Economics

A Memo to Alan Greenspan

Why the former Fed chairman should keep quiet

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I'm getting tired of Alan Greenspan. First, the former Federal Reserve chairman blamed an allegedly unregulated free market for the housing and financial debacle. Now he favors repealing the Bush-era tax cuts.

This has a certain sad irony. Recall that Greenspan once was an associate of Ayn Rand, the philosophical novelist who provided a moral defense of the free market, or as she put it, the separation of state and economy. Greenspan even contributed three essays to Rand's book Capitalism: The Unknown Ideal—one for the gold standard, one against antitrust laws, and one against government consumer protection.

It was slightly bizarre when Greenspan accepted President Reagan's appointment to run the Fed—maybe he thought that as long as the Fed exists, better someone like him run it rather than one who really believes government should centrally plan money and banking. Be that as it may, Greenspan went on to pursue an easy-money policy in the early 2000s that is widely credited, along with the government's easy-mortgage policy, for the boom and bust that followed.

During a congressional hearing two years ago, Greenspan shocked me by blaming the free market—not Fed and housing policies—for the financial collapse. As The New York Times gleefully reported, "(A) humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets."

He said he favored regulation of big banks, as if the banking industry weren't already a heavily regulated cartel run for the benefit of bankers. Bush-era deregulation is a myth perpetrated by those who would have government control the economy.

We libertarians were distressed by Greenspan's apparent abandonment of his free-market philosophy and his neglect of the government's decisive role in the crisis.

But at least he took a shot at the new controls Congress coveted: "Whatever regulatory changes are made, they will pale in comparison to the change already evident. … (M)arkets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime."

But now Greenspan, going beyond what even President Obama favors, calls on Congress to let the 2001 and 2003 Bush tax cuts expire—not just for upper-income people but for everyone. "I'm in favor of tax cuts, but not with borrowed money. Our choices right now are not between good and better; they're between bad and worse. The problem we now face is the most extraordinary financial crisis that I have ever seen or read about," he told the Times.

He says he supported the 2001 cuts because of pending budget surpluses, but now that huge deficits loom, new revenues are needed.

Why? Brian Riedl of the Heritage Foundation says that since the cuts, "The rich are now shouldering even more of the income tax burden." The deficit has grown not because we are undertaxed but because government overspends. "Tax revenues are above the historical average, even after the tax cuts," Riedl writes.

Given the stagnant economy, this is the worst possible time for tax increases. (Is there ever a good time?) Taking money out of the economy will stifle investment and recovery, and it's unlikely to raise substantial revenue, even if that were a good thing.

Finally, the stupidest thing said about tax cuts is the often-repeated claim that "they ought to be paid for." How absurd! Tax cuts merely let people keep money they rightfully own. It's government programs, not tax cuts, that must be paid for. The tax-hungry politicians' demand that cuts be "paid for" implies the federal budget isn't $3 trillion, but $15 trillion—the whole GDP—with anything mercifully left in our pockets being some form of government spending. How monstrous!

If cutting taxes leaves less money for government programs, the answer is simple: Ax the programs!

John Stossel is host of Stossel on the Fox Business Network. He's the author of Give Me a Break and of Myth, Lies, and Downright Stupidity. To find out more about John Stossel, visit his site at johnstossel.com.

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  1. Yes, everyone who disagrees with John Stossel should shut up. Particularly when they have more credibility than John Stossel.

    1. Sound a little bitter, Alan? Need your own tv show to rant? Denied by Fox/CNN/CNBC and MSNBC?

      I see your point, pet. The meds’ll make you see the world in a better light. Keep swallowing the pills for at least another week or two.

    2. Alan Greenspan will gain credibility the day he takes his partial responsibility for the housing fiasco.

      Stossel could have zero credibility and still have more than that douche.

    3. No credibility compared to Greenspan. Not like Greenspan presided over the biggest financial collapse in 80 years or anything.

      They need to ban you Venneman. You do nothing but make douchy comments and then run off and refuse to defend yourself. At least Tony and Chad stay to take their beatings.

      1. run off and refuse to defend yourself

        It’s much more rational to spend the whole day here, repeating the same points you’ve made a thousand times, and then arguing with strangers.

        1. Because saying something stupid and never bothering to defend it makes so much sense.

  2. “We libertarians were distressed by Greenspan’s apparent abandonment of his free-market…”
    ??Abandoment??? That presumes somewhere in his history at the Fed that he acted to support the free market – it is a profit and LOSS system. Whether bailing out Mexico, Thailand, or bailing LTCM, or deciding there should no recession after the tech bubble (and NOTE – he didn’t bail out the people of those countries – it was always the same – bail out bondholders), because NOTHING could ever be allowed to happen to destroy ever more cheap credit.

    1. Yep Greenspan will be known in history as the inflationator.

      Free Market Advoczate?

      Maybe for counterfitters.

    2. Reading this it sounded in my mind as if it was a narrated reason.tv video.

  3. I could tolerate Stossel’s tongue-lashing of Greenspan’s self-serving blame-shifting until I got to this part:

    Finally, the stupidest thing said about tax cuts is the often-repeated claim that “they ought to be paid for.” How absurd! Tax cuts merely let people keep money they rightfully own. It’s government programs, not tax cuts, that must be paid for. The tax-hungry politicians’ demand that cuts be “paid for” implies the federal budget isn’t $3 trillion, but $15 trillion?the whole GDP?with anything mercifully left in our pockets being some form of government spending. How monstrous!

    Do you know how we “pay for” tax cuts, Mr. Stossel? By cutting spending.

    In other words, every dollar you want to drop taxes had better be a dollar you stop spending. Otherwise, you’re simply robbing from the young to pay the old.

    Fiscal austerity – what a “monstrous idea,” indeed.

    1. That’s what he’s saying-instead of raising taxes we should cut spending.

      1. From cursory reading, this seems to be what Greenspan is saying – otherwise, Stossel is simply attacking a strawman in rather hyperbolic terms.

        What Stossel appears to be saying seems more along the tropes given during the debate over the Bush tax cuts: “Who the hell cares about offsetting tax cuts with spending cuts! Full steam ahead!”

        This is a problem, because as we have all already learned, “starving the beast” is anything but.

        1. Read it again. Greenspan is advocating higher taxes without ever mentioning spending cuts. Stossel outright says that spending needs to be cut rather than taxes increased.

          1. That interpretation doesn’t even make the slightest bit of sense. We have to offset tax cuts by increasing taxes? Is there anyone outside of a mental institution making this claim?

            1. Steve,

              I think you are misinterpreting everything you’ve read so far.

              To repeat, Stossel is saying that before Greenspan talks about raising taxes he should be instead calling for reduced government spending.

              Period. Full stop. The end.

              1. To repeat, Stossel is saying that before Greenspan talks about raising taxes he should be instead calling for reduced government spending.

                Period. Full stop. The end.

                Allow me to pull a Fox Mulder for a moment and say, “I want to believe.”

                Greenspan calling for the tax cuts to universally expire, as the article indicates, to pay for yawning deficits (caused by overspending) is stupid – we all agree on this one.

                But the alternative posed by some (whether or not Stossel is included is up for debate, but certainly those like Grover Norquist) – is to continue to tax cuts and then cut spending whenever we get around to it.

                This, in my mind, is even dumber; it’s downright pathological. And it is being actively preached by those who claim we should keep the tax cuts (good) without any concrete plans to close the gap in spending (very bad).

                1. Greenspan calling for the tax cuts to universally expire, as the article indicates, to pay for yawning deficits (caused by overspending) is stupid – we all agree on this one.

                  Mind-numbingly stupid. This is the point Stossel is making.

                  But the alternative posed by some (whether or not Stossel is included is up for debate, but certainly those like Grover Norquist) – is to continue to tax cuts and then cut spending whenever we get around to it.

                  Milton Friedman: “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, “How do you hold down government spending?” Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.”

                  1. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.”

                    I deeply respect the late Dr. Friedman – I really do – but hasn’t the last decade thoroughly discredited this hypothesis?

                    1. No, in fact it’s actually further enhanced his point. Since spending cuts aren’t going to happen with this administration, the only way the citizens can call for spending cuts is to tell them to take less of our money.

                    2. Since spending cuts aren’t going to happen with this administration, the only way the citizens can call for spending cuts is to tell them to take less of our money.

                      This assumes some small sensitivity to running up further deficits – which, as we have seen in this administration and the last – does not exist.

                      Therefore, what force exists to cut spending if cutting revenues exerts no fiscal pressure?

                    3. A few of his views – certainly his monetarist ones, I’d say – have been discredited, but it’s hard to argue with the logic of the above statement. At some point, printing and borrowing just aren’t options anymore.

                      The real problem I see here is that no matter what you do, government always seems to find a way to spend more money they don’t have. Sooner or later we, or our kids, have to default on these debts – but squeezing blood from stones just doesn’t seem like a viable option.

                      And actually, technically, we don’t have to default on our debts either – in reality, we could free the economy and once more become an engine of production that was the envy of the world – and thus pay down our debts like the responsible nation of hard-working, inventive people that we were supposed to be and which was described to me in grade school. We could do that… But we aren’t. We’re doing the opposite.

                      I don’t blame Friedman for much of that, except his rejection of the Austrian view on the Business Cycle – since had he done that, he might not have supported quasi-keynesian bullshit in monetary policy.

                    4. And actually, technically, we don’t have to default on our debts either – in reality, we could free the economy and once more become an engine of production that was the envy of the world – and thus pay down our debts like the responsible nation of hard-working, inventive people that we were supposed to be and which was described to me in grade school. We could do that… But we aren’t. We’re doing the opposite.

                      You’re right, we’re doing the opposite. Politicians don’t care about running up the credit card, as long as they’re not around when the bill comes due. So what exactly is exerting the counter-pressure to stop runaway spending?

                      Look, at this point, running up massive deficits amounts to generational thievery. And tax cuts are great – wonderful – but at the moment, they have zero effect on cutting spending. The result is that we cut taxes by stealing from the young, since cutting spending is somehow out of the question.

                      I’d much, much rather see us cut taxes and cut spending. But if cutting taxes doesn’t come with the corresponding spending cuts, then how is this not simply a scam?

                    5. It’s not exactly like there’s a good solution here, Steve.

                      Running up massive deficits IS generational thievery – but we’re running gigantic deficits with or without the Bush-era tax cuts.

                      These cuts aren’t going to make up that deficit, and you couldn’t possibly raise taxes enough to make up for it anyway. Moreover, higher tax rates put even more strain on an already abysmal economy and will further reduce our opportunity to ever dig our way out of this hole.

                      I have no way to know which is better, but if it comes down to it, I think it’s more important not to do any more damage to the economy as it is today. Ultimately, I’d suggest the following:

                      1. Hold tax rates at whatever they are today or figure out a way to lower them (not really possible today, perhaps).
                      2. Immediately end all “stimulus” programs and repay the debt.
                      3. Immediately recall troops from Iraq & Afghanistan, and hopefully from many other parts of the world.
                      4. Repeal the recent financial bill and the health care bill and basically undo all the damage Obama & Bush did in policy over the last several years.
                      5. Make bankruptcy a smoother, easier process so that assets can clear.

                      I get that most of that is unlikely – but why sacrifice one of the few things that could help get the economy going again at this stage? We’re pretty fucked either way, but extracting even more money from the American people at this time doesn’t seem like a smart plan at all.

                    6. I don’t blame Friedman for much of that, except his rejection of the Austrian view on the Business Cycle – since had he done that, he might not have supported quasi-keynesian bullshit in monetary policy.

                      This.

                      Rothbard > Friedman > Keynes. QED

                    7. Rothbard > Friedman > Keynes > Krugman>……………………………………> Cramer > 7-11 Cashier > Oprah >………………………….Snookie > The Situation >…………………> Drunk-Monkey-Dartboard > Greenspan > a Dial-tone……..

                2. is to continue to tax cuts and then cut spending whenever we get around to it.

                  This, in my mind, is even dumber; it’s downright pathological.

                  Why would you think something that crazy?

                  In plain terms is it better to get mugged so to enable the mugger to stalk and attack you at a future time.

                  Or is it better if the stalker / assaulter pays directly for his activities without also robbing you?

            2. Yes, that’s exactly what people are saying. Many claim that tax cuts need to be undone (offset is another word for it) by raising taxes.

            3. Yes, that’s exactly what people are saying. Many claim that tax cuts need to be undone (offset is another word for it) by raising taxes.

    2. Ummm I thought the article said that Greenspan wants to end the Bush tax cuts (raise taxes).

      The popular DEM talking point is that the Bush Tax Cuts need to be paid for. This is what Stossel was referring to in his last paragraph. He argued that you don’t pay for tax cuts, you just spend less money. It can be seen plainly from this line at the end of his article –

      “If cutting taxes leaves less money for government programs, the answer is simple: Ax the programs!”

      1. I think I missed that line in the original read; hence, my question.

      2. There’s also the assumption in the argument of “paying for tax cuts” that the relationship between tax rates and tax revenues is linear. How do you “pay for” a tax cut if your tax rate is above or near the point of diminishing returns?

      3. But the Govt. HAS NOT been cutting spending when taxes get cut, THEY BORROW the DIFFERENCE! Is everyone taking stupid pills?

  4. It was the least regulated institutions that caused the most strife in the financial food chain. Namely, Lehman Bros, Merrill Lynch, and Bear Stearns.

    1. You might want to put Freddie and Fanny in there. Pretty sure they were less regulated than anyone on Wall Street.

    2. Who was backing their behavior up?

      1. No one. They all failed or were shotgun married to prevent systemic collapse. Lehman x 3 would have been disastrous.

        Fannie/Freddie were restricted to the repurchase of only conforming mortgages. In 2005 the upper limit was $330,000. OTOH, the investment banks bought whatever was marketed by the fly-by-night mortgage originators that were so prevalent 2003-07.

  5. I actually Alan Greespan and his dingbat wife in a restaurant a couple of weeks ago. And they really do look alike in person. It is just uncanny.

    1. Your first sentence is missing a verb.

      I suggest “felched.” Yuck.

      1. I am skipping words today. I saw Greenspan and his dingbat wife. Sorry.

        1. I’m sure it was almost as unpleasant.

          1. Greenspan is married to The Joker. John’s just lucky he didn’t get stabbed.

            1. That photo is majorly touched up. In person she is anorexic skinny and wrinkly as hell. She really does look like a female version of her husband.

              1. He looks like he is made out of ballsack. And liver spots. At least she wears makeup.

                1. To slightly cover up the fact that she looks like she is made out of a liver spotted ball sack.

                2. I take great offense to that!

                3. + a ball sack. That was fucking funny.

  6. I read Greenspan’s book a few years ago and it read like a guy who parted ways with his principles a long time ago. He has more faith in government than he does in the market, and to me he sounds more like a communist the past few years.

    1. Yeah, it read like a long, boring excuse/rationalization-riddled apology to his younger self for squandering his great mind in pursuit of power.

  7. I actually Alan Greespan and his dingbat wife in a restaurant a couple of weeks ago.

    “ate”?

    That guy looks pretty stringy.

    1. Another Match Game opportunity?

      Gene: “I actually __________ed Alan Greenspan and his dingbat wife in a restaurant a couple of weeks ago.”

      Unfortunately, I got nothing this time. Anyone inspired?

      1. I think “bitch slapped” fits

      2. Skullfucked.

        You see, Andrea likes to wear a viking helmet out to dinner sometimes, because it draws attention away from the musty smell of her crotch and Alan doesn’t really know what’s going on anymore. Right Alan?

        Alan: Oooooooobama! Obama. O-blibity-bama.

        Thanks, Alan. So, since Alan hasn’t achieved an erection since Ayn Rand last allowed him to tweeze pubic hair out of her ass crack, Andrea ordered fellatio as an appetizer.

        Alan: Obamaaa. Omaba. Oooooobaba!

        No, Alan, no Obama. So anyway, Andrea asked me to get up on the table, grab her by the horns, and skull-fuck her like I was Leif Erickson, or Leif Garrett. I can’t remember. I made it happen, though. I gave Al some seed, too.

        Alan: Obama!

        That’s right, Alan. Obama. So there it is, Gene. Skullfucked.

        1. Served?

      3. Resuscitated?
        Why did you do that?

  8. You might want to put Freddie and Fanny in there. Pretty sure they were less regulated than anyone on Wall Street.

    Worse than that; they paid a lot of protection money to the right people, and it worked.

  9. Notice how the beltway and nyc libertarians never mentioned that Alan Greenspan was once a big supporter of the gold standard. Or, how Milton Friedman made an 8.3 trillion dollar error per David Stockman. For some reason people like Katherine Mangu Ward and other staff at Reason think they’re smarter than people like Jim Rogers or Stockman who have “real world” experience. Keep chirping on your typewriter Reason because it falls on deaf ears. A staff full of interns with journalist degrees, none in finance or economics. I wouldn’t even trust Matt Welch as a teller or customer service for a bank.

    Reason magazine is great with social liberties but terrible with economic liberties. They seem to advocate the same bullshit supply sider nonsense that simply doesn’t work. Call anyone kooky for advocating “honest” money.

    1. Textbook ad-hom.

      Congrats!

    2. Yes. Clearly, the central-planning command economy model favored by the Keynesians and collectivists is once again (in real time) showing those dumb supply-siders what REAL economic growth looks like.

      1. Call anyone kooky for advocating “honest” money.

        Please outline for me what you mean by “honest” money, and what would qualify as “dishonest” money.

        1. replied to the wrong comment, whoops

        2. I imagine it would look something like this:

          Honest money = money taken by force from private citizens and companies, to be re-distributed to favored constituencies in exchange for votes and political support

          Dishonest money = profit made by a company in the private sector

    3. “Greenspan even contributed three essays to Rand’s book Capitalism: The Unknown Ideal?one for the gold standard,….”

      Are you people even reading the article?

      1. I don’t have to read anything! My mind is already made up!

        1. milton friedman was a stooge economist who in his own right advocated for redistribution of wealth. he has a good pat on the back for 99% of this fiscal insanity. thank him for ending the draft, but fuck him in the ass for advocating some really stupid economic policies. greenspan was just another ayn rand fanboy for the time. at least he got over it. how can you be intellectually free from any mind when you’re on your knees trying to eat ayn rand’s pussy? fuck-a-ayn-rand.

          reason has also become this paul ryan “cheerleader”. fuck that. look at his votes and where paul ryan has put us. it’s a little too late to car. listen to his whiny house floor speech on bailing out the banks.

          i like balko, gillespie and jesse walker. as for the rest of reason, i wouldn’t trust them as day traders with their own money. i wouldn’t piss on them if they were on fire.

          1. Boy you sure seem to know how to win friends and influence people, is there a magazine or newsletter that I may subscribe to in order to learn more about your ideas?

            1. yeah, it’s called “you’re a fag”. you can pick it up next to the cheesy romantic novels you’ll find in your local grocery checkout lane.

              tman your sarcasm is the dying end to a banter that never began.

              peace out niggas.

              1. You seem to know quite a bit about this publication, enough that you can vouch for it’s content and recommend it to others. Not to mention expert knowledge of the romance novel genre, with detailed insight into apparently various levels of craftsmanship.

                Also you’ve severely mistaken some other text for your fortune cookie. Or the ‘zen master’ mail-order training DVD you bought was defective. Or was it your parents divorce that stunted your social development? I’m guessing it’s not your stunning popularity with the ladies that keeps you busy?

                What was this peace inside of before? Why did you take it out? Did you ever consider that a treaty with you might be a premature assumption of your various adversaries desired policy?

          2. Do you judge ideas based upon the content or the source?

          3. I, too, and fascinated by this revolutionary financial system “reason is questionable” seems to have in mind – where individuals, instead of being free to produce, profit, rise and fall on their merits, play by the rules and pay when they don’t – are consigned instead to simply do what a more knowledgeable far-removed entity somewhere has prescribed for them to do. It’s far more humane to have that system than to allow people to be free to engage in commerce at will. People might not end up giving their lives and wealth to the government when given the choice. Can’t have that. It’s uncivilized.

          4. excuse all the misspellings. you see i’m at work, at a real financial institution and i’m writing comments when i really should be working. so to katherine mangu ward you cum guzzling queen, blow me. you’ve read books, i have to. i’ve read roald dahl books, i’ve read clive barker books and i’ve read tons of economic books. i went to school for finance and got a job in the “real world”, not some think tank publication with no “real world” experience. you wear the badge of blogger intellectual, i don’t. i don’t need to. i work for one of the largest private banks in the commercial loan area, which means i’m not some keyboard/blogger gangster. i know how to do the shit, hence i was employable. mangu you even know how to fill out a bank deposit slip? you’ve got no fucking clue in the world. absolutely none at all. if i wanted to take a paycut i’d leave my job and lobby to take over yours. instead of cheerleading the “federalist” paul ryan, i’d call his ass out.

            reason doesn’t know the difference between friedman, fekete to hayek.

            so to all you bloggers, suck my dick. get real jobs in the real world. think tanks are for people who don’t have the qualifications (but have a degree in journalism).

            that’s the end of my terrible rant full of hatred.

            1. And what a rant it was – certainly spittle-flecked and full of hate.

              So what’s your economic system of choice, again?

              1. Since RQ is doing such a terrible job defending himself, I’ll help him out. I don’t think he’s criticizing Reason writers and Milton Friedman for going too far in their ideas about economic freedom, it’s that they don’t go far enough. Based on his earlier comment about their tendency to brand anyone who advocates “honest” money (which I interpret to mean gold-backed) as “kooky,” I think he’s a Paulian. But he’s not representing himself or his ideas particularly well.

            2. You have answered my question, you definitely judge ideas not on their merit but on the source.

            3. Sounds like someone zipped their pee-pee.

            4. Looks to me like if trusted source says something that you know to be wrong you go along with it anyway, and if a source you have deemed to be unreliable for whatever reason says something you know to be true you speak out against it anyway.

              Them’s some principles, or should I say principals?

            5. “so to all you bloggers, suck my dick.”

              Get your dick outta your own mouth first.

            6. You work for a big lender in an economic collapse? Lol, if took a source argument instead of content as was pointed out, I would consider you to be the last person to listen to 🙂

          5. as for the rest of reason, i wouldn’t trust them as day traders with their own money. i wouldn’t piss on them if they were on fire.

            I would,

            Even if they weren’t on fire.

    4. Let me summarize…

      Stoopid liberetardians! u’s all morans! u’s no nuthing! HUR, HUR, HUR! )(@#$HFDSHASD fags.

    5. Given that the Fed is populated by PhDs, I’d say advanced degrees are worth diddly!

  10. It’s true. You don’t need to read things to know what they say.

    1. You have to pass them to see what’s in Nancy’s plans.

  11. Why does NO ONE in the press connect the dots?

    You cannot spend trillions a year on defense and have tax cuts.

    We CAN NOT AFFORD THE WAR.

    FORGET about social programs. We spent $7.5 trillion in the last 25 years just to keep aircraft carriers in the gulf.

    We spend a trillion plus a year on the Pentagon.

    The disaster will only spiral farther out of control until someone in power has the balls to fully decapitate the military-industrial complex.

    1. Stunning assumption bonehead.

      Yes, we all know the basket weaving unicorns of rainbow land don’t like any kind of violence, and in their parallel universe in the marshmallow dimension, no one is even mean to anyone. However, while your sparkle joy-joy wands are very colorful and interesting, you’ve overestimated your grasp on our reality. BTW, the 60’s just called, and said they want you to return all their worn out clich?s, but that you can keep the tie-die beenie (& vis-a-vis head lice).

      Not that it its overly expensive, but unlike the money spent on your education, the military seems to be the only segment of the government that actually produces something from the tax investment. Those carriers are pretty damn incredible works of engineering… what kind of wonders is the education-industrial complex churning out these days?

  12. We spend (total) more on education and entitlements than on the defense. And defense is constitutionally mandated. Education spending and entitlements are not.

    Facts. They’re what’s for dinner.

    1. But I thought the two words “general welfare” outweighed everything else in the Constitution.

      [/sarcasm]

      1. Sigh. People don’t get what “General Welfare” means in the Constitution at all. See, General Welfare was a person. It just so happens that I’m his sole surviving lineal descendant.

        Please cut out the middle man and honor the Founders’ original intent by sending me all of your taxes.

        1. I believe you’re referring to General Cyrus ‘Snatch’ Welfare who fought for the Confederacy. Long thought as having died before the end of the war, he emerged from hiding in the 60’s and began a terror campaign called the hippies, later rebranded as the progressive movement, it seeks to reinstate slavery and many other smelly bad things.

  13. The one free market cheerleader with the brain and spine to admit he was wrong should just shut his mouth so you don’t have to question your cherished fairy tales?

    1. So the government guy who, get this, sets the interest rate is a free-market cheerleader.

      Wow, Tony. Just wow.

      1. Blow me. Never a true scotsman. Not even Alan Greenspan, libertarian supply-sider extraordinaire, is pure enough to fit in your club.

        Of course like all intelligent 9th graders he eventually realized the unadulterated folly of his worldview, even if he is pushing the century mark.

        1. The interest rate is a pretty big deal, Tony. I don’t know what time period in the Spectacled Scrotum’s life you’re saying his conversion took place, but it’s some pretty serious apostasy to claim free-market chops when you’re King Tard of the banking realm.

          I think he switched to the dark side long before Reagan appointed him.

          1. He admitted that his premises were wrong after the economy collapsed. That is, after economic circumstances PROVED them wrong. None of you other guys got the memo. Luckily there’s a ready-made GOP-supplied alternate history out there so that you don’t have to give up beliefs that have been completely belied by historical events: poor black people did it!

            1. You’re right – the economic circumstances that proved him wrong were those that his planning and policy helped mightily in creating. But as Fed Chairman, his premise was that he could plan a bubble-free economy by manipulating interest rates and money supply… like any monetarist. Of course he was wrong. You can thank him for years of cheap credit and subsequent malinvestment. He’s also the same guy that was pushing ARMs a few years back – so he’s a shitty financial planner for both the consumer and the government.

              He’s been trying to distance himself from his involvement in the financial meltdown for months. While he had a lot of help from many sectors, he and his policies made a lot of bad behavior and shitty decisions possible. Its no surprise to see him shit on the free market – being one of the architects of the latest massive failure of central planning.

              1. I am not defending Greenspan for his activities at the Fed, I’m defending him for being able to admit when he was wrong.

        2. Tony. You fucking idiot. Money accounts for virtually 50% of all economic transactions… umm… ever.

          Controlling the supply of money, and thus its value, is REALLY fucking important. It’s also the opposite of “free market”. WAY the opposite…

          Seriously, why are you this dumb, all the time??

          It’s like you do it intentionally. The free market = NO CENTRAL PLANNING of the economy… No bureaucrats deciding what the “correct” price of anything is and not inhibiting people from agreeing to basically whatever voluntary exchange they want with their own property.

          Mr. Greenspan – who you may remember as the guy who we used to call “The Maestro”, for fucks sake! – was a CENTRAL PLANNER who spent years getting to dictate the price of money. Sticking with your fallacious “no true Scotsman” argument – If libertarians are Scotsmen, Greenspan is Chinese.

          Ergo: Free market ? Alan Greenspan.

  14. Is there ever a good time?

    Apparently not. Not even to pay for a war. Not ever. Nope. Just send your brain on vacation and say “cut spending” and pat yourself on the back for being so fiscally responsible.

    This no-tax-raise-ever bullshit is not a rational fiscal policy, it’s a refusal to address reality because if you countenance one tax hike, then there might be others. This is pure dogma. It’s dangerous because the entire GOP believes in it and will make a big shitstorm over anyone trying to balance the budget with revenue increases. Of course their motives are obvious–they don’t really care about fixing things, they have an election to win. But what the fuck are responsible libertarian columnists doing?

    The rich are not more burdened with taxes now than in the past, but much less. There has been a concerted effort to transfer wealth upward for decades and I don’t give a shit if you people say it was theirs to begin with. No it wasn’t, it was ours, and we gave it to them for no reason other than they wanted to take it, and they sold it to us with stupid supply-side fairy tales. Trickle this, you disingenuous libertarian douches.

    1. I love you, Tony!

    2. “No it wasn’t, it was ours, and we gave it to them for no reason other than they wanted to take it, and they sold it to us with stupid supply-side fairy tales.”

      What in the hell does that even mean?

      Take your meds, Tony, for everybody’s sake.

      1. Money that belongs in the treasury earmarked for payments to rich people is money that was ours and is now theirs. Who are you to say it was their’s to begin with?

        1. Rich people? Are you talking about evil bureaucrats or basketball players? Are they really illuminati vampires too? Do lotto winners count? What about celebrities, even the cool ones like DEVO and that guy who does all the crappy jobs on TV? Or an innocent progressive child born on a desert island, who then thru no fault of their own finds out they are heir to a vast fortune? Is it their evil that makes them crave the money, or is there actually some kind of addictive chemical on the bills that effects the part of the brain that governs morality?

          Do you ever worry that evil rich people, especially right wing crazies, might be so devious as to alter their appearance during the day, maybe even live functioning lives as Democrats to avoid suspicion? Infiltrating the enemy is super villain 101, they always have a master of disguise on their team, usually a former east german or russian who grew up travelling with a circus. So you should really check that out. A good way to tell, is if you know someone who never has his wallet to buy a round of drinks, and is always mooching. He probably has millions of gold Iraqi war bucks in his wallet the whole time. That’s how they get their money… They steal it over there, every Iraqi village has an oil well in the center, that the wholesome villagers toil in the hot sun for. But these rich scumbags will steal all the oil just to keep making more Walmarts and McDonalds or something. Alas so many goats go hungry every day. We should really just bomb them out of their misery.

    3. “There has been a concerted effort to transfer wealth upward for decades…”

      Yes, things like Social Security, Medicare, progressive taxation- all pushing wealth to the top of the pyramid.

  15. I have tried to do some research on this, but it is really hard to tell who is truthful anymore.

    Are the Bush tax cuts good for America or not? From the right I hear yes, backed up by a miriad of “proof” and from the left I hear no, backed up by a miriad of “proof”.

    I am hoping you well-educated folks, both left/middle/right, can answer this for me.

    1. Define good for America. Did they increase revenues as was promised? Nope, quite the opposite. Did they create jobs? Uh, look around.

      Did they put some more cash in the pockets of the richest 2%? Yep. BINGO, the one libertarian value, rich people getting richer, damn the consequences.

      1. Well it doesn’t help when you continue spending nonexistent wealth on “wars” and theft. Unfortunately, without the cuts, those assholes would have just spent more. Why? To fuck us, that’s why.

        1. Are you under the impression that there has been some restraint in spending?

          All I ask is that a single libertarian besides Alan Greenspan grow the tiniest pair of nuts and say sometimes taxes need to be raised in the real world.

          Fuck I could sit around all day masturbating to thoughts of a Star Trek like socialist utopia but what is the goddamn point. We’re not getting rid of entitlement programs any time soon so can’t one of you guys address reality for one goddamn second?

          1. As long as you admit you enjoy jamming that big gun of the state in our temples we might be able to agree that you are stealing it from us in order to increase revenue. We just want some honesty for once. Just admit you love the power. Is that unrealistic?

            1. No I will not now or ever admit that taxation is theft. Taxation is the user fee you pay for the service of civilization and if you don’t like it you are perfectly free to move somewhere else, where you will almost certainly be required to pay taxes as well.

              1. Cut spending, fuckhead.

                1. Cut spending on what?

                    1. 10% across the board for a start. All sacred cows get gored. But you’ve read me saying this for weeks now and are just playing stupid. Which comes very easily for you.

                    2. SugarFree,

                      And you’ve seen my very rational rebuttal, which is that you’re being dumb. Cutting any percentage across the board only rewards the actual money dumps and punishes efficient programs that might not need or be able to be cut. Be a little more creative. I’m all for slashing defense. Entitlement programs are fairly easily made sustainable. What I won’t tolerate is putting granny on the street to die so that a couple hundred thousand of the richest people the world has ever known can hang onto some pocket change or their 10th chateau.

                    3. Grannies weren’t dying on the street BEFORE Social Security, so what makes you think Social Security is keeping them alive now? What do “Progressives” have against Charity?

                    4. Grannies weren’t dying on the street BEFORE Social Security, so what makes you think Social Security is keeping them alive now? What do “Progressives” have against Charity?

              2. You know, Tony, I would agree with your conception of taxes if the money wasn’t taken as some dickwad politician’s society improvement experiment and instead spent on the absolute minimums necessary for defense and courts and stuff.

                Instead, the “price of civilization” includes the cost of tunnels for turtles and other totally wasteful shit. Your civilization sucks.

                1. Not only does Tony’s conception of “civilization” suck, it’s pretty much impossible to opt out of. So like, say I thought it would be better to live in a civilization whose “leaders” didn’t feel compelled to take people’s money and blow it on a $2 million bike rack… Nope. Can’t do it.

                  Feels a hell of a lot more like theft (you know, aside from taxes being pretty much a textbook definition when you strip away everyone’s fancy titles and the veneer of legitimacy) when you start looking around and actually paying attention to reality. When politicians are basically collecting taxes purely to repay favors to their buddies, who in turn get them re-elected in a vicious, perpetual cycle of ass-raping the public, I’m pretty sure we aren’t talking about a civilization most people really want to be a part of if they stopped to think about it.

                2. Subsidize Me!

                  Thank you for admitting that we have only policy differences, that you’re not, in fact, an anarchist, and that taxes are indeed necessary, implying sometimes it’s necessary to raise them.

      2. Tony- I hate to pull the “citation needed”, but would you please provide some sort of non-biased evidence that the tax-cuts raised no revenue/helped only the rich?

        You may be correct, but until there is supporting documentation your statement is only an opinion and there are plenty of those on all sides.

        And to be clear, my under-educated opinion is that yes the cuts provided the wealthy more spending money, which may have “trickled down” to the middle and lower classes. People with money tend to spend it thereby benefitting those in lower financial classes via jobs.

        A “rich” man may buy a $500K yacht, but it would seem to me that the tax on that yacht and the labor at all levels involved in building/transporting the yacht would benefit so many others that it would be a good thing for America in the form of tax revenue and jobs.

    2. To answer you 29inNet – Tax cuts, in general, are always good for the population. The problem is that when you cut taxes and keep going on a massive spending binge like Bush did (and like Obama has turned into some kind of olympic sport!) is that all you’re doing is contributing to deficits.

      The Bush tax cuts are actually really useful in demonstrating that when you’re talking about an overall tax-burden dragging down the economy, you can’t just talk about marginal rates. The real drain on the economy is government spending – because most sane people know, intuitively or explicitly, that eventually trillions of dollars thrown into a government money pit will be coming out of their pockets. Even if they have slightly fewer dollars taken from them this year thanks to tax cuts, you still know that next year, the damage will have to be worse to cover the gap.

      In general though, tax cuts -> more money withheld by individuals -> more money for them to either save, or spend on goods & services of value to them -> a bigger part of the economy working off of real consumer demand instead of mandates & cronyism dictated by politicians = good.

      1. I appreciate the response Sean…I was composing my response (slowly it seems- I type like shit) which seems to include the gist of your points.

  16. “No it wasn’t, it was ours, and we gave it to them for no reason other than they wanted to take it, and they sold it to us with stupid supply-side fairy tales.”

    If you bought a pet rock, that was your money to lose. If they made the pet rock, and you bought it, and no one pointed a gun at your head, it was your money to lose. If you thought you really really wanted a pet rock because you watched a commercial that you think deluded you into thinking you wanted a pet rock, it was still your money to lose. You made them rich asshole. You didn’t have to give them shit. But no, you had to have that pet rock.

    Replace “pet rock” with any number of useful products and watch the lie fall to pieces. Except houses, for some reasons, a completly different set of assholes wanted us to buy houses with cheap credit manufactured by state-sanctioned institutions. As I did with the pet rock, I looked out at the landscape of bullshit and said “But…I don’t fucking need a goddamned house”. Unfortunately, saving the pittance I can scrape together after taxes instead of buying shit I don’t need/want is one of the most immoral things fucks like Krugman(and Chony) thinks a person can do.

    1. I don’t have any problem with people getting rich selling whatever people will buy. I do have a problem with the tax code being written in such a way that wealth stratification is as regressive as possible.

      I do however have a slight issue with snake oil. People should be informed consumers. And supply-side economics is pure snake oil.

      1. Tony|8.12.10 @ 2:54PM|#
        “…And supply-side economics is pure snake oil.”

        And Tony is an ignoramus.
        And unlike Tony, I have evidence.

      2. Sadly, Tony is so ridiculously ignorant of the study of economics that not only does he fail to grasp what ideas are & are not snake oil, he can’t even understand why it’s important not to fuck up such assessments.

      3. “I do have a problem with the tax code being written in such a way that wealth stratification is as regressive as possible.”

        What can it mean that wealth stratification is regressive? How do those words even go together in a way that possibly makes sense?

  17. There is actually no evidence to support the claim that “easy money” (whatever that means) contributed to the housing bubble. By this standard of “easy money” Japan should have seen the mother of all bubbles over the last two decades … so where is that bubble again? Also, serious analysis suggests monetary policy didn’t cause the bubble. All anyone has is dumb Austrian theory and a naive regression done by John Taylor that’s utterly laughable. Serious analysis provides scant evidence in favor of this hypothesis. People like Del Negro and Otrok or Jarocinski and Smets have done the hard work using structural and Bayesian VARS and find only a small contribution of monetary policy to the housing bubble. Also, I still don’t know why “easy money” (again, whatever that means since interest rates are a stupid metric for the stance of monetary policy – for example, money is extremely tight right now) causes banks to give bad loans. Until someone can provide evidence beyond a silly regression that’s completely meaningless I won’t be tossing out over 60 years of macroeconomic theory which simply suggests the feedback from monetary policy into housing prices is not that strong.

    Also, there is another big problem with the story. Monetary policy can’t have regional impacts. We are a currency union. So, why was the bubble mostly regional? (Don’t cite me the drop in prices in the fall of 2008, that was caused by inflation expectations plummeting due to the federal reserve’s contractionary policy – that wasn’t a bubble bursting).

    I’m also surprised at Stossel. All the libertarian rhetoric blaming monetary policy (which has no basis in empirical evidence) somehow assumes that the market is retarded. I always thought we libertarians trusted the market a bit more than that. Do we really believe the market is composed of a bunch of morons who can be tricked into doing bad investments by the central bank? Really, do we believe that? I, on the other hand, trust the market – I realize they make mistakes and they can often have big consequences, but it’s better than the alternative.

    1. Yes, people respond to trillions of cheap dollars pouring into an economy. That’s all we’re saying. And, yes, libertarians do believe that when someone gets cheap, fake money, they tend to malinvest.

      1. Besides, why would gov’t ban counterfeit if it leads to no bad consequences? The people who get it first benefit. Those at the end of the line get shafted.

    2. “There is actually no evidence to support the claim that “easy money” (whatever that means) contributed to the housing bubble.”

      Actually – there’s mountains of evidence for this, I would consult http://www.mises.org for hundreds, if not thousands, of pages on that topic. Also, Tom Woods’ book “Meltdown” would be a good resource. As SoonerLiberty points out below, YES, people respond to trillions of brand new dollars pouring into the economy – even if they aren’t consciously aware of the big picture.

      When the major investment banks get first dibs on those trillions of dollars, they don’t send out a memo to their account-holders saying “Hey, the government just printed a shitload of money!” They just start using that money (or rather, they use it when it is actually available for them to use based on their various asset positions) and trying to earn profits on it via lending & investing.

      So what ordinary people are aware of is that there is more credit available to them at lower interest rates and that saving money is less advantageous than spending it.

      “Also, there is another big problem with the story. Monetary policy can’t have regional impacts. We are a currency union. So, why was the bubble mostly regional?”

      Bullshit!

      Different states & cities host different incentives and different regulatory environments, and realty laws vary widely. Cities that are more aggressive about housing policy (on top of the fairly uniquely aggressive HUD tactics in the late 1990s/early 2000s) and push for lower lending standards, and more home ownership experience the bubble worse than cities which don’t do those things. Shock.

      Also, historical data is probably not very reliable in terms of monetary policy & housing. Government hasn’t always pushed the housing policies that they pushed in the run up to the crisis – and we only really have since the 1970s-80s that the Fed has been able to manipulate the currency as they do now.

      “Do we really believe the market is composed of a bunch of morons who can be tricked into doing bad investments by the central bank?”

      To the contrary, they’re not morons at all! They’re just ignorant of the big picture actions of the Fed for the most part – and thus ignorant of the long-term consequences of their policies.

      Mostly it’s just people responding to incentives.
      Banker says: “I’ll give you a great deal on a loan for a brand new house!”

      Government says: “We’ll even give you $8,000 to buy the house if you act now”

      Realtor says: “Look at this chart, housing prices are just going up and up and up – it’s a great investment! Why ‘waste’ your money on rent when you could have equity and be a home-owner!?”

      Potential home buyer says: “Well, I don’t know that I really have the money, but this is too good a deal to pass up… I’ll take it.”

      Problem is – The government & the banks wouldn’t have been able to offer low rates and special rebates/tax incentives without the printed money, and that in turn produces the kinds of charts realtors use to claim that housing is always a great investment.

      The consumer made a pretty sane choice given his available information of prices. His information was just radically distorted by bad policy. And that is unsustainable.

      For that, see Bastiat’s parable of the builder.

      ” I, on the other hand, trust the market…”

      Then trust it to set its own interest rates and the value of currency without intervention.

    3. Read “The Big Short” by M. Lewis

  18. There is actually no evidence to support the claim that “easy money” (whatever that means) contributed to the housing bubble.

    I’d be more convinced by your dismissal of “easy money” sa a factor if you would define it for us.

    Low interest rates? Low lending standards? Raising money to lend in the secondary mortgage market? All of these? None?

  19. Tony, and all you other liberal fools, keep this in mind. I ran the largest private banking cartel in the world. That’s right, the Federal Reserve is private, it is not a gov’t agency. Where do you think all your gold went? We have it. We replaced your lawful currency with play money, that has lost 98% of it’s value in the past 100 years. Now, fight amongst yourselves, I have still more to plunder.

    1. Of course, this private cartel could not exist without gov’t backing, lest Tony gets the idea that the free market produces such atrocities.

      It’s also interesting that Tony believes the free market is a fairytale. Yet, he blames it for everything.

      1. Yeah the free market is a fairy tale. But not a happy one, more like the ones where children get eaten.

        That’s why the free market philosophy that has been guiding our fiscal and monetary policies for decades has wrought so much harm and misery, despite not fulfilling its ultimate goals.

        1. Do you REALLY believe we’ve enjoyed a free market for decades?

          1. No, just the collateral damage from the attempts to get us there.

            1. Yes, and gov’t-run economies must be horror stories. Have you ever read about the successes Somalia has had since its gov’t fell? Probably not, nor would you believe them, b/c they contradict the delusions you’ve constructed.

              1. Then why don’t you move there?

                And yes, I’ve already started drinking.

            2. You do realize that one could make the same argument against government intervention into the market, right?

              For instance, that what we’re seeing now is precisely because the government simply can’t help but intrude into the market, and that the government has steadily been gaining more and more of presence in the market since its inception?

  20. I hate those fucking commercials where some realtor douche tries pawning houses off onto the unsuspecting public by saying it’s a good investment and paying rent is a bad idea. Have you ever done one of those loan calculators? At 6% interest for $100k you end up paying the bank $215k after 30 years, with no guarantee that your house will be worth that $215k at the end of the term. This is a good investment how?

  21. Huh. Did I miss Stossel?

    STOP YELLING AT ME, JUDGE!

  22. I thought Hippie In A Suit was going to make WikiLeaks Huntress cry.

  23. You rail again Greenspan, but he’s not so different from you. You both think debts are bad, you both want to see lower spending and you both want to see lower taxes. Greenspan thinks debt is the worst of the three and is willing to sacrifice low taxes. You think the debt is not so scary and therefore are unwilling to raise taxes. You shouldn’t malign him because he is 90% in agreement with you and just differs on priority.

  24. It’s pathetic of you to pretend you don’t understand the statement “tax cuts should be paid for.” You may not like the wording, but the meaning is obvious. It’s dishonest argumentation to set up a straw man by intentionally misinterpreting a statement.

    1. You can’t “pay” for tax cuts. By definition, tax cuts are the government lowering the amount of money they take from you. They are still taking money. You can only pay for spending.

      If I start getting paid less, I don’t go out and buy a house and a new car and a flat screen and a bunch of other crap, I CUT BACK ON MY SPENDING HABITS.

      1. Yes, it’s dumb wording, but it’s not like you don’t know what they mean when they say it.

        You’re talking about “starve the beast.” How has that been working out? You should “pay” (dumb wording) for your tax cuts with reduced spending. If you don’t eat your meat, you can’t have any pudding.

    2. http://www.theonion.com/video/…..mon,14289/

      I can agree with you, cut spending to pay for tax cuts, as opposed to the GOVT answer: BORROW MORE CURRENCY!

  25. Alan caused the credit crises by too much printing, and now Ben is printing twice as much. The next credit crises will be a doozy.

  26. The printing press is making the budget deficit worse. Inflation is not even across all sectors. Supply constrained sectors experience inflation, while surfeit supply sectors are simultaneously experiencing deflation. In particular, the health care sector is experiencing hyper inflation due to the interaction of the printing press with de jure supply constraints. Health care is the biggest budget buster around.

    To help balance the budget, stop printing, and open up health care to genuine international competition.

  27. That may be your best article Mr. Stossel.

  28. I believe the era of tax cuts is over, and that it is high time for tax suspension on the way to ending the income tax altogether. Tax cuts mean only selective freedoms for a favored few. Liberty for all working taxpayers is infinitely more valuable. We have been stuck in low gear with tax cuts. Let’s move on: http://lobbyingforum.com/petit…..spx?id=211

  29. Greenspan committed the libertarian sin of letting reality alter his views.

  30. I can agree with you, cut spending to pay for tax cuts, as opposed to the GOVT answer: BORROW MORE CURRENCY!

  31. How Absurd! How Monstrous! Your former hero coming to his senses, realizing that things are a little more complicated than any Libertarian would have you beleive. Free markets will not solve everything, neither will Jesus or Saint Nick. THEY DON’T EXIST.

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