Occupy Wall Street (1 Viewer)

[jamny]

I like this one

 

[pantagrapher]

Occupy DC's proposal to reduce the deficit

For those that keep clamoring for "solutions" from the protesters, there's a start.

A quick look (using their numbers):-$600B of additional taxes per year.

-$222B for ending tax subsidies.

-$108B for ending the wars.

-Save undisclosed amounts for cutting defense spending.

-$20B for "negotiating better prices with big Pharma".

-Slash mortgages to market value.

-Don't rely on private sector for job growth.

-A massive public works project.

-Cut military jobs and convert the spending to other areas.

-"Improved Medicare for All"

-Erase student loan debt.

-Hike taxes for Social Security.

Can we all get a pony too???

So, basically their plan is to hike taxes by well over $800 billion per year, slash the military, dramatically increase discretionary government spending, and wipe out trillions in mortgage and student loan debt.

I don't see how anyone would conclude that their goal is a massive redistribution of wealth in their favor. Greed is good.

Wealth redistribution has been in the favor of the rich for long enough. I don't think there's anything shocking about OWS wanting to reverse that trend.

 

[Class Dismissed]

Occupy DC's proposal to reduce the deficit

For those that keep clamoring for "solutions" from the protesters, there's a start.

A quick look (using their numbers):-$600B of additional taxes per year.

-$222B for ending tax subsidies.

-$108B for ending the wars.

-Save undisclosed amounts for cutting defense spending.

-$20B for "negotiating better prices with big Pharma".

-Slash mortgages to market value.

-Don't rely on private sector for job growth.

-A massive public works project.

-Cut military jobs and convert the spending to other areas.

-"Improved Medicare for All"

-Erase student loan debt.

-Hike taxes for Social Security.

Can we all get a pony too???

So, basically their plan is to hike taxes by well over $800 billion per year, slash the military, dramatically increase discretionary government spending, and wipe out trillions in mortgage and student loan debt.

I don't see how anyone would conclude that their goal is a massive redistribution of wealth in their favor. Greed is good.

Lets send this proposal over to the CBO and get it scored....STAT!

 

[Soonerman]

Occupy DC's proposal to reduce the deficit

For those that keep clamoring for "solutions" from the protesters, there's a start.

A quick look (using their numbers):-$600B of additional taxes per year.

-$222B for ending tax subsidies.

-$108B for ending the wars.

-Save undisclosed amounts for cutting defense spending.

-$20B for "negotiating better prices with big Pharma".

-Slash mortgages to market value.

-Don't rely on private sector for job growth.

-A massive public works project.

-Cut military jobs and convert the spending to other areas.

-"Improved Medicare for All"

-Erase student loan debt.

-Hike taxes for Social Security.

Can we all get a pony too???

So, basically their plan is to hike taxes by well over $800 billion per year, slash the military, dramatically increase discretionary government spending, and wipe out trillions in mortgage and student loan debt.

I don't see how anyone would conclude that their goal is a massive redistribution of wealth in their favor. Greed is good.

Wealth redistribution has been in the favor of the rich for long enough. I don't think there's anything shocking about OWS wanting to reverse that trend.

Fail.

 

[guderian]

Occupy DC's proposal to reduce the deficit

For those that keep clamoring for "solutions" from the protesters, there's a start.

A quick look (using their numbers):-$600B of additional taxes per year.

-$222B for ending tax subsidies.

-$108B for ending the wars.

-Save undisclosed amounts for cutting defense spending.

-$20B for "negotiating better prices with big Pharma".

-Slash mortgages to market value.

-Don't rely on private sector for job growth.

-A massive public works project.

-Cut military jobs and convert the spending to other areas.

-"Improved Medicare for All"

-Erase student loan debt.

-Hike taxes for Social Security.

Can we all get a pony too???

So, basically their plan is to hike taxes by well over $800 billion per year, slash the military, dramatically increase discretionary government spending, and wipe out trillions in mortgage and student loan debt.

I don't see how anyone would conclude that their goal is a massive redistribution of wealth in their favor. Greed is good.

Wealth redistribution has been in the favor of the rich for long enough. I don't think there's anything shocking about OWS wanting to reverse that trend.

I'm not shocked, I've just heard and read a lot of people trying to spin it into something more mainstream. I think it's good that they've finally put pen to paper and quantified it.

 

[dickey moe]

So apparently if you are a business its basically a license to be a complete sociopath.

Amazing the ability to which some license the government to be "a complete sociopath."

 

[Bob Sacamano]

I suddenly find myself wanting an apple.

A good apple.

 

[Bob Sacamano]

I suddenly find myself wanting an apple. A good apple.

And yet I have none.I must be the 99%.

 

[dickey moe]

Occupy DC's proposal to reduce the deficit

For those that keep clamoring for "solutions" from the protesters, there's a start.

Thank you. This has crystallized it well for the sane.

 

[guderian]

Occupy DC's proposal to reduce the deficit

For those that keep clamoring for "solutions" from the protesters, there's a start.

On the "About Us" section of that site there are a lot of full-time activists driving that particular group.Link

 

[Zow]

Occupy DC's proposal to reduce the deficit

For those that keep clamoring for "solutions" from the protesters, there's a start.

A quick look (using their numbers):-$600B of additional taxes per year.

-$222B for ending tax subsidies.

-$108B for ending the wars.

-Save undisclosed amounts for cutting defense spending.

-$20B for "negotiating better prices with big Pharma".

-Slash mortgages to market value.

-Don't rely on private sector for job growth.

-A massive public works project.

-Cut military jobs and convert the spending to other areas.

-"Improved Medicare for All"

-Erase student loan debt.

-Hike taxes for Social Security.

Can we all get a pony too???

So, basically their plan is to hike taxes by well over $800 billion per year, slash the military, dramatically increase discretionary government spending, and wipe out trillions in mortgage and student loan debt.

I don't see how anyone would conclude that their goal is a massive redistribution of wealth in their favor. Greed is good.

Wealth redistribution has been in the favor of the rich for long enough. I don't think there's anything shocking about OWS wanting to reverse that trend.

How so?

 

[Zow]

So apparently if you are a business its basically a license to be a complete sociopath.

If you invested say thousands of your hard earned dollars into owning stock in a company so that your yield may pay for your kids to go to college and the CEO of that company thought he had a "moral obligation" to walk around the Occupy protests and give all that company's quarterly profits to the occupiers, leaving you with no dividends and a drop in stock value, you'd be incredibly upset.

 

[Zow]

So apparently if you are a business its basically a license to be a complete sociopath.

If you invested say thousands of your hard earned dollars into owning stock in a company so that your yield may pay for your kids to go to college and the CEO of that company thought he had a "moral obligation" to walk around the Occupy protests and give all that company's quarterly profits to the occupiers, leaving you with no dividends and a drop in stock value, you'd be incredibly upset.

 

[Zow]

So apparently if you are a business its basically a license to be a complete sociopath.

If you invested say thousands of your hard earned dollars into owning stock in a company so that your yield may pay for your kids to go to college and the CEO of that company thought he had a "moral obligation" to walk around the Occupy protests and give all that company's quarterly profits to the occupiers, leaving you with no dividends and a drop in stock value, you'd be incredibly upset.

 

[timschochet]

The UC Davis pepper spray incident looks terrible on film. Awful. Whatever their motivation, the police shouldn't be engaged in pepper spraying students just sitting there on the ground.

 

[jamny]

The UC Davis pepper spray incident looks terrible on film. Awful. Whatever their motivation, the police shouldn't be engaged in pepper spraying students just sitting there on the ground.

Apparently they just dragged those kids away a few minutes later anyway. Why bother with the pepper spray?What's the deal with pepper spray? Most of the kids didn't seem affected by it. One kid just wiped off his glasses. If you just close your eyes and hold your breath, does it last longer than 30 seconds once the spray stops?

 

[mcintyre1]

The UC Davis pepper spray incident looks terrible on film. Awful. Whatever their motivation, the police shouldn't be engaged in pepper spraying students just sitting there on the ground.

Apparently they just dragged those kids away a few minutes later anyway. Why bother with the pepper spray?What's the deal with pepper spray? Most of the kids didn't seem affected by it. One kid just wiped off his glasses. If you just close your eyes and hold your breath, does it last longer than 30 seconds once the spray stops?

That's the problem. It isn't well established. Some people can take pepper spray very easily, some people die from allergic reactions, as well as a great variety of steps in between those two.

 

[mcintyre1]

Occupy DC's proposal to reduce the deficit

For those that keep clamoring for "solutions" from the protesters, there's a start.

On the "About Us" section of that site there are a lot of full-time activists driving that particular group.Link

EDIT: I misread the report in question, as far as I can tell there is no list of authors so my previous point isn't valid.

 

[hook014]

Say what you will about the OWS people but what's starting to intrigue me is what you don't hear. No multi million bonuses for executives that mismanaged the banks announced. No new plans to shift the debt onto public roles. Just not much of any new scheme to get out from under their mistakes.

I think what the organizers have had in mind all along is not to have a leader identified, nor have any concrete demands. Denying their opponents the hard target needed to marginilize them. And it appears to be working, much to the frustration of those opponents. Now I came to this conclusion months ago as many of you did but I didn't think they would be able to maintain that posture this long. Just too many wackos showing up with their own agenda. Kudos to them for making it this far.

Now they have what can only be described as presence. Which is a threat, in and of itself, that any action detrimental to the middle class could spark a huge reaction and swell their numbers greatly. Much easier to join a group than start one. It would seem to be at minimum a standoff and is surely making the powerful sweat a little.

When seen in those terms it certainly takes on a more serious nature than some of you are willing to admit.

As someone who reads history for a hobby I'll make one observation here. Whenever things get bad enough in this country, and it takes a whole helluva lot for people to actually protest, they are almost always right. It's okay to have a different opinion than them. That's your right. But history says you are already losing.

 

[MaxThreshold]

Say what you will about the OWS people but what's starting to intrigue me is what you don't hear. No multi million bonuses for executives that mismanaged the banks announced. No new plans to shift the debt onto public roles. Just not much of any new scheme to get out from under their mistakes.I think what the organizers have had in mind all along is not to have a leader identified, nor have any concrete demands. Denying their opponents the hard target needed to marginilize them. And it appears to be working, much to the frustration of those opponents. Now I came to this conclusion months ago as many of you did but I didn't think they would be able to maintain that posture this long. Just too many wackos showing up with their own agenda. Kudos to them for making it this far.Now they have what can only be described as presence. Which is a threat, in and of itself, that any action detrimental to the middle class could spark a huge reaction and swell their numbers greatly. Much easier to join a group than start one. It would seem to be at minimum a standoff and is surely making the powerful sweat a little. When seen in those terms it certainly takes on a more serious nature than some of you are willing to admit.As someone who reads history for a hobby I'll make one observation here. Whenever things get bad enough in this country, and it takes a whole helluva lot for people to actually protest, they are almost always right. It's okay to have a different opinion than them. That's your right. But history says you are already losing.

So wait...now the disorganization, numerous incoherent messages and general chaos of the movement was an actual strategy? And you think their message is actually working? And that they haven't been marginalized?Well, i respectfully disagree. Even the democrats are running away form this group.

 

[Tiny Dancer]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

 

[Jackstraw]

Say what you will about the OWS people but what's starting to intrigue me is what you don't hear. No multi million bonuses for executives that mismanaged the banks announced. No new plans to shift the debt onto public roles. Just not much of any new scheme to get out from under their mistakes.I think what the organizers have had in mind all along is not to have a leader identified, nor have any concrete demands. Denying their opponents the hard target needed to marginilize them. And it appears to be working, much to the frustration of those opponents. Now I came to this conclusion months ago as many of you did but I didn't think they would be able to maintain that posture this long. Just too many wackos showing up with their own agenda. Kudos to them for making it this far.Now they have what can only be described as presence. Which is a threat, in and of itself, that any action detrimental to the middle class could spark a huge reaction and swell their numbers greatly. Much easier to join a group than start one. It would seem to be at minimum a standoff and is surely making the powerful sweat a little. When seen in those terms it certainly takes on a more serious nature than some of you are willing to admit.As someone who reads history for a hobby I'll make one observation here. Whenever things get bad enough in this country, and it takes a whole helluva lot for people to actually protest, they are almost always right. It's okay to have a different opinion than them. That's your right. But history says you are already losing.

So wait...now the disorganization, numerous incoherent messages and general chaos of the movement was an actual strategy? And you think their message is actually working? And that they haven't been marginalized?Well, i respectfully disagree. Even the democrats are running away form this group.

http://www.washingtonpost.com/blogs/ezra-klein/post/occupy-wall-streets-big-win-in-one-graph/2011/08/25/gIQAv8oqCN_blog.htmlMedia mentions of income inequality up 500% in a month and a half. They've shifted the dialogue and thats pretty darn good. I think they have done an excellent job of shining light on a real problem. I've heard in politics that sunshine is the best disinfectant.

 

[Rayderr]

Say what you will about the OWS people but what's starting to intrigue me is what you don't hear. No multi million bonuses for executives that mismanaged the banks announced. No new plans to shift the debt onto public roles. Just not much of any new scheme to get out from under their mistakes.I think what the organizers have had in mind all along is not to have a leader identified, nor have any concrete demands. Denying their opponents the hard target needed to marginilize them. And it appears to be working, much to the frustration of those opponents. Now I came to this conclusion months ago as many of you did but I didn't think they would be able to maintain that posture this long. Just too many wackos showing up with their own agenda. Kudos to them for making it this far.Now they have what can only be described as presence. Which is a threat, in and of itself, that any action detrimental to the middle class could spark a huge reaction and swell their numbers greatly. Much easier to join a group than start one. It would seem to be at minimum a standoff and is surely making the powerful sweat a little. When seen in those terms it certainly takes on a more serious nature than some of you are willing to admit.As someone who reads history for a hobby I'll make one observation here. Whenever things get bad enough in this country, and it takes a whole helluva lot for people to actually protest, they are almost always right. It's okay to have a different opinion than them. That's your right. But history says you are already losing.

So wait...now the disorganization, numerous incoherent messages and general chaos of the movement was an actual strategy? And you think their message is actually working? And that they haven't been marginalized?Well, i respectfully disagree. Even the democrats are running away form this group.

http://www.washingtonpost.com/blogs/ezra-klein/post/occupy-wall-streets-big-win-in-one-graph/2011/08/25/gIQAv8oqCN_blog.htmlMedia mentions of income inequality up 500% in a month and a half. They've shifted the dialogue and thats pretty darn good. I think they have done an excellent job of shining light on a real problem. I've heard in politics that sunshine is the best disinfectant.

Context is everything. A mention like "8 people protesting income inequality were arrested for assault today" doesn't really shift the dialogue.

 

[Maurile Tremblay]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

 

[tommyGunZ]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

 

[Maurile Tremblay]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, I don't think the argument would apply at the margin where the current level of governmental power is zero.

 

[Slapdash]

What is the contribution of the financial sector?Andrew G Haldane Vasileios Madouros22 November 2011While few would argue that the financial crisis has not brought the real economy down with it, there is considerably less clarity about what the positive contribution of the financial sector is during normal times. This lead commentary in the current Vox debate on the issue focuses on the value-added of risk and government subsidies in national accounting, and makes an important distinction between risk-taking and risk management.This column is a Lead Commentary on VoxEU's debate on Why do we need a financial sector?Join the debateThere is no doubting the financial sector has a significant impact on the real economy. Financial crisis experience makes this only too clear.1 Financial recessions are both deeper and longer-lasting than normal recessions. At this stage of a normal recession, output would be about 5% above its pre-crisis level. Today, in the UK, it remains about 3.5% below. So this much is clear: Starved of the services of the financial sector, the real economy cannot recuperate quickly.But that does not answer the question of what positive contribution finance makes in normal, non-recessionary states. This is an altogether murkier picture. Even in concept, there is little clarity about the services that banks provide to customers, much less whether statisticians are correctly measuring those services.2 As currently measured, however, it seems likely that the value of financial intermediation services is significantly overstated in the national accounts, for reasons we now explain.‘Excess’ returns in the banking sector3The headline national accounts numbers point to a significant contribution of the financial sector to the economy. For the US, the value-added of financial intermediaries was about $1.2 trillion in 2010 – equivalent to 8% of total GDP. In the UK, the value-added of finance was around 10% of GDP in 2009. The trends over time are even more striking. For example, they suggest that the contribution of the financial sector to GDP in the US has increased almost fourfold since the Second World War.At face value, these trends would be consistent with large productivity gains in finance. Pre-crisis, that is what the bald numbers implied. Measured total factor productivity growth in the financial sector exceeded that in the rest of the economy (Figure 1). Financial innovation was said to have allowed the banking system to better manage risk and allocate capital. These efficiency gains in turn allowed the factors of banking production (labour and capital) to reap the benefits through high returns (wages and dividends).Figure 1 Differential in TFP growth between financial intermediation and the whole economya,bSource: EU KLEMS and authors' calculations. The EU KLEMS data are available online at www.euklems.net. For further detail on the database, see O'Mahony, M and Timmer, P M (2009), "Output, input and productivity measures at the industry level: the EU KLEMS Database", Economic Journal, 119(538), pp. 374-403.Notes: aTFP estimates beased on the value-added approach and account for changes in both the quantity and quality of labour. bA positive number implies higher TFP growth in financial intermedation relative to the whole economy.But crisis experience has challenged this narrative. High pre-crisis returns in the financial sector proved temporary. The return on tangible equity in UK banking fell from levels of 25%+ in 2006 to - 29% in 2008. Many financial institutions around the world found themselves calling on the authorities, in enormous size, to help manage their solvency and liquidity risk. That fall from grace, and the resulting ballooning of risk, sits uneasily with a pre-crisis story of a shift in the technological frontier of banks’ risk management.In fact, high pre-crisis returns to banking had a much more mundane explanation. They reflected simply increased risk-taking across the sector. This was not an outward shift in the portfolio possibility set of finance. Instead, it was a traverse up the high-wire of risk and return. This hire-wire act involved, on the asset side, rapid credit expansion, often through the development of poorly understood financial instruments. On the liability side, this ballooning balance sheet was financed using risky leverage, often at short maturities.Risk-taking versus risk managementIn what sense is increased risk-taking by banks a value-added service for the economy at large? In short, it is not.The financial system provides a number of services to the wider economy, including payment and transaction services to depositors and borrowers; intermediation services by transforming deposits into funding for households, companies or governments; and risk transfer and insurance services. In doing so, financial intermediaries take on risk. For example, when they finance long-term loans to companies using short-term deposits from households, banks assume liquidity risk. And when they extend mortgages to households, they take on credit risk.But bearing risk is not, by itself, a productive activity. The act of investing capital in a risky asset is a fundamental feature of capital markets. For example, a retail investor that purchases bonds issued by a company is bearing risk, but not contributing so much as a cent to measured economic activity. Similarly, a household that decides to use all of its liquid deposits to purchase a house, instead of borrowing some money from the bank and keeping some of its deposits with the bank, is bearing liquidity risk.Neither of these acts could be said to boost overall economic activity or productivity in the economy. They re-allocate risk in the system but do not fundamentally change its size or shape. For that reason, statisticians do not count these activities in capital markets as contributing to activity or welfare. Rightly so.What is a demonstrably productive economic activity is the management of risk. Banks use labour and capital to screen borrowers, assess their creditworthiness and monitor them. And they spend resources to assess their vulnerability to liquidity shocks arising from the maturity mismatches on their balance sheets. Customers, in turn, remunerate banks for these productive services.The current framework for measuring the contribution of financial intermediaries captures few of these subtleties. Crucially, it blurs the distinction between risk-bearing and risk management. Revenues that banks earn as compensation for risk-bearing – the spread between loan and deposit rates on their loan book – are accounted for as output by the banking sector. So bank balance-sheet expansion, as occurred ahead of the crisis, counts as increased value-added. But this confuses risk-bearing with risk management, especially when the risk itself may be mis-priced or mis-managed.The upshot is a potentially significant over-estimation of the valued-added of the financial sector. The size of this effect is potentially very large. For example, Colangelo and Inklaar (2010) suggest that, for the Eurozone as a whole, adjusting for risk-taking would reduce the estimated output of the financial sector by about 25-40 % relative to the current methodology. If the same factor were applied in the UK, the measured contribution of the financial sector would suddenly drop to about 6-7.5% of GDP. That’s a measurement error of about £35-£55 billion based on 2009 data. The impact of this on overall GDP is likely to be smaller because half of the output of the financial sector is consumed by other businesses – so, while the measured value added of finance would drop, that of other sectors would increase.Indeed, a banking system that does not accurately assess and price risk could even be thought to subtract value from the economy. Buyers and sellers of risk could meet instead in capital markets – as indeed they have, increasingly, following the crisis. The national accounts would capture such a transfer as a fall in GDP. But to the extent that capital markets are at present better able to price and manage that risk than banks, the opposite is actually true.Implicit subsidiesThere is a second, equally important, reason why the measured value-added of the financial sector in the national accounts may be seriously over-stated. We now know that the risk being taken by banks was not in fact borne by them, fully or potentially even partially. Instead it has been borne by society. That is why GDP today lies below its pre-crisis level. And it is why government balance sheets, relative to GDP, are set to double as a result of the crisis in many countries.But if banking risks are not borne by banks, they will not be priced by banks, or investors in banks, either. The implicit support of the taxpayer and society will show up as an explicit profits bonus to the financial system. Lower risk means lower funding costs, which in turn means fatter banking profits. If there are expectations that the government cavalry always stands at the ready, excess returns will be harvested both pre and post-crisis.Elsewhere, we have sought to estimate those implicit subsidies to banking arising from its too big-to-fail status. For the largest 25 or so global banks, the average annual subsidy between 2007-2010 was hundreds of billions of dollars; on some estimates it was over $1 trillion (Haldane 2011). This compares with average annual profitability of the largest global banks of about $170 billion per annum in the five years ahead of the crisis.Government subsidies – whether implicit or explicit – cannot be said to have added to economic well-being in aggregate. At best, they are a sectoral re-distribution of resources from the general taxpayer to the banks. If raising taxes or lowering government revenues has deadweight welfare costs, this transfer is actually welfare-reducing. That effect, too, is completely missed by existing statistical measures of the contribution of the financial sector.ConclusionIf risk-making were a value-adding activity, Russian roulette players would contribute disproportionately to global welfare. And if government subsidies were the route to improved well-being, today’s growth problems could be solved at a stroke. Typically, this is not the way societies keep score. But it was those very misconceptions which caused the measured contribution of the financial sector to be over-estimated ahead of the crisis.Risk-management is a legitimately value-added activity. It lies at the heart of the services banks provide. Today’s debate around banking and bankers has usefully rediscovered that key fact, amid the rubble of broken balance sheets and wasted financial and human capital. Investors, regulators and statisticians now need to adjust their measuring rods to ensure they are not blind to risk when next evaluating the return to banking.

http://www.voxeu.org/index.php?q=node/7314

 

[Soonerman]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, pretty much everyone agrees that we need some level of government. It's more of an argument that the Founders got the balance about right, and it is too bad we have gotten away from that.

 

[tommyGunZ]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, I don't think the argument would apply at the margin where the current level of governmental power is zero.

So the general "more power for politicians is harmful" argument depends on where on an abstract governmental power scale you believe we are, correct?

 

[urbanhack]

So apparently if you are a business its basically a license to be a complete sociopath.

Businesses are composed of people--each with legal obligations and morals. Beyond that businesses are subject to regulations and additional laws. A business is just a legal fabrication--it can't "do" anything. Occupy Wall Street seems to think that businesses are these giant, monolithic entities that are void of humanity--or that their employees just blindly do the bidding of the greedy, evil 1%ers. I think they've watched too many movies.

Or some of us have actually experienced it in real life.

 

[tommyGunZ]

No, pretty much everyone agrees that we need some level of government. It's more of an argument that the Founders got the balance about right, and it is too bad we have gotten away from that.

Agreed. Which is why I don't think MT's general "more power to politicians = bad outcomes" generality holds water.

 

[Maurile Tremblay]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, I don't think the argument would apply at the margin where the current level of governmental power is zero.

So the general "more power for politicians is harmful" argument depends on where on an abstract governmental power scale you believe we are, correct?

Of course. Unless the optimal number of governmental powers is zero or infinity, whether we should prefer to add to them or subtract from them depends on what powers it currently has.If a government currently has zero powers, there will be some extremely low-hanging fruit, like providing for a national defense, that will almost certainly do more good than harm.

Once the low-hanging fruit is gone, however, that's when I think that any additional powers will become subject to the principles I outlined in my previous post. We'll get diminishing marginal returns on the good that noble politicians can do with more power, while the harm that corrupt politicians can do will remain ever proportional to their power, even as it metastasizes.

 

[cosjobs]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, pretty much everyone agrees that we need some level of government. It's more of an argument that the Founders got the balance about right, and it is too bad we have gotten away from that.

Okay then, first we need to remove the corporate entity

 

[Soonerman]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, pretty much everyone agrees that we need some level of government. It's more of an argument that the Founders got the balance about right, and it is too bad we have gotten away from that.

Okay then, first we need to remove the corporate entity

How and why?

 

[Soonerman]

No, pretty much everyone agrees that we need some level of government. It's more of an argument that the Founders got the balance about right, and it is too bad we have gotten away from that.

Agreed. Which is why I don't think MT's general "more power to politicians = bad outcomes" generality holds water.

Really? You agree that the Founders got the level of government about right? I think my brain just melted.

 

[cosjobs]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, pretty much everyone agrees that we need some level of government. It's more of an argument that the Founders got the balance about right, and it is too bad we have gotten away from that.

Okay then, first we need to remove the corporate entity

How and why?

There were no corporations when our country was founded. Now they are the most powerful element, How could the original framework and balance continue to be ideal?

 

[Soonerman]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, pretty much everyone agrees that we need some level of government. It's more of an argument that the Founders got the balance about right, and it is too bad we have gotten away from that.

Okay then, first we need to remove the corporate entity

How and why?

There were no corporations when our country was founded. Now they are the most powerful element, How could the original framework and balance continue to be ideal?

We had corporations well before the 1930's when the breakdown of the constituional order really began. We also had them in the 1960's when the breakdown was accelerated. So prior to that, we somehow dealt with corporations without throwing out the constitution.Besides that, a lot of the expansions of government have nothing to do with acting as a check on corporations. If the only expansions of government power were limited to that, I could almost live with it.

But you said we need to get rid of corporations. How exactly would we do that?

 

[Maurile Tremblay]

There were no corporations when our country was founded.

I'm pretty sure that's false.ETA: Dartmouth College, for example, was incorporated in 1769.

 

[Soonerman]

There were no corporations when our country was founded.

I'm pretty sure that's false.

It is mostly false. Certainly by very early in the 1800's, when many of the Founding Generation were still around, corporations were very prominent and increasing.

 

[Slapdash]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, pretty much everyone agrees that we need some level of government. It's more of an argument that the Founders got the balance about right, and it is too bad we have gotten away from that.

Okay then, first we need to remove the corporate entity

How and why?

There were no corporations when our country was founded. Now they are the most powerful element, How could the original framework and balance continue to be ideal?

We had corporations well before the 1930's when the breakdown of the constituional order really began. We also had them in the 1960's when the breakdown was accelerated. So prior to that, we somehow dealt with corporations without throwing out the constitution.Besides that, a lot of the expansions of government have nothing to do with acting as a check on corporations. If the only expansions of government power were limited to that, I could almost live with it.

But you said we need to get rid of corporations. How exactly would we do that?

What are you refering to during these periods that were "breakdowns in constituional order"?

 

[Soonerman]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, pretty much everyone agrees that we need some level of government. It's more of an argument that the Founders got the balance about right, and it is too bad we have gotten away from that.

Okay then, first we need to remove the corporate entity

How and why?

There were no corporations when our country was founded. Now they are the most powerful element, How could the original framework and balance continue to be ideal?

We had corporations well before the 1930's when the breakdown of the constituional order really began. We also had them in the 1960's when the breakdown was accelerated. So prior to that, we somehow dealt with corporations without throwing out the constitution.Besides that, a lot of the expansions of government have nothing to do with acting as a check on corporations. If the only expansions of government power were limited to that, I could almost live with it.

But you said we need to get rid of corporations. How exactly would we do that?

What are you refering to during these periods that were "breakdowns in constituional order"?

Oh I don't know. Maybe the Federal Government suddenly having the power to tell a wheat farmer he couldn't grow wheat for his personal use.

 

[Sarnoff]

There were no corporations when our country was founded.

Wasn't our country partially colonized by the British East India Company?

 

[Soonerman]

There were no corporations when our country was founded.

Wasn't our country partially colonized by the British East India Company?

You could argue it was a "Charter Company" and not the same as modern corporations. But it clearly was similar. And like I pointed out, by the early 1800's, corporations similar to what we have today were pretty common.

 

[Slapdash]

We had corporations well before the 1930's when the breakdown of the constituional order really began. We also had them in the 1960's when the breakdown was accelerated. So prior to that, we somehow dealt with corporations without throwing out the constitution.Besides that, a lot of the expansions of government have nothing to do with acting as a check on corporations. If the only expansions of government power were limited to that, I could almost live with it.But you said we need to get rid of corporations. How exactly would we do that?

What are you refering to during these periods that were "breakdowns in constituional order"?

Oh I don't know. Maybe the Federal Government suddenly having the power to tell a wheat farmer he couldn't grow wheat for his personal use.

So you think judicial decisions on the Commerce Clause broke down constitutional order? If so, how would you fix that?

 

[Soonerman]

We had corporations well before the 1930's when the breakdown of the constituional order really began. We also had them in the 1960's when the breakdown was accelerated. So prior to that, we somehow dealt with corporations without throwing out the constitution.Besides that, a lot of the expansions of government have nothing to do with acting as a check on corporations. If the only expansions of government power were limited to that, I could almost live with it.But you said we need to get rid of corporations. How exactly would we do that?

What are you refering to during these periods that were "breakdowns in constituional order"?

Oh I don't know. Maybe the Federal Government suddenly having the power to tell a wheat farmer he couldn't grow wheat for his personal use.

So you think judicial decisions on the Commerce Clause broke down constitutional order? If so, how would you fix that?

Yes, I think the idea of a limited government with only enumerated powers has been mortally wounded.How would I fix that? Operating in what capacity?

 

[Slapdash]

We had corporations well before the 1930's when the breakdown of the constituional order really began. We also had them in the 1960's when the breakdown was accelerated. So prior to that, we somehow dealt with corporations without throwing out the constitution.Besides that, a lot of the expansions of government have nothing to do with acting as a check on corporations. If the only expansions of government power were limited to that, I could almost live with it.But you said we need to get rid of corporations. How exactly would we do that?

What are you refering to during these periods that were "breakdowns in constituional order"?

Oh I don't know. Maybe the Federal Government suddenly having the power to tell a wheat farmer he couldn't grow wheat for his personal use.

So you think judicial decisions on the Commerce Clause broke down constitutional order? If so, how would you fix that?

Yes, I think the idea of a limited government with only enumerated powers has been mortally wounded.How would I fix that? Operating in what capacity?

Given that the court has upheld it for 80 years I'm guessing you would need some amendment to reverse it. Maybe there are other ways, but I was just curious what you would have in mind if so.

 

[tommyGunZ]

In any case, my observations in an American-style democracy lead me to believe that any power given to politicians is more likely to be used for their ends than for ours. I don't think it's because the wrong people are in charge; I think it's because people are in charge. It's human nature to treat one's friends better than one's enemies, and to treat campaign donors as friends. (Isn't that the thinking behind restrictions on campaign contributions?) Even good apples aren't immune from human nature.

I don't feel like power is divided very equitably in the absence of government either. If we take some power (or money) away from rich people and give it to the government, I'm not convinced that's a bad thing for poor people. I know you like to point out that some government programs are regressive, but I don't think it has to be that way. It's undoubtedly a challenge to do anything in democracy, but that doesn't mean it can't be done.

It's hard to speak meaningfully of more governmental power or less governmental power in the abstract, because it depends heavily on which specific powers we're talking about. We'd probably both agree that the government should have the power to provide a national defense, but shouldn't have the power to execute citizens for speaking freely without so much as a jury trial. In between, there are plenty of harder questions.But to remain uselessly abstract for a minute, I think it's self-evident that giving politicians more power gives the bad apples a greater capacity to do harm as well as the good apples a greater capacity to do good. But I don't think those two forces are equal.

For one thing, as I mentioned before, giving politicians more power might increase the ratio of bad apples to good apples (either by attracting more bad apples, or by turning some good apples bad). At the margin, this may not be a significant effect. I don't know.

For another thing, I think a politician's power will be the limiting factor in his ability to do harm more often than it will be in his ability to do good. A bad politician will almost always be able to do marginally more harm if he's given marginally more power. Quite often, however, a good politician may be unable to do marginally more good for some reason other than a lack of power, so giving him more power won't help. Give a well-meaning politician the infinite power to determine routes and set fares for airlines, and he still may not be able to determine routes or set fares as sensibly as the market would, because he can't aggregate all relevant information as well. (Give a corrupt politician the same power, and no such practical impediments will prevent him from sacrificing the public interest for his own.)

So as politicians get progressively more power, at least in a uselessly abstract sense, there is some reason to suspect we'll see an increase in the ratio of bad things to good things they do with it.

Isn't this an argument for anarchy?

No, I don't think the argument would apply at the margin where the current level of governmental power is zero.

So the general "more power for politicians is harmful" argument depends on where on an abstract governmental power scale you believe we are, correct?

Of course. Unless the optimal number of governmental powers is zero or infinity, whether we should prefer to add to them or subtract from them depends on what powers it currently has.If a government currently has zero powers, there will be some extremely low-hanging fruit, like providing for a national defense, that will almost certainly do more good than harm.

Once the low-hanging fruit is gone, however, that's when I think that any additional powers will become subject to the principles I outlined in my previous post. We'll get diminishing marginal returns on the good that noble politicians can do with more power, while the harm that corrupt politicians can do will remain ever proportional to their power, even as it metastasizes.

Cool. I agree with you in theory, though I'm guessing we probably disagree slightly as to where on the gov't power scale we currently are.

 

[Soonerman]

We had corporations well before the 1930's when the breakdown of the constituional order really began. We also had them in the 1960's when the breakdown was accelerated. So prior to that, we somehow dealt with corporations without throwing out the constitution.Besides that, a lot of the expansions of government have nothing to do with acting as a check on corporations. If the only expansions of government power were limited to that, I could almost live with it.But you said we need to get rid of corporations. How exactly would we do that?

What are you refering to during these periods that were "breakdowns in constituional order"?

Oh I don't know. Maybe the Federal Government suddenly having the power to tell a wheat farmer he couldn't grow wheat for his personal use.

So you think judicial decisions on the Commerce Clause broke down constitutional order? If so, how would you fix that?

Yes, I think the idea of a limited government with only enumerated powers has been mortally wounded.How would I fix that? Operating in what capacity?

Given that the court has upheld it for 80 years I'm guessing you would need some amendment to reverse it. Maybe there are other ways, but I was just curious what you would have in mind if so.

That's interesting. An amendment to basically say "We really, really mean what the Commerce Clause actually says."I would hold the opposite. The burden for changing the meaning of the constitution should have required an amendment of the people who wanted to do the changing.The battle over Prohibition worked out the way it was supposed to. The anti-liquor forces didn't pretend that the constitution enabled them to ban liquor. They sought and got an amendment to get what they wanted. Similarly, the anti-Prohibition forces got a competing amendment approved to bring back liquor. Neither side woud have imagined that they could just ban liquor sales as part of existing constitutional powers.

 

[Maurile Tremblay]

Neither side woud have imagined that they could just ban liquor sales as part of existing constitutional powers.

A federal ban on cocaine and heroin should have required a constitutional amendment similar to the one for alcohol, but times have changed.

 

[davidbostonsbicepsfan]

This thing over? Good for them for showing how dumb the 25% can be.