Osler's Razor

My Congressman has brought an STD to our district. He didn't put it in the newsletter, though.
 

I agree with everything you said, which is why I was against the Bush stimulus (the first stimulus), the Obama stimulus (the second stimulus), and Obama's proposed "second stimulus" (the third stimulus). Also why I'm against the massive government overhaul of health care and the incredibly costly carbon cap and trade program. What should you do in the middle of an economic crisis? Free up capital by reducing spending, reducing taxes, and freeing the engines of economic growth?? NO! Of course not. Hope and change demands otherwise!

I would like to point out that while the Bush administration certainly didn't produce the kind of shrinking of government that we all hoped for (and by we all, I mean all the people that understand the nature of economics). But, the Republican party has at least had a history of some politicians that understand the importance of fiscal conservatism, and actually try to do things to move that way. Phil Gramm, Jack Kemp, Newt Gingrich, and some others didn't just pay lip service to smaller government. And Reagan wasn't perfect (though he was close), but he did fundamentally overhaul many of the depression era government tax and spend policies that were hamstringing our economy.

Anyways, hope and change! When are my government overlords arriving to give me my health care?

Smoke 'em if you got 'em!
 

Prof. Osler,

Would you sign on to the socialized profits and socialized losses theory of government?
 

Well said, professor!
 

RRL--

Reagan just is not my hero. He was a tax and spend Republican, though he talked a good game. He spent way too much on defense, greatly increased government spending, promised to eliminate two government departments and instead added one, and then took credit for Communism's fall, rarely noting the sacrifices by people like the Poles or the Russian dissidents themselves (not to mention the Afghans).

RRL, we come to the same point from different directions. You care about lower taxes, I care about lower spending and smaller government. I don't think I am overtaxed, and I don't believe in trickle down economics; I think the rich have far too many advantages under our tax laws already. I care about the spending side, and that is where people like Gramm and Gingrich failed us when they were in power-- they did not do what every responsible adult has to do in their own life, which is spend less than we make. In fact, I think the "lower tax" mantra is too often part of a greedy individualism that is akin to, not in tension with, the Veruca Salt budgets we see from all of our federal governments. This is especially true when it is not combined with fiscal restraint, which is exactly what Reagan offered us.
 

Here here! The pay-as-you-go provisions are back before the House this week, but with a lot of opposition and very watered down. This weak sauce version makes exceptions for just about every appropriation under the sun, including most avenues for pork barrel spending.

I'm of the mind that our entire appropriations process needs an overhaul. Congress holds the pursestrings, which they're using to hang the rest of us.
 

Prof. Oslizzle:

I don't know if I totally agree with you. First, I care deeply about spending. I think it is critically important that we spend less. However, I also think that people should keep more of their money by lowering taxes, but not out of some selfish desire to keep everything I earn, but instead because I fundamentally believe in freedom and also I believe that individuals do a better job spending their money than the government does, which fits in nicely with your own philosophy on spending.

I don't think we disagree in the slightest on spending. Whether we disagree on taxes is a different story.

RE: Reagan - I admitted that Reagan wasn't perfect. He did dramatically increase defense spending, but did so to crush the Russian economy under the weight of an accelerated arms race. And it worked. He didn't dramatically increase spending on domestic policies. And he didn't do much of the credit claiming on the fall of communism as he was on the farm and never in the public spotlight when the USSR actually fell. Others may not have properly credited Russian dissidents and other Eastern Europeans in the name of crediting Reagan, but I don't think Reagan himself can be saddled with that criticism. And claiming that he isn't the only one that deserves credit for the fall of the USSR is absolutely fair, but claiming that he deserves no credit is ludicrous.

RE: Gramm, Kemp, Gingrich - "people like Gramm and Gingrich failed us when they were in power." Really? The first time the Republicans had any control over the congress, 1994, those three men as much as anyone oversaw a tremendous shrinking of the federal government. Balanced budget, welfare reform, etc. I'm not saying they were perfect, but they certainly backed up their claims on some level, and can't be saddled with the Bush legacy of big government Republicans.

Also, don't forget that it is hard to decrease the size of government when every time you merely suggest cutting federal spending you get Maxine Waters or Barbara Boxer or Nancy Pelosi on TV calling you a racist, or a person that wants to put the elderly on the street and in poverty, or a person that wants to starve children, or whatever.
 

I just hope one day I'm too big to fail.
 

This is endemic of the capitalist system as a whole. As long as we keep reifying "wealth" as something concrete that has value in and of itself, we lead ourselves into statements like that we must "free the engines of economic growth."

The "part-time capitalists" (or capitalism-lite, as I call it) realize the tension between the private system of wealth generation that capitalism sets up and social justice/morality.

It's easy to point to government "waste" as something bad; we have a definite aversion to inefficiency. No matter what economic system one uses (classical, neoclassical, Marxist, etc.) it is possible for it to be inefficiently used. The system form isn't a panacea to economic woes. Every system is going to require work.

On the other hand, a lot of these stimulus measures are just band-aids that are attempting to stave off economic crisis to perpetuate the system you all seem to think "works" after a fashion. In crisis, we'd be forced to admit that social programs are a legitimate aim of government, that it derives its legitimacy from what it can do as our public servant, and that requires resources. However, this problem is compounded by the fact that we consider money (or more aptly, credit) to be the same thing as a resource in some way that gives it value itself.

This kind of fetishism is problematic because it makes us a slave to the whims of markets and speculative value.

Unfortunately, there really isn't any good way to go about it. Band-aid measures stave off the the problems you highlight: inflation, destabilization, conflict... they give us time to prepare. Allowing collapse and hoping for the best of it seems to me to be a worse course of action.
 

I'm being repressed! I'm being repressed!

What Osler just did to me is what a socialist government will turn into. My valid points deleted because he disagreed with my assessment.
 

Oh Anonymous, if you want to debate and call me names, come over to my blog. I'm feeling a little arrogant and ass-like tonight and I could use a little verbal sparring! I got to the party late today so I missed my Thursday tussle with RRL. Sigh. The price of work.
 

Anonymous--

I deleted your comment because you are an anonymous coward who posted a crass personal insult directed at another commenter without identifying yourself. It wasn't because you disagreed with Lane-- after all, he was disagreeing with me.

If you want to do stuff like that, start your own blog. I would suggest calling it "Anonymous Coward Reports."
 

Lane - work is no excuse!
I worked today and discussed
economic policy on the Razor.
However, I have responses to
your post I will post tomorrow
(celebrating my bday right now,
can't engage in philosphical
discussion) so if you're in we
can continue tomorrow. I will
even post in haiku if necessary.

RRL (not anonymous)
 

RRL-kun,

I accept your noble challenge of duel by haiku! Kumite!

As for my absence while at work, since I work for the People's Revolutionary State of Texas, we are not allowed to use our state-owned computers for non-work purposes... that, and I had some capital habeas on my desk.

Happy birthday, by the way.
 

And there's the mayhem, folks!
 

I want a bailout now daaaaaaadddddddddy!!!!!
 

In re Reagan:

At some point in our friendship, Prof., I would like to understand your unrelenting hostility to Reagan.

Reagan will go down in history as a near-great president (which puts him just below GW, AL, and FDR--and on a par with TR, TJ, AJ, James K. Polk, and a few others).

Here's why:

1. Reagan won the Cold War. That is, he actively campaigned as a traditional cold war warrior at a time when that was not in vogue. He enacted that tone. He played tough and smart with the Soviets--and, when he was finished, the walls came tumbling down.

To say that credit should be spread around is obvious but not germane to the assertion. FDR gets credit for winning WWII--although he had some help. Lincoln gets credit for winning the CW--although he had some help. Polk gets credit for adding the West--although he had some help.

2. Reagan reversed the long process (or at least slowed the momentum) of the rush toward an American welfare state. Reagan spent a lot of money (mainly on defense--which worked--see above), but he made "big government" a dirty word for a while. That was a good thing. His administration was a watershed moment in the way we perceived government.

3. Reagan revived an American economy, which was on a downward slide. By lowering taxes and de-regulating, Reagan spurred economic growth that lasted for a quarter century. It is unequivocally the most miraculous sustained expansion in American economic history. He left us with some problems, no doubt, but most of those problems are of our own making--not his.

FYI: conservative economists have always advocated lower taxes to starve big government--not necessarily to help the greedy. Although, there is strong evidence that reduced tax rates does stimulate growth in a very big way (much more than the massive government spending in vogue today).

4. Reagan "made America great again." That is, Reagan restored American confidence. Because he was such an inherently optimistic and benevolent person, he assumed America was all those things. And his confidence and humanity were contagious.

None of that means that we don't have some serious problems--but you really have to go out of your way intellectually to blame them all on Reagan.

PS I associate myself with RRL's remarks abvoe. For the most part, I think he gets most of it right.
 

To get off of the current topic, I agree with Prof. Osler. I can't help but wonder what would have happened if the presidents hadn't started throwing money at people and saying, "Here's your own little part of the national debt. Now go revive the economy."

Also, re: Waco Farmer's Reagen defense: I so, so want to argue, but you've truly got me. The only thing that I can say is the minor inaccuracy that the Cold War could never be won, since it technically didn't exist. There were no declarations of war, no soldiers, no armies, no battles. The fall of the Berlin wall was not only an American accomplishment. Besides that, however, I'm stumped as how to argue. Hmmm...
 

Great comments and discussion.

As for President Reagan, let me say that I believe he was far more intelligent and astute than many folks on the Left gave him credit for in the 1980s or even presently.

I believe, however, that Nixon did more "to win" the Cold War as it were (re: opening up China).

Secondly, the slowing or "reversal" of the welfare state was great rhetoric used by candidate, and then, President Reagan. Yet, the Great Society envisioned by Johnson was never fully supported by Democrats, let alone Republicans.

It took a Democrat, Bill Clinton, to end welfare as we know it.

The economic conditions of the mid-to-late 1970's and the dreadful recession of 1981-1982 had more to do with the after effects of our little experiment in South East Asia and our switch away from a manufacturing based economy, which in Detroit, we are still attempting to adjust.

President Reagan was an exceptional politician, who truly loved his country, and I am sure that at his core he was a very decent and good man.

His great genius, in my mind, lay in his ability to take several disparate groups (i.e. free market, social conservatives, libertarians) and convince them that he empathized with their values.

President Reagan, for instance, rarely if ever attended Church. His home Church was Presbyterian of Bell Air. Yet, he was super successful in mobilizing socially conservative Protestants, who to this day regard him as a saint.

In this sense, he was and remains a brilliant politician.
 

One last parting shot:

Scott Davis makes a point worth pursuing. Opening China and inaugurating the policy of "triangulation" was important--without a doubt.

However, Reagan was different from Nixon--and Johnson, Ford, and Carter (before Carter came to see the light in light of the Soviet invasion of Afghanistan)--in one key respect.

The four presidents prior to Reagan had pretty much accepted the idea of "peaceful coexistence" with the Soviets.

Reagan consistently believed that the Soviets were wrong and the United States was right. That is, democracy was better than Soviet-style communism. Therefore, he set out to beat them--rather than accept them.

If you recall, the "enlightened" world was horrified when the blustering cowboy called the Soviets an "evil empire." You have probably heard the stories regarding the debate over the "Mr. Gorbachev, tear down this wall!" line. But to his credit--he said it unflinchingly.

For his entire public life, Ronald Reagan loved to say and, more importantly, to believe that the USA was ordained to be a "shining city on a hill."

Because he was so different--and at the end (new subject)--so pragmatic (when he switched from cold war hardliner to the great bargainer), he deserves special credit for presiding over the fall of the Soviet Empire.