Posted on 12/14/2008 4:24:12 PM PST by GoodDay
Summers apparently does not see, or if he does see, does not care, that in presenting his proposal for redistribution, what he is urging is armed robbery on a massive scale. That is the essence of any policy of “redistribution,” whether advocated by Summers and Obama or by Lenin, Stalin, or Mao.
http://www.georgereisman.com/blog/
(Excerpt) Read more at georgereisman.com ...
Larry Summers: Heavyweight Centrist or Lightweight Leftist? A recent New York Times article provides two significant pieces of information about Larry Summers, the man designated by President-Elect Obama to be head of the National Economic Council and, as such, according to The Times, “his lead economic adviser inside the White House.” (David Leonhardt, “The Return of Larry Summers,” November 26, 2008, p. B1.)
First, The Times’ article informs its readers that Summers, a former Secretary of the Treasury under President Clinton, and later President of Harvard University, so impressed Henry Kissinger that years ago “Kissinger suggested that Mr. Summers be given a White House post in which he was charged with shooting down or fixing bad ideas. Mr. Summers’ loyal protégés — Timothy Geithner, who beat him out to become the next Treasury secretary; Peter Orszag, the next budget director; Sheryl Sandberg, the chief operating officer of Facebook; and others — say that Mr. Summers can make them smarter in ways that almost no else can.”
The second significant piece of information provided by The Times’ article describes the nature of Mr. Summers’ own ideas. It describes how “His favorite argument today…goes like this: To undo the rise in income inequality since the late ’70s, every household in the top 1 percent of the distribution, which makes $1.7 million on average, would need to write a check for $800,000. This money could then be pooled and used to send out a $10,000 check to every household in the bottom 80 percent of the distribution, those making less than $120,000. Only then would the country be as economically equal as it was three decades ago.”
The Times’ reporter has apparently known about Mr. Summers’ redistributionist ideas, as well as his closeness to Mr. Obama, for at least a year and a half. As a professional journalist, he had a moral obligation to share such important knowledge with the general public. But he, and many others, similarly so informed, did not bother to do so. Instead, even in the face of the substantial public upset in connection with the question about redistribution posed to Mr. Obama by the now famous “Joe the Plumber,” they chose to remain silent.
They personally favored the election of Mr. Obama and his ideas on the subject of redistribution. Badly lacking in professional standards and personal morals, they placed their own political agenda above their professional obligation to inform the public about a matter vital to an intelligent decision as to how to cast its ballots.
And now, when they openly describe the redistributionist egalitarianism of Mr. Summers and, implicitly, Mr. Obama, they try to make a far-left agenda more palatable by depicting these gentlemen as belonging to the “center” of the political spectrum.[1]
Summers apparently does not see, or if he does see, does not care, that in presenting his proposal for redistribution, what he is urging is armed robbery on a massive scale. That is the essence of any policy of “redistribution,” whether advocated by Summers and Obama or by Lenin, Stalin, or Mao.
http://www.georgereisman.com/blog/
I would not recommend he do that. It will shorten his life and possible the lives of anyone who does likewise!
Dr. Reisman is a welcome counterpoint to the economic idiocy that seems to be prevailing these days.
This is a very logical progression for the Democrats. That is, next year, tax revenues are going to be off by double digits. $2.7T this year may be as little as $2.0 in 2009.
And then what happens? Their first inclination is to sell T-bills, bonds, to increase the federal deficit. But right now the T-bill market is in a frenzy of sales, creating a gigantic economic bubble. Demand is 4-to-1 ahead of availability. In an almost surreal gesture, the FED is hoping to issue bonds, to get in on the buying panic.
It is far worse than the speculation based run-up of oil prices just weeks ago. And when the T-bill balloon busts, the result has been described as “spectacular”, unlike any economic crash ever before seen.
But that will mean the instant end of deficit spending. The government won’t want it to end, however, and will have several bad ways of trying to get more money.
Raising taxes won’t work at all. The Laffer Curve is already engaged. So they will try what this author suggested they are planning: not *income* taxes, but *wealth* taxes. That is, re-taxing the money you already have.
But when that happens, wealth will disappear overnight. It is taxation like in ‘Hagar the Horrible’, where a tax man with an axe shows up and says “give me your money”. But the public will shrug, and say, “We don’t have any”. At least not where the government can get it. Some corporations are already moving out of the US in expectation of this.
So this will not work, either. Finally, the government will decide to “monetize the debt”, and just declare money to exist. But the instant they do, that new money will hyperinflate to being valueless.
But being stupid, and foolish, until the government goes through the motions, they won’t get it, that none of this will work.
too late they have already robbed us.
And 12-18 months later, the money would all be back in the respective layers of income, just not necessarily in the same pockets.
Socialism fails whenever it's tried. But it has such an emotional attachment and seems so “fair” that the left will never quit trying to make it work.
bttt for later
What do you know about “sparrows”?
This country is now, and will be in the future, a socialist/marxist country.
“The principle for which we contend is bound to reassert itself, though it may be at another time and in another form.”
Jefferson Davis
You’re lucky to have studied with him personally.
I heard him lecture years ago when he was still living in New York. I have his books, as well as his lecture series on capitalism. All excellent materials, very clearly presented.
That's wonderful...
You seem to an intelligent person?
Can you really tell me these lectures, books and the like have any merit in the climate we live in today?
I love Capitalism and have read some the great minds who espouse it.
But, let us be frank, capitalism is dead for the time being...
Summers isn’t an idiot, economically. He understands the superiority of markets over government for 99% of things, and has said as much in interviews.
His big flaws are the same big flaws you see in all other Keynesian, pseudo-Keynesian, and neo-Keynesian economists:
1) They see income inequality as something that needs to be corrected by the government, at the expense of efficiency (IOW economic freedom, which inherently leads to efficiency).
2) While they understand that the changes in the statistics on “income inequality” are largely due to demographic changes (rise in single-mother-headed households for example) rather than actual discrepancies between, say, productivity and pay, they don’t seem to care. “Yeah, standards of living continue to escalate and traditional two-parent households continue to do better and better, but I don’t care.”
3) They advocate symptomatic treatments for economic ills rather than causal treatments. As above, instead of drastically reforming/reducing welfare and vehemently enforcing child support laws (all as a means to do away with our illegitimacy problem which is the root of much of our “poverty” problems), they simply advocate more handouts. Their idea of dealing with a ship that sprung a leak is to wear stilts so we don’t drown, instead of actually plugging the hole.
BTW, the redistributionist policy discussed above isn’t necessarily socialist. Icons of economic freedom such as Hayek and Friedman and John Stuart Mill have advocated some form of guaranteed minimum income to the poor. Obviously, this was meant to be money for the destitute, not something to buy middle class votes. And it wasn’t so much as to reduce inequality as it was to reduce inefficiencies, i.e. preventing massive recessions and ensuring that those such as the mentally retarded or the disable or people who through no fault of their own have become impoverished.
Ever read what they spend on welfare and other social programs and think “gee, they could cut costs by 95% just by mailing checks out to the lowest rung on the income scale.” Well, it’s a similar idea. Don’t let bastardizations of the idea completely turn you against it.
If anything, such a scheme could be seen as insurance against any kind of full-fledged welfare state.
I'm going to play devils advocate here: Why is the inequality wrong? Because its 'unfair' for some to go through life living with ease (the rich) and others to go through life experiencing large amounts of suffering and toil (the poor).
Of course, the rebuttal is "life is unfair". And there really ain't no way to fix that. Chance will always tag some people as winners and others as losers.
He was harsh on the Congressional Democrats in the 1980s about excessive domestic spending but not happy that Republicans were pushing for farm subsidies.
“I love Capitalism and have read some the great minds who espouse it.
But, let us be frank, capitalism is dead for the time being... “
Well, thanks. That put me in a good mood for Monday morning.
“Summers isn’t an idiot, economically. He understands the superiority of markets over government for 99% of things, and has said as much in interviews.
His big flaws are the same big flaws you see in all other Keynesian, pseudo-Keynesian, and neo-Keynesian economists:
1) They see income inequality as something that needs to be corrected by the government, at the expense of efficiency (IOW economic freedom, which inherently leads to efficiency).”
In other words, he’s an idiot.
“2) While they understand that the changes in the statistics on “income inequality” are largely due to demographic changes (rise in single-mother-headed households for example) rather than actual discrepancies between, say, productivity and pay, they don’t seem to care. “Yeah, standards of living continue to escalate and traditional two-parent households continue to do better and better, but I don’t care.””
In other words, he’s an idiot.
“3) They advocate symptomatic treatments for economic ills rather than causal treatments. As above, instead of drastically reforming/reducing welfare and vehemently enforcing child support laws (all as a means to do away with our illegitimacy problem which is the root of much of our “poverty” problems), they simply advocate more handouts. Their idea of dealing with a ship that sprung a leak is to wear stilts so we don’t drown, instead of actually plugging the hole.”
In other words, he’s an idiot.
“BTW, the redistributionist policy discussed above isn’t necessarily socialist. Icons of economic freedom such as Hayek and Friedman and John Stuart Mill have advocated some form of guaranteed minimum income to the poor.”
Which makes them inconsistent (not necessarily idiots, because Hayek and Friedman eventually saw the error of their ways). At one famous meeting of the Mont Pelerin Society, Ludwig von Mises called Hayek a socialist to his face and stormed out of the room (wouldn’t you have loved to see that!). Friedman once advocated a so-called “negative income tax” but repudiated it later on. Mill actually was a socialist and admitted so in his Autobiography (his father, James Mill, was more consistent on free market issues).
A is A. Socialism is what it is regardless of who advocates it or for what reason.
Lenin temporarily (and successfully) implemented capitalism in Revolutionary Russia — his “New Economic Policy” — but that didn’t make him ideologically a capitalist. Likewise, socialist leanings in otherwise great champions of freedom (like Friedman and Hayek) don’t make them socialists. It makes them inconsistent in their application of freedom to economic and social issues.
“Obviously, this was meant to be money for the destitute, not something to buy middle class votes. And it wasn’t so much as to reduce inequality as it was to reduce inefficiencies, i.e. preventing massive recessions and ensuring that those such as the mentally retarded or the disable or people who through no fault of their own have become impoverished.
Ever read what they spend on welfare and other social programs and think “gee, they could cut costs by 95% just by mailing checks out to the lowest rung on the income scale.” Well, it’s a similar idea. Don’t let bastardizations of the idea completely turn you against it.”
Ah, you sound like...a Republican (”No, no, I’m not actually against socialism! I just want it to work efficiently! That’s what I want: an efficient socialism!”)
“If anything, such a scheme could be seen as insurance against any kind of full-fledged welfare state.”
Sure. Whatever you say. Let’s institute Socialism as a hedge against the Welfare State. If that doesn’t work, we can try the Massive Interventionist State to counterbalance Socialism. Finally, we can install Dictatorship to protect us from Tyranny.
You know, just because the government provides something, that doesn’t make it “socialist.”
You can have a very free market *and* a broad array of social services, as Hayek said in The Road to Serfdom. Merely pointing this out doesn’t make one a socialist, and going a few steps further to actually advocate more social services (which I didn’t actually do) also does not make you a socialist. The freest economies in the world have government-provided universal health care, and in some cases housing (see Singapore).
(this was something I didn’t really understand when I first started studying economics, I thought you were either a Friedmanite or a commie)
Of course, the actual implementation of these systems is enormously different from the likes of the NHS or other top-down socialist institutions.
Hayek also said that if you have a system that is half market and half centrally planned, you can wind up with something even worse than something that is totally centrally planned. If you ask me, that describes the health care sector in America these days. I don’t for a second drop my support of a fully free health care sector, BUT I honestly can’t recommend our system, with its costs and benefits, ahead of Singapore’s. And that’s not blaming the market, that’s blaming the government for screwing up the market so bad that what’s left of market competition in the health care sector isn’t enough to make up for what’s bad with it.
FWIW, I do believe that the government ought to help out the mentally retarded, the severely disabled, and orphaned children. There are some people, thankfully a minority, who will never function in a market economy and we can’t just let them wither and die or hope that private charity will totally and completely provide for them. Is that socialism, or is it merely being realistic in seeing that the most valuable resource of all (human life) will be wasted in a handful of cases if left to the market?
P.S. I work first-hand with mentally retarded adults, and BELIEVE ME there are some who have no family, no nothing, and will never ever get a real job because they have no job skills and no people skills.
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