Comments on: Fiction is fundamental to all our politics

By: teddpotts

teddpotts — Sun, 27 Sep 2009 17:25:42 +0000

I agree that neither of us is likely to convince the other. I am responding in hopes that there is someone reading our conversation who remains unconvinced of either point of view, and might be influenced by further explanation. I wrote that capitalism is natural; it occurs when there is no government intervention in the economy. Mr. Alpert countered with a straw-man argument, saying capitalism needs government. That is a straw-man argument because I agree government needs laws, courts, and cops, and that government should respond to thieves and frauds. Where I assume Mr. Alpert and I disagree is on the issue of whether government should initiate force against businesses and their owners. For example, in America a criminal is considered innocent until proven guilty, but business owners are required by hundreds (thousands?) of laws to prove their innocence on a regular basis. I submit that regulation of honest, peaceful business owners is not capitalism; it is fascism. Capitalism, real laissez-faire capitalism, does require a government that protects the individual rights of life, liberty, and property; but it also requires a government that stays out of the way unless and until physical force or fraud is initiated by an individual or company.

By: teddpotts

teddpotts — Sun, 27 Sep 2009 12:25:42 +0000

By: teddpotts

teddpotts — Sun, 27 Sep 2009 11:25:42 +0000

By: teddpotts

teddpotts — Sun, 27 Sep 2009 10:25:42 +0000

By: arthuralpert

arthuralpert — Sat, 26 Sep 2009 17:29:53 +0000

To debate True Believers is difficult.
teddpotts wrote, for example, “Remember, capitalism is what happens when there is no government intervention in the economy; it is as natural as gravity.”
That's lovely but otherworldly.
Capitalism lives within society and its governmental structure. I just bought an expensive TV set. I wouldn't have risked my money if there was no government – laws, courts and cops – to protect me against shoddy goods or thievery on the part of the retailer or manufacturer.
Also, in the real world, corporate enterprise benefits from direct or indirect subsidies, plus rules (e.g., depreciation schedules) and protections which make the businesses more powerful than individuals.
tedpotts also wrote, “Those who study economic history (with or without lab coats) understand that America's economic meltdowns have been caused by government interference, the latest one by the combined efforts of Fannie Mae, Freddie Mac, the Federal Reserve, and, to a lesser extent, the FDIC's enforcement of the CRA.”
That's inaccurate.That statement of faith – not fact – represents only a sect of economic historians found in numbers at the U. of Chicago, Heritage, CATO and other corporate-funded institutions.
Again, teddpotts really should read beyond his church's recommendations. (James Stewart's piece on last year's Wall Street crisis in the Sept. 21 New Yorker might be worthwhile.)
I'll quit here; further debate isn't likely to be educational.
Arthur Alpert

By: teddpotts

teddpotts — Sat, 26 Sep 2009 14:45:47 +0000

No, I don't read the stuff from CATO, so I guess the vast majority of your reply is a straw-man argument. Regarding the “derivatives turned toxic assets” they were developed under the watch of the government agencies you probably advocate, not under private supervisory agencies. Why people think government does a better job of supervising business activity than private firms is beyond me. It seems no matter how many times the bureaucrats are proved incompetent, the general public just offers up more funding, via congress. If, however, one looks at private oversight agencies, like Underwriter Laboratories, they take full responsibility for mistakes they make – if and when they make any – and don't take any taxpayer money. Gee, maybe the moral is the practical! As for the cheap mortgages that were “pushed” on the public, they were only “cheap” because the Federal Reserve kept interest rates below the rate of inflation, and because Freddie Mac and Fannie Mae bought below-market-rate mortgages. The government decided to hand Wall Street “free” taxpayer money and you choose to blame Wall Street? I suggest you look at the root causes of the financial crisis, and ask yourself why collapses like the Great Depression didn't happen until after Congress nationalized the creation of money in 1913.

By: Benson

Benson — Fri, 25 Sep 2009 21:41:07 +0000

Don't worry Barb, he'll soon be saying that the health care crisis is the fault of Medicare, Medicaid and that people should just trust in free-market “charitable group led” health care.

By: arthuralpert

arthuralpert — Fri, 25 Sep 2009 15:28:39 +0000

teddpotts: Sir, your comments tell me that you, too, read what the CATO Institute (or, locally, the Rio Grande Foundation) preaches as economic gospel. But I read skeptically and you, I presume, religiously.
The US "close to laissez-faire" until 1913? If you ignore the tariffs, maybe. You do know that the US built its manufacturing capacity behind protective walls throughout the 19th century?
And you're aware that Washington subsidized every means of transportation from the Pony Express to the railroads? (The track-layers got big money from a corrupt Congress. Sound familiar?)
As for your libertarian version of the financial collapse, how come it ignores those complex derivatives-turned-toxic assets? Ignores Merrill, Bear Stearns, Lehman, AIG and all the other players who played fast and loose with our money? Or the private mortgage giants that lied to customers? Remember those TV ads pushing cheap mortgages on every Tom, Dick and Harry?
As for regulation, their number doesn't matter if they're not enforced. (Senators and Representatives routinely discourage any regulator silly enough to take the rules seriously. In the Bush Administration, of course, that was hardly necessary, since the White House appointed regulators to subvert regulation. As for Justice Department, it brought zero anti-trust cases, if I remember correctly.
How come CATO doesn't mention that (since Reagan) nobody in government has wanted to douse the "animal spirits" on Wall Street? That the American Corporate Party (with Republican and Democratic members) repealed New Deal rules on business? Or mention that big financial institutions were allowed to merge, to get "too big to fail"? And to minimize their reserves, which is another way of saying they were freed to play roulette?
Alan Greenspan was a CATO hero once. Is he still, having admitted his (libertarian) philosophy was imperfect?
There are more things in the real economy than CATO dreams of. And many things it knows that don't exist in the real world. Fictional, that is.
Arthur Alpert
PS You might consider reading one or two of the many books out there on the collapse, to supplement CATO's dogma.

By: barbwire

barbwire — Fri, 25 Sep 2009 14:28:53 +0000

Denial is not just a river in Egypt

By: teddpotts

teddpotts — Fri, 25 Sep 2009 10:02:48 +0000

Exactly when do you claim capitalism was free here in America? It was close to laissez-faire from the civil war until 1913, when practically the whole world wanted to emigrate to the social-program-free US, but your article seems to imply it was free just a few years ago, when 75,000 pages of new regulations were added annually to the Federal Register and Sarbanes-Oxley was initiated. Remember, capitalism is what happens when there is no government intervention into the economy; it is as natural as gravity. What we have today is a mixture of capitalism and state control, with the control side growing rapidly, and the free side stagnant. Those who study economic history (with or without lab coats) understand that America's economic meltdowns have been caused by government interference, the latest one by the combined efforts of Fannie Mae, Freddie Mac, the Federal Reserve, and, to a lesser extent, the FDIC's enforcement of the CRA.