Resurrection of socialism?

Consider this development in the government’s attempt to shore up the mortgage market:

Treasury Secretary Henry Paulson swung the weight of the federal government behind Fannie Mae and Freddie Mac, the beleaguered companies that buy or finance almost half of the $12 trillion of U.S. mortgages.

Paulson, speaking on the steps of the Treasury facing the White House, asked Congress for authority to buy unlimited stakes in and lend to the companies, aiming to stem a collapse in confidence. The Federal Reserve separately authorized the firms to borrow directly from the central bank.

When the government OWN industries, isn’t that socialism? A Washington Post pundit uses the N-word in calling for complete nationalization of these two institutions, arguing that instead of just lending them money the state should get something back by owning them.

Government-run health care is now, some are saying, inevitable. Liberal politicians have been threatening to nationalize the oil industries. Now that conservativism is being repudiated, do you think the once discredited economic system of socialism is coming back into favor?

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://heresyhunter.blogspot.com Bob Hunter

    Regarding health care, a couple of questions: Which is worse – government-run health care or uninsured citizens dying because they can’t afford coverage? Is there a better alternative to either scenario?

  • http://heresyhunter.blogspot.com Bob Hunter

    Regarding health care, a couple of questions: Which is worse – government-run health care or uninsured citizens dying because they can’t afford coverage? Is there a better alternative to either scenario?

  • FWw

    i think labels like socialism and such are unproductive here in this particular discussion…..

    the problem is that the free market does need policing just as any other human endeavor does. the fiction that we can loose an unregulated free market is what has brought us to this point. 20 years ago men predicted the creation of freddy mac and the fictitious privatization of fannie mae would lead to taxpayers holding the bag. Guess what. Now this is happening.

    the popular discourse confuses things. deregulation does not equal free market. Free does not mean unregulated. That is anarchy. Structure DOES equal freedom. this is the exact point of error.

    trust is essential in an economy based on pieces of paper with only a perceived worth. we call them dollars.

    now that the economy is becoming internationalized, this trust is even more essential and will probably need some adjustments to our concept of the word “sovreignty” as well.

    It would be most beneficial for us to study and return to the concept of “the rule of law”. The root problem is that we are returning to the “rule of men”. we are placing our trust in them.

    The socialism question merely addresses a symptom of this root problem.

    The public discourse, full of personality and personal attacks and defenses is my proof of all this. Bush and cheney have pushed for FISA and legalized torture and for limiting the Rule of Law to our borders by means of technicalities. I do not believe that Bush and Cheney are evil or men of evil intensions in any way. Good men do evil things, and even evil men can make the trains run on time and promote motherhood and patriotism. Proof of social goodness is allegiance to Rules and Laws and proper procedure and demonstration of that in times when that is highly inconvenient and unpopular.

    I DO believe that if someone evil were to appear and want to become a dictator or worse, Bush and Cheney , with the full complicity of a Democratic congress……. , have dramatically eroded the Rule of Law in favor of a “strong executive branch” and expedient means justified by “just” ends.

    Health care…. free market….. we are sooooo far from that fiction…. when was the last time you tried to do market research on selecting a surgeon for a surgery? how many failed surguries? how many did he or she perform? Where is the market data that would let consumers make informed decisions here and that would move towards cost reductions in the form of letting consumers decide on various options?

    Would either party, democratic or republican , promote the radical regulations (yes regulations … ) necessary to overcome the AMA monopolistic practices?

    The public debate on healthcare also sidesteps important and obvious facts….

    When I was much younger, there were few regulations needed in national parks because there were fewer people using those parks. It vexes me now to have so many rules about camp fires and fishing and all….. but as there are more people there need to be more rules. more regulations.

    I would suggest that this is quite ordinary and desirable actually. This is not about free market versus socialism. regulation versus free market mechanisms. This is about the Rule of Law vs the rule (chaos) of Men.

    If you pose the wrong question or pose it as a “pick choice a or b and the correct answer” , the solutions appear more obvious but this is only an appearance.

  • FWw

    i think labels like socialism and such are unproductive here in this particular discussion…..

    the problem is that the free market does need policing just as any other human endeavor does. the fiction that we can loose an unregulated free market is what has brought us to this point. 20 years ago men predicted the creation of freddy mac and the fictitious privatization of fannie mae would lead to taxpayers holding the bag. Guess what. Now this is happening.

    the popular discourse confuses things. deregulation does not equal free market. Free does not mean unregulated. That is anarchy. Structure DOES equal freedom. this is the exact point of error.

    trust is essential in an economy based on pieces of paper with only a perceived worth. we call them dollars.

    now that the economy is becoming internationalized, this trust is even more essential and will probably need some adjustments to our concept of the word “sovreignty” as well.

    It would be most beneficial for us to study and return to the concept of “the rule of law”. The root problem is that we are returning to the “rule of men”. we are placing our trust in them.

    The socialism question merely addresses a symptom of this root problem.

    The public discourse, full of personality and personal attacks and defenses is my proof of all this. Bush and cheney have pushed for FISA and legalized torture and for limiting the Rule of Law to our borders by means of technicalities. I do not believe that Bush and Cheney are evil or men of evil intensions in any way. Good men do evil things, and even evil men can make the trains run on time and promote motherhood and patriotism. Proof of social goodness is allegiance to Rules and Laws and proper procedure and demonstration of that in times when that is highly inconvenient and unpopular.

    I DO believe that if someone evil were to appear and want to become a dictator or worse, Bush and Cheney , with the full complicity of a Democratic congress……. , have dramatically eroded the Rule of Law in favor of a “strong executive branch” and expedient means justified by “just” ends.

    Health care…. free market….. we are sooooo far from that fiction…. when was the last time you tried to do market research on selecting a surgeon for a surgery? how many failed surguries? how many did he or she perform? Where is the market data that would let consumers make informed decisions here and that would move towards cost reductions in the form of letting consumers decide on various options?

    Would either party, democratic or republican , promote the radical regulations (yes regulations … ) necessary to overcome the AMA monopolistic practices?

    The public debate on healthcare also sidesteps important and obvious facts….

    When I was much younger, there were few regulations needed in national parks because there were fewer people using those parks. It vexes me now to have so many rules about camp fires and fishing and all….. but as there are more people there need to be more rules. more regulations.

    I would suggest that this is quite ordinary and desirable actually. This is not about free market versus socialism. regulation versus free market mechanisms. This is about the Rule of Law vs the rule (chaos) of Men.

    If you pose the wrong question or pose it as a “pick choice a or b and the correct answer” , the solutions appear more obvious but this is only an appearance.

  • EconJeff

    From what I’ve seen in the data, nationalized health care is far more efficient in terms of pooling risk for an unexpected health care need. However, it will necessarily entail some cap on spending or else the Medicare-funding problem is going to be dwarfed in size. As long as individuals can purchase private, supplemental insurance and the national program is a “no frills” (however defined) program, I’m a converted conservative on that issue.

    But I really don’t see the need for a nationalized mortgage lender. If the two highly-regulated firms didn’t work out (which some might argue is because of those regulations), why would a single firm run by an enormous bureacracy be better?

  • EconJeff

    From what I’ve seen in the data, nationalized health care is far more efficient in terms of pooling risk for an unexpected health care need. However, it will necessarily entail some cap on spending or else the Medicare-funding problem is going to be dwarfed in size. As long as individuals can purchase private, supplemental insurance and the national program is a “no frills” (however defined) program, I’m a converted conservative on that issue.

    But I really don’t see the need for a nationalized mortgage lender. If the two highly-regulated firms didn’t work out (which some might argue is because of those regulations), why would a single firm run by an enormous bureacracy be better?

  • EconJeff

    Oh, and to actually answer the post: To some extent socialism is coming back into favor. The market can fail and so can government. To look at more immediate history, the 60s/70s seemed to swing the pendulum to the left, the 80s/90s seemed to swing it right (maybe not conservative, but more individualistic) and it seems we are now starting to swing more towards a balance.

    As I indicated in my previous post, the research on health care seems to be that the current system is not working. And as FWw has pointed out, there need to be some more rules now-a-days. What those rules are we can debate about, but something needs to change.

  • EconJeff

    Oh, and to actually answer the post: To some extent socialism is coming back into favor. The market can fail and so can government. To look at more immediate history, the 60s/70s seemed to swing the pendulum to the left, the 80s/90s seemed to swing it right (maybe not conservative, but more individualistic) and it seems we are now starting to swing more towards a balance.

    As I indicated in my previous post, the research on health care seems to be that the current system is not working. And as FWw has pointed out, there need to be some more rules now-a-days. What those rules are we can debate about, but something needs to change.

  • FWw

    by the way. Milton Freedman convinced me that government regulation almost always results in government enforced monopolies. the ICC was created to regulate railroads, because there was a great disparity in rates between long hauls and short hauls) and in time the railroads took over the ICC and raised long haul rates to equal short haul rates! He also posited the theory that a monopoly can exist only with government support.

    Where I differ from Dr Freeman is that while is observations are right on the money, his conclusion from that that regulations are bad or unnecessary is wrong.

    Financial activities, perhaps more than any other, inspire sin and often sin masked as virtue (eg “hard work” “merit” “independence”, etc etc). So here the Rule of Law is especially important and especially here you will see the powerful spare no effort to assert their exception from the Rule of Law.

    I am a CPA and international auditor with years of experience in business. I have first hand experience here.

  • FWw

    by the way. Milton Freedman convinced me that government regulation almost always results in government enforced monopolies. the ICC was created to regulate railroads, because there was a great disparity in rates between long hauls and short hauls) and in time the railroads took over the ICC and raised long haul rates to equal short haul rates! He also posited the theory that a monopoly can exist only with government support.

    Where I differ from Dr Freeman is that while is observations are right on the money, his conclusion from that that regulations are bad or unnecessary is wrong.

    Financial activities, perhaps more than any other, inspire sin and often sin masked as virtue (eg “hard work” “merit” “independence”, etc etc). So here the Rule of Law is especially important and especially here you will see the powerful spare no effort to assert their exception from the Rule of Law.

    I am a CPA and international auditor with years of experience in business. I have first hand experience here.

  • FWw

    econ Jeff

    I am most surprised Jeff that you did not respond to my thoughts about just how radically far we are from a market in healthcare that provides consumers with even the most very basic of information that would be necessary for them to select a doctor or hospital factoring quality and cost.

    Without those things arent we really then discussing anything BUT free market capitalism even with health care as it existed 30 or 40 years ago?

    Isnt the discussion about government vs non government healthcare way off the mark? the false choice here seems obvious.

    we perpetuate a government enabled monopoly of doctors and hospitals (that extends even to the production of more doctors….cost of becoming a doctor is now prohibitive for all except the rich….) that has been in existence for the life of what we know as modern medicine (passage of time still doesn´t make it right or desireable), OR socialized medicine…. that is not a good set of choices….

  • FWw

    econ Jeff

    I am most surprised Jeff that you did not respond to my thoughts about just how radically far we are from a market in healthcare that provides consumers with even the most very basic of information that would be necessary for them to select a doctor or hospital factoring quality and cost.

    Without those things arent we really then discussing anything BUT free market capitalism even with health care as it existed 30 or 40 years ago?

    Isnt the discussion about government vs non government healthcare way off the mark? the false choice here seems obvious.

    we perpetuate a government enabled monopoly of doctors and hospitals (that extends even to the production of more doctors….cost of becoming a doctor is now prohibitive for all except the rich….) that has been in existence for the life of what we know as modern medicine (passage of time still doesn´t make it right or desireable), OR socialized medicine…. that is not a good set of choices….

  • EconJeff

    FWw-

    I agree, we are very far from the free market with respect to health care. I haven’t had the “pleasure” of searching for a surgeon recently, but from what I understand from my HMO, my options are limited.

    You’re right, the choice isn’t between laissez faire-style health care provision and socialism, but between some form of government-regulated care and some form of government-provided care. Those are the true alternatives available to us.

    There are a number of options we can take, but they all involve the government either setting the rules or providing the service. I’d rather them set the rules, and there are likely better rules than are in force at present.

  • EconJeff

    FWw-

    I agree, we are very far from the free market with respect to health care. I haven’t had the “pleasure” of searching for a surgeon recently, but from what I understand from my HMO, my options are limited.

    You’re right, the choice isn’t between laissez faire-style health care provision and socialism, but between some form of government-regulated care and some form of government-provided care. Those are the true alternatives available to us.

    There are a number of options we can take, but they all involve the government either setting the rules or providing the service. I’d rather them set the rules, and there are likely better rules than are in force at present.

  • Joe

    We are very far from a free market in health care and in my opinion that is the problem – way too much involvement by the feds and state. If you look at the cost growth in non-insurance; non-over regulated areas of medicine like cosmetic surgery and lasik eye procedures you find out that the market works well in medicine. The problem is gov’t mandates and a lake of information. (I will grant that when you are in the middle of a heart attack you are not going to price shop but catastrophic coverage is a different animal from normal basic health care). If you live in Wisconsin you can find comparative pricing of procedures by facility on a state run website and you can check the medical boards complaint website to get all sorts of information regarding potential doctors. My family uses both to help make healthcare decisions. Also, you can call a hospital to get pricing data whenever you want.

    Also, I want to end the 47 million Americans can’t afford health care nonsense that always ends up as part of this nationalization debate. First, health insurance does not equal healthcare. You can pay cash for medical care. Second, these numbers are just garbage. Lets break it down to who these folks are:

    1. 10 million are not citizens (you can debate whether the gov’t should be paying for them or not)

    2. 8.3 million make between $50,000 and 74,999 a year. These people can likely afford some level of health insurance.

    3. 8.74 million make over $74,999 a year. They can certainly afford some level of health insurance.

    4. 45% of those without insurance will not be uninsured for more than 4 months. Lack of insurance is not a permanent state for many and usually represents the time it takes to find a new job.

    So you end up with about 9 million American citizens who are permanently without health insurance. That is a very small percentage of the population. Is it worth nationalizing the entire industry? I say no.

    I have seen the data for these numbers many places here is where I found it again today. http://www.freemarketproject.org/articles/2007/20070718153509.aspx

    Also, markets don’t fail. They just sometimes produce outcomes we don’t like – that is not a failed market that is a correct outcome that just happens to be detrimental to the interests of some people who are in that market. By the same token markets don’t succeed either. They just are. If every single lender failed it would not be a failure of the market for mortgages it would be a failure of the particular bad business practices that caused the lender to fail (i.e. sub-prime loans). It would actually be the market working by punishing anyone who was foolish enough to use a bad business model. The real problem is that we as a society have decided we want all of the rewards of a free market economy without any of the risks. This, leads to over regulation and bailouts. What will the folks learn form this little market correction? They will learn that you should always take bad risks with huge rewards because someone else will bail you out if the risk materializes.

    But more importantly, we are heading for nationalization at the same time the most other nations are reintroducing various levels private care. Also, many nations have developed tables that determine if certain folks are allowed healthcare at all. Have cancer and are over a certain age- too bad, go home and die. Do we really want that here?

    And what about freedom. Once the gov’t is paying, how long will it be before we are no longer allowed to eat what we want, or to have a couple of drinks.

    And for the record, the trains did not run on time. http://www.snopes.com/history/govern/trains.asp

  • Joe

    We are very far from a free market in health care and in my opinion that is the problem – way too much involvement by the feds and state. If you look at the cost growth in non-insurance; non-over regulated areas of medicine like cosmetic surgery and lasik eye procedures you find out that the market works well in medicine. The problem is gov’t mandates and a lake of information. (I will grant that when you are in the middle of a heart attack you are not going to price shop but catastrophic coverage is a different animal from normal basic health care). If you live in Wisconsin you can find comparative pricing of procedures by facility on a state run website and you can check the medical boards complaint website to get all sorts of information regarding potential doctors. My family uses both to help make healthcare decisions. Also, you can call a hospital to get pricing data whenever you want.

    Also, I want to end the 47 million Americans can’t afford health care nonsense that always ends up as part of this nationalization debate. First, health insurance does not equal healthcare. You can pay cash for medical care. Second, these numbers are just garbage. Lets break it down to who these folks are:

    1. 10 million are not citizens (you can debate whether the gov’t should be paying for them or not)

    2. 8.3 million make between $50,000 and 74,999 a year. These people can likely afford some level of health insurance.

    3. 8.74 million make over $74,999 a year. They can certainly afford some level of health insurance.

    4. 45% of those without insurance will not be uninsured for more than 4 months. Lack of insurance is not a permanent state for many and usually represents the time it takes to find a new job.

    So you end up with about 9 million American citizens who are permanently without health insurance. That is a very small percentage of the population. Is it worth nationalizing the entire industry? I say no.

    I have seen the data for these numbers many places here is where I found it again today. http://www.freemarketproject.org/articles/2007/20070718153509.aspx

    Also, markets don’t fail. They just sometimes produce outcomes we don’t like – that is not a failed market that is a correct outcome that just happens to be detrimental to the interests of some people who are in that market. By the same token markets don’t succeed either. They just are. If every single lender failed it would not be a failure of the market for mortgages it would be a failure of the particular bad business practices that caused the lender to fail (i.e. sub-prime loans). It would actually be the market working by punishing anyone who was foolish enough to use a bad business model. The real problem is that we as a society have decided we want all of the rewards of a free market economy without any of the risks. This, leads to over regulation and bailouts. What will the folks learn form this little market correction? They will learn that you should always take bad risks with huge rewards because someone else will bail you out if the risk materializes.

    But more importantly, we are heading for nationalization at the same time the most other nations are reintroducing various levels private care. Also, many nations have developed tables that determine if certain folks are allowed healthcare at all. Have cancer and are over a certain age- too bad, go home and die. Do we really want that here?

    And what about freedom. Once the gov’t is paying, how long will it be before we are no longer allowed to eat what we want, or to have a couple of drinks.

    And for the record, the trains did not run on time. http://www.snopes.com/history/govern/trains.asp

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

    Keep in mind here that what is increasingly happening in socialized medicine is that the “insured” are not getting care. Two examples that come to mind for me are Canada’s 17 week wait for gallbladder surger (I had mine out here after four days) and England’s refusal to buy Avastin (very good anticancer drug) for patients–my mom’s life was likely saved by this drug.

    So when people come out and tell me that the same guys that run Amtrak and the Post Office are going to save healthcare, I have to wonder what planet they’re from, and why do they want to kill my mother?

    Reality here is that something like 55% of healthcare costs are avoidable (heart disease/smoking/diabetes/etc..), and so if the customer paid the costs of avoidable diseases, maybe eating that salad or taking that walk would seem like a little bit better idea.

    Moreover, I’ve been in clinics where the insurance processors outnumbered the doctors nearly two to one; again, we’ve got a situation where government-created HMOs (Kennedy bill, 1970 or so) take the first 40% of every healthcare dollar.

    The way I calculate it, health-conscious people who go to major medical can almost immediately reduce their healthcare costs by about 70%. Maybe it’s time to repeal some laws and make it easier for people to do so.

    And nationalize homeownership? Shoot, maybe we can all live in those 5 story concrete block things that the Russians have so many of. That’ll be the ticket…..to really, really, depressing homes.

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

    Keep in mind here that what is increasingly happening in socialized medicine is that the “insured” are not getting care. Two examples that come to mind for me are Canada’s 17 week wait for gallbladder surger (I had mine out here after four days) and England’s refusal to buy Avastin (very good anticancer drug) for patients–my mom’s life was likely saved by this drug.

    So when people come out and tell me that the same guys that run Amtrak and the Post Office are going to save healthcare, I have to wonder what planet they’re from, and why do they want to kill my mother?

    Reality here is that something like 55% of healthcare costs are avoidable (heart disease/smoking/diabetes/etc..), and so if the customer paid the costs of avoidable diseases, maybe eating that salad or taking that walk would seem like a little bit better idea.

    Moreover, I’ve been in clinics where the insurance processors outnumbered the doctors nearly two to one; again, we’ve got a situation where government-created HMOs (Kennedy bill, 1970 or so) take the first 40% of every healthcare dollar.

    The way I calculate it, health-conscious people who go to major medical can almost immediately reduce their healthcare costs by about 70%. Maybe it’s time to repeal some laws and make it easier for people to do so.

    And nationalize homeownership? Shoot, maybe we can all live in those 5 story concrete block things that the Russians have so many of. That’ll be the ticket…..to really, really, depressing homes.

  • http://boundedirrationality.blogspot.com econ grad

    Bad incentives and poor structures for handling risk aren’t the whole story.

    We’re marshaling vast resources to extend life. We’ve got an ethic that holds that everyone deserves life-saving care.

    As the resources to provide that care grow we face a dilemma.

    Where do we compromise between our ethics and economic reality?

  • http://boundedirrationality.blogspot.com econ grad

    Bad incentives and poor structures for handling risk aren’t the whole story.

    We’re marshaling vast resources to extend life. We’ve got an ethic that holds that everyone deserves life-saving care.

    As the resources to provide that care grow we face a dilemma.

    Where do we compromise between our ethics and economic reality?

  • EconJeff

    Joe-

    Whoa there. Markets can and do fail. To suggest otherwise is simply to replace one set of value judgements with another.

    Here’s an example of how markets can fail: Pollution. Now, I’m not an environmental lobbyist or anything, but from an economic perspective we do not fully internalize all the costs associated with disposing of all our waste or using all of a resource–we don’t pay for the true cost to society for air pollution, say. If there is no mechanism to get people to internalize that cost (pay for it) then individuals will over-consume a resource or use it in a manner which leaves unwanted (from a social perspective) material around–there will be an inefficient level of pollution.

    You could say that the market is working as it should. You could also say that because there is a lack of information, the market is not working as it should. Almost all economists would agree (not something easy to come by!) that there are such things as externalities, and that is typically what is meant by market failure.

    Not all economists will agree, however, that the health care situation, the increase in oil prices, or the home mortgage situation are market failures. But to make a blanket statement that “markets don’t fail” is overselling your point.

    Markets aren’t something we can sit back and watch and not have judgements about. We are a part of them. It is our desires which make them work. We have developed an economic system which has certain goals in mind–some way of producing goods so that we can consume them. If that system isn’t meeting our stated goals, then the market we set up has failed.

    By the way, while the numbers you posted are interesting, one statistic you didn’t post was how much more those of us with health care have to pay for those 9 million (and the other uninsured). You see, when they don’t pay, we pay pay for them.

    Also, you should probably add the 43.3 million receiving Medicare and 55 million on Medicaid, since those people will no longer have health insurance when you get rid of government-run health care.

    I’m all for reducing the regulations. The way we run health care just doesn’t make sense. I just don’t see those changes as powerful enough to make as much of a difference as we as a society want to see.

  • EconJeff

    Joe-

    Whoa there. Markets can and do fail. To suggest otherwise is simply to replace one set of value judgements with another.

    Here’s an example of how markets can fail: Pollution. Now, I’m not an environmental lobbyist or anything, but from an economic perspective we do not fully internalize all the costs associated with disposing of all our waste or using all of a resource–we don’t pay for the true cost to society for air pollution, say. If there is no mechanism to get people to internalize that cost (pay for it) then individuals will over-consume a resource or use it in a manner which leaves unwanted (from a social perspective) material around–there will be an inefficient level of pollution.

    You could say that the market is working as it should. You could also say that because there is a lack of information, the market is not working as it should. Almost all economists would agree (not something easy to come by!) that there are such things as externalities, and that is typically what is meant by market failure.

    Not all economists will agree, however, that the health care situation, the increase in oil prices, or the home mortgage situation are market failures. But to make a blanket statement that “markets don’t fail” is overselling your point.

    Markets aren’t something we can sit back and watch and not have judgements about. We are a part of them. It is our desires which make them work. We have developed an economic system which has certain goals in mind–some way of producing goods so that we can consume them. If that system isn’t meeting our stated goals, then the market we set up has failed.

    By the way, while the numbers you posted are interesting, one statistic you didn’t post was how much more those of us with health care have to pay for those 9 million (and the other uninsured). You see, when they don’t pay, we pay pay for them.

    Also, you should probably add the 43.3 million receiving Medicare and 55 million on Medicaid, since those people will no longer have health insurance when you get rid of government-run health care.

    I’m all for reducing the regulations. The way we run health care just doesn’t make sense. I just don’t see those changes as powerful enough to make as much of a difference as we as a society want to see.

  • Joe

    Perhaps, my post was too long or I was to hasty, but I fully understand that the 9 million uninsured impact the premiums and the cost of delivery of services for everyone else. The point of the numbers is not to suggest there is no problem with the current system but to demonstrate that the 47 million number that most pro-socialized medicine folks toss out is junk. It is really a 9 million (or 19 million if you want to extend coverage to non-citizens) person problem and the degree to which you are willing to destroy/alter/re-create the current healthcare system should be impacted by the magnitude of the actual problem. It should not be based on a number that is more than 5 times higher than reality.

    Also, I am not advocating an end to all level’s gov’t involvement (unfortunately Medicare and Medicaid and the VA are not going to go away until after they bankrupt the country). But our current system is so far from a free market system that to say the free market has failed in healthcare is a fundamentally false proposition. There hasn’t been a free market in healthcare for decades – since the FDR wage controls that gave birth the employer funded system that we have today. My position is that we should reintroduce as true a market as is possible and give it a chance before we decide to become Europe.

    “Almost all economists would agree (not something easy to come by!) that there are such things as externalities, and that is typically what is meant by market failure.”

    Perhaps this is just a matter of perspective, but I don’t see externalities as market failure – it’s a failure of the participants in the market to realize all the costs/risks of their product/service. In other words, market actors fail but the market doesn’t. Failing to realize and account for externalities (or even the unknown) is like blaming the inability to precisely measure a 6 foot board on the 5 foot tape measure you decided to use. Its is not the rulers fault. It’s the carpenters.

    If people truly want cleaner electricity, then a company that wants to be green can tell people that it is going to go green and that this will cost them 5 cents more per unit. If the people/consumers really want it then they will pay for it. If not, the company will fail. Business failures should be expected. It is how a society communicates its wants and desires.

  • Joe

    Perhaps, my post was too long or I was to hasty, but I fully understand that the 9 million uninsured impact the premiums and the cost of delivery of services for everyone else. The point of the numbers is not to suggest there is no problem with the current system but to demonstrate that the 47 million number that most pro-socialized medicine folks toss out is junk. It is really a 9 million (or 19 million if you want to extend coverage to non-citizens) person problem and the degree to which you are willing to destroy/alter/re-create the current healthcare system should be impacted by the magnitude of the actual problem. It should not be based on a number that is more than 5 times higher than reality.

    Also, I am not advocating an end to all level’s gov’t involvement (unfortunately Medicare and Medicaid and the VA are not going to go away until after they bankrupt the country). But our current system is so far from a free market system that to say the free market has failed in healthcare is a fundamentally false proposition. There hasn’t been a free market in healthcare for decades – since the FDR wage controls that gave birth the employer funded system that we have today. My position is that we should reintroduce as true a market as is possible and give it a chance before we decide to become Europe.

    “Almost all economists would agree (not something easy to come by!) that there are such things as externalities, and that is typically what is meant by market failure.”

    Perhaps this is just a matter of perspective, but I don’t see externalities as market failure – it’s a failure of the participants in the market to realize all the costs/risks of their product/service. In other words, market actors fail but the market doesn’t. Failing to realize and account for externalities (or even the unknown) is like blaming the inability to precisely measure a 6 foot board on the 5 foot tape measure you decided to use. Its is not the rulers fault. It’s the carpenters.

    If people truly want cleaner electricity, then a company that wants to be green can tell people that it is going to go green and that this will cost them 5 cents more per unit. If the people/consumers really want it then they will pay for it. If not, the company will fail. Business failures should be expected. It is how a society communicates its wants and desires.

  • FWw

    joe. I believe that the market needs police action just as any other sphere of human activity. to be completely free the way you implies would mean that police action would be limited to a lawsuit of whoever was injured. this is like shutting the barn door after the horses have left.

    the world is getting faster and more sophisticated. it is easy to say that people should be responsible with credit and read the 6pt print carefully that the lenders send them. as a cpa that fine print challenges me. we live in an increasingly illiterate society.

    Once again government regulation is not in any way necessarily the antithesis of free market, nor is deregulation always a good thing. depends.

    the government has a duty to enforce morality. “Let the Buyer beware” is not ethical. It is not moral. It IS a free market axiom. As a christian or even athiestic yet moral seller, my buyers should not need to beware of anything that I sell them or my prices or my practices. my prices should be fare. the golden rule should be followed. JC penny was an inspiration in that regard. His biography is an enlightening one. It IS possible to be moral and successful in business!

    Once again our economy of paper dollars relies heavily on trust. bank panics are not a good thing. they are increasingly more important to avoid. There need to be regulations that are clear and that keep people from gaming the system, and the with the deregulation of financial institutions allowing them to do all the things that banks do… well, it is pure insanity not to also subject them to the same regulations as to cash reserves, etc etc. but we did not do any of that in the (false ) arguments of (not really) free market policies.

    We simply can´t allow bear stearns or fannie mae or freddy mac to fail. when I worked as an auditor, one of the things to watch for was when one debtor to a company was a high percentage of total debt the company was due to receive. this is because that debtor then became the tail that could wag the dog, force the creditor in to bankruptcy.

    This is what the large financial institutions are in the process of doing to all of us. they have positioned themselves with the help of deregulation, to become so critical, that we the taxpayers will have no choice but to bail them out.

    with the globalization of markets, and the trillions of debt in iraq(we could arguable finance public health care for a year with the money we spend in iraq in a month I have heard…) borrowed from china….. this is not good for the future of our country……

    Joe, with all due respect, I find your statements to lack nuance.

  • FWw

    joe. I believe that the market needs police action just as any other sphere of human activity. to be completely free the way you implies would mean that police action would be limited to a lawsuit of whoever was injured. this is like shutting the barn door after the horses have left.

    the world is getting faster and more sophisticated. it is easy to say that people should be responsible with credit and read the 6pt print carefully that the lenders send them. as a cpa that fine print challenges me. we live in an increasingly illiterate society.

    Once again government regulation is not in any way necessarily the antithesis of free market, nor is deregulation always a good thing. depends.

    the government has a duty to enforce morality. “Let the Buyer beware” is not ethical. It is not moral. It IS a free market axiom. As a christian or even athiestic yet moral seller, my buyers should not need to beware of anything that I sell them or my prices or my practices. my prices should be fare. the golden rule should be followed. JC penny was an inspiration in that regard. His biography is an enlightening one. It IS possible to be moral and successful in business!

    Once again our economy of paper dollars relies heavily on trust. bank panics are not a good thing. they are increasingly more important to avoid. There need to be regulations that are clear and that keep people from gaming the system, and the with the deregulation of financial institutions allowing them to do all the things that banks do… well, it is pure insanity not to also subject them to the same regulations as to cash reserves, etc etc. but we did not do any of that in the (false ) arguments of (not really) free market policies.

    We simply can´t allow bear stearns or fannie mae or freddy mac to fail. when I worked as an auditor, one of the things to watch for was when one debtor to a company was a high percentage of total debt the company was due to receive. this is because that debtor then became the tail that could wag the dog, force the creditor in to bankruptcy.

    This is what the large financial institutions are in the process of doing to all of us. they have positioned themselves with the help of deregulation, to become so critical, that we the taxpayers will have no choice but to bail them out.

    with the globalization of markets, and the trillions of debt in iraq(we could arguable finance public health care for a year with the money we spend in iraq in a month I have heard…) borrowed from china….. this is not good for the future of our country……

    Joe, with all due respect, I find your statements to lack nuance.

  • WebMonk

    Joe, to a certain extent you’re absolutely right that the market will give the customers what they want, but the customer doesn’t always want what is good for him and for others. That’s the whole point of enforcing things like pollution regulations and forcing power companies to internalize more of the actual cost.

    It’s nearly too-obvious a thing to state that people are horribly near-sighted and blindered, myself included. Given an option between an extra $30 per month on power bills and the strong probability of respiratory problems that would cost much more but aren’t as obvious, society will almost universally select to save the $30 per month on their power bill.

    Is the market ‘failing’ when it would select toward the cheaper power bill each month while costing far more in health costs, shortened life span, and decreased productivity? It depends I guess on what is considered ‘failure’. It’s giving exactly what people ask for, but that’s not a good thing in many cases.

    The sorts of cases when giving people what they ask for isn’t a good thing, are typically cases where there are high externalities that are not being internalized. They are not just in cases of pollution, but in all sorts of areas, including health care and mortgage economics. So it’s not necessarily a debate as to whether or not to have government regulation, but how much and of what type to have, and in what areas.

    That said, putting the government in ownership of Fannie and Freddie would be a Bad Thing, but it’s not an economy-crushing sort of occurrence either. In the current mix of regulations that are in place over lending, there is plenty of opportunity for the govt-ought-to-run-things and for the total-free-market crowds to find plenty of fodder to support their particular side.

    My position on it would be a really major restructuring of the regulations that for the most part would be removing govt regulations, but there would be a couple areas where govt oversight would be slammed down on some of the shenanigans currently happening like an Acme Anvil on Wile E Coyote. The short term impact would be rough, but I think the long term would be much more stable and helpful.

    Regulations tend to be suggested for relatively good reasons, but by the time they are actually implemented they tend to look like a painting of swiss cheese done by Max Ernst. That’s not just due to the lobbying efforts of those who would be regulated, but also to the ignorance of those drafting and passing the regulations.

  • WebMonk

    Joe, to a certain extent you’re absolutely right that the market will give the customers what they want, but the customer doesn’t always want what is good for him and for others. That’s the whole point of enforcing things like pollution regulations and forcing power companies to internalize more of the actual cost.

    It’s nearly too-obvious a thing to state that people are horribly near-sighted and blindered, myself included. Given an option between an extra $30 per month on power bills and the strong probability of respiratory problems that would cost much more but aren’t as obvious, society will almost universally select to save the $30 per month on their power bill.

    Is the market ‘failing’ when it would select toward the cheaper power bill each month while costing far more in health costs, shortened life span, and decreased productivity? It depends I guess on what is considered ‘failure’. It’s giving exactly what people ask for, but that’s not a good thing in many cases.

    The sorts of cases when giving people what they ask for isn’t a good thing, are typically cases where there are high externalities that are not being internalized. They are not just in cases of pollution, but in all sorts of areas, including health care and mortgage economics. So it’s not necessarily a debate as to whether or not to have government regulation, but how much and of what type to have, and in what areas.

    That said, putting the government in ownership of Fannie and Freddie would be a Bad Thing, but it’s not an economy-crushing sort of occurrence either. In the current mix of regulations that are in place over lending, there is plenty of opportunity for the govt-ought-to-run-things and for the total-free-market crowds to find plenty of fodder to support their particular side.

    My position on it would be a really major restructuring of the regulations that for the most part would be removing govt regulations, but there would be a couple areas where govt oversight would be slammed down on some of the shenanigans currently happening like an Acme Anvil on Wile E Coyote. The short term impact would be rough, but I think the long term would be much more stable and helpful.

    Regulations tend to be suggested for relatively good reasons, but by the time they are actually implemented they tend to look like a painting of swiss cheese done by Max Ernst. That’s not just due to the lobbying efforts of those who would be regulated, but also to the ignorance of those drafting and passing the regulations.

  • FWw

    webmonk you made me think.

    yes. most regulations end up badly. i heartily agree.

    and yes, you are right the question is not whether to regulate or not. regulation (ie the law) is necessary in a sinful society.

    Could it be that this is just one more symptom of our societies moving away from the recent (since 1776) concept of the majestic “Rule of Law” as THE formal basis for governing, back to the historical norm of the rule of men?

    I suggest that what the rule of law would look like would be for men to decide in abstract what would be fair and just laws, and then apply those laws to whatever situation arises. This would look like wrapping the situation around the law.

    Instead we have the rule of men, where we find that someone is finding a “loophole” or is doing something societally harmful or destructive, and then wrapping some ad-hoc law around the situation. The law has it´s basis in a particular situation and therefore by definition is not based on principle (not to say that it is wholly unprincipled…).

    In lawschool my sister was taught that law does not equal justice. That is probably not a good way to train lawyers…. but not being a lawyer, I am maybe missing some context….. from my perspective however, this viewpoint seems to be part of the problem being that most legislators are trained as attorneys….

    further “putting the government in charge of fannie and freddy…” hot news flash. they ARE in charge… everyone has always assumed that the govt would bail them out if necessary. here is a great article on this particular point…..

    http://www.stephenbainbridge.com/punditry/comments/the_imminent_fannie_mae_and_freddie_mac_debacle

    This is an extremely clear-eyed view (imho) of the history and reality of fannie/freddie… please read Joe and webmonk!

  • FWw

    webmonk you made me think.

    yes. most regulations end up badly. i heartily agree.

    and yes, you are right the question is not whether to regulate or not. regulation (ie the law) is necessary in a sinful society.

    Could it be that this is just one more symptom of our societies moving away from the recent (since 1776) concept of the majestic “Rule of Law” as THE formal basis for governing, back to the historical norm of the rule of men?

    I suggest that what the rule of law would look like would be for men to decide in abstract what would be fair and just laws, and then apply those laws to whatever situation arises. This would look like wrapping the situation around the law.

    Instead we have the rule of men, where we find that someone is finding a “loophole” or is doing something societally harmful or destructive, and then wrapping some ad-hoc law around the situation. The law has it´s basis in a particular situation and therefore by definition is not based on principle (not to say that it is wholly unprincipled…).

    In lawschool my sister was taught that law does not equal justice. That is probably not a good way to train lawyers…. but not being a lawyer, I am maybe missing some context….. from my perspective however, this viewpoint seems to be part of the problem being that most legislators are trained as attorneys….

    further “putting the government in charge of fannie and freddy…” hot news flash. they ARE in charge… everyone has always assumed that the govt would bail them out if necessary. here is a great article on this particular point…..

    http://www.stephenbainbridge.com/punditry/comments/the_imminent_fannie_mae_and_freddie_mac_debacle

    This is an extremely clear-eyed view (imho) of the history and reality of fannie/freddie… please read Joe and webmonk!

  • WebMonk

    FWw – you had me nodding right along with your #13 post right until I got to the two paragraphs:

    “We simply can´t allow bear stearns….”
    and
    “This is what the large financial institutions….”

    We most certainly can allow them to implode! There would be some major pains, but they wouldn’t be any worse than what’s currently happening. As you said, the tail (debtors) is wagging the dog right now, but letting the tail die wouldn’t be the disaster you suggest. To keep up the tail analogy, a large chunk of the tail would rot away, but the dog would live and it wouldn’t be any more damaging than the current mix of bandages and salves that are being applied.

    Do I think that will happen? Nope. They’ll be bailed out in some way. There are ways they could be bailed out with relatively little extra damage, but my hopes of those are slim.

    Also, it was most certainly not due to deregulation that the ‘tail’ got in such a shape. There wasn’t anything even close to a deregulation of the financial markets; there were changes in regulations, but not deregulation. When the changes were being implemented, many voices decried the increasing regulations. Essentially the ‘deregulation’ was a set of regulated loopholes in existing regulations. That’s not deregulation. Blaming ‘deregulation’ for causing/allowing the current state of things isn’t accurate.

    Also, it’s an urban myth that 1 month of the spending for the Iraq war could finance a year of public health. According most critics, the war runs around $16 billion per month. (govt claims only $9 billion per month) The current health budget (Medicare and Medicaid mostly) run $50-70 billion a month. (depending on who you ask) Iraq could only pay for 1/3 to 1/4 of the current US expenditures for health care. If a full public health care system were put into place, the Iraq war would pay only 5% to 2% depending on what figures you use for the cost of the system.

  • WebMonk

    FWw – you had me nodding right along with your #13 post right until I got to the two paragraphs:

    “We simply can´t allow bear stearns….”
    and
    “This is what the large financial institutions….”

    We most certainly can allow them to implode! There would be some major pains, but they wouldn’t be any worse than what’s currently happening. As you said, the tail (debtors) is wagging the dog right now, but letting the tail die wouldn’t be the disaster you suggest. To keep up the tail analogy, a large chunk of the tail would rot away, but the dog would live and it wouldn’t be any more damaging than the current mix of bandages and salves that are being applied.

    Do I think that will happen? Nope. They’ll be bailed out in some way. There are ways they could be bailed out with relatively little extra damage, but my hopes of those are slim.

    Also, it was most certainly not due to deregulation that the ‘tail’ got in such a shape. There wasn’t anything even close to a deregulation of the financial markets; there were changes in regulations, but not deregulation. When the changes were being implemented, many voices decried the increasing regulations. Essentially the ‘deregulation’ was a set of regulated loopholes in existing regulations. That’s not deregulation. Blaming ‘deregulation’ for causing/allowing the current state of things isn’t accurate.

    Also, it’s an urban myth that 1 month of the spending for the Iraq war could finance a year of public health. According most critics, the war runs around $16 billion per month. (govt claims only $9 billion per month) The current health budget (Medicare and Medicaid mostly) run $50-70 billion a month. (depending on who you ask) Iraq could only pay for 1/3 to 1/4 of the current US expenditures for health care. If a full public health care system were put into place, the Iraq war would pay only 5% to 2% depending on what figures you use for the cost of the system.

  • WebMonk

    FWw #15 – Bainbridge’s post was excellent. I like most of his columns that I find in newspapers, but I never thought to look to see if he has a site of his own. Many thanks!

  • WebMonk

    FWw #15 – Bainbridge’s post was excellent. I like most of his columns that I find in newspapers, but I never thought to look to see if he has a site of his own. Many thanks!

  • FWw

    webmonk you are right. I overstated. I was thinking more of the grand arc of things that were put in place to prevent bank runs during the great depression.

    are you thinking that these structures were not useful or necessary at all or???

  • FWw

    webmonk you are right. I overstated. I was thinking more of the grand arc of things that were put in place to prevent bank runs during the great depression.

    are you thinking that these structures were not useful or necessary at all or???

  • Joe

    I must be having a lousy day in the conveying my thoughts arena. I keep getting labeled as a complete and total free market advocate sans any gov’t regulation. The followings statement must have been missed (or perhaps it was too nuanced ;):

    “My position is that we should reintroduce as true a market as is possible and give it a chance before we decide to become Europe.”

    “as true a market as is possible” was meant to convey that there would be some level of regulation – although I generally would like to see it limited to a forcing disclosure of information so people can make informed decisions.

    As for the statement that people don’t always do what is in their own best interest, I fully understand that – its obvious. Its just that I don’t think the gov’t has the right or the responsibility to determine what is in someone’s “best interest” unless we are in the realm of criminal penalties for proscribed behavior. People, at least in this country, have a right to be stupid and make bad economic decisions – it is a core part of freedom.

    But again, perhaps I was not clear enough, I am not talking about a world free from all regulation. I am talking about a world with very limited regulation. I don’t disagree with the proposition that some gov’t regulation is necessary. I just tend to disagree that it is always necessary whenever there is a perceived problem. I also have a problem with the way the gov’t decides which problems there are that need fixing.

    I think a huge housing correction is not only going to happen it will be a good thing. At present, 1/3 of American households rent. Most do not do so by choice. It is just that they can’t afford a house and are unwilling to take bad debt risks to buy one. So if we have a wave of foreclosures because people took bad debt and the over all property values of houses go down, these people who were responsible and did not overextend themselves on a house they could not afford will be rewarded. They will be able to buy an affordable home without doing anything stupid. If we bail out all this bad debt these same people will be punished for exhibiting good behavior.

  • Joe

    I must be having a lousy day in the conveying my thoughts arena. I keep getting labeled as a complete and total free market advocate sans any gov’t regulation. The followings statement must have been missed (or perhaps it was too nuanced ;):

    “My position is that we should reintroduce as true a market as is possible and give it a chance before we decide to become Europe.”

    “as true a market as is possible” was meant to convey that there would be some level of regulation – although I generally would like to see it limited to a forcing disclosure of information so people can make informed decisions.

    As for the statement that people don’t always do what is in their own best interest, I fully understand that – its obvious. Its just that I don’t think the gov’t has the right or the responsibility to determine what is in someone’s “best interest” unless we are in the realm of criminal penalties for proscribed behavior. People, at least in this country, have a right to be stupid and make bad economic decisions – it is a core part of freedom.

    But again, perhaps I was not clear enough, I am not talking about a world free from all regulation. I am talking about a world with very limited regulation. I don’t disagree with the proposition that some gov’t regulation is necessary. I just tend to disagree that it is always necessary whenever there is a perceived problem. I also have a problem with the way the gov’t decides which problems there are that need fixing.

    I think a huge housing correction is not only going to happen it will be a good thing. At present, 1/3 of American households rent. Most do not do so by choice. It is just that they can’t afford a house and are unwilling to take bad debt risks to buy one. So if we have a wave of foreclosures because people took bad debt and the over all property values of houses go down, these people who were responsible and did not overextend themselves on a house they could not afford will be rewarded. They will be able to buy an affordable home without doing anything stupid. If we bail out all this bad debt these same people will be punished for exhibiting good behavior.

  • Ruthie

    Canada’s healthcare system is failing too. I’m surprised so many here are for socialized medicine. The architect of Canada’s system says it has failed.
    http://www.investors.com/editorial/editorialcontent.asp?secid=1502&status=article&id=299282509335931

    I suggest free market healthcare, which this country has not had since the AMA and the government colluded together to keep wages up and competition down for physicians, while duping the public into thinking they’re protected.

  • Ruthie

    Canada’s healthcare system is failing too. I’m surprised so many here are for socialized medicine. The architect of Canada’s system says it has failed.
    http://www.investors.com/editorial/editorialcontent.asp?secid=1502&status=article&id=299282509335931

    I suggest free market healthcare, which this country has not had since the AMA and the government colluded together to keep wages up and competition down for physicians, while duping the public into thinking they’re protected.

  • Patrick Kyle

    Ruthie is on to something here. What is often villified as deregulation is really partial regulation or regulation designed to give a select group an advantage while protecting them from real competiton.
    Now the taxpayers are on the hook for all the irresponsibility fostered by these financial institutions. Great… Furthermore, what kind of insanity is it that sees the ineptitude of our government and thinks we need their intervention in even more areas of our life.
    Whatever happened to “Buyer Beware”? I forgot who the quote comes from(Frank Herbert maybe?) but he said ” When men are shielded from the effects of folly, it produces a nation of fools.” Now the government is looked to for protection from ourselves and our bad decisions. Maybe if the government wasn’t so quick to our rescue we would become more cautious and more resonsible; like those who weathered the Great Depression.
    Do we truly believe McCain or Obama can /will really do anything to change our situation? The Scriptures caution us against placing our hope in princes.

    Aachhh… I am so digusted with our present political situation….

  • Patrick Kyle

    Ruthie is on to something here. What is often villified as deregulation is really partial regulation or regulation designed to give a select group an advantage while protecting them from real competiton.
    Now the taxpayers are on the hook for all the irresponsibility fostered by these financial institutions. Great… Furthermore, what kind of insanity is it that sees the ineptitude of our government and thinks we need their intervention in even more areas of our life.
    Whatever happened to “Buyer Beware”? I forgot who the quote comes from(Frank Herbert maybe?) but he said ” When men are shielded from the effects of folly, it produces a nation of fools.” Now the government is looked to for protection from ourselves and our bad decisions. Maybe if the government wasn’t so quick to our rescue we would become more cautious and more resonsible; like those who weathered the Great Depression.
    Do we truly believe McCain or Obama can /will really do anything to change our situation? The Scriptures caution us against placing our hope in princes.

    Aachhh… I am so digusted with our present political situation….

  • EconJeff

    Joe- I think I generally agree with you. (Sorry for the late post)

  • EconJeff

    Joe- I think I generally agree with you. (Sorry for the late post)

  • WebMonk

    FWw #18, I would put those sorts of regulations in the “necessary” category – guarding against what amounts to criminal negligence on the part of banks.

    Are you FWSonneck or Sonnet or something?

  • WebMonk

    FWw #18, I would put those sorts of regulations in the “necessary” category – guarding against what amounts to criminal negligence on the part of banks.

    Are you FWSonneck or Sonnet or something?

  • WebMonk

    PatrickKyle – just let’s not go overboard toward the buyer beware side of things. Remember, people were ‘buyer beware’ and still went into the Stock Market Crash, Panic/Depression of 1893, and the myriad of panics, crashes and depressions that happened during the 1800s.

  • WebMonk

    PatrickKyle – just let’s not go overboard toward the buyer beware side of things. Remember, people were ‘buyer beware’ and still went into the Stock Market Crash, Panic/Depression of 1893, and the myriad of panics, crashes and depressions that happened during the 1800s.

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

    Let’s keep in mind, though, WebMonk, what really happened in 1929. More or less, the Fed had been pursuing loose money standards for a decade at the time, obscuring the reality that stock market gains are (sorry S&P fans) usually only about 2-3%/year after inflation is accounted for.

    So the government was busting its rear to hide the ordinary signs of “buyer beware.” For what it’s worth, I’m also told that those who ignored the government when they could did OK in the 1930s.

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

    Let’s keep in mind, though, WebMonk, what really happened in 1929. More or less, the Fed had been pursuing loose money standards for a decade at the time, obscuring the reality that stock market gains are (sorry S&P fans) usually only about 2-3%/year after inflation is accounted for.

    So the government was busting its rear to hide the ordinary signs of “buyer beware.” For what it’s worth, I’m also told that those who ignored the government when they could did OK in the 1930s.

  • Anon

    What might the Biblical principles be? What if we were to think about that and discuss that?

    As to socialism; if I’m not mistaken, corporate-State bundling is traditionally called ‘fascism’, though with the current administration it is more a gentler form, such as with Franco. With BHO and his proposed national police force as numerous and funded as the Pentagon, and with the ideological conformity element, it will more closely resemble that of Hitler and Stalin.

  • Anon

    What might the Biblical principles be? What if we were to think about that and discuss that?

    As to socialism; if I’m not mistaken, corporate-State bundling is traditionally called ‘fascism’, though with the current administration it is more a gentler form, such as with Franco. With BHO and his proposed national police force as numerous and funded as the Pentagon, and with the ideological conformity element, it will more closely resemble that of Hitler and Stalin.

  • Joe

    EconJeff – I thought so too!

  • Joe

    EconJeff – I thought so too!

  • WebMonk

    Bike – I quite agree with you on many aspects of the ’29 implosion. There was a great deal of governmental stupidity there, but there was also quite a bit of shady goings-on that had set up a lot of inverted pyramids in the financial world. The ’29 crash and the following economic trouble is a mixed bag with quite a bit of fodder for just about any position.

    The earlier crashes during the 1800′s tend to be a bit more clear. There was less in the way of governmental influence and there were numerous crashes that very clearly had non-govt driving forces (though there were still many instances of govt-caused instabilities, like the dual-gold-silver-backed US currency).

    The point is not to say crashes are due to, or could be avoided by either govt action or especially free markets. Rather the point is that both can, and regularly have, caused plenty of crashes.

    Moving toward a strongly buyer-beware sort of environment wouldn’t avoid crashes, and neither would it ensure that only the careless, greedy, or lazy got stung when the crashes happen. Careful and conscientious people are going to get caught in either environment.

    Right now I think that we’ve definitely got too much regulation in most areas, and so it’s very easy to point out the ways in which the govt’s handling of things is causing problems for everyone. In the past there have also been plenty of opportunities to see how unrestrained private actions have caused problems for everyone too.

    Why don’t people listen to me? I could solve all the US’s problems over a glass of good whiskey! I could solve the whole world’s problems after 3 or 4! (though it might take a few more if someone else is buying!)

  • WebMonk

    Bike – I quite agree with you on many aspects of the ’29 implosion. There was a great deal of governmental stupidity there, but there was also quite a bit of shady goings-on that had set up a lot of inverted pyramids in the financial world. The ’29 crash and the following economic trouble is a mixed bag with quite a bit of fodder for just about any position.

    The earlier crashes during the 1800′s tend to be a bit more clear. There was less in the way of governmental influence and there were numerous crashes that very clearly had non-govt driving forces (though there were still many instances of govt-caused instabilities, like the dual-gold-silver-backed US currency).

    The point is not to say crashes are due to, or could be avoided by either govt action or especially free markets. Rather the point is that both can, and regularly have, caused plenty of crashes.

    Moving toward a strongly buyer-beware sort of environment wouldn’t avoid crashes, and neither would it ensure that only the careless, greedy, or lazy got stung when the crashes happen. Careful and conscientious people are going to get caught in either environment.

    Right now I think that we’ve definitely got too much regulation in most areas, and so it’s very easy to point out the ways in which the govt’s handling of things is causing problems for everyone. In the past there have also been plenty of opportunities to see how unrestrained private actions have caused problems for everyone too.

    Why don’t people listen to me? I could solve all the US’s problems over a glass of good whiskey! I could solve the whole world’s problems after 3 or 4! (though it might take a few more if someone else is buying!)

  • FWw

    #23 webmonk. yup that would be me fw sonnek

  • FWw

    #23 webmonk. yup that would be me fw sonnek

  • Trey

    I heard on NBC on Monday that the bailing out Fannie May and Freddie (or Bernie) Mac is part of a more planned economy. This phrase alone rung a bell. That’s what the Soviet Union described their state run economy. Here comes socialism!

  • Trey

    I heard on NBC on Monday that the bailing out Fannie May and Freddie (or Bernie) Mac is part of a more planned economy. This phrase alone rung a bell. That’s what the Soviet Union described their state run economy. Here comes socialism!

  • http://www.scyldingsinthemeadhall.blogspot.com The Scylding

    It is good to see a discussion where you don’t have an automatic capitalism is biblical, socialism is of the devil theme.

    I think the first thing to note is that there are no complete socialistic / capitalistic societies. Furthermore, the sinfulness of man would indicate that a system of checks and balances could be the best way to go – and the centre of that system could either be to the left or the right (economically speaking), without comprimising Christian principles.

    Now, I note the comment that Canada’s healthcare system is failing. That is somewhat of an overstatement – I have lived in countries where the public health system is failing – and this ain’t it. In Saskatchewan, where I live now, not only is the medical system state owned, but also the power, gas, insurance and telephone (the latter offers mobile and cable services as well, but those compete with private companies like Shaw and Bell). And I would not have it any other way – car insurance here works, and is cheaper than virtually any other place in Canada. Sure, it is not perfect, but no system is. But I would not claim that every other Province/State/Country should do the same. Formulastic economic (and socio-political) applications are not helpful.

    My simple point is that we cannot wed our faith to any specific economic theory, contra the Reconstructionists / Theonomists. But it also bears stating that the Church should be the prophetic voice not only to the sovereign, but also to the economic system as regulated / not regulated by the state.

  • http://www.scyldingsinthemeadhall.blogspot.com The Scylding

    It is good to see a discussion where you don’t have an automatic capitalism is biblical, socialism is of the devil theme.

    I think the first thing to note is that there are no complete socialistic / capitalistic societies. Furthermore, the sinfulness of man would indicate that a system of checks and balances could be the best way to go – and the centre of that system could either be to the left or the right (economically speaking), without comprimising Christian principles.

    Now, I note the comment that Canada’s healthcare system is failing. That is somewhat of an overstatement – I have lived in countries where the public health system is failing – and this ain’t it. In Saskatchewan, where I live now, not only is the medical system state owned, but also the power, gas, insurance and telephone (the latter offers mobile and cable services as well, but those compete with private companies like Shaw and Bell). And I would not have it any other way – car insurance here works, and is cheaper than virtually any other place in Canada. Sure, it is not perfect, but no system is. But I would not claim that every other Province/State/Country should do the same. Formulastic economic (and socio-political) applications are not helpful.

    My simple point is that we cannot wed our faith to any specific economic theory, contra the Reconstructionists / Theonomists. But it also bears stating that the Church should be the prophetic voice not only to the sovereign, but also to the economic system as regulated / not regulated by the state.

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