Free Markets, Free People

Daily Archives: July 27, 2010


Dale’s Observations For 2010-07-27

Raising taxes in the middle of a recession is stupid. Both Hoover and FDR did it, with disastrous results. Cut spending, don't raise taxes. #

RT @MelissaTweets @ScottBrownMA: The blatantly partisan 'Disclosure' Bill was defeated. | Woot! #

RT @dmataconis @DavidCornDC @NewtGingrich: Odds of a Newt 2012 bid at 97%. | Odds of a Newt 2012 win at 0%. #

Heh. The new Harley-Davidson Street Glide will have an integrated stereo w/ 8gb iPod nano. Nothing says "outlaw biker" like an iPod nano. #

Victory announced their 2011 motorcycles. All of them will sport the big 106ci, 92+HP, V-Twin, and a newly designed 6-speed transmission. #

Harley-Davidson says it has 32 models of motorcycle this year. But it's really 4 models of motorcycle with 32 trim packages. #

Harley-Davidson introduces its 2011 models. http://is.gd/dMQc6 #

Obama: Reducing influence over elections should be non-partisan. Dems made it partisan by exempting unions. http://bit.ly/9feNSR #

Quarterly economic forecast takes a turn for the worse http://usat.me?39422252 #RecoverySummer #

Consumer confidence drops for second straight month, according to the Conference Board. http://usat.me?39442884 #RecoverySummer #

Victory's 2011 motorcycles will all have the 106ci Big Twin. 97HP and 116 ft-lbs or torque. Not bad at all for V-Twin cruiser. #


Why "me first" in the market is different from "me first" in entitlements

If you’re interested in reading one of the most mixed up pleas to get entitlement spending under control, I invite you to read Neel Kashkari’s (I love the last name though)op/ed in the Washington post.

His premise is that entitlements are breaking us.

Sold.

His assumptions, however, are all over the place and misrepresent the real problem.

He claims that it is a ubiquitous "me first" mentality that both drives the market and also drives entitlement. That self-interest drives the boat.

Yes, self-interest is always a motivator. But when it comes to the market and entitlements, "me first" mean entirely different things. In the market, "me first" means seeing what you want, earning what is necessary to get it and then obtaining it. Pricing and demand come from that – and jobs, expansion, etc. The point is, in the sense of the market it’s "me first because I’ve earned what is necessary to purchase it".

Not so when it comes to entitlements. In that case, "me first" means, "I want what someone else has earned because I (excuse goes here) and therefore I’m owed this".

That’s an entirely different concept of the market "me first". In the latter, money is taken from the earner (thereby limiting his ability to act on his "me first" priorities), the market is denied whatever percentage as it is taken by government, wends its costly way through the system, and ends up in the pocket of someone who has determined that the benefit of earning the equivalent through work is just not worth it.

Kashkari then tries the “fairness” argument:

Cutting entitlement spending requires us to think beyond what is in our own immediate self-interest. But it also runs against our sense of fairness: We have, after all, paid for entitlements for earlier generations. Is it now fair to cut my benefits? No, it isn’t. But if we don’t focus on our collective good, all of us will suffer.

Fairness has nothing to do with this. Is it fair when you take money from one person to give to another for whatever arbitrary reason? Of course not. So if we want to play the fairness game, the first stake holder on the "not fair" side of the game is the taxpayer who has his earning taken to subsidize someone’s entitlement benefit.

And, honestly, our "collective good" would be better served by getting government to hell out of the entitlement business (and there by reducing its size and the size of the chunk it takes out of our wallets) and getting back to what has made America both great and, despite Obama’s claims, exceptional.

… [B]ailing out the financial system went directly against our shared beliefs in free markets and fair play. While the vast majority of Americans did not cause the financial crisis, we all had to sacrifice to stop it. Such a cultural violation has angered people nationwide, which makes cutting entitlements more difficult because it will again betray our sense of fairness.

Here’s where he almost gets a clue, except he attributes it to “fairness” again.  Instead it was a revolt of the taxpayers, already enraged about the cost of government and the impact it had on their own choices, saw government suddenly expand that cost exponentially, head into areas it had never been before and indenture their grandchildren and great grandchildren to a tune of multi-thousands of dollars each.  It wasn’t about “fairness” it was about “get the hell out of my life and wallet”.  The Tea Party movement wasn’t formed because anyone was concerned with “fairness” – it was formed to cut taxes, reduce the size of government and demand government spend less.  And yes, if that means cutting entitlements, then by all means, do so.

Kashkari’s concludes with 3 steps to cut entitlements:

– Our economy needs to experience sustained growth, creating good jobs, so Americans feel economically secure. It is hard for anyone to think about long-term sacrifice when they are worried about how to pay their bills today.

– The emotional bruising inflicted by the financial crisis needs to heal. Along with the passage of time we need a renewed sense that people are succeeding and failing on their own merits.

– Our leaders need to make the case for cutting entitlement spending by tapping into our shared beliefs of sacrifice and self-reliance. They must be willing to risk their own political fortunes for the sake of our country.

Or to paraphrase myself from above, we need to get government back to basics and Americans back to a culture that made this nation great, rich and exceptional.  And that includes self-reliance, sacrifice and earning our own way in life.  It is the latter part of the equation that will solve the entitlement problem and something Kashkari doesn’t include.

~McQ

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Another Obama supporter finds “disappointment”

I think we could probably make this a regular feature on Q&O – this week’s Obama supporter who finds that he who was wrapped in all the hype of the presidential campaign was mostly an empty suit.

This week it is the editorial board of the Denver Post – who admits to endorsing Mr. Obama in 2008 because they thought his ideas for recovery from the financial crisis were better than McCain’s. 

But we also hoped he would restore the nation’s reputation with the rest of the world. But instead of being vilified, as we were under Bush, the United States is now suddenly bordering on being irrelevant.

So glad you noticed – a man with no executive experience and no foreign policy experience was somehow going to be an instant foreign policy success?  Those that supported Obama had to fool themselves into believing none of that was important.

They’re also discovering, in the world of foreign policy, that it is much better to be respected and feared than liked and irrelevant.   And, as the Post notes, we’re on the latter side of the equation with “liked” being a relative term.

Look, foreign policy and diplomacy takes place in a world of relative anarchy.  Big dog politics if you will.  If you’re the alpha male, other countries defer to your judgment, strategies and ideas.  If you refuse the role, someone will attempt to take it.  It isn’t a matter of our “decline” that’s caused this, but Obama’s refusal to lead.  The Denver Post is honest enough – now – to note that.

The Post lists the results of the Carteresque foreign policy of the last 18 months and, as you might expect, it’s not pretty.   And even while claiming that at least on the domestic front he’s “accomplished” something, they’re not particularly impressed with that either:

His health care plan, approved only after the type of backroom, sleazy deal-making he crusaded against during his campaign, does little to bring down exorbitant costs and could bankrupt states once higher Medicaid costs are passed down.

The $1 trillion stimulus provided only a blip of a recovery, while saddling the nation with an unsustainable debt load. And the federal government’s reach into business and the financial world, for better or worse, is now deeper than ever.

Welcome to finally beginning to figure out who this guy is and what he’s about.  Too bad it’s about 20 months to late.  You get what you vote for (or endorse) which is why it is so important to do a thorough job of vetting a candidate, something the media, to include the Denver Post, didn’t do.  And now we have an unqualified person in the Oval Office doing the only thing he knows to do – pushing an ideological agenda.  But, as is becoming apparent now, he’s not a leader.  That takes us back to another leaderless era in America that this presidency is coming very near to replicating:

There’s also been an intangible, yet inescapable, sense of unease in the country, reminiscent of our late- 1970s malaise. Faith in Obama’s "Yes we can" slogan has faded faster than the Obama-Biden stickers still clinging to bumpers.

Indeed.  The Post then wonders:

One media outlet asked last week: Can Obama get his groove back?

Someone tell me – other than campaigning, has he ever actually had a “groove” since he’s been in office?

The answer is an obvious “no”.  And it’s thanks to “media outlets” like the Denver Post that we’re in the middle of the presidency of an unqualified man who is doing possibly irreparable harm to this country.  They didn’t do the due diligence expected of the media but instead became cheerleaders.  Now suddenly, they’re concerned.  Excuse me if I answer that with a giant “I told you so” and dismiss their sudden angst as too little and, unfortunately, too freakin’ late.

~McQ

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