Balkinization  

Wednesday, August 27, 2014

"Poverty Capitalism"

Sandy Levinson

If there is any one article that everyone should read and think deeply about, it is Thomas Edsall's piece in the NYTimes (online) on the rise of what he calls "poverty capitalism," i.e., the privatisation of government functions that has the consequences of imposing huge financial costs on the poor.  One cannot possibly understand the realities of Ferguson, Missouri, for example, without understanding the depth of this problem.  Edsall ends his column thusly:

What should be done to interrupt the dangerous feedback loop between low-level crime and extortionate punishment? First, local governments should bring private sector collection charges, court-imposed administrative fees and the dollar amount of traffic fines (which often double and triple when they go unpaid) into line with the economic resources of poor offenders. But larger reforms are needed and those will not come about unless the poor begin to exercise their latent political power. In many ways, everything is working against them. But the public outpouring spurred by the shooting of Michael Brown provides an indication of a possible path to the future. It was, after all, just 50 years ago — not too distant in historical terms — that collective action and social solidarity produced tangible results.
 But  does anyone seriously believe that the United States today is capable of a revived Civil Rights Movement based on the notion of "the beloved community."  Our "community organizer" President in whom so many of us had genuine hope has certainly betrayed any commitment he might ever have had to genuine "community organizing."  And, alas, only the Tea Party is willing to demonstrate and engage in "uncivil" responses to people they (often correctly) view as exploiting ordinary Americans.  Perhaps 'poverty capitalism" is simply a fancier way of saying "Dickensian," for Edwall demonstrates how we have recreated debtor's prisons (in the control of "private" business with an incentive to think only of their bottom lines).  Who in the next presidential election will speak for these victims?  Will Eric Holder start examining legal theories suggesting that there might be limits on the "privatized state" and the betrayal of what we'd like to think are constitutional norms before one can be deprived of liberty or property? 

Comments:

RE: "And, alas, only the Tea Party is willing to demonstrate and engage in "uncivil" responses to people they (often correctly) view as exploiting ordinary Americans."

Unless those "ordinary citizens" are black, brown, yellow, or even very tan. Only the white "ordinary citizens" are of interest to the Tea Party.

This is a real and growing problem for the poor. But those controlling the outcome are the very ones who have benefited from the privatization of services formerly provided the government. It seems like we're not going to put the genie back in that bottle.
 

"What should be done to interrupt the dangerous feedback loop between low-level crime and extortionate punishment?"

The first thing that comes to mind is, not committing low level crime. This has the advantage of being something any given person can do on their own, rather than getting saddled with collective action problems.

"Unless those "ordinary citizens" are black, brown, yellow, or even very tan. Only the white "ordinary citizens" are of interest to the Tea Party."

I'm afraid that you've fallen for the anti-Tea party media narrative. Check out these demographics. It's actually pretty amazing that 6% of the Tea party are black, when you consider how few blacks are Republicans.

The Tea party is actually much blacker than the GOP, with demographics comparable to political independents. Not the picture the media paints of them, of course.
 

The poll you reference is from 2010. A 2012 poll by CBS shows the following: "Eighteen percent of Americans identify as Tea Party supporters. The vast majority of them -- 89 percent -- are white. Just one percent is black. They tend to skew older: Three in four are 45 years old or older, including 29 percent who are 65 plus. They are also more likely to be men (59 percent) than women (41 percent).

I may not have the pulse of the Tea Party, but I don't think they are really all that interested in looking after the welfare of the poor. Especially the non white poor.


 


Ok, you're free to believe that a political movement completely changed its demographics in two years. I'm free to believe that somebody's polling technique is screwed up, because these polls flatly disagree. Flatly disagree about race, age, you name it.

From your poll: "CBS News and the New York Times surveyed 1,580 adults, including 881 self-identified Tea Party supporters, to get a snapshot of the Tea Party movement. There is a lot of information to unpack; let's begin with the demographics.

Eighteen percent of Americans identify as Tea Party supporters. The vast majority of them -- 89 percent -- are white. Just one percent is black."

Ok, blunt question: How do you do a random sample of 1580 adults, and end up with 881 of them being members of a movement you say is 18% of the population? You do understand that, with those two paragraphs, CBS has admitted the sample for it's poll wasn't random? It not being a random sample of Americans, what makes you think it's a random sample of Tea party members? I think I've just demonstrated which poll is dubious.

Gallup, back in 2010, was randomly sampling Americans to get its results, not cherry picking them.

Back in the 90's, I attended a number of conservative political gatherings which were covered by the press. Racially mixed gatherings. I got to observe first hand them choosing camera angles to avoid showing the presence of blacks, and then reporting the gathering as lily white. They still get caught at that today, cropping photos to make conservative gatherings look white.

They've got a narrative, they make their coverage match it, no matter what it takes.
 

Let's add to Brett's credentials as a 2nd A absolutist AND a self-proclaimed anarcho-libertarian, that he is a Tea Partier as well. What do these categories have in common? An American Spring, brought to us by non-state unregulated militias? Who are their enemies, besides the central and state governments?
 

Traffic fines are really taxes upon which communities rely for revenues. Instead of a tax agency, these county and municipal governments rely upon a collections agency.

Courts make payment of criminal fines, costs and restitution a condition of probation so the court can maintain jurisdiction over the defendant with the threat of jail for non-payment. Probation is not imposed simply to give defendants more time to pay these costs.

This is a very effective system to coerce defendants to pay restitution to their victims.

My state of Colorado will convert unpaid fines, costs and probation supervision fees owed to the government into a civil judgment debt if the defendant can show an inability to pay. Like any other creditor, the government sells their debts to collection agencies.

Defendants only pay a fraction of the cost of administering their cases, so their fines, costs and supervision fees are hardly exorbitant. Why should taxpayers foot more of the bill?

There is an easy way to avoid paying any of this...

DON'T COMMIT THE CRIME!
 

This comment has been removed by the author.
 

I'm surprised by your comment about the President in the context of poverty.

Obama is the first President in many many years to do anything about alleviating poverty. The proposal to raise the minimum wage for federal workers is a clear example (http://www.whitehouse.gov/raise-the-wage).

The ACA is important in many ways, but the effect of producing some economic security will be a long-lasting improvement: A major benefit of health insurance coverage is that it protects the insured from unexpected medical costs that may devastate their personal finances (http://chicagofed.org/webpages/publications/working_papers/2014/wp_01.cfm).

John
 

Teresa: Unless those "ordinary citizens" are black, brown, yellow, or even very tan. Only the white "ordinary citizens" are of interest to the Tea Party.

I'll chalk this whopper up to ignorance bred from limiting your news intake to Democrat media propaganda.

Herman Cain

Tim Scott

Marco Rubio

Nikki Haley

Bobby Jindal

Suzanna Martinez

Mia Love

Etc, etc, etc...

http://www.nationaljournal.com/magazine/tea-party-fuels-surge-of-minorities-into-office-20111020

Cain put out the best presidential campaign video in 2012:

http://youtu.be/MOFB-2yJzCY
 

Prof. Levinson's cries from the heart on this blog sometimes make me feel sorry for him.

I'm unsure btw what this means:

Our "community organizer" President in whom so many of us had genuine hope has certainly betrayed any commitment he might ever have had to genuine "community organizing."

First, it comes off as something of a dig that I more likely wouldn't hear from the likes of Sarah Palin.

To the extent it is the cry of someone who feels his hopes were crushed, what does it mean?

John Krall might not be quite right about him being the first President "to do anything" in many many years, especially if that isn't qualified. (I reckon people can find things Clinton did and heck I bet some might argue Bush did something).

But, yes, just to use that example, that "solidly produced tangible results" and is in part a result of people pushing for it, in fact many wanting more.

Obama repeatedly has spoken out to the immediate public. Eric Holder has as well on justice issues. This includes trying to protect the right to vote.

The push for more should not be the same as ignoring the positive things that occur. This is a lesson for all, including conservatives or whatever.
 

Joe,

I'm sure that I overstated my case. On the other hand, Clinton's signature achievement with regard to poverty is welfare reform, which has made things worse. See: http://www.cbpp.org/cms/index.cfm?fa=view&id=4034.

With regard to GW Bush, it could be argued the Medicare Part D did work to indirectly reduce poverty. However, the economic crash at the end of the Bush administration certainly increased poverty substantially.

By contrast, ACA, the Fair Pay Act, and the proposed raise in minimum wage are all efforts of the Obama administration that work to decrease poverty.

More could be done, but I was surprised to see the "betrayal" comment.

John
 

John and Joe:

What makes you think that Barack Obama or any other progressive/socialist gives a damn about actually alleviating poverty?

Employing a progressive income tax to pay for a means tested welfare state effectively compels the shrinking number of taxpayers to provide others a middle class income in transfer payments and benefits to remain under or unemployed and in poverty, and thus imposes a high marginal cost in lost benefits and new tax liabilities to taking middle class employment.

Illustrative Examples of Effective Marginal Tax Rates Faced by Married and Single Taxpayers: Supplemental Material for Effective Marginal Tax Rates for Low- and Moderate-Income Workers, Congressional Budget Office (November 2012).

Michael Tanner and Charles Hughes, The Work versus Welfare Tradeoff: 2103, The Cato Institute (2013).

http://www.zerohedge.com/news/2012-11-27/when-work-punished-tragedy-americas-welfare-state

Minimum compensation mandates for wages and benefits make it cost ineffective to employ the young and inexperienced who cannot produce enough in goods and services to justify the mandated compensation, pushing millions more into endemic under or unemployment and poverty.

David Neumark and William L. Wascher, Minimum Wages (Massachusetts Institute of Technology Press 2008).

Only a little over a third of Millennials can find full time employment today.

2013 Millennial Civic Health Index, National Conference on Citizenship, accessed March 31, 2014, http://www.ncoc.net/MillennialsCHI.

Progressivism/socialism is all about increasing government dependence in the name of alleviating poverty.
 

John Krall, it was at most a mild criticism on a use of a term I found too absolute. It is sorta a pet peeve of mine.

I appreciate your overall remarks.

 

Joe,

I took it as a very mild (and useful) criticism. Thanks for the kind words.

Bart Depalma,

What is the goal behind deepening government dependence? I've heard that before but don't really understand what purpose is served by increasing dependence.

I didn't have time to look at all of the cites, but did look over the Cato monograph. It seems to me that housing assistance is doing a lot of the heavy lifting in their calculations. However, housing assistance is not a very widely available benefit and access to housing support has decreased about 14% in the range examined. The authors report that cash assistance has also decreased over that time.

The $49K total for benefits in Hawaii seems nice, but only 15% of those receiving benefits get housing assistance. If the cost of housing really is around $23K, how will the other 85% afford that with only $7,632 in cash support?

John
 

"What is the goal behind deepening government dependence? I've heard that before but don't really understand what purpose is served by increasing dependence."

If people are dependent on government, and thanks to progressive taxation or their own unemployment, not paying for it themselves, they can be reliable votes for more government.

Put simply, by increasing dependence, and concentrating taxes on small fraction of the population, you create a situation where most voters are going to be net beneficiaries of government spending even if that spending fails any rational cost/benefit analysis. Because they only see the benefits, never the costs.
 

John: "What is the goal behind deepening government dependence? I've heard that before but don't really understand what purpose is served by increasing dependence.

Redistribution of wealth, the belief that the poor are incapable of directing their own lives without government assistance, and generating votes for the party providing the payments and benefits.

As a explanatory note, nearly every OECD nation (including most recently the US under the Obama administration) employs a hybrid progressive and socialist government. As a shorthand, I will refer to this hybrid as progressivism.

Progressivism is a totalitarian political economy in that progressives believe that government can direct nearly every aspect of our lives better than we can. Progressives were fairly open about this before voters started rejecting increasingly invasive progressive policies starting in the 1970s. Now many progressive politicians campaign like kinder and gentler Reagan clones.

The progressive remedy for every single social and economic problem (and many aspects of life which are not really problems) is further government regulation or redistribution of wealth. When was the last time you heard a progressive politician say that government could not remedy a problem?

Although they would not put it this way. progressives believe that government dependence is a good unto itself.
 

The Constitution increased government power in various ways, it made people more "dependent" on government in that respect.

The idea was that on the whole it would be most productive to entrust the government with certain powers to secure our well being. See, e.g., the Declaration of Independence.

One area this can be see is the jury system. The jury system and the connected aspects of "government" justice is not the only way to settle disputes.

But, over centuries, it has been found that it was a positive in various ways to do so. In the process, we got more "dependent" on the government.

This is not trivial -- our Constitution itself was set up at a time where private prosecutions were common, where on the whole police departments as we know them were not existent.

I realize the term "dependence" is likely being used in a special way, but resist the framing on some basic level.

Anyway, ACA follows the above. It is determined that more reliance on a system with more government involvement is most productive, particularly given, e.g., the gigantic affects on interstate commerce. Also, even your libertarian minded philosophers repeatedly accepted a safety net even having fire departments and health care that don't bankrupt makes you somewhat "dependent" on the government.

It is to me something akin to Alexander Hamilton understanding that government debt can be a way for private investors to have a stake and in the long run benefit the people as a whole, since in this country we don't just have some "government" but one that is "government of the people, by the people, for the people."

It is not just some vote getting device or something though people do tend to support government that manages to serve basic needs -- which again is what it is set up to do on some level. DOI.
 

Addendum: It has to be done the right way and there are imperfections but the same is true as to the alternative let's say in 1914 society.
 

As a purely factual matter, those most dependent on government in the US are elderly white people. They vote pretty dramatically for Republicans.
 

Mark:

What makes you think that the GOP (at least its establishment) is not a progressive party?

We have had a progressive government since Roosevelt and even conservative reformers like Reagan only temporarily slowed down the increase in the size and reach of that government.
 

Bart,

"We have had a progressive government since Roosevelt"

And things have really gone to hell since 1933, haven't they?
 

This comment has been removed by the author.
 

BD: "We have had a progressive government since Roosevelt"

toad: And things have really gone to hell since 1933, haven't they?


Let's tally up...

Over the subsequent 80 years, we have suffered through the only two depressions (recessions without a standard business cycle recovery) in our history (The Great Depression and our current depression).

During the post-WWII, pre-Reagan progressive "golden age" of high taxes and unions (1945-1982), the United States suffered through seven recessions (1946, 1949, 1953, 1958, 1960-61, 1969-70, 1973-75), ending with the terrible 1970s stagflation and bottoming out into the 1980-82 mega-recession.

There was one all too brief prosperous time during which the expansion of the progressive state was halted and in some ways pushed back - the Reagan Prosperity (1982-2007). This was the longest period in American history without a major recession. We had a minor recession in 1991 and one near recession in 2001.

Real per capita GDP and per capita income during the Reagan Prosperity was nearly double that of the previous post WWII period.

https://thecitizenpamphleteer.wordpress.com/2014/03/07/the-mythical-progressive-golden-age-vs-the-reagan-prosperity/

Even counting the Reagan Prosperity, GDP growth under progressive government is 1/3 lower and average unemployment nearly double that under the previous free markets.

And things are getting progressively worse. [Pun very much intended]

Today, the US had joined the other progressive nations of the world in population, economic and fiscal implosion. Our reproduction level has fallen below break even for the first time in our history. Our economy is crawling at 1.8% real GDP growth. Our real unemployment (counting all those of working age who have given up looking for work) is around 10%. Our public debt has doubled during our current recession and, when you count all the Social Security IOUs, our total federal debt is approaching 107% of GDP.

The progressive political economy is unsustainable and we are slowly becoming a failed state.
 

The Foreign Affairs weekly email flyer includes this:

America in Decay
The Sources of Political Dysfunction
By Francis Fukuyama
The problems with American politics today stem from the basic design of U.S. political institutions, exacerbated by increasingly hostile polarization. Unfortunately, absent some sort of major external shock, the decay is likely to continue for the foreseeable future.

I've been a tad busy with readings on Charles Beard and Mark Graber's 14th A article, so I haven't jumped into the tumult of this thread, although I am following it. I no longer subscribe to Foreign Affairs but assume that enough about Fukuyama's article will be discussed that I may not have to read it. This may be a bigger hit for him than his "The End of History."
 

Our CO gasbag's:

"The progressive political economy is unsustainable and we are slowly becoming a failed state."

is time to remind readers at this Blog that he believes strongly that "The Gilded Age" were America's best days. This "Age" led to the progressive era that preceded the New Deal, off and on, by several decades. And consider what brought about the New Deal, the "Roaring Twenties," 8 years of Harding and Coolidge. Poor Hubert Heever was in the first year of his term when the markets crashed and he could not clean up the mess in the remaining 3+ years of his term, leaving the mess for FDR and his New Deal. So consider the alternatives to the progressivism, e.g., "The Gilded Age" and the "Roaring Twenties."

Since our CO gasbag includes the GOP as progressives (at least the establishment), what is his cure for this alleged "failed state"? Are the Tea Party and libertarians of the ilk of our CO gasbag and Brett relying upon non-state unregulated militias as a cure, sort of their version of an American Spring?

toad is giving our CO gasbag even more warts.
 

Shag:

Weren't you practicing in the 1920s? ;^)

The 1920s were bracketed with two severe progressive recessions - the "1920 depression" under Wilson caused by his government's misdirection of the economy during WWI and the Hoover recession, massively deepened by the trade war he started with the Smoot Hawley Tariff, his millionaire's tax, a surge in borrowing and spending, and the failure of the Fed to maintain the solvency of the banks during the initial bank run.

As a side note, the 1929 market correction you read about in school was nearly completely recovered six months later. This did not cause the Great Depression.

Even counting the "1920 depression" and the 1929 stock market correction, real GNP growth during this decade was a massive 4.7% per year and per capita GNP growth was 2.7% per year. The latter was lower because of massive immigration during this time to take all the new jobs being created. Here is a link with reams of data concerning the booming 1920s.

http://eh.net/encyclopedia/the-u-s-economy-in-the-1920s/

Yes, Shag, I would take the 1920s in a heartbeat over any subsequent decade apart from maybe the 1990s after all the Reagan and Gingrich/Clinton liberalizations went fully into effect.

Today, during our second progressive depression, we can only dream about 1920s level of growth and job creation.
 

Our CO gasbag's:

"Yes, Shag, I would take the 1920s in a heartbeat over any subsequent decade apart from maybe the 1990s after all the Reagan and Gingrich/Clinton liberalizations went fully into effect."

is a "wet dream" of a person with no sensitivity as to the lives of many of the masses of population during the "Roaring Twenties." But note that our CO gasbag doesn't take us back to America's best days, the earlier "The Gilded Age." That's some progress, to say the least. Query: Was "The Great Gatsby" a prelude to the libertarians' iconic Ayn Rand's "Atlas Shrugged"? Alas, the cardiac resuscitator that could recover our CO gasbag's "heartbeat" doesn't exist. And once again he demonstrates ahistorical history in automatic RIL* fashion.

*Res Ipsa Loquaciousness
 

Here's an earlier comment from our CO gasbag who self-identifies as a criminal defense attorney:

"There is an easy way to avoid paying any of this...

DON'T COMMIT THE CRIME!"

I wonder if our CO gasbag provides similar advice to his DUI clients. But then again our CO gasbag in his mountain community DUI practice may have deep pocket clients, which may help with plea bargains and other means to avoid loss of license.
 

The "Reagan Prosperity" from 1982 to 2007?

This is one of the dumbest things I've ever read on the Internet.
 

Further regarding our CO gasbag's:


The "Reagan Prosperity" from 1982 to 2007

Recount the Reagan tax increases beginning in 1982 following Reagan's disastrous earlier tax cuts for the wealthy. Recount Iran/Contra. Recount Iraq I under Reagan's successor G. H. W. Bush and the latter's reneging on "No new taxes" and moving his lips to do so. Recall in the '92 presidential campaign "It's the Economy, Stupid." And the Gingrich Revolution that led to his and succeeding GOP House leaders resigning because they couldn't keep it in their pants. Consider that the Clinton economic recovery and surplus came about despite the Revolution's failure to convict impeachment of Clinton. And consider the Bush/Cheney 8 years of two unpaid for tax cuts for the wealthy, two unpaid wars - Iraq II based on lies - and other events leading to the Bush/Cheney Great Recession of 2007-8.

Our CO gasbag just throws crap against the wall, hoping something may stick in his knee-jerk RIL* style.

*Res Ipsa Loquaciousness
 

Still further regarding our CO gasbag's:


The "Reagan Prosperity" from 1982 to 2007

in fairness to our CO gasbag, perhaps the "Prosperity' he meant was of the very rich. Take a look at "It's the Inequality, Stupid" by by Gilson and Perot at Mother Jones:

http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-grap

Our CO gasbag is oh so subtle. The Koch Bros. would be so proud.
 

By the way, Bart, do you really think that the Great Depression started in March, 1933, when FDR took office? May I suggest a little historical research?

And how did the so-called "Reagan Prosperity" (employment grew more rapidly under both Carter and Clinton than under Reagan, incidentally) suddenly come to a screeching halt in 2008? You mean the benign influence of Reagan's policies just disappeared one day?


 

Colbert's Reagan bit from the other day is apropos.


http://thecolbertreport.cc.com/videos

[end of ISIS Panic and then ISIS Panic: Announcing Reagan's Return]


 

This comment has been removed by the author.
 

Toad:

As I noted above, a depression is a recession without a normal business cycle recovery. I blame Hoover for the recession. I blame FDR for the 14 years of depression that followed before the private economy recovered in 1947.

Reagan inherited a double dip recession from Carter which began in 1980.

Reagan's polices started to go into effect in 1982, which is the start of the prosperity.

The Clinton era government directed and subsidized subprime home mortgage market ( avery progressive policy) mass defaulted in 2007, ending the prosperity.

What followed was an expansion of progressive and then socialist government rivaling FDR's New Deal - the most progressively punitive tax system (harpist increase from bottom to top) since the Hoover Millionaire Tax, a mass of regulations dwarfing the entire output of the New Deal and doubling the public debt.

The Reagan Prosperity gave way to another progressive depression.

 

Bart,

I hope you understand law better than you understand economic history.

I should have left it at "dumbest thing I've ever read on the Internet."

Now I will.
 

Our CO gasbag must be covered with warts in coming up with this:

"The Reagan Prosperity gave way to another progressive depression."

So the 2007-8 Bush Cheney Great Recession was a progressive depression? Like Hubert Heever gave us an earlier progressive depression that he could not cure in the 3+ remaining years of his term, dumping it on FDR in 1933? Anther RIL* moment.

*Res Ipsa Loquaciousness

 

Shag:

You are free to offer evidence that a single Bush policy caused the mass default of the subprime home mortgage market created by Clinton banking regulators at the Fed and HUD back in the mid 90s, with a large amount of coercion from several dozen Clinton Justice Department lawsuits.

In any case, the recession ended between the spring and summer of 2009 before a single Obama policy took substantial effect. The subsequent recovery-less depression occurred after those policies went into effect.

Cause and effect.

In their January 2009 white paper selling the president elect's borrow and spend plan, the Obama economic team projected that, if the government did absolutely nothing, the normal business cycle recovery would have concluded two years ago.

http://otrans.3cdn.net/45593e8ecbd339d074_l3m6bt1te.pdf

Instead, we have an ongoing depression with no end in sight.

New Deal deja vu all over again.
 

I wish this blog would ban Bart DePalma. He clutters up what might be an enlightening comment section with extremely low quality contributions. He's just not even close to a borderline case.
 

Our CO gasbag's:

"Instead, we have an ongoing depression with no end in sight."

suggests an "ongoing depression" of the GOP (fka "The Party of Lincoln") with its primary base of former Democrats from the former slave states post the civil rights movement of the 1950s-60s, augmented by the "reformist" Tea Party as the tail that wags the dog at a hydrant, that can't accept the election and re-election of Barack Obama by a MAJORITY of voters each time.

But I can't imagine our CO gasbag depressed in his mountain community in this day and age in the Mile High State (of mind) with its high-minded recreational offerings. Could be he's a Tea Party-totaler. One who is so depressed should not keep a Glock in his jock.

Our CO gasbag attempts to emulate Yogi Berra with:

"New Deal deja vu all over again"

as he has wet dreams for "The Gilded Age" and the "Roaring Twenties." While we do learn from history, history does not actually repeat itself. In any event, our CO gasbag is ahistorical - as well as Chicken Little hysterical - with constant repetition of bad economics. He recognizes that the GOP establishment is progressive, perhaps realizing that the Tea Party reformists cannot take over the GOP. So what will the Tea Party - and other libertarians - do? Something revolting?

By the Bybee [expletives deleted], Mark Graber's "What's in a Name?" about the DJ Average during Obama's reign should be kept in mind, for as it increases our CO gasbag gets depressed. Coincidence? Chicken Little needs some ganja.
 

This comment has been removed by the author.
 

Shag: He recognizes that the GOP establishment is progressive, perhaps realizing that the Tea Party reformists cannot take over the GOP. So what will the Tea Party - and other libertarians - do? Something revolting?

Excellent question.

There are three possible resolutions:

1) We continue along this path and fall to the current French level sometime around 2030 and the current Greek level about a decade later when we have to borrow even more to cover Social Security and Medicare shortfalls.

If the voters fire the Democrats and hire the GOP, the dates may change, but not the end result.

BTW, I am using the CBO and SS Trustee figures here which assume GDP and tax revenue growth about 50% higher than during the Obama administration, so the fiscal implosion is likely to occur sooner.

2) Revolution overthrowing the failing or failed progressive government.

BTW, such revolutions are not of the libertarian kind like our American Revolution or anything the Tea Party would theoretically wage. Historically, the governments following failed progressive states were fascist. Large masses of government dependents want order, not freedom.

3) We revise the Constitution to reverse and relimit much of the progressive government.

The Reagan experiment of democratically maintaining, but attempting to limit, the progressive welfare and regulatory states has plainly failed. Progressives eventually learned to campaign as conservatives and impose their policies after they take power. Progressives may lose the following elections, but the bureaucracies and welfare programs they leave behind are forever.

We are at the point where nearly half of the population are government dependents to some extent, while only 20% pay nearly all the federal taxes to finance this dependence. Progressives rely upon government dependents voting themselves other people's money by electing progressives.

Fundamental constitutional reform is the only real option I see to save our Republic.
 

Assuming the excellence of my question, the answer is revolting.

Then our CO gasbag closes with:

"Fundamental constitutional reform is the only real option I see to save our Republic."

without setting forth what, in his view, constitutes "fundamental constitutional reform." Maybe our CO gasbag will provide a "chapter" on this. Is it possible he would revert to the original 1787 Constitution, plus the Bill of Rights?

It is amazing that our CO gasbag was not in this Chicken Little "The sky is falling!" mode during the 8 years of Bush/Cheney that ended with the 2007-8 Great Recession (that apparently ended the "Reagan Prosperity" that began in 1982).
 

Shag: Maybe our CO gasbag will provide a "chapter" on this.

Actually, one or two books.

I have completed a draft of a 100+ page essay offering and explaining ten proposed amendments to the Constitution to relimit government. Returning to the pre-New Deal Constitution would be insufficient because the Founders had no concept of progressive government and did not enact the necessary checks in the original Constitution or the subsequent amendments.

I am finishing another essay describing progressivism and laying out why it is unsustainable. This is not ideological hyperbole. Most of my data sources are from progressive academics and governments around the world, and that data scares the hell out of me. The more perceptive progressives see what is coming. They are in the bargaining stage of grief and hope that one more economic recovery will bail them out.

I am still considering whether to publish these essays as one or two books.
 

I had read Thomas Edsall's column before I was aware of Sandy's post. Edsall has written some great columns, this one on an under- or sub-class that struck a chord as I was then in the process of reading Bartholemew Sparrow and Shannon Bow O'Brien's "Pulling Punches: Charles Beard, the Propertyless, and the Founding of the United States" in the Summer 2014 issue of Constitutional Commentary, which issue consists of papers on Charles Beard on the 100th anniversary of His "An Economic Interpretation of the Constitution of the United States." The authors do not pull any punches in describing such propertyless at the time of the founding. Here's a sample (p. 413):

"For many Europeans who came to the New World, America was not a land of opportunity or the occasion for a new beginning - contra the American myth. Many of them came as bound labor, filling the demand for farm workers, craftsmen, tutors, domestic help, and other occupations. These persons constituted the majority of unfree labor in the 17th century and first decades of the 18th century. Not until the latter half of the 18th century did African slavery become the principal component of forced labor. All told, approximately half of all Europeans emigrating to British North America came over as bound labor in some form, whether as indentured servants, political exiles, or transported felons."

These persons, women and African slaves do not seem to have been represented in either Constitutional Convention of 1787 of the states' ratifying conventions. They were not part of "We the People ...." While today's sub- under-class has the right to vote, those in power take steps to make voting more difficult. This sub- under-class is chastened by our CO gasbag: "DON'T DO THE CRIME." But the equivalent of the old debtors' prison remains evil. Alas, if only the financial people who led us into the 2007-8 Great Recession collapse had heeded this advice; then agains they ran little risk of criminal prosecutions.
 

Our CO gasbag teases with:

"The more perceptive progressives see what is coming."

I guess we'll have to wait for the book or books or article or articles to get names. But I don't trust if he can't verify, not in a remainder bin, but now. If these progressives actually exist, their identities may reveal how perceptive they are.
 

Shag:

Do you always have to act like a complete arse? All you had to do was ask.

Ronald Lee, Andrew Mason and Daniel Cotlear, Some Economic Consequences of Global Aging, World Bank HNP Discussion Paper (2010).

Michele Boldrin, Mariacristina De Nardi, and Larry E. Jones, Fertility and Social Security, NBER Working Paper 11146 (February 2005).

Indermit S. Gill and Martin Raiser, Golden Growth: Restoring the lustre of the European economic model, World Bank Publications (March 6, 2012)

Sarah Harper, Environment, migration and the European demographic deficit, Environmental Research Letters, Vol. 7, Number 1 (2012).

David Neumark and William L. Wascher, Minimum Wages (Massachusetts Institute of Technology Press 2008).

Adrienne Fernandez-Alcantara, Youth and the Labor Force: Background and Trends, Congressional Research Service (May 10, 1012).

2013 Millennial Civic Health Index, National Conference on Citizenship, accessed March 31, 2014, http://www.ncoc.net/MillennialsCHI.

Almut Balleer, Ramon Gomez-Salvador and Jarkko Turenen, Labour Force Participation in the Euro Area, European Central Bank Working Paper No. 1049 (May 2009).

Illustrative Examples of Effective Marginal Tax Rates Faced by Married and Single Taxpayers: Supplemental Material for Effective Marginal Tax Rates for Low- and Moderate-Income Workers, Congressional Budget Office (November 2012).

Michael Tanner and Charles Hughes, The Work versus Welfare Tradeoff: 2103, The Cato Institute (2013). (Libertarians)

Antonio Afonso and Joao Toval Jalles, Economic Performance and Government Size, European Central Bank Working Paper No. 1399 (November 2011).

Diana Ferrell, et al, The coming demographic deficit: How aging populations will reduce global savings, McKinsey Global Institute Report (January 2005).

Tae-hwan Rhee, Macroeconomic Effects of Progressive Taxation, Samsung Economic Institute (November 2012).

Ravi Shah, “Working Paper: The Effect of Tax Progressivity on Economic Growth,” (thesis presented to the College of New Jersey 2011). http://business.pages.tcnj.edu/files/2011/07/Shah.Thesis.pdf

John W. Dawson, “Regulation and the Macroeconomy,” Kyklos 60, no. 1 (February 2007): 15-36.

Ian Hathaway and Robert E. Litan, Declining Business Dynamism in the United States: A Look at States and Metros, Economic Studies at Brookings (May 2014).

Robert Rector & Jason Richwine, The Fiscal Cost of Unlawful Immigrants and Amnesty, Heritage Foundation Special Report #133 on Immigration (May 6, 2013). (Conservatives. Used to rebut the progressive hope that immigrants will mitigate the population, economic and fiscal implosion).

An Update to the Budget and Economic Outlook: 2014 to 2024, Congressional Budget Office, August 27, 2014, http://www.cbo.gov/publication/45653 (accessed August 28, 2014).

U.S. Social Security Administration, Status Of The Social Security And Medicare Programs: A Summary Of The 2014 Annuals Reports, Social Security and Medicare Boards of Trustees, August 2014, http://www.ssa.gov/oact/trsum/

U.S. Social Security Administration, 2014 OASDI Trustees Report – B. Economic Assumptions, http://www.ssa.gov/oact/tr/2014/V_B_econ.html (accessed August 28, 2014).

Rachel Greszler, History Suggests Social Security Insolvency Is Coming Sooner Than Projected, The Heritage Foundation Issue Brief No. 3980 (June 27, 2013). (Conservatives)
 

Our CO gasbag responds with a list of names and/or publications, so I assume the persons named are all in this category he earlier asserted:

"The more perceptive progressives see what is coming."

In his earlier comment that sentence was followed by this:

"They are in the bargaining stage of grief and hope that one more economic recovery will bail them out."

So our CO gasbag's list of persons are not only "Perceptive progressives" who are in a "bargaining stage of grief" like a 12 step program?

I'll have my progressive staff check this out. Perhaps some skeptics at this Blog who think our CO gasbag pulls his crap of of his "arse" will check some of the names. I see that according to the list some of these "perceptive progressives" are associate with the Heritage Foundation and The Cato Institute. Do they know that?

By the way, where is the very recent CBO Report on the Obamacare further reductions in the deficit? And where is the recent update on the extension of the viability of Social Security? Surely by the time our CO gasbag publishes, he will have to check for updates.

Get to it staff, this is serious.


 

Shag:

I provided you all my current major sources of data, not just the progressive ones.

The fourth from the bottom is the last August CBO projection for the next decade. The problem with it and the SS trustee reports is that that assume between 2.5% and 2.8% GDP growth over time without recessions when the real growth after the end of the 2008 recession has been only 1.8%.

As I stated above, the progressive government bean counters are relying on another economic recovery when they project that Medicare will run out of intragovernmental bonds/IOUs in 2024, SS in 2033 and the total debt as a percentage of GDP will be a bit over 80% at that time.

However, if our lost decade of low growth continues and turns into two, with a couple recessions thrown in (the Great Depression panned out just that way), then Medicare runs out of bonds in less than a decade, SS in a little over a decade and then the deficit balloons above 100% of GDP in the next few years afterward to cover the shortfall.

The EU is in worse shape and at the edge of the precipice. France under the socialists have driven up their public debt/GDP higher than where Spain when it collapsed into deep depression. Europe as a whole is sliding into negative growth again and these people are our primary trading partners.

Read my sources for content and you will see my points.
 

"Reagan's polices started to go into effect in 1982, which is the start of the prosperity.

The Clinton era government directed and subsidized subprime home mortgage market ( avery progressive policy) mass defaulted in 2007, ending the prosperity."

So Reagen's policies went into effect in 1982 and immediately caused the start of prosperity, but Clinton's policies lay dormant for seven years until, lo, they suddenly caused a recession in the last year of the second term of his successor?

Bart, this is partisan special pleading.

"I am finishing another essay describing progressivism and laying out why it is unsustainable. "

Of course, laisezz-faire Gilded Age era economics were found to be unsustainable after the Great Crash.
 

So our CO gasbag admits with this:

"I provided you all my current major sources of data, not just the progressive ones."

that he went beyond identification that I was interested in, i.e., the identities of his claimed:

"The more perceptive progressives see what is coming."

All I had to do was ask. So he just piled on data in an unresponsive manner.

Just the names, please, for verification that they are progressives and perceptive. And then I can follow up on this claim about them:

"They are in the bargaining stage of grief and hope that one more economic recovery will bail them out."

I am aware that "In the long run we are all dead." But progressivism has a long way to go.
 

Mr. W: So Reagen's policies went into effect in 1982 and immediately caused the start of prosperity, but Clinton's policies lay dormant for seven years until, lo, they suddenly caused a recession in the last year of the second term of his successor?

Apples and kumquats.

Tax reform (lowering and flattening the income tax code) historically takes a year or less to increase economic growth. See 1921, 1964, 1982 and 2003.

Creating a subprime home mortgage market is hardly analogous to tax reform. If you are looking for immediate effect, this progressive government misdirection of the economy immediately inflated the cost of single family homes into a massive bubble starting in 1997. However, it took longer for the subprime deadbeats to mass default.

http://www.businessinsider.com/robert-shiller-nyt-housing-bubble-quote-2013-10

These results would have been the same no matter the party membership of the policy makers. Indeed, Democrats Kennedy and Johnson signed off on tax reform and economic growth still increased as it did after Republicans reforms.

Of course, laisezz-faire Gilded Age era economics were found to be unsustainable after the Great Crash.

Really? When precisely did either Hoover or Roosevelt try free market economics of any kind after the 1929 stock market correction?

Hoover imposed higher taxes, tariffs, borrowing and spending.

FDR put all of Hoover's progressive policies on steroids and then added government encouraged labor unrest and a massive regulatory surge.

It is a damned shame that Coolidge did not run for a second term in 1928. Millions would not have suffered in poverty for nearly two decades.
 

Translation (Abdallah's response to our CO gasbag):

"Careful, that's camel dung you're walking on."

And Our CO gasbag will lead the "American Spring"? Imagine a laissez-faire revolt, and herding libertarians.
 

I'm asking our CO gasbag to identify advanced nations with economies based on free markets (aka laissez-faire) that he deems successful. Then a comparison can be made with progressive nations.

Hopefully our CO gasbag will not revert to America's "The Gilded Age" which was far from a free market as both federal and state governments subsidized the few who were gilded, who could "buy" under the then constitutional provisions the "elections" of Senators to Congress.
 

Shag:.

Today, there is no large free market economy with which to make the comparison. All the major economies to varying degrees have transitioned to a hybrid progressive and socialist political economy and all are at some stage of population, economic and fiscal implosion.

You can only compare free market economies of the past. Free markets created the last two world super powers - UK and US - where small percentages of the world population created a substantial portion of the world GDP and their citizenries became fantastically wealthy in comparison.

The before and after comparisons of the UK and US under free markets and progressivism is stark. I have noted the comparisons concerning the US above. I will leave it to you to research the UK yourself.

No matter how many ad hominem attacks you offer and red herring you shovel, the data is clear - progressivism is unsustainable
 

Bart, those measures of Hoover you cite came years into his term and after the tanking of the economy. The economy tanked when the policies of Harding and Coolidge were well in place. You're just engaging in 'just so stories' of after the fact rationalizations.

I'm also dubious of your claims about the connection between laisezz-faire policies and eonomic growth in the UK and the US. I'm not denying there was growth then for those two nations, but your connection seems spurious. I'm betting industrialization, not laissez=faire accomplished the bulk of the growth. The facts of the rise of the USSR as a super power and the recent rise of China seem to indicate that it is the process of industrialization itself, regardless of economic ideology, which leads to dramatic growth and change.
 

Our CO gasbag, who would not be a gleam inanyone's eyes until decades later, informs us in the manner of Carnac the Magnificent:

"It is a damned shame that Coolidge did not run for a second term in 1928. Millions would not have suffered in poverty for nearly two decades."

Speaking of "woulda, coulda shoulda" consider this:

"It's a damned shame that Ike ran for a second term in 1956, not only because of Trickly Dick, but more 'advisors' in Vietnam during his second term leading to many deaths, injuries loss of fisc in the 1960s-70s."

"It's a damned shame that Nixon ran for a second term in 1972 that brought us Watergate and almost brought the government down, as well as prolonging the Vietnam War that Ike got primed with "advisors" placed in Vietnam."

"It's a damned shame that Reagan ran for a second term with his health issues that let Iran/Contra to come about, creating messes in Central America that reverberate today with border issues of young children from nations in Central America."

"It's a damned shame that Bush/Cheney ran for a second term during which their lies of the first term for going into Iraq continued to fester, contributed to the Bush/Cheney 2007-8 Great Recession and roil the Middle East that continues today."

Calvin Coolidge? Our CO gasbag is too, too high minded historically, with his CUI* style.

*Commenting Under the Influence
 

I wish this blog would ban Bart DePalma. He clutters up what might be an enlightening comment section with extremely low quality contributions. He's just not even close to a borderline case.

The standard here is somewhat hard to apply and don't think it is worth the candle here. Banning imho should be left to abusive sorts, spammers and obvious "troll" types.

Not true believers who we might find unproductive. I realize when Mr. W., who has more patience than many here, starts to post stuff that suggests annoyance that a red light comes on.

But, banning people should be a last resort.

 

This comment has been removed by the author.
 

This comment has been removed by the author.
 

Mista Whiskas said...Bart, those measures of Hoover you cite came years into his term and after the tanking of the economy. The economy tanked when the policies of Harding and Coolidge were well in place. You're just engaging in 'just so stories' of after the fact rationalizations.

The initial recession lasted from 1930 to 1932.

The 1929 stock market correction was largely recovered through the Summer of 1930. After that, the markets fell with the GDP.

Smoot Haley was imposed in the summer of 1930 when the market dive began.

The Millionaire Tax was imposed in 1932 during the sharpest drop in GDP.

Hoover's borrowing and spending went on through out the recession.

I am unsure what Coolidge policies you think caused this recession, nevertheless the 15 year depression that followed.

I'm also dubious of your claims about the connection between laisezz-faire policies and eonomic growth in the UK and the US. I'm not denying there was growth then for those two nations, but your connection seems spurious. I'm betting industrialization, not laissez=faire accomplished the bulk of the growth.

The British Empire had been a world super power for a century and the US rose from a colonial backwater to a world power before the industrial revolution hit full stride in the last half of the 19th century.

Both the UK and US led the industrial revolution because they had comparatively freer economies than their rivals. The UK started the industrialization and then US eclipsed it by the end of the 19th century.

Here is a rough measure of per capita GDP over the is period:

http://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_(PPP)_per_capita

Here is the total GDP of these two superpowers:

http://www.efficientfrontier.com/ef/902/us-uk.gif

The industrial revolution was far more than simple factory production. The relatively free UK and US massively led in finance to capitalize their economies and trade to sell their products.
 

Here's a graph of GDP during that time, notice it goes nothing but down from 1929-the early 1930s.

http://en.wikipedia.org/wiki/Great_Depression#mediaviewer/File:US_GDP_10-60.jpg

"The industrial revolution was far more than simple factory production."

And so what's your 'just so' story as to why GDP rose for the Soviets and the Chinese during their periods of industrialization sans capitalist freedom? Russia went from a middling agricultural backwater to the second SuperPower in the span of a few decades.
 

Mr. W:

Here is a yearly GDP estimate from the Bureau of Economic Analysis.

http://www.iaconoresearch.com/BlogImages/08-11-11c_gdp_and_debt_to_gdp.png

The GDP grew in 1929.

Scroll to the bottom of this link for a yearly timeline with the BEA GDP estimates along side the Hoover progressive policy interventions.

http://useconomy.about.com/od/GDP-by-Year/a/US-GDP-History.htm
 

Mista Whiskas said...And so what's your 'just so' story as to why GDP rose for the Soviets and the Chinese during their periods of industrialization sans capitalist freedom?

The Soviet and Red Chinese per capita GDP were a fraction of that of the UK and US. The CIA grossly overstated estimates of the former during the Cold War. The Russian and Chinese per capital GDP still trails ours by a country mile.
 

Bart, I don't claim to be an expert on economic history, I'm just a man with a Google. And on the first page of a search for US Economy in the 1920s I find this:

"The Great Depression began in the summer of 1929, possibly as early as June. The initial downturn was relatively mild but the contraction accelerated after the crash of the stock market at the end of October. Real total GNP fell 10.2 percent from 1929 to 1930 while real GNP per capita fell 11.5 percent from 1929 to 1930."

http://eh.net/encyclopedia/the-u-s-economy-in-the-1920s/

"The Soviet and Red Chinese per capita GDP were a fraction of that of the UK and US."

Remember, I was talking about the US in the late 19th century, the USSR under early Communism and contemporary China. My point was that for all three places at these times there was significant growth in GDP, and since they had very different ruling economic ideologies it suggests that industrialization itself, regardless of economic ideology, was behind all three expansions.

The source below lists GDP "in millions in 1990 International dollars." The US figures go from 98,374 in 1970 to 517,383 in 1913, an over fivefold increase. But notice the USSR goes from 232,351 in 1913 to 510,243 by 1950. Sure, that's not fivefold, but it is a doubling, and all done under pretty oppressive communism! Note China increases its GDP nearly fourfold from 1950-1973, a time when it too was under the reddest of red communism, but also its period of industrialization. Incredibly, China's GDP was eight times higher in 2003 than 1973, a period that while there was certainly noticeable market reforms, was still one where there was much more state control and intervention there than anything we've had.

http://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_%28PPP%29#World_1.E2.80.932003_.28Maddison.29
 

This comment has been removed by the author.
 

Mr. W:

The yearly GDP prior to when the government started gathering stats in 1948 are educated guestimates. We do not have the data for accurate quarterly GDP back then. All we know for sure is that the markets recovered after the 1929 correction until Smoot Hawley.

Smoot Hawley was no small thing. If you look at the timeline I provided in my second to last post, the resulting trade war reduced our foreign trade by 2/3 by 1934.

The private economy arguably did not recover until the 1944 Bretton Woods agreement dropping the tariffs and returning to some semblance of free trade.

We have no accurate GDP data for first decades of the USSR. We do know that agricultural production collapsed and there was wide spread famine. The communists also butchered millions of their own people, which further reduced GDP. Stalin later engaged in a mass industrialization campaign, but the vast majority of it was dedicated to the Soviet war machine as the Germans discovered after they invaded. I do not count weapons and munitions as wealth.

We have even less GDP data for Red China. Given that China's per capita GDP remains a fraction of our own after decades of economic liberalization and high growth, I doubt their communist per capita GDP amounted to spit.

http://data.worldbank.org/indicator/NY.GDP.PCAP.CD

The figures you are using are probably based on CIA guestimates.
 

Get Facebook Likes on your fb page, likes on your facebook pictures, followers on your facebook id, shares of your facebook posts, every thing is available here, visit for more details
www.jobzcorner.com
 

Sandy,

Thomas Edsall's column today in NYTimes looks at poverty, the poor.
 

Thanks for the informative post. It helped me a lot. May the Force be with you.
Saudi Arabia Law Firm
 

Earning is only for you, just spend 1 hour daily and earn upto $35 Daily with just clicking job, Join Now
adsclickearning.com
 

Instant Payment without any Risk, Just Invest and Rest of your home, Just Invest as low as $5 and Get Instant Profit, Join Fast
HotProfitOnline.com
 

Post a Comment

Older Posts
Newer Posts
Home