Can someone who supported Barack Obama tell me how his plan to correct our economy is any better the George Bush’s plan? It seems like the only answer that either of them can come up with is to spend trillions of dollars to nationalize failing businesses.
The following quote from an article by Peter Wehner and Paul Ryan in the Wall Street Journal illustrates where we could be headed as Tweedle Dum leaves office and Tweedle Dumber is inaugurated:
The last several months are a foreshadowing of a new era of government activism, rather than an unfortunate but necessary (and anomalous) emergency action. We will soon shift from a market-based economy to a political one in which the government picks winners and losers and extends its reach and power in unprecedented ways.
If you didn’t read the article that I linked above, you probably ought to. Especially if you are someone who is frightened by the government’s recent desire to get involved in some of our most important industries.
Doesn’t anyone else seem to be a little worried that the government is bailing out financial institutions, auto companies, and if you got enough hope, maybe the health care industry. The government is targeting only the industries that will create the most dependence. You don’t see the government targeting retail stores and restaurants with their bailout measures, because people don’t rely on these industries like they do the financial and healthcare industries. The government only wants to play in the industries where it can create dependent citizens out of us.
I would prefer that the government get out of the picture, and the market can sort things out. When centralized economic systems fail, it is proof that they don’t work. When a capitalistic economic system fails, it is proof that the system is working. When a centralized economic system fails, you end up with an insolvent government unable to provide entitlements to its dependent population (See bankrupt California for an example of the latest failure on socialism’s long list of failures). When a capitalistic system fails, you end up with a new generation of entrepreneurs and innovators who discover how to create wealth again out of the failed assets of previously existing enterprises. This process is painful, but in the long run it is very rewarding.
The big story this weekend is that Circuit City is going out of business and going to liquidate its assets. Read this article for a great rundown of why this happened. I especially like the graph at the bottom of the article that explains why Circuit City failed. Would it be better for the government to get involved here, or would it be better for Costco and Best Buy and Walmart to reap the rewards for better running their businesses?
It would be nice to see our government, which is no stranger to failure, recognize that failure happens, and that failure is an option in a capitalistic economy.
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Seems that you are stating the obvious to those who are paying even a little attention!
Truly Amazing.
You argue that the government is becoming involved in the industries mentioned precisely because, through them, they can create more dependence? I wonder how it can escape your attention the possibility that the government is becoming involved in these industries only because people now depend so heavily upon them.
First, if I may, comparing Circuit City, with its ear bud earphones and speaker wire to financial institutions with retirement plans, and the entirety of the health care industry—truly a stroke of brilliant convolution. We’re not even at apples and oranges. I can’t think of something so disparately incomparable, so there’s got to be some kind of prize for that.
Build a 60 story sky scraper on farmland in Mona with a drunk foreman, a blind architect using support beams made out of candy corn, the government would survey it, clear the building, and let it fall over. Build that same building, same drunk foreman, same blind architect on E46th street in NY, and the government is going to do everything it can to make sure the building will stand—that, or come down safely. The difference is one will affect countless innocent bystanders. The other will not. That’s the difference between Circuit City and our financial institutions. (And again, I’m not even saying I’m on board with the bailout, just can’t stand to see such a poor comparison.)
If you want to argue about how the building got built in the first place, that’s your right. It doesn’t change the fact that this thing was built and people will be seriously harmed if it falls. If we want to argue culpability, we can do that too. Again, doesn’t change facts on the ground.
As far as pointing out the obvious? I’d love to meet a group of people to whom your argumentation is obvious, because I have SO MANY bridges to sell for some amazing prices. Spread the word.
It was my plea after my last reply to a post of yours, and I sincerely plead for it here: rigor. That’s all I ask for.
I think the question of comparing the Bush and Obama plans is a moot point, especially considering that the former obviously didn’t have the incentive to think longer term than the influence he might have in the waning months of his term, since the institution of such a large plan could not have gone forth in time. Thus, perhaps in principle, there is no large difference. The question you should be asking, on the other hand, is what is better – the direction being taken or one of the alternatives.
In the matter of full disclosure, I am stepping to the plate as an Obama supporter. I do agree with the general ideas behind the stimulus package, though I do not profess to be of the expertise to say what the best likely scope of action should be. I have been in communication with a good number of economists on the point, however. It seems to me that the consensus among those with whom I have discussed these issues (all of whom did not vote for Obama) consider most of the actions being taken a necessary evil. It is not an option to let the companies that hold an overwhelming percentage of the country’s borrowed assets fail. There does seem to be an extensive agreement on that fact, and disagreement seems to be mostly in the details, such as the needed scope of action and the particular incentives that the government should impose on the system. In sum, I would argue that even among those that make the economy the object of their career and tend to champion free markets over alternative frameworks admit that government intervention is on occasion necessary, and the scope of the current crisis is indeed one of those occasions. Thus, reverting to the party line, “government stay out, let the market work its magic” ignores some of the special characteristics of the current situation, such as the need to unfreeze the lending markets and allow capital to flow again.
Further, to state the current actions as nationalization of these industries is a simplification. I have been impressed with the measures taken to see that private capital replaces public capital in these industries as soon as possible, although time will tell whether this ends up to be the case. We are treading in uncharted waters with many of these actions, and I tend to agree with the theoretical ideas underpinning many of the stimulus plan’s actions.