Give Me A Break, and Another Break, and Another

New at Reason: You paid for John Stossel's beach house. The well-heeled ABC newsman explains how he and other plutocrats game the government for free money, price supports and other goodies.

Comments

[Swamp Justice]

In Southern California, rich people build their houses on beautiful beach cliffs. After a couple storms or earthquakes, their McMansions inevitably fall into the abyss. Uncle Sam is their to pay them off too.

btw, I just read John Stossel's new book "Give Me a Break!" He is a bit curmudgeonly, but he has some great stories. Here's a transcript from a recent book talk he gave in Oakland. He even says that Reason magazine was his introduction to libertarianism! 😉

http://www.independent.org/tii/forums/040130ipfTrans.html

[Fred]

Great article until the end where she says "This is America. My husband fought in the war and worked to make sure I would have a roof over my head, and they want to take it from me?"

That is not a logical statement to my mind. Right, I don't have all the facts and I am not her, but I would take the $1 million and bail. Who wants to live in Atlantic City, especially next to a casino? How many drunks pee in her yard every night?

Do people get stupid when they are old and widowed? Yes. Yes they do.

[jim]

I know I don't have all the facts and I'm not him, but Fred is an idiot.

[dj of raleigh]

"If this insurance wasn?t here," he said, "then people would be building in those areas anyway. Then it would cost the American taxpayers more [in relief funds] if a disaster hit."

There is truth in this. When tornadoes ripped through town,
the apartment owners who had insurance didn't
fare as well as the ones without, who could take
advantage of the federal relief funds.

[Warren]

Stossel is the sole voice of libertarianism in all of commercial media.

Thank you John.

[Highway]

Yeah, there's really nothing to say in response to that article but to tell everyone you can to go read it.

[Rich]

I might be mistaken, and if Stossel's article is recent, then perhaps I am. But I thought that the government revised or even eliminated the flood insurance program after the 1993 floods on the northern Mississippi. I can remember something about it from TV news at that time, and I was glad about it b/c I saw no reason to insure people for doing dumb stuff.

Of course, I was a college student then and may have been a little bit, well, baked, at the time
🙂

Any insights into revising or canceling the Federal Flood Insurance?

[bigbigslacker]

I don't have all Jim's facts, and I'm not him, but I have to agree with Fred. That woman was insane. I believe the woman was in the legal right (obviously) and can understand (while disagreeing with) someone's emotional attachment to their two by fours. But are they in love with the dirt and rock under their foundations as well, and also the GPS coordinates? Any house can be moved, especially for a million bucks - and as an added bonus you can build a modern, dry basement underneath.

[Tommy_Grand]

Forgive my cynicism, but I suspect the truth is that someone convinced her she can get more out of Trump than 1 million - not that there's anything wrong with that. And, of course, it doesn't excuse the ED abuse at all.

[Russ]

Sorry bigbigslacker,

Until you are that elderly woman who has lived in, and become attached to, a particular home, and to whom a bunch of dollars might not significantly improve her quality of life, you don't have any say in the decision to take or leave the million bucks.

It doesn't make a lick of difference if she's certifiably insane to turn down the money. It's her property and she can do with it what she will.

Trump made a good point that individuals will often reject a generous offer to become the sole remaining obstruction and maximize their bargaining power.

If Don were a bit smarter, he'd make a conditional offer to all of the homeowners collectively. They all get a generous payout, but only if every single person agrees to it. Any dissenters would have to face the wrath of their neighbours.

[Jennifer]

As a youngish woman with (hopefully) many decades of life left to me, I would have taken The Donald's offer. But if I were a retiree with a relatively short time left, then quite frankly the money would have given me less pleasure than the thought of sticking it to a rich asshole with the gall to think he could force me out of my home.

[Brian]

What Jennifer said.

Except the part about being a woman, of course.

[thoreau]

One of the best Reason articles I've ever read. I need to show it to some leftist friends of mine the next time they lament how a free market would hurt the poor. Maybe this will drive home to a few of them (most of my friends are pretty smart) that our unfree market helps the rich. While some may lament that democracy lets 51% rob the other 49%, it seems to me that the top 1% have already stacked the deck.

[80sfan]

I'm sure the old broad was holding out for more--not bright but within her rights. Trump on the other hand decided it was cheaper for him to do the deal "extra-legally"; only fair that he get humiliated by an 87-year-old woman (this same case was also the final ruination of Bob Guccione, I believe)

Great excerpt btw

[Kevin Carson]

Good point, thoreau.

Who do you really think had more to do with the food stamp program? Unemployed welfare moms, or agribusiness interests in Bob Dole's district? "The hands are Esau's, but the voice is Jacob's."

[J. Alexander Lowman]

Yes, very good article.

I posted the link on a message board that many of my lefty friends and others who may also be fairly lefty frequent. Of course I just scolded a Republican friend of mine for saying how great Bush has been on that same forum. Well, not so much scolding as telling him that he's probably much more lib than Republican.

Still, this article should be read by towne criers in the towne square...or at least disseminated all over the 'net.

[Fred]

Conspericy theory alert!

Does anyone think ADM is behind the contiued embargo of Cuba? That would be a really cool story to find in next month's Atlantic.

A little bit more seriously, I have a feeling there is something really wrong with high fructose corn syrup. It's so ubiquitous that it is even in bread.

Any scientists out there with some knowledge of high fructose corn syrup?

[Fred]

Oops, Conspiracy theory alert!

Man, I can't spell at all today.

[Jason Ligon]

I don't know that I agree with the idea that the wealthy drive these supports. I think what happens is that a majority votes themselves a goodie, but the rich are able to capitalize on the allocation principle to a greater percent.

I'm thinking here that, yes, ADM is the greatest beneficiary of agro subsidies, but they aren't the reason those subsidies still exist. The subsidies exist because it is political suicide to oppose them if you represent farm districts. It IS the little guy who insists that they are needed, but it is ADM who has the ability to maximize the size of the welfare check they receive. Perverse ...

[Jason Ligon]

greater extent ...

[Mo]

Jason,
Maybe for things like food stamps and the like it's the "little guys," but often you'll see protectionist barriers requested by affected corporations. Someone has to pay for the ads and pressure gov't officials w/ the carrot of campaign donations. Some how I don't think Ma and Pa Farming, Inc. has the clout to do this, they just look good in the commercials paid for by ADM.

[thoreau]

Jason-

I don't mean to say that the top 1% could engineer these subsidies without the acquiescence of voters. But it does seem interesting how much gov't spending seems to benefit those who can afford the good lobbyists. Sort of like the intricacies of the tax code.

One could look at what I'm suggesting and lambast it as leftist class warfare. "Thoreau only gets upset when the rich benefit!" Or one could look at it and say "Ah, a way to sell some left-leaning voters on the benefits of free markets."

(Note that there is a HUGE difference between a left-leaning voter and a lefty politician or activist. The politicians and activists are committed to their BS, while left-leaning voters are mostly nice, normal, intelligent people who have concluded that Democrats are often the lesser evil. Sort of like the difference between your typical conservative voter and your typical conservative politician.)

[thoreau]

Mo-

I was just reading an article on trade in "Foreign Affairs." (My brother got me a subscription for Christmas. I know some of the people here will probably lambast "Foreign Affairs" for one reason or another, but it has some interesting stuff, and I'm usually fond of anything my brother gets me.) One interesting thing it pointed out about protectionism is that the poorest countries are often the most protectionist. As huge as our subsidies may be, the direct barriers (tariffs, etc.) and indirect barriers ("fees" to corrupt officials) to doing business in many third world countries are much more onerous.

It's also worth noting that some of the biggest wealth inequities exist in the 3rd world (kleptocrats and their cronies stashing dough in Zurich accounts while their people are starving). That confluence of high trade barriers and wealth inequities might have a lesson or two in it. As might Stossel's observations.

Personally, being that I was raised as a bleeding-heart leftist, these sorts of arguments for free markets are much more persuasive to me. Tirades on property rights make me snore, but examples of corrupt anti-market policies hurting the poor were among the factors that got me to start voting libertarian.

[Jennifer]

I grew up in Virginia, and long before ED abuses won national attention, Virginia was so notorious for ED abuses that there were a lot of lawyers who made a full-time living handling such cases.

In the city of Norfolk there's a section called Ghent, which used to be a poor neighborhood with a high crime rate. Rather than hire more police officers or sponsor midnight basketball programs or whatever it is governments do to reduce crime, they just ED'd ALL the property in the area, knocked down all the poorfolk housing, and built [a far smaller number of] froufrou condominiums that are among the most expensive in that region. Then they did it to the Ocean View section of the city.

What happened to the poor people who originally lived in these areas? Nobody bothered to ask.

[Jason Ligon]

Mo,

I don't think so. Go to Iowa and suggest the elimination of farm subsidies. Let me know what happens.

I would even be willing to bet that the biggest sell ADM can do in support of subsidies is to have politicians ask their constituents how they feel about either getting goodies or not.

The same thing goes for the prescription drug bill, which is absolutely a vote grab targeting the AARP, not because they are wealthy but because they all vote.

Thoreau,

Government spending is based on some set of criteria. Elements of the tax code are based on the quantity subject to taxation. Rich people 'benefit' from reductions in the tax code only because they are paying more in the first place. A lot more.

Here is another example for you. How about the dreaded Military Industrial Complex? Is it about Raytheon giving money to politicians, or is it about politicians trying to bring jobs to their districts? People vote for politicans who will bring stuff to their districts, and in a system of private property, stuff usually belongs to somebody else. The government has a few choices to satisfy their constituents: A) They can take from some and give to their constituents by obvious fiat. This is prescription drug benefits. B) They can convince private parties to locate a job in their district instead of somewhere else. This is the tax break for Wal Mart. C) They can have the government spend tax dollars on things that are already produced within their districts. This is defence spending.

Some would say there is no difference in the three, but B & C are less straight forward to analyze. The tax break to Wal Mart is a reduction in local taxation that will only continue if the local folks want it to. There is no relationship between the payor and beneficiary in the drug benefit, however. Just thinking out loud ...

[Mo]

thoreau,
Oh, I believe it. In Egypt (I know, I sound like a broken record, but it's a kleptocracy that I am familiar with) ALL automobiles cost more than they do here. I don't mean in real term, but in straight up dollar value. A Honda Accord is considered to be a vehicle for the well off and costs about $40-50K. This is primarily due to the extraordinarily high tarriffs (something around 50%). However, you can get a sweet deal on a 80s vintage Fiat (JB, chime in with a witty comment anytime). Actually, this is true of most products. Usually when someone visits from out there to here, they bring an empty suitcase (or rather 2 half empty ones) and then fill up on cheap American goods to bring back to friends and family.

To say bribery is rampant would be an understatement. Corruption and civil liberties were the primary reasons my father moved out here (my family pretty well to do out there), so I've was raised with a strong distaste of corruption and a jealous love of civil liberties. Most of the stories my father tells me about dealing w/ the "system" or government involves a bribe. What is amazing is the extremely low price that some bribes have and the pervasiveness. He used to work in electronics and developed systems for their defense and intelligence depts and bribes are the name of the game not quality. Bribery is more than just a tax on doing business, it saps a society of getting the best product for their money because only those willing to bribe the most will get ahead, not those with the best product.

It's a negative feedback loop that's hard to escape. It also makes for ripe recruiting grounds for Islamic fundamentalist groups out there. The fact that these groups are "illegal" make them even more attractive to those unhappy with the government.

[Mo]

Jason,
I'm not saying the people don't like them. Of course they do, but when you can align the interests of a big corporate donor, a whole lot of people are getting jobbed for tax money. My point is if someone votes against farm subsidies, ADM is going to help get the word out so the local constituents know who to vote against.

[TheDonald]

Jennifer, you're fired.

[Steinbrenner]

Jennifer, you're hired! At double your previous salary. Anything to piss off that pipsqueak in Jersey.

[Tommy_Grand]

That is a terrific article.

[Douglas Fletcher]

I haven't read the article, but if I find out I paid for his haircut too I'm going to be very annoyed.

[Len]

Certainly a good read and it does make one wonder if there is any truth is saying "money goes where money is".

Every time I see a beach house rolled into the ocean or a farmer cry about how prices are lousy I get a little peeved because I know thanks to the rest of us everything will be all right - for them and not us.

[shane]

thoreau, you are absolutely right. Our economy is more of a mercantilist/corporatist one than a true free market. It's freer than most, but still...

Just finished reading Stossel's latest book and have always enjoyed his specials.

Freeloaders is one of the best and it also deals with this issue specifically.

[George Costanza]

But..but..Mr. Steinbrenner! I needed that job!

[Douglas Fletcher]

We don't drink,
we don't smoke,
Norfolk, Norfolk...

[Douglas Fletcher]

I remember throwing up near someone's porch one evening in the Ghent area of Norfolk, back when I was an occasionally drunken sailor on a destroyer ported there. I hope it wasn't your porch, Jennifer.

God, that was one beat little town.

[Donover Sandra Corsover]

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DATE: 05/20/2004 09:01:03
The superior man loves his soul, the inferior man loves his property.