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Thread: Five Destructive Myths re Economic Recovery

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    Five Destructive Myths re Economic Recovery

    Interesting article from Time...

    [B]What U.S. Economic Recovery? Five Destructive Myths[/B]

    By Rana Foroohar


    [I]Double dip[/I] is not a term that a government keen to extricate itself from the economic-crisis-management business likes to hear. A couple of weeks ago, the Obama Administration was poised to switch to growth mode. Then the ugly data started pouring in like the overflowing Mississippi. First-quarter GDP numbers showed a measly 1.8% increase, well short of the expectations of above 3%, and second-quarter estimates are not much better. Then came a report on housing-price declines that have not been seen since the Great Depression, followed by reports of consumer spending at six-month lows and weak manufacturing surveys. The worst was unemployment figures to make you cry: a mere 54,000 jobs were created in May, less than half of what was expected and less than a third of what is needed to lower a 9.1% unemployment rate.

    You can hardly blame Council of Economic Advisers head Austan Goolsbee for picking this moment to retreat to his tenured university post in Chicago. The professor tried to put a good face on things, brushing away worries of a double dip and citing stiff but temporary "headwinds" from such factors as the Japanese-nuclear-disaster-related supply shocks and higher gas prices. Fed Chairman Ben Bernanke was somewhat more sober, admitting that the recovery was proving to be "uneven" and "frustratingly slow." Yet he gave no hint of being willing to helicopter in a third round of fiscal stimulus — at least not yet. "Monetary policy," he said, "cannot be a panacea." Or as Goolsbee put it, it's time for the private sector to "stand up and lead the recovery."

    If only. There may be $2 trillion sitting on the balance sheets of American corporations globally, but firms show no signs of wanting to spend it in order to hire workers at home, however much Washington might hope they will. Meanwhile, the average American is feeling poorer by the week. "If one looks at unemployment and housing, it's clear that for all practical purposes, we have yet to fully get out of recession," says Harvard economist Ken Rogoff, summing up what everyone who doesn't live inside the Beltway Bubble is thinking. While the White House's official 2011 growth estimate, locked in before Japan and the oil shock, is still 3.1%, most economic seers are betting on 2.6%. That's not nearly enough to propel us out of an unemployment crisis that threatens to create a lost generation of workers who can't find good jobs and may never find them. Welcome to the 2% economy.

    While the Administration is taking a sort of "move along, nothing to see here" approach, Republicans are trying to pin every economic problem on Obama in the run-up to the 2012 election. Let's be clear: the slow growth the U.S. is experiencing is not an Obama-specific problem. Many of the ingredients in it were already baked into the economy and were simply laid bare by the financial crisis. According to research by Rogoff and economist Carmen Reinhart, it takes four years after a financial crisis just to get back to the same per capita GDP level you started with, and there's no doubt things would have been dramatically worse had the Administration not taken all the action it did in the wake of the crisis.

    But at the same time, the growth problem is Obama's. Every President inherits his predecessor's economy; indeed, it's often what gets him the job. It's then up to the new guy to change the numbers as well as the debate. Now it looks as if Obama is losing that debate. The Republicans have pulled off a major (some would say cynical) miracle by convincing the majority of Americans that the way to jump-start the economy is to slash taxes on the wealthy and on cash-hoarding corporations while cutting benefits for millions of Americans. It's fun-house math that can't work; we'll need both tax increases and sensible entitlement cuts to get back on track. Yet surveys show 50% of Americans think that not raising the debt ceiling is a good idea — that you can somehow starve your way to economic growth.

    No wonder the rest of the world is so worried about our future. Sadly, other regions won't be able to help us out, as happened in 2008. Europe is in the middle of its own debt crisis. And emerging markets like China, which helped sustain American companies by buying everything from our heavy machinery to our luxury goods during the recession, are now slamming on the growth brakes. Why? They're worried about inflation, which is partly a result of the Fed's policy of increasing the money supply, known as quantitative easing. Much of that money ended up in stock markets, enriching the upper quarter of the population while the majority has been digging coins out from under couch cushions. Investor money also chased oil prices way up (which hurts the poor most of all) and created bubbles in emerging economies. Now these things are coming back to bite us.
    All this sounds complicated, and it is. But it's important to understand that our economy has changed over the past several decades in important and profound ways that politicians at both ends of the spectrum still don't get. There are half a billion middle-class people living abroad who can do our jobs. At the same time, technology has allowed companies to weather the recession almost entirely through job cuts. While Democrats may be downplaying the bad news, Republicans, obsessed with the sideshow that is the debt-ceiling debate, haven't offered a more cohesive explanation for the problems or any real solutions. Rather, both sides continue to push myths about what's happening and how the economy will — or won't — recover. Here are five of the most destructive myths and why we need to figure out a different path to growth.

    [B]Myth No. 1: This is a temporary blip, and then it's full steam ahead[/B]
    True, only 12.2% of economists surveyed in the past few days by the Philadelphia Fed believe that the current backsliding will develop into a double-dip recession (though that percentage is up significantly from the start of the year). Avoiding a double dip is not the same as creating growth that's strong enough to revive the job market. In fact, there's an unfortunate snowball effect with growth and employment when they are weak. It used to take roughly six months for the U.S. to get back to a normal employment picture after a recession; the McKinsey Global Institute estimates it will take five years this time around. That lingering unemployment cuts GDP growth by reducing consumer demand, which in turn makes it harder to create jobs. We would need to create 187,000 jobs a month, growing at a rate of 3.3%, to get to a healthy 5% unemployment rate by 2020. At the current rate of growth and job creation, we would maybe get halfway there by that time.
    [B][/B]
    [B]Myth No. 2: We can buy our way out of all this[/B]
    While a third round of stimulus shouldn't be off the table in an emergency (Obama has already indicated it's a possibility if things get much worse), the risk-reward ratio isn't good. For starters, our creditors — the largest of which is China — would squawk about the debt implications of doling out more money, not to mention the risk of creating hot-money bubbles in their economies. That's almost beside the point, though, because the stimulus — which has taken the form of Fed purchases of T-bills designed to reduce long-term interest rates and make homeowner refinancing easier — isn't much help if homeowners don't have jobs that allow them to make any payments at all. Although foreclosures are declining, the supply of foreclosed homes for sale is undermining the real estate market, which is dampening consumer spending and sentiment. "It's time to move beyond financial Band-Aids," says Mohamed El-Erian, CEO of Pimco, the world's largest bond trader. "It's clear that the stimulus-induced recovery hasn't overcome the structural challenges to large-scale job creation."
    [B][/B]
    [B]Myth No. 3: The private sector will make it all better[/B]
    There is a fundamental disconnect between the fortunes of American companies, which are doing quite well, and American workers, most of whom are earning a lower hourly wage now than they did during the recession. The thing is, companies make plenty of money; they just don't spend it on workers here.

    Half of Americans say they couldn't come up with $2,000 in 30 days without selling some of their possessions. Meanwhile, companies are flush: American firms generated $1.68 trillion in profit in the last quarter of 2010 alone. But many firms would think twice before putting their next factory or R&D center in the U.S. when they could put it in Brazil, China or India. These emerging-market nations are churning out 70 million new middle-class workers and consumers every year. That's one reason unemployment is high and wages are constrained here at home. This was true well before the recession and even before Obama arrived in office. From 2000 to 2007, the U.S. saw its weakest period of job creation since the Great Depression.
    Nobel laureate Michael Spence, author of [I]The Next Convergence[/I], has looked at which American companies created jobs at home from 1990 to 2008, a period of extreme globalization. The results are startling. The companies that did business in global markets, including manufacturers, banks, exporters, energy firms and financial services, contributed almost nothing to overall American job growth. The firms that did contribute were those operating mostly in the U.S. market, immune to global competition — health care companies, government agencies, retailers and hotels. Sadly, jobs in these sectors are lower paid and lower skilled than those that were outsourced. "When I first looked at the data, I was kind of stunned," says Spence, who now advocates a German-style industrial policy to keep jobs in some high-value sectors at home. Clearly, it's a myth that businesses are simply waiting for more economic and regulatory "certainty" to invest back home.

    [B]Myth No. 4: We'll pack up and move for new jobs[/B]
    The myth of mobility — that if you build jobs, people will come — is no longer the case. In fact, many people can't move, in part because they are underwater on their homes but also because the much heralded American labor mobility was declining even before this whole mess began. In the 1980s, about 1 out of 5 workers moved every year; now only 1 of 10 does. That's due in part to the rise of the two-career family — it's no longer an easy and obvious decision to move for Dad's job. This is a trend that will only grow stronger now that women are earning more advanced degrees and grabbing jobs in the fastest-growing fields.
    A bigger issue is that the available skills in the labor pool don't line up well with the available jobs. Case in point: there are 3 million job openings today. "There's a tremendous mismatch in the jobs market right now," says McKinsey partner James Manyika, co-author of a new study titled [I]An Economy That Works: Job Creation and America's Future[/I]. "It runs across skill set, gender, class and geography." A labor market bifurcated by gender, skill set and geography means that unemployed autoworkers in Michigan can't sell their underwater homes and retool as machinists in North Dakota, where homes are cheaper and the unemployment rate is under 5%.
    [B][/B]
    [B]Myth No. 5: Entrepreneurs are the foundation of the economy[/B]
    Entrepreneurship is still one of America's great strengths, right? Wrong. Rates of new-business creation have been contracting since the 1980s. Funny enough, that's just when the financial sector began to get a lot bigger. The two trends are not disconnected. A study by the Kauffman Foundation found an inverse correlation between the two. The explanation could be tied to the fact that the financial sector has sucked up so much talent that might have otherwise done something useful in Silicon Valley or in other entrepreneurial hubs. The credit crunch has exacerbated the problem. Lending is still constrained, and the old methods of self-funding a business — maxing out credit cards or taking a home-equity loan — are no longer as viable.

    So where does it all leave us? With an economy that still needs a major shake-up. There are short-term and long-term solutions. Job No. 1 is to fix the housing market. While the government is understandably reluctant to get deeper into the loan business, it's clear that private markets aren't able to work through the pile of foreclosures quickly enough for house prices to stabilize. If the numbers don't improve in the next month or so, it might be time for the government to step in and either take on more failing loans (a TARP for homeowners as opposed to investment banks?) or pass rules that would allow more homeowners to negotiate better terms with lenders.

    And let's not forget the youth-unemployment crisis. There's now a generation of young workers who are in danger of being permanently sidetracked in the labor markets and disconnected from society. Research shows that the long-term unemployed tend to be depressed, suffer greater health problems and even have shorter life expectancy. The youth unemployment rate is now 24%, compared with the overall rate of 9.1%. If and when these young people return to work, they'll earn 20% less over the next 15 to 20 years than peers who were employed. That increases the wealth divide that is one of the root causes of growing political populism in our country. While Republicans have pushed back against spending on broad government-sponsored work programs and retraining, it would behoove the Administration to keep pushing for a short-term summer-work program to target the most at-risk groups.
    But these are stopgaps. The real solutions, of course, are neither quick nor easy — making them especially challenging for Congress. It's a clichι that better education is the path to a more competitive society, but it's not just about churning out more engineers than the Chinese. The U.S. will also need a lot more welders and administrative assistants with sharper communication skills. There's an argument for a good system of technical colleges, which would in turn require a frank conversation about the fact that not everyone can or should shell out money for a four-year liberal-arts degree that may leave them overleveraged and underemployed. [URL="http://swampland.time.com/2011/06/07/bernanke-sharp-spending-cuts-could-hurt-the-economy/"](See if sharp spending cuts could hurt the economy.)[/URL]

    The other major issue is bridging the divide between the fortunes of companies and the fortunes of workers. Democrats and Republicans argue about whether and how to get American corporations to repatriate money so it can be taxed, and again they are missing the point. For starters, it's hard to imagine that crafty corporate lawyers won't find ways around any new rules. (That in itself is an argument for tax simplification that would reduce the loopholes that allow the 400 richest Americans to pay 18% income tax.) The bottom line is that we have to find ways to make the U.S. a more attractive destination for investment.

    One way to do that is by considering a third-rail term: industrial policy. It's a concept that needs to be rebranded, because Democrats and Republicans alike shudder at being associated with something so "anti-American." In fact, good industrial policy can be a useful economic nudge. It's not about creating a command-and-control economy like China's but about the private and public sectors coming together at every level, as in Germany, to decide how best to keep jobs at home. [URL="http://www.time.com/time/magazine/article/0,9171,2075364,00.html"](See "Why the Economic Recovery Is Slowing Down.")[/URL]
    The lesson of Germany is a good one. Back in 2000, the Germans were facing an economic rebalancing not unlike what the U.S. is experiencing. East and West Germany had unified, creating a huge wealth gap and high unemployment at a time when German jobs were moving to central Europe. The country didn't try to explain away the problem in quarterly blips but rather stared it directly in the face. CEOs sat down with labor leaders as partners; union reps sit on management boards in Germany. The government offered firms temporary subsidies to forestall outsourcing. Corporate leaders worked with educators to churn out a labor force with the right skills. It worked. Today Germany has not only higher levels of growth but also lower levels of unemployment than it did prerecession.
    In our politically polarized society, such cooperation may seem impossible. But Germany after the fall of the Berlin Wall was perhaps far more polarized. It is worth remembering that economic change tends to happen only during crises. We've survived the banking crisis. How we deal with the longer-range crisis — the crisis of growth and unemployment — will define our economic future for not just the next few quarters but the next few decades.

  2. #2
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    [U]TLDR Read-Between-the-lines Summary:[/U]

    Government is the answer. Government is your Savior. Government is the only solution.

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    I work in the private sector..for ONLY private sector company's. My practice is basically businesses and high net worth clients. THIS economy is getting worse. I see evidence everyday and it appears that just lately, it is getting worse.

    Go ahead LIL, post some internet site about how I am wrong. I'll pass it along to the clients that have lost their jobs. You pass it along to other civil servants. Deal.:rolleyes:

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    [QUOTE=Warfish;4060612][U]TLDR Read-Between-the-lines Summary:[/U]

    Government is the answer. Government is your Savior. Government is the only solution.[/QUOTE]

    Hardly what I took away from this, although the author is not shy to consider hybrid approaches (i.e. the German model), which is of course anathema to Supply-side thumping conservatives living off paradigms that died about twenty years ago and didn't work even then (i.e., the Reagan/Stockman approach).

    I know this article skewers one of your devoutly held ideas: if people need a job they should just move... obviously that has become much more complex as the author points out.

    It also skewers two other ideas: if corporations could simply be allowed to generate more profits they will reinvest in the U.S. workforce. That has been shown to be a complete bunch of hogwash.

    And finally, we need to encourage entrepreneurs through lower taxes. Yet structural changes in finance have made this very difficult.

    To me, what the author is suggesting is that you can't move a large-scale economy in a particular direction without coordination between government and industry. Of course, again, that is anathema to the Adam Smith crowd. Industry working with government? Outrageous. UnAmerican. Unpatriotic.

    Obama has not found the answer, any more than Bush did before him. Perhaps it's time to start looking past tired and obsolete models and think out of the box....

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    [QUOTE=long island leprechaun;4060694]I know this article skewers one of your devoutly held ideas: if people need a job they should just move... obviously that has become much more complex as the author points out.[/quote]

    It doesn't, actually. It says people are unwilling (a point I agree with), or are saddled with previous economic mistakes. But as I've said repeatedly, I don't give a **** if they are unwilling, and their economic errors are their problem to handle, not the taxpayers. No handouts will make people "willing" rather quickly, and no handouts will make those whove made mistakes face the consequences (bankruptcy or default) all that much faster, leading to the eventual time where they can try and re-make their lives afterwads.

    As for complexity, it's the same line Bit used in his "picking fruit is an advanced skill that requires generations of breeding and evolution to be able to do..." line. It's as lol now as it was when he made it.

    [QUOTE]It also skewers two other ideas: if corporations could simply be allowed to generate more profits they will reinvest in the U.S. workforce. That has been shown to be a complete bunch of hogwash.[/QUOTE]

    And again, that is a straw man. Investment requires a certain level of economic predictabillity, something that remains totally lacking in the current environment. As such, investment has predictably lagged, as Companies hold their capital for a time when their investment won't look so risky.

    Oh, and can you show us again where the bad company touched you? Here is a doll, show us on the doll.

    [QUOTE]And finally, we need to encourage entrepreneurs through lower taxes. Yet structural changes in finance have made this very difficult.[/QUOTE]

    And higher taxes will help?

    [QUOTE]To me, what the author is suggesting is that you can't move a large-scale economy in a particular direction without coordination between government and industry.[/QUOTE]

    You assume that we agree that Govt. should be trying to "move the economy in a particular direction" at all.

    We do not agree.

    [QUOTE]Of course, again, that is anathema to the Adam Smith crowd. Industry working with government? Outrageous. UnAmerican. Unpatriotic.[/QUOTE]

    Public/Private Partnerships? I'm more familiar with them than you might think, and can tell you that most I've seen result in a great boon for the Corporation involved at minimal gain for the public. Exactly the kind of Pro-Corporate boondoggle you'd usually be up in arms about.

    [QUOTE]Obama has not found the answer[/QUOTE]

    He's not even tried. When he puts forth, in writing, a plan/budget, then we can discuss his ideas. Tillt hen, he either has none, or is too politically fearful to put them out publicly.

    [quote]Perhaps it's time to start looking past tired and obsolete models and think out of the box....[/QUOTE]

    It's funny you think any of this is new or out of the box. Public/Private has been around for quite some time my friend.

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    [QUOTE=Warfish;4060612][U]TLDR Read-Between-the-lines Summary:[/U]

    Government is the answer. Government is your Savior. Government is the only solution.[/QUOTE]

    I don't know how you could accuratly comment on the thread if you didn't read the aritcle, it doesn't say anything like that at all, to me, it was a bleak "nothing will work like we are told it will" piece.

    Basically telling us how due to change in times and in the circumstances we live in Gov't spending won't help and unfettered private sector won't help thanks to globalization and the change in how the family income structure has changed.


    [QUOTE]It says people are unwilling (a point I agree with), or are saddled with previous economic mistakes.[/QUOTE]

    this ignores how in order for one to take a job in another state it either splits a family (something my family did in the 70's) or forces one parent to quit a job in order for the other to pursue one, which probably doesn't help their situation, just moves them. That and the idea that moving for work is some zero-sum game, which it isn't.

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    [QUOTE=piney;4060994]I don't know how you could accuratly comment on the thread if you didn't read the aritcle[/quote]

    Our differing interpritations of the authors intent does not imply a lack of reading on my part piney.

    The entire article is best summarized as "the free market has failed and will always fail, we need somethig new...soemthing with more Government".

    [quote]this ignores how in order for one to take a job in another state it either splits a family (something my family did in the 70's)[/quote]

    No it doesn't.

    I simply don't care in any way if your family has to split. I (the taxpayer) do not owe you welfare so your family can stay together, if work is available elsewhere. As you say, your family did it (and you turned out pretty good), and my family did it, more than once matter of fact, to make ends meet.

    Again, there is an entitlement mindset that is killing our Nation, that many things are owed to the people, things they should (and used) to have to work for, work that bettered them and our society, and did not cost us all to support the lazy, weak and stupid who refuse to earn their own keep, and instead demand it from others.

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    [QUOTE=Warfish;4061001]Our differing interpritations of the authors intent does not imply a lack of reading on my part piney.[/QUOTE]

    sorry, I took you TLDR as authentic, that you didn't read it.

    [QUOTE]The entire article is best summarized as "the free market has failed and will always fail, we need somethig new...soemthing with more Government".[/QUOTE]

    I didn't get that at all, again, it sounded more like, everything failed, gov't and the free market.

    [QUOTE]No it doesn't.

    I simply don't care in any way if your family has to split. I (the taxpayer) do not owe you welfare so your family can stay together, if work is available elsewhere. As you say, your family did it (and you turned out pretty good), and my family did it, more than once matter of fact, to make ends meet.

    Again, there is an entitlement mindset that is killing our Nation, that many things are owed to the people, things they should (and used) to have to work for, work that bettered them and our society, and did not cost us all to support the lazy, weak and stupid who refuse to earn their own keep, and instead demand it from others.[/QUOTE]


    there is the rub, I didn't really put getting welfare into the equation, and when I was talking about families and two person income households, to me, those people are rarely collecting welfare (if I lost my job today and my wife worked we would not be eligible to collect welfare, as I would assume, most two income households).

    So, you aren't so angry about unemployment as you are with welfare. Am I getting this right?

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    [QUOTE=piney;4061008]sorry, I took you TLDR as authentic, that you didn't read it.[/quote]

    My own fault. I tend to use "TLDR" as more of a "this is the TLDR Version for other readers to save them the effort of "Wall of Text"".

    [quote]So, you aren't so angry about unemployment as you are with welfare. Am I getting this right?[/QUOTE]

    Unemployment Benefits are too long as things stand today, and other entitlements far too generous. It creates a situation where it is more profitable/comfotable to live off the State, than to seek out new work, perhaps in a new area, and be a productive member of society.

    [url]http://en.wikipedia.org/wiki/Welfare_trap[/url]

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    [QUOTE=Warfish;4061023]My own fault. I tend to use "TLDR" as more of a "this is the TLDR Version for other readers to save them the effort of "Wall of Text"".



    Unemployment Benefits are too long as things stand today, and other entitlements far too generous. It creates a situation where it is more profitable/comfotable to live off the State, than to seek out new work, perhaps in a new area, and be a productive member of society.

    [url]http://en.wikipedia.org/wiki/Welfare_trap[/url][/QUOTE]


    I thought we contributed to unemployment funds when we work.

    I also am probably in the minority, and it probably seems to fly in the face of living in a city, but I don't know if I would categorize welfare as large drain on our tax dollar.

    I think there are other areas we are more wasteful and would be more productive focusing on, but we feel better with a more tangible aspect like a welfare recipient who is abusing the system.


    Not saying the system doesn't need to be reformed and policed better, but I just don't think if we eliminated all welfare it would help our economy or lower tax burdens much.

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    [QUOTE=piney;4061025]I just don't think if we eliminated all welfare[/QUOTE]

    /facepalm

    One of the things I hate about this forum is the baseless extrapolation of one viewpoint or opinion, into a massive all-or-nothing viewpoint.

    At no point have I proposed or supported "eliminating all welfare" or all unemployment.

    /sigh indeed

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    [QUOTE=Warfish;4061030]/facepalm

    One of the things I hate about this forum is the baseless extrapolation of one viewpoint or opinion, into a massive all-or-nothing viewpoint.

    At no point have I proposed or supported "eliminating all welfare" or all unemployment.

    /sigh indeed[/QUOTE]

    Sorry if that was the implication, I was merely making a point, not implying your own opinion.

    Sometime, when a conversation starts, it can just evolve. I was merely making a point that I don't think welfare is that big of a chunk of our national debt, and I tried to make the point by saying how if eliminated entirely I didn't think it would make a difference.

    it's not always about you man! ;)

    my turn to vent:


    what I hate about this forum is how conversations are never just allowed to organically grow. How every word typed is seen through a prism of indictment on one poster or another.

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    [QUOTE=Warfish;4060612][U]TLDR Read-Between-the-lines Summary:[/U]

    Government is the answer. Government is your Savior. Government is the only solution.[/QUOTE]

    Broad strokes?

    How about government (ours) is not evil. Government has worked before. Government is NOT the only solution though?

    Fair?

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    [QUOTE=piney;4061038]it's not always about you man! ;)[/quote]

    It isn't? :huh:

    [quote]my turn to vent:

    what I hate about this forum is how conversations are never just allowed to organically grow. How every word typed is seen through a prism of indictment on one poster or another.[/QUOTE]

    Yup, our "poli-sci reputation" seems to preceed each of us, as we're almost all long-timer vets in here.

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    [QUOTE=Warfish;4061001]Our differing interpritations of the authors intent does not imply a lack of reading on my part piney.

    The entire article is best summarized as "the free market has failed and will always fail, we need somethig new...soemthing with more Government".



    No it doesn't.

    I simply don't care in any way if your family has to split. I (the taxpayer) do not owe you welfare so your family can stay together, if work is available elsewhere. As you say, your family did it (and you turned out pretty good), and my family did it, more than once matter of fact, to make ends meet.

    Again, there is an entitlement mindset that is killing our Nation, that many things are owed to the people, things they should (and used) to have to work for, work that bettered them and our society, and did not cost us all to support the lazy, weak and stupid who refuse to earn their own keep, and instead demand it from others.[/QUOTE]

    As I said before, I didn't read it that way at all. Industry and government sitting down to figure out a way of re-balancing the employment picture in the U.S. seems to me to be emminently sensible. We've simply never had a true unfettered capitalist model in the U.S. so I don't know who's saying "the free market has failed." We are a mixed capitalistic economy in which the government has been a significant player for at least 120 years. There are certain ideas that people tend to swallow wholesale and then have no interest in confirming by actual data. The idea that lowering taxes will increase domestic investment and create U.S. jobs may be one of them. The idea that people will simply move where the jobs are may be another, not because people are entitled, but because people are assessing known evils vs. unknown evils, risk vs. reward, all combined with the massive disruption to family, social connections, and stability that uprooting entails. Policies that rely on people to do what they have shown they won't do are stupid policies that are guaranteed to fail. Your position on mobility may be morally reasonable, but practically useless since it is not reflective of reality. Entrepreneurship is nice in theory, but are the conditions such that it is economically viable for people with small business ideas to launch a business? If in fact, competing markets take those entrepreneurs out of play, don't we need to re-examine the trends and figure out some new solutions to encourage small business growth? And if the government isn't going to partner with industry to do so, how will this happen?

    Perhaps our biggest disagreement is that you feel government should simply step back and let the market work by some proverbial invisible hand. I would argue that government is such a major player already that you can't pretend the elephant isn't in the room. Make the elephant dance a few steps at least....

  16. #16
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    [QUOTE=long island leprechaun;4061132]As I said before, I didn't read it that way at all.[/quote]

    No harm in that, we clearly see things very differently, and as such it is not unexpected we could see differing meaning/intent in the same piece.

    [QUOTE]Perhaps our biggest disagreement is that you feel government should simply step back and let the market work by some proverbial invisible hand.[/QUOTE]

    Yes. By "invisible hand", I assume you mean "the people", because that is who the market is. You, me, everyone.

    [quote]I would argue that government is such a major player already that you can't pretend the elephant isn't in the room. Make the elephant dance a few steps at least....[/QUOTE]

    I agree it's already a big player, and my personal preference in policy is to reduce that.

    As for making the elephant dance, it is my view that when an elephant dances, it's not good to be the people beneath him. And in my view, thats what people like me, the middle class taxpayer hard worker, are. Victims of Govt. dancing to promote this social engineering program, this welfare state project, or that idea of "whats best" for me.

    I prefer to do my own dancing, and am willing to suffer the cosequences of teh steps I choose. I wish all Americans were as well.

  17. #17
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    [QUOTE=long island leprechaun;4061132]As I said before, I didn't read it that way at all. Industry and government sitting down to figure out a way of re-balancing the employment picture in the U.S. seems to me to be emminently sensible. We've simply never had a true unfettered capitalist model in the U.S. so I don't know who's saying "the free market has failed." We are a mixed capitalistic economy in which the government has been a significant player for at least 120 years. There are certain ideas that people tend to swallow wholesale and then have no interest in confirming by actual data. The idea that lowering taxes will increase domestic investment and create U.S. jobs may be one of them. The idea that people will simply move where the jobs are may be another, not because people are entitled, but because people are assessing known evils vs. unknown evils, risk vs. reward, all combined with the massive disruption to family, social connections, and stability that uprooting entails. Policies that rely on people to do what they have shown they won't do are stupid policies that are guaranteed to fail. Your position on mobility may be morally reasonable, but practically useless since it is not reflective of reality. Entrepreneurship is nice in theory, but are the conditions such that it is economically viable for people with small business ideas to launch a business? If in fact, competing markets take those entrepreneurs out of play, don't we need to re-examine the trends and figure out some new solutions to encourage small business growth? And if the government isn't going to partner with industry to do so, how will this happen?

    Perhaps our biggest disagreement is that you feel government should simply step back and let the market work by some proverbial invisible hand. I would argue that government is such a major player already that you can't pretend the elephant isn't in the room. Make the elephant dance a few steps at least....[/QUOTE]

    Other than passing legislation/regulations, how has the US govt been a significant player? Examples?

  18. #18
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    [QUOTE=Warfish;4061162]
    I prefer to do my own dancing, and am willing to suffer the cosequences of teh steps I choose. I wish all Americans were as well.[/QUOTE]

    so when the gov't bails out flood victims or fights wild fires... you are against that? People after all chose to live in fire and flood zones.

  19. #19
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    [QUOTE=bitonti;4061259]so when the gov't bails out flood victims or fights wild fires... you are against that? People after all chose to live in fire and flood zones.[/QUOTE]

    Bails out flood "victims"? Yes, I am against that.

    Fights Wild Fires? No, that falls under universal sociatal accepted public services (Cops, Courts, Firemen, etc.) that only an infinitesimally small % of taxpayers would contest.

    For the record, by the way, Wild Fires are vital to ecosystems, and stopping them does harm to the environement. Suprised an eco-guy like you would be for fighting them rather than allowing nature to take it's course. Maybe you don't care about the planet as much as you claim, valuing some rich guys home over whats good for the environment.;)

  20. #20
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    [QUOTE=quantum;4061248]Other than passing legislation/regulations, how has the US govt been a significant player? Examples?[/QUOTE]

    A multi-trillion dollar budget. A major employer (including armed forces), as well as an indirect employer through state and local funding. Taxation. Controlling the spigot of the money supply. As a lender and borrower on a humungous scale. Were you serious in asking that?

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