Walter Williams on the Bailout

[Mormon Red Death]

Supreme Court Justice Louis Brandeis warned, "The greatest dangers to liberty lurk in the insidious encroachment by men of zeal, well meaning but without understanding." The freedom of individuals from compulsion or coercion never was, and is not now, the normal state of human affairs. The normal state for the ordinary person is tyranny, arbitrary control and abuse mainly by their own government. While imperfect in its execution, the founders of our nation sought to make an exception to this ugly part of mankind's history. Unfortunately, at the urging of the American people, we are unwittingly in the process of returning to mankind's normal state of affairs.

Americans demand that Congress spend trillions of dollars on farm subsidies, business bailouts, education subsidies, Social Security, Medicare and prescription drugs and other elements of a welfare state. The problem is that Congress produces nothing. Whatever Congress wishes to give, it has to first take other people's money. Thus, at the root of the welfare state is the immorality of intimidation, threats and coercion backed up with the threat of violence by the agents of the U.S. Congress. In order for Congress to do what some Americans deem as good, it must first do evil. It must do that which, if done privately, would mean a jail sentence; namely, take the property of one American to give to another.


According to a Washington Post article (June 22, 2005), there were nearly 35,000 highly paid registered lobbyists in Washington in 2004 who spent $2.1 billion lobbying the White House, Congress and various agencies on behalf of various interest groups. Political action committees, private donors and companies give billions of dollars to political campaigns. My question to you: Do you think that these people are spending billions of dollars to assist presidents and congressmen to better perform their sworn oath of office to preserve, protect and defend the U.S. Constitution? If you do, you're a fine candidate for a straitjacket. For the most part, the money is being spent to get politicians and government officials to use their coercive power to create a favor or special privilege for one American at the expense of some other American.

If we Americans didn't give Washington such enormous control over our lives, I doubt whether there would be 10 percent of the money currently spent on lobbying and campaign contributions. This enormous control that Congress has over our lives also goes a long way toward explaining much of the government corruption that we see in Washington.

If the average American were asked whether he wishes to return to mankind's normal state of affairs featured by arbitrary abuse, control and government dictates, I am sure he would find such a suggestion repulsive. But if you were to ask, say, the average senior citizen whether Social Security, Medicare and prescription drug subsidies should be continued, he would probably answer yes. The same would be true if you asked a college professor whether higher education should continue to be subsidized, or a farmer or a dairyman whether their products should be subsidized, or a manufacturer whether there should be tariffs and quotas on foreign products that compete with his product. The problem with congressmen producing favors and privileges to all interest groups is that it creates what none of us wants: massive control, numerous dictates and micromanagement of our lives.

There is no question that if one were to ask whether we Americans are moving toward more liberty or more government control over our lives, the answer would unambiguously be the latter — more government control over our lives. We might have reached a point where the trend is irreversible, and that is a true tragedy, for if liberty is lost in America, it will be lost for all times and all places.

[Ma'ake]

I suppose it's natural to gravitate toward sources that reinforce one's worldview, but as an Econ man I've always found Walter Williams' anecdotes & advice to be pretty simplistic and... well... weak.

My question to those who are more of the libertarian bent (SU, Arch, IPU, et al) is how much suffering is tolerable to preserve maximum individual freedom, eschew any kind of taxation or governmental involvement?

I get the impression that all things being equal, a full-scale Depression is preferable than higher taxes or social programs. (Or maybe the question is avoided by stating the New Deal caused/prolonged the Great Depression?)

[Tex]

Originally Posted by Ma'ake

I suppose it's natural to gravitate toward sources that reinforce one's worldview, but as an Econ man I've always found Walter Williams' anecdotes & advice to be pretty simplistic and... well... weak.

My question to those who are more of the libertarian bent (SU, Arch, IPU, et al) is how much suffering is tolerable to preserve maximum individual freedom, eschew any kind of taxation or governmental involvement?

I get the impression that all things being equal, a full-scale Depression is preferable than higher taxes or social programs. (Or maybe the question is avoided by stating the New Deal caused/prolonged the Great Depression?)

I've said this before ... I find "Great Depression, Part 2" to be the Hitler of Godwin's Law of Economic discussions. I can't tell you how many times in a recession I've heard, "If we don't do X, it's the next Great Depression."

1987 is the other favored stepchild. Another 1987 is always just around the corner. I don't find it profitable to a discussion.

[Mormon Red Death]

Originally Posted by Ma'ake

I suppose it's natural to gravitate toward sources that reinforce one's worldview, but as an Econ man I've always found Walter Williams' anecdotes & advice to be pretty simplistic and... well... weak.

My question to those who are more of the libertarian bent (SU, Arch, IPU, et al) is how much suffering is tolerable to preserve maximum individual freedom, eschew any kind of taxation or governmental involvement?

I get the impression that all things being equal, a full-scale Depression is preferable than higher taxes or social programs. (Or maybe the question is avoided by stating the New Deal caused/prolonged the Great Depression?)

I thought you were an IT guy? as for Walter Williams he makes some very salient points. If one is to have a social program you have to tax to pay for it (Ie take money from someone and give it to someone else).

One thing that amazes me about Liberals is how they say if the government doesnt provide a safety net who will? Why couldn't charity fulfill the role that government programs fill now? A good example of this is hospitals. Ben Franklin was the founder of U of Penn hospital and did he go straight to the government to get this founded? No it was based on charity.

As for question about the New deal I believe it did prolong the great depression. IMO the depression happened because the government got too involved in the market and started doing the same things its doing right now.

[Ma'ake]

Originally Posted by Tex

I've said this before ... I find "Great Depression, Part 2" to be the Hitler of Godwin's Law of Economic discussions. I can't tell you how many times in a recession I've heard, "If we don't do X, it's the next Great Depression."

1987 is the other favored stepchild. Another 1987 is always just around the corner. I don't find it profitable to a discussion.

For future reference, what's your threshold? My sense is many on the right have to be dragged, kicking & screaming, into discussions about economic trouble (that does not involve certain calamity or creeping communism should a Dem be elected.) For example, would your fellow Texan, the former economic advisor to Senator McCain, consider that we're outside the bounds of mere whining as the basis behind the current economic situation?

[UtahDan]

Originally Posted by Ma'ake

I suppose it's natural to gravitate toward sources that reinforce one's worldview, but as an Econ man I've always found Walter Williams' anecdotes & advice to be pretty simplistic and... well... weak.

My question to those who are more of the libertarian bent (SU, Arch, IPU, et al) is how much suffering is tolerable to preserve maximum individual freedom, eschew any kind of taxation or governmental involvement?

I get the impression that all things being equal, a full-scale Depression is preferable than higher taxes or social programs. (Or maybe the question is avoided by stating the New Deal caused/prolonged the Great Depression?)

Respectfully, your argument is the mirror imagine of the strawman Williams erects. No one really wants no government at all any more than anyone really wants government to control absolutely everything.

I don't know a serious person who does not favor government providing things that we as individuals can't. Infrastructure, police, military, a monetary system and yes a safety net. I am no econ guy but it seems elementary to me that there are two extreme: a society so unfettered and a government so weak that people suffer and a society so chained down and a government so powerful and intrusive that the economic engine is over burdened and can no longer pull the load.

I think Williams argument is the boiling frog argument and I think he is right that it is easy to lose sight of the fact that government controls so much. The problem in my mind is not whether government should do all of these things, because I think it is almost impossible to go back, but whether in the course of doing these things it begins to disincentivize the behaviors that create the wealth.

Of course all of these social goodies are desirable. We just can't afford them all and continue to redistribute ever more to an increasing number of different groups. Saying that society ought to lift the lease among us is a very very different thing than saying that every special interest and sector of the economy ought to get its own subsidy and hand out. One need not be heartless to believe that a point comes where we can't do basic things because we are trying to do so many extraneous things. A part of the mirage is the belief that we can provide social programs at the level that Europe does. We cannot and neither will they be able to long term. As I have pointed out so many times, they can afford it only because we provide their defense. The day is approaching where we won't be able to and when they again have to pay for this themselves they will be right where we are, making a choices between desirable things because you just can't have everything.

Two thirds of our national budget every year goes to entitlements. Do we really believe that all of these people would suffer and die in the absence of a monthly check from uncle Sam? Wouldn't the vast majority of them simply plan differently if they knew they had to count on themselves? Is it heartless to say that we ought not create conditions that encourage people who could take care of themselves not to, so that we have more money to help those who truly need it?

So in answer to your question, how much suffering is tolerable, my answer is that in my opinion we could eliminate half of our entitlements tomorrow and the only suffering that would ensue is the suffering I feel when I hop into my Honda instead of a Lexis, or look at the time on my Citizen instead of a Rolex. This country is addicted to hand outs it doesn't really need and it is this money being pointlessly diverted from where it could truly be doing good that contributes to suffering in our country (to the extent you can really say there are many people who are by comparison to 99% of the rest of the world). And there I'm spent.

[Tex]

Originally Posted by Ma'ake

For future reference, what's your threshold? My sense is many on the right have to be dragged, kicking & screaming, into discussions about economic trouble (that does not involve certain calamity or creeping communism should a Dem be elected.) For example, would your fellow Texan, the former economic advisor to Senator McCain, consider that we're outside the bounds of mere whining as the basis behind the current economic situation?

In my opinion, the conditions that led to the depression (and extended it) were unique to the era. That doesn't mean it couldn't happen again, but it would take much larger house of cards falling than it required in those days. Times have changed.

Is this house of cards big enough? Perhaps. I'm no economist, how should I know? Conservatives of all economic stripes disagree on this, and it's hard to know who's right. But scare-tactic/fear-mongering about the imminent 2nd depression is unimpressive and unpersuasive.

Your Gramm comment is a cheap shot.

[il Padrino Ute]

Originally Posted by Ma'ake

My question to those who are more of the libertarian bent (SU, Arch, IPU, et al) is how much suffering is tolerable to preserve maximum individual freedom, eschew any kind of taxation or governmental involvement?

I believe in helping people when they need it, but I believe it shouldn't be forced, i.e. higher taxes for universal health care.

If I'm allowed to keep more of my money, then I would have more in order to help.

As for the bailout, which seems to be a part of what Williams is writing about, I don't want my tax dollars going to help idiots who made stupid business decisions. That's really all it seems to be. If they tank, it's their own fault.

[Ma'ake]

Originally Posted by UtahDan

Respectfully, your argument is the mirror imagine of the strawman Williams erects. No one really wants no government at all any more than anyone really wants government to control absolutely everything.

The extent of this sentiment is frequently hard for me to determine. In friendly political debate, a couple of guys I work with - young guys, granted - vigorously assert there should be *no* taxes, at all. None. "It is larceny." Questions about taxes for public education are met with "I don't have kids", questions about roads & infrastructure are met with "I have a truck, dirt roads are fine by me". "People shouldn't have kids until they can pay for their needs, including education". Very, very strong individualistic bias.

If we look at taxation for public education, almost everyone accepts that older generations sharing the child-rearing generation's education cost load is a smart investment for society. But, if we were to look at that debate when it occurred, who thinks it would be much different than the healthcare debate of today? How many libertarians think education is a "right"? For that matter, isn't taxation for education part of the creeping governmental dominance Williams refers to?

There is a degree of individualism on the right that I can't quite relate to. I see from folks (whom I respect) with basic perspectives along the lines of "why am I expected to care for others, everyone should take care of themselves". It is the classic dichotomy between individual & group. An LDS derivative is based on the family... "I take care of my family & want government to leave us alone. We're all better off if families fend for themselves." Or Reagan's dreaded 11 words. "I'm from the government and I'm here to help you". Government *is* the problem.

The family of my son's friend are very wealthy - multiple houses of 20,000 sq ft or more. For example, my son & a couple of other friends are paid each holiday season to erect 19 (nineteen) Christmas trees throughout the Bountiful home. The father rails incessantly about taxes, the unfairness of the wealthy having to pay so much of the total tax load, etc. I honestly believe this man would be fine if he paid the mean tax. He earned his money, why should he have to pay more than the average? (His construction company also recently filed for bankruptcy - not sure how many of the homes he may have to give up. If he has good accountants, maybe none of them.)

As for the spectrum of opinion on how much government should be involved in the economy, I'm on the other side of the aisle, admittedly. For example, having worked in private health insurance, I can tell you the American public is being driven to the bank on a daily basis by private interests - and many redundant private bureaucracies - but this is apparently far more preferably than government sponsored health insurance, money or quality of coverage be damned.

Thus my hyperbolic question was not intended as literal, per se, but from my perspective it's pretty close, as near as I can tell, for many on the far right.

[Mormon Red Death]

Originally Posted by Ma'ake

The extent of this sentiment is frequently hard for me to determine. In friendly political debate, a couple of guys I work with - young guys, granted - vigorously assert there should be *no* taxes, at all. None. "It is larceny." Questions about taxes for public education are met with "I don't have kids", questions about roads & infrastructure are met with "I have a truck, dirt roads are fine by me". "People shouldn't have kids until they can pay for their needs, including education". Very, very strong individualistic bias.

If we look at taxation for public education, almost everyone accepts that older generations sharing the child-rearing generation's education cost load is a smart investment for society. But, if we were to look at that debate when it occurred, who thinks it would be much different than the healthcare debate of today? How many libertarians think education is a "right"? For that matter, isn't taxation for education part of the creeping governmental dominance Williams refers to?

There is a degree of individualism on the right that I can't quite relate to. I see from folks (whom I respect) with basic perspectives along the lines of "why am I expected to care for others, everyone should take care of themselves". It is the classic dichotomy between individual & group. An LDS derivative is based on the family... "I take care of my family & want government to leave us alone. We're all better off if families fend for themselves." Or Reagan's dreaded 11 words. "I'm from the government and I'm here to help you". Government *is* the problem.

The family of my son's friend are very wealthy - multiple houses of 20,000 sq ft or more. For example, my son & a couple of other friends are paid each holiday season to erect 19 (nineteen) Christmas trees throughout the Bountiful home. The father rails incessantly about taxes, the unfairness of the wealthy having to pay so much of the total tax load, etc. I honestly believe this man would be fine if he paid the mean tax. He earned his money, why should he have to pay more than the average? (His construction company also recently filed for bankruptcy - not sure how many of the homes he may have to give up. If he has good accountants, maybe none of them.)

As for the spectrum of opinion on how much government should be involved in the economy, I'm on the other side of the aisle, admittedly. For example, having worked in private health insurance, I can tell you the American public is being driven to the bank on a daily basis by private interests - and many redundant private bureaucracies - but this is apparently far more preferably than government sponsored health insurance, money or quality of coverage be damned.

Thus my hyperbolic question was not intended as literal, per se, but from my perspective it's pretty close, as near as I can tell, for many on the far right.

Maake.. Libertarians by definition believe that the sole purpose of government is to protect Life, Liberty and property. subsidizing healthcare and education is not in that edict.