The American People Have Lied To Mitt Romney

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Elias Isquith

Elias Isquith is a freelance journalist and blogger. He considers Bob Dylan and Walter Sobchak to be the two great Jewish thinkers of our time; he thinks Kafka was half-right when he said there was hope, "but not for us"; and he can be reached through the twitter via @eliasisquith or via email. The opinions he expresses on the blog and throughout the interwebs are exclusively his own.

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235 Responses

  1. Avatar Stillwater says:

    Excellent post, Elias. I think it’s great that you’re continuing to explore the central theme underlying all the conservative angst and rending of garments over Bain. It takes the form of a question: why are Americans so unAmerican about American-style capitalism? I also like the linked Chait post quite a bit. More often than not, his analyses are just devastatingly accurate.Report

  2. Avatar Jason Kuznicki says:

    The Republican base has been populist rather than libertarian or pro-capitalist for quite a while now.

    Indeed, our relatively laissez-faire system in the United States is, I would argue, one part historical accident — and one part mirage. By many reasonable metrics, Canada has a less intrusive government than we do.Report

    • Avatar Zach in reply to Jason Kuznicki says:

      A regime of corporate law that allows someone in the United States to “buy” American companies by investing in foreign shell corporations and see all of the upside while taxpayers, naive smaller-scale investors and employees shoulder the entire downside is indeed pretty far from laisses-faire. I don’t think you need the “I would argue…” caveat.

      I’d like to see Obama tie Bain’s activities to similar but more familiar (and easier to understand) techniques in real estate investment through which folks like Donald Trump can simultaneously be serial deadbeats and be lauded as financial wizards.

      And this isn’t even getting into benefits in tax law that are only accessible to those above an incredibly high wealth threshold.Report

      • Avatar Morat20 in reply to Zach says:

        I’m still a little uncertain as to how the basic Bain business model actually worked more than once.

        1) Borrow a lot of money.
        2) Use money to buy control of a company.
        3) “Reorganize” company (asset strip it and pay yourself (Bain) a great deal of money, inccuring excessive debt on behalf of the bought-out company.
        4) Spin off bought-out, debt laden company.
        5) Repay your (original) loan.

        Individually step 3 is a bit..disturbing..as it’s basically pillaging, but the problem is each and every step seems perfectly legal. But the end result is literally a case where you borrowed a bunch of money through a shell, paid it to yourself, then tossed off the shell to go bankrupt.

        Seems like theft from investors or banks. Which makes me wonder why anyone would loan a newly acquired Bain company money (or invest). I know there was one or two actual successes, but speaking from an investor’s perspective….I wouldn’t touch that with a ten-foot poll.

        But people did. Maybe it wasn’t so obvious at the time, but in hindsight it’s like waiting in line to get conned, certain somehow you won’t fall for the exact same thing everyone else did.Report

        • Avatar Bob Wallace in reply to Morat20 says:

          Madoff created an image for his investors that they were doing great. What image was provided for Bain investors?

          Then, in a raging economy don’t you think it would be somewhat easy to find banks eager to loan money to a “highly profitable company”, at least until you burned them a few times? The first crash or two of a Bain acquisition could be written off as ‘understandable’. Bain might have been able to go back to that well multiple times before someone started wondering.Report

          • Avatar Don Zeko in reply to Bob Wallace says:

            Which investors are you talking about? by my count, this process includes three different layers of investors: the people paying into Bain’s PE funds in hopes of earning a large profit (minus Bain’s 2/20 management fees), the people loaning that fund money that it used to buyout firms, and then the people loaning the bought out firms money. If the above description is accurate, group #3 are definitely suckers, while #2 is getting their debt paid back and #1 is making out like bandits.Report

        • Avatar Rod in reply to Morat20 says:

          I’ve been wondering the same thing. It just looks like outright theft, or at least fraud.

          I mean… you start off with a company that’s struggling. So presumably it isn’t worth much at that point. And then… somehow… at the end of the process you’ve got a few millions more bucks in the bank than when you started, a bankrupt company, and creditors left holding the bag.

          I have to wonder if the deal is that on the bank’s end of things that it’s sort of like the mortgage meltdown. The bank takes big losses, but you personally, the executive decision-maker, have already “earned” your salary and bonuses so you don’t really care that much. It’s all somebody else’s money anyway, right?Report

          • Avatar Jason Kuznicki in reply to Rod says:

            I think one of the reasons why people are reluctant to defend Bain here is because no one quite understands what they were up to. Not well enough to go out on that limb, anyway. I know I sure don’t.

            Still, steps 1-5 seem fairly implausible to me as outlined. How do you get anyone to buy a company that consists of nothing but debt? How do you manage to do it more than once, while operating under the same name?Report

            • Avatar Morat20 in reply to Jason Kuznicki says:

              You don’t. You spin it off, it begs for investors, it fails, it goes bankrupt.

              What gets me is that the definition of ‘weak’ or ‘failing’ companies can include those that are perfectly profitable, just not as profitable as Wall Street wants.

              What’s the point of making steady 5% a year profits when you can slash and burn it to 15% for two years? When the hidden costs catch up, someone else will have the bag.Report

              • Avatar Jason Kuznicki in reply to Morat20 says:

                You spin it off

                To whom? Companies are owned by someone.

                it begs for investors, it fails, it goes bankrupt.

                If it fails to find investors (owners), then Bain still owns it.

                What gets me is that the definition of ‘weak’ or ‘failing’ companies can include those that are perfectly profitable, just not as profitable as Wall Street wants.

                If a company could make a 5% profit or a 15% profit, why is 5% preferable? I personally don’t agree that it is.

                You suggest it’s not sustainable to keep making 15%, and it might be, but if that’s the case then we’re back at the pesky question of offloading all that loss.Report

              • Avatar NewDealer in reply to Jason Kuznicki says:

                From what I understand, a lot of the debt that Bain took in the name of the company just went back to pay BAIN. NPR’s Planet Money did some shows on how BAIN worked several months ago.Report

              • Avatar Jason Kuznicki in reply to NewDealer says:

                I’ll have to look those up. I’m not following how acquiring a bunch of someone else’s debt works out to a company’s favor, particularly when the original holder of the debt was suffering under it.

                Note that I’m not saying Bain was always acting on the up-and-up, and that its business dealings were always good. I’m just saying I haven’t yet seen a plausible model here of what they did wrong.Report

              • Avatar Jason Kuznicki in reply to Jason Kuznicki says:

                Or, I might add, even a plausible model of what they did.Report

              • I think you are all making this far more complicated than it either is or needs to be.Report

              • Avatar Morat20 in reply to Jason Kuznicki says:

                Here (warning, pdf) — a sidebar explaining how Bain handled Ampad.

                Basically put, they buy it with debt and take it private, sell themselves everything they are legally allowed, charge out the wazoo in ‘management fees’, do everything they can to pump the short-term appeal of the company (generally financed by debt, closures, and other short-term profit maximizers at the expense of long-term profit), arrange a sale or IPO (which they get paid for) and then run away, giggling.

                And that was their respectable, 1980s style. It got worse.Report

              • Avatar Rod in reply to Jason Kuznicki says:

                Or, I might add, even a plausible model of what they did.

                Isn’t that part of the whole problem? Romney made a shit-pile of money but nobody can satisfactorily explain how he made all that dough? Or maybe they could, but they don’t want to?

                It’s all part and parcel of the deal with his tax returns. Whether you agree that candidates should have to disclose such things or not, it has become pretty standard practice since… about forever. Watergate era at least.

                So we have this guy who’s made hundreds of millions of dollars in sort of mysterious ways. At least mysterious to the 99.9% of us who don’t make our money that way, whatever that way is. And now he refuses to release his tax returns. Why? What’s he hiding? Apparently whatever’s in them is worse than than all the speculation of what might be in them. Because this secrecy thing isn’t doing him any good politically that’s for sure.Report

              • Avatar MikeSchilling in reply to Jason Kuznicki says:

                The obvious bad act is taking over a company that was responsible enough to keep its pension fund vested, getting rid of the employees who are partially vested or close to it, and paying yourself out of the resulting freed-up cash. I’m presuming there are no smoking gun examples of Bain doing this, or we would have heard about them.Report

              • “Romney made a shit-pile of money but nobody can satisfactorily explain how he made all that dough? … So we have this guy who’s made hundreds of millions of dollars in sort of mysterious ways”

                I do not think this is at all true.Report

              • Avatar Stillwater in reply to Jason Kuznicki says:

                If you’re objecting to the word “can” in that comment, I agree with you. Surely someone can tell us how Romney made all his money. Fact is, tho, they one guy who knows is being pretty tight-lipped about it.Report

              • Well, I think that he has two difficulties there. First, there’s no easily digestible way to put “we buy companies we think are undervalued, become contractors to make them more profitable, and just sell them for parts (and still make money, because they were undervalued) if we fail” that rolls off the tongue.

                Also, talking about it at all gets us into the of hot water we don’t like to get into in a political campaign. And I mean “we,” not just “Romney’s people.” Election campaigns are all about black and white choices, avoiding the “it will be mostly good but there will be these other things that come with it that really suck” is considered paramount. Long-term growth vs. short-term growth in both companies we invest in and companies we work for put us smack dab in the middle of a conversation we tend to avoid having at all costs in this country.Report

              • Avatar Rod in reply to Jason Kuznicki says:

                Tod,

                If you understand it, more power to you. Could you enlighten us mere mortals? Because I only vaguely understand it and a lot of what I do understand isn’t pretty. Like raiding pension funds and stuff.

                I think the problem with the Bain business model (and they’re certainly not unique in this) is that it really stretches the paradigm of the Noble Capitalist (TM), sacrificing and building and producing and creating. It looks like, fairly or not–and that’s where the complexity and opacity don’t help much either–that there’s a lot of tearing down and shutting down and laying off and breaking up and whole lot of taking and taking and taking some more. Taking that’s way out of proportion to any building and producing and creating that may have accidentally happened.

                Like maybe if we got a peak behind the curtain, instead of an all-powerful Wizard of Industry (TM) we really see some schlub with a microphone and a good line. Basically a con man. But we just don’t know.Report

              • Rod:

                I think you’re getting into a whole different (and more important) kettle of fish when you start talking about the negative aspects of what companies like Bain do. But as to what they do, it’s relatively simple.

                They invest in companies that they believe to be undervalued and/or underperforming. They attempt to make those companies profitable, and if the fail they sell the assets off and (hopefully for them) still make a profit. In Bain’s case, it looks like they also brought in their own contracted management teams to make sure things were being done the way they wanted them done.

                That’s really all they did, and that’s how Romney appears to have made his money. Well, that and the fact that it appears he was really, really good at it.

                The problem arises in the political world because politics wants to lay out a choice for people of All Good Outcomes vs. All Bad Outcomes. But business doesn’t operate that way; in fact, it leads us into some pretty complex weeds.

                In the pdf Morat20 linked to, American Pad & Paper received $5 million from Bain, presumably in an agreement to hire them to reorganize. It appears they were organized (to what extent the graph does not show) and eventually filed for bankruptcy. Bain, who only paid $5 million initially made a substantial amount in revenues off of that deal over the the course of the next 8 years. But was it piracy?

                If you look at the two years that Bain charged the most significant amount of fees and other charges, you’ll see that Ampad paid them almost $125 million in revenue. That’s a lot. However, if you note that, you should also note that during that same period AMpad had revenues of over $1.2 billion; and that’s for a company that barely broke $100 mill a year before Bain took over.

                In any business model I can imagine, Ampad was a huge success, not a failure. And therein lie the tall weeds. Because the very fact that it was a success introduces a lot of tough questions.

                ** This example is really hard on our bootstrap story. You and I, even if we were amazingly clever and hardworking, could not make wealth in this fashion. In order to make investment class wealth, you must have investment class wealth. In fact, debt was acquired during the boom years at a substantial rate, to the point where it took the company under. Most of the people associated with the company ended up with nothing at the end of the day, save they were allowed to work somewhere for a while. “I used my influence to leverage debt to an unwise amount, and when it put everything underwater I walked away with a small fortune” is not exactly the message the GOP wants right now, as they construct a narrative of the dangers of public debt.

                ** Short-term gains in business often come at the expense of long-term gains. Which, as a politician, do you want to tell people are on their way?

                ** Businesses, despite their PR teams, are amoral entities. The decisions to have jobs or profits go off shore are what you do to be more profitable, but they are not necessarily what makes your local community thrive. Which do we choose? If we choose long term goals, are we less competitive? Do we take fewer risks, and see development in technology slow to a crawl – and is that a good or a bad thing?

                The weeds are a difficult place to be over a beer; they are death in a presidential campaign.Report

              • Avatar Morat20 in reply to Jason Kuznicki says:

                Because the 15% is made by, to use an analogy, eating your seed corn. It is relatively easy to boost profits in the short term, you do it by being penny-wise, pound foolish.

                Me? I’d prefer a steady 5% profit because I was looking to the long-term, than two years of 15% because I made a bunch of decisions that boosted income for two years until all the postponed costs hit and I drowned.

                But speaking purely pragmatically, not if I planned to sell my shares and get gone after two years.

                As to Bain, I am uncertain, but the net effect was Bain running away with a lot of money and the company they bought independent again and under a lot more debt.Report

              • Avatar DBrownb in reply to Morat20 says:

                As I have read it, and this makes sense, most the companies were making good, steady profits; however, the invester returns were modest to small. Bain comes in, using debt, buys the company and using the company’s ok income and low debt, uses this to get high returns (for a handsome fee and a piece of the high returns.) Debts climbs as the company is forced to expand by buying other companies – the stock climbs (of course) because people see the firm growing. Bain jumps out as do smart investors. Many (but not all) crash and burn leaving new investors holding the bag.
                The model works since there are always unvestors welling to get in hoping to cash out before the burn down. A few of the companies, while there debt really climbed, did continue to get along (out-source for some did save them.)
                The only winner 100% of the time was Bain and its CEO – Mitt. Others did well if they were part of his plan. Others, not so well.
                My take on what is written, not necessarily right.Report

              • Avatar Simon K in reply to Morat20 says:

                That’s actually more or less how private equity investments are meant to work. Debt and equity are both forms of investment capital. No-one ever talks about companies being loaded up with equity the way they do about them being loaded with debt, but that’s illogical. Equity is actually overall more expensive, because the firm is no under any obligation to pay shareholders anything at all, so in order to keep them on board it must actually provide them with steady current returns.

                Private equity typically involves a change in capital structure from one dominated by equity to one with more debt. Equity is typically more desirable for a fast growing company, that can get more funding in exchange for high but uncertain future expected revenue that way. Debt is more appropriate for businesses with predictable revenue but little scope to grow.

                Private equity typically gets involves when equity-financed companies saturate their markets and hit their limits on growth. Once the market realizes that, the stock price falls as investors unload shares bought on the expectation of future growth. Management, recognizing the problem, will often seek a private equity sale. The private equity investor will typically borrow money, use it to buy the outstanding shares, and then put the debt on the firm’s books. Contrary to the way this is perceived, its often a much better deal for the firm than having undervalued shares outstanding. The firm will often be sold back to the public eventually, sometimes even with a higher stock market valuation, which seems counterintuitive but can sometimes be justified. This is how the PE firm makes money, after all.

                The justification is where all the nasty stuff comes in. Typically the goal of PE investors once they’re there is to maximize free cash flow. That means any and all costs, especially labor costs get cut to the bone. Since typically the investors know more about money than about the business, this is done by the book. The fire people, fight unions, outsource jobs, stagnate salaries and career progressions and close plants. They sell off buildings and machinery and rent them back. The goal of all of this is to get cash that can be used to pay debt and produce profits to attract new equity investment.

                Some companies do actually need this kind of treatment. I can’t comment on the specifics of what Bain did. It sounds like some companies, such as Staples, where successes and others maybe not so much.Report

              • Avatar DensityDuck in reply to Simon K says:

                So in other words, the problem isn’t that the business wants to eat its seed corn; the problem is that the people who gave the business money want a BIG DINNER RIGHT NOW.

                The answer would seem to be that you stay private, but then it’s hard to make much money.Report

              • Avatar Simon K in reply to Simon K says:

                The problem tends to be that the seed corn isn’t growing. So given that you need to eat (or at least pay for the new yacht) with something, you may as well eat it.Report

              • Avatar James B Franks in reply to Jason Kuznicki says:

                Is it better to make 5% for 10 years or 15% for 2 then nothing?Report

            • Avatar Zach in reply to Jason Kuznicki says:

              You don’t need to get anyone to buy the company. Think about how real estate investment works. Individuals have control over multiple holding companies (for example, I pay my rent to one of at least 7 holding companies organized by my landlord and he’s not particularly big-time). You lump all of your risky assets (property in volatile markets; unsold property still in construction) into one of these, leverage those assets to get even riskier loans, and use that money to make more risky bets. In the event of a real estate crash or whatever, your high-risk assets go kaput and that holding company goes through bankruptcy. But your safe, low-yield investments are protected.

              From what I understand, Bain essentially does the same thing. The bonus is that shares in the holding companies can be valued at $0 (and placed in IRAs to grow tax-free) until they are capitalized by investment from Bain partners. And its holding companies are PO boxes on Grand Cayman so it also can avoid paying US income tax until the next corporate income tax repatriation holiday. Such as the one that Romney’s proposing, which he will personally profit from to the tune of millions of dollars I imagine. I suspect one reason Romney won’t release old returns is that we’ll see how much he profited from the 2004/5 foreign income tax holiday. His 2010 return shows that his foreign-taxes-paid deduction spiked in those years, but there are other reasons this could happen of course.Report

    • Avatar Anderson in reply to Jason Kuznicki says:

      “By many reasonable metrics, Canada has a less intrusive government than we do.”

      I’ve always loved that point. For all the shitting on “socialist” Canada, Europe, and other non-US developed countries, there’s the famous Heritage Foundation economic freedom index (of all places, of course) that ranks Australia, New Zealand, Switzerland, Canada, and Ireland in front of the U.S. (http://www.heritage.org/index/ranking)…

      I think alot of it has to do with the idea that you can have very free markets–in terms of tariffs, duties, access to business visas, etc–and a stronger safety net. Alot of these places do the smart thing of taxing things like consumption and carbon (in Australia’s case) instead of personal and corporate income too.

      I have always have the urge to whip the Heritage survey out in front of conservatives who freak out at the expression “well, you know, it would be good for us to be more like Canada.”Report

      • Avatar Brandon Berg in reply to Anderson says:

        It is very much dependent on how you weight the different factors. Only 20% of the composite score is determined by taxes and spending, which is how Sweden can do reasonably well overall despite getting terrible scores in those categories.Report

        • I think the obvious response to that is: “if the fishing Heritage Foundation is only attaching 20% weight to taxes and spending, then there probably is quite a bit more to economic freedom than, y’know, taxes and spending.”Report

          • Avatar MFarmer in reply to Mark Thompson says:

            For a State to become powerful enough to violate economic freedom it must spend lots of money, and in order to spend lots of money it has to take it from those who create wealth, so taxes and spending are very important to economic freedom. If government is limited and not endlessly funded, then it can’t become powerful enough to violate economic freedom. The State must first convince the public that limits on government power will prevent government from controlling the market which doesn’t naturally generate fair outcomes. In order for the State to control the economy, it must be able to intervene when it feels intervention is necessary for the public welfare. Thus, limits are effectively removed and the State determines when interventions are legitimate, thus government begins the process of controlling the economy which requires much spending and taxes to fund the spending and control.Report

            • Avatar Murali in reply to MFarmer says:

              Its not entirely clear if this is true. It seems very easy (if particularly stupid) to impose stringent labour, capital and trade regulations without much increase in marginal cost of governance (although the economy will die).

              but more importantly, even though high taxes can in principle be used to limit economic freedom, a number of places with high taxes don’t use that money to do so. I’ll be the last person to advocate for high taxes, but I think you are being mopic on this issue. Our tax burden in Singapore is half of yours. (which says a lot about how much taxes you can cut)Report

            • Avatar Jakop in reply to MFarmer says:

              Except that monetarily sovereign states like the United States don’t have to tax to spend. Non monetarily sovereign states like California (and the 0ther 49) do have to tax to spend. Which is why the US can bail out the 50 states whose finances are in shambles.

              Taxation has a whole other purpose for the US federal government. Can you figure out what that is?Report

            • Avatar Simon K in reply to MFarmer says:

              As Murali said, that’s not obviously true. The US federal government and states both generate rafts of economic regulation that’s not consistently enforced, and therefore does not cost very much to keep around. It still impinges on economic freedom since it prevents unlicensed hairdressers and tiny startups violating mysterious patents from being able to access the law for redress and against real violations. Its this vast mass of regulation, compared with its opaqueness, that reduces the US’s scored on those rankings. In comparison, they (correctly, in my view) think relatively high income transfers have a comparitively small impact. In fact, if you examine the detailed data that Heritage makes available, almost all the other factors in the index tend to co-vary where the tax & spending portion doesn’t really correlate with them.Report

    • Avatar North in reply to Jason Kuznicki says:

      Very apt Jason, I’ve always thought that the GOP is quite remarkable libertarian in their economic rhetoric but even more astonishingly populist in their economic actions. Unless you count debt fuelled tax cuts as libertarian (which I presume most libertarians don’t) or buy into the fairytale that if the GOP starves the beast enough the Democratic Party will at some point commit electoral suicide by cutting government to balance the books for them then the republicans are astonishingly statist. Dems are statist of course but then they don’t campaign on being anti-statist.Report

      • Avatar Brandon Berg in reply to North says:

        debt fuelled tax cuts

        Why is it “debt-fueled tax cuts” and not “debt-fueled spending?”Report

        • Avatar Jason Kuznicki in reply to Brandon Berg says:

          Because you’re never allowed to question government spending. The only allowable question is whether we pay for it now or later.Report

        • Avatar Liberty60 in reply to Brandon Berg says:

          Because the tax cuts were made without any intention of spending cuts; taxes were cut, in full awareness of the deficits that would result.

          Its also true that had the cuts not occured, and spending remained constant, the deficits would be much much smaller; iow, most of the deficits arose from cutting taxes.Report

        • Avatar Morat20 in reply to Brandon Berg says:

          Because they were tax cuts that incurred debt, not spending hikes that incurred debt?

          Medicare Part D would be a Bush example of debt-fueled spending. So would the war in Iraq and Afghanistan. But the tax cuts were debt-fueled tax cuts.

          This was only 10 years ago. How do you not remember this?Report

          • Avatar Jason Kuznicki in reply to Morat20 says:

            What if both are correct?Report

            • Avatar North in reply to Jason Kuznicki says:

              Then great, I was mentioning tax cuts, not debt fuelled spending increases. I assumed it went without saying that debt fuelled spending increases are anti-libertarian. Am I wrong in assuming you, one of our most prominent libertarian writers, disapprove in debt fuelled tax cuts? Are you a starve the beast proponent?Report

              • Avatar Jason Kuznicki in reply to North says:

                I would say to cut spending first. I think the evidence shows that “starve the beast” doesn’t work. It convinces people that they can and should get something for nothing; it makes government services seem cheaper than they really are. And paradoxically, it makes people want more of them.

                Still, from the standpoint of pure revenue optimization, it really does look like we aren’t getting much out of the Laffer Curve anymore. So cutting taxes does now have the effect of increasing our debts.

                But all of this is not to say that collecting the most possible revenue is what tax collection should be about. Taxation ought to collect the amount required to run a proper government, never more than that, and only sometimes a bit less.Report

              • Avatar MikeSchilling in reply to Jason Kuznicki says:

                . I think the evidence shows that “starve the beast” doesn’t work. It convinces people that they can and should get something for nothing; it makes government services seem cheaper than they really are. And paradoxically, it makes people want more of them.

                100 times yes. This idiocy began as a rationalization of the fact that Reagan could get tax cuts passed but not domestic spending cuts, while he was massively increasing defense spending. How do you explain that when you ran as a deficit hawk? If we starve the beast, it’ll all work out in the end.Report

              • Avatar North in reply to Jason Kuznicki says:

                I’m glad to agree with you Jason and yeah Mike, I’d say that’s pretty much precisely the origin of Starve the Beast in a nutshell.

                Though Jason as far as I’ve read I didn’t think they’ve thought that the laffer curve effects were happening to any significant extent since Kennedy? Weren’t the required starting taxes around like 50% before you started getting significant Laffer curving?Report

              • Avatar Jason Kuznicki in reply to North says:

                I’m inclined to think that there were Laffer Curve gains in revenue as recently as Reagan, but I’m doubtful of everything afterward.

                The problem is, revenue maximization is for businesses. The government should ask itself the opposite question — how little revenue it can get by on? As long as it’s doing everything it ought to be doing, there is no reason to extend revenue collection beyond what’s needed to cover expenses.

                Both of you might like to see the empirical work on “starve the beast” done by Cato’s late chairman emeritus, William Niskanen (pdf).Report

            • Avatar James Hanley in reply to Jason Kuznicki says:

              Yes, both. Not only were there tax cuts without any intention of spending cuts (particularly with that notorious fiscal conservative GWB).Report

    • “Indeed, our relatively laissez-faire system in the United States ”

      I’ve come to believe that a mixed economy cannot be said to consist of a mixture of laissez-faire and central control, because the definition of laissez-faire is immediately obliterated once government begins controlling the economy outside the realm of rights protection. We can only say our statist system controls the economy in these ways, then list the ways it’s controlled.Report

      • Avatar Liberty60 in reply to MFarmer says:

        By this definition, has there ever been anything that could be described as lassez-faire?Report

        • Avatar Jason Kuznicki in reply to Liberty60 says:

          There are certainly movements toward or away from a never fully realized ideal.

          It would be specious to say that because even the healthiest people have had some sort of illness, there is no meaning to the word “health.”Report

          • …which is also why it’s specious to say that, because a modern mass society, or political platform, or moral theory, or anthropology, or political speech, or paragraph in a political speech, or sentence in a paragraph in a political speech, has elements that embody “social” values, it is therefore “socialist” or “anti-capitalist.”Report

          • Not if the sickness is constant.Report

            • Avatar MFarmer in reply to MFarmer says:

              You wouldn’t say the person is part sick and part well. The person who is contantly sick cannot be said to be a mixture of wellness and sickness.Report

              • Avatar MFarmer in reply to MFarmer says:

                You wouldn’t say about a constantly sick person that the relative wellness of the person is such and such. I guess relative to a totally diseased person whose ears are falling off, you could say the constantly sick person is relatively well — or you could less speciously say the person is constantly sick but not as sick as the person with the ears falling off.Report

              • Avatar MikeSchilling in reply to MFarmer says:

                But if we only moved to a system that’s never existed in the real world, ignore the hardships that would fall mostly on those least able to endure them: once the bugs are all out, the eventual rewards will be worth it. Trust me.Report

              • Avatar MFarmer in reply to MikeSchilling says:

                Schilling,

                I wasn’t really making a normative argument here, only that we should identify our system as it is, not as we like to beleive for political reasons. Freddie used to speak to this issue criticizing “liberals” for not embracing the principles of social democracy or socialism or communism or whatever it’s finally called — our system is not, though, a mixture of true liberalism and welfare state interventionism. The Left should embrace the principles of social democracy if it’s what they believe, because in the Information Age no one is buying the mixture/have your cake and eat it to facade.Report

          • Avatar Liberty60 in reply to Jason Kuznicki says:

            But this is why such things as socialism and libertarianism become untestable faith.

            Since even one drop of anything to the contrary makes it “Not laissez-faire” or “not socialism” any failure can always be attributed to the expereriment being insufficiently pure.Report

            • Avatar MFarmer in reply to Liberty60 says:

              One drop? I suppose if these types of things could be measured in drops, then we could speak of a mixture more appropriately, but when interventionism became the norm in government, to describe our system as relatively laissez faire with a drop of interventionism makes no sense. I suppose we’ve become acustomed to the interventions so that that we think of the system as the free American syatem we’ve always had, just a tad more managed because of the complexities, but really we don’t have a laissez-faire system. We have an Americanized form of fascism if we’re honest. Fascism influenced social democracy in Europe, then Swedish social democracy eliminated the bad parts of fascism. America is similar to these transitions. Both liberalism and marxism were rejected for a Third Way — the Third Way is not laissez-faire at all in any significant way.Report

              • Avatar Liberty60 in reply to MFarmer says:

                I don’t disagree necessarily, but it goes to my comments of the other day, in which I said that libertarianism was very hard to define; and now laissez-faire likewise.
                Since the preconditions for earning that title are virtually impossible to create, advocating that we have a “laissez-faire” economy are absurd. One can only argue that we move closer to that extreme, and haggle over the degree.Report

              • Avatar MFarmer in reply to Liberty60 says:

                One can argue for strict limits on government power, which is limited to protection of rights, and a separation of State and Economy. It might not ever come about, but if I believe this is the way out, then I have to state what I believe, especially when I believe that anything other than strict limits on power leads to expansion of State power over time until liberty is destroyed. I could say “Well, I have it okay — I can move about, and my choices aren’t that restricted, so what the hell, it’s not so bad.” Or, I can look around at all the violations of liberty and consider the people being abused by State power, then imagine what it will be like for the next generation and the next, then I can resist this expansion of State power any way I can, then I will feel as if I’m maintaining integrity rather than capitulating because my little world is semi-okay and comfortable.Report

              • Avatar BlaiseP in reply to MFarmer says:

                Separation of State and Economy. Now there’s something Liberals have been demanding for many years now. It’s a great pity some folks don’t look at insider trading and corporate malfeasance with the same stink eye they cast upon State Power. Seems to me a little more State Power might separate Winners from Losers when they’re caught out cheating.Report

              • Avatar James Hanley in reply to BlaiseP says:

                Separation of State and Economy. Now there’s something Liberals have been demanding for many years now. … insider trading and corporate malfeasance

                There’s no doubt liberals have long been ferocious critics of insider trading and various forms of corporate malfeasance in general. But that itself is not sufficient to constitute a separation of state and economy. As long as liberals support subsidies for particular industries–whether it be agriculture or renewables–or limits on free trade, or various types of industrial policy in general, they cannot be said to advocate separation of state and economy.

                That says nothing about the legitimacy or value of those policies; whether they’re good or bad is not at all my point here. Only that liberals do advocate integration of state and economy to the extent they support such policies. (Conservatives, too, of course, and even libertarians to the extent any of them support some such policies, which is probably a small but non-zero number.)Report

              • Avatar BlaiseP in reply to BlaiseP says:

                It has been my observation the beneficiaries of government largesse have been the very sort of folks who want less regulation and oversight. I go about, like Diogenes, with my little lamp by the light of day, in search of an honest Libertarian who might actually be in favour of making and enforcing laws against Force and Fraud. Thus far, I have not found any.Report

              • Avatar James Hanley in reply to BlaiseP says:

                Well, I tried to make it non-ideological.

                in search of an honest Libertarian who might actually be in favour of making and enforcing laws against Force and Fraud. Thus far, I have not found any.

                Since there are several right here at the League, I’m guessing Diogenes’ lamp must have burned out.Report

              • Avatar BlaiseP in reply to BlaiseP says:

                Which ones might those be? The one which says There’s no doubt liberals have long been ferocious critics of insider trading and various forms of corporate malfeasance in general. But that itself is not sufficient to constitute a separation of state and economy. can definitely be ruled out.Report

              • Avatar James Hanley in reply to BlaiseP says:

                Blaise,

                How can I be ruled out? I didn’t make any argument against forbidding insider trading and corporate malfeasance. All I said was that forbidding those is not sufficient to constitute separation of state and economy. So based on that comment of mine, you have no basis for claiming that I am not “in favour of making and enforcing laws against Force and Fraud.”

                Is it possible to return this to my original point, or is it inevitable that it will turn into a nasty personal and ideological argument?Report

              • Avatar Jason Kuznicki in reply to MFarmer says:

                This is how I feel, too.

                It astonishes me that there are so many lame excuses for not, say, ending the War on Drugs, or occupational licensing, or farm subsidies, or many other things that are clearly and undeniably steps toward greater laissez faire.

                But the lamest excuse of all is that we don’t know exactly what perfect laissez faire would look like. If the policy is a good one, our ignorance on that point shouldn’t matter a bit.

                So — are these good policies, on the merits? And could we please have that discussion instead?Report

              • Avatar BlaiseP in reply to Jason Kuznicki says:

                You might look to China under the later emperors for what the end to the War on Drugs might look like. The opium trade was a wonderful thing for those who benefited from it: many of those lovely mansions in southern England were built with Chinese silver extracted from addicts. Even the USA waged war on those who tried to put an end to the blight of opium addiction in China. The Pure Food and Drug Act tried to put an end to the practice of putting opiates into patent medicine. Sears Roebuck made a fortune getting around it by mail order business.

                Those who advocate a complete end to the War on Drugs are simplistic to the point of dangerousness. But then, these are the same folks who want to deregulate our financial and risk markets, though every day more proof arises like so many turds in the cesspool of the consequences of such deregulation. How often must we demonstrate the obvious? Markets do not regulate themselves.

                And I can’t wait for the day when anyone may call himself a surgeon.Report

              • Avatar James Hanley in reply to Jason Kuznicki says:

                We could also look at Portugal.Report

            • Avatar James Hanley in reply to Liberty60 says:

              Liberty,

              It’s not to your credit that you can only see people of differing beliefs in their most fanatical form, whether we’re talking about libertarians or socialists. It reveals only your blindness, or perhaps your un-generous unwillingness to see people as individuals rather than as stereotypes.Report

              • Avatar Liberty60 in reply to James Hanley says:

                I know it seems like I am being uncharitable, but look at it this way- I don’t hear libertarians advocating a mix of private and public- MFarmer premised his entire post on the idea that even the tiniest amount of public ownership negated laissez-faire, and that was a bad thing.

                The thing we have now- a mixture of public and private- is castigated as “part sick”, when it isn’t being derided as “statist”.

                Yes, I know plenty of libertarians will accept some degree of public ownership. But notice how it is invariably grudging, and constantly contested?
                Consider Jaybird’s posts about where his obligations begin and end; or Roger’s fretting about having to be coerced into paying to the cleanup of the environment.
                In these posts, state power is invariably bad; compulsory obligations to community are never legitimate.
                This is why I keep saying libertarians are confused as to their attitude towards public ownership, and the idea that the community has a claim to make on your individual soveriegnty. They accept the idea, but only in abstract; faced with the actual impllcations, i.e., paying taxes, having your economic choices limited- you blanch, and struggle to find a way to deny them.

                Based on these posts, the highest ideal DOES seem to be a society in which every engagement is voluntary, where society makes no demands of you that you don’t choose or that you are free to reject.

                Maybe that doesn’t sound fanatical or radical to you. But I consider it extreme.Report

              • Avatar Jaybird in reply to Liberty60 says:

                Consider Jaybird’s posts about where his obligations begin and end

                Aren’t these important questions to have answered?

                Wouldn’t *YOU* like to know that *YOUR* obligations are being met?

                Is your fundamental assumption that part of meeting your obligations involve praying to the right idols and the libertarians, in failing to do even this simple thing, are failing in their most fundamental duties?Report

              • Avatar James Hanley in reply to Liberty60 says:

                I don’t hear libertarians advocating a mix of private and public

                It’s hard to hear when you’re not listening. I know that is also ungenerous, but it truly seems to me that you are making an effort to not hear.

                Libertarians support competitive bidding for many government services. E.g., does a municipality need to have it’s own street repair department or could it more cost-effectively contract that out (or, as sometimes happens, let the city agency bid against private agencies, and if it has a better bid, it gets the contract). Is that not a mix of public and private? In fact most of what gets called “privatization” is actually just “contracting out.” I admit the language is misleading there, but I don’t think that’s any particular group’s fault.

                Libertarians support the role of courts in issues of fraud and contract disputes, but they also emphasize that private mediators can also play a useful role here. Is that not a mix of public and private?

                Yes, I know plenty of libertarians will accept some degree of public ownership. But notice how it is invariably grudging, and constantly contested?

                I honestly don’t understand what is wrong with contesting public ownership. Is there some crucial flaw in questioning conventional wisdom? Sure, the questioning will not always be wise and sophisticated, but neither will the support for public ownership always be wise and sophisticated. To me personally, opposing continuing questioning sounds like a fundamentally illiberal position.

                Consider Jaybird’s posts about where his obligations begin and end;

                I can’t understand why that’s not a legitimate question to ask. Even if you disagree with where Jaybird might end up on the question, how on earth could it possibly be an inappropriate question to ask unless you are implying that our obligations are limitless and unquestionable. I don’t think you mean to imply that, but it’s the only way the complaint makes sense to me.

                Based on these posts, the highest ideal DOES seem to be a society in which every engagement is voluntary, where society makes no demands of you that you don’t choose or that you are free to reject.
                Maybe that doesn’t sound fanatical or radical to you. But I consider it extreme.

                Again, I truly cannot understand this. Let’s agree that the ideal in its Platonic form is unreachable. But consider it in the abstract; it would be a society with no coercion. Think about that. The most standard justification of the state is to prevent and punish coercion; but in this hypothetical ideal, the state is literally unnecessary.

                Of course coercion does and will exist, so most libertarians will agree that a state is necessary to some degree. But they disagree with you on what that degree is; they consistently think less, you consistently think more…I see nothing radical in either position. All the libertarians are really trying to achieve is to move as close that non-coercive state as possible.

                Setting aside the troublesome fuzziness of the concept of society as an entity that can be said to make demands, are there no limits on the demands society can make on us? Are the demands made in The Ones Who Walk Away From Omelas legitimate? Was the 17th century Swiss society’s demand that my ancestors leave their anabaptist doctrine and return to the Reformed Church legitimate?

                I am quite sure that you see limits on the types of demands society can place on us, which means there are limits to our obligations. If so, then can we not legitimately debate where those limits are?Report

              • Avatar Liberty60 in reply to James Hanley says:

                “Let’s agree that the ideal in its Platonic form is unreachable. But consider it in the abstract; it would be a society with no coercion. ”

                This is my central objection. In my opinion, a state without coercion is not merely impossible, it is NOT ideal.
                What you call coercion I call compulsory engagement, obligations to the community from which you cannot opt out.

                Compulsory engagement with the community is in and of itself a good thing; Its not merely that complete individual sovereignty is an unattainable ideal- it shouldn’t become one.

                When I talk about a mix of public and private, I ground that in the idea that property rights and sovereignty are not absolute, but are limited, that the community has a lien on them, and the surrendering of some small percentage of individual rights to the collective is what creates the culture that conservatives make reference to.Report

              • Avatar James Hanley in reply to Liberty60 says:

                In my opinion, a state without coercion is not merely impossible, it is NOT ideal.

                Well a state without coercion is not a state. Unless you’re meaning “situation” or “condition,” rather than “government” “country.” Damn those words with multiple meanings! 😉

                I’m talking, though, in this ideal, about a condition where coercion isn’t necessary. Nobody steals/defrauds/murders/rapes/etc, so no retributive coercion is needed. Collective action problems don’t exist, so there’s no need to coerce people into contributing. Everyone has enough value to exchange with others (whether labor or capital) that all are well off enough (or those that aren’t are voluntarily taken care of) that no coercive redistribution is necessary.

                Now, still holding to the agreement that such a condition is impossible, what about it is non-ideal? Your answer seems to be:

                Compulsory engagement with the community is in and of itself a good thing;

                I can agree that engagement with the community is in and of itself a good thing. Humans are, by biological history, a social animal; it is in our nature to engage with a community, and depriving people of the opportunity to do so, whether by ostracization or solitary confinement, is a truly harsh punishment.

                But I can’t for the life of me understand why compulsory engagement is superior to voluntary engagement.

                You think libertarians are radical, but I sincerely think this is one of the most radical ideas I’ve ever encountered. It seems to require that if we did in fact have a world where engagement with community was entirely voluntary and everyone’s needs were met through that voluntary engagement, with the community being a thriving and tight-knit society, it would still be improved by adding a compulsory element to it.

                And as far as I can tell so far, your reason is just an objection to individual sovereignty, regardless of the outcome. But I think you misunderstand that concept of sovereignty. You write,

                the surrendering of some small percentage of individual rights to the collective is what creates the culture that conservatives make reference to.

                But that surrendering can be voluntary; it doesn't have to be compulsory. As a married man, I have surrendered some of my rights, like the right to go out and drink any night I want and the right to go home with that pretty girl at the bar. I actually haven't surrendered these rights–I still have them but I voluntarily choose not to exercise them. And in so doing I help create the culture of my marriage.

                Extrapolate from that, and a purely voluntary society does not mean a purely self-centered society, but one wherein we all refrain from exercising some rights because we value our membership in the community more than the exercise of those rights. And we still create culture that way; the idea of culture doesn't disappear in any way whatsoever. I'm a member of an informal group that has no compulsion whatsoever, colleagues with whom I'm friends and who eat and drink together and help each other out with home repairs and other such things. We have a culture, as would be defined by any anthropologist; shared norms, beliefs, and in some ways language (in-jokes, jargon, and so on).

                In what way would compulsion improve on that?Report

              • Avatar James Hanley in reply to Liberty60 says:

                Fudge. Will some kind LoOGer fix my bungled tag, please?Report

              • Avatar James Hanley in reply to Liberty60 says:

                Liberty,

                As so often happens, the discussion has wandered away from the starting question. Not that there’s anything wrong with that, but I don’t want to lose focus on it, either.

                Our two intertwined issues appear to be a) the intrinsic value of coercion/compulsion, on which it appears to me we have a fundamental disagreement (unless I have misunderstood you), and b) how much we can legitimately be compelled (what do we owe to society) and whether it’s legitimate to even ask that question.

                To get a b), let me assume your position on a). Take as given that compulsory engagement with, contributions (financial, time, attention, what have you) to society are not simply necessary but good in and of themselves. What in that principle leads to the conclusion that it’s improper to question the extent to which that compulsion is legitimate? I truly can’t picture you saying “society can demand anything of you and you have no right to question it,” because I think if society demanded that you and I be compelled to fight a death match for the entertainment of the unwashed masses you’d join me in questioning the legitimacy of that compulsory contribution. But your argument, as stated so far, seems to lead inexorably to that conclusion.Report

              • Avatar Jesse Ewiak in reply to Liberty60 says:

                Of course there are demands upon a citizen you or I would find unreasonable. But, the truth is, if 2/3 of the states and Congress approves of it, we’re sort of out of luck unless we’ve got enough ammunition or manpower.

                There is no right that the state can’t say, “OK, actually, slavery wasn’t such a bad plan after all” and reinstitute it. Now, if that happens, I’ll send guns and money to help those people hurt by it out (if I’m not one of those thrown into debt peonage), but I can’t say the government has no right to throw me into debt peonage/slavery/indentured servitude.

                After all, once something has enough popular support (and I mean 80-90% support along with support of major institutional players), the only things stopping the government from doing something is another larger force stopping them or that 20% minority causing enough problems that the government does a cost benefit analysis and says, screw it.

                Now, this may sounds like an argument for libertarianism, but the truth is, the same thing could happen in a perfect free market, only the debt peonage and indentured servitude wouldn’t need a vote and would be ran by Monsanto and ADM instead of the government.

                The weakness of the commons is also the strength of the commons. The fact that we don’t have all the horrible things the state can do in this country isn’t because we’re a better people than the Iraqi’s, Russian’s, or North Koreans or because our Constitution is some sacred document, it’s because the politicians are still reasonably afraid of the electorate (which can be a bad thing sometimes) and there’s still an underlying support of common principles among pretty much everybody, outside of some communes in Berkeley and compounds in Idaho.

                Now, to be perfectly frank, I think the danger is that if Romney loses in this election, instead of a 1-2% rump of crazy people who think we’re about to become a socialist nation ruled by Czar Obama, that number might grow to 4-5% who start to lose faith in the institutions of this country thanks to our friends at Fox News at EBI Broadcasting, but that’s for another day.Report

              • Avatar Liberty60 in reply to Liberty60 says:

                James- a lot here to discuss, and yes we’ve wandered afar from the original question; it may be that we’ve also run out of indents, signalling that this can be better addressed in another thread.
                But for now-
                I am in fact saying that compulsory engagement is superior (to a limited degree!) to voluntary engagement. This can be explained more in another thread.

                As to your second post, the degree of compulsory v voluntary is certainly malleable, and debatable. But there must be at least some of each.Report

              • Avatar James Hanley in reply to Liberty60 says:

                Jesse, I’m much in agreement with you here. I could quibble about your claim about the market, but I’d rather note that overall I fully agree.

                Liberty, the degree of compulsory v voluntary is certainly…debatable.

                So that “constantly contested” business is ok, after all, even if frequently irritating? And Jaybird’s committed no sin?Report

              • Avatar James Hanley in reply to Liberty60 says:

                I am in fact saying that compulsory engagement is superior (to a limited degree!) to voluntary engagement.

                Now that seems truly radical to me. Standard social contract theory treats compulsion as an unfortunate necessity. And standard communitarian theory treats the community as organic, something we naturally engage in and co-create, so I don’t think it treats compulsion itself as inherently good, but again an unfortunate necessity for when we act anti-socially instead of pro-socially.

                I guess I’m quite startled to find someone who’s calling others radical holding such an unconventional belief.Report

              • Avatar Roger in reply to Liberty60 says:

                I don’t recall fretting about being coerced to pay to clean the environment. I recall saying let’s make sure the costs outweigh the benefits. Honestly most of the comments about my opinions were others arguing what they thought i was going to say. I got a kick out of it. I’m on a camping trip and just checking my phone twice a day.

                But I can’t wait to read libertys pro coercion post.Report

  3. Avatar b-psycho says:

    If this status quo is how capitalism is defined, is it any surprise that many voters are less-than-total adherents?

    At times I wonder what would trigger a shift among a significant number of the less attached from that state of less-than-total adherence to straight up rejection.Report

    • Avatar CK MacLeod in reply to b-psycho says:

      Catastrophe, miracle, or time – though it would be helfpful if you’d define what you mean by “capitalism” so we can know what “straight up rejection” is supposed to mean. We do know that, according to the right, “capitalist” is shorthand for “victim of severe narcissistic personality disorder.”Report

      • Avatar b-psycho in reply to CK MacLeod says:

        There’s a tendency to blur the term “capitalism”, using it somehow to mean both an ideal free-market & the system that actually exists at once. I’m defining the latter, the existing system, similar to how Gary Chartier defines it, which is in opposition to the former.

        The unease that Elias describes with it is at the point of general preference for simple, open commerce and against the perception of having gotten over on people. That unease turning to rejection would mean deciding that capitalism inherently = getting over on folks, thus a rise of “I’z Agin’ It” sentiment.Report

    • Avatar Liberty60 in reply to b-psycho says:

      I wonder also how long it is going to take for the word socialism to lose its shock and awe as a political epithet.
      I mean, if you were to sit a youngster down and explain to him what made communism so terrible, an innocent might draw some uncomfortable parallels between that and the modern Security State.Report

      • Avatar Bob Wallace in reply to Liberty60 says:

        Add in the third leg of that beast – fascism.

        It would be better if we would separate economic systems from enforcement systems. Any economic system could be administered by jack-booted thugs.

        What pure socialism and pure laisses-faire, free market capitalism share in common is that neither actually work in a way that should interest us. To make either the law of the land would require large amounts of force.Report

      • Avatar Morat20 in reply to Liberty60 says:

        It appears to already be doing so. Let’s face it, the GOP has sorta watered the word down a lot.

        A LOT of what gets screamed out as being “socialist” is pretty weak-sauce — or popular. (Like, you know, the entire New Deal stuff). I’m afraid those who didn’t grow up scared out of their wits by the mean Russians don’t exactly equate the ACA with communist jack-booted thugs.

        Especially when France, Canada, England, Germany, Singapore…practically everyone manages it and they seem okay places.

        Socialism, to Gen X and Y, is just a word Republicans use for Democratic programs. I’d imagine very few would know real socialism if it bit them in the ass, and judging by the polls, most of them are pretty fond of what passes for ‘socialism’ in America these days.Report

        • Avatar Tom Van Dyke in reply to Morat20 says:

          Give a man a fish, and he won’t fish.

          Mr. Morat, in America 2012, “socialist” is easily understood shorthand. Let’s fess up.

          I was going to prop up some Larry O’Donnell quotes—he baldly, boldly and honestly cops to being a ‘socialist.’ France just elected a president from the Socialist Party. I recently linked a Pew poll where 55% of black America is fine with copping to a sympathy for “socialism.”

          There it is. Enough of the word battle. It is what it is. To not piss you socialists off I [and several others @ LoOG] have used “communitarian,” an elegant euphemism.

          Hell, I’ve even helped you make your case for it. FDRism was a good thing, and is inextricably woven in to the American fabric.

          Just tell the truth. I realize that “socialism” is a pejorative, but Reagan made “liberal” a term to be avoided rather than embraced. “Progressive” is like, lock the barn door Nellie because Big Brother needs a hamburger.

          ;-P

          Bill Clinton was a liberal, but more precisely, he and the extinct Democratic Leadership Conference were neo-liberals. Let industry and capitalism create the wealth, then we tax it to the point we don’t kill it. That’s been the American plan for 80 years now.

          Now it’s not. Fish fishing, gimme a fish.Report

    • Avatar North in reply to b-psycho says:

      I’m only guessing here but presumably the passing away of the generation that soured on socialism in the 70’s?

      Alternatively an end to the War on Drugs might help.Report

  4. Avatar MikeSchilling says:

    David Brooks at his logic-free best:

    Democrats are casting Republicans into the eat-your-spinach posture (you need to accept outsourcing and the pains of creative destruction if you want your prosperity).

    Dammit, how do you expect to be prosperous without having your pay cut or losing your job?Report

    • Avatar Jason Kuznicki in reply to MikeSchilling says:

      If no one ever took a pay cut or ever lost a job, we would all be poor and miserable, because everyone would still have their jobs… as peasants.

      So you tell me.Report

      • Avatar Stillwater in reply to Jason Kuznicki says:

        So, taking pay cuts and losing jobs is what brought people out of serfdom?

        That’s an interesting argument.Report

        • Avatar Jason Kuznicki in reply to Stillwater says:

          Being a peasant has lousy pay nowadays, particularly compared with just about everything else.

          So yes. It’s a very interesting argument. It’s what causes prosperity — sometimes jobs become relatively less productive, and people may find it a good idea to move out of them.

          Were you really suggesting we’d be better off if peasantry were still our best option, perhaps thanks to state-run peasants’ protection programs? I can’t honestly believe you were. So what were you arguing for?Report

      • Avatar MikeSchilling in reply to Jason Kuznicki says:

        You mean everyone that became an industrial worker started out by being fired from his position as peasant? I thought most of them changed because the pay was better, not because turnip production had been outsourced to the Midlands.Report

    • Avatar DavidTC in reply to MikeSchilling says:

      Dammit, how do you expect to be prosperous without having your pay cut or losing your job?

      Ah, yes. This is the strangely surreal idea that we should all get behind increasing the _sum total_ of productivity, which basically has been the stated policy for decades. The problem is, the sum total of productivity has almost nothing to do with how we actually live.

      We, as a country, would be vastly better off if we’d enact policies that kept the GDP steady or dropping, but increase the median income by 1%+inflation or something. I’m not saying redistribute the wealth, I’m saying aim policies intended to cause the wealth creation at the people without wealth, instead of the economy as a whole. Because ‘helping the economy as a whole’ actually means ‘helping the people who own almost everything’.

      It would, instead, be better if sometime companies were encouraged to just _stay there making things and providing jobs_, instead of trying to suck even bit of profit out of things, or having to put on a song and dance for the asshole ‘investor class’ because their perfectly slow and steady money-making is not fast enough. Companies should die due to competition or failure to keep up, not because some investor demanded they start taking risks, and they did, and it failed. That is the _opposite_ of being a ‘job creator’.

      I don’t think the American people quite realize that yet, they still iodolize the ‘innovation’ concept without quite realizing that 99% of the stuff that needs to be done is not innovative at all. But they’re now looking long and hard at practices, like Bain, that don’t seem to produce anything _at all_ while they harm random people.Report

  5. Avatar MFarmer says:

    “(Of course, and as Romney no doubt would acknowledge, capitalism doesn’t work unless there’s some kind of inequality present in society… so maybe not everybody should be rich…) ”

    You lose credibility right out of the gate. It’s not that capitalism is a system designed to work through the purposeful creation of inequality, it’s that it’s impossible for everyone to be “rich” because “rich” would have no meaning, if you understand economics.You are proposing a potential reality that can’t exist and saying that capitalists are purposefully preventing this reality so that their system can work. Ludicrous and ignorant.Report

  6. Avatar MFarmer says:

    For all the accusations of libertarians naively believing in utopian schemes, the Left is lost in a utopian vision that leads to policies which are destroying our economy.Report

  7. Avatar DensityDuck says:

    Of course capitalism requires inequality to function. Without inequal utility of goods, why would there be any reason for trade to occur?Report

    • Avatar Bob Wallace in reply to DensityDuck says:

      There’s no requirement that the distribution of goods needs to be drastically uneven for capitalism to work.Report

      • Avatar Jason Kuznicki in reply to Bob Wallace says:

        Heterogeneity =/= inequality.

        I’m with Bob on this one. I strongly suspect that certain pro-free-market reforms would go a long way toward lessening economic inequality. Things like shortening intellectual property terms and ending corporate welfare.Report

        • Anyone who understands what a free market is would naturally oppose corporate welfare. This is what I’m getting at — conservatives, in the main, aren’t pro-free market — there are maybe a handful of influential people in the political realm who promote a free market. It’s much more complex that criticizing welfare cheats, letting poor people starve, shilling for the Kochs and ignoring the rights of women and minorities. I don’t see any pro-freemarket movement, really. A Free Market would truly transform America is radical ways. Most conservatives want to control capitalism just like the Left, except they want government to do different things with the wealth they confiscate from the system.Report

        • Avatar DensityDuck in reply to Jason Kuznicki says:

          Again: If you value something I possess more than I value it, isn’t this inequality?

          Or maybe I missed the point, and it’s really just HURF DURF RICH PEOPLE.Report

    • Avatar Bob Wallace in reply to DensityDuck says:

      Might I try out an idea here? When I step back and look at our economy it seems to me that we have the effort criterion attached to the wrong end of the economy. By that I mean that we’ve made it too difficult to enter at the low end and earn a modest lifestyle and too easy to go from “the first million to the tenth billion”.

      We end up with people who lacking skills, luck, whatever bounce around on the bottom and barely exist. We have people on the top who make money so fast that they end up with enormous wealth, far past what they and likely a few subsequent generations can spend.

      What if we pleased the liberals by making it possible for the “least among us” to have a decent life, or at the absolute minimum three square and a dry floor to lay on and at the same time pleased the conservatives by making sure that they earned that food and shelter?

      And what if we financed that by giving the rich the enjoyment of having to work a bit for their extra millions/billions? Or just slowed down the growth of wealth if they are on autopilot.Report

      • BobW, I’m good w/all that. The “rich” devoted themselves thoroughly to the war [WWII] effort. It was the same dynamic—innovate, make money, save the free world. So well by doing good.

        Wall St. is a bunch of arbitraging parasitical scumsuckers, true—the currency manipulator George Soros the biggest scumsucking parasite of all. Even Rupert Murdoch works for a living.

        We need to readjust our parameters. Soros is OK because we approve of what he does with his ill-gotten gains. The Koches are bad because we don’t approve with what what they did with what they earned.

        So it goes.Report

        • Avatar Bob Wallace in reply to Tom Van Dyke says:

          Makes sense that we would feel better about wealthy people who spent their money in an attempt to help others, make things better. I have much better feelings about Bill Gates since he’s started working on getting rid of polio, etc. I have less good feelings about the other rich guy who just bought one of the Hawaiian islands.

          I would bet that the reason you think George Soros to be ” the biggest scumsucking parasite of all” is because he spends his money on causes you dislike. If he was giving his money to right-wing causes then he’d be an American hero.

          But you apparently totally missed my point.

          Or perhaps you did get it but were just looking for another opportunity to take a shot at Soros….Report

  8. Avatar Rod says:

    Over at the BHL blog Steve Horwitz posted a piece, The Speech Mitt Romney Should Give But Won’t. It’s a great illustration of exactly why libertarians will forever be relegate to the backwoods of electoral politics. A couple of exerpts:

    I will not apologize for working for a company that made numerous other companies more efficient and, in doing so, freed capital and labor to more productive uses that have enriched this nation. Would my opponent prefer that we stagnate in the jobs and lower standard of living of a generation ago?

    Translation: I laid off a bunch of people from decent-paying factory jobs so they could be more productive flipping burgers for minimum wage. If that.

    So the idea is that laying off a bunch of folks, closing factories, etc. is a noble thing because, Hey! We saved the company!

    But what really is the company, anyway? A corporate charter in a drawer in the Delaware Secretary of State’s office? So what was saved? Doesn’t “the company” include the people that work there? How does that company even meaningfully exist anymore for the folks in the unemployment line?

    I will not apologize for working for a company that provided jobs in poorer parts of the world for people who desperately need better opportunities. Would my opponent prefer that they continue in poverty and starvation?

    Translation: I sent those jobs to overseas sweatshops.

    But this is a new-ish meme (at to me) that’s been popping up lately. Liberals are supposed to be happy that jobs are being sent overseas. Because don’t we care about poor people the world over? Huh, don’t ya, huh? What’s the matter with you? Don’t you care about poor people?

    Well, yeah. I care about poor people. I’d also like to avoid becoming one of them, thank-you very much. And isn’t that just exactly the zero-sum thinking that the libbies tell us is so bad?Report

    • Avatar Rod in reply to Rod says:

      Pardon the formatting error, please.Report

    • Avatar Roger in reply to Rod says:

      Rod, you are hitting upon the conventional wisdom problem. The point is that to understand economics requires complex and counterintuitive reasoning. People are natural tribalists. They believe prosperity is about jobs rather than productivity. And they are mercantilists.

      In other words they think like you. Economists have been able to temporarily free enough people from these illusions to unleash the prosperity that allows yeti finally live over a few dollars per day.

      It is sad that people can’t appreciate the complexity of the system they owe their lives to. But they can’t. It appears you can’t either.Report

      • Avatar Rod in reply to Roger says:

        Oh, just bite me, Roger. Seriously, I am so sick of libertarians’ condescending attitude about economics. Especially when you’re wrong, which is like, most of the time. Economics is complex, yes, because there’s a lot of moving parts. But it’s not really counter-intuitive, at least it wasn’t when I was an under-grad, lo thirty years or so ago. When my econ prof–I think the class was Money & Banking, 300 level, IIRC–wanted me to switch majors from engineering. I took econ classes to fill out my humanities electives because it was “mathy” and I’m good at math so econ was pretty easy. It’s only counter-intuitive in bizarro-libertarian land when you’re trying to convince me that the yellowish fluid running down my leg is rainwater.

        Mercantilism can be a very successful strategy, particularly for a young, developing, economy. It’s worked out quite well for Korea, Japan, and China, for example. And it worked well for us when our republic was young when we needed to build out an industrial base. That kind of mercantile strategy likely isn’t appropriate for a fully developed economy like ours or Western Europe. But neither is this weird anti-mercantilism where we intentionally allow our industrial base to go to weeds.

        Is prosperity about jobs? Yeah. For most people it is. What’s your alternative suggestion? Learn to live off the humidity in the air like a fern?

        Productivity is a great thing. But equating outsourcing to Indonesia with productivity gains–even if it satisfies the formal definition–is abusing the concept. At least in a developed economy it is. In a developing economy, one where demand outstrips supply, outsourcing can free up labor and capital currently making “X” in favor of making “Y”. But that runs into the law of diminishing returns eventually. Literally, we’re running out of Y’s to shift to. Just because you’re personally not feeling it doesn’t mean it isn’t happening.

        Consider all the sturm and drang over the national debt. Yeah, it’s big. Yeah, it’s scary. And it’s the accumulation of decades of budget deficits. But have you ever considered the trade debt? If you’re like me you’ve likely never heard the term. Trade deficit, sure. Trade surplus, of course. Even balance of payments. But trade debt? The U.S. has been running a trade deficit every year since 1975. That cumulative debt is about 9 or 10 Trillion $ by now, IIRC (I have to relocate the source). That’s money going out and goods coming in (net, we do export quite a bit yet as well). Now the money does come back, some of it at least, but it comes back to purchase assets. Everything from stocks and bonds, to government debt, to real estate. And the goods that we purchased were either immediately consumed or have depreciated substantially. It’s called eating the seed corn. It’s not good and it’s not sustainable and you’re a cheerleader. Yay! The situation would actually be a lot worse, and have gotten that way a lot sooner, were it not for the status of the dollar as the world’s reserve currency.

        It’s been my observation that libertarians and conservatives know business very well–and hat’s off to you for that. But economics? Not so much. Particularly on the macro side of things. Or perhaps it’s a studied indifference given your monomaniacal focus on the individual. You look at a forest and all you see are… trees. This tree, that tree, the other tree. But the forest as an organic entity in its own right is beyond your ken.Report

        • Avatar DensityDuck in reply to Rod says:

          It’s not condescension to suggest that you’re nothing more than a moron with a big vocabulary.Report

        • Avatar James Hanley in reply to Rod says:

          U.S. has been running a trade deficit every year since 1975. That cumulative debt is about 9 or 10 Trillion $ by now, IIRC

          That’s just flatly incorrect. The trade deficit is not a debt. When I buy a plastic widget from China for $1.99, and China does not spend that $1.99 buying anything from the U.S., our trade deficit increases by the $1.99. But what debt is created? None, because I paid for that item.

          There’s simply no such thing as a trade debt in that sense.

          That’s money going out and goods coming in (net, we do export quite a bit yet as well). Now the money does come back, some of it at least, but it comes back to purchase assets. Everything from stocks and bonds, to government debt, to real estate.

          That’s called foreign direct investment, and it’s something all countries want. Specifically, more money is invested in the U.S. by China than is invest in China by the U.S. That’s called a capital account surplus. In fact the trade deficit exactly equals the capital account surplus. There’s nothing wrong with foreigners investing in the U.S. by purchasing assets. It most assuredly is not eating the seed corn, because no investment capital is consumed/destroyed.Report

          • Avatar Jakop in reply to James Hanley says:

            Actually, I disagree. Where does that US dollar come from? When a dollar is issued, it is issued as an IOU. As debt. This is by law, not economic necessity, but it is a fact that it is. If we are running a trade deficit, dollars are leaving the country faster than they will come in. Hence, the supply of dollars in the domestic economy diminishes. What must happen then? The issue of new debt.Report

            • Avatar Tom Van Dyke in reply to Jakop says:

              Jakop, “where dollars come from” is actually interesting. “From the stork” is most accurate, as long as America gets to be the stork.Report

            • Avatar James Hanley in reply to Jakop says:

              If we are running a trade deficit, dollars are leaving the country faster than they will come in. Hence, the supply of dollars in the domestic economy diminishes.

              That’s incorrect. It only means that the dollars coming back into the country are not coming back to purchase goods, but as investments. Either way, the money comes back to the U.S. in a flow that’s pretty much the same rate as it flows out. The only alternative would be that some foreigners are sitting around with piles of American dollars that aren’t giving them any benefit, which isn’t too likely.Report

              • Avatar Patrick Cahalan in reply to James Hanley says:

                > That’s incorrect. It only means that the dollars
                > coming back into the country are not coming
                > back to purchase goods, but as investments

                Well, nitpick, it’s incorrect *if* the dollars coming back into this country as investments + trade are equal to the dollars leaving this country as investments + trade.

                Interestingly, I don’t know of a handy reference that talks about this much. Got one, James?

                Foreign investment in the U.S. waxes and wanes, but U.S. investment in foreign entities does, too. How does that map to trade deficits/surpluses?Report

              • Avatar James Hanley in reply to Patrick Cahalan says:

                Patrick,

                The dollars coming back in as investments + trade are equal to the dollars leaving this country for those purposes. I buy a plastic widget made in China, but what’s a Chinese guy going to do with an American dollar? He can buy something from America, he can invest in America, or he can sit on it. The first two actions have value for him, the third one doesn’t.

                Of course he can trade it for Euros, but that just means the new holder of the dollars must decide whether to buy, invest, or sit on it, and s/he also won’t have any value in sitting on it.

                Or let’s say I want to invest in Germany. Normally I’ll need Euros to do so, so I’ll trade my dollars for Euros and use the Euros. Where did those dollars go? Into the hands of someone who’s going to buy, invest, or sit on them.

                In a nutshell, the key to the question is, what do people do with U.S. dollars? And the answer almost always is, “spend them in the U.S.”

                The limited exception to this rule is U.S. dollars held by foreigners for use in their own country, when their country’s currency is poorly valued. For example, in Zimbabwe when the country had hyperinflation the dollar, the Euro, and the South African Rand became their de facto currencies. That’s because the U.S. is a strong currency (whatever gold bugs may think of it). Similarly, I found dollars almost always got me a nice discount in Syria, because they were so much more desired than the national currency. But overall that’s a miniscule proportion of the dollars that flow throughout the world.

                I learned all this from reading Paul Krugman’s pop econ books, but forget which one(s) specifically. It’s probably somewhere in either Peddling Prosperity,, The Accidental Theorist. I recommend both books. But here’s a more direct primer.Report

              • Avatar Patrick Cahalan in reply to James Hanley says:

                Well, I figured of course in the grand sense it all goes necessarily somewhere, barring a small amount.

                But with the issuance of national debt, and various payment schedules thereof, and currency devaluation, and debt forgiveness, occasionally some of it goes… nowhere (statistically a negligible amount? I wouldn’t be surprised, but I don’t know for sure). And in any given snapshot of time, a good portion of it might be straining away in the deep end of the pool.

                > In a nutshell, the key to the question is, what
                > do people do with U.S. dollars? And the
                > answer almost always is, “spend them in the U.S.”

                Ja, I get that… but money doesn’t move at a constant rate, so I’m curious as to how quickly that winds up at equilibrium, so to speak.

                If the money is really moving around in the Euro zone, it’s generating a lot of economic activity there. It might wind up *back* here, but if it changes hands 20 times in Germany and only once or twice in the U.S., the amount of economic activity generated by that dollar tilts way in favor of the Germans, right?Report

              • Avatar James Hanley in reply to Patrick Cahalan says:

                Patrick,

                At that point you’ve gone beyond my level of technical knowledge, I’m afraid. Simon K or James K could certainly answer better than I could. But I’d suggest that at worst all it really means is that the system doesn’t adjust as instantaneously as the ideal model (but then almost nothing in the real world economy adjusts as instantaneously as the model), and that probably yesterday’s delay more or less makes up for today’s delay, so that while there is always lag in the system, so that on a historical scale it may always be somewhat out of balance, on a functional scale it’s probably normally balanced enough.Report

              • Avatar Roger in reply to Patrick Cahalan says:

                Pat

                Why would we be concerned if dollars generate economic activity in Europe? Sounds like a good thing, right? Trade isn’t war. It is positive sum, right? I am probably just reading too much into the tilting comment.Report

              • Avatar Rod in reply to James Hanley says:

                In a nutshell, the key to the question is, what do people do with U.S. dollars? And the answer almost always is, “spend them in the U.S.”

                Patently false or we simply wouldn’t have a trade deficit in the first place. It’s only true if you count buying Treasury notes as spending.

                Look, I don’t say this to be condescending–God knows I hate it when people do that to me–but you could really stand to read up on this a bit. The wikipedia entry on Balance of Trade is a good start. (Although I think in one section they may have mixed up currency appreciation and depreciation.) It’s just a lot more complicated than you’re describing and the complications matter.Report

              • Nob Akimoto Nob Akimoto in reply to Rod says:

                Current accounts only take you so far. James is certainly right that the Capital Accounts of the US have been a large surplus. The question of whether or not that’s a desirable trend given high levels of house hold debt vs. savings is another question.Report

              • Avatar James Hanley in reply to Patrick Cahalan says:

                Foreign investment in the U.S. waxes and wanes, but U.S. investment in foreign entities does, too. How does that map to trade deficits/surpluses?

                Missed this. I think someone like the Ks (James or Simon) could answer this more clearly than I can. But I’ll try.

                If you begin with a simple two country model, the trade deficits and capital accounts surplus will vary in perfect concordance with each other, always equaling zero. So if country A’s trade deficit increases, B has more $As (A dollars) and will increase its investment in A. Because A’s buying more and selling less to B, it will receive fewer $Bs and will of necessity reduce its investment in B.

                Of course the real world has complexities that affect how that plays out and on what time frame. If there’s a country C, and they’re willing to lend to A, A’s investment in B won’t decline, but of necessity, then, C’s will, so it still balances out. Most of all there are governments that face political pressure to try to change this essential process. What many American citizens seem to want is a small trade deficit and a strong dollar, although those don’t go together, and can’t actually be achieved. And you have China, which many argue purposely devalues its currency to promote exports (at least they understand how that works, unlike many U.S. policymakers!), but which certainly can’t do so forever. But even if they could, their choice to focus on exports mean they are sacrificing FDI. So those actions disrupt the smooth functioning of the equalizing flows, but don’t change the essential nature of the process.Report

              • Trade deficits tend to be pro-cyclical along with FDI.

                Foreign investment by US firms abroad tends to be counter-cyclical, IIRC, but it’s been a while since I’ve looked at that particular data set.Report

          • Avatar Rod in reply to James Hanley says:

            James,

            It’s true that economists don’t use the term “trade debt,” but that doesn’t mean you couldn’t do so as an analogue of the Federal Debt. That’s all I was getting at. There was certainly no implication that you as a consumer was incurring a financial debt by purchasing a foreign-made good. And frankly, it’s a little insulting that you attributed such an asinine interpretation to me.

            But I have to dispute your equating foreign direct investment with the capital surplus account. The CAS has four components: foreign direct investment, portfolio investment, other investment, and the Fed reserve account. Of the four components the largest is the reserve account activities where the Fed buys and sells foreign currencies.

            And there’s nothing intrinsically wrong with foreign direct and portfolio investment although a sense of rough balance is good. You might want to ask some of the third world countries about how much they want this investment. In bygone eras it was called colonialism and it’s not clear that the situation has actually improved a lot. Sort of a rose-by-any-other-name thing.Report

        • Avatar Roger in reply to Rod says:

          Rod

          Sorry for biting you. There is a lot of empirical proof that economics is counterintuitive.

          When people are given difficult complex questions they often substitute the question for another one which is easier to answer. ( Kahneman) People have difficulty understanding comparative advantage, decentralized problem solving, positive sum interactions , the role of prices and creative destruction. So they substitute their easy questions and easy answers. Jobs good. Trade out for money makes jobs so good. Made in America good. Outsourcing bad. Capitalist bad. Community organizer good.

          Your focus on trade deficits and outsourcing are perfect examples. How are your views on community organizing?Report

          • Avatar Rod in reply to Roger says:

            Sorry for biting you.

            I wasn’t complaining that you bit me. I was telling you to bite me. How about fuck off? Is that clearer? Because you’re still doing the condescending ass thing.

            When people are given difficult complex questions they often substitute the question for another one which is easier to answer. ( Kahneman)

            Then stop doing that. Regardless of the situation or the facts on the ground, you guys have exactly one answer for everything.

            People have difficulty understanding comparative advantage, decentralized problem solving, positive sum interactions , the role of prices and creative destruction.

            I don’t; but apparently you do. In particular, since my post concerned trade, are you aware that Ricardo’s Theory of Comparative Advantage explicitly assumed that labor and capital were immobile and that trade was balanced, that it was essentially international barter? Or that when Smith treated the subject, he relaxed the barter assumption to allow monetized transactions, but when he did so he explicitly assumed that money was gold, measured by weight, and therefore just another form of barter. And that trade would thus automatically re-balance due to currency appreciation, resulting in deflation, on the part of the deficit partner and the reverse on the part of the surplus partner? And I hope you also realize that’s a sucky way of achieving balance since deflation invariably results in economic contraction? Likely not, since your understanding of economics is a mile wide but about an inch deep.

            And are you aware of the Bretton Woods agreement, engineered by John Maynard Keynes post WWII, establishing fixed exchange rates among the world’s major economies and with the whole thing anchored by the value of the dollar being pegged to gold, thus establishing the dollar as the world’s reserve currency? And that under BW, until we withdrew from the agreement under the Nixon administration, the U.S. ran neither a trade deficit nor a surplus–and has run a trade deficit every year subsequent beginning in 1975, because that’s what Bretton Woods did? And that the whole point of BW was to avoid the punishing contractions resulting from currency revaluations resulting from imbalanced trade? And that the U.S. experienced not a single economic contraction lasting more than a few months, and nothing remotely comparable to what we’re currently experiencing, during the time it was operative? Likely not, since your understanding of history is similarly shallow and it’s more fun to beat up on Keynes than to understand him.

            And, finally, are you aware of the basics of predicate logic, whereby if you have proven that a proposition, P, holds given conditions A and B, that when A and B don’t actually hold true, you can no longer assert the truth of proposition P? Because that’s exactly what you’re doing when you advocate for unrestricted and unregulated trade by referring to Comparative Advantage. Don’t get me wrong here; Comparative Advantage is a valid theory. Ultimately it’s just the macroeconomic version of the advantages of specialization of labor theory, which is practically self-evidently true. It’s just that we haven’t been satisfying the predicate conditions that would render it applicable since we abandoned Bretton Woods.

            You must really, really, like the Federal deficit. Because the Federal debt is a big part of what finances our trade deficit. Contrary to Hanley’s blithe and unsupported assertion, the excess currency we send overseas does not return to the U.S. as foreign investment, unless you define the “investment” down to virtual meaninglessness. Partially we’ve been able to skate by on the strength of the dollar as the primary reserve currency. Foreign central and commercial banks are willing to hold dollars as reserves based on our economic and military strength; basically our status as a world Empire through the twentieth century. And some of it returns via foreign purchases of equities and direct investments like building auto plants in Alabama. But primarily the dollars have come back to us by selling commercial and government debt. The Fed also auctions securities specifically for this purpose apart from financing the debt. I misspoke (mis-wrote?) in a post above when I stated we were “eating our seed corn”. It would be more accurate to say that we’ve been mortgaging the farm and selling our tractors on lease buy-back deals in order to buy food.

            So they substitute their easy questions and easy answers. Jobs good. Trade out for money makes jobs so good. Made in America good. Outsourcing bad. Capitalist bad. Community organizer good.

            Sigh… why don’t you add one of DD’s trademark HURF-DURF’s to that and make your brain-dead condescension complete? Yeah, jobs are good. Unless you prefer to cut folks checks for just sitting around on their asses? And exporting goods to pay for importing goods makes sense the same way as an individual selling goods or services (including labor) to pay for consumption makes sense. You can only live on your credit cards so long without making a payment before the bank cuts you off and everybody notices that you’re just a bum.

            Any particular instance of outsourcing isn’t necessarily a problem, per se. But outsourcing solely to take advantage of cheap labor and utilizing relocated domestic capital breaks the premises of Comparative Advantage and can’t be justified on that basis. But if the trade is balanced by whatever means–and I prefer publicly traded import certificates, essentially you earn the right to import a dollar’s worth of goods by exporting a dollar’s worth of goods–then outsourcing is a non-problem for anybody.

            Finally, there’s a difference between criticizing capitalism as a base concept and criticizing capitalism as currently practiced. I’m sure you have your own criticisms of the latter that you expect to be taken seriously. It would be helpful for discourse if you would return the favor instead of treating anyone who disagrees with anything you say like a moron that doesn’t understand economics.

            Now we can have a flame war or we can have a conversation. It’s totally your choice at this juncture but I have limited interest in the former and better things to do with my time.Report

            • Avatar Will Truman in reply to Rod says:

              Rod, a bit of friendly advice: take a step back. Roger is not the guy you’re treating him like here. Frustrating at times, but a valuable contributor for his perspective.Report

              • Avatar Tom Van Dyke in reply to Will Truman says:

                Ditto. Dude apologized straightup, man.Report

              • Avatar Rod in reply to Tom Van Dyke says:

                Maybe. But then he turned around and the rest of the post was the same condescending bullshit so it’s hard to take the apology very seriously.

                It’s like saying, “Sorry I called you a douche-bag, you douche-bag.”

                My only regret is that my tone may have detracted from the substance of my post, thus rendering the whole thing a waste of time. But then, this is ALL a pretty much a waste of time anyway.

                I have a simple rule: Treat me with respect and I’ll do likewise. We don’t have to agree, just be civil. Which is something you and I have mostly been able to accomplish.Report

              • Avatar Tom Van Dyke in reply to Rod says:

                I thought the apology was for straight, Rod, and wouldn’t have jumped in if I didn’t. Peace, and likewise on the last bit.Report

              • Avatar Rod in reply to Will Truman says:

                I hear you and I’m not really interested in a flame-war either. But do libertarians just get some kind of automatic pass? Why am I expected to show him any more respect than he showed me?

                YOU don’t talk to people like that, Will, which is why I really like you.Report

              • Avatar Will Truman in reply to Rod says:

                Roger can come across as condescending at times, it’s true. I understand how that gets under people’s skin (there’s this one guy elsewhere who drives me batty even though he loves talking about the exact things I love talking about…), but it’s in attempt to engage and not inflame or shut-down. There are some people I would not say that about, but I will very much say that about Roger. Again, some friendly advice (and not meant as an admonishment).Report

              • I have to admit, I’ve largely stopped following discussions like this one, because I feel like I can’t be as civil when it comes to people trying to lecture me about the lovely wonders of trade. Roger’s whole “the magic of positive sum and comparative advantage will make everyone better off” shtick and the “you just don’t understand it” stuff is particularly grating.Report

              • Avatar Roger in reply to Nob Akimoto says:

                Just let me know how to improve it, Nob. Seriously. If my shtick doesn’t make sense let me know where it goes astray.Report

              • Avatar Rod in reply to Will Truman says:

                I guess you’re just a better and kinder soul than I. I have a real hard time reading a comment like his last as an “attempt to engage”.

                But I have to admit that there’s other times when he comes off as damn reasonable. This sure as hell wasn’t one of them.

                Look… I’ve learned to mostly ignore the boiler-plate “liberals are [generic or specific epithet]” comments. This just felt personal and I’d just had it up to… [reaching high above my head]… here with it.

                You may now return to your regular programming….Report

            • Avatar Roger in reply to Rod says:

              Hi Rod

              Sorry for not keeping up. I am camping and using a phone with low battery.

              I think we started the conversation with my comment that economics is complex and counterintuitive. I think you just proved my point.

              One other thing. I continue to perceive an us against them note in your free trade arguments. Just to clarify my position… Free trade, efficiency, specialization and so on are good for worldwide prosperity. Long term they are best for US as well. My guess is you basically agree.Report

    • Avatar DavidTC in reply to Rod says:

      This. We’re helping ‘the company’. We’re helping ‘the economy’.

      And people are like ‘Hey, I work for that company!’ and ‘Hey, I live in that economy!’. Sounds good.

      Except what is almost always meant is ‘We’re going to help the people who own the company and who own the economy’.

      Economies are not real. Companies are not real. The GDP is not real. Profit is not real. They are made-up ways of looking at money and the movement of thereof.

      The people who _are part of them_ are real.

      And about half the time, ‘the problem’ that is being solved is that the fictional entity is not doing _good enough_. They’re making money, they’re producing stuff that people want and pay for, workers in them are living okay, everything really seems fine…but somehow it’s not quite enough for the owners.

      So…tinkering is required. Tinkering that hurts the vast majority of people who are part of that entity, and in fact often causes it to fail, but makes the people on top come out better.

      Bain just throw it into even sharper relief because the tinkerers weren’t even the actual owners of the place. They just leapt it, took it over, and ‘tinkered’ in ways to obviously benefit themselves like paying themselves huge mounds of cash, and then half the time they immediately exited stage left, making off like bandits.Report

  9. (Of course, and as Romney no doubt would acknowledge, capitalism doesn’t work unless there’s some kind of inequality present in society… so maybe not everybody should be rich…)

    Please explain this?

    What element of capitalism requires inequality?Report

    • Avatar Brandon Berg in reply to Bill Woolsey says:

      With no inequality, there are no incentives. If building a business doesn’t earn you a better standard of living than slacking, and slacking is more fun, or at least easier, who’s going to build a business? Why go to medical school if doctors don’t make any more money than the guy working part time at the record store? Etc. Inequality is what motivates people to work hard.

      That said, it isn’t true that we can’t all be rich. Right now we’re all rich by the standards of the 19th century. In the future we’ll all be rich by today’s standards. If you define “rich” as having an income or net worth in the top 1%, then it’s tautological that we can’t all be rich. But if you define it in terms of a fixed standard of living, then we certainly can, while still maintaining inequality.Report

      • Avatar MikeSchilling in reply to Brandon Berg says:

        I’m unconvinced. Why are the Koch brothers doing anything other than living of their inheritances?Report

        • Why do you think they’re doing anything else? They have an extravagant hobby — shrinking the federal government’s role in regulation, social insurance, etc. If I were in their position, with income sufficient that I could spend tens of millions of dollars each year on a hobby, I would also have a political hobby. Not the same as theirs, and possibly farther out on the lunatic fringe, but I would have it.Report

        • Avatar Brandon Berg in reply to MikeSchilling says:

          I suspect that a lot of the behavior of the very wealthy can be chalked up to status games with net worth as the scorecard, in which case inequality still matters. That said, it’s probably true that there are some people who wouldn’t be taking it easy even if it had no effect on their absolute or relative incomes.

          I think it’s almost certainly true that these people are a small minority.Report

    • “What element of capitalism requires inequality?”

      In practice, at least, it seems that accumulation of capital sufficient for contemporary factories and such require a certain degree of inequality. Perhaps in theory as well; a person making $1M per year is likely to save/invest more than the total savings of 100 people making $10K per year. Assuming that there is an “optimal” amount of annual investment needed, and a known savings-rate function of income, there should be an “optimal” amount of inequality as well.Report

      • Avatar Rod in reply to Michael Cain says:

        I sincerely believe we’re well past that optimal level of inequality. And not just because I’m a bleeding-heart liberal (I am) but because of what we observe these people doing that they call investing.

        Whenever there’s too much “hot money” floating around the top, it become increasingly difficult to find productive investments–like factories and such–to put the money. So it increasingly goes into speculation, driving up asset prices. Stock bubbles, bond bubbles, real-estate bubbles, commodities bubbles. That’s basically what we’ve had going on since the mid ’80s starting with the S&L crisis.Report

        • Avatar Morat20 in reply to Rod says:

          *shrug* Once I understood what “high-frequency trading” was and how it worked, I pretty much wrote off modern capitalism as completely broken. In gaming terms, it’s being exploited to hell and back, and the mods aren’t doing anything.

          Still, being one of the HFT firms is a sweet gig if you can get it. It’s just it’s mere existance is pretty much proof positive that Wall Street and the stock market in general has become a giant casino. Complete with a table rake that no casino in Vegas would have the balls to set.Report

          • Avatar Michelle in reply to Morat20 says:

            +1

            I’ve believed in the casino theory for quite a while now. To me, there’s a huge disconnect between the games that occur on Wall Street and actual investment in something tangible and productive. When an investment company can leverage the same debt many times over there’s nothing “real” going on, just a symbolic manipulation of numbers supposedly representing some kind of economic activity.

            This quote from Tod, much earlier in this thread, pretty much sums up the problem with our current capitalist model for me: “I used my influence to leverage debt to an unwise amount, and when it put everything underwater I walked away with a small fortune” is not exactly the message the GOP wants right now, as they construct a narrative of the dangers of public debt.

            The other reason the GOP doesn’t want to put out this message is that, while it describes much of what goes on in the financial industry to a tee, it presents a model of economic behavior that, while not illegal, is devoid of any moral or ethical concerns. It is the casino economy–winners take all. And the losers, of whom there are a growing number, might not take well to that message.Report

      • Avatar MikeSchilling in reply to Michael Cain says:

        In practice, at least, it seems that accumulation of capital sufficient for contemporary factories and such require a certain degree of inequality.

        That’s the point of corporations, to allow joint ownership of such things.Report

        • But in practice? There’s a reason why tech start-ups (to pick an example) don’t run about, selling shares here and there in a retail fashion, instead of finding angel or venture funding where one or a handful of people who can afford it buy a major chunk of the company. And that doesn’t address the more fundamental problem that 100 people each earning $10K will save almost nothing in total, where one person with the same $1M in income will save a sizable portion of it.Report

          • Avatar Jason Kuznicki in reply to Michael Cain says:

            If I were a real revolutionary, I might suggest that we need to solve this collective action problem. If every middle- and lower-income American managed to save up and buy just one share of stock per month — and vote them in corporate elections — I think a lot of inequality might disappear very quickly.

            What does it mean when we observe that Americans don’t do this? Sometimes a collective action problem is only a collective action problem. And sometimes it’s a revealed preference.

            I’m not honestly sure which it is here, but I can easily think of social media approaches that might facilitate coordinating the project.Report

      • Avatar Bill Woolsey in reply to Michael Cain says:

        Michael Cain:

        There are actually theories that suggest there is an optimal amount of saving and investment, but the notion that it is only “capitalism” if consumption is on the golden rule growth path would be foreign to such theories.

        Even if there were no modern factories because saving was too low to generate enough investment to building any wouldn’t mean that the resulting order was not capitalist.

        In fact, if we image an economic order with many poor people would hardly saved anything, and then taxed them all and gave it all to a few folks, because they would save an invest, which would allow for more production–the result would not be a deviation from capitalism.

        Now, I can conceive of an argument that inequality is good because those with the higher incomes save and invest more, and that this leads to great future benefits due to industrialization.

        In fact, I think it is a bit of a bastardized Marxism. “Capitalism” is “good” because it leads to industrialization, which allows it to birth mankind’s final end, socialism. In Marxism, profit = capital income = saving = investment = industrialization (more or less.) Capitalism is the stage of history where profit, or capital income, is save by the capitalists and used to build net worth, more capital goods, and industrialize the entire world.

        In my view, this is just wrongheaded. Capitalism isn’t a stage of history. Whether or not capital income is saved or not has nothing to do with it.Report

    • Avatar Roger in reply to Bill Woolsey says:

      Bill are you serious? You think the outcome of free and voluntary interactions of 7 billion people leads to perfectly equal out ones on every dimension?

      Are you familiar with how free enterprise works?Report

      • Avatar DensityDuck in reply to Roger says:

        ” You think the outcome of free and voluntary interactions of 7 billion people leads to perfectly equal out ones on every dimension?”

        Hey, it makes at least as much sense as the notion that welfare and child-support payments are going to stop poverty and single motherhood.Report

        • Avatar Morat20 in reply to DensityDuck says:

          I was under the impression they were designed to prevent people starving to death and allow them to afford shelter, not cure poverty. Much less single motherhood.

          If you were going to cure poverty, welfare payments would have to be a LOT higher — and single motherhood? What on earth does money have to do with it? Turn the money into a husband?

          You know, if real liberals were as asinine as the ones in your head, I wouldn’t vote for them either.Report

          • Avatar Bill Woolsey in reply to Morat20 says:

            Does capitalism require inequality?

            No.

            I can come up with scenarios where everyone has the exact same everything and there is still trade. You don’t require different preferences for there to be trade.

            Everyone is a independent farmer. Technology is such that growing small amounts of all food types is less productive than speciallization.

            Each former concetrates on one crop, sells it, and everyone buys a little from all the other farmers. We eat the same thing, but there is exchange.

            It is very unlikely that the real incomes that everyone got from this would be the exact same. But if there were, it would still be capitalism.

            It would not be the case that if it so happened that everyone had the exact same real income it would no longer be a capitalist system because there is no inequality.

            The famers all own their own land. There is private property in the means of production. Suppose they all construct farm implements and they belong to them. There is private ownership of capital.

            Now, I is unlikely that all of the land and equipment owned by each farmer would always be worth exactly the same amount, but if it were, it wouldn’t suddenly stop being capitalism.

            Against, capitalism doesn’t require inequaility. It may generate inequality, and some kind of tax and transfer scheme that tries to prevent all inequality might have adverse effects on capitalism. But that is true of any rewards based system, not just capitalism.Report

            • Avatar MFarmer in reply to Bill Woolsey says:

              “It may generate inequality”

              That’s more accurate than saying it requires inequality. But human existence generates inequality. Socialism generates inequality. Any economic system designed would generate inequality, because inequality is a reality, even if all people agreed to create a system so that all can be equal, there would still be inequality, because there is no such thing as perfect equality. We would have to be something other than humans for there to be perfect equality. It’s true that some systems can create more inequality than others, and so far the socialist system has won that award, if we’re talking about the inequality between the dominators and the dominated. I think capitalism created more diversity, even though it generated inequality too.Report

              • Avatar Roger in reply to MFarmer says:

                With even a few million people and any given random distribution of wealth there are more potential distributions than there are subatomic particles in the universe. Exactly one of these distributions is equal according to any one persons view. Interestingly everyone rlse will probably disagree with this view So yes. Capitalism statistically must be unequal.Report

          • Avatar Roger in reply to Morat20 says:

            Divide the 900 plus billion in means tested transfer payments by the number of poor and they are all middle class. It’s magic.

            We spent a week on inequality. Did some people lose their notes?Report

            • Avatar Jesse Ewiak in reply to Roger says:

              Obviously, you did, since it was pointed out to you that about half that 900 billion was marked for sick old people and the rest of it was scattered into different programs that had different requirements and in reality, there wasn’t one person on welfare getting benefits from all 79 programs.

              Welfare doesn’t make poor people middle class. It makes being poor bearable for a segment of society.Report

              • Avatar Roger in reply to Jesse Ewiak says:

                Jesse

                Do the math. Almost one trillion in means tested transfer programs. Either the programs are going to the poor and they are thus not poor, or they are not going to the poor in which case they are misdirected.

                Go back and re read the post. The retort that nobody gets all 79 programs is just silly. Nobody suggests they do. The math is the math. Our poor may lack dignity per some but they don’t lack a lifestyle that would make 95% of humanity jealous.Report

  10. Avatar Tim Kowal says:

    True, neither the “uber-capitalists” nor the big-government statists want to give the people a tour of their sausage factories. We all know this: Whenever it’s not election season, we bloggers are doing our best to explain why capitalism is cold and cruel, or why statism is arbitrary and unresponsive. Each candidate will do their best to cast their opponent as representing the worst attributes of his respective governing philosophy by using what’s available in the public record. And, if they can get their opponent to cough them up, their private records, too. Maybe Romney has something out of the ordinary to hide in the private record. But just as likely not. Capitalism, particularly the financial sector, is ugly even when it’s on the up and up. Even uglier when you let the other guy do the spinning. Uglier still when the other guy is the Democratic presidential campaign. The lefty media has gotten two weeks out of SEC filings showing Romney’s legal title with Bain, which, whatever they mean, certainly don’t impute actual knowledge, particularly in light of the substantive evidence (i.e., of actual Bain officials) to the contrary. For heaven’s sake, were Romney to release all the tax returns, board minutes, and whatever else the media and Obama campaign are demanding, there’d be enough misdirection for two elections.

    Romney has answered the Bain question. It’s same one candidate Obama gave to demands for his academic transcripts. And it’ll play out the same way: The information is immaterial, so the demands will fade away—Romney just won’t be able to make believable claims to transparency. (Obama can’t, either, but that doesn’t stop him.)

    The real upside for Obama with all this Bain talk is that he was able to slide this by: http://www.nationalreview.com/corner/309300/obama-ends-welfare-reform-we-know-it-robert-rector. Remember this when employment numbers suddenly improve in the coming months. While the media was too busy wondering about what Romney wasn’t doing a decade ago, they neglected to watch what the President actually was doing.Report

    • Avatar Rod in reply to Tim Kowal says:

      With all due respect, Tim (and you’re likely my favorite conservative on this site), how can Bain possibly be immaterial to Romney’s campaign? I mean he’s only touting his business acumen as his number one and only qualification for the office. You never hear him saying squat about his term as governor of Mass. Which is odd when you think about it because a governorship, aside from the foreign policy aspect, is the closest equivalent to the job description of a president as you’re going to get. A heck of a lot closer than being a venture/equity/vulture/whatever capitalist.Report

    • Avatar trizzlor in reply to Tim Kowal says:

      Tim, this whole argument that capitalism is a cold-hearted mistress and a candidate can’t defend it in front of the voting public because they get frightened by big words like outsourcing is getting pretty darn rich. If Romney can’t defend his record at Bain then he should stop running on it, and if he can’t accurately explain the principles of capitalism that he passionately believes in then he doesn’t deserve to be president. Yes, he’s answered the Bain question, and his response was “I wasn’t there” and “We didn’t do it”. The fact that there exist dozens of perfectly reasonable explanations does not absolve him of the responsibility to present them.

      Here’s an idea, Romney can put out a 50 point plan on his web-site explaining what he did at Bain and why that experience would make him a good president; he can get some eggheads and fact-checkers from both parties to vet the plan and give us their interpretation; he can use their quotes and some choice passages from the plan itself in his campaign ads. Let’s not pretend that the pros and cons of Bain & Co. are more difficult to explain than the myriad of serious problems facing this great nation.Report

      • Avatar Tim Kowal in reply to trizzlor says:

        Most Americans say they want less government, and 70% say they love free enterprise, according to Arthur Brooks. Yet we consistently re-elect legislators who cartelize florists and taxi drivers. A majority of Americans disapprove of the Obama administration’s health care reforms, yet a 2010 CBS News/New York Times poll showed 64% think government should provide health care to everyone. There’s no guiding principle here. Any reasonably careful observer of American politics knows that asking a politician to defend every tough outcome of free market capitalism is a fool’s errand. (As if there were such a thing as free market capitalism—the task is also much more difficult, requiring an explanation of how market forces compensate for the distorted signals caused by regulation.) It’s a Morton’s Fork: release your tax returns and we’ll skewer you; don’t release your tax returns and we’ll skewer you.Report

        • Avatar trizzlor in reply to Tim Kowal says:

          There’s no guiding principle here.

          Or maybe the guiding principle is “I err on the side of free-markets except for boundary cases where markets fail” which leads Americans to want taxi drivers to cover poor areas and health insurance companies to cover genetic disorders and … well the florists thing is just fished up. I understand your hesitance to discuss difficult concepts during a campaign, but that is exactly what a good president is expected to do. Keeping your powder dry for the off-season makes it look like you can’t handle the big leagues, and the implication that Americans can’t handle conflicting information isn’t helping.

          Are you honestly satisfied with Romney’s actual answer on Bain? Or are you satisfied with getting the heat off of a candidate that has other positive qualities? Because if it’s the latter then you’re doing a disservice to the voter.Report

        • “A majority of Americans disapprove of the Obama administration’s health care reforms, yet a 2010 CBS News/New York Times poll showed 64% think government should provide health care to everyone. There’s no guiding principle here.”

          As I understand the details of the group that disapprove of the PPACA, about one-third disapprove of it because it doesn’t go far enough. That is, they don’t like the PPACA because they really wanted single-payer, or at least a public option. I’m doing this from memory, but I believe that if you add those that approve of the PPACA and those who wanted single-payer/public option, you get about 65%. So the polls are both consistent, and establish a guiding principle: roughly two-thirds of the public wants a health care financing system (which is what we’re really talking about here) that looks more like the Canadian/European models, and less like the free market.

          I’ve forgotten which conservative said it, and exactly when, but they said something to the effect of, it is critical to block the passage of single payer in Congress, because the global evidence suggests that once in place, it is so popular it is impossible to repeal. Bill Buckley back in the early 1990s?Report

    • Avatar Jakop in reply to Tim Kowal says:

      Tax returns and college transcripts; really? I mean REALLY?

      Romney hasn’t been forthcoming with his college transcripts either, BUT Obama has released twelve years of tax returns (http://www.taxhistory.org/www/website.nsf/Web/PresidentialTaxReturns/)

      So I don’t get it? How can you or anyone else point to Obama not releasing college transcripts as if that shows anything. And lets not even start to talk about Romney’s birth certificate. Or his grand-dad’s five wives….Report

      • Avatar Bob Wallace in reply to Jakop says:

        Can anyone explain why calling for the release of Obama’s college transcripts is anything but racism?

        What might it be other than a desire to find some evidence that Obama made it to the top, not on his merits, but because of some form of affirmative action?Report

        • Avatar Jaybird in reply to Bob Wallace says:

          Bob, is this the first time that folks have agitated to see the college transcripts of a guy running for president?

          If it’s not, could you allow for the *POSSIBILITY* that it *MIGHT* be for reasons similar to the reasons that people have agitated to see other college transcripts of other guys running for president?Report

          • Avatar Bob Wallace in reply to Jaybird says:

            I’ve never heard of a request to see someone’s college transcripts.

            PBO has been out of college since 1983 (if I looked on the right site). He graduated from Columbia in 1983 and entered law school at Harvard in 1988. They’re asking for school records from 30 years ago.

            Give me a context that makes since outside of “How did this nCLANG get into Harvard Law?”.

            Why are they not asking about Romney’s 1975 degree from Brigham Young with a BA in English? Obama got his BA in political science from Columbia, a major university. How did Romney get into the top law school with a degree in English from BYU?Report

            • Avatar Jaybird in reply to Bob Wallace says:

              Not even Dumbya’s? Come on. Wrack your brain. Try to remember.Report

              • Avatar Bob Wallace in reply to Jaybird says:

                No, I don’t recall anyone asking for George W’s transcripts.

                I do recall something about one of his professors talking about him not being a very good student. But no widespread call to see his transcripts.Report

              • Avatar Jaybird in reply to Bob Wallace says:

                Can you see how someone who does remember people calling for the transcripts of Dumbya would see your request for an explanation of how requests for Obama’s transcripts aren’t racist?Report

              • Avatar Bob Wallace in reply to Jaybird says:

                My search did not find people calling to see GW’s transcript. What happened, best I can tell, is that a reporter managed to get it (and Gore’s) and released them.

                Do you have some references to a call for Bush’s transcripts? Anything like is happening now with Obama’s? I’d like to see some evidence that there was a call to see GW’s transcripts if you’ve got it.Report

              • Avatar Jaybird in reply to Bob Wallace says:

                So you have newspapers publishing the transcripts, but don’t believe that anyone was calling for the transcripts?

                For the record, I can’t find an article from 1999 or 2000 asking for the transcripts.

                Much of that, I suppose, is due to the fact that the transcripts were published by March of the election year.Report

              • Avatar Bob Wallace in reply to Bob Wallace says:

                The newspaper today has the story of a car wreck.

                That proves that someone was calling for a car wreck?

                I remember quite a bit of discussion about how apparently dumb GW was/is. And how he probably got just about everything in his life, including not being charged with desertion, because of who his father was. But I recall no great outcry to see his transcripts.

                I did my search from 2008 back to 1990. I found only the fact that some reporter had unearthed Gore’s and Bush’s transcripts.Report

              • Avatar Stillwater in reply to Jaybird says:

                I think you have to establish a) the context of the request and b) both how wide spread that request was and what purpose it was serving to say that “both sides do it”.

                For the record, I don’t remember anyone from the Democratic party ever asking to have GW’s transcripts published.Report

              • Avatar Jaybird in reply to Stillwater says:

                I’m not saying “both sides do it”. I’m saying “there are more reasons than racism to want to see Obama’s transcripts”.

                Here’s a fun question: have the transcripts of presidential candidates been published by this point in the campaign in the past?

                If the answer is “yes”, can we conclude that there is a precedent for people knowing what the grades of the candidates were by this point in the cycle?

                If the answer is “yes”, does that give us any ground at all to wonder if there might be a reason other than “racism” when it comes to Obama’s grades?Report

              • Avatar Bob Wallace in reply to Stillwater says:

                I’m saying “there are more reasons than racism to want to see Obama’s transcripts”. – Jaybird

                And those reasons are? That is my original question and you have danced around it.

                Have any college transcripts other than Gore’s and Bush’s been published before?

                In the case of Gore/Bush I would imagine that it was because one was perceived as significantly smarter than the other. That, my guess, is the reason their transcripts came to light.

                There is no comparison of Romney/Obama relative intelligence in this call. It started long before the Republicans had candidates identified. What is the motivation for asking to see Obama’s transcript if it is not racism?

                There may be a good reason. I just can’t find it.Report

              • Avatar Tim Kowal in reply to Stillwater says:

                Typically I go out of my way not to respond to tired and baseless accusations of racism. But since the question is (nominally) relevant and I had the tab open, here’s this: http://www.nationalreview.com/media-blog/309811/why-obamas-transcripts-matter-greg-pollowitz

                I think the reasons are weak, but no weaker than the reasons for releasing tax returns, which I understand merely to be to arouse the ire of average Americans who file short forms at H&R Block—i.e., specifically for prejudicial value rather than probative value.Report

              • Avatar Stillwater in reply to Stillwater says:

                I’m not saying “both sides do it”. I’m saying “there are more reasons than racism to want to see Obama’s transcripts”.

                That may be true, but are you suggesting that non-racist motivations actually do account for the entirety of the requests, or only that it possibly accounts for the entirety of the requests?Report

              • Obama ’08 was the least qualified candidate in decades. His Harvard education, law review presidency, “constitutional scholar” [instructor, not resident faculty at University of Chicago], all part of the narrative.

                Smarter than Mitt Romney, who not only got his law degree from Harvard in 3 years but an MBA too? As a married man?

                That Barack obama is smarter than John McCain, who was last in his West Point class—was fairly self-evident. That his intelligence made up for his lack of experience in ’08 was a viable argument vs. McCain.

                That Barack Obama’s record as president justifies his re-election, or that he’s smarter than Mitt Romney in the way he was smarter than John McCain—well, we’re going to take a vote on that in 3 months or so.

                Racism? C’mon, BobW. That’s bullshit. We already know that Joe Biden is dumb as rock. It’s not even worth mentioning. He lost his debate with high school graduate Sarah Palin, fer crissakes, and that takes some serious intellectual inferiority.Report

              • Avatar Bob Wallace in reply to Stillwater says:

                Well, that was kind of an interesting read.

                So here are the issues:

                Obama might not have taken classes in a foreign language. We need to know whether he did or did not. 30 years ago.

                Obama might have “lied on his application to gain admittance as a foreign student”. Of course we have zero reason to suspect that.

                Obama’s “hiding the fact that most of the classes he took might — just might — lean slightly left”. OMG, he might have slight socialistic ideas in his head.

                Well, that right there – that wipes out any thought that the motivation might be racist. Yes sir, that does it.

                The reasons for looking at Romney’s tax forms is to evaluate the recent behavior of someone we are interviewing for a job.Report

              • Avatar Bob Wallace in reply to Stillwater says:

                Tom, I’m going on record as someone who thinks your input is generally worth less than zero. I think you are so deeply enmeshed in your political belief system that you can’t recognize the truth if it bites you in the nuts.

                To make a claim such as this “We already know that Joe Biden is dumb as rock. It’s not even worth mentioning. He lost his debate with high school graduate Sarah Palin, fer crissakes, and that takes some serious intellectual inferiority.”

                Let me just say that I think the best strategy for me is to consider you unwelcomed noise in the system and, in general, to avoid interactions with you from this time forward.

                Have a nice day.Report

              • Thank you, Bob. But Biden did lose to Palin.Report

              • Avatar Tim Kowal in reply to Stillwater says:

                Dude didn’t just crawl from under a rock. He was Governor of Massachusetts for crying out loud. That was pretty recent behavior. And he’s giving us his two most recent returns.

                No, the info the Obama folks want is not the recent stuff. They want the 11, 12, and 13 years old stuff. They’ve gotta turn the corner on their outsourcing misstatements. Whatever this is, it’s not “due diligence,” and it’s wrong to pretend otherwise.Report

              • Avatar Bob Wallace in reply to Stillwater says:

                Romney has hardly mentioned his tenure as governor. He made a big deal about being a successful businessman and job creator. Governor, his record wasn’t so hot. 49th out of 50 in terms of job creation, was it not?

                Now, I don’t know about the request for 11, 12, 13 year old tax records. All I’ve heard is for a release for more than two. I’ll be glad to look if you’ve got links to requests from Obama’s team for 2000 era tax records.

                Just a thought. You might be confusing discussion of whether Romney was running Bain back in 1999-2001 (those the right years?) when Bain was shipping a lot of American jobs overseas.

                Remember, Mitt has said that he was the CEO during those years, he signed a form stating that he was running the company those years. There’s a different “looking” going on there, but it’s not about his taxes. Part of it is whether he played an active role in sending jobs overseas. And part of it is whether he committed a felony.

                Romney signed two documents both under penalty of perjury. One said, in essence, that he was running Bain. The other said that he wasn’t. There’s a legitimate question there that goes to character. (He’s beat the statute of limitations.)Report

              • Avatar Mike Schilling in reply to Stillwater says:

                But Biden did lose to Palin.

                Only in the swimsuit competition. (Biden rocked that evening gown.)Report

              • Avatar trizzlor in reply to Stillwater says:

                And he’s giving us his two most recent returns.

                Romney has released one full and one partial tax-return from the past two years where he was actively campaigning and obviously knew they would be scrutinized. This is the same guy who has multiple conflicting SEC statements about a company he claims he wasn’t involved with at all, and a tax-shelter that he shifted over to his wife one week before becoming governor. Does that sound well vetted to you?

                The argument that any amount of private information spills blood for the sharks is largely disproven by the fact that both Obama and Biden released a decade’s worth of returns without any controversy.Report

              • Avatar Bob Wallace in reply to Stillwater says:

                Romney released 23 years of his tax returns to the McCain team when he was applying for the vice presidency position.

                McCain vetted Romney and picked someone else.Report

              • Avatar James Hanley in reply to Stillwater says:

                e lost his debate with high school graduate Sarah Palin, fer crissakes

                A) Palin also has a B.A. from the University of Idaho.

                B) Palin did not win the debate with Biden, although she did a good job of rallying a certain subset of partisans who like simplistic dogma.Report

              • Avatar Michelle in reply to Stillwater says:

                No, the info the Obama folks want is not the recent stuff. They want the 11, 12, and 13 years old stuff. They’ve gotta turn the corner on their outsourcing misstatements. Whatever this is, it’s not “due diligence,” and it’s wrong to pretend otherwise.

                Actually, the returns they seem most interested in are those from 2009, which might show that Romney managed to pay no taxes at all and/or that he took advantage of a program of tax amnesty for previously undeclared foreign accounts.Report

              • Avatar Mike Schilling in reply to Bob Wallace says:

                Good thing neither of them wants to work at Google. They ask for verification of your GPA , even if it was 30 years ago.Report

              • Avatar Bob Wallace in reply to Jaybird says:

                I just did a search. What I found is that the Washington Post somehow got a copies of both Bush’s and Gore’s transcripts and SAT scores and released them.

                http://www.insidepolitics.org/heard/heard32300.html

                That I recall, with the reminder.

                That’s not the same as members of one political party requesting the transcript.Report

              • Avatar Mike Schilling in reply to Bob Wallace says:

                Look at those SAT scores. And people complain about Affirmative Action students being unqualified!Report

              • Has Romney released his college transcripts? If so, I suspect it’s because he was mostly a good student who didn’t have any wacky courses and/or wacky teachers (that is, there is no “HE TOOK A COURSE FROM LEO STRAUSS!!!!!” blogpost hiding in his transcript).

                If he hasn’t, I think it’s safe to assume that he’s got a ‘D’ in something or other back there. (Full Disclosure: I have a ‘D’ in Organic Chemistry hiding in my Sophmore Closet.)

                For similar reasons, I suspect that Obama has either some mediocre grades or, let’s check the google, he graduated with a BA “where he majored in political science with a specialty in international relations” in 1983. This tells me that he is likely to have (at least) one course with the name “Communism” in the title. There are a lot of people out there who would be delighted to make hay from “Communism” *ONE* *LAST* *TIME*.

                There’s not a lot of upside for releasing the transcripts from way back when and a bit of downside.

                Of course the possiblity also exists that he’s playing 13-dimensional chess and he’s got all As, and a B in “Russian Diplomacy” (“the topic didn’t really hold my interest”) and he’s waiting until Romney releases his mostly Bs and Cs to lay that particular smack down.Report

              • Avatar Patrick Cahalan in reply to Jaybird says:

                If you’re running for President, and you think something might be hard to explain, release it right away. Like, the day the primary is over.

                Let the opponent blather about it for two weeks and move on. If they keep bringing it up, you get to start to make fun of them for it… “The country is going to hell in a handbasket and the best dirt they can come up with is stuff I released voluntarily at the beginning of this campaign?”Report

      • Avatar Kazzy in reply to Jakop says:

        Interesting that folks here have turned to the tax return/college transcript false equivalency now. It’s almost like I just heard that same silliness somwhere else…

        Of course! Donald Trump on Sean Hannity. That’s a couple of good horses to hitch your wagon to.Report

    • Avatar Don Zeko in reply to Tim Kowal says:

      Just for fun, here are some governors that supported making exactly this change to welfare in 2005:

      Mike Huckabee
      Tim Pawlenty
      Jeb Bush
      Mitch Daniels
      Rick Perry
      Mitt Romney

      So yeah. This is definitely a dirty, partisan, election-year trick….
      source:
      http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/19/the-obama-administration-fires-back-on-welfare/Report

      • Avatar Tim Kowal in reply to Don Zeko says:

        I see the governors’ letter was directed to Senate Majority Leader Frist, urging him to present a Senate bill authorizing these waivers, not to the unelected Secretary of the HHS. You may think bicameralism and presentment is quaint or immaterial, but I do not.Report

  11. Avatar wardsmith says:

    This just in, Elias Isquith is going to bite the handlers that feed him and write a multi-part expose on how Democrat darling George Soros made his billions.Report

  12. Quite the embarrassment of riches: Sullivan, Drum, Chait, Yglasias, conservative turncoat David Frum. A sneer at David Brooks just to stay in practice, topped off with a HT toward some guy @ Balloon Juice. Sweet.

    All in one place, each with a force from a source we all endorse, a horse is a horse of course of course.

    But was Ezra Klein on vacation? Something’s missing here.Report

  13. Avatar MyName says:

    A good article, but I think the American opinion on capitalism is much simpler: they like the value creation part, but have a dislike for people who make a fortune without creating anything of value. That’s why the Bain attacks are sticking.Report

  14. Avatar Jakop says:

    As far as I can tell, Americans hate corporations and corporatism. They don’t hate business, or free-enterprise. They see big corporations as a threat to their freedom. The sucky thing is that the merits of free-enterprise are being used to defend corporate interests, and a lot of Americans are pretty sick of it.Report

  15. Avatar Zach says:

    One question that I haven’t seen asked: can Romney identify a Bain investment that lost Romney and his partners significant amounts of money (other than in 2008 when credit markets froze)?

    There are other private equity firms who bid against Bain to buy companies. Thus, these acquisitions should be fairly priced and Bain should lose money pretty regularly if it’s balanced against these huge gains we hear about. My biggest beef with what I know about Bain is that it completely insulates from downside in its investments (other than lost time) and abuses corporate law and tax law to put people on the hook for failure who had nothing to do with the acquisition.Report

  16. Avatar BlaiseP says:

    Yet while Brooks and his ilk rend garments over the crypto-commies slinking through the US voting public, it’s worth keeping in mind the unstated assumption that undergirds their worries: Mainly, that capitalism as Romney performed it is capitalism—full stop—rather than a particular (and particularly callous) variant.

    It’s high time America came to terms with the sight of capitalism, all naked and dripping wet, just climbing out of the shower in the morning, before it dries off and climbs into that business suit. Nothing particularly callous about capitalism. Granted, it sure does look better in a bespoke suit than peering into the bathroom mirror trying to trim the hairs out of its nose.

    As with the bespoke suit, capitalism looks better when it’s behaving itself in accordance with the rules of the game, you know, making an honest buck, for not all bucks are honestly acquired. In the heart of Munich is the Englischer Garten where a startled visitor can usually find naked Germans lounging about on the grass just past the Japanese teahouse. Not a particularly beautiful or prurient sight unless the sight of wrinkly old health nuts doing yoga exercises is your thing.

    Romney might be just the guy to straighten out what’s gone wrong in American Capitalism, based on the principle of Set a Thief to Catch a Thief. But when we set such a thief on the task of catching others, a common enough principle in every sort of intelligence operation, we start with by understanding we are sending a manifest thief and should not be surprised if he continues in this line of work, however little honour there might be among thieves. Romney’s long track record of gouging out personal profit is one thing. But look at who’s backing Romney: the very sort of people we would hope government would regulate. This doesn’t bode well for his chances with the alienated middle class who built the scaffolding from which their jobs were hanged.Report

  17. Avatar Scott says:

    I think that with the recent announcement of the increase in jobless claims and the fact the Barry’s job council has been AWOL for six months we should spend more time talking about Bain and not fact that the economy hasn’t left the crapper even after four years of “hope and change.”Report

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