sir, are the animal. You have no respect for the free will of individuals. You use force and the threat of force in order to get what you want.

    I don't understand how a person who actually wants what is morally right can actually be angry at anything that I have said. I want humanity to evolve past the use of brute force, to a system where no one can be a bully. I advocate for true equality. Libertarians are called selfish and greedy, but it is you the statist who is greedy for power. Which is worse: the capitalist who has earned his money without coercing others, or the politician who was given the power to steal and force people to do things against their will by people like you?

    You think I am the animal? You are the animal. YOU do not respect individuals. YOU steal what others have earned. YOU use brute force to get what you want. You disgust me.

  • Chad||

    And even if you somehow could prove that libertarianism will make the world worse in some way (which I think Old Mexican and Sean and everyone else here have thoroughly shown is not true)

    How? By bleating the same old un-falsifiable libertarian mantras?

    We just got through a decade of slashing taxes...the core libertarian principle. How did that work out? Hmmm...ballooning deficits, economic collapse, middle-class wage stagnation, no job growth, health care flying off a cliff...But damn, the rich got richer, and our iPods are cooler!

    What a surprise. We tested major elements of libertarianism, and the result was a New Gilded Age, followed by Collapse, as they always are. Of course, libertarians will just blame the nearest government policy...their always-ready scapegoat.

  • claw||

    "We just got through a decade of slashing taxes...the core libertarian principle. How did that work out? Hmmm...ballooning deficits, economic collapse, middle-class wage stagnation, no job growth, health care flying off a cliff"

    Dude, you are so spot on! But you don't go far enough. The mild tax cuts initiated by the Bush administration also caused the genocide in Darfur, male pattern baldness, Hurricane Katrina, and weather

  • claw||

    I should also add that the famous libertarian administration of Bush 2 was noted for outspending all previous administrations, including spending on regulations. Yet, it should be noted, none of this excessive spending, spiralling almost continually upward for generations, culminating in the presidency of Bush, can ever be considered to be even remotely linked to any of the problems mentioned by Chad.

  • The Libertarian Guy||

    Bullshit Troll Alert!

    Bush Version 2.0 was nowhere NEAR being a libertarian administration.

    Peddle your MediaMatters talking points elsewhere.

  • The Libertarian Guy||

    Wait, claw, I think in my early-Sunday post-drink haze, I may have missed something. My bad.

  • Sean W. Malone||

    WTF are you talking about Chad? That post was disingenuous even for you...

    The Bush administration was one of the biggest-spending, most gigantic power-grabs of all time. As Veronique de Rugy pointed out in this very magazine, thousands of pages of new business-effecting regulation were imposed during the Bush administration. And unless you're a complete moron (and yes, I know that you are), you'd just assume this to be true as you'd be aware of the effect that adding massive new levels of bureaucracy in the form of the Department of Homeland Security & the TSA had on businesses, banking and travel.

    The Bush administration will go down as one of the least libertarian in the history of the world. And the "New Gilded Age" is purely a result of a massive expansion of credit put forth by Alan Greenspan - which conveniently is something that most libertarians spoke out against. And more amusingly, was exactly what the Federal Reserve did during the 1920s to create the first gilded age.

    Your history, your concept of policy, and your reasoning are wrong and extremely dishonest. So go eat a bag of dicks, Chad.

  • Chad||

    No wait, Sean. Is it taxes that are bad for the economy, or spending? They are not the same thing. Why does government spending hurt the economy (in the short term). You can't claim that it crowded out other investments, as interests rates were rock bottom regardless.

    We tried the libertarian "cut taxes forever" mantra, and predictably, the rich got filthy stinking rich, the deficit ballooned, and the economy flew off a cliff.

    You now seem to be taking the path of "If our plan isn't adopted in 100% purity, any failures are to be blamed on the portion which we disagree with". If that is the case, your theory is again unfalsifiable in the real world, and we may as well be arguing about how many angels can dance on the head of a pin.

  • ||

    "No wait, Sean. Is it taxes that are bad for the economy, or spending? They are not the same thing. Why does government spending hurt the economy (in the short term). You can't claim that it crowded out other investments, as interests rates were rock bottom regardless."

    We can argue the economics of government forever without coming to an agreement. The more important point is that spending necessitates taxes, and taxes are a form of theft, which is wrong.

    "We tried the libertarian "cut taxes forever" mantra, and predictably, the rich got filthy stinking rich, the deficit ballooned, and the economy flew off a cliff."

    "Really? We eliminated all taxes that paid for anything other than the police, defense, and justice system? I must have been sleeping when they did that.

    You now seem to be taking the path of "If our plan isn't adopted in 100% purity, any failures are to be blamed on the portion which we disagree with". If that is the case, your theory is again unfalsifiable in the real world, and we may as well be arguing about how many angels can dance on the head of a pin."

    Chad, are you arguing against libertarianism or are you arguing against the politics of Bush? No matter how much you think they are the same thing, they are not. Bush cutting taxes does not equal a libertarian golden age. The truth is that we have never even come close to anything that libertarians want. We have had a highly coercive state since early civilization.

    Again, with this idiotic "unfalsifiable" argument? Either we can test libertarianism in the real world, or we can't. Choose a side Chad! If you think a non-coercive state couldn't exist in reality, you're wrong. If you think we've already tested a non-coercive state then you are also wrong.

  • Sean W. Malone||

    Where the fuck were all the tax-cuts Chad? I don't remember when those happened. I heard about a few temporary $300 rebates. I saw some abatements for favored firms... But exactly where was anything remotely like libertarian policy tried?

    God you're a disingenous prick.

  • ||

    Chad:

    "How? By bleating the same old un-falsifiable libertarian mantras?"

    Unfalsifiable? So it would be impossible to test a libertarian system? Unfalsifiable does not equal untested.

    "We just got through a decade of slashing taxes...the core libertarian principle. How did that work out? Hmmm...ballooning deficits, economic collapse, middle-class wage stagnation, no job growth, health care flying off a cliff...But damn, the rich got richer, and our iPods are cooler!"

    "Actually, the core libertarian principle is non-coercion, which there was an increase of in the Bush years. Yes, all the bad things happened because of Bush's sweeping libertarian reforms, gotcha.

    What a surprise. We tested major elements of libertarianism, and the result was a New Gilded Age, followed by Collapse, as they always are. Of course, libertarians will just blame the nearest government policy...their always-ready scapegoat."

    Oh so libertarianism can be tested? So libertarianism is falsifiable? Wow Chad, you get an award for most self-contradicting post of the year. The truth is that we have NOT tested any elements of libertarianism so far. The political majority does not WANT to test libertarian elements. Until they do they can use the always handy freedom scapegoat. Why do we need more regulation? Because freedom is dangerous, duuuuh. It's great to have a scapegoat that doesn't actually exist.

  • ||

    Clarification:

    "there was an increase of [coercion] in the Bush years."

  • Sean W. Malone||

    I frankly don't buy that Bush's "tax cuts" in the midst of raising the federal budget by (at the time) unprecedented amounts, shoving a $500 B a year deficit on the country even remotely count as "tax cuts".

    Spending & taxation are obviously intrinsically linked, since government spending can either come from direct taxation, borrowing (future taxation) or printing money (devaluation of the currency).

    So, Bush spending a shitload of non-existent money while pretending to cut taxes is completely fictitious anyway... Whatever the short-term reduction of taxes just means a higher burden (with interest!) on future taxpayers.

    Of course, the libertarians of the world hated Bush... Not that Chad understands why.

  • ||

    Chad-

    At 6:41 PM on Friday, you asserted that "I bet you have never looked at a federal budget before" in response to my observation that it is impossible to measure the entirety of economic activity in the US.

    What does reading a federal budget have to do with the proposition that it is impossible to measure the entirety of economic output? Sure, Congress may make assumptions predicated upon the assumptions made by the CBO and others that the gross domestic product may be x for fiscal year y, but, that does not change the fact that your comment easily qualifies as a good sized non-sequitur.

    We just cannot measure all economic activity. It is utterly irrational to hold otherwise. Do you need some illustrations?

    1. Take "Jennifer" who is a Manhattan escort who offers her services through several high end agencies such as "The Sloan Club" and "Model Towers." One hour engagements with Jennifer run between a grand to $1,250. Jennifer gets half and the agency gets the other half.

    "Jennifer" is in grad school at NYU, seeking an MBA (what, did you think she would be pursuing a Masters in "Women's Studies?"). She averages 4 calls a week, taking home 2,000 on average per week.

    "Jennifer" does not, surprise, file a tax return. She made nearly one hundred thousand last year; however, how does her income get measured? It does not.

    The point is that the state can not accurately acount for all of the economic activity that takes place. That is what is good about black markets, what the russians call Na Lyava. I like that. You probably do not.

  • Chad||

    Really? Most hookers file tax returns, because they want to establish credit and because the penalties for tax evasion are a lot higher than the penalties for prostitution. Additionally, she is neither required to specifically list prostitution as the source of her income (due to 5th amendment protections...ACORN was actually more or less right...lol), nor could the IRS report her anyway.

    There are, of course, black markets and lots of under-the-table dealing. However, in modern economies these are relatively small. In any case, why do we need to perfectly measure them?

  • The Libertarian Guy||

    Think of the untold wasted billions spent on the futile attempt to comply with the tax codes, Chad. How many poor people would be fed with that kind of money?

  • Sean W. Malone||

    They're a lot bigger than you think Chad. A huge chunk of the entertainment industry, construction, restaurants, and a bunch of other major sectors of the economy have huge black market components. Plus, you may have noticed that a few hundred thousand people are jailed each year for non-violent drug offenses, that entire market place is "black" as well.

    If I had to guess, there's probably several billion dollars of economic activity each year that don't get calculated by the US Government, in spite of being a "modern economy".

  • Chad||

    Several billion? I would have put it closer to a hundred billion. What difference does that make in a $14 trillion dollar economy? Why do we need this number for anything?

  • Chad||

    Actually, at a zero to that. It's probably closer to a trillion. But so what?

  • The Libertarian Guy||

    Because it is inefficient and futile to tax income, Chad.

    I know two people, neither of whom have ever made six-digit incomes, yet are paying for (in one case) an intentional tax mistake and (in another) through no fault of her own due to a SS number mixup (she was adopted and wound up with two SS numbers).

    Both of these people are and will be paying interest and penalties to the IRS until the day they die because the meter NEVER stops running. Who knows how many other people are in that boat, or one similar?

    Add that to the futile effort of trying to honestly comply with the byzantine, incredibly unfair and complex tax codes, and the only people making out good are accountants, tax lawyers, and so forth. That's not productive, nor is it equitable.

    You bitch that the rich don't pay enough. Well, regular people have to pay to have their taxes done, too. And sometimes the IRS swoops down and picks the bones of those who do not deserve to have money yanked out of their bank accounts without their knowledge, or to be treated like criminals if they don't fill in the right number of dollars (not tens of thousands, just dollars) on Line 666 of their "easy-to-understand" tax forms.

    It's ridiculous, and it only makes people like you feel better because it's a way to punish those who make a good living. Hell, YOU punish YOURSELF. How fucking stupid are you?

    Wait, we all know how to answer that...

  • Chad||

    Your second friend need to hire a lawyer, unless she is being forced to repay double benefits. In that case, there is no problem with her being required to repay. As for your first friend, I am a little confused by the expression "an intentional tax mistake". Seems a little contradictory, no? If you meant unintential, again, is he or she just required to pay back money the got from the government? What is the problem there?

    And it's not hard to deal with SS for 99% of people. You don't really do anything, really. It's a thousand times simpler than investing, that's for sure.

    Well, regular people have to pay to have their taxes done, too

    Only if they are stupid or lazy. I have done my taxes by hand every year. It takes no more than an hour, once I have all the documents. The only exception was a year were I lived in two states, had three jobs, and all sorts of other complications. I paid for that one, and then double checked by hand anyway. It cost me a whopping $50. Turbotax is stupid easy, too. Costs what, $20?

  • Chad||

    Oh thank you Supreme Leaders for making it so easy to give you our money. Oh God I love sucking politicians' cocks. Spray your salty entitlement sauce all over my face. MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM

  • ||

    Oh yes let me join you my sister! Oh MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM

  • The Libertarian Guy||

    Point is, intentional or otherwise, the IRS has penalties and interest that would make any loan shark blush.

    But that's okay with you, isn't it.

  • The Libertarian Guy||

    And you still sidestep the wasteful spending on trying to comply with tax codes so complex, no one can understand it completely.

    But, again, that's okay with you.

  • Sean W. Malone||

    Well, I'm only thinking of money transactions... I'm sure there's probably multiple trillions if you were able to factor in barter on craigslist and shit. Also I'm only talking about the US.

    But I think you just agreed with me anyway... There's an immense amount of economic activity that doesn't get tabulated.

  • The Libertarian Guy||

    I believe that there should be one world government and a global synchronization of policy in order to prevent races to the bottom. - Chad

    That won't prevent anything, Chad. There is no way to "prevent" inequalities in outcome - which is one of many impossible goals, something you know deep down but will never allow yourself to admit.

    Your "solution" would only make billions of people equally miserable, while the ruling class lives it up. Sounds familiar, doesn't it... Kim Jong today, the Soviet Union bigwigs of the recent past, Hugo and the Castros right this minute...

    Unfortunately, you may get your wish, Chad. Trading freedom for two hots and a cot... yeah, that's "fair".

  • Chad||

    Where have I ever advocated communism, LG? Is it hard for you to grasp the world of difference between a 50% tax rate and a 100% tax rate?

  • ||

    Politicians have all your money or politicians have half your money. Nope, I don't really see a big difference there. Both systems are highly coercive, just at different degrees.

  • The Libertarian Guy||

    Incrementalism, Chad. Besides, you sidestepped your one-world/one tax rate advocacy, which is your most glaring - and dangerous - wish for Americans.

    Thank God you're not in the White House. He's bad enough as it is.

  • The Libertarian Guy||

    BTW, I only mentioned communism in passing re: how the head honchos live(d) in current/past communist regimes. That would happen in your world-vision, yet you will not acknowledge the fact.

  • juris imprudent||

    I was wondering why this was over 450 posts, now I see, a new world-class troll.

  • MNG||

    Boy, I knew there was a reason I avoided this thread..

    This thread makes me think of the members of two religious cults getting into an argument. It is funny though to see all the members of the one cult (Austrians) bitch about the denseness and "trolling" of the members of the second cult (Marxists) because the latter doesn't accept the fundamental tenents (axioms) of the former's faith.

    You just don't understand EKONOMICS!

    Of course in the actual field of economics (among academicians, analysts, consultants, etc.,) Marxist and Austrian fundies are properly, safely and routinely ignored much like Hare Krishnas trying to hand out pamphlets at streetcorners.

  • ||

    I was under the impression Austrians have been semi-vindicated by the financial crisis, and are now more widely respected.

    Although, I would have to say they were always taken WAY more seriosuly than the Marxists, so you can hardly put them on an equal footing.

    Anyway the concept of subjective value is not controversial in economics. Labor theory of value, and "surplus value", on the other hand, won't even merit a sneer. Just perhaps a patronizing smile.

  • Chad||

    I was under the impression Austrians have been semi-vindicated by the financial crisis, and are now more widely respected.

    Perma-bears are semi-vindicated in every financial crisis.

  • ||

    Chad didn't Sean already refute this argument a few posts ago on this very thread. I guess you just ignored those links then, huh.

  • Sean W. Malone||

    Yeah Heller, he tends to ignore it repeatedly, because he never wants to actually talk about the reality of the Austrian school's supporting arguments & evidence. For Chad, it's all just random, and since they're "permabears" they have to be right occasionally.

    Course, that's also very American-centric - since Austrians look at what other nations are doing and often have good things to say.

  • MNG||

    I do have a question, if Austrian's claim falsifiable predictions about economic conditions cannot be made, how can they be vindicated?

  • MNG||

    I do have a question, if Austrian's claim falsifiable predictions about economic conditions cannot be made, how can they be vindicated?

  • ||

    Falsifiable does not mean false.

  • Sean W. Malone||

    Ugh... Please MNG, learn what the actual claim is, yeah?

    Logical arguments are not proven false or true via laboratory experiments. That's the point. If I tell you 2x2 = 4, you cannot prove me right or wrong in a "test". You have to examine the definitions, and the logic of the argument.

    Arguments, then, CAN be proven to be false - but only through examining premises, and the reasoning that resulted in the conclusions.

  • MNG||

    But you, or rather Austrians, are making empirical claims about the results and nature of human behavior, not mathematical/conceptual claims.

  • ||

    Austrians make me horny.

  • claw||

    They make me hungry. Best home-made bread I ever tasted was made by an Austrian.

  • Sean W. Malone||

    Well, MNG - it's based on a set of axioms about human behavior which are observed and defined. These are the premises upon which the rest of the logic is based.

    I already said you can examine & debate the premises, didn't I?

    The main axiom is this (in Ludwig von Mises' words:

    "(Human) Action is an attempt to substitute a more satisfactory state of affairs for a less satisfactory one. We call such a willfully induced alteration an exchange."

    Hans Herman-Hoppe discussed this more in depth in Economic Science and the Austrian Method and of course Mises wrote a book or two on the subject.

    The basic point is that people act purposefully in order to achieve something of value to them... Value being judged by them.

    Whatever the personal ends are, people act for a reason. There are a lot of conclusions that can flow from that axiom though. If you want to debate that axiom - fine - though this isn't a great forum for that (also Gennady Stolyarov wrote about this here) that's still a debate we can have. But it's a debate about logic, and non-contradiction, and there'd be no way to put it into a laboratory and run an experiment on it.

    I'm not gonna write out all the flaws of Behavioral Economics here, but many of the flaws stem from the mistaken belief that psychological games in a laboratory are actually reflective of real human behavior - even though all the incentives and scenarios are much different.

    But actually a lot of people *do* realize this. Marketing people are well aware of the fact that what people "say" they will buy or what prices they'd be willing to pay when asked in surveys and what they actually buy or for how much are often very different.

    You can't use what people *say* as a guide, but only what they *do*, which goes into supporting the action axiom as a point of departure.

    Anyway... Point is, like in mathematics, once you accept that the number "2" has a certain definition - once you accept the axioms - the truth of the argument lies in whether or not the logic is sound (non-contradictory). So you have to debate the logic, and realize that a big piece of the Austrian position is that what people's values are are impossible to know - so while we can know people will act to further their values, we can't predict what that will mean across the board. No one's values are the same, so writing out big fancy mathematical models about how people are going to behave or trying to create "tests" is just silly.

    But if you simply accept that people act purposefully, you can deduce a lot of stuff about people... This is something I figured out when I was 12-13 as a "people watcher", so when I was first exposed to the Austrian view, it made a lot of sense right off to me. People act to pursue whatever it is that they value... It's not always easy to figure out what those values are, but you can be sure there is a reason for their action or it wouldn't be taken. Some girls go out for cheerleading because they believe it will improve their popularity. Some guys go out for Football because their dad was an all-state center (personal experience is a bitch) and they don't want to disappoint them. Some people avoid the drama club or marching band because they're worried about being teased... Most of us go through the lunch line every day because we're hungry.

    We all act purposefully... But it's a fatal flaw to assume that all people value anything equally - and when you start trying to create models of human behavior using calculus, in the tradition of people like Paul Krugman, you will fail.

    I could go on about this for a while, but yeah... I won't. I do hope I'm making sense here though.

  • Chad||

    This is something I figured out when I was 12-13 as a "people watcher"

    The problem was that when you were 12-13, you didn't figure out that people often act in ways that benefit them right then, regardless of the long term consequences or its affects on anyone else. Somehow, this error has persisted into adulthood. There is always hope, though.

  • ||

    Silent clap for Chad. He did it, everyone. He refuted everything Sean just said. Wow.

  • MNG||

    It's not about whether laboratory results mirror real world results, if you are saying that humans have characteristic A or act in fashion B then you have to prove that by referencing actual humans and their actions. Your making claims about empirical phenomena (unless you want to argue human beings and their actions don't involve empirically verifiable phenomena). Yes your claims should not be logically fallacious, but that just demonstrates validity. For soundness they need to be true, and as they make empirical claims this means they need to be consistent with empirical reality.

    BTW-Results of lab studies do reveal something even if I accept your conclusions about them; that at least reveal how humans will act in that setting. And if an axiom is, for example, that people always pursue what they value in a rational manner then that can be shown to be false at least in a lab setting. If false there now it's open to whether its false in "real world" settings (labs are "real world" settings too, they are not mirages).

  • Sean W. Malone||

    Yes and no, MNG.

    First off, I didn't say - that people *always* pursue what they value "in a rational manner", which I'm assuming you believe means in the sense that they will never make mistake in reasoning or out of ignorance.

    For instance, I might pursue the value of acquiring water, but still mistakenly believe that a good way to do that is with a dousing rod. I'd be wrong and going about things a pretty bad way, but given what I believed, I would not be acting irrationally.

    Given my beliefs and available knowledge, I would, in fact be operating very rationally - as I have value X (water), and am pursuing said value in the best way I know of (dousing). I need to be educated that my method is wrong - however many psychologists & behavioral economists will claim I'm behaving irrationally, which is untrue from the standpoint of human action.

    Additionally, the problem with lab experiments that supposedly show "irrational" behavior is that they presume to know what values are being chosen by the subjects. For instance, in "The Prisoners Dilemma", the assumption made by researchers is that each prisoner's goal is to minimize prison time. In the real world, observations of criminal behavior can certainly be shown to disprove that in all cases. Depending on the context, prisoners might value more jail time, or avoiding any reputation of being a "snitch", or they might value the solidarity with their crime-partner above jail time.... Etc. There are many possible reasons why asking the question "what should the prisoners do" is a waste of time without an understanding of what their values are.

    It certainly does not prove that people are irrational if they pick the solution that isn't researcher-approved.

    A lot of experiments work out the same way though... The FLAW is that the researchers are assuming they know what people's values "should" be to begin with, rather than asking a different and much more difficult series of questions about what persons values are (which as I noted above, are actually really only viewable as actions anyway since what people say & do aren't always the same) and what knowledge people have that they're using to make decisions about pursuing those values.

    Game theory experiments only prove the way those individuals involved act under those conditions. That cannot reflect non-game situations, or be applied to all individuals generally.

  • Sean W. Malone||

    er... when I said "disprove that in all cases", I meant that it is *not* true to say that in all cases prisoners are going to elect to minimize prison time.

    Also, I should note that some people, in "game" or "experiment" settings are going to act differently regardless purely because they know it's an experiment and believe that changes the rules.

    For instance the Milgram experiments always bothered me as a "proof" of humans being generally willing to follow orders to torture people. Within the context of an experiment, a big part of me is going to believe that the researchers aren't going to let me seriously harm another person. My concept of the "rules" of the situation are such that I'm probably going to assume that it's controlled in such a way that no participants are actually going to be tortured.

    Likewise, when you find situations in real life where this kind of thing does happen, I often have to wonder how self-selected those groups of people are. If you're going after a job that may involve torturing people (Turkish prison guard, for example), aren't you more likely to be the kind of person who wants to hurt others anyway?

    These things always raise far more questions for me than they answer - and yet any time these kinds of experiments get publicized, reporters (as usual) exaggerate the results and apply the claims broadly and nonsensically.

  • MNG||

    It's not about whether laboratory results mirror real world results, if you are saying that humans have characteristic A or act in fashion B then you have to prove that by referencing actual humans and their actions. Your making claims about empirical phenomena (unless you want to argue human beings and their actions don't involve empirically verifiable phenomena). Yes your claims should not be logically fallacious, but that just demonstrates validity. For soundness they need to be true, and as they make empirical claims this means they need to be consistent with empirical reality.

    BTW-Results of lab studies do reveal something even if I accept your conclusions about them; that at least reveal how humans will act in that setting. And if an axiom is, for example, that people always pursue what they value in a rational manner then that can be shown to be false at least in a lab setting. If false there now it's open to whether its false in "real world" settings (labs are "real world" settings too, they are not mirages).

  • MNG||

    Hazel
    I don't know the current consensus of economists on theories of value. My point was that Austrian or Marxist fundamentalists make up, at best, minority fringes in the field. I submit this is because scientists should see fundamentalism as counterproductive to their enterprise.

    I'm not going to get involved in this debate, but for those who are a little more thoughtful, such as yourself, and perhaps appreciative that any minority position should value actually changing people's minds rather than proclaiming TEH TRUTH while decrying TEH IGNORANCE of people who disagree, I'll offer the following observation: a lot of people that balk at people here who say that "value is subjective" are probably thinking that by that folks mean that the value of anything to a person is always, completely and arbitrarily a matter of that person's whims and fancies. And they probably think, well, there are some things that have "objective value" to all persons. Notice how they always bring up some thing that human beings objectivel