Our financial house of cards. . .

is collapsing. So the government is working to bail out the big investment firms that have made easy credit possible. It seems that everyone is a free market capitalist during good times, but once a downturn happens, everybody wants to state to intervene into the economy after all.

See E. J. Dionne Jr. – The Street on Welfare – washingtonpost.com

Perhaps these interventions are necessary. (We need our resident economist, EconJeff, to advise us.) But I worry that this is just the beginning of a turn back to a state run economy.

I sense that liberalism is rising from the dead, that a Democratic president and a Democratic Congress will re-regulate the whole economy and utterly undo the Reagan revolution.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • http://poststop.wordpress.com Ethan

    I am all against govt. bail outs unless it turns out the guys who are holding my 401K. I have no idea what the financial condition of said guys are and I wouldn’t even know where to begin to find out. The experts (Cramer) were telling us a few weeks ago to hold Bear Stearns, everything was fine. If the “experts” can’t figure this out there is there any chance for me? I think we are already a long way from free market capitalism. Taxes, tax incentives, regulations and laws written by the business groups they benefit do much to destroy the free market.

  • http://poststop.wordpress.com Ethan

    I am all against govt. bail outs unless it turns out the guys who are holding my 401K. I have no idea what the financial condition of said guys are and I wouldn’t even know where to begin to find out. The experts (Cramer) were telling us a few weeks ago to hold Bear Stearns, everything was fine. If the “experts” can’t figure this out there is there any chance for me? I think we are already a long way from free market capitalism. Taxes, tax incentives, regulations and laws written by the business groups they benefit do much to destroy the free market.

  • Manxman

    Conspiracy theorist that I am, I see worse things than the controlled economy of the Democrats as a possibility.

    Bush & the globalists have been very busy working toward a North American version of the EU, cutting all kinds of non-congressionally approved deals with the Canadians & Mexicans. It seems to me that all this magic money the Fed is creating out of thin air & pumping into the economy is going to greatly cheapen the value of the dollar, pushing ot further toward collapse. What if this whole thing is being engineered to create a scenario where the dollar is abandoned & a new currency, the “Amero,” is established in a North American Union?

  • Manxman

    Conspiracy theorist that I am, I see worse things than the controlled economy of the Democrats as a possibility.

    Bush & the globalists have been very busy working toward a North American version of the EU, cutting all kinds of non-congressionally approved deals with the Canadians & Mexicans. It seems to me that all this magic money the Fed is creating out of thin air & pumping into the economy is going to greatly cheapen the value of the dollar, pushing ot further toward collapse. What if this whole thing is being engineered to create a scenario where the dollar is abandoned & a new currency, the “Amero,” is established in a North American Union?

  • Carl Vehse

    Forget your 401K.

    Once the leading edge of baby-boomers starts converting their 401Ks back to cash, the stock values will be taking a dive.

  • Carl Vehse

    Forget your 401K.

    Once the leading edge of baby-boomers starts converting their 401Ks back to cash, the stock values will be taking a dive.

  • WebMonk

    Ethan, as an excellent rule for life, DON’T LISTEN TO CRAMER. He has one of the worst track records of all the TV investment gurus. I have a variety of theories about why he’s wrong so often (trying to puff his own holdings, being paid to promote companies, etc) but whatever the reason, he’s one of the worst guys to follow. You’ll actually be better off betting the opposite of him since his “correct” rate is around 35-40%. (www.cxoadvisory.com/gurus/)

    There are a great number of complications, and it’s not at all true that it’s only now, during a downturn, that the govt is actively trying to move the markets/economy. The entire US market system is ALWAYS being moved by governmental actions – rate cuts/hikes, bond offerings, lending rules, etc. I can’t see that there’s any fundamental difference in what the government is doing now in their “bailout” compared to normal; they’ve always been “doing”, but now they’re doing something different.

    The need for a fix of some sort is “needed”, but the reason that a fix is needed is mostly the fault of those now needing the fix.

    As the major lending firms get crunched for funds, they can’t lend out money. It’s a trickle-down system of sorts – big lenders borrow from the govt to lend to smaller lenders, those lenders lend to still smaller lenders, and finally you get down to the level of banks who are lending to people and businesses. Especially at the top levels, the original borrowing was/are backed by assets that are made up of millions of mortgages. As the housing market drops, those assets aren’t worth as much as they were before, so all of a sudden the top-level firms don’t have anything to back up further lending.

    The trickle-down of funds gets tight and it starts cutting into the practices of smaller firms that lend to individuals and companies. Individuals have more trouble getting loans for homes/cars/improvements/etc and the economy slows down and the housing market shrinks further, exacerbating the problem. Companies can’t borrow money for growth or investments, so they start producing less, which starts crunching the job market and has a bad effect on the economy, which goes back and exacerbates the problems more.

    The Fed is trying to loosen up funds at the top by lower the prime rate and by making different types of loans available to these big firms so that they can get back into standard lending practices. The problem is that a lot of those things the Fed is doing tend to pump up inflation.

    As there are more dollars existing, each “thing” is worth more dollars – oil being a particularly touchy “thing”. Inflation/oil has a cascading effect on all sorts of other things, most of which make it more costly for people to live, which cuts down on their spending on non-essential items, and tends to cause crunches in those industries which are non-essential. Layoffs, hiring freezes, smaller raises, are some of the effects, which exacerbates problems still more.

    It sounds a bit gloomy, and it is, but hardly disastrous. Anyway, I’ll shut up now. Just don’t listen to Cramer.

  • WebMonk

    Ethan, as an excellent rule for life, DON’T LISTEN TO CRAMER. He has one of the worst track records of all the TV investment gurus. I have a variety of theories about why he’s wrong so often (trying to puff his own holdings, being paid to promote companies, etc) but whatever the reason, he’s one of the worst guys to follow. You’ll actually be better off betting the opposite of him since his “correct” rate is around 35-40%. (www.cxoadvisory.com/gurus/)

    There are a great number of complications, and it’s not at all true that it’s only now, during a downturn, that the govt is actively trying to move the markets/economy. The entire US market system is ALWAYS being moved by governmental actions – rate cuts/hikes, bond offerings, lending rules, etc. I can’t see that there’s any fundamental difference in what the government is doing now in their “bailout” compared to normal; they’ve always been “doing”, but now they’re doing something different.

    The need for a fix of some sort is “needed”, but the reason that a fix is needed is mostly the fault of those now needing the fix.

    As the major lending firms get crunched for funds, they can’t lend out money. It’s a trickle-down system of sorts – big lenders borrow from the govt to lend to smaller lenders, those lenders lend to still smaller lenders, and finally you get down to the level of banks who are lending to people and businesses. Especially at the top levels, the original borrowing was/are backed by assets that are made up of millions of mortgages. As the housing market drops, those assets aren’t worth as much as they were before, so all of a sudden the top-level firms don’t have anything to back up further lending.

    The trickle-down of funds gets tight and it starts cutting into the practices of smaller firms that lend to individuals and companies. Individuals have more trouble getting loans for homes/cars/improvements/etc and the economy slows down and the housing market shrinks further, exacerbating the problem. Companies can’t borrow money for growth or investments, so they start producing less, which starts crunching the job market and has a bad effect on the economy, which goes back and exacerbates the problems more.

    The Fed is trying to loosen up funds at the top by lower the prime rate and by making different types of loans available to these big firms so that they can get back into standard lending practices. The problem is that a lot of those things the Fed is doing tend to pump up inflation.

    As there are more dollars existing, each “thing” is worth more dollars – oil being a particularly touchy “thing”. Inflation/oil has a cascading effect on all sorts of other things, most of which make it more costly for people to live, which cuts down on their spending on non-essential items, and tends to cause crunches in those industries which are non-essential. Layoffs, hiring freezes, smaller raises, are some of the effects, which exacerbates problems still more.

    It sounds a bit gloomy, and it is, but hardly disastrous. Anyway, I’ll shut up now. Just don’t listen to Cramer.

  • http://necessaryroughness.org Dan at Necessary Roughness

    With respect to banks, we stopped being a free-market system no later (and perhaps earlier) than the Jimmy Carter years, when banks were strongly encouraged to make risky loans just to get minorities to own more homes. The same was done in Bush-43′s “ownership society.”

    We actually need a little bit of a recession here, so that banks and government would realize that making risky mortgages, is well, risky.

    Meanwhile, our federal government continues to keep spending above revenues, and the Federal Reserve keeps making money more available. The easier it is to get money, the less worth each unit of currency is going to be.

  • http://necessaryroughness.org Dan at Necessary Roughness

    With respect to banks, we stopped being a free-market system no later (and perhaps earlier) than the Jimmy Carter years, when banks were strongly encouraged to make risky loans just to get minorities to own more homes. The same was done in Bush-43′s “ownership society.”

    We actually need a little bit of a recession here, so that banks and government would realize that making risky mortgages, is well, risky.

    Meanwhile, our federal government continues to keep spending above revenues, and the Federal Reserve keeps making money more available. The easier it is to get money, the less worth each unit of currency is going to be.

  • Nathan

    This just make me like that “non-economic conservative” Mike Huckabee more (even as the dangers of “Liberal Fascism” inevitably approach).

    I recently saw this:

    http://www2.arkansasonline.com/news/1998/jun/08/huckabee-us-gave-religion/

    Does this guy really misunderstand the two kingdoms? From reading this article, I have a hard time concluding this.

  • Nathan

    This just make me like that “non-economic conservative” Mike Huckabee more (even as the dangers of “Liberal Fascism” inevitably approach).

    I recently saw this:

    http://www2.arkansasonline.com/news/1998/jun/08/huckabee-us-gave-religion/

    Does this guy really misunderstand the two kingdoms? From reading this article, I have a hard time concluding this.

  • http://www.bikebubba.blogspot.com Bike Bubba

    Exactly why should we be further devaluing the dollar to bail out banks who are rightly getting hammered for issuing high risk debt? They gambled, they lost, so WE have to pay the price as our savings and income are pilfered via inflation of the money supply? Excuse me?

    Methinks Bernanke needs to read some Rothbard and remember that it was the Fed’s inflationary policy, combined with Hoover and FDR’s efforts to “goose” the economy, that turned the 1929 recession into the Great Depression–and heck, it was the Fed’s inflationary policy that set the stage for the 1929 recession to begin with.

  • http://www.bikebubba.blogspot.com Bike Bubba

    Exactly why should we be further devaluing the dollar to bail out banks who are rightly getting hammered for issuing high risk debt? They gambled, they lost, so WE have to pay the price as our savings and income are pilfered via inflation of the money supply? Excuse me?

    Methinks Bernanke needs to read some Rothbard and remember that it was the Fed’s inflationary policy, combined with Hoover and FDR’s efforts to “goose” the economy, that turned the 1929 recession into the Great Depression–and heck, it was the Fed’s inflationary policy that set the stage for the 1929 recession to begin with.

  • JSH

    I couldn’t care less about companies that have made stupidly risking mortgages and even less about companies (read Bear Stearns) who “invest” in derivatives far flung from anything real. HOWEVER, when their house of cards falls it is affecting every single investor in this country no matter how reasonable or cautious. All real stocks, all retirement funds of all kinds, everything that people like me have worked long and hard to build up. That does make me angry. For that reason the Fed has no choice but to step in and do what it can to keep this entire economy from collapsing. Inflation will be the unfortunate consequence.

  • JSH

    I couldn’t care less about companies that have made stupidly risking mortgages and even less about companies (read Bear Stearns) who “invest” in derivatives far flung from anything real. HOWEVER, when their house of cards falls it is affecting every single investor in this country no matter how reasonable or cautious. All real stocks, all retirement funds of all kinds, everything that people like me have worked long and hard to build up. That does make me angry. For that reason the Fed has no choice but to step in and do what it can to keep this entire economy from collapsing. Inflation will be the unfortunate consequence.

  • http://poststop.wordpress.com Ethan

    For the record, I don’t listen to Cramer, was just using that for an example. I moved my 401K out of S&P a couple months ago and into more conservative options but I am worried about them also. We may need to use it in a few years if we attempt a move to a more rural setting.

    Anyway, EconTalk has a pretty good podcast this week with Tyler Cowen from GMU. How close is GMU to Patrick Henry? Any Economics work going on at PH?

    http://tinyurl.com/3yabpt

  • http://poststop.wordpress.com Ethan

    For the record, I don’t listen to Cramer, was just using that for an example. I moved my 401K out of S&P a couple months ago and into more conservative options but I am worried about them also. We may need to use it in a few years if we attempt a move to a more rural setting.

    Anyway, EconTalk has a pretty good podcast this week with Tyler Cowen from GMU. How close is GMU to Patrick Henry? Any Economics work going on at PH?

    http://tinyurl.com/3yabpt

  • Don S

    We in the U.S. have lost the concept of risk/reward. You can see it every time we have a natural disaster and we are seeing it now. People who are prudent, and save for retirement, carefully evaluate their investments, save for college, choose a relatively safe place to live, etc. have their assets continually confiscated by the government to subsidize and bail out the imprudent — those who take foolish risks with their investments (think subprime lending), live in dangerous places, spend profligately, etc. Think back to Katrina — Bush was demonized because people who had chosen to live in a flood bowl behind neglected levies, and didn’t leave the city when warned of an impending disaster, suffered because of the resulting flooding. Why was he demonized? Because, in the eyes of some, the bailout didn’t happen quickly enough, and not enough billions of $$$ were thrown at the victims. Now, in the wake of an entirely predictable correction after a very speculative and stupid real estate run-up, those institutions and individuals who foolishly invested in this unsustainable event, and reaped billions in profits during the good times, are being extravagently bailed out by the rest of us who saw this coming and made responsible decisions.

    This is not to say that I disagree with the Fed’s actions to try to ameliorate some of the worst effects of the financial crash on those of us who are relatively innocent regarding its cause, by lowering the discount rate and pumping a reasonable amount of cash into the markets, but outrights bailouts amount to theft from the responsible to prop up the irresponsible. Let the banks and brokerages which are obviously poorly managed fail — there is insurance for that.

    Hard times steel a nation, and, more importantly, steel a soul. The Adversary loves our carnal mindset that we will not tolerate tough times or suffering, because he knows that such times are also times of great spiritual revival and renewal.

  • Don S

    We in the U.S. have lost the concept of risk/reward. You can see it every time we have a natural disaster and we are seeing it now. People who are prudent, and save for retirement, carefully evaluate their investments, save for college, choose a relatively safe place to live, etc. have their assets continually confiscated by the government to subsidize and bail out the imprudent — those who take foolish risks with their investments (think subprime lending), live in dangerous places, spend profligately, etc. Think back to Katrina — Bush was demonized because people who had chosen to live in a flood bowl behind neglected levies, and didn’t leave the city when warned of an impending disaster, suffered because of the resulting flooding. Why was he demonized? Because, in the eyes of some, the bailout didn’t happen quickly enough, and not enough billions of $$$ were thrown at the victims. Now, in the wake of an entirely predictable correction after a very speculative and stupid real estate run-up, those institutions and individuals who foolishly invested in this unsustainable event, and reaped billions in profits during the good times, are being extravagently bailed out by the rest of us who saw this coming and made responsible decisions.

    This is not to say that I disagree with the Fed’s actions to try to ameliorate some of the worst effects of the financial crash on those of us who are relatively innocent regarding its cause, by lowering the discount rate and pumping a reasonable amount of cash into the markets, but outrights bailouts amount to theft from the responsible to prop up the irresponsible. Let the banks and brokerages which are obviously poorly managed fail — there is insurance for that.

    Hard times steel a nation, and, more importantly, steel a soul. The Adversary loves our carnal mindset that we will not tolerate tough times or suffering, because he knows that such times are also times of great spiritual revival and renewal.

  • http://www.cockahoop.com/ tODD

    Don S (@10), if you’re going to advocate a let-the-chips-fall-where-they-may policy and talk about how good it is to have hard times, then does it make sense to also write that you don’t “disagree with the Fed’s actions to try to ameliorate some of the worst effects of the financial crash on those of us who are relatively innocent regarding its cause”?

    I, too, am loathe to reward wrong-doing, hubris, or arrogance. But isn’t one of the underlying thoughts behind a bailout exactly that innocent people will be affected if nothing is done and people reap what they’ve sown? Is it possible to punish the wrong-doers and not have that impact the “innocent”?

  • http://www.cockahoop.com/ tODD

    Don S (@10), if you’re going to advocate a let-the-chips-fall-where-they-may policy and talk about how good it is to have hard times, then does it make sense to also write that you don’t “disagree with the Fed’s actions to try to ameliorate some of the worst effects of the financial crash on those of us who are relatively innocent regarding its cause”?

    I, too, am loathe to reward wrong-doing, hubris, or arrogance. But isn’t one of the underlying thoughts behind a bailout exactly that innocent people will be affected if nothing is done and people reap what they’ve sown? Is it possible to punish the wrong-doers and not have that impact the “innocent”?

  • Greg

    Don S writes:”but outrights bailouts amount to theft from the responsible to prop up the irresponsible. Let the banks and brokerages which are obviously poorly managed fail — there is insurance for that.” Given the fact that Bear Sterns was not bailed out as much as bought out at fire sale prices it looks like the fed is taking your advice. They seem to be trying to keep the economy afloat without creating a moral hazard. This might be an impossible task and fed mucking around with the economy may create more harm than good. I think though they are actually trying to help.

  • Greg

    Don S writes:”but outrights bailouts amount to theft from the responsible to prop up the irresponsible. Let the banks and brokerages which are obviously poorly managed fail — there is insurance for that.” Given the fact that Bear Sterns was not bailed out as much as bought out at fire sale prices it looks like the fed is taking your advice. They seem to be trying to keep the economy afloat without creating a moral hazard. This might be an impossible task and fed mucking around with the economy may create more harm than good. I think though they are actually trying to help.

  • http://stpaulbluepoint.org Speers

    The problem with these discussions, between right and left, gov’t intervention/regulation and free market etc, in our culture, is that, as Thomas Oden noted a few years ago, there is really no difference between the right and the left. Oden made a great point, as he visited the soviet union, that while they held their optimistic views of man’s nature, we in the US were no better, also holding to optimistic views of human nature. Listen to the rhetoric from Reagan, as he talks about what we can do. The Marxist/totalitarian regimes trust men to take care of them, and in the secular west we do the exact same thing, mystifying, perhaps, by claiming that things trickle down, that there is a hidden hand etc. In either case, those who have power, abuse their neighbors and cannot be trusted. Obama and the left’s popularity is evidence that, like the drunken peasant we fall off the donkey on both sides, trying to compensate for our last fall.

  • http://stpaulbluepoint.org Speers

    The problem with these discussions, between right and left, gov’t intervention/regulation and free market etc, in our culture, is that, as Thomas Oden noted a few years ago, there is really no difference between the right and the left. Oden made a great point, as he visited the soviet union, that while they held their optimistic views of man’s nature, we in the US were no better, also holding to optimistic views of human nature. Listen to the rhetoric from Reagan, as he talks about what we can do. The Marxist/totalitarian regimes trust men to take care of them, and in the secular west we do the exact same thing, mystifying, perhaps, by claiming that things trickle down, that there is a hidden hand etc. In either case, those who have power, abuse their neighbors and cannot be trusted. Obama and the left’s popularity is evidence that, like the drunken peasant we fall off the donkey on both sides, trying to compensate for our last fall.

  • http://stpaulbluepoint.org Speers

    The problem, ethically speaking, with NOT bailing people out, is that while everybody thought someone was watching, nobody was watching, and so lots of little folk get hurt while the CEOs et al walk away with hundreds of millions. Christians can never line up with either the right or the left without being willing to compensate for the abuses that inherent in each side. Huckabee was very good on this stuff and takes a much more biblical understanding of the two kingdoms than any of the other candidates, especially when it comes to dealing with those in need, hurt by the powerful etc.

  • http://stpaulbluepoint.org Speers

    The problem, ethically speaking, with NOT bailing people out, is that while everybody thought someone was watching, nobody was watching, and so lots of little folk get hurt while the CEOs et al walk away with hundreds of millions. Christians can never line up with either the right or the left without being willing to compensate for the abuses that inherent in each side. Huckabee was very good on this stuff and takes a much more biblical understanding of the two kingdoms than any of the other candidates, especially when it comes to dealing with those in need, hurt by the powerful etc.

  • http://www.bikebubba.blogspot.com Bike Bubba

    But Speers, we’re not bailing out the little guy here, but rather Bear Stearns. So while the big guy gets his hundreds of millions, the little guy gets taken TWICE–once on his loan or the value of his home, the second time via inflation & taxation.

  • http://www.bikebubba.blogspot.com Bike Bubba

    But Speers, we’re not bailing out the little guy here, but rather Bear Stearns. So while the big guy gets his hundreds of millions, the little guy gets taken TWICE–once on his loan or the value of his home, the second time via inflation & taxation.

  • Don S

    I had a feeling my last post would be a tad controversial, but I think it is a point that needs to be made. There is a spiritual aspect to this risk-averse mentality we all, left and right, have adopted in the past half century that needs to be considered.

    tODD @ # 11, I am not saying that we should encourage hard times, or suffering, or that we should take deliberate actions to “bring it on”. Rather, what I am saying is that, in my view, it is morally wrong to extract hard-earned tax money from responsible citizens to subsidize the actions of irresponsible citizens. At times, the market needs to correct, and we need to let it correct. Let people take responsibility for their actions. Of course, should people be in desperate straits, as a result, we as Christians have a duty to charitably meet their basic needs, to alleviate their suffering, as private individuals and churches, and to address their spiritual needs, which are ever so more poignantly evident to them at their time of need, at the same time.

    The difference between the fed exercising reasonable monetary policy (easing or tightening money supply) rather than engaging in outright bailouts, whether those be actual cash transfers or guaranteed lines of credit, should be obvious. And, of course, we are all affected to a degree by the overall state of the economy — the innocent will never be totally protected in this life, and none of us are truly innocent. However, that risk is one we all take by living.

    Greg @ #12 — I beg to differ. If you read the article Dr. Veith linked, you will see that the Fed made a $30 billion credit line guarantee to entice the bail out of Bear Stearns. We are on the hook for that. We are also on the hook for the drastically increased conforming loan guarantees Congress passed a month or so ago to bail out irresponsible homeowners.

    Speers @ #14 — you hit it on the head. None of us pay attention to what we are doing anymore because we all assume someone else (read government regulator) is watching. Whatever happened to caveat emptor? We need to do our own due diligence when we purchase, borrow, or invest, and it is irresponsible of us to assume the government will protect us or bail us out. We have lost the capacity of self-sufficiency which made America great.

  • Don S

    I had a feeling my last post would be a tad controversial, but I think it is a point that needs to be made. There is a spiritual aspect to this risk-averse mentality we all, left and right, have adopted in the past half century that needs to be considered.

    tODD @ # 11, I am not saying that we should encourage hard times, or suffering, or that we should take deliberate actions to “bring it on”. Rather, what I am saying is that, in my view, it is morally wrong to extract hard-earned tax money from responsible citizens to subsidize the actions of irresponsible citizens. At times, the market needs to correct, and we need to let it correct. Let people take responsibility for their actions. Of course, should people be in desperate straits, as a result, we as Christians have a duty to charitably meet their basic needs, to alleviate their suffering, as private individuals and churches, and to address their spiritual needs, which are ever so more poignantly evident to them at their time of need, at the same time.

    The difference between the fed exercising reasonable monetary policy (easing or tightening money supply) rather than engaging in outright bailouts, whether those be actual cash transfers or guaranteed lines of credit, should be obvious. And, of course, we are all affected to a degree by the overall state of the economy — the innocent will never be totally protected in this life, and none of us are truly innocent. However, that risk is one we all take by living.

    Greg @ #12 — I beg to differ. If you read the article Dr. Veith linked, you will see that the Fed made a $30 billion credit line guarantee to entice the bail out of Bear Stearns. We are on the hook for that. We are also on the hook for the drastically increased conforming loan guarantees Congress passed a month or so ago to bail out irresponsible homeowners.

    Speers @ #14 — you hit it on the head. None of us pay attention to what we are doing anymore because we all assume someone else (read government regulator) is watching. Whatever happened to caveat emptor? We need to do our own due diligence when we purchase, borrow, or invest, and it is irresponsible of us to assume the government will protect us or bail us out. We have lost the capacity of self-sufficiency which made America great.

  • http://stpaulbluepoint.org Speers

    The problem is that in a fallen world, there will always be regulators and laws etc, because we cannot watch everything everywhere. Buyer beware is fine when one is buying a pot from the local potter, but financial markets are not easy to negotiate.

    One of my good friends, a number of years ago, while looking the credit bubble warned me that this thing would soon be crashing. He also bought me a book, entitled Valuing Wallstreet by Smithers and Wright, in which, at this time, 11-2001, the stock market was overvalued by a factor of 2, which means, it will come down. Right now, we are trying to keep the thing from crashing around our ears, preventing another mess like the 1930s. Again, human beings are not trustworthy, and so there need to be laws, regulations, even GAAP. It is sad that we need this stuff, and it is expensive, as is the military, police force, enviromental regulations etc. Look at China, right now, a great strong economic force, but at what expense? They are reliving the industrial revolution, and in much of its horrid squalor…we will see if people will be able to breathe when they get there for the olympics.

    We were never self-sufficient. That is a myth. Again, people like Reagan and Rush et al all claim this. It makes for good rhetoric, but is, like much strong rhetoric, mythical.

  • http://stpaulbluepoint.org Speers

    The problem is that in a fallen world, there will always be regulators and laws etc, because we cannot watch everything everywhere. Buyer beware is fine when one is buying a pot from the local potter, but financial markets are not easy to negotiate.

    One of my good friends, a number of years ago, while looking the credit bubble warned me that this thing would soon be crashing. He also bought me a book, entitled Valuing Wallstreet by Smithers and Wright, in which, at this time, 11-2001, the stock market was overvalued by a factor of 2, which means, it will come down. Right now, we are trying to keep the thing from crashing around our ears, preventing another mess like the 1930s. Again, human beings are not trustworthy, and so there need to be laws, regulations, even GAAP. It is sad that we need this stuff, and it is expensive, as is the military, police force, enviromental regulations etc. Look at China, right now, a great strong economic force, but at what expense? They are reliving the industrial revolution, and in much of its horrid squalor…we will see if people will be able to breathe when they get there for the olympics.

    We were never self-sufficient. That is a myth. Again, people like Reagan and Rush et al all claim this. It makes for good rhetoric, but is, like much strong rhetoric, mythical.

  • Don S

    Speers, exactly how will more regulation and laws, made and enforced by the fallen in a fallen world, as you put it, really protect us? All of that is in place, and as you say, we are still in the economic soup. But someone who is in the habit of flipping houses to make a living, buying them with subprime loans and turning them over 6 months later in a rising market, making a fortune, should understand the basic law of economics — sooner or later the market will turn and correct. Explain to me why, exactly, you and I, presumably having made much more sane and careful choices, but having as a result missed out on the huge profits Mr. Flipper made for several years, now have the government come in and confiscate a portion of our wealth, in the form of taxes, to bail out Mr. Flipper? You’ve bought in to the nanny government mentality hook, line, and sinker.

    And where do you get the idea that “we were never self-sufficient” and that such a concept is “a myth”? You made the statement — back it up. Certainly, you are not saying that our founding fathers lived under the same oppressive regulatory scheme that we live under today? Certainly you are not saying that the pioneers who trekked across the prairie in the 1800′s had to file 1000 page environmental impact statements to ensure that the travel of their wagons across sensitive grasslands did not damage threatened flora or wildlife? Surely you are not saying that FEMA rushed into Chicago in the aftermath of the Great Chicago Fire in 1871 to ensure that each alleged victim of the fire received a $2,000 voucher and a free FEMA trailer?

    And you have ignored the primary point that I was making, concerning the damage to our spiritual lives because of our aversion to failure. The linkage between decisions we make and consequences to those decisions is lost when we bail out those who make poor choices. Moreover, we reinforce those poor choices. We deny people the opportunity to trust in God for their provision — we prefer them to trust in Almighty Big Government.

  • Don S

    Speers, exactly how will more regulation and laws, made and enforced by the fallen in a fallen world, as you put it, really protect us? All of that is in place, and as you say, we are still in the economic soup. But someone who is in the habit of flipping houses to make a living, buying them with subprime loans and turning them over 6 months later in a rising market, making a fortune, should understand the basic law of economics — sooner or later the market will turn and correct. Explain to me why, exactly, you and I, presumably having made much more sane and careful choices, but having as a result missed out on the huge profits Mr. Flipper made for several years, now have the government come in and confiscate a portion of our wealth, in the form of taxes, to bail out Mr. Flipper? You’ve bought in to the nanny government mentality hook, line, and sinker.

    And where do you get the idea that “we were never self-sufficient” and that such a concept is “a myth”? You made the statement — back it up. Certainly, you are not saying that our founding fathers lived under the same oppressive regulatory scheme that we live under today? Certainly you are not saying that the pioneers who trekked across the prairie in the 1800′s had to file 1000 page environmental impact statements to ensure that the travel of their wagons across sensitive grasslands did not damage threatened flora or wildlife? Surely you are not saying that FEMA rushed into Chicago in the aftermath of the Great Chicago Fire in 1871 to ensure that each alleged victim of the fire received a $2,000 voucher and a free FEMA trailer?

    And you have ignored the primary point that I was making, concerning the damage to our spiritual lives because of our aversion to failure. The linkage between decisions we make and consequences to those decisions is lost when we bail out those who make poor choices. Moreover, we reinforce those poor choices. We deny people the opportunity to trust in God for their provision — we prefer them to trust in Almighty Big Government.

  • http://stpaulbluepoint.org Speers

    Don S,
    Once you get as old as I am, you will remember things like the fact that the banking industry was regulated, more heavily regulated years ago. It was in 1994 and then in 1999 that this deregulation came to pass for the banking industry…hmmmm. And before that, in the 1980s, Reagan loosened the regulations on the savings and loans, and guess what, the Savings and Loan bailout. In fact, was Pres Clinton involved in some ways with real estate nonsense? In each case, greed seems to overrun commonsense and ethics. One could even blame Keynes, in part for some of this, as his theories really made a mess of our industrial base. (one of the ideas, which is somewhat of an exaggeration, is that we do not care about the long term…just the bottom line, NOW).

    When I was younger, the banks were not allowed to give everybody and their grandmother a credit card, loan money to those they know could not pay back. And these guys were not acting in the dark, they KNEW the risks etc. Now they, especially in the subprime markets, come back and claim, as they did before congress that they just did not know. They actually had the guts to claim that the money their companies made on upfront fees on subprime loans, is an indication of their good leadership, but NOW, when the market crashes, they blame housing prices (which their activity artificially inflated, and then they aggressively market 2nd or 3rd mortgages/home equity loans based on artificially inflated market values, so they get interest TWICE on the same property!), and walk away with the money they EARNED, NOT! And the republican party prostitutes itself to this nonsense under the guise of free market etc. What a way to make socialism look good to the common man! Remember, that unless there is self-control, a decent moral compass among executives, they will cut their own throats, and the iron fist of government will come down, at the beckoning of the people. That is how totalitarianism comes, with the consent of the people. Chaos leads to the desire for safety, at whatever cost it takes. That is why terrorism is a common theme among folk like Stalin, Lenin, Mao and the new terrorists. It is a method of political coercion.

  • http://stpaulbluepoint.org Speers

    Don S,
    Once you get as old as I am, you will remember things like the fact that the banking industry was regulated, more heavily regulated years ago. It was in 1994 and then in 1999 that this deregulation came to pass for the banking industry…hmmmm. And before that, in the 1980s, Reagan loosened the regulations on the savings and loans, and guess what, the Savings and Loan bailout. In fact, was Pres Clinton involved in some ways with real estate nonsense? In each case, greed seems to overrun commonsense and ethics. One could even blame Keynes, in part for some of this, as his theories really made a mess of our industrial base. (one of the ideas, which is somewhat of an exaggeration, is that we do not care about the long term…just the bottom line, NOW).

    When I was younger, the banks were not allowed to give everybody and their grandmother a credit card, loan money to those they know could not pay back. And these guys were not acting in the dark, they KNEW the risks etc. Now they, especially in the subprime markets, come back and claim, as they did before congress that they just did not know. They actually had the guts to claim that the money their companies made on upfront fees on subprime loans, is an indication of their good leadership, but NOW, when the market crashes, they blame housing prices (which their activity artificially inflated, and then they aggressively market 2nd or 3rd mortgages/home equity loans based on artificially inflated market values, so they get interest TWICE on the same property!), and walk away with the money they EARNED, NOT! And the republican party prostitutes itself to this nonsense under the guise of free market etc. What a way to make socialism look good to the common man! Remember, that unless there is self-control, a decent moral compass among executives, they will cut their own throats, and the iron fist of government will come down, at the beckoning of the people. That is how totalitarianism comes, with the consent of the people. Chaos leads to the desire for safety, at whatever cost it takes. That is why terrorism is a common theme among folk like Stalin, Lenin, Mao and the new terrorists. It is a method of political coercion.

  • http://stpaulbluepoint.org Speers

    Don S, with respect to the choices you and I have made, I wish it were that simple. In fact the Scriptures denies the idea that we are where we are on the basis of the choices that we made. We are given what we have by God, and God alone. I stress to my people, when I preach, that it is nothing but pure idolatry and arrogance to claim that the reason that I have is because I work hard and make good choices. NOT! Ask the woman or man working in China or some third world country for a few dollars a day, while their country is wrecked so we can have cheap Ipods etc, if they do not work hard? Ask the peasants and workers what choices they can make? That picture of the world is just too simplistic and too easily denied by the left. However, the Scriptures make it clear that we have what we need by the hand of God ALONE. (if you want to read a bit more about my understanding of this, read Luther’s small catechism, 1st article of the creed and his explanation and the 4th petition of the Lord’s Prayer and Luther’s explanation). The right in the US needs to think a bit more clearly about all this. And this is where I found Huckabee to be a breath of fresh air. He actually had to deal, responsibly with real troubles.

    You see, the Scriptures deny that we are “self-sufficient”. Another, deeper, read on this is Luther’s lectures on Ecclesiastes. There is no such thing, and no, I do not believe that anything that happened on the prairie/frontier substantiates ideas like that. I live in a farming community, on the prairie, and the folk who seek to live completely independently of others, who do not help and seek help, are the houses that you will drive past, in need of work, farms a mess, etc. The frontier folk, were dependent on the government in many ways.

    Wrt, environmental regulations, no they did not have to fill out the forms, but then again, ask yourself why this has happened? I used to work in the Metal Finishing industry, eg electroplating-nickel, chrome, zinc, cadmium etc. A hard industry to work in, given the regs that came out in the 70s and 80s. But there were reasons, and most of it came BECAUSE if idiots who tried to cheat their responsibilities to their neighbor. One guy, instead of paying to get rid of heavy metal sludge, buried under the sidewalk in the middle of a midwestern city. Ok, that made it easier for us to work!

  • http://stpaulbluepoint.org Speers

    Don S, with respect to the choices you and I have made, I wish it were that simple. In fact the Scriptures denies the idea that we are where we are on the basis of the choices that we made. We are given what we have by God, and God alone. I stress to my people, when I preach, that it is nothing but pure idolatry and arrogance to claim that the reason that I have is because I work hard and make good choices. NOT! Ask the woman or man working in China or some third world country for a few dollars a day, while their country is wrecked so we can have cheap Ipods etc, if they do not work hard? Ask the peasants and workers what choices they can make? That picture of the world is just too simplistic and too easily denied by the left. However, the Scriptures make it clear that we have what we need by the hand of God ALONE. (if you want to read a bit more about my understanding of this, read Luther’s small catechism, 1st article of the creed and his explanation and the 4th petition of the Lord’s Prayer and Luther’s explanation). The right in the US needs to think a bit more clearly about all this. And this is where I found Huckabee to be a breath of fresh air. He actually had to deal, responsibly with real troubles.

    You see, the Scriptures deny that we are “self-sufficient”. Another, deeper, read on this is Luther’s lectures on Ecclesiastes. There is no such thing, and no, I do not believe that anything that happened on the prairie/frontier substantiates ideas like that. I live in a farming community, on the prairie, and the folk who seek to live completely independently of others, who do not help and seek help, are the houses that you will drive past, in need of work, farms a mess, etc. The frontier folk, were dependent on the government in many ways.

    Wrt, environmental regulations, no they did not have to fill out the forms, but then again, ask yourself why this has happened? I used to work in the Metal Finishing industry, eg electroplating-nickel, chrome, zinc, cadmium etc. A hard industry to work in, given the regs that came out in the 70s and 80s. But there were reasons, and most of it came BECAUSE if idiots who tried to cheat their responsibilities to their neighbor. One guy, instead of paying to get rid of heavy metal sludge, buried under the sidewalk in the middle of a midwestern city. Ok, that made it easier for us to work!

  • Don S

    Speers, how old do you think I am? I am 48, and have 5 kids, two in college. I remember well the 70′s, those marvelous Carter years, and the breath of fresh air which was the 80′s, under the leadership of a man who understood the blessings that we uniquely enjoy as Americans in world history — there has never been another country as uniquely blessed and free as our’s. God is good, and we have been blessed, as you say, to have been born in America.

    Of course I agree with you that we are not self-sufficient, in the sense that our very breath derives from God. You know perfectly well that the context of my remarks were that I meant self-sufficiency in the sense of being independent from government, not from God. I agree that we have what we need by the hand of God, but it is a mistake to assume that we make no choices. People make choices every day. We are not robots, we are people who have been blessed by God to have free will and to use or not to use the talents and gifts that He has given us for His service. We have what we have by the hand of God, but we have to choose what to do with what He has given us, within the circumstances He has placed us in.

    As for frontier folk, I certainly did not claim that they were not interdependent. Of course, they required community to be successful. I don’t see how you make the leap from community to government, however. At least not to be centralized federal government.

    Regarding a regulated vs. a free market economy, of course you will have excesses in a free market. But, you also have excesses in a regulated economy. These mostly come in the form of corruption — you have legislators and regulators with incredible power and the ability to grant favors to certain constituencies and contributors, you have enforcers who enforce unevenly either because of incompetence or corruption (bribery, etc.). The difference is that in a free market, you have the opportunity to walk away and use another vendor. It tends to self-correct. Once government has entered the arena, it can act only by coercion. There will be no liberty to choose an alternative, and there will, of course, be no accommodation of God or spirituality in that arena because of the highly pernicious doctrine of separation of church and state.

    Hard times steel the soul. The point I made in my first post still stands — dependence on God, rather than “almighty government” is a good thing.

  • Don S

    Speers, how old do you think I am? I am 48, and have 5 kids, two in college. I remember well the 70′s, those marvelous Carter years, and the breath of fresh air which was the 80′s, under the leadership of a man who understood the blessings that we uniquely enjoy as Americans in world history — there has never been another country as uniquely blessed and free as our’s. God is good, and we have been blessed, as you say, to have been born in America.

    Of course I agree with you that we are not self-sufficient, in the sense that our very breath derives from God. You know perfectly well that the context of my remarks were that I meant self-sufficiency in the sense of being independent from government, not from God. I agree that we have what we need by the hand of God, but it is a mistake to assume that we make no choices. People make choices every day. We are not robots, we are people who have been blessed by God to have free will and to use or not to use the talents and gifts that He has given us for His service. We have what we have by the hand of God, but we have to choose what to do with what He has given us, within the circumstances He has placed us in.

    As for frontier folk, I certainly did not claim that they were not interdependent. Of course, they required community to be successful. I don’t see how you make the leap from community to government, however. At least not to be centralized federal government.

    Regarding a regulated vs. a free market economy, of course you will have excesses in a free market. But, you also have excesses in a regulated economy. These mostly come in the form of corruption — you have legislators and regulators with incredible power and the ability to grant favors to certain constituencies and contributors, you have enforcers who enforce unevenly either because of incompetence or corruption (bribery, etc.). The difference is that in a free market, you have the opportunity to walk away and use another vendor. It tends to self-correct. Once government has entered the arena, it can act only by coercion. There will be no liberty to choose an alternative, and there will, of course, be no accommodation of God or spirituality in that arena because of the highly pernicious doctrine of separation of church and state.

    Hard times steel the soul. The point I made in my first post still stands — dependence on God, rather than “almighty government” is a good thing.

  • Don S

    Here’s a succinct way to put it:

    Hard times steel our souls, over-reliance on big governement steals our souls.

  • Don S

    Here’s a succinct way to put it:

    Hard times steel our souls, over-reliance on big governement steals our souls.

  • http://stpaulbluepoint.org Speers

    Don

    I did not know how old you are. I do know, however, that we are not independent from govt, cf Romans 13 and Luther’s doctrine of the Two Kingdoms. Paul writes in Romans 13 that every authority is from God, and so the govt, even as Luther notes in his explanation to the 1st article of the creed, and also in his discussions on the 4th commandment.

    The realities of being tied/dependent upon large govt, federal govt as you say, is a fact of life for all who care about their neighbor and who do not want to see the US balkanized. I am not saying that govt is the way things should be done, however, when population will not take care of neighbors, (cf Milton Freeman’s book Free to Choose, where he advocated that churches and private individuals take care of neighbor, BECAUSE they can do a much better job of it, more efficient etc, than govt can…I even did a paper for an urban affairs class on poverty, noting that in 1980 it cost the US govt $167,000.00 to raise one person above the poverty level, might as well just cut each a check and close down the bureaucracy).

    The problem, Don, is that neighbors, being greedy and selfish, make others clean up their messes. Instead of people caring for each other, we have businessmen, the “icons” of American business, images of the American Dream according to a couple silly republican congressman, who plundered their neighbor, essentially and now walk away with the spoils, again, as “icons”. Sorry, but I cannot stomach this. It sounds easy to say that the folk who were buffaloed should have been more careful, but you know, we had laws against usurious practices, loansharking et al, until things were deregulated. Loansharks prey on the weak…hence the term sharks, wolves…we make them icons. Just does not fit with any vision of community that I know. Left or right…

  • http://stpaulbluepoint.org Speers

    Don

    I did not know how old you are. I do know, however, that we are not independent from govt, cf Romans 13 and Luther’s doctrine of the Two Kingdoms. Paul writes in Romans 13 that every authority is from God, and so the govt, even as Luther notes in his explanation to the 1st article of the creed, and also in his discussions on the 4th commandment.

    The realities of being tied/dependent upon large govt, federal govt as you say, is a fact of life for all who care about their neighbor and who do not want to see the US balkanized. I am not saying that govt is the way things should be done, however, when population will not take care of neighbors, (cf Milton Freeman’s book Free to Choose, where he advocated that churches and private individuals take care of neighbor, BECAUSE they can do a much better job of it, more efficient etc, than govt can…I even did a paper for an urban affairs class on poverty, noting that in 1980 it cost the US govt $167,000.00 to raise one person above the poverty level, might as well just cut each a check and close down the bureaucracy).

    The problem, Don, is that neighbors, being greedy and selfish, make others clean up their messes. Instead of people caring for each other, we have businessmen, the “icons” of American business, images of the American Dream according to a couple silly republican congressman, who plundered their neighbor, essentially and now walk away with the spoils, again, as “icons”. Sorry, but I cannot stomach this. It sounds easy to say that the folk who were buffaloed should have been more careful, but you know, we had laws against usurious practices, loansharking et al, until things were deregulated. Loansharks prey on the weak…hence the term sharks, wolves…we make them icons. Just does not fit with any vision of community that I know. Left or right…

  • http://stpaulbluepoint.org Speers

    With regard to free markets, you have not quite got there, Don. We had free markets in the early part of the 20th century, oil was one of them, and we quickly found out that they needed to be regulated. Monopolies have rarely been a positive development, and that is a direction that the powerful tend to move, over and over again throughout history. You buy only from me and pay my prices. Again, fallen human nature does not allow free markets to work, without regulations.

  • http://stpaulbluepoint.org Speers

    With regard to free markets, you have not quite got there, Don. We had free markets in the early part of the 20th century, oil was one of them, and we quickly found out that they needed to be regulated. Monopolies have rarely been a positive development, and that is a direction that the powerful tend to move, over and over again throughout history. You buy only from me and pay my prices. Again, fallen human nature does not allow free markets to work, without regulations.

  • http://stpaulbluepoint.org Speers

    I like the doctrine of the separation of church and state, for as Luther said, when churchmen start to run the state, they make a mess of it.

    The subtle distinction, in your final words, Don, is “over-reliance”, and that is something that we are always trying to balance. However, when scum in business, ruin people’s lives for their own enrichment, and steal and covet with impunity, there should be no mercy from the govt. There should be severe penalities, not golden parachutes.

  • http://stpaulbluepoint.org Speers

    I like the doctrine of the separation of church and state, for as Luther said, when churchmen start to run the state, they make a mess of it.

    The subtle distinction, in your final words, Don, is “over-reliance”, and that is something that we are always trying to balance. However, when scum in business, ruin people’s lives for their own enrichment, and steal and covet with impunity, there should be no mercy from the govt. There should be severe penalities, not golden parachutes.

  • Don S

    Speers, obviously we profoundly disagree in our politics. I notice you keep referencing “silly republicans”, as if there has never been a silly democrat. You keep mentioning corrupt businessmen, but proceed as if there are no corrupt politicians.

    Government can do nothing without coercion. Every dollar it spends is extracted involuntarily from someone. Every regulation it promulgates diminishes someone’s liberty. Because it is distributing limited resources, and is incapable of producing anything on its own, it is naturally divisive, inducing factions which demand their share of those limited resources, at the expense of some other faction. It induces corruption, to ensure favorable consideration by those imbued with the power to distribute the aforementioned resources. It is metastatic, growing voraciously into more and more sectors of daily life. This growth is irreversible, because once a new program has been instituted, those who benefit from it will ensure that it is never allowed to lapse. An entrenched bureaucracy further ensures the eternal life of every government program, in order to protect its own jobs.

    Two other observations, for your consideration. 1) Big government destroys community. Where neighbors used to help one another as a way of life, now they expect government to perform this function for them (I pay my taxes — why isn’t the government stepping in and taking care of this?). Government also takes so many of the peoples’ resources that they don’t feel like they have an option to be as charitable as they would otherwise like. 2) Big government has intruded into so many areas of everyday life, that faith has been pushed into churches and homes. You say you like the doctrine of separation of church and state, but surely you don’t mean you like it as it is interpreted by the ACLU’s of this world, wherein one is not free to practice one’s faith in any area of life in which government is involved.

    No, I’ll take my chances with limited government and free markets any day of the week.

  • Don S

    Speers, obviously we profoundly disagree in our politics. I notice you keep referencing “silly republicans”, as if there has never been a silly democrat. You keep mentioning corrupt businessmen, but proceed as if there are no corrupt politicians.

    Government can do nothing without coercion. Every dollar it spends is extracted involuntarily from someone. Every regulation it promulgates diminishes someone’s liberty. Because it is distributing limited resources, and is incapable of producing anything on its own, it is naturally divisive, inducing factions which demand their share of those limited resources, at the expense of some other faction. It induces corruption, to ensure favorable consideration by those imbued with the power to distribute the aforementioned resources. It is metastatic, growing voraciously into more and more sectors of daily life. This growth is irreversible, because once a new program has been instituted, those who benefit from it will ensure that it is never allowed to lapse. An entrenched bureaucracy further ensures the eternal life of every government program, in order to protect its own jobs.

    Two other observations, for your consideration. 1) Big government destroys community. Where neighbors used to help one another as a way of life, now they expect government to perform this function for them (I pay my taxes — why isn’t the government stepping in and taking care of this?). Government also takes so many of the peoples’ resources that they don’t feel like they have an option to be as charitable as they would otherwise like. 2) Big government has intruded into so many areas of everyday life, that faith has been pushed into churches and homes. You say you like the doctrine of separation of church and state, but surely you don’t mean you like it as it is interpreted by the ACLU’s of this world, wherein one is not free to practice one’s faith in any area of life in which government is involved.

    No, I’ll take my chances with limited government and free markets any day of the week.

  • http://www.bikebubba.blogspot.com Bike Bubba

    Speers, it actually turns out that (Olasky, The American Leadership Tradition) Standard Oil had lost about a third of its market share due to being late to Texas before the antitrust action even began. Markets destroy monopolies–as is notable by the case of J.P. Hill, whose Great Northern Railroad nearly put the Union Pacific and Central Pacific out of business until the government intervened–despite having a decidedly less advantageous route than the U.P. had (further north).

    Reality is that the late 1800s and early 1900s were actually times of great government interference (e.g. railroads), not laissez-faire–and the great monopolies were born not of markets, but of government intervention.

  • http://www.bikebubba.blogspot.com Bike Bubba

    Speers, it actually turns out that (Olasky, The American Leadership Tradition) Standard Oil had lost about a third of its market share due to being late to Texas before the antitrust action even began. Markets destroy monopolies–as is notable by the case of J.P. Hill, whose Great Northern Railroad nearly put the Union Pacific and Central Pacific out of business until the government intervened–despite having a decidedly less advantageous route than the U.P. had (further north).

    Reality is that the late 1800s and early 1900s were actually times of great government interference (e.g. railroads), not laissez-faire–and the great monopolies were born not of markets, but of government intervention.

  • http://stpaulbluepoint.org Speers

    Bubba,

    Why did we need antitrust legislation? Your point is actually a non-sequitur, since if markets controlled things, as if they had some ethical character apart from the sinners who inhabit and use them, people would not need regulation. Again, I suggest some light from Luther’s works on Usury, Two Kind of Righteousness, etc.

    Markets are not creatures that are acting from some moral compass, but a reflection of our own ethics, actually played out. And so, while it might be nice to disengage the market from the current state of ethics et al, and claim some sort of stable, force which corrects problems, the fact is, the market is people, and reflect the ethic and character of the people.

    As someone who worked in American Industry in the 70s-90s, I have to say that the market, over and over again, had to be regulated because people were hurt, and not because they did not practice buyer beware.

    A good book to chew on wrt this kind of stuff is Herbert Schlossberg’s Idols for Destruction, in which he summarily rips apart the naive pretensions of the left and right and claims that each should know the errors, potential errors and troubles inherent in each system. There is no system which exists which man cannot corrupt and abuse. So there exists commandments from God to take care of neighbor, not protect your ideology.

  • http://stpaulbluepoint.org Speers

    Bubba,

    Why did we need antitrust legislation? Your point is actually a non-sequitur, since if markets controlled things, as if they had some ethical character apart from the sinners who inhabit and use them, people would not need regulation. Again, I suggest some light from Luther’s works on Usury, Two Kind of Righteousness, etc.

    Markets are not creatures that are acting from some moral compass, but a reflection of our own ethics, actually played out. And so, while it might be nice to disengage the market from the current state of ethics et al, and claim some sort of stable, force which corrects problems, the fact is, the market is people, and reflect the ethic and character of the people.

    As someone who worked in American Industry in the 70s-90s, I have to say that the market, over and over again, had to be regulated because people were hurt, and not because they did not practice buyer beware.

    A good book to chew on wrt this kind of stuff is Herbert Schlossberg’s Idols for Destruction, in which he summarily rips apart the naive pretensions of the left and right and claims that each should know the errors, potential errors and troubles inherent in each system. There is no system which exists which man cannot corrupt and abuse. So there exists commandments from God to take care of neighbor, not protect your ideology.

  • http://stpaulbluepoint.org Speers

    Don,

    The Market is very coercive…why won’t people admit this? Just the fact that people believe they need insurance is evidence of this.

    Government is a good gift of God, according to the bible. Romans 13, *it* does not force or do anything. Sinful human nature ruins govt, markets, etc. As John Warwick Montgomery said of our legal code in America, we have 30,000 laws to enforce 10 commandments, essentially.

  • http://stpaulbluepoint.org Speers

    Don,

    The Market is very coercive…why won’t people admit this? Just the fact that people believe they need insurance is evidence of this.

    Government is a good gift of God, according to the bible. Romans 13, *it* does not force or do anything. Sinful human nature ruins govt, markets, etc. As John Warwick Montgomery said of our legal code in America, we have 30,000 laws to enforce 10 commandments, essentially.

  • http://stpaulbluepoint.org Speers

    Don, again, please understand, I am not committed to one party/ideology over another. I have to deal with what is. Now this is not pragmaticism, as much as it is love. I would like to say that everything should work the way it should work, but according to Genesis 3, in all human endeavors there are weeds, stones, and thorns.

    The reason I mentioned silly republicans, is that they are so oblivious to things that they do not understand why people are laughing. They should be more self-critical. They should recognize that they need to use some form of an ethic to judge the character of people and not their own greed or desire for power, (and the willingness of the other to help them achieve this).

    The difference I see between the Reagan era and now, is that the Republicans are now more interested in power than in a message. You can almost see them moving with every light breeze. Instead, if they actually had some depth (and some of them do), and could speak about it, in contrast to the democrats, they might have a chance to rule. But right now, the only thing they can hope for is a series of gaffs on the part of the democrats.

  • http://stpaulbluepoint.org Speers

    Don, again, please understand, I am not committed to one party/ideology over another. I have to deal with what is. Now this is not pragmaticism, as much as it is love. I would like to say that everything should work the way it should work, but according to Genesis 3, in all human endeavors there are weeds, stones, and thorns.

    The reason I mentioned silly republicans, is that they are so oblivious to things that they do not understand why people are laughing. They should be more self-critical. They should recognize that they need to use some form of an ethic to judge the character of people and not their own greed or desire for power, (and the willingness of the other to help them achieve this).

    The difference I see between the Reagan era and now, is that the Republicans are now more interested in power than in a message. You can almost see them moving with every light breeze. Instead, if they actually had some depth (and some of them do), and could speak about it, in contrast to the democrats, they might have a chance to rule. But right now, the only thing they can hope for is a series of gaffs on the part of the democrats.

  • http://www.bikebubba.blogspot.com Bike Bubba

    Speers, my question stands; why is it that most of the monopolies I’ve seen actually were set up by government? Why is it that I can’t name a single successful antitrust action–one that actually broke up a company that had no viable competitors?

    The answer is that the coercive element is government, not the market–you can walk away from the latter, but good luck getting away from the former.

    And all that “helpful” regulation? Do you mean like the Fed’s reserve rules that led to the Depression? Or the phone regulations that prevented telephone service from being inexpensive and reliable? Please.

  • http://www.bikebubba.blogspot.com Bike Bubba

    Speers, my question stands; why is it that most of the monopolies I’ve seen actually were set up by government? Why is it that I can’t name a single successful antitrust action–one that actually broke up a company that had no viable competitors?

    The answer is that the coercive element is government, not the market–you can walk away from the latter, but good luck getting away from the former.

    And all that “helpful” regulation? Do you mean like the Fed’s reserve rules that led to the Depression? Or the phone regulations that prevented telephone service from being inexpensive and reliable? Please.

  • http://stpaulbluepoint.org Speers

    The reality of your question is that you are arguing from anecdotes…I can do the same. We will get nowhere.

    The market is very coercive. I do not understand how someone can say otherwise? Is one more coercive than another? I think it depends on the circumstances. For someone losing their house so that some speculator can now cash in on artificially inflated markets, created by the speculators and banks, (remember the “market” is a mystery to most if not all economists, and runs on emotion a great deal of the time, swinging like emotions, and like emotions, hurting one and then another), the market looks very coercive. To banks who want to keep people in debt, selling debt, et al, there is a matter of coercion. Oh, it is not a gun, but it is there, nonetheless.

    Show me ONE example of a society where there have been NO regulations? For crying out loud, the 7th commandment, the theocracy of Israel et al, all regulated. Did God just not know what He was doing? Again, show me ONE example of a society without govt regulations. If there are none, then we have to deal with trying to find healthy balance. When things are regulated, guns eg, do people get annoyed, bothered etc? Sure, but what brings that on? Did we always have such regulations? No, people abusing their freedoms, the degeneration of culture leads to more and more regulations since, when people will not impose self-control, in business, personal life etc, then someone will.

  • http://stpaulbluepoint.org Speers

    The reality of your question is that you are arguing from anecdotes…I can do the same. We will get nowhere.

    The market is very coercive. I do not understand how someone can say otherwise? Is one more coercive than another? I think it depends on the circumstances. For someone losing their house so that some speculator can now cash in on artificially inflated markets, created by the speculators and banks, (remember the “market” is a mystery to most if not all economists, and runs on emotion a great deal of the time, swinging like emotions, and like emotions, hurting one and then another), the market looks very coercive. To banks who want to keep people in debt, selling debt, et al, there is a matter of coercion. Oh, it is not a gun, but it is there, nonetheless.

    Show me ONE example of a society where there have been NO regulations? For crying out loud, the 7th commandment, the theocracy of Israel et al, all regulated. Did God just not know what He was doing? Again, show me ONE example of a society without govt regulations. If there are none, then we have to deal with trying to find healthy balance. When things are regulated, guns eg, do people get annoyed, bothered etc? Sure, but what brings that on? Did we always have such regulations? No, people abusing their freedoms, the degeneration of culture leads to more and more regulations since, when people will not impose self-control, in business, personal life etc, then someone will.

  • http://stpaulbluepoint.org Speers

    Francis Schaeffer made this point again and again, but I think it can be found in How THen Shall we Live, that when people will not live responsibly, when they claim to have the right to fulfill their desires, when chaos begins to become the order of the day, other people will call out for justice and control. When there is no SELF-CONTROL, people will welcome tyrants. The tyrants will remove the freedoms, rights etc, all under the guise of safety and well-being. Ironically, that is exactly what the Right in the US is playing with, and the ACLU is struggling against. Notice the irony, the group fighting, according to some, for big government/regulation is fighting those who are always crying out freedom, personal responsibility etc. It just depends on what ethic/worldview you hold.

  • http://stpaulbluepoint.org Speers

    Francis Schaeffer made this point again and again, but I think it can be found in How THen Shall we Live, that when people will not live responsibly, when they claim to have the right to fulfill their desires, when chaos begins to become the order of the day, other people will call out for justice and control. When there is no SELF-CONTROL, people will welcome tyrants. The tyrants will remove the freedoms, rights etc, all under the guise of safety and well-being. Ironically, that is exactly what the Right in the US is playing with, and the ACLU is struggling against. Notice the irony, the group fighting, according to some, for big government/regulation is fighting those who are always crying out freedom, personal responsibility etc. It just depends on what ethic/worldview you hold.

  • http://stpaulbluepoint.org Speers

    Just to clarify

    Notice the irony, the group fighting, according to some, for big government/regulation **(THE ACLU)** is fighting those who are always crying out freedom, personal responsibility etc **(THE RIGHT)**. That is, the ACLU is seemingly on the opposite side, fighting for our civil liberties, while the right, claiming big govt is a no-no, regulation bad, is perceived as taking away liberties.

  • http://stpaulbluepoint.org Speers

    Just to clarify

    Notice the irony, the group fighting, according to some, for big government/regulation **(THE ACLU)** is fighting those who are always crying out freedom, personal responsibility etc **(THE RIGHT)**. That is, the ACLU is seemingly on the opposite side, fighting for our civil liberties, while the right, claiming big govt is a no-no, regulation bad, is perceived as taking away liberties.

  • http://www.cockahoop.com/ tODD

    I have often thought that the problem with leftists, socialists, and statists is that they forget that man is sinful. If a few men are placed in a position of power over others for their good (in theory), the sinfulness of the few will become evident as they act selfishly to their own ends, and not that of their neighbors (constituents).

    Similarly, the problem with rightists, free-marketers, and libertarians is that they forget that man is sinful. If the government does not act as a check over individuals and they are allowed to act for their own good (in theory), the sinfulness of the many will become evident as they act selfishly to their own ends and not that of their neighbors.

  • http://www.cockahoop.com/ tODD

    I have often thought that the problem with leftists, socialists, and statists is that they forget that man is sinful. If a few men are placed in a position of power over others for their good (in theory), the sinfulness of the few will become evident as they act selfishly to their own ends, and not that of their neighbors (constituents).

    Similarly, the problem with rightists, free-marketers, and libertarians is that they forget that man is sinful. If the government does not act as a check over individuals and they are allowed to act for their own good (in theory), the sinfulness of the many will become evident as they act selfishly to their own ends and not that of their neighbors.

  • speers

    Todd,

    Exactly!

  • speers

    Todd,

    Exactly!


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