Clearly, Hand Grenades Are the Answer

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Jason Kuznicki

Jason Kuznicki is a research fellow at the Cato Institute and contributor of Cato Unbound. He's on twitter as JasonKuznicki. His interests include political theory and history.

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  1. Avatar North
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    says:

    Er… does anyone at the League assert that capitalism doesn’t work? Freddie maybe in his occasional drive-by’s but otherwise no one is leaping to mind. Or did you mean to post this to Balloon Juice?Report

    • Avatar Jason Kuznicki in reply to North
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      says:

      I think there are plenty of commenters here who will assert it.Report

      • Avatar Kimmi in reply to Jason Kuznicki
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        says:

        hell, I won’t do that, and I’m a leftist if you need one. I say that capitalism requires a free market, which is a hell of an assumption for certain markets. But capitalism does work, mostly, when regulated to create the unstable equilibrium that it requires.Report

      • Avatar North in reply to Jason Kuznicki
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        says:

        Such as? I’m honestly not recalling anyone espousing command economies or traditionalist economies here.Report

        • Avatar Rufus F. in reply to North
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          says:

          North: the protesters holding the signs are with the workers world party- they’re revolutionary socialists who push for class war and communism and have been since the 50s at least. I mean, not that I imagine many of us agree with that position either.Report

          • Avatar Jaybird in reply to Rufus F.
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            says:

            Are the Wobblies still around? God bless them.Report

          • Avatar North in reply to Rufus F.
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            says:

            Oh no doubt, I just didn’t know any were regulars here.Report

            • Avatar Koz in reply to North
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              says:

              Btw North, in case you’re still interested we can cut American public debt by spending restraint (instead of tax increases) and that successful debt reduction is done that way, according to Veronique de Rugy et al.Report

              • Avatar North in reply to Koz
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                says:

                I’m always interested in budgets Koz and the studies are not surprising. I’ve always been a proponent of using both which obviously is significantly more effective than using an either/or dichotomy.Report

              • Avatar Koz in reply to North
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                says:

                Even if that were so, the politics of the issue go beyond Washington, in particular what the American people will accept as credible. For very good reason, the American people don’t accept Demo promises of spending cuts as credible. Therefore we actually have to see them before we accept them as real. That puts our understanding of maneuvering room in a much different light, or ought to at least.Report

              • Avatar North in reply to Koz
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                says:

                Hogwash. The american people repeatedly and emphatically endorse both revenue increases and spending cuts -together- as their preferred means of balancing the budget in poll after poll.

                But the GOP is certainly capable of getting their wish. All they have to do is be intransigent on tax increases on the super comittee and the built in 100% spending cut consequence will kick in automatically. Personally I wouldn’t mind; the defense budget was long overdue for a healthy trimming.Report

              • Avatar Koz in reply to North
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                says:

                “Personally I wouldn’t mind; the defense budget was long overdue for a healthy trimming.”

                If that was the case why did we have to go through all the sturm und drang for most of the summer then? We could have gotten the Reid plan or the eventual compromise in March or April.

                In any event, for your larger point you’re making a fairly important scale/time frame error. Our fiscal problems are not the sort that can be rectified in one policy move, if they can be fixed at all. (The same goes for Euro bond restructurings too btw.) If at some point in the medium-term future we have stabilized our fiscal situation it’s very likely, as you say, that it will be a combination of tax hikes and spending cuts that does it.

                But we don’t know what such a thing would look like in policy terms because we don’t know enough about the economy to have enough confidence in the numbers. More importantly, if we did know what such a thing looked like we couldn’t commit to it anyway because it would be speaking for people and policy actors far into the future who we have no ability to control.

                What we can do is change, to the extent practical, our current policy and our future intent. Or it might be clearer to put it this way: in 2011 we have no way to control what the fiscal situation in actually will be in 2033. We can only control now what we anticipate it to be then, and we can’t even completely control that.

                That’s why it’s important to come to grips with the reality that there is no tax regime that funds the trajectory of our current trajectory of expenditures. Therefore if we are going to have fiscal stability at any point in our plausible future we have to start with spending cuts.Report

              • Avatar Kimmi in reply to North
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                says:

                koz,
                Why do you hate leverage so much? If debt’s good for a business, and cons want to treat gov’t like a business, why isn’t debt good for gov’t? Particularly when that debt incentivizes lack of warfare with emerging countries?Report

              • Avatar North in reply to North
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                says:

                We went through the fooferaw because the GOP threatened to crash the country’s credit into a tree because they wanted to revisit the budget (which Obama and the Dems didn’t) and then once they’d forced the subject because they wanted all cuts (which the Dems and Obama didn’t) and because defense cuts certainly weren’t on the table to the degree they are now. But you know that perfectly well.
                There’s certainly very little constituency among the Dems for trying to close the deficit gap using only tax increases. Obama et all have been advocating the combined approach all along, albeit in a rather limp wristed way (I’m assuming they think there’s political advantage to be won).Report

              • Avatar Koz in reply to North
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                says:

                Sorry for returning to this, I had to let this go for a few days.

                “….and then once they’d forced the subject because they wanted all cuts…”

                This is sorta true but I think you’re deluding yourself into the same timeframe error by phrasing it that way. Ie, there seems to be an unstated premise that there is some deal or policy move that will resolve America’s fiscal problems, or a choice among several of them. And among these choices, the Demos want to choose one that combines tax hikes and spending cuts.

                But it’s important to clarify that there is no such deal. There are only policy moves that we can make now that will aggravate or mitigate the situation later.

                Therefore, to say that the Demos don’t want a deal with all cuts means that they don’t want a deal with any cuts, unless they get some tax hikes too. This is like saying in order to get a diabetic to start on a healthy diet, we have to give him a cupcake with his vegetables, or that we have to do a shot with a drunk to celebrate successfully completing five AA meetings. That defeats the whole purpose of the reform, that we can establish a new pattern of action that doesn’t repeat the problem.

                “There’s certainly very little constituency among the Dems for trying to close the deficit gap using only tax increases.”

                I’m sure there are some Demos who believe that, but they are operating from an invalid premise. By contrast, I’d venture that among Americans who intend to vote to reelect President Obama now, somewhere between 70% and 95% of them reason something like, “We shouldn’t cut any more government programs until we repeal the Bush tax cuts and then see where we are,” which is a valid premise. But that’s exactly what won’t help our fiscal situation and exactly what the Republicans won’t accept.

                Therefore, in order to unwind our fiscal crisis, we have to repudiate the corruption, self-dealing, stupidity and mewling incompetence Of The Libs And Demos. You might think it’s a crude buzzkill to bring that up, and to a substantial extent I agree. But there’s no way around it. The incompetence of the libs and Demos has created path dependencies/game theory considerations/public choice issues that have to be dealt with.

                In short, you’re taking what is necessarily a dynamic process and trying to analyze it statically. What we do now is an extension, clarification, and correction to what’s been done before. What we do now will be extended, clarified, or corrected by others in the future (or even by ourselves). Until you accept the dynamic context of this issue it’s very difficult for you to make any sense.Report

              • Avatar North in reply to North
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                says:

                No worries about the pause Koz, take all the time you need so long as I can catch your response scrolling up the sidebar when you offer it.
                In this case perhaps you’d rather take more time because I don’t think this is a very persuasive argument. You suggest that there aren’t deals, just policy moves. This of course is contradictory; deals are policy moves. You agree to policy move A that you don’t like and I do and in exchange I’ll agree to policy move B that I dislike and you like. This is exactly the context that the negotiations happened in and the context that they broke down under. The GOP refused to accept any form that included quid pro quos and instead demanded that Dems and the President accept their own policy preferences en toto against not only the Dems own political principals but also their practical politics and the repeatedly indicated preferences of the public.
                I hate to flat out disagree with you but such deals were both plausible and possible. Boehner repeatedly agreed in private to such deals only to have his caucus rejected them because said deals contained tax increases (even when those deals had massively move spending cuts and or when such deals involved preempting the expiration of the Bush tax increases through tax reform). Indeed the incredulous howls of conservatives like Frum, Bartlette and Brooks were deafening as the GOP caucus rejected these offerings, you can look them up; I don’t want to trap my response in moderation hell.
                Where you’re spot on is your description of the excuses the GOP offered for rejecting the deals. Drunkard comparisons and diabetic comparisons were all common and of course were blatantly inaccurate spin. Tax increases are cast in these analogies as being akin to sugar for a diabetic or liquor for an alcoholic when in terms of deficit reduction they are identical to spending cuts; to wit they are policy moves that can reduce the deficit. The deficit can be reduced by reducing spending and the deficit can be reduced by increasing revenue. This is not merely basic governance, this is basic accounting and basic math and in this environment where revenues and rates are the lowest they have been since the 1940’s it is a fact that virtually everyone is aware of.
                From that point you build up your normal edifice of accusations of Democratic malice, misrepresentation and climax with your standard primal howl about liberals in general. You’ll forgive me for not addressing this portion since it’s either standard for you or premised on the faulty reasoning that you start with when you try and pretend like spending cuts alone are the only legitimate policy responses to deficit concerns. They weren’t and they aren’t.
                Happily the way things ultimately panned out is that it’s looking we’re going to get either some sort of tax hike/spending cut combo deal or a jolt of cuts targeted heavily at defense spending and delayed to the end of this year. That latter result certainly wouldn’t be my preferred prescription with the economy only just sputtering under way again but I’m hopeful it won’t do too much damage (especially with so much of it landing on the DoD where it could do some serious good).Report

              • Avatar Koz in reply to North
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                says:

                “You suggest that there aren’t deals, just policy moves. This of course is contradictory; deals are policy moves. You agree to policy move A that you don’t like and I do and in exchange I’ll agree to policy move B that I dislike and you like. This is exactly the context that the negotiations happened in and the context that they broke down under.”

                Let’s stop here for a sec.

                What you’ve written is ok as far as it goes, but I think you missed what I was getting at when I said there are no deals, just moves. The point is that there are no deals that solve the problem, only policy moves (including deals) that make it bigger or smaller.

                Let’s think about what we decided to have for lunch today. There were probably a hundred choices each of us could have made. We were not meaningfully constrained by what we had for lunch yesterday. And what each of us chose for lunch today doesn’t meaningfully constrain what we can eat tomorrow. Therefore, we can treat today’s lunch as a freestanding, static problem that requires few if any extraneous considerations.

                That is exactly what the current budget crisis isn’t.

                What we do today is significantly constrained by what’s been done in the past, and will be modified by others in the future. Therefore we have to calibrate our expectations and judgments relative to our sphere of action, which is much smaller than the overall problem.Report

              • Avatar North in reply to North
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                says:

                The point is that there are no deals that solve the problem, only policy moves (including deals) that make it bigger or smaller.

                Yes I would say that you would be right in that assertion. If by the problem you mean the deficit (and debt) then a single deal would generally be too big a piece of deal making to be very legislatively likely.

                Where I don’t seem to be following is where we get from this relative political truism to the understanding that revenue increases, whether via increased tax rates or tax reform that improves revenues, are not a policy that would improve the problem. If you increase revenue then ceteris paribus the deficit decreases (and of course equally if you decrease spending then ceteris paribus the deficit decreases).Report

              • Avatar Koz in reply to North
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                says:

                “I hate to flat out disagree with you but such deals were both plausible and possible. Boehner repeatedly agreed in private to such deals only to have his caucus rejected them…”

                Ok, let’s stipulate to that. Let’s say that any of the various deals in the press supposedly hashed out by Boehner and President Obama could have become law. Then what?

                Then, if the policies making up the deal are allowed to run their course, and if the economic projections subsumed in the deal come to pass (and if it can pass Congress), then ten years from now we’ll have Treasury debt of $25T instead of $30T or whatever, and slightly higher taxes here and there.

                Objectively speaking, that makes very little progress toward the problem. But more than that, it makes even less progress toward the subjective nature of the problem which is much more important.

                On the other hand, if we cut $1T of in spending and don’t do anything about taxes (ie, the Reid plan), you can say that objectively it’s not any better than the Obama/Boehner deal. But subjectively, this is a crucial advance. Because we’re not trying to stop further budget cuts in the future, in fact we intend to do those too. (And for that matter, we’re not foreclosing against the possibility of tax hikes in the future either.)

                Finally, the Obama/Boehner negoations were like 80% of the way through the whole drama in the first place. The only reason anything like that ever came into consideration is because the Republicans refused to increase the debt ceiling in the first place.Report

              • Avatar Koz in reply to North
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                says:

                “Yes I would say that you would be right in that assertion. If by the problem you mean the deficit (and debt) then a single deal would generally be too big a piece of deal making to be very legislatively likely.”

                Great, I’m glad you’ve gotten that far because that’s an important advance from things you’ve written before.Report

              • Avatar James Hanley in reply to North
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                says:

                Off topic, but koz, you really need to get a gravatar.  You sound intelligent, but how can I believe anything written by a heart-shaped turd with horns?Report

              • Avatar Koz in reply to North
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                says:

                “Where I don’t seem to be following is where we get from this relative political truism to the understanding that revenue increases, whether via increased tax rates or tax reform that improves revenues, are not a policy that would improve the problem.”

                Because, the objective nature of the problem has gotten so big, ie the numbers are so big, that the time frame to comprehensively address it expands well beyond our immediate sphere of action (that’s what you agreed to above, btw). As a consequence of that, the problem becomes less objective and more subjective.

                Revenue increases, if they are done now, subjectively aggravate the problem because they feed the misperception that the problem is essentially a matter of lack of revenue, therefore the solution is to raise more revenue. That misperception takes us further away from the solution, well beyond what’s mitigated by whatever revenue they raise.Report

              • Avatar Koz in reply to North
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                says:

                “You sound intelligent, but how can I believe anything written by a heart-shaped turd with horns?”

                Yeah, I probably should. All I can say is that I’ve never picked one out. Periodically whatever shows up next to my name changes for no particular reason.Report

              • Avatar Koz in reply to North
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                says:

                “The GOP ….. demanded that Dems and the President accept their own policy preferences en toto against not only the Dems own political principals …”

                Like the other things I mentioned, this is a mistake resulting from looking at the fiscal situation as a static picture.

                No North, there is no principle, Demo or otherwise, that says that we have to have tax hikes as a condition for spending cuts. It doesn’t make any sense. The fact that so many libs have deluded themselves into thinking that just illustrates their own schizophrenia in the matter.

                There is a GOP principle that we can’t have tax hikes. There could be a Demo principle against spending cuts. Our team is very much afraid that there is, but many Demos (including yourself) assure us that there isn’t.

                Therefore we could make the obvious deal that violates no party’s principles: cuts only. And eventually we did after the Demos intransigence and the Tea Party’s brinksmanship but otherwise there was no necessary substantive reason for it.Report

              • Avatar North in reply to North
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                says:

                Great, I’m glad you’ve gotten that far because that’s an important advance from things you’ve written before.

                I fail to see how that’s a change from any of my prior positions. I certainly don’t recall ever saying that the debt wasn’t very big. I suppose I have said that the debt problem isn’t the biggest thing in the world relative to the debt problems faced by other countries. I’d say that remains true today. The US has a huge economy, low taxes and large amounts of spending they could conceivably do away with. There’s a lot of room there to balance the budget. Compare that to countries with bigger debt, smaller economies and higher taxes they have considerably less room to maneuver.

                Revenue increases, if they are done now, subjectively aggravate the problem because they feed the misperception that the problem is essentially a matter of lack of revenue; therefore the solution is to raise more revenue.

                But this is utterly subjective which makes it pretty much meaningless once again since subjective changes depending on the viewer. Sure your average right winger has been conditioned to think that any revenue increase won’t help the problem. So what? It’s objectively false. The fact remains that if you increase revenue (or decrease spending) then all, else being equal, deficits fall. Where exactly is this misperception that only the revenue side is the problem seated? It’s certainly not been pushed by the Dems, they always were touting combination revenue increases/spending cut plans.

                Then, if the policies making up the deal are allowed to run their course, and if the economic projections subsumed in the deal come to pass (and if it can pass Congress), then ten years from now we’ll have Treasury debt of $25T instead of $30T or whatever, and slightly higher taxes here and there.

                You seem to be leaving out all of the spending cuts that were included in these proposed deals; spending cuts that started out at around seven times the revenue increases and then ramped up from there in successive deals. So you would have ended up with lower debt, slightly higher taxes and significantly lower spending levels. If deficit reduction is your goal I do not see how one would not consider this outcome desirable or possibly even ideal objectively. 

                 Where I feel like I am not understanding you is where you say that since the timeframe of the debt problem reaches beyond the span of, say, the current administration or congressional term or whatnot it suddenly becomes subjective. No, you can’t control the decisions of future congresses or presidents. How that makes something subjective is beyond me. If you cut spending or raise revenue then that state of affairs will persist into the future until/unless changed by future governments. Where is the subjectivity of that?

                 The only reason anything like that ever came into consideration is because the Republicans refused to increase the debt ceiling in the first place.

                 I certainly wouldn’t deny this. It remains to be seen as to whether this was a good idea. The confrontation rattled the markets, put the full faith of the US credit under some doubt and raised an already toxic political climate to new heights and we’re still waiting to see what the final result is. I think the GOP would have been better off being intransigent during a budget fight rather than during a debt ceiling reauthorization.Report

              • Avatar Koz in reply to North
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                says:

                “But this is utterly subjective which makes it pretty much meaningless once again since subjective changes depending on the viewer. “

                Subjective doesn’t equal meaningless. Some version of Republican cuts is simply better than the Obama FY2012 plan released in February, though they must be evaluated subjectively for the reasons I mentioned before.Report

              • Avatar Koz in reply to North
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                says:

                “You seem to be leaving out all of the spending cuts that were included in these proposed deals;…”

                No I’m not, I’m giving (and/or President Obama or whoever) credit for all of them. In round numbers the Boehner/Obama deal was $4T in spending cuts and $1T in tax increases. Add that up you get $25T in Treasury debt instead of $30T or whatever. If you’re lucky you might knock off another $1-3T in interest cost as well. Now having $25T in Treasury debt is better than $30T but it’s still not good enough.

                The problem isn’t solved objectively but subjectively.Report

              • Avatar North in reply to North
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                says:

                Heck, I’ll do you one better there Koz and say that all of the GOP proposals were better than Obama’s Feb proposals from a deficit standpoint. This is, of course, comparing apples to oranges. Obama wasn’t worrying about the deficit in Feb. he was worrying about the recession.

                Now if we wanted to compare apples to apples we’d be looking at what the GOP and the Dems were offering once the subject was changed during the deficit ceilign stand off to deficit reduction (the credit/blame for that incidentally I’ll agree lies almost entirely with the TP/GOP). Were the GOP proposals better than the Democratic counter proposals? I’d say no. The Democratic proposals offered more deficit reduction through a balanced approach, they were the preferred solution both in the opinion of the voters and the markets and they were rejected because that approach included tax increases which the GOP has chosen oppose supposedly on principal.Report

              • Avatar North in reply to North
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                says:

                I suppose, but isn’t this a reversal on your part? You just pointed out that the problem is so large that it cannot be solved in one swoop and one legislative session. By those lights a deal that through a little tax increasing and a lot of spending cuts dropped the debt by 5 trillion would be a pretty good one. Certainly it’d be superior to a deal that dropped the debt by only 1.2 trillion and contained only spending cuts. If debt reduction is the goal then that seems elementary.Report

              • Avatar Koz in reply to North
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                says:

                “It remains to be seen as to whether this was a good idea. The confrontation rattled the markets, put the full faith of the US credit under some doubt and raised an already toxic political climate to new heights and we’re still waiting to see what the final result is.”

                Right. We both opposed it at the time IIRC. The Tea Party strategy was incredibly risky. And even if it worked, which you can say it did, it still contributed to a very poisonous environment that will make future bipartisan cooperation very difficult. On the other hand, they thought there was no other way to get any kind of meaningful spending cuts, and I think they might have a point.

                “I think the GOP would have been better off being intransigent during a budget fight rather than during a debt ceiling reauthorization.”

                They tried. We came within two days or whatever of a government shutdown. The Demos were slow to understand that if they were going to be completely intransigent on spending reform, there was going to be a confrontation somewhere.Report

              • Avatar Koz in reply to North
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                says:

                “This is, of course, comparing apples to oranges. Obama wasn’t worrying about the deficit in Feb. he was worrying about the recession.”

                We don’t think it’s apples to oranges at all. We think the instability of government finance is responsible for the continuation of the recession. And even if that were President Obama’s excuse, it doesn’t hold water anyway. If he cared about the recession, he shouldn’t have passed PPACA. Which, let’s note, still hasn’t been repealed and if anybody tried presumably the Demos would try to defend it.Report

              • Avatar North in reply to North
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                says:

                Yes I’m aware of the whole; deficits cause joblessness thing. I’ve not read any convincing arguement for it yet but I know it’s a core plank in the GOP platform so I’m certainly not going to pretend like I could persuade you that it is economic nonsense.Report

              • Avatar Koz in reply to North
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                says:

                “By those lights a deal that through a little tax increasing and a lot of spending cuts dropped the debt by 5 trillion would be a pretty good one.”

                Yeah, Megan McArdle, David Brooks and Tyler Cowen thought so. I’m agnostic on that point myself. Among other things, the problem is that there was a lot of doubt that the Boehner/Obama deal could be implemented, even if it were agreed to between Boehner and Obama. The Reid plan was much better because it tried for much less, and we can be sure it helped the problem instead of hurt.Report

              • Avatar North in reply to North
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                says:

                PPACA was a healthcare bill, not a jobs bill. The GOP had their shot to influence it. They instead tried to cynically reenact 1994 to kill it altogether. They lost. It got passed, mangled, but fully legally passed and they deserved to loose on it.

                I have no sympathy for the right on that subject and the GOP can suck eggs. They lost any iota of respect I retained for them on the subject of healthcare when Bob Bennett got primaried out of office by a Tea Party fruitcake.Report

              • Avatar Kimmi in reply to North
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                says:

                because koz hates leverage! because leverage is ooga booga scary! Except when it’s done by the banks! or by yoooou or me!

                But if the government uses leverage, we’re all gonnaaa Die!

                Debt ain’t bad except when it’s government Debt! At least that’s what he’d say.

                Pass the ammunition, someone needs a schoolin in how to shoot straight.

                 

                 Report

              • Avatar Koz in reply to North
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                says:

                “….so I’m certainly not going to pretend like I could persuade you that it is economic nonsense.”

                Given what’s happened since we’ve been corresponding, why would you be trying to convince that anything I’ve written is economic nonsense? More or less all of it has come to pass which we can’t say about some things you’ve written.Report

              • Avatar North in reply to North
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                says:

                With Reid it remains to be seen what the final outcome is until December at the earliest.Report

              • Avatar North in reply to North
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                says:

                Lets not open up the subjects of predictions, neither of us come out looking good on that one except that I did assert that Obama’s Hope&Change thing was a schtick and it turned out right.Report

              • Avatar Koz in reply to North
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                says:

                “PPACA was a healthcare bill, not a jobs bill.”

                PPACA was a healthcare bill that killed jobs and extended the recession therefore it’s a jobs bill and a recession bill too. Seriously, it’s getting very implausible to think that PPACA will actually be implemented at this point. The Demos ought to get themselves some credit for pulling the plug on it themselves as opposed to somebody else doing it for them. Though truth be told at this point they won’t get much.Report

              • Avatar Koz in reply to North
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                says:

                “With Reid it remains to be seen what the final outcome is until December at the earliest.”

                Well yeah, that’s the point. We do Reid, draw a line under it, then come back six months or a year later and see what else there is to cut. But then you’ve already implemented some cuts and have the credibility of having done them instead of representing something about what you’re going to do in the future.Report

              • Avatar North in reply to North
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                says:

                PPACA was a healthcare bill that killed jobs and extended the recession therefore it’s a jobs bill and a recession bill too.

                Yes and apparently it’s a time travelling bill too since it did all this without even being enacted yet. Honestly, old boy, the way you loop around and eat your own tail in some of your comments is epic. Come now this is just spin. It’s not like the GOP even proposed an alternative healthcare proposal. Hell, they still haven’t.Report

              • Avatar Koz in reply to Koz
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                says:

                “I fail to see how that’s a change from any of my prior positions.”

                It’s a very important thematic advance for understanding the big picture. Your positions, changing or not, are downstream from that.

                Just to reiterate for completeness ‘cuz it’s important. The debt problem is not like deciding what to get for lunch: what we do now is constrained by what’s been done in the past, and will be modified by others in the future. Therefore our sphere of action is smaller than some seem to think it is, and in particular smaller than the size of the problem.Report

              • Avatar Kimmi in reply to Koz
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                says:

                You assume debt is a problem. Kindly explain to me the evils of mortgages or student loans. Then we can talk public debt. Seriously, what the fuck is your problem with leverage? Do you think that our stock market would be helped if we stopped issuing corporate bonds entirely?

                Or is there something magical and pixy dust special about Public Debt? Cause, from where I sit, private debt be doing a lot more to tank our fucking economy than public debt.Report

              • Avatar Joecitizen in reply to Koz
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                says:

                Kimmi,

                Remind me why leverage is a good thing?Report

              • Avatar Koz in reply to Koz
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                says:

                “Yes and apparently it’s a time travelling bill too since it did all this without even being enacted yet. “

                Well, yes. Through this modern miracle called movable type, people can see what’s in the bill before it’s implemented and even before it becomes law and react accordingly.

                Btw, if the alternative is PPACA, the GOP doesn’t need a health care bill, the status quo is just fine. (Something the libs never figured out during the health care debate.)Report

              • Avatar North in reply to Koz
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                says:

                Yeah one knows the discussion has run its course once you start rolling out those faith based talking points. I’d dig out the crowbars and links and tear it down again but PPACA wasn’t the subject of discussion on this tear anyhow.

                I’d gather from your sanguine opinion of Reid that you’re not taking the neocon doomsaying about the defense cuts very seriously?Report

              • Avatar Koz in reply to Koz
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                says:

                North, when it comes to the incompetence of the libs, PPACA is always the subject of discussion. I expect my team will be running against PPACA until it’s repealed and a decade after that. PPACA is the Jimmy Carter of the 21st century.

                Actually the whole defense business is one reason why I liked the Reid plan better. The Reid plan had X dollars in cuts to the defense budget and spelled them out. The compromise that eventually passed has this massive sequester hanging over the defense budget like a sword of Damocles. When push comes to shove I don’t think they find a way around it somehow but I’m not quite sure how.Report

    • Avatar Ryan Bonneville in reply to North
      Ignored
      says:

      I don’t think even the commenters at Balloon Juice think capitalism doesn’t work. Maybe they’ll say it as a bit of rhetorical excess to make a point, but no one I’ve ever met has a fundamental objection to buying and selling things. This is massive straw man.Report

      • Avatar Jason Kuznicki in reply to Ryan Bonneville
        Ignored
        says:

        It’s not a strawman, in that the protester carrying the sign presumably believed it.

        It’s also not the focus of this essay, only a jumping-off point to help explain what I think capitalism really is about.Report

        • Avatar Michael Drew in reply to Jason Kuznicki
          Ignored
          says:

          Yeah, I’m with Jason here. The sign’s right there. The only thing to emphasize (and it’s no a correction, becauseJason didn’t suggest otherwise) is that the sign doesn’t represent more than a small slice of OWS. The issue is not whether capitalism works, but whether it has stopped working as well as it has been promised to work for average people, or been hijacked and prevented from working as it should.

          Jason’s graph clearly shows the superior productive capacity of the market system; what it doesn’t show are distributional outcomes. Distributional outcomes have been pretty. really very good in capitalism as we have practiced it in this country until quite recently, but we have practiced a managed, redistributional form of capitalism – that is, until fairly recently, when we have begun to scale back the redistribution. A lack of any really sever, prolonged economic downturns during the period of counter-redistribution have muted the social consequences of changing the distributional terms on which capitalism will be understood to work, but now that string of luck has come to an end. OWS emerged at exactly the time when it became utterly clear that the efforts to save ordinary people from the consequences of relatively unregulated, unmanaged capitalism had failed, while the efforts to save the most powerful, flush, and culpable institutions had succeeded in making them only more flush without changing their incentive structure.

          OWS is a materialist movement in greatest part. A very few in it challenge capitalism as such, saying it doesn’t work, period (generally those people were already organized around that belief long before OWS), but the majority believe in capitalism, believe it can, has, and should work, but believe it has stopped working *for them*, in the way it has been argued to them that it would, and want it it be made to do so again by a restoration of a managed form of it by the elites who said that it would.

          http://www.amazon.com/Squandering-America-Politics-Undermines-Prosperity/dp/1400040809/ref=pd_bbs_sr_1/103-2829433-8511809?ie=UTF8&s=books&qid=1192470161&sr=8-1Report

  2. Avatar reflectionephemeral
    Ignored
    says:

    “Capitalism doesn’t work” is a stupid sentiment, for sure.

    Happily, it doesn’t appear to be the main message of OWS, and better still, it doesn’t have any chance of being taken seriously by anyone making policy in the US.Report

  3. “Now, capitalism doesn’t guarantee success — nothing can — but it often lets you try. It even bends over backwards to provide you with funding, if that’s what you lack. Among economic systems, capitalism is unique that way.”

    Careful Jason – this is way too real for some people.Report

  4. Avatar Robert Boyd
    Ignored
    says:

    Not that I disagree with your basic premise (obviously capitalism–combined with technology–has lead billions out of poverty). But no matter how you look at it, capitalism depends on the police defending it against its enemies. You have to have a system of laws that, at the very least, protect property. And for those laws to work, you need police (whether these police are military, civilian, or private). I think even the most die-hard capitalist agrees that for a capitalist system to work, the rule of law must exist.

    A left-wing critic takes this one step further. Capital needs the police to maintain its existence, especially when it is in periods of extreme inequality (because in such periods, the proles get restless, y’know). The famous quote attributed to Jay Gould is apropos here: “I can hire one half of the working class to kill the other half.”

    You can define capitalism so that it doesn’t include police brutality, but you can’t escape from the fact that historically, in capitalist societies, when the poor, the working class, the 99% (or whatever phrase you want to use) have taken to the streets to complain about injustices they see as perpetrated by the rich, the response has been billy clubs, fire hoses, law courts, tear gas, and bullets. This might not be “capitalism” by your definition, but it is a perennial feature of capitalist societies.Report

    • “You can define capitalism so that it doesn’t include police brutality, but you can’t escape from the fact that historically, in capitalist societies, when the poor, the working class, the 99% (or whatever phrase you want to use) have taken to the streets to complain about injustices they see as perpetrated by the rich, the response has been billy clubs, fire hoses, law courts, tear gas, and bullets.”

      This is a good point however, companies can’t hire Pinkerton agents to break up strikes any more. So the question is: What is the motivation of the police in this incident? If it wasn’t simply an overreaction, then what drove their response?Report

      • Avatar Franz Gruber in reply to Mike at The Big Stick
        Ignored
        says:

        Having a Molotov cocktail bounced off your head, or rocks, or bricks, or hundreds of hard rubber balls thrown on the ground to incapacitate a cop’s horse, or macing a cop’s German shepherd is worthy of a much stronger response than recitation of one’s Miranda rights. The deserve to get their asses kicked, but good. When and where did this happen?–“have taken to the streets to complain about injustices they see as perpetrated by the rich, the response has been billy clubs, fire hoses, law courts, tear gas, and bullets.”

        Law enforcement should stand on the sidelines watching “anarchists” trashing the windows of Saks, Macy’s, FAO Schwartz? Overturning cars and setting them on fire is a valid tactic and response to the injustices perpertrated by the rich?
        Eh gads, the ranks of the insane grow steadily by the day.Report

        • Avatar Jason Kuznicki in reply to Franz Gruber
          Ignored
          says:

          So they should also throw a grenade at people trying to help someone who is bleeding and unconscious?

          Because that’s what the video shows. Glad we’re clear on that.Report

          • Avatar A Teacher in reply to Jason Kuznicki
            Ignored
            says:

            Okay I think we’re in agreement that tossing a flash bang at people trying to respond to a serious injury was a bad judgement call.

            However, I’m hesitant to be overly critical (critical, yes, overly so, no) because at the end of the day it ~is~ law enforcement that allows us to have Captalism.

            I come up with a novel good. I open a store and sell them for $20. Without law enforcement what is to stop:
            a) A gang walking into my store and just TAKING the goods without repaying me for the creation?
            b) Another company stealing my design and selling it themselves?

            Law Enforcement is a critical part of any civilized society because some people either through ignorance or intent, just can’t play by the rules. And those rules are what makes capitalism work.Report

            • Avatar Jason Kuznicki in reply to A Teacher
              Ignored
              says:

              I agree entirely. I’m not saying to abolish law enforcement. I’m saying that law enforcement needs to chill out when it comes to citizens exercising a basic right in our society.Report

              • Avatar A Teacher in reply to Jason Kuznicki
                Ignored
                says:

                So … what basic right are we talking about?

                There were issues with the occupiers no longer legally having access to the space for a variety of reasons. They were asked to leave so the issues could be resolved. They refused. They were warned. They ignored the warnings. Crap happened.

                Now, that said, I’m not sure at this point that the police didn’t over-react. BUT I’m also loathe to leap to judge that they ~did~ overreact too. There are points where peaceful demonstration crosses into becoming a dangerous mob. Police are there to protect property and enforce the rule of law.

                I’m willing to let them investigate this more and see what comes from it.Report

              • Avatar Chris in reply to A Teacher
                Ignored
                says:

                When the people who will ultimately be responsible for doing the investigation and acting on its findings lie, in 2011, the age of cell phone video cameras and Youtube, about the use of flash bang grenades by police, I don’t really trust them.Report

              • Avatar A Teacher in reply to Chris
                Ignored
                says:

                This is also the age of selective editing…..Report

              • Avatar Franz Gruber in reply to A Teacher
                Ignored
                says:

                What, they haven’t even begun the investigstion and you’re already branding them, liars? How exactly, do you make that kind of leap? Let’s get real here
                Chris. I’ll wager a thousand dollars that it can be proven you were supporting Sharpton and their defense team on the Tawana Brawly case; also, you, like their hysterical mob looking to some lynch some Duke white frat boys, was firmly convinced the accused were guilty. Remember the despicable, gutless, spineless Duke faculty with their “Teach-In”, rally for justice—yeah, we’ll give them a fair trail and then hang ’em in the morning. Apparently, they were even more convinced than mathematically possible. The guilty as a dog average was somewhere in the 130s range. And geez what do you know—the accuser was a certifiable sexual nut job who had been having sex with every Tom, Dick, and Harry. The DNA of four different
                men was found in her vagina, four different men who had not even been near the party. You don’t suppose a woman of such fine moral manners would cheat on her husband, do you? She had no husband; her longest relationship was between 1-2 weeks and that was with 6 different guys.
                Good thing you weren’t on the Tawana Brawley Grand Jury, or the Mumia jury, Chris.Report

            • Avatar DensityDuck in reply to A Teacher
              Ignored
              says:

              “I think we’re in agreement that tossing a flash bang at people trying to respond to a serious injury was a bad judgement call.”

              A bad call? Those people are dead, Burke! Don’t you have any idea what you’ve done here?Report

    • Avatar Jason Kuznicki in reply to Robert Boyd
      Ignored
      says:

      [N]o matter how you look at it, capitalism depends on the police defending it against its enemies. You have to have a system of laws that, at the very least, protect property. And for those laws to work, you need police (whether these police are military, civilian, or private). I think even the most die-hard capitalist agrees that for a capitalist system to work, the rule of law must exist.

      All I’m suggesting is that people acting within the marketplace of ideas are less of a danger to capitalism than people acting on the principle that might makes right.

      The police will always be with us, whatever system we have. I’m not trying to imagine a world without them. I’m just trying to imagine a world where protests are allowed to happen with a lot less violence from them. That’s all.Report

      • Avatar Franz Gruber in reply to Jason Kuznicki
        Ignored
        says:

        So they should also throw a grenade at people trying to help someone who is bleeding and unconscious?”

        Of course not, Jason. Nor has anyone, cop or any member of a law enforcement agency advocated using grenades/flash bangs to quell riots. A girl in Boston was killed by a plastic bullet or some other projectile fired by a Boston cop after the Red Sox lost their final ALCS pennant game in 2003 to the Yankees–(yeah, Yankee hatred really does run that deep.) This wasn’t a case of lethal force, it was clearly an accident–the girl who was shot was not even the intended target, but, in the blink of an eye,the Yankees Suck party turned into a full-fledged riot with few options left to law enforcement. What would you do? Disperse would be nice and probably sufficient, but unfortunately, the tide didn’t turn that way, a line had been crossed, and for the safety of everyone there, it was determined that the crowd needed to broken up immediately. We’re not living in a Police State. Go to Iran or Cuba or China, or North Korea if you want to see how they deal with their “protesters”.Report

        • Avatar Jason Kuznicki in reply to Franz Gruber
          Ignored
          says:

          Of course not, Jason.

          Thank you. In the future, please try to stay on topic. If you have evidence that OWS protesters have been breaking windows, throwing molotov cocktails, or any of the rest, please present it.

          Reports I’ve read were that one or two bottles got thrown, and then the entire crowd started shouting “Stop throwing shit!” Which they did.

          Of course, those reports could be wrong. If they are wrong, there should be evidence.Report

    • Avatar Roger in reply to Robert Boyd
      Ignored
      says:

      Robert,

      Compared to what?

      You say that billy clubs and tear gas are perennial features of capitalism. For this to be more relevant it would be useful to compare it to other economic systems such as serfdom, slavery or socialism.

      Seems to me that capitalism tends to go with democracy and that both are usually less coercive and exploitative than the alternatives. Would you agree?

      (I certainly agree that current society is too coercive, I am not disagreeing with you on that at all)Report

  5. Avatar Mike
    Ignored
    says:

    Communism doesn’t work, except for very small religious communes where the free-riders can be kicked out (though they still take care of physically restricted members, who contribute when/where they can in other means or are honored and cared for in respect for previous contributions made before they became physically disabled).

    Unrestricted, laissez-faire capitalism doesn’t work either. It results in precisely the crappy economic policies that resulted in the Great Depression, the incredible wage gaps of the early 1900s, the social inequities that created the current corporate oligarchy, and the situations that created the monarchies/oligarchies of earlier centuries. It also, lest you forget, created the same situation in ancient Rome, where eventually one could even purchase the office of Caesar as such.

    The middle ground – a tightly regulated capitalism that prevents abuses while still allowing for opportunity and reward for innovation – is what is required. When you examine today’s politics, this is what would classically be known as “liberal.” The foaming-mouthed neo-anarchist rightwing kooks of the Tea Party just are too brain dead to understand the concept because their masters in the corporate oligarchy feed them a steady diet of “Two Minutes Hate” centered on how anything but corporate anarchy is an affront to “freedom”, even though in basic terms, the masses today live in indentured servitude or slavery.Report

    • Avatar Jason Kuznicki in reply to Mike
      Ignored
      says:

      Unrestricted, laissez-faire capitalism doesn’t work either.

      It depends very much what you mean by that.

      It results in precisely the crappy economic policies that resulted in the Great Depression…

      No. That was bad monetary policy, aggravated by a high tariff — the opposite of a free market.

      the incredible wage gaps of the early 1900s…

      Possibly.

      the social inequities that created the current corporate oligarchy….

      I’ve never seen a system without social inequality. It could always be worse, because it could be merely hereditary, and tied directly to political power.

      ….and the situations that created the monarchies/oligarchies of earlier centuries. It also, lest you forget, created the same situation in ancient Rome, where eventually one could even purchase the office of Caesar as such.

      Those were anti-laissez faire. To the core. A system founded on serfdom or conquest slavery is not a laissez faire system.Report

      • Avatar Kimmi in reply to Jason Kuznicki
        Ignored
        says:

        unrestricted capitalism leads to monopolies. it is triflingly easy to create systems where better products can be outcompeted because a different company has more money/marketshare and can afford to starve the competition.Report

      • Avatar Mike in reply to Jason Kuznicki
        Ignored
        says:

        Those were anti-laissez faire. To the core. A system founded on serfdom or conquest slavery is not a laissez faire system.

        On the contrary. Those systems, just like the slavery of the 1800s, the virtual-slavery/serfdom of the late 1800s/early 1900s, and today’s system, were predicated on the argument of powerful interests who insisted they should be “left alone” or that the “free market should work unimpeded.”

        The underlying problem is ignorant dolts like you who don’t understand that “laissez-faire capitalism”, as it was described by its proponents in the early 1900s, is merely slang for “let the rich and powerful get away with their abuses and we don’t give a crap about the poor.”

        Slavery is slavery. This is true whether you’re referring to the Roman conquest model, the serfdom of the dark and middle ages, the slavery of the 1800s, the serfdom model of the sharecroppers, the model that led to mass destitution in the 1930s, or the model evolved today.Report

        • Avatar Jason Kuznicki in reply to Mike
          Ignored
          says:

          (On serfdom and the Roman Empire.)

          Those systems, just like the slavery of the 1800s, the virtual-slavery/serfdom of the late 1800s/early 1900s, and today’s system, were predicated on the argument of powerful interests who insisted they should be “left alone” or that the “free market should work unimpeded.”

          [Citation needed.]

          You’ll search in vain for anyone at all who thought during Roman times that labor, commodities, and capital should all be freely exchanged at market prices. Ancient writing on economics is radically different from anything anyone believes today.

          Likewise in most of the medieval and era. There is hardly a hint of free-market thinking, with the possible exception of the Salamanca economists, whom no one listened to anyway. It was only very late in the medieval era that the idea emerged that market prices existed for any identifiable reason beyond the mere attempt to cheat the buyer or seller.Report

        • Avatar Brandon Berg in reply to Mike
          Ignored
          says:

          Ideally you should not follow “The underlying problem is ignorant dolts like you” with an ignorant, doltish assertion.Report

        • Avatar Roger in reply to Mike
          Ignored
          says:

          Mike,

          You bring up a good point on the baggage that has adhered to terms such as capitalism and laissez faire. When you use the latter term, you are defining it as anything goes. When some of the responders are using it they mean Free Enterprise — voluntary positive sum interactions with property “conventions and no coercion.Report

          • Avatar MFarmer in reply to Roger
            Ignored
            says:

            ” you are defining it as anything goes.”

            No, fraud doesn’t go, forced labor doesn’t go, polluting your neighbor’s property doesn’t go, etc. A free market should be considered in the context of the rule of law which prevents violations of basic rights. Being a free market advocate is not the same as advocating for individual businesses doing anything they choose to do.

            This difference is vital to understanding. Just as soon as a free market advocate speaks, there is the assumption the advocate is shilling for “rich bastards” (not directed at you). My concern is not with individuals in business or individual businesses per se, but with the legal/contractual framework that makes a free market possible.

            Whatever form the market takes in freedom, restricted only by rational laws preventing rights violations, is fine with me, as long as actions in the market are voluntary. We should have the freedom to act in the market as we choose according to our diverse values. We respect each other’s basic rights and freely trade with one another. Those who say that some people don’t have the capacity to compete in the market equally with others are addressing a different problem — as long as there is no coercive restriction from competing, there’s no reason to be concerned about the free market, but it does bring up the question if society cares about those who lack the capacity to compete, will there be efforts to help those who lack the natural gifts most of us possess to work and advance in a free market. I say that a free society will respond to those in need of help — we’ve done it in the past, and if government doesn’t interfere, we’ll do it in the future.Report

            • Avatar Mike in reply to MFarmer
              Ignored
              says:

              No, fraud doesn’t go, forced labor doesn’t go, polluting your neighbor’s property doesn’t go, etc.

              Under Laissez-faire capitalism, all of those things DID go.

              Under the modern laissez-faire capitalism and “down with regulations” bullcrap of the republicans, we got Enron and endless following financial scandals leading up to the Bush Depression.

              “The Free Market”, according to republicans, is not what you describe. Not remotely.Report

              • Avatar Roger in reply to Mike
                Ignored
                says:

                Mike and MFarmer,

                I agree with everything you wrote MF. My comment was to Mike without a last initial, who probably doesn’t.

                Mike, you seem to want to debate somebody against crony capitalism. I won’t engage. Most of the free market advocates in this forum are equally repulsed by fraud and coercion. They are just defining laissez faire differently than you.

                There is no point in debating which definition is best. If there are any republicans in this forum, I will let them defend themselves, but your characterization certainly isn’t reflected in the views of the Wall Street Journal.Report

              • Avatar MFarmer in reply to Roger
                Ignored
                says:

                Whoops, too many Mikes — Mike seems to be stuck in the cartoon/talking point version of free market captitalism taught in public schools and pushed by Democrat hacks. The same hackneyed criticisms are circulated without any apparent efforts to study history.Report

              • Avatar Kimmi in reply to MFarmer
                Ignored
                says:

                I’ve studied argentina. you?
                It’s far more likely than stability…Report

              • Avatar Jason Kuznicki in reply to Mike
                Ignored
                says:

                Under the modern laissez-faire capitalism and “down with regulations” bullcrap of the republicans, we got Enron and endless following financial scandals leading up to the Bush Depression.

                False. In particular, Enron made its ill-gotten money by taking advantage of state-imposed price controls and quotas in California’s energy market. These were called “deregulation,” but they were nothing of the kind. The Cato Institute both warned of the dangers before and documented the problem afterward. See this, for instance.

                “The Free Market”, according to republicans, is not what you describe. Not remotely.

                Well aware of it, my friend. I haven’t voted Republican since 1996.Report

              • Avatar Kimmi in reply to Jason Kuznicki
                Ignored
                says:

                yet Cato, surprisingly, was unable to document it during the incident, despite the rather obvious financial benefits for bringing up Enrons own documentation to the SEC.Report

              • Avatar Chris in reply to Jason Kuznicki
                Ignored
                says:

                False. In particular, Enron made its ill-gotten money by taking advantage of state-imposed price controls and quotas in California’s energy market. These were called “deregulation,” but they were nothing of the kind. The Cato Institute both warned of the dangers before and documented the problem afterward. See this, for instance.

                Eh, it’s more complicated than that, unsurprisingly. No offense to Cato, but Cato does have an agenda. Public Citizen’s findings were basically the opposite, unsurprisingly. No offense to Public Citizen, but Public Citizen does have an agenda.

                Deregulation of energy commodity trading at the federal level. Deregulation of the energy market in Texas helped too. As did certain aspects of deregulation in California. Basically, Enron got whatever they wanted from the government: deregulation here, tailored regulation there. It was a big fishin’ mess, deregulation was a big part of it, but not the only part.Report

              • Avatar MFarmer in reply to Jason Kuznicki
                Ignored
                says:

                Mike – “The Free Market”, according to republicans, is not what you describe. Not remotely.

                Jason — “Well aware of it, my friend. I haven’t voted Republican since 1996.”

                Yes, that’s a curious rebuttal that I see over and over as if some people can’t consider free market prinicples without association to the Republican Party. This should worry Democrats. Republicans should be blamed more than Democrats for the perversion of free market principles, because Republicans claim to know better.Report

    • Avatar Kimmi in reply to Mike
      Ignored
      says:

      1)Kibbutzim are not religious but secular entities.
      2) don’t overstate your conclusions. calling it indentured servitude or slavery is a lot more of a stretch than you should be making. Makes you sound loony.Report

      • Avatar Mike in reply to Kimmi
        Ignored
        says:

        1 – I wasn’t referring to “kibbutzim”, I was referring to the religious orders of buddhist, catholic, or other christian denominations who live in relative squestration with each other.

        2 – Slavery is slavery. Whether you are enslaved to a cruel master with a whip, to the company store, or simply unable to quit your job or find a new one for fear of not having health insurance or other options (or being unable to find a new one if you are “out of work too long”), you are nonetheless enslaved. Even worse are those who are enslaved because the price of “education” was permanent wage-enslavement, or because of unfortunate medical circumstances leaving them permanently enslaved to debts.Report

        • Avatar Jason Kuznicki in reply to Mike
          Ignored
          says:

          Whenever my belly rumbles, I am enslaved.

          The atmosphere itself enslaves me, because I can’t live very long without it.

          And there’s no sense even talking about degrees. I’m every bit as enslaved as a black man in the old South!

          Reductio is just… lost on some people.Report

          • Avatar Chris in reply to Jason Kuznicki
            Ignored
            says:

            While I don’t think wage slavery is a spurious concept, nor is it one that’s susceptible to simple reductio ad absurdum, it does appear that Mike’s not using the concept very well here. He’d probably do better, particularly in this crowd, to talk about degrees of liberty or freedom or some such.Report

            • Avatar dhex in reply to Chris
              Ignored
              says:

              “Whether you are enslaved to a cruel master with a whip, to the company store, or simply unable to quit your job or find a new one for fear of not having health insurance or other options (or being unable to find a new one if you are “out of work too long”), you are nonetheless enslaved.”

              in all seriousness, you need to read orlando patterson’s “slavery and social death” because what you’re saying is so ignorant as to be offensive.

              slavery is not “being trapped in a bad situation”. it is total domination and social oblivion. to compare it to taking on a heavy student loan burden sounds like the sort of ridiculous analogy that someone like glenn beck would come up with.Report

              • Avatar Chris in reply to dhex
                Ignored
                says:

                Are you responding to me?Report

              • Avatar dhex in reply to Chris
                Ignored
                says:

                unless yer the guy who wrote what i quoted*, no, though i do think the term “wage slavery” is a good rhetorical tactic. it’s kinda stupid if you think about it, but that’s what bumper stickers are. fist pumping and all that.

                *that would be mike above at 1:50 pmReport

              • Avatar Chris in reply to dhex
                Ignored
                says:

                K, the embedding can be tricky, and since it was embedded as responding to me, I wanted to make sure.

                Also, since wage slavery is a fairly rich concept with a long history, I find it a bit dismissive to think of it as merely “a good rhetorical tactic.” I’d be interested in hearing what you think is stupid about it, though.Report

              • Avatar dhex in reply to Chris
                Ignored
                says:

                what makes it a good rhetorical tactic is that it hits a fundamental emotional note – even more so when it was coined, as southern slavery was a crumbling but tenable system or a memory (.

                in our culture with – barring some outliers – nothing resembling chattel slavery, it still has tremendous power as a very abstract concept, especially when de-racialized*. presuming commenter mike wasn’t joking above, a modern american’s use of the term slavery helps invoke the kind of hopelessness people feel when they contemplate a loss of their livelihood, or their health, or an inability to take care of their families. that’s what makes it powerful. that doesn’t make it not a ridiculous thing to say, but, again, bumper stickers.

                i do think it’s at best myopic to say “i have fears of the future; i have borrowed too much; i have made poor choices; i live in a kind of slavery” with any kind of seriousness, barring trafficking type scenarios – which most people who invoke the term are not actually referring to. especially in america, as the mental association to slavery is that of african chattel slavery in the deep south. that’s not unintentional, and as rhetoric it is a great move for motivating like-minded individuals.

                it’s just kinda shitty.

                another example: you’re no doubt familiar with the libertarian slogan “taxation is theft”, right? that’s a similar attempt to tap into a deep-seated fear/resentment, but one that also falls apart in terms of actual scope. (that both are ultimately appeals to personal weakness undermines their wider appeal, i think)

                * in that though it invokes for most americans images of southern slavery, it bypasses the ladder of privilege framework and allows even white males to partake.Report

              • Avatar Chris in reply to Chris
                Ignored
                says:

                yeah, something tells me you don’t know how people use “wage slavery,” when they use it in less… loose ways than Mike is, particularly those who know its history. I think there are better ways of describing the condition of American workers, for the most part.Report

  6. Avatar clawback
    Ignored
    says:

    I think you’d want to redo that graph on a log scale; otherwise it’s just deceptive hand-waving. Except don’t bother because then you’d still have to show that any resulting impressive increase in living standards was due to capitalism rather than in spite of it. It could be due primarily to the rise of mixed economies. Or science. Or almost anything from modernity. Hell, it could be due to the rise of police-state tactics and technologies, for all we know.

    So, actually, never mind; this post can’t be salvaged.Report

    • Avatar Jason Kuznicki in reply to clawback
      Ignored
      says:

      I think you’d want to redo that graph on a log scale; otherwise it’s just deceptive hand-waving.

      I’m sure Wikipedia will appreciate it. Go forth and edit!

      Meanwhile, I’m well aware that other candidates exist for why we are the way we are nowadays. If you want to argue for them, you may, but so far, you haven’t.Report

    • Avatar Michael Cain in reply to clawback
      Ignored
      says:

      Assorted individuals and groups show essentially the same chart, with the vertical axis labeled “fossil fuels”. There is no reasonable doubt that the enormous gains in productivity over time shown in the chart are due to the ability to apply comparable amounts of external energy to the production processes, and the source of that energy from the point where the curve takes off has been the three fossil fuels — coal, oil, natural gas.

      I suspect that in another 40 years or so, historians will look back and say that the defining issue of the first half of the 21st century was not capitalism, or radical Islam, or any of the other political issues. It will have been the success (or failure) of the transition away from fossil fuels.Report

    • Avatar Benjamin Daniels in reply to clawback
      Ignored
      says:

      Here’s the log-scale: http://commons.wikimedia.org/wiki/File:World_GDP_Per_Capita_1500_to_2000,_Log_Scale.png

      So basically the growth rate has been increased since about 1800 – in other words, capitalism and increased growth are indeed correlated here. As one of the people who will still say “capitalism doesn’t work”, let me explain why.

      “Capitalism doesn’t work” doesn’t mean “markets don’t work”. In fact, as a socialist, I think that markets are the key economic innovation – and I think that markets are the reason why growth increased after 1800. But capitalism is not the same thing as markets – and socialism is not the opposite of markets. As I wrote before (kindly quoted at https://ordinary-times.com/blog/2011/09/07/craft-beer-and-the-human-economy/):

      “Altogether the philosophical flow [of market socialism] is the opposite of neoliberalism [read: capitalism]. There, what the market produces is proper because it is said to reveal our preferences; here, we reject that assumption, state our preferences first, and use markets to acquire the necessary information and enact those preferences.”

      The key areas where capitalism fails are distribution of income and of ownership. Capitalism never satisfied the complex needs of society, but it “worked” to the extent that it was a primitive method for implementing the technology of “markets”. Now that we understand more fully the separability of “markets” from “capitalism”, we can retain the benefits of markets without shackling ourselves to the instabilities and injustices of capitalism.Report

      • Avatar Patrick Cahalan in reply to Benjamin Daniels
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        says:

        I think capitalism works just fine.

        I think the steam engine sorta kicked its ass, though.Report

        • Avatar Kimmi in reply to Patrick Cahalan
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          says:

          capitalism is fine, for a certain manner of “good”. it doesn’t fix everything, and I get kinda mad when people start to claim it will…Report

        • Avatar Michael Drew in reply to Patrick Cahalan
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          says:

          I think capitalism works just fine.

          I think the steam engine sorta kicked its ass, though.

          Full of win. Things happening at the same time =! causality.

          On the other hand, yes, I think capitalism works well, as well. But it can work more well or less well (by various people’s lights, because here departures of valuation are simply unavoidable) in different forms. By my lights, regulated, managed capitalism has worked much better than laissez-faire capitalism where it has been tried (not very many time-places to be sure, but from what I can see, where there have been major moves toward it, the results have generally been not much better and often dramatically worse in particular ways).Report

      • Avatar James Hanley in reply to Benjamin Daniels
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        says:

        @Benjamin Daniels,

        socialism is not the opposite of markets.

        You might try reading Hayek’s “The Use of Knowledge in Society” to know why socialism and markets don’t actually mix.

        we reject that assumption, state our preferences first, and use markets to acquire the necessary information and enact those preferences.”

        You might also want to review some of the behavioral economics research that empirically demonstrates that we don’t realistically estimate our preferences in abstract settings (i.e., in lab experiments, asking someone how much they would value a coffee cup elicits a different response than trying to buy a coffee cup they have been given as compensation for participating in the experiment).

        Daniels’ words sound nice, persuasive, noble, and meaningful, but they’re based on an idealistic hope about how markets can work, rather than a study of how they really do work.Report

        • Avatar Benjamin Daniels in reply to James Hanley
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          says:

          Hold on, what are you arguing here? I absolutely agree that markets don’t work efficiently and that behavioral economics has a lot to teach us about these variations, but that seems to be even more an indictment of market capitalism, which gives market outcomes moral weight, than it is of a socialism which applies markets as an informational tool when appropriate.

          Market socialism doesn’t depend on markets that are efficient everywhere; in fact it is as robust as our knowledge of market failures. I will check the Hayek, but I wonder what system if any you are trying to support with your comment?Report

  7. Avatar Chris
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    says:

    Where have I seen a trend like that? Oh right, communism doesn’t work.

    I don’t mean this to endorse communism, but simply to point out that maybe this isn’t the best metric for determining whether these things “work.”Report

    • Avatar Chris in reply to Chris
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      says:

      And when I say I’m not endorsing communism, I mean I’m not endorsing Communism.Report

      • Avatar Jason Kuznicki in reply to Chris
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        says:

        Correct me if I’m wrong, but doesn’t that graph mostly seem to indicate that the USSR was faking its GDP numbers?Report

        • Avatar Chris in reply to Jason Kuznicki
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          says:

          Well, no, it doesn’t (if it did, I guarantee you it would have topped the U.S.’s at some point). It does show a couple periods of stagnation, and it shows that after the upheaval that came with the fall of the Soviet Union, the bottom fell out, but it doesn’t show that they were faking. What it shows is that Communism produced a dramatic increase in GDP over the course of a few decades. Why? Well, in part because Communism modernized a primarily aggrarian, quasi-feudal society and economy, partly because World War II turned Soviet industry into one of, if not the most efficient in the world (for a time), and for a host of other reasons as well (competition with the U.S., e.g.). But the upshot of it is, GDP per capita ain’t a great measure of “success.” Sure, a rising tide raises all ships, but at what cost? We saw quite the cost in the Soviet Union. What’s the cost here? Ask the people killed or maimed in wars funded by diamond money, maybe? (I use this only as an example — there’s a cost, and sometimes it’s deferred, sometimes it’s at someone else’s expense, sometimes it’s at our own and we don’t even see it.) I think militarized police working for a government that works for capital is a pretty big cost, and in our society, it’s a rapidly growing cost, but I don’t think it’s the only one (and by the way, I can imagine a world without police, but it ain’t a capitalist one, and it ain’t Communist either).Report

          • Avatar Jaybird in reply to Chris
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            says:

            Isn’t it true that if the government paid me $100 to pee and then taxed me 100% on my “tinkle paycheck” that urination would increase the GDP by $200 every time I went to the toilet?

            Even though I was not producing anything that I wouldn’t have been producing anyway?Report

            • Avatar Chris in reply to Jaybird
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              says:

              I’m not sure it works that way, but maybe. If that’s the case, all the numbers are fake.Report

              • Avatar Jaybird in reply to Chris
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                says:

                No, not all of them… because if I carved a piece of wood and made it look like a Moose and sold it for 6 bucks and the government taxed me 36 cents on that sale, then the GDP would, seriously!, have increased by six dollars and thirty-six cents.

                Or, for example, any other number of transactions we could come up with where real value was added.Report

              • Avatar Ryan Bonneville in reply to Jaybird
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                says:

                This is not how GDP works. Taxes do not add to GDP.Report

              • Avatar Jaybird in reply to Ryan Bonneville
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                says:

                So in the first case it’d be $100 and in the second it’d be $6?Report

              • Avatar Ryan Bonneville in reply to Jaybird
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                says:

                In a sense, yes. If you use the expenditure method (which is how I’m approaching this), government spending counts as part of GDP.

                GDP = Consumption + Investment + Government Spending + (Exports – Imports)

                The insight that’s missing from your analysis is that the government got that $100 from somewhere, so if they didn’t have it/didn’t pay you to pee, that would likely end up in the C or I pools, so the impact on GDP would net out. The government can’t create new GDP out of nothing.Report

              • Avatar Jaybird in reply to Jaybird
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                says:

                Given that they have the printing presses, I’m pretty sure that they could have found the money *SOMEWHERE*.

                (Isn’t it the case that the Ruble could not (officially, anyway) be traded for dollars?)Report

              • Avatar Ryan Bonneville in reply to Jaybird
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                says:

                This, of course, is why we tend to use *real* GDP. Of course the government can create nominal GDP out of nowhere, if it really wants to. But printing more money doesn’t increase the real value of things.Report

              • Avatar Jaybird in reply to Jaybird
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                says:

                Which brings us back to Chris’s graph…Report

              • Avatar Brandon Berg in reply to Jaybird
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                says:

                Specifically, that’s government consumption, not government spending generally. Government transfer payments, like Social Security, aren’t counted.Report

              • Avatar Chris in reply to Ryan Bonneville
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                says:

                If you don’t like my graph, you can look at the source of Jason’s. It will give you numbers for the Soviet Union, which figure into the numbers in Jason’s graph. Unfortunately, I can’t paste the graph I quickly made here, but if I could, you’d see that it looks even more striking than the one I linked to: between the 1930s and 1990, the USSR went from under 1,500 per person to over 7,000 per person, then dropped off substantially (to around 4,000) with the breakup (5,400 as of 2003).

                I think my point stands. If that graph shows that capitalism works, then the Soviet graph shows that Communism works. Therefore, we either have to admit that Communism works, or look for a different metric (or at least use multiple metrics).Report

              • Avatar Jaybird in reply to Chris
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                says:

                Dude, I *LOVE* your graph!

                Though I’d also point out that a great way to increase stuff per capita (without much production work) would be to kill 20 million people.Report

              • Avatar Chris in reply to Chris
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                says:

                That was an embedding fail, by the way. It was meant to respond to Jaybird’s comment reading, “Which brings us back to Chris’s graph…”Report

              • Avatar Chris in reply to Chris
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                says:

                Jaybird, again, you’re making my point for me (I can’t tell if you’re trying to argue against it or not, but that’s not uncommon).

                I would add that killing 40 million, plus the 20 million killed by the Nazis, is somewhat counterbalanced economically by adding the dirt poor Caucasus and the Central Asian -stans (also, many of the 60 million combined Soviet and Nazi deaths were from the merchant class, the Kulaks, which can’t help your GDP).Report

              • Avatar Jason Kuznicki in reply to Chris
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                says:

                Therefore, we either have to admit that Communism works, or look for a different metric (or at least use multiple metrics).

                Using multiple metrics is clearly the way to go if we wanted to be rigorous, yes. As a first approximation answer to a three-word protest sign? I still think the graph works as-is.

                So… aside from still not trusting Soviet numbers — where did you get them, by the way? — the outsized military spending by the Soviet Union did very little to help the typical Soviet citizen. Likewise with industrial facilities that were built but then sat empty or were grossly underutilized. All that still counts in per capita GDP, and ceasing to spend money on those wasteful projects is probably for the ordinary people’s long-term good.Report

              • Avatar Chris in reply to Chris
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                says:

                Jason, the ones I just gave came from the source of your graph (which I got through your link). The graph I gave eariler came from the UN, via Wikipedia. I had seen a similar graph before, but couldn’t find it (it didn’t have the post-Soviet numbers).Report

              • Avatar Jaybird in reply to Chris
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                says:

                I’d also be interested in the GDP numbers of the South in, oh, 1850 and compare them to the numbers of 1866.

                I betcha that the dollar amount of goods was much, much higher in 1850.Report

              • Avatar Chris in reply to Chris
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                says:

                Jason, I’d argue that you need a different method entirely, even in response to a three-letter sign. I think it is beyond dispute, of course, to say that the modern world, with its many liberal democracies and its various types of market economies, has improved the lot of a great many people across the globe, and has raised the tide pretty high. I doubt, however, that addresses the point the person with the sign was ultimately trying to make, though, even if it’s difficult to divine from a 3-word sign.Report

          • Avatar Jason Kuznicki in reply to Chris
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            says:

            What’s the cost here? Ask the people killed or maimed in wars funded by diamond money, maybe?

            Those people were there both before and during the recent growth. If anything, there was considerably more of a human cost during the colonial era, even counting the Rwandan genocide.Report

            • Avatar Chris in reply to Jason Kuznicki
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              says:

              Oh, I agree, but I also think the capitalism creates some of those issues. My point in that example wasn’t that it’s somehow unique to capitalism (it is the cost of materialism, period, of which capitalism is a particularly advanced and form), but that there are costs that don’t show up in GDP per capita.Report

          • Avatar James Hanley in reply to Chris
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            says:

            in part because Communism modernized a primarily aggrarian, quasi-feudal society and economy,

            Yes. That is, they mobilized labor, by moving it from low-value agricultural work to higher-value industrial work. This is the way every industrialized did it, and it produces temporary rapid growth in GDP. It’s the process the Asian Tigers went through in the ’80s that led people to (foolishly) think they’d discovered a new economic model.

            partly because World War II turned Soviet industry into one of, if not the most efficient in the world (for a time),
            No. Emphatically no. Lots of production is not the same thing as efficiency. The Soviet Union’s problem was never mobilizing labor; it’s problem always was achieving efficiency in production.Report

  8. Avatar Stillwater
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    says:

    Jason, I agree with part of your take on things here. Police brutality is antithetical to the theory of capitalism, but an (almost) necessary component of its practice, given the radical power and wealth differentials that result from it.

    To suppose that a successful capitalist would defend the principles upon which his success derives to a greater degree than he would defend the his material gains is antithetical to capitalism as well.Report

  9. Avatar Jaybird
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    says:

    How well does that graph chart to “ability to distribute girlie pics”?Report

  10. Avatar Zach
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    says:

    “I’m sure most of you deny this. I’m sure most of you think that capitalism merely replaced an old set of social controls with new, possibly stricter ones. ”

    I don’t know how anyone could legitimately call them stricter.

    In any case, I think a sense of dislocation is far more endemic and much more apt to generate violence than any chafing under new social controls. People can put up with a lot of tyranny if they feel they can make the system work for themselves and their families.Report

  11. Avatar Mad Rocket Scientist
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    says:

    Although the use of a flash-bang was overkill, I do seem to recall that the Oakland protesters were asked to leave the park so (IIRC) it could be cleaned, since there were reports of excessive trash, property damage, and raw sewage/human waste in the park. Such a gathering, while a great example of voluntary action, can quickly pose a public health risk that the police have to respond to.Report

  12. Avatar MFarmer
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    says:

    Everyone believes capitalism works, if it’s properly managed and directed by the State. Duh.

    I’ve found it necessary to stipulate free market capitalism, because, otherwise, every form of control over the economy which is not direct ownership of the means of production is considered capitalism.Report

  13. Avatar MFarmer
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    says:

    Does anyone wonder why a progressive city like Oakland would be the place for such over-zealous police action?Report

  14. Avatar dexter
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    says:

    Jason, If possible I would like to see a graph telling me how the growth was distributed. I would like to see a graph telling me how much of the growth is due to population increase. Also, I would like to see a chart telling me what would happen if the 1,000 richest people in the world had ten percent less.Report

    • Avatar Jason Kuznicki in reply to dexter
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      says:

      Jason, If possible I would like to see a graph telling me how the growth was distributed.

      It would be very complicated, and I’m not sure one is readily available.

      I would like to see a graph telling me how much of the growth is due to population increase.

      None. It’s a per capita graph.

      Also, I would like to see a chart telling me what would happen if the 1,000 richest people in the world had ten percent less.

      I’m not sure I understand the question. You mean cutting 10% off of the 1,000 richest people at any given year, 1500-2003, worldwide?

      If so, the rise would be steeper, because so much of it consists of the creation of a middle class, not the enrichment of a few relative to all others.Report

  15. Avatar Steve S.
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    says:

    “But this is an absurdity. That someone is doing something doesn’t mean it’s ‘capitalism'”

    If humanity’s overarching goal is positive change in GDP then to whatever extent Big C Capitalism is responsible, congratulations to Big C Capitalism. May I suggest that into the Capitalism Hall of Fame we induct Stalin and Mao, under whom per capita GDP grew at sometimes spectacular rates.Report

  16. Avatar DensityDuck
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    says:

    This post brought to you by the Heritage Foundation.Report

  17. Avatar E.D. Kain
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    says:

    I’m sure most of you deny this. I’m sure most of you think that capitalism merely replaced an old set of social controls with new, possibly stricter ones.

    Maybe some OWS protesters believe that capitalism is awful, maybe even any of them, but you are referring here to the commentariat at The League. This seems very peculiar to me. Maybe a handful of commenters believe this, though I can’t think of many off the top of my head, but “many?”

    Yeah, no. I don’t think so. Many might argue over the proper way to handle the welfare state as it exists alongside capitalism, but that is all.Report

  18. Avatar mclaren
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    says:

    Clearly capitalism no longer works in large parts of the economy, and as automation + algorithms + databases + the internet become increasingly sophisticated, the available evidence suggests that capitalism will soon break down completely.

    A mountain of evidence converges on this conclusion.

    With the help of a small army of researchers and associates (most importantly, Chris Matgouranis, Jonathan Robe, and Chris Denhart) and starting with help from Douglas Himes of the Bureau of Labor Statistics (BLS), the Center for College Affordability and Productivity (CCAP) has unearthed what I think is the single most scandalous statistic in higher education. It reveals many current problems and ones that will grow enormously as policymakers mindlessly push enrollment expansion amidst what must become greater public-sector resource limits.

    Here it is: approximately 60 percent of the increase in the number of college graduates from 1992 to 2008 worked in jobs that the BLS considers relatively low skilled—occupations where many participants have only high school diplomas and often even less. Only a minority of the increment in our nation’s stock of college graduates is filling jobs historically considered as requiring a bachelor’s degree or more.

    Source: “The Great College-Degree Scam,” Richard Vedder, Chronicles of Higher Education, 9 December 2010.

    Arnold Kling remarks:

    Average annual job creation from business startups has declined from 3.5 percent of employment in the 1980s, to 3 percent in the 1990s to 2.6 percent in the post-2000 period. This represents more than a 25 percent decline in the pace of job creation from business startups.

    (..) Between March 2008 and March 2009, expanding and new businesses created jobs at a 12.4 percentage point rate. While this is still many jobs being created in even very difficult times, it represents a substantial decline relative to the 16.5 percentage point rate in 2006 and the lowest rate in at least 30 years.

    W. Brian Arthur notes:

    What used to be done by humans is now executed as a series of conversations among remotely located servers.

    Physical jobs are disappearing into the second economy, and I believe this effect is dwarfing the much more publicized effect of jobs disappearing to places like India and China.

    So the main challenge of the economy is shifting from producing prosperity to distributing prosperity. The second economy will produce wealth no matter what we do; distributing that wealth has become the main problem. For centuries, wealth has traditionally been apportioned in the West through jobs, and jobs have always been forthcoming. When farm jobs disappeared, we still had manufacturing jobs, and when these disappeared we migrated to service jobs. With this digital transformation, this last repository of jobs is shrinking–fewer of us in the future may have white-collar business process jobs–and we face a problem.

    To which Arnold Kling adds:

    The standard view in economics is that wants are unlimited, so that in the long run as old jobs are destroyed new jobs are created. But will reality conform to this theory? Brian Arthur is suggesting that it might not. I have an article coming out in about a month at American.com that speculates along very similar lines.

    What if there are many people whose marginal product is so low that there is little social cost to their engaging in leisure rather than in work? How do we adapt to that?

    As Arthur puts it,

    Perhaps some new part of the economy will come forward and generate a whole new set of jobs. Perhaps we will have short workweeks and long vacations so there will be more jobs to go around. Perhaps we will have to subsidize job creation. Perhaps the very idea of a job and of being productive will change over the next two or three decades.

    “The Robots Are Winning”

    http://www.washingtonpost.com/blogs/ezra-klein/post/the-robots-are-winning/2011/10/24/gIQAEoc1CM_blog.html

    “A Robotic Cross of Gold”

    http://modeledbehavior.com/2011/10/24/a-robotic-cross-of-gold-real-variable-bias-the-macroeconomy-exists/

    “Jobs vs. Value”

    http://modeledbehavior.com/2011/10/18/jobs-vs-value/

    “For the Myth of the Macroeconomy File” (baffling title, not really appropriate for this piece)

    http://econlog.econlib.org/archives/2011/10/for_the_myth_of.html#more

    “The Second Economy”

    http://www.mckinseyquarterly.com/Strategy/Growth/The_second_economy_2853

    In the years ahead, sizable numbers of skilled, reasonably well-educated middle-income workers in service-sector jobs long considered safe from foreign trade—accounting, law, financial and risk management, health care and information technology, to name a few—could be facing layoffs or serious wage pressure as developing nations perform increasingly sophisticated offshore work.

    Source: 30 May 2010 Newsweek International Edition, “Europe: The Big Squeeze.”

    In “The Future of the Book,” Sam Harris sums up the effects of this wave of technological transition on writers and artists and musicians:

    Writers, artists, and public intellectuals are nearing some sort of precipice: Their audiences increasingly expect digital content to be free. Jaron Lanier has written and spoken about this issue with great sagacity. You can purchase his book, which most of you will not do, or you can watch him discuss these matters for free. The problem is thus revealed even in the act of stating it. How can a person like Lanier get paid for being brilliant? This has become an increasingly difficult question to answer.

    http://www.thedailybeast.com/articles/2011/09/27/sam-harris-on-the-future-of-the-book.html

    Various commenters will now reply that I’m making the “lump of labor fallacy.” But if the lump of labor fallacy is correct, how can we explain that for the last 20 years 60% of the people with bachelors degrees in America have been taking low-skill low-wage jobs that don’t require education — jobs like barista and xerox clerk?

    And if the “lump of labor fallacy” reasoning is correct, how do you explain the continual decline in wages for four-year college graduates over the last 20 years?

    Michael Mandel has talked about this a lot:
    http://innovationandgrowth.wordpress.com/2011/10/01/the-state-of-young-college-grads-2011/

    Hand-waving and vacuous nostrums like “more education” and “retraining” aren’t going to cut it. The middle class is eroding fast, making impossible first-world economies with current levels of public infrastructure. We appear to have two choices: 1) allow the standard of living in first-world nations to decline to the level of rural China or rural India, so that the average worker in America now makes the same wage as a worker in Mumbai India, and lives in a hut with no running water and no electricity and a dirt floor and spends 70% of his income on food…

    Or 2) We jettison capitalism and markets and move to some other paradigm.

    As Bruce Sterling put it, we’re rapidly headed for a world where everything is free and no one has a job. Operations like Wikipedia and Craigslist are eating the lunch of traditional businesses, and one of the hallmarks of these new organizations is they aren’t organized around money and make little or no profit and don’t operate by means of traditional markets.

    As for the graph in the OP, capitalism started with the advent of the first banks (rich merchants who lent money to farmers) circa 2000 B.C. in Assyria and Bablyonia. The original article confuses capitalism (which has been around for roughly 4000 years) with the industrial revolution (which does not require capitalism to function — the Soviet Union made great use of industry, to the point where the USSR was able to build some of the world’s biggest dams and electrification projects and put the first man into orbit).

    The industrial revolution had a huge impact on GDP. Capitalism for 95% of its history had no meaningful impact on GDP.Report

    • Avatar Roger in reply to mclaren
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      says:

      Great stuff mclaren,

      A few add ons….

      1) It probably isn’t surprising many college degrees are almost worthless, as people major in topics that are interesting to them as opposed to productive. There are all kinds of good reasons to major in literature or art, but getting a job shouldn’t be one of them.

      2) There really is a transition occurring from a physical economy to an ethereal or virtual economy. I spend a HUGE portion of my free time watching movies, surfing the net, taking on-line courses, playing video games and listening to music. These are all non-rivalrous activities. These are all almost or soon to be free activities. A few brilliant performers, directors and programmers can produce the entertainment or information and 7 billion people (as of tomorrow) are able to simultaneously enjoy it at soon to be near zero cost. Capitalism was built around scarce rivalrous goods. How will this phase transition work? You and Mr Sterling introduce great questions.

      3) Minor quibbles on your capitalism comments… Free enterprise (in trade, employment and finance) has indeed been around since we became human. It has grown in relative importance as we have developed institutions, protocols, communications systems and various technologies that have extended the range of the system and — most importantly — has neutered the destructive effects of local exploitation. Large scale free enterprise was certainly not the predominant economic system though until fairly recently.

      Yes, the Soviet Union made great uses of institutions and solutions generated by free enterprise. Master planners can attempt to copy that which they could not ever create.

      Your two choices are a bit extreme though. There is no trend toward lower standard of living — the last decade was the best growth decade ever for the human prosperity — by far. Further, the move to free ethereal production means that things like GDP no longer will fully account for the creation of value. Unlimited free entertainment and learning enrich our lives, not our GDP. Worldwide, the longer term trend is a radical diminishing share of our income goes to food and shelter.

      Instead of jettisoning free enterprise, I would suggest we continue to explore and experiment with new voluntary social arrangements. Borrowing the term from Virginia Postrel, I recommend THE VERGE. Take the best of what works today and experimenting with novel offshoots.

      You are right… an economic and social phase transition seems to be on the horizon. It is scary. If handled well, experimentally without dogma, coercion and exploitation, I see it as humanity and the earth’s greatest opportunity (of at least the last 13.8 billion years).Report

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