Thomas Sowell, on States: "They should go bankrupt. I'm looking forward to it."

There's a new interview of economist Thomas Sowell by John Hawkins of Right Wing News. Sample:

We're getting very close to the point where we could have states default on their debts for the first time. What should happen then?

They should go bankrupt. I'm looking forward to it.

There are three possibilities -- bankruptcy or bailouts or ruinous taxations. Of the three, bankruptcy is the one that makes the most sense because it's the one that conveys the most accurate knowledge -- which is that they've run out of money and couldn't cover all the promises they made. That fact should be revealed to all for future reference. The other thing about bankruptcy is that it's the only thing I know of that can get rid of these ruinous public sector union contracts with these extravagant pensions. Those pensions are so popular because the politicians can promise the pension now and get votes now without losing the votes of taxpayers now, because they don't set aside enough money to cover the pensions. Then they simply kick the can down the road and leave it to somebody else to figure out what to do when the money runs out.

There's also this bit on ending the Fed:

Now, in recent years we started to hear more people calling to get rid of the Federal Reserve. Good idea, bad idea? What are your thoughts?

Good idea.

Good idea? What do you think we should replace it with? What do you think we should do?

Well, it's like when you remove a cancer, what do you replace it with? I understand the wonderful theories about the great things the Federal Reserve can and should do. That's totally different from what the Federal Reserve has done and is likely to do in the future. It's painful to read Woodrow Wilson's glowing words when the Federal Reserve was set up, about the things it was supposed to do -- like keep the money supply from either contracting suddenly or having runaway inflation or having bank failures and so forth.

All those things empirically have become worse after there was a Federal Reserve System. So, there's no question that there are good things the Federal Reserve could do just as there are good things that the government could do. But people who say that never seem to want to look at the record and say, "Never mind what they could do; what have they actually done and what are they likely to do, given the incentives?" The incentives are there for both the Fed and for the political branches to interfere with the economy, to the detriment of the economy.

Whole thing here; link via Instapundit.

Reason on Sowell here, including Brian Doherty's May 2009 interview. See also our collections on the state fiscal crisis and the Federal Reserve.

Comments

[Colonel_Angus]

RACIST111

[Max]

Sowell is a marginal right-wing nutbar, so who gives a flying fuck what he thinks? Oh, you marginal right-wing nutbars do, of course.

[Old Mexican]

Nooo, no, bad Max, bad! Don't do your banalities on the carpet, it was just steamed! Somebody get me a rolled-up newspaper, there will be some serious snout-rubbing to do!

[nanda]

don't spend money you don't have.
everyone knows that but liberals.
thanks to liberals, we will probably end up with a majority that does not pay taxes and sees no reaason to vote itself whatever it wants and that will be the end of liberalism.
alot of people sincerely think that the government should guarantee them not just housing, but a certain kind of house, say three or four bedroom colonial, the best health care, individual tutors for each child, vacations, warmth in the winter, and air conditioning in the summer, a four hour day and many other things.

[Tony]

In this day and age do you really think the problem is that poor people have it too good? The rich get richer, the bullshit stays the same.

[J sub D]

I see the Dish Network hardware mounted on public housing unites and note that food stamps provide $200 a month for a single person in Michigan (which is about what I spend). Government funded medical service is provided as well. Yeah it sucks that "the poor" in the US have more entertainment options, a better diet and better health care than 99.9% of history's "rich". Time for a revolution, huh?

[Tony]

Well it wouldn't be right-wing class warfare bullshit without the welfare queen anecdote.

[J sub D]

You deny the truth of anything I just said?

You deny the truth of institutionalized inter-generational poverty since the advent of LBJ's Great Society programs?

If either is the case, you have once again proven yourself an idiot who's lost contact with reality.

[Tony]

The Great Society halved the national poverty rate in fewer than 10 years. You don't know what you're talking about. All conservative criticism of the GS tends to be based on some crass moral condemnation of poor people, who are constitutionally incapable, apparently, of not being leeches on society (they have it so good!)

I believe in inter-generational poverty, but whatever its cause, it would seem that the mere fact of it belies the libertarian notion that one can bring oneself out of poverty through sheer willpower, does it not?

[Jeffersonian]

Not true

http://en.wikipedia.org/wiki/F.....meline.gif

You will notice that the poverty rate and the number of people in poverty were in steep decline before GS kicked into gear. If anything, TGS arrested a virtuous trend and cemented in the underclass it purported to eliminate.

[Tony]

You're gonna link that entire timeline to the GS? From where I'm sitting it looks like things went wrong because we had president Reagan.

[J_L_B]

The Reagan through W years provided extensive economic growth with statistically indeterminable recessions. Perhaps we reached the limits of the government's ability to fight poverty through redistribution.

By the way, the poverty mindset is most evident by the numerous cases of poor lottery winners having to file bankruptcy a few years later. But beyond those extreme cases, for most, poverty is a culture that punishes overt attempts to escape.

[Jeffersonian]

Tony, your contention was that TGS reduced the poverty rate by half. I linked that graphic to show that, by the time TGS was implemented, most of the reduction in the poverty rate had already been realized and that the reduction *stopped* once the welfare state was implemented.

That, my friend, is not disputable.

[Tony]

Jeffersonian, the poverty rate has remained relatively stable since the introduction of the GS. You could argue that it would have gone down more in its absence, but that's speculation. The GS didn't dramatically increase poverty rates, at any rate. I suspect that without the mitigating effects of social welfare programs, poverty would have swung back up more significantly during recessions.

[Britt]

So Jeff says the poverty rate would have declined without GS, but that's speculation.

Yet you assert with no facts backing you whatsoever that the poverty rate would have reversed itself and gone back up, but that's not speculation.

You're barely capable of thought.

[Tony]

Yeah it's speculation. Nothing wrong with speculation. It is a fact, however, that poverty rates have remained fairly stable since GS.

[Britt]

So then we've spent trillions of dollars for nothing. Well, except creating a large bloc of people who will reliably vote Democrat.

You know, my grandad was a yellow dog Democrat, old Southern boy. He used to go around trying to buy votes for the Democrats. He used his own money. The Democrats, for the last few decades, have been buying their votes with my money.

Once the party of slavery, always the party of slavery.

[Fantasy Tony]

"Thank you for showing me the facts which demonstrate that, not only were my earlier claims false, they were the exact opposite of what happened in reality. Rather than desperately making up increasingly implausible hypothetical counterfactual scenarios, I'm going to go take a long hard look at identifying and correcting the aspects of my worldview which lead me to make such erroneous predictions."

[Jeffersonian]

So the best we can say is that, after trillions of dollars poured into TGS programs, they didn't make things worse. The *best*.

Of course, they did wonders for cementing in a permanent left-liberal political culture.

[Tony]

Jeffersonian, maybe if the GS's only purpose were handing out checks to people. It actually created incentives for finding work and avenues for volunteering.

Not to mention the fact that you look ridiculous constantly pining for the Old Confederacy.

[Rather]

He forgot to mention the kids with the different baby daddies

[Rather]

I only have one. My daddy's baby, I mean.

Read my blog!

[Rather]

did helle write something? I'm sure it was idiotic.

[Ice Nine]

There are precious few of us who have it too good. Notwithstanding that, poor people in America are a disgrace to the name.

[Tony]

Hang around a lot of poor people, do you?

[Xeones]

As a poor person living within what means i have: shut the fuck up, Tony, you utter pretentious ass.

[Pro Libertate]

He owns you, Xeones, don't you understand?

[Tony]

Oh look another poor libertarian. This is fascinating to me. What, do you just not want to pull yourself up from your bootstraps?

[Pro Libertate]

Yep, keep 'em down and dependent. Just who is trying to do that?

[Jeffersonian]

Dependency breeds subservience, PL. My namesake reminded us of that as a warning, but Tony sees it as a political opportunity to be exploited.

[Tony]

Jeffersonian government isn't the only thing that can enslave people. Given the choice, a rational person might prefer "subservience" to food stamps rather than to starvation.

[Jeffersonian]

You say that as if food stamps and the rest of the panopoly of welfare-state boondoggles you support have no pernicious effect on the very pathologies you point to. They do, from both a supply and a demand side.

LBJ solidified the underclass, and in doing so created a massive voting block for left-liberal politicians.

[Tony]

You say that as if food stamps and the rest of the panopoly of welfare-state boondoggles you support have no pernicious effect on the very pathologies you point to.

I'm not referring to any pathologies. I'm not the one who formulates policy positions based on a sweeping generalization of the moral or mental defects of entire classes of people.

I suppose there's the risk of making people dependent, but I just don't see that as bigger a problem than the risk of people actually being in poverty. We can morally condemn them after they have their basic needs met, how about?

I won't even address your bullshit about LBJ's nefarious plan to lift millions out of poverty so that they'd vote for Democrats.

[JoshINHB]

I suppose there's the risk of making people dependent, but I just don't see that as bigger a problem than the risk of people actually being in poverty

Especially since those people become a secure voting block for democrats.

There is an automatic 35-40% block of voters between them and public employee parasites. Throw in some guilty honkies and your have one party states like NY & CA.

[Tony]

JoshINHB yes it must be so frustrating that Republicans can only get the votes of religious zealots. Why can't other poor people behave more like them and vote against their best economic interest?

[JoshINHB]

JoshINHB yes it must be so frustrating that Republicans can only get the votes of religious zealots. Why can't other poor people behave more like them and vote against their best economic interest?

Gotta love appeals to thievery.

Well at least your an honest prog.

[East Bay Jay]

And with the same acceptance of alternate views as China.

[Jeffersonian]

I suppose there's the risk of making people dependent, but I just don't see that as bigger a problem than the risk of people actually being in poverty. We can morally condemn them after they have their basic needs met, how about?

Of course, that's one of the risks: The moral hazard of creating the very pathology that you are trying to alleviate. When people can live without effort as well, or nearly as well, as they can with effort, guess which they will choose?

On top of that, taxing productivity and effort to pay for the programs in the first place disincentivises such effort, resulting in less wealth creating and, on the whole, a poorer society.

It's axiomatic, Tony: What you tax you get less of, what you subsidize you get more of. We tax productivity and thrift, we subsidize indolence and profligacy. And then we sit, amazed that Americans are lazy and spendthrift.

[nekoxgirl]

Jeffersonian: "What you tax you get less of, what you subsidize you get more of. We tax productivity and thrift, we subsidize indolence and profligacy. And then we sit, amazed that Americans are lazy and spendthrift."

Me: It's basic behavioral psychology. I'm surprised so many people don't get it.

[R C Dean]

Me: It's basic behavioral psychology.

That's why its an Iron Law:

You get more of what you reward, and less of what you punish.

[Tony]

We have one of the stingiest social welfare systems in the industrialized world. If Americans are lazier than people living in other such countries, the cause must be something other than our welfare state.

The problem with this bullshit is that it's just so tired. It never made any sense--the poor are not oppressing the rich. But it makes even less sense with unemployment near 10%. If there AREN'T ENOUGH JOBS then why are you morally condemning people for not working?

[generic Brand]

If there AREN'T ENOUGH JOBS then why are you morally condemning people for not working?

There are enough jobs. There aren't enough incentives to hire though. Hmmm, let's up our taxes, expenses, and losses by taking on another employee. Or we can just pay the ones we have the occasional overtime paycheck.

The governement fixes wages, fixes the hours people could work. You don't think that in this kind of economy people would work for less than minimum wage or for longer hours if they could???

[Tony]

You don't think that in this kind of economy people would work for less than minimum wage or for longer hours if they could???

I think all else being equal, without a minimum wage, roughly the same number of people would be working, only at lower pay.

Of course things wouldn't be equal. Since workers would all have less money, they'd have less spending power, meaning the economy wouldn't be as robust and there wouldn't be as many jobs.

[East Bay Jay]

"I think all else being equal, without a minimum wage, roughly the same number of people would be working, only at lower pay"

Tell that to those that go fired when the minimum wage last went up. And it's not hard to find those people, it's at the same time that the unemployment rate started going up. It's almost like there's two dots that want to connect but you won't let them.

[Tony]

Tell that to those that go fired when the minimum wage last went up. And it's not hard to find those people, it's at the same time that the unemployment rate started going up. It's almost like there's two dots that want to connect but you won't let them.

Even if min. wage increases cause some job losses, my contention is that having a min. wage raises the standard of living for everyone else, growing the economy, and providing new, better jobs as a result.

[Red Rocks Rockin]

Even if min. wage increases cause some job losses, my contention is that having a min. wage raises the standard of living for everyone else, growing the economy, and providing new, better jobs as a result.

What a load of crap. The only thing min. wage increases have done is contribute to the inflation of our currency, which destroys spending power. You want to blame something for the steady drop in real wages for the last 40 years? Don't blame the concentration of wealth at the top, which has waxed and waned during that time period. Look at the steady increase in the minimum wage.

Deflation isn't always a bad thing, Tony. I realize a passive-aggressive twerp like you doesn't want to accept that point on paper, but you can only inflate the currency exponentially for so long before it finally becomes too much of a burden for the economy to bear. The housing bubble should have taught you that.

[Carston]

A little late on the convo, but had to reply to this. Yes, most likely w/o minimum wage laws, some people would make less, but things would also cost less, because they cost less to make. Overall, there would be less price distortion, which would be good for everyone, rich, poor, or ruling class.

[Pablo]

"We have one of the stingiest social welfare systems in the industrialized world."

Not for long.

In case you missed it, the European countries providing cradle-to-grave security for everyone, and a pony too, are broke. That is what happens when people find it easier to be on the dole than to work and support themselves.

[Tony]

In case you missed it, the European countries providing cradle-to-grave security for everyone, and a pony too, are broke. That is what happens when people find it easier to be on the dole than to work and support themselves.

No, that's what happens when there's a global economic downturn. That is the cause of the budget problems, although certain factions are using the downturn as an excuse to attack social welfare programs (they'll use any excuse), the real reason being they think poor people are dirty and their money could be in better hands (rich people's).

[Tony]

Of course, that's one of the risks: The moral hazard of creating the very pathology that you are trying to alleviate. When people can live without effort as well, or nearly as well, as they can with effort, guess which they will choose?

On top of that, taxing productivity and effort to pay for the programs in the first place disincentivises such effort, resulting in less wealth creating and, on the whole, a poorer society.

That may all be true if we go to extremes, but I don't think US social welfare programs are lucrative enough or taxes high enough to cause any of those incentive effects. Of course I also don't think we should make policy based on mass pop-psychoanalysis.

[Ray]

"I'll have them ni**ers voting democrat for a hundred years."
-LBJ

[Tony]

Ray the GOP has done everything they possibly can to ensure that blacks stay loyal to Dems, including, oh I dunno, describing them as a bunch of mindless animals lured to the nearest political party handing out treats.

[East Bay Jay]

By treats you mean Affirmative Action forever, right? Discrimination forever, baby!

[JR]

Starvation?? Bwaaa. Where?
I'll bet there are 10,000 satellite dishes on section 8 apartments for every starving poor person.

[Evil Libertarian]

Isn't obesity the biggest health problem for poor people?

[Rather]

lol

Tony bootstraps cost money. Don't be so mean 😉

[Xeones]

It's called "upward mobility," you dumb fascist fuck. Look into it.

[Ice Nine]

>>Hang around a lot of poor people, do you?

S'matter of fact, yes. Worked in the 'Toe for a couple of decades.

[NotSure]

Yes actually they do have it too good, which is why people are fully justified to move business to places where people actually do want to work hard and not pretend its their birthright to get free stuff from others.

Americas poor are richer than any poor people in the world, and that includes your sacred two: Sweden and France.

[Tony]

America's rich are also comparatively better off. I don't suppose that has anything to do with government handouts and their moral turpitude, though.

[Old Mexican]

Re: Tony,

America's rich are also comparatively better off. I don't suppose that has anything to do with government handouts and their moral turpitude, though.

That's very likely - where does that leave your beloved State, statist?

[Colonel_Angus]

Tony can't grasp a concept of wealth other than money.

[Drax the Destroyer]

SAY IT WITH ME FOLKS (Inhales deeply) RAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAACCCCCCCCCCCCCCCCCCCCCCCCCCIIIIIIII
IIIIIIIIIIIIIIIIIIIIIIIIIISSSSSSSSSSSSSSSSSSSSSSSSSSSSTTTTTTTTTTTTTTTTTTTTT!!!
!!!!!!!!!!!!!!!!!!!!!!!!!

[Jeffersonian]

Why do you hate African-Americans, Max?

[Mr. FIFY]

You basically cut'n'pasted your own post in the Huckabee thread.

What a doosh.

[Bee Tagger]

I prefer to think he typed it out. Why rush the rush, man?

[J sub D]

When they go bankrupt, don't they have to declare assets and let the courts decide how they are supposed to be disposed of?

Putting the Georgia fish museum and a state park on the Detroit Riverfront up for bids should be interesting.

[Brett L]

Too bad FL isn't up for that. Yet. I'd totally buy the Capitol complex, just to put a dome on the New Capitol and complete the image.

[Old Mexican]

There are three possibilities -- bankruptcy or bailouts or ruinous taxations. Of the three, bankruptcy is the one that makes the most sense because it's the one that conveys the most accurate knowledge -- which is that they've run out of money and couldn't cover all the promises they made.

Right on.

[Mr Spendthrift]

Only 3 possibilities? He forgets a fourth, spend less. He assumes they can't do that, that everything they spend is mandated by contracts or laws. I haven't seen any such reports.

[Mike Laursen]

In California pretty much all spending is locked in by voter initiatives and union contracts. To straighten things out we would probably have to pass some new initiatives canceling some of the mandatory spending.

[James]

Sowell is a hack. He basically preaches ideology to the public without engaging in serious debate with leaders in his field. In general I find it intellectually dishonest to favor certain social scientists just because their views validate your politics.

[Kant feel Pietzsche]

You mean like you just did?

[James]

Uh, no. I was criticizing Sowell is his lack of intellectual rigor. My political views are closer to his than those of Paul Krugman or Brad Delong, but that doesn't make him a good economist.

[JW]

Oh, so THAT'S irony. Now I get it.

[DanD]

Sowell is a hack

Dude, just do a quick Google Scholar search for this guy's name. He is the picture of academic rigor. Just because he doesn't go on the tube to get in 60-second shouting matches that resolve nothing, it doesn't mean he isn't a "good economist" by any standards other than your arbitrary bullshit ones. Try reading or maybe doing a modicum of research before you go spouting off your unfound generalities.

If you're just trying to troll, try harder.

[tote-road]

Sowell is a black, not a hack. Typo?

[Anonymous Coward]

The Technocratic Hierarchy *MUST* be respected!

[Mike Laursen]

Inclined to agree with him about bankruptcy being the best of the three.

There's a fourth possibility, though: unions voluntarily accepting revised contracts. It has been known to happen. And the union leadership sometimes do recognize when they're about to push thing too far and lose the golden egg layer.

[J sub D]

Like in Camden?

[J sub D]

Like in Camden?

[OhioOrrin]

like all over ohio w police, firefighters, & teachers agreeing to pay cuts, furloughs, higher co-pays & deductables...

[Jeffersonian]

Yay! Finally, "public servants" doing what we greedy, self-centered and hate-filled private-sector types have been doing for years.

[Tony]

I'd like to see a single CEO, even say one of the canned and disgraced Wall Street casualties, live the lifestyle of a teacher for a day.

[Jeffersonian]

I'm not sure what planet you live on, Tony, but the teachers I know (and I know a lot of them) live pretty damn well. As I mentioned above, one I know lives with her fireman hubby and two daughters in a century-old 5,000sf refurbished farmhouse worth about $700,000. Not exactly Oliver Twist territory, I dare say.

[Pablo]

Firemen aren't living in poverty either. There's one in the family and he has enough time off that he can work a second job. He has built a vacation home on his days off.

[Brett L]

I know a couple of CEOs that live pretty modestly. Maybe not 22-yo rookie teacher poor, but at least one was just as poor and hungry when starting his business. Granted, my acquaintances aren't Fortune 500 CEOS, but there's only 500 of them (or fewer).

[Tony]

I too know a couple of anecdotes.

[Jeffersonian]

Your mommy must be so proud.

[Colonel_Angus]

I know personally a few of CEO's that used to be teachers. I'd say every CEO that I have actually met

[Barely Suppressed Rage]

So, Tony, someone pointed a gun to the teacher's head or held his/her kids hostage and forced him/her to become a teacher and suffer through such an awful line of work and live at barely above the subsistence level?

You really are a class warrior. Class warfare truly is an ugly thing.

I know a married couple with two kids - the dad is a state police officer and the wife is a public elementary school teacher. They live in a $800,000 house. I'm a lawyer in a big firm and there's no way I could afford that much house. Between the two of them, their pensions upon retirement will be more than I'm making right now, which is well above the national average. And then there are the various benefits, holidays, etc.

I'd like to see a teacher live the lifestyle of an auto mechanic, or even a typical lawyer, for a day.

I also agree with Jeffersonian - it never ceases to amaze me at how so many teachers I have met who truly are just stupid and ignorant. And yet there they remain, "teaching" children.

This is not a general indictment of all teachers - we're fortunate in where we live; our public schools are some of the best in the state, and the teachers we've met have, for the most part, seem to be quite good.

But I recall quite well some of the teachers I had as a kid in NJ, and even then I recognized how dopey some of them were. I'm talking about a history teacher being unable to properly pronounce "burgesses" (as in the House of Burgesse) and an English teacher who wrote the following sentence on the chalk board: "There was a creek in the floor."

I guess someone had a burst pipe!

[Tony]

Those people are all leeches and should continue to be punished for the bad economy, even though they had nothing to do with it. Don't you remember how well paid all your teachers were for the work they did?

[Jeffersonian]

My wife is a public school teacher. Having hung around them for abou 20 years, I can say they are quite possibly the stupidest people I've ever met, as a group.

Oh, and one is married to a local firefighter. They live in a $700,000 house. They aren't exactly hurting in these troubled times.

[JR]

We have to pretend that they are all brilliant people that passed on material wealth in the private sector because they love kids. They all have Masters degrees in Ed from third rate diploma mills, they must be brilliant.

[Red Rocks Rockin]

To be fair, they're probably living paycheck to paycheck, on a 50-year mortgage, to stay in a house like that. I bet if you actually go into their home, their furnishings are either 1) sparse and not that nice, or 2) bought with maxed-out credit cards.

[Mike Laursen]

I'm still trying to find the comment you are replying to. You know the one where somebody accused police, firefighters, and teachers of being leeches who caused the current recession. Guess it's so hard to find because it only exists in your head.

[Colonel_Angus]

"higher co-pays & deductables (sic)"
=Paying for the services you use.

[Pro Libertate]

There's a fifth possibility: California could sell itself to another country. The price would have to be high enough to cover its liabilities, of course.

[deified]

I'm not a racist, but here's an over-the-weekend interview with Walter Williams. Sharp dude.

[Mainer]

Indeed. See his depressing comment that future historians may look back at this little 200 year exception when liberty flourished, before we reverted to the norm of government domination. Smart money says he's right.

[Mr. FIFY]

Put Williams on the ticked with Herman Cain, and watch liberals drive themselves crazy trying to criticize them and not sound like they're beating up on two intelligent black men.

Then again, they're good at that.

[Slut Bunwalla]

Leftists don't recognize Sowell and Williams as black people.

[Jeffersonian]

Or Palin as a woman. It's almost as if you can't be authentic unless you're a port-sider.

[sarcasmic]

They don't like Palin because she's attractive.

Lefties like homely women.

[Rachel Maddow]

And thank God for it.

[sarcasmic]

http://www.moonbattery.com/arc.....ve_vs.html

Ayuh

[Liberal Douche]

Real women look like men.

[deified]

More people should be named "slut."

Also, "cunt."

Preferably males.

(I also make sure to only call heterosexuals "faggot." Some words are just fun to say!)

[Booger]

Hurr hurr!! Derpa derp.

[Banjos Kick Ass!]

I love the word cunt. I call my car the cuntmobile.

[generic Brand]

"The welfare state has done to black Americans what slavery couldn't do, what Jim Crow couldn't do, what the harshest racism couldn't do," Mr. Williams says. "And that is to destroy the black family."

That's a damning statement that I don't think gets said enough.

[Mainer]

Actually, states have defaulted before. So this wouldn't be the first time.

http://www.freerepublic.com/focus/f-news/2651295/posts

[Adam Smith 1776]

Adn the Feds defaulted (technically) back in the 1930s. Federal bonds were redeemable in dollars or their equivalent in gold, but then FDR took away the option to redeem the bonds for gold. That was a default on existing bonds, and helped to unleash the government to spend, spend, spend.

[JoshINHB]

Among historians, the rule of thumb is that U.S. states would pay interest rates one percentage point higher than Canadian issuers the rest of the 19th century.

Oh the horror!

Really that's it? That's not even enough pain to make the C--ksuckers slow down spending, let alone slash the size of their governments.

[P Brooks]

But people who say that never seem to want to look at the record and say, "Never mind what they could do; what have they actually done and what are they likely to do, given the incentives?"

Sowell for President!

[DanD]

Read his book A Personal Odyssey. He goes into detail how he almost ran for senate, and why he'll never get into politics.

The sensible people almost never get into politics. 🙁

[Vermont Gun Owner]

Whoa, whoa whoa. Calm down there P Brooks. We wouldn't want someone doing that kind of thinking as President. That sounds like that sciencey kind of thinking. We need that lawyery kind of thinking.

[P Brooks]

I'd like to see a single CEO, even say one of the canned and disgraced Wall Street casualties, live the lifestyle of a teacher for a day.

They'd probably commit suicide, just to relieve the boredom. That's what you meant, right?

[P Brooks]

At this point, I think the only way to make it plainly obvious to everyone that we're in deep deep shit is bankruptcy; and not fake bankruptcy GM-style, where the feds strongarmed investors for the benefit of the unions (and state and local governments).

[Dubyah]

Well, it's like when you remove a cancer, what do you replace it with?

Heh, you tell me!

[Almanian]

What a bonus - Walter Williams AND Thos Sowell on the same day!

[Old Mexican]

Re: Tony,

The Great Society halved the national poverty rate in fewer than 10 years.

This has been totally debunked above. Not only that, it was a damned lie, a figment of your imagination.

All conservative criticism of the GS tends to be based on some crass moral condemnation of poor people[...]

Actually, the moral criticism against the Great Society came to be true: That by placing people on the dole, the state created an underclass of people that depended on government for their total income and not on their productivity, pretty much condemning them to permanent poverty.

I believe in inter-generational poverty

...along some other things that are equally not so.

[...]but whatever its cause, it would seem that the mere fact of it belies the libertarian notion that one can bring oneself out of poverty through sheer willpower, does it not?

No, it does not, Tony - you seem to blissfully ignore the several thousand rags-to-riches stories that abound. The fact that parents started poor does not mean they condemn their kids to poverty, unless they instill the same sense of dependency that condemned them:

http://www.iea.org.uk/blog/how.....dependency

[Tony]

OM "several thousand" anecdotes would seem to be the exception to the rule, considering the millions in poverty. Whatever your policy solutions, it's pretty hard to deny that one's parents' wealth or poverty is a pretty good indicator of one's success.

[sarcasmic]

Fifteen years or so ago I was homeless, now I own my own home.

I worked by butt off to get a degree just a couple classes at a time, then used that degree to get a nice salary.

No social programs involved.

On a different note I have something else you will not believe.
I live in a rural area without municipal trash pickup. You, being Tony, probably think that every single home has a mountain of trash on the property because if the government doesn't pick it up there is no way for it to be disposed. But somehow the trash manages to find it's way to the transfer station.

It's magic.

Nothing else explains it.

You yourself said that without municipal trash pickup that everyone would live in squalor.

Oh, and go fuck yourself you fucking moron.

[Tony]

Good for you sarcasmic. So what does your life story have to do with macro policy?

You said you live in a rural area. If you lived in a city, trash pickup would be a major concern.

I think almost everything in politics can be divided by urban vs. rural. It's perfectly natural to want less government if you're rural. You don't need it. People in cities do, and they respond by wanting it more.

[Ray Pew]

Good for you sarcasmic. So what does your life story have to do with macro policy?

The macro is composed on the micro. Without the individuals who act, there is no macro to study. You can't separate the two.

If you could, then you could solve the poverty problem without assisting individuals.

[sarcasmic]

"So what does your life story have to do with macro policy?"

If I can lift myself from poverty, without the aid of government programs, then anyone can.

I'm not special.

[Tony]

sarcasmic,

You probably have certain benefits. Like not being old or handicapped or a minority (pure guessing).

But beyond that, you didn't do it all on your own. It's not like you live in a 3rd world hellhole. There are lots of existing benefits in place that come with our civilization, easing people's upward mobility, including the programs being discussed (not saying you availed yourself of any of them). You benefited from every government program that allows you to move relatively freely in this economy. Take all that away and you'd have long ago been cat food.

[Barely Suppressed Rage]

You probably have certain benefits. Like not being old or handicapped or a minority.

So being a minority, in itself is a handicap? And not being a minority automatically gives "benefits"?

I'll be sure to pass that along to the poor white folks I pass on my way back to my gated mansion - if I can get my driver to slow down, I'll push the button to roll down the window and mention it to them as I pass.

What a steaming pile of pure horse shit.

[Tony]

Considering unemployment among blacks is double what it is among whites, the explanations are either social--meaning merely being black has a disadvantage in our society--or racist. I choose the non-racist explanations.

[sarcasmic]

Tony - You are a bigot. Bigotry of low expectations.

[Old Mexican]

Re: Tony,

So what does your life story have to do with macro policy?

Again with the macro...

You know, statist fucks who fall back to the micro/macro economic fallacy sound a lot like Creationists who also fall back to the micro/macro evolution fallacy as a way to obfuscate the discussion.

You said you live in a rural area. If you lived in a city, trash pickup would be a major concern.

Trash pickup is ALREADY a major concern especially where unionized, public trash collectors are present, FYI.

[Tony]

OM what's really fallacious is taking anecdotes as evidence. Is there something wrong with looking at the economy as a whole?

Since there aren't too many examples of private sanitation services on a large scale, I guess we'll have to take your word for it that one of the oldest functions of government would be better in private hands? I suppose dysentery respects property lines?

[Barely Suppressed Rage]

What, do you think that all trash pickup services and landfill are owned and operated by government? WRONG.

There aren't too many examples of private sanitation services on a large scale? I guess you've never heard of a little company called Waste Management, or another one called BFI, just to name two.

Keep digging, statist fuck.

[sarcasmic]

"OM what's really fallacious is taking anecdotes as evidence."

What's really fallacious is your inability to believe anything, including your own eyes, unless it has been confirmed by someone with authority.

It's called Appeal to Authority.

Not that I'm surprised being that you are an authoritarian.

[Old Mexican]

Re: Tony,

OM "several thousand" anecdotes would seem to be the exception to the rule, considering the millions in poverty.

The problem with this "millions in poverty" canard is that the baseline keeps being raised every change of administration.

Despite what you think, a "poor person" in the US would be considered a rich person in Mexico, for the simple fact that WEALTH IS NOT MERELY MONEY. The fact that "poor people" in the US have access to myriads more goods and services than most in the rest of the world speaks volumes of the productive capability of a capitalist society, compared to the uber-egalitarian societies in North Korea, or Cuba. You have a guarrantee rich people will not be created in those countries. You also have a guarrantee the bar for poverty is placed very, VERY low so as to avoid embarrassment.

Whatever your policy solutions, it's pretty hard to deny that one's parents' wealth or poverty is a pretty good indicator of one's success.

It is VERY EASY to deny, Tony, because the so-called "exceptions" DENIES the "rule" you so confidently posit. Either a theory applies to everything it tries to explain, or it does not. YOURS does not.

[sarcasmic]

Show me a "poor person" in this country and I'll show you someone with a solid roof over their head, a heated living space, an unhealthy physique from too much food and not enough exercise, access to internet, myriad electronic devices, and a cell phone.
And this person likely feels bad about themselves because there are people with more stuff than them.

Show me a "poor person" in most of the rest of the world and I'll show you someone with a shack over their head, no heat an unhealthy physique from lack of food and backbreaking toil, no internet, few if any electronic devices, and no cell phone.
At least this person is OK with their existence because everyone else lives in similar conditions, so there's nobody to envy.

Hey Tony, go fuck yourself you fucking moron.

[Tony]

The fact that "poor people" in the US have access to myriads more goods and services than most in the rest of the world speaks volumes of the productive capability of a capitalist society, compared to the uber-egalitarian societies in North Korea, or Cuba.

Capitalism delivers economic growth, which helps fund a strong infrastructure and social safety net. Our poor people have it better because they have a strong government behind them. Explain how a poor person would prosper in a laissez-faire society.

t is VERY EASY to deny, Tony, because the so-called "exceptions" DENIES the "rule" you so confidently posit. Either a theory applies to everything it tries to explain, or it does not. YOURS does not.

Dumbass, it's not a law of nature, it's a probability. If you have rich parents, you are statistically more likely to be rich when you grow up. I think that's a pretty safe bet.

[Ray Pew]

Capitalism delivers economic growth, which helps fund a strong infrastructure and social safety net. Our poor people have it better because they have a strong government behind them. Explain how a poor person would prosper in a laissez-faire society.

Your question assumes that poor individuals CANNOT prosper without government assistance, but begs the question: how did the non-poor succeed?

Poor individuals would prosper by the same mechanisms that allow non-poor individuals to have prospered.

Will everyone "prosper"? Of course not. Nothing prevents individuals from suffering calamities or poor decisions. Every nation, heavily socialized or not, has a percentage of impoverished people.

[Old Mexican]

Re: Tony,

Capitalism delivers economic growth, which helps fund a strong infrastructure and social safety net.

"Helps fund" does not mean the "strong infrasctructure and social safety nets" are the sine qua non of capitalism.

Our poor people have it better because they have a strong government behind them.

Like, HOW strong, Tony? Stronger than North Korea's? If a strong government is what drives economic growth for poor people, why aren't the Cubans the richest poor people in the world?

Explain how a poor person would prosper in a laissez-faire society.

Depends on what you mean by "prosper". Certainly, a poor person CAN increase his or her wealth by being productive, exchanging his or her labor (for instance) for other goods, or exchanging goods for other goods. 100 years ago, few people had ever seen a radio - today, you can buy one for $5.00. You're telling me that such is NOT progress???

[I]t's not a law of nature, it's a probability. If you have rich parents, you are statistically more likely to be rich when you grow up. I think that's a pretty safe bet.

Right. And, you changed the focus in an intellectualy dishonest way: you were NOT saying that rich people tend to have rich kids, but that poor people tend to have children that REMAIN poor BECAUSE the parents are poor. A little investigation shows that this cannot be true in the US unless you HAPPEN to LIKE being poor. Even the kids of poor immigrants tend to live much BETTER and WEALTHIER than their parents - ergo

[Tony]

"Helps fund" does not mean the "strong infrasctructure and social safety nets" are the sine qua non of capitalism.

They certainly help it along.

Like, HOW strong, Tony? Stronger than North Korea's? If a strong government is what drives economic growth for poor people, why aren't the Cubans the richest poor people in the world?

A "strong" government of course is necessary but not sufficient. Doesn't mean a total dictatorship will be better than a democracy. I'd say the US government is stronger than North Korea's or Cuba's, even though it has less of a heavy hand in domestic policy.

Depends on what you mean by "prosper". Certainly, a poor person CAN increase his or her wealth by being productive, exchanging his or her labor (for instance) for other goods, or exchanging goods for other goods. 100 years ago, few people had ever seen a radio - today, you can buy one for $5.00. You're telling me that such is NOT progress???

How many new technologies are invented in places with weak governments?

Right. And, you changed the focus in an intellectualy dishonest way: you were NOT saying that rich people tend to have rich kids, but that poor people tend to have children that REMAIN poor BECAUSE the parents are poor. A little investigation shows that this cannot be true in the US unless you HAPPEN to LIKE being poor. Even the kids of poor immigrants tend to live much BETTER and WEALTHIER than their parents - ergo

I wasn't able to find numbers by Googling, but I think the point I'm making is self-evident. Having wealthy parents means you grow up in a better neighborhood, go to better schools, participate in crime less, have more leisure time, etc. All of these things are advantages that children of poor parents don't have.

Of course, arguably what matters more than money is having supportive parents, which speaks to your point about immigrants. Not everyone can count on that either, but I assume you think fairness means a theoretical level playing field rather than an actual one.

[Barely Suppressed Rage]

How many new technologies are invented in places with weak governments?

Yeah, if it weren't for that strong national government all through the 19th Century, James Watt never would have been able to build his steam engine, Bell never would have been able to invent the telephone, and Thomas Edison would have just had to sit on a bench at the train station sucking his thumb all day.

Henry Ford and the Wright Brothers also surely would have been totally fucked without the government there to make sure they were able to invent stuff.

[Tony]

Uhh late 19th/early 20th century America doesn't count as a weak national government, especially in its historical context.

No, the type of society you're selling is neither plausible in the future nor real in the past.

[NotSure]

So when exactly did weak government occur ? Surely you believe that your FDR saved the world from the evils of the free market. Yet according to you the governments before were not weak but strong.

[Carston]

Once you start creating "social safety nets" you no longer have capitalism, you have a hybrid economy, with all the price distortion and social engineering that comes with non-capitalist societies.

[guy in the back row]

Completely wrong in my experience. From epersonal experience a better indicator of success in society is how many generations you are from immigrants. The poeple I know whose families have been here for generations are usually unemplyed slackers sponging off parents and society.

[Ray Pew]

OM "several thousand" anecdotes would seem to be the exception to the rule, considering the millions in poverty. Whatever your policy solutions, it's pretty hard to deny that one's parents' wealth or poverty is a pretty good indicator of one's success.

And if one were to only consider such statistical associations, one would believe that it is the income of one's parents that determines the income of oneself. If one were to think about the subject for more than 5 minutes, it may become apparent that the culture one is raised in, in regards to work ethic, eduction ethic, moral ethic, etc., may also associate with those who remain in poverty over generations vs. those who move out of it.

[Old Mexican]

Re: Tony,

Jeffersonian[,] government isn't the only thing that can enslave people. Given the choice, a rational person might prefer "subservience" to food stamps rather than to starvation.

You mean they would prefer to join the army instead of accepting food stamps?

I ask this because I cannot fathom any other sort of choice that would equate to voluntary slavery, not unless you mean working for someone is the same as being a slave - that would be an extraordinary claim, given the fact the exchange of labor for money is a purely voluntary transaction.

[democratsarefascists]

AMEN!

Let them FAIL.

[califronian]

The states are not going bankrupt because of welfare. They are going bankrupt because of public employees.

I don't know what theory of social contract or democratic governance requires the citizens to support lifelong sinecures for a segment of the population but but I''m astonished at the "liberals" who vehemently support this structure which is obviously screwing the working class the hardest. WTF.

[Tony]

No, they are going bankrupt because of fewer tax receipts resulting from a deep recession and high unemployment.

Starve-the-beasters are just using that crisis as an excuse to gut programs and trash public servants.

[East Bay Jay]

Because California has $500 Billion in the bank to pay for public employee pensions. In some world anyway.

What you're saying is flat out stupid, Tony. California's fiscal goose has been cooked for 10 years. The global downtown is only a few years old. How can you say Cali was fine before the downturn when we were borrowing billions every year to keep the government funded? What is this alt-math that you are using?

[Tony]

Agreed that Cali is just fucked up. I think its government is fundamentally flawed.

[Greg V.]

They don't come more brilliant than Dr. Sowell!

[J.J.]

As an economist I can say that the Federal Reserve is needed. However they have been consistantly making terrible decisions over the last 10 years. They should have never lowered interest rates to 2002 levels just to "stimulate the economy" ie: help get Bush re-elected at the expense of the OUR future. They should have let the big banks FAIL and cut them into thousands of smaller banks. There was a chance to create thousands of new President, Secretary, and other higher level bank jobs while making it known that no one is too big to fail in a capitalist society. It's too bad Bernake and Geithner are in BED with Goldman Sachs, BofA, and Morgan Stanley and feel it is more important to attend New York Christmas parties than do what is best for America...