Social Question

josie's avatar

Why isn't the current political conflict in Washington regarded with same admiration that we regard other popular revolts against opressive government.

Asked by josie (22950 points ) August 3rd, 2011

Popular uprisings against expensive, capricious and oppressive government are among the most inspiring stories in History. The Exodus, the Reformation, the American Revolution, the French Revolution, the Russian Revolution (the first one, not the Bolshevik counter revolution), the fall of the Soviet Union etc. etc.

In a way, the current conflict about the size, the cost and the role of American government has elements of the same theme. And yet, people act as if it is something else. Why?

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87 Answers

wundayatta's avatar

Because it isn’t a popular revolt against an oppressive government.

The previous government was much more oppressive. It enacted the so-called “patriot” act. Where were all these tea farty fanatics when their civil rights were being taken away?

Blackberry's avatar

The Russian Revolution was to overthrow a Tsarist autocracy, the French Revolution was to overthrow an absolute monarchy, and the American Revolution was to get away from the british empire.The conflict in Washington is about two parties deciding how to budget…......

Cruiser's avatar

Laziness and many are afraid to bite the hand that feeds them!

tom_g's avatar

You mean why didn’t we revolt when Bush enacted those tax cuts which make up a huge part of this problem? I don’t know.

relevant

Aethelflaed's avatar

I’m not so sure those revolts are really the inspiring story you say they are. The French Revolution replaced an absolutist monarchy with Napoleon, the Russian Revolution replaced a Tsarist regime with a Communist regime, and the Protestant Reformation led to the Wars of the Religions. While they all fascinate me, they definitely don’t make me proud of the human race, or inspire me. And this isn’t a revolt, it’s a few people holding up signs at rallies and defending racial epithets as a noble cause. So maybe it’s because people actually know a thing or two about this “revolt”, and if they knew more about the other ones, they wouldn’t be so quick to hold it up as the awe-inspiring tale of human courage you say it’s seen as.

And, it’s important to note that when those revolts where happening, exactly none of them were universally championed as right and noble and honorable and just plain awesome. Every single one was seriously controversial at the time.

Ron_C's avatar

Maybe we the “tea party” revolution isn’t admired because they are bent on destroying government and giving international corporations free reign in this country. The original tea party fought oppression orchestrated by a large international corporation. Today’s tea party is fighting for them. We have a long history fighting oppression and look at disdain to those trying to re-establish taxation without representation.

Qingu's avatar

@josie, wow, where do I start.

Because the Tea Party is not a popular revolt; it is an arm of the Republican party, financed by Republicans, with 100% backing from Republican establishment and media.

Because the American government is not expansive, capricious, or oppressive in remotely the same sense as these other groups you’ve mentioned. It is not a monarchy. It is not enslaving people. It is democratically-elected. What the Tea Party doesn’t like is that its democratically-elected government wants to spend tax money on social safety nets when that money could be used by wealthy people to buy yachts.

Except when the Tea Party says they support social safety nets, or when the Tea Party says they want government out of their Medicare. I mean, it’s not like the Tea Party has any sort of coherent platform or remotely intelligent understanding of what the government actually does.

But I have a better question: Why aren’t we comparing people like the Tea Party to al-Qaeda? Both are uncompromising and want to bring down what they see as oppressive governments opposed to their good old-fashioned values. That’s not a dumb question at all!

Qingu's avatar

@lucillelucillelucille, I love your answer. “Liberal media.”

It’s so succinct and to the point. And it answers so many questions, too!

“Why don’t Americans support the Tea Party?” Liberal media.

“Why is Sarah Palin’s approval ratings dismal?” Liberal media.

“Why do Americans overwhelmingly want to raise taxes on the rich?” Liberal media.

It’s such a great multipurpose answer. Like something you’d see hawked on late night infomercials.

YoBob's avatar

Alas, there is a frighteningly large percentage of the population that believe that it is the role of government to solve all of our social ills through bureaucracy.

Qingu's avatar

I really have to say:

Of all the things that piss me off about conservatives, this propensity to whine and bitch about being “oppressed” pisses me off the most.

Walmart says “Happy Holidays” instead of “Merry Christmas”? OMG oppression it’s like ancient Rome feeding Christians to the lions all over again!

The EPA wants to regulate carbon as a pollutant? THE GOVERNMENT CAN’T TELL BUSINESS WHAT TO DO what is this Stalinism?

Health care reform says you’ve got to buy insurance but will pay for it if you can’t afford it? What’s next, concentration camp tattooes?

It’s shit like this that makes me want to actually lock up conservatives in FEMA death camps.

Cruiser's avatar

@Qingu There is nothing in the Tea Party agenda that is specifically against Social Safety nets…though #5 below would address wasteful spending in our social programs.

Identify constitutionality of every new law
Reject emissions trading
Demand a balanced federal budget
Simplify the tax system
Audit federal government agencies for waste and constitutionality
Limit annual growth in federal spending
Repeal the healthcare legislation passed on March 23, 2010
Pass an ‘All-of-the-Above’ Energy Policy
Reduce Earmarks
Reduce Taxes

Qingu's avatar

@YoBob, the role of government is to prevent the strong from oppressing the weak.

A major way government does this is through regulation. Regulation requires bureaucracy.

“Bureaucracy” can be annoying, but it is not inherently oppressive, and if you’ve ever worked in an office with more than 25 people in it you’d realize it’s necessary for any complicated organization to work smoothly.

If you want to rail against inefficient or outdated bureacracy, I’m with you, brother. I’m sure every liberal would be too. But bureaucracy in general? I think you need to grow up.

jaytkay's avatar

The revolts in the Middle East are an attempt to make life better for most people.

Conservatives are working hard to make things worse. And as the Bush years illustrated, they are really good at it.

Qingu's avatar

@Cruiser, mind explaining to me how that platform can be interpreted, practically speaking, to be anything other than “limit social safety net?”

They want to reduce taxes. They want to cut spending. Is the Tea Party secretly about abolishing the Pentagon?

(I mean, granted, many Tea Partiers probably don’t have a clue what their tax dollars pay for, and thus don’t actually grasp the real-world implications of their rhetoric, but still…)

Aethelflaed's avatar

The tea party doesn’t come off as a noble cause. It comes off as a bunch of racist, uneducated whiners throwing temper tantrums. Now, maybe not all of them are that way. I’ve known a few who weren’t. But here’s the key: They don’t really do much to change perception except whine about how misunderstood they are. Seriously, emo teens whine less about being misunderstood than tea party does. They don’t strongly condemn those who show up to rallies with racist signs, they don’t constantly plead members to do a quick spellcheck of signs first, they simply say “nah-uhhhh!!!” and complain about the “the media” is screwing them over. It’s one thing to have different ideologies than I do, and be able to express those articulately, but also not really give a shit if others see you as a new Scarlet Pimpernel than a Thomas Jefferson, because you have bigger things to worry about than how A Random Person sees you. Tea partiers, on the other hand, care massively about perception but do nothing about it. I can’t how most tea partiers have come to their conclusions, or how they go about fighting their fight.

tom_g's avatar

The thing that puzzles me is that a large part of the tea party isn’t just bunch of billionaires running around demanding to be serviced* – it’s uneducated, lower-middle-class people who are fighting for the right to service* the billionaires.

Qingu's avatar

@tom_g, you said “billionaires” but I think you meant to say “job creators.”

Cruiser's avatar

@Qingu Where do you see anything that says remove social safety nets?? That is the problem with liberal media is this “interpretation” you refer to!

Qingu's avatar

@Cruiser, please explain to me how you would

Lower taxes
Cut spending
while NOT cutting social safety nets. Would you cut the Pentagon? Be specific. SS, Medicare, and Defense are what we spend the vast majority of our taxes on, with UI taking a good chunk now as well.

YoBob's avatar

@Qingu -

“the role of government is to prevent the strong from oppressing the weak.”

No, that is the role of laws. The (intended) role of (Federal) government, at least in the U.S., is to provide for common defense and the regulation of inter-state commerce.

I submit that those who expect government to play the role of nanny are the ones who need to grow up.

Qingu's avatar

LOL. So the role of “laws” is to prevent the strong from oppressing the weak, but the role of government is something different?

Did the government stop being the entity in charge of creating and enforcing laws recently? I must have missed it.

Zaku's avatar

@YoBob These days, the common defense to me would be about defending the environment from corporations, and defending people’s rights from corporations, but the Tea Party wants to gut the EPA, keep corporate welfare, etc.

Aethelflaed's avatar

@YoBob I would submit that no one ever convinced someone to come over to their side by telling them to ‘grow up’.

Cruiser's avatar

@Qingu Yes I would tear into the Pentagon budget, oil subsidies and costly foreign policies. Privatizing parts of and trimming the size of the Government alone could solve the debt crisis.

@Zaku where do you get that the T P wants to gut the EPA and support corporations ability to limit peoples rights?? That’s nonsense!

YoBob's avatar

@Aethelflaed – I quite agree, But (in best bratty kid voice) “he started it”.

Qingu's avatar

@Cruiser, so you would divert virtually all of spending cuts and tax cuts to trimming the Pentagon? And none towards trimming Medicare, Medicaid, SS and UI?

Oil subsidies and “foreign policies” (I’m assuming you mean foreign aid) form a tiny fraction of the budget.

Cruiser's avatar

@Qingu That is the liberal media interpretation at play again! These numbers are anything but small and no matter how small it all adds up. This balanced budget is a joke…we are being hosed and if anyone sees it any other way they should have their right to vote taken away. Both the Dems AND the Republicans have kicked the can down the road, increased our debt and have no solutions what-so-ever to our jobs problems.

It is our liberal media interpretation of the current administration that has helped this current administration put rose colored glasses on our entire country! It’s time you and all the others that think this is a simple and painless tax-the-rich solution to a very serious and deep problem we ALL face to WAKE UP!

tom_g's avatar

This might be helpful for this pleasant discussion.

I’ll let @Qingu play the role of sane adult. He’s significantly more articulate (and probably smarter) than me.

Zaku's avatar

@Cruiser I get it from the lock-step Republican party lines in their recent budget proposals massively defunding the EPA, insistence on keeping tax loopholes for billionaires and megacorporations, as well as the proposals to drill in the Grand Canyon, to remove various endangered species protections, cut foreign aid to support foreign wildlife habitats, etc.

Cruiser's avatar

@Zaku I think you have the Tea Party confused with the Republican party. Those are many of the reasons Tea Parties use for forming their own party that is pretty distinct from the Republican party and much more aligned with the Libertarian mindset of how a Government should run.

Qingu's avatar

@Cruiser, Democrats have a solution to our jobs problem: stimulus. It works. It worked during the depression, it worked in 2009, and considering our problem is entirely depressed demand, it’s the only solution that can work now.

The problem is that it’s in opposition to our other problem, the debt. And Republicans believe the debt is a higher priority than our 10% unemployment. Which is absolutely fucking insane, but it’s part of Republican dogma that the market knows best and if you are unemployed you must somehow deserve it.

And what on earth are you talking about “liberal media”? Seriously. Look at tom-g’s link. You are simply factually incorrect about where your tax dollars go. Now, you can be an adult and admit you were wrong, or you can spout bullshit about how the liberal media bogeyman is twisting reality around. And I’ll note that I’ve asked you several times to explain specifically how you’d cut both spending and taxes while preserving Pentagon/SS/Health, and you haven’t.

Qingu's avatar

@Cruiser, no, the Tea Party is a branch of the Republican party.

You will note that every single elected member of the Tea Party is a Republican.

SavoirFaire's avatar

@Cruiser Since you said “the Libertarian mindset” and not “the libertarian mindset,” I will simply point out that the US Libertarian party does not represent all libertarians equally. As a left libertarian, for instance, the Libertarian Party has never done a good job of representing me. It only represents right libertarians (who are often just Republicans who want to be able to smoke pot, though not always).

Cruiser's avatar

@Qingu I see it differently in that most if not all T P’s are disenchanted Republicans.

I agree with you there @SavoirFaire just as there are many different “groups” who call themselves Tea Partiers some so extreme they give the T P an undeserving bad rap.

Zaku's avatar

@Cruiser If that is true, where are the Tea Party representatives voting for environmental protection, and against megacorporate interests?

flutherother's avatar

Because it isn’t an oppressive government, it is simply reflecting the various strands of public opinion. The ‘haves’ versus the ‘have nots’.

Qingu's avatar

The fact that virtually every member of the Tea Party denies that global warming is a manmade problem more than anything else makes it clear that they are a product of the Republican party’s bankrollers.

incendiary_dan's avatar

It’s a squabble among people deciding how to run an empire, not how to topple one.

augustlan's avatar

[mod says] This is our Question of the Day!

Jaxk's avatar

@Qingu

I was trying to stay out of this one but you’ve gone too far.

“Democrats have a solution to our jobs problem: stimulus. It works. It worked during the depression”

You have to be kidding. After 8 years of stimulus spending, unemployment was still at 17%. And somehow you consider that SUCCESS? The only way FDR got unemployment under control was to put 12 million men in uniform and the military is what you rail against. Stimulus was a total failure in the thirties and it is a total failure now.

Henry Morgenthau, Jr. was FDR’s Secretary of the Treasury from 1934–1945. In testimony to the Ways and Means Committee, he said

“We have tried spending money. We are spending more money than we have ever spent before and it does not work. And I have just none interest, and if I am wrong . . . somebody else can have my job. I want to see this country prosperous. I want to see people get a job, I want to see people get enough to eat. We have never made good on our promises. . . . I say after eight years of this administration we have just as much unemployment as when we started . . . . And an enormous debt to boot!”

Doesn’t that sound vaguely familiar.

Qingu's avatar

@Jaxk still does not understand rate of change.

I’m afraid to ask what your solution to the Great Depression would have been. Tax cuts and letting businesses run the show?

Jaxk's avatar

@Qingu

With taxes over 71% and spending at levels never seen before, the depression did not end but rather lingered on. I would think that at some point you’d have to admit it wasn’t working. Maybe after 5 or 6 years of depression you may change course. But no we gave it more than a decade of spending and taxing. It was only the war that disrupted the cycle. Even the war didn’t fix it, that happened after the war.

We are now 3 years into this one and and Democrats are saying we haven’t had enough time to fix it. I guess your solution really does take more than a decade. If the Great Depression is the best example you have of the success of your plan, shouldn’t we try something else? I’m not ready for a decade of depression. And I’m certainly, not ready to call a decade of depression a success story.

Tax cuts worked in 1964, 1983, and 2003. They all turned the economy around quickly and substantially. Even if you can’t understand why they worked, it would seem to be a better record than the extravagant spending that didn’t work. Hell, you scream at one moment that the excessive spending by Bush got us into this mess and then argue that extravagant spending will get us out of it. Do you guys even listen to your own arguments?

Qingu's avatar

First of all, huge financial crises such as the Depression and the Great Recession cannot be instantly solved. They have the effect of sapping consumer demand, which takes years to recover from. See here. To expect a magic turnaround from any policy in the face of a consumer bust is simply naive at best and crass political point-scoring at worse.

Secondly, the Depression got better under Roosevelt by a number of metrics. The New Deal provided aid for the poor. Not everyone, but before these policies thousands of people were literally starving to death. The WPA provided several million jobs. Not enough to “solve” the depression and reduce unemployment to normal levels, but it helped significantly. Perhaps most importantly, the New Deal stabilized the banking crisis. It didn’t fix every problem that banks were having, but compare those policies to other places around the world.

I’m also confused as to how you think low taxes “fixed” the depression after the war. Maybe “confused” isn’t the right word; “flabbergasted.” Taxes remained very high throughout the 50’s and 60’s which was the period of massive growth and increased living standards. This was also the period of powerful labor unions.

Now, tax cuts can work to stimulate the economy. They work largely the same as certain kinds of spending. They can create demand. But they don’t work as well as many kinds of spending. And they also differ in their effecicacy by marginal rates (since wealthy people tend to save their cuts rather than channel them into the economy). I’ve said something to this effect many times on Fluther. I am not against tax cuts.

But you don’t really seem to understand any of the nuances involved. More importantly, you seem to have a serious problem with honestly engaging with reality. Your absurd suggestion that the post-war economy got “fixed” without spending and taxes. And now you’re saying that tax cuts worked in 2003. Did they? To what extent (beyond the natural business cycle)? The 2000’s still saw the lowest growth in decades; far below the 90’s when tax rates were higher. And those tax cuts are now the single largest contributor to our deficit. Was their limited effect worth the hit to our deficit, which now severely limits our ability to respond to this crisis?

All in all, @Jaxk, you’ve been on Fluther for what? Almost a year? And you don’t appear to have made any effort to actually understand economics. You believe tax cuts “work.” When tax cuts don’t work well, or when the economy grows without tax cuts, you simply ignore it. When people point out concepts like liquidity trap, or monetary policy (and its limits) in general, you make no effort to understand it or to see how it fits in with your preconceptions. You just keep on saying the exact same thing you’ve been saying. Why are you like this?

Qingu's avatar

Also, about current policies “working”:

The stimulus was $800 billion. Only about $300 billion was “spending.” The rest was tax cuts and funds to state governments.

The amount of money in the stimulus was lowballed even early in the recession. Some of Obama’s advisers wanted to do a 1.2 trillion stimulus, but he never even got the memo. The reason for the larger stimulus was to sufficiently pull the slack on demand. The $800 billion number, even early on, was recognized as not nearly enough to fill the demand hole.

And then, after all that, it turned out the hole caused by the recession was even deeper still.

So yes, the stimulus did not “work” in the sense of filling the demand hole entirely. But it worked exactly how economists thought it would work. It succeeded in stopping the bleeding. There just wasn’t enough of it to move us back up from the crater.

Now, @Jaxk, do you agree with this assessment? Why or why not? What parts of it do you disagree with, and why? It’s so easy to sit there and say “the stimulus failed!” over and over again. It’s a lot harder to understand why and how it failed. Will you make an effort to do so, or are you just going to stick to reciting conservative platitudes like usual?

Cruiser's avatar

@Qingu From where I sit the stimulus may have stopped the bleeding but accomplished little else. When I hear the word stimulus as it was presented and sold to me it was supposed to created jobs first and foremost but as the very last dollars are being spent, we still have 9.4 or more percent unemployment and that number doesn’t reflect the scores of underemployed who are more than patiently waiting for a better job to again open up.

Even worse yet the number one employer of US citizens…our military is winding down 2 major conflicts which will mean hundreds of thousands of men and women desperately looking for jobs that don’t exist.

The worst part is this defict ceiling debate was beyond a joke with no real solution to the deficit at all and nothing of any relevance to take effect until after the next election. Obama has merely kicked the can down the road while we all make the sacrifices.

Qingu's avatar

@Cruiser, the stimulus did create jobs. If it were bigger, it would have created more jobs. If it were smaller, it would have created less jobs.

I also have no idea why you are blaming Obama for the deficit deal debacle. It should have been a clean increase like all the other times in the past. THe only reason it wasn’t? The Republicans wanted to use it as a hostage to force spending cuts that have nothing to do with jobs and in fact will certainly harm the economic recovery. I’m quoting Mitch McConnell, by the way:

“I think some of our members may have thought the default issue was a hostage you might take a chance at shooting,” he said. “Most of us didn’t think that. What we did learn is this — it’s a hostage that’s worth ransoming. And it focuses the Congress on something that must be done.”

Qingu's avatar

I also honestly don’t know what to do about jobs at this point. More stimulus would be ideal but with REpublicans in control of the house that’s not going to happen, unless they all the sudden grow brains and intellectual honesty.

The least we could do is extend the payroll tax cut so workers have more money to pump back into the economy. But amazingly, Republicans are probably going to oppose that. Because apparently Republicans only want to maintain tax cuts for the wealthiest Americans, workers be damned.

But even the payroll tax cut is a bandaid. The job situation is horrifying. And wasting time on hostage-taking with the debt is irresponsibility bordering on malevolence.

Cruiser's avatar

@Qingu Holy Cow! At what point in time do you finally say enough is enough? 14 trillion in debt and climbing my the day is not enough for you?? OK smarty pants….how do you create jobs AND reduce this deficit instead of making it bigger?? Isn’t this what Obama said he would do by 2011??? Show me the money instead of simply giving it away! Plus quoting any elected official is just another loudmouth waving their hands and passing the buck in an effort to preserve their ability to get re-elected.

Qingu's avatar

@Cruiser, that is the entire problem!

Unemployment is high because we have a hole in demand. Consumers have no money to pump into the economy. Ordinarily, the government would lower interest rates. This would force creditors to spend money rather than save it, which would boost the economy (as part of monetary policy). Reagan did this, for example. The problem? Our interest rate is practically zero. We can’t lower it any more. We are in a liquidity trap.

So the only thing left to do to help the demand crisis? Fiscal policy, i.e. adding to the deficit. The government can make tax cuts, particularly for workers who will pump the money into the economy rather than save it. Or it can spend money, for example on research, infrastructure projects, or shoring up state budgets, which will put more money into the economy as well.

The problem with fiscal policy is that after 10 years of Bush tax cuts, Medicare Part D, and two unfunded wars, our deficit is huge. Adding to it is scary. I’m not denying that, Cruiser.

But the question you need to ask yourself is: what is the greater priority? Reducing the deficit? Or reducing unemployment?

The answer is clear to me. The deficit is a huge problem, but it is not an immediate problem. Inflation is still low and bond rates haven’t spiked (those are the signs of a deficit becoming a huge problem). High unemployment, on the other hand, is killing this economy. And reducing unemployment—even through spending money or cutting taxes—can actually help reduce the deficit in the long run too. If less people are unemployed, that means more tax revenue to collect and economic activity to tax.

What do you think?

Jaxk's avatar

@Qingu

Unfortunately you have tunnel vision and like to assign things to me that I haven’t said. For instance, the post war boom is what finally solved the depression. It had nothing to do with tax rates but rather the world economy. The world had been destroyed and we were the only country left to rebuild it. During the 50s we produced fully half of the world’s Gross Product. Taxes whether high or low could not have stopped that industrial growth. (OK before you say it yes 100% taxes would likely have stopped it). The same thing happened in the 90s when we went through the Internet revolution. Whole new industries were created and the way we did business changed. The growth was a result of that revolution not the result of taxes. Reasonable people can disagree but when you assign your unreasonable positions to others you’re just flailing about in the weeds. Instead of trying to manufacture an argument out of isolated facts, try looking at the big picture for a change.

You keep going back to your liquidity trap but if you’ve read my posts, you’d know I’ve addressed it many times. I just haven’t given you the definition (you’ll have to look that up yourself). Even my suggestion about about refinancing mortgages addresses the problem by generating lending fees, improving the flow of credit markets, creating more expendable income for the middle class, and improving tax revenue.

But more to the point, both consumers and business are afraid to borrow or invest in the future. This problem is directly related to the Obama policies. Raising taxes, increased regulation, and unknown health care costs have made everyone skittish. Consequently no one is willing to borrow, or even invest their own money in new products or improvements. Yes money is cheap right now but who wants to borrow when they don’t know what the administration will do next. All they know for sure is that Obama will demonize them and strangle thier business. The liquidity trap didn’t just happen it was created by this administration. As for monetary policy, there’s little room left to do much. If you have a point you should make it.

Cruiser's avatar

@ I think @Jaxk answered my points better than I could…

“more to the point, both consumers and business are afraid to borrow or invest in the future. This problem is directly related to the Obama policies. Raising taxes, increased regulation, and unknown health care costs have made everyone skittish. Consequently no one is willing to borrow, or even invest their own money in new products or improvements. Yes money is cheap right now but who wants to borrow when they don’t know what the administration will do next. All they know for sure is that Obama will demonize them and strangle thier business. The liquidity trap didn’t just happen it was created by this administration.”

Borrowing money for me to buy my business and a home this year was an excruciating process with near impossible hoops to jump through. Even my best friend banker principal owner was apologizing for how he was ham-strung by all the regulations he now has to answer to. Both my personal credit rating and business credit ratings are as high as they can go and I still had to provide dollar for dollar collateralization for these deals. Not many people or businesses can do this. It was depressing experience at best and gave me a first-hand inside view as to why there is little to no money on the street in this current economic climate.

Qingu's avatar

@Jaxk, so if you agree that there are other very important factors for stimulating economic growth besides taxes, why on earth is “cut taxes” your balm for every problem?

And no, you have not addressed the problem of the liquidity trap and what you said now demonstrates again that you don’t know what the problem is. And no, Obama did not create the liquidity trap; though I don’t even know where to start in response to this because you don’t know what a liquidity trap is.

You also appear to have confused the crisis of lack of demand with lack of borrowing and investment, which again points to your basic ignorance. But that said, your explanation for lack of borrowing and investment is also nonsense. People aren’t investing because… Obama is scary and unpredictable? No, actually, people aren’t investing because there are no consumers to buy their products. In addition, the global economic system in the Western world at least is teetering on the brink of insolvency.

I ask again: why do you feel comfortable even posting your opinion about these topics when you demonstrably know nothing about them? Is there a part of your brain that realizes you are BSing, or do you actually fully believe what you say is valid?

Qingu's avatar

@Cruiser, what regulations are you referring to that hampered your ability to borrow money? Please be specific.

And just to be clear, since @Jaxk completely misunderstood, a liquidity trap does not refer to consumer or business ability to borrow. That is another problem, though it is related. A liquidity trap refers to the government’s inability to lower the interest rate. In monetary policy (championed by conservative economists), the government can help control the energy of the economy by manipulating the interest rate. If inflation is too high, it raises the interest rate. If the economy is sluggish (like during Reagan’s second recession), it lowers the rate.

Monetary policy has been useful in helping soften recessions. But when the rate is zero—as it is now—it’s utterly useless. That’s my point. My point was that out of the two weapons government has to fight recession, one of them is useless. And the other one is practically useless since it requires adding to our massive debt.

Qingu's avatar

@Cruiser, do you actually believe that businesses are not investing because they are scared of the Obama administration?

What do you think the effect of 10% of unemployment plus massively low consumer spending in general is on the business mindset?

Jaxk's avatar

@Qingu

Your irrationality and lack of insight is staggering. You apparently have no idea what to do other than keep spending money we don’t have and obviously has not worked. Whether you want to try spending or tax cuts or whatever, the idea is to get business and taxpayers to begin spending their own money. That is the only way we will ever emerge from this recession.

I see you’ve finally looked up liquidity trap but you should have kept reading. When they reduce the interest rate to spur borrowing and investment AND it doesn’t work (ie. still no borrowing or investment) that’s when you see the liquidity trap. Obama has created policies that deter borrowing and investment which is why it isn’t happening.

If you weren’t so narrow minded that you think spending is the only tool government can use, you may find a way out of this mess. Regulation is a major disincentive to investment, raising taxes takes money away from those that would spend it, and uncertainty puts everything on hold. Obama has pushed everything that would kill a recovery.

And just for the sake of argument, if unemployment were the deterrent to investment we never would have emerged from any recession. It is the prospect of better times that encourage business to invest in the future. Especially when money is cheap. If you weren’t so afraid of someone making a few bucks we could emerge stronger than when we went in to this recession. Instead we need to hike energy costs, dramatically increase onerous and useless regulation, raise taxes, takeover whole industries, forfeit our future to debt, and reward bad behavior. Hell, it’s little wonder no one wants to invest in the future, with this administration, we don’t one.

Ron_C's avatar

@Jaxk Obama tried to encourage policies that would improve the infrastructure and build high speed rails, of course the right shut him down. When interest rates are zero and nobody wants to borrow it is because there is no market. Nobody expands their business unless they can be reasonably sure that there will be customers. No jobs, no customers, no business expansion. Thirty years of shipping jobs overseas, free trade, and the removal of tariffs have come to roost. The only way to start up the market is to put people back to work. If business doesn’t do it, government must. Besides, the money the government spends comes back in increased tax revenue. It’s a no-brainer!

Qingu's avatar

What policies has Obama created that deter borrowing and investment exactly, Jaxk?

Qingu's avatar

@Ron_C, I don’t think free trade is to blame. Free trade will probably be instrumental in getting us out of this mess, especially if we can weaken the dollar. Since there aren’t consumers here in America anymore, our economy is going to need to rely on consumers elsewhere (and a weak dollar will help make the products we manufacture here more competitive).

Qingu's avatar

Aaaand now the stock market is diving. I wonder why.

Surely it can’t have anything to do with the jackass “hostage takers” in the Republican party insisting on economy-dampening spending cuts during a stagnant recession, or the European debt crisis.

Oh, I know why stocks are tanking. It’s because investors are worried about the Obama administration being anti-business.

Jaxk's avatar

@Ron_C

Sorry, I disagree. You guys are hung up on this idea that no one will invest until consumer spending increases and the only way to make that happen is for the government to spend gobs of money. Take a step back for a moment and look at the situation without your ideologically tinted glasses.

We know that business has money. they have over $trillion sitting on the sidelines. We know that consumers have money. The savings rate has substantially increased. Even businesses that don’t have money on the sidelines have the lowest interest rates available in my lifetime. What do you suppose is stopping them from spending or investing? Confidence!

We have been told for three years now that this is the worst economy since the great depression. Even after being told that we were told it’s even worse than we thought. Not exactly a confidence builder. But I can blow all that off as just so much political rhetoric. But then we get to some really scary stuff.

When GM and Chrysler got into trouble Obama took them over. They went bankrupt anyway but the shareholders and bond holders were pretty much cut out of the loop in favor of the unions. Hell, that’s something you would expect in a third world country not the US. We don’t nationalize industries here, or do we? We spend money on infrastructure but limit the contracts to union shops. No one new gets a job but the employed union workers do just fine. The we threaten ‘Card Check’. Effectively trying to increase the cost of labor for everyone. Hell who wants to expand thier labor force with that staring them in the face. Then we decide to nationalize health care. Hell, no one know what that will cost only that the government will now dictate what coverage is required and some unknown maze of regulation to enforce it. The initial response has been to raise insurance premiums substantially and no one really believes there is any cost savings in the entire bill. Hell just the new rules for the 1099 forms will cost me substantially. With SS and Medicare in dire straights, it’s just not believable that the health care bill will fare any better.

Meanwhile, we’re looking at shutting down the coal industry, cutting off oil exploration, and creating Czars and bureaucracies that do nothing more than create new regulations. Regulate everything. Hell, while we’re in the middle of this recession we take time to increase mileage standards that will…. Drum roll…..increase the cost of automobiles. Maybe we could have taken a breath and done that after the recession. Doesn’t matter really since we’re pushing the auto industry to invest in electric cars. Now there’s a big winner.

I’m growing old here trying to list all the missteps of this crazy administration. Obama has said he will refocus on jobs. Again. He’s been saying that for three years now and the only focus I’ve seen is in destroying jobs. Forgive me if I lack confidence.

Qingu's avatar

@Jaxk, “We know that consumers have money.”

No, they don’t. If you don’t understand this then you don’t understand anything about this economy.

Why are you still posting?

Jaxk's avatar

@Qingu

You must be right. I can’t believe the stock market would react to the revised growth numbers. !st Quarter revised down to >4% and second quarter revised down to 1.3%. Nor would the market react to the pathetic jobs numbers as growth comes to a standstill and layoffs skyrocket.

Jaxk's avatar

Sorry >4% s/b .4%

Jaxk's avatar

@Qingu

Because somebody keeps posting ridiculous theories that have no basis in reality. We need a little sanity.

Qingu's avatar

The rest of your post is so breathtakingly dishonest that I am considering flagging it as spam.

GM was temporarily taken over to avert massive unemployment by its workers. It’s now a private company again. Also it is thriving. Also those workers? Still employed, still adding to the economy. But somehow you think this is preventing businesses from investing?

Card check is nothing new, does not affect many businesses (it certainly doesn’t affect for example Apple which is sitting on $70 billion in cash instead of investing). It doesn’t add to uncertainty. It might slightly increase cost of labor. Why does it prevent businesses from investing?

HCR? It hasn’t taken affect yet for the most part. Industry has been given years to adapt. It barely affects the basic structure of employee compensation for insurance. Explain to me how this law is, for example, preventing Apple from investing its tens of billions?

Czars? Ronald Reagan appointed czars. Another example of you not knowing a thing about what you are complaining about.

I could go on. But what’s the point? You’ve been here so long and you aren’t interested in discourse. You’re interested in spouting talking points that are often outright lies, about a subject you know nothing about. It’s like talking to a cultist at this point. You have your faith in Republican marketing, and evidence or facts be damned.

Qingu's avatar

I’m done with you, Jaxk. This is my last response to you, until you demonstrate you have some degree of intellectual integrity and honesty.

Jaxk's avatar

@Qingu

That’s fine with me. I grow weary of your name calling and distortion. I can’t for the life of me understand you issue with Apple since they seem to be growing just fine. The have money and are taking advantage of the low costs.

And just for the record, a 60% ownership of GM is a government takeover in my mind and apparently in the minds of most Americans.

And I wait until you have some degree of intellectual capacity.

Cruiser's avatar

@Qingu 2 years ago I could have borrowed a million bucks based on the history, credit rating and bank balance of this business. AND I was borrowing from the bank that has had our business for over 15 years. Their hands were tied and could only loan out a ½ mil AND I had to dollar for dollar collateralize the loan.

Second because of NEW Obama regs set on Jan 2010 if I bought the business BEFORE I bought the house I would not be able to get a mortgage for 2 years despite an 810 credit rating and sufficient income to support the loan ratios. The mortgage guy told me before that I would have been able to get upwards of a mil no questions asked.

So right there proved to me just how tight the regulations have become and if you don’t believe me ask any banker, realtor and mort broker just how difficult it is to get loan approvals.

To your other comment I KNOW business are not investing precisely because of the Obama’s ineptitude and inability to provide the necessarry leadership to get Congress and the House to pull together on policies that work towards creating jobs in the business secotr and not milestones in history. TARP, Obama Care and the Stimulus were all busts and collosal waste of time. My customers are hurting, my employees are hurting all because nobody has the extra money they once had. Everything we buy is going up in price yet there is no extra cash flow to enable businesses like mine to offer raises or new jobs. A correction, depression, recessions are part of the game we play but when you play it by just throwing more money at the money pit Obama has made even bigger…it is time to stop playing the game and get serious about this change he promised and hasn’t delivered. But that change would come at a price neither the Dems or the Repubs are willing to cut a deal on and Obama lacks the leadership to make it all happen. Corporate tax cuts, income tax increases for the upper income earners, cut out foreign and oil subsidies and create fair and balanced trade regulations that put American manufacturing on equal footing with cheap foreign labor. Do all or even some of this and the manufacturing community will feel more confident they can invest what money they have left without surprise tax attacks from this administration.

Qingu's avatar

What regulations, Cruiser? Name them.

And you “know” businesses aren’t investing? With your magic powers of perception? I asked you if you understand the demand crisis. It apparently didn’t register, because you need to believe that Obama is somehow at fault for everything at happens.

And you know what? My fiancee is unemployed, my best friend is about to be unemployed, my uncle has been unemployed for years, and now we are looking at a double-dip recession. And you expect me to give a shit about how you can’t borrow money easily with your perfect credit rating?

I’m through with you too. I would love to have an honest debate about this. But I should have known long ago that conservatives aren’t capable of that. People like you, and your willful ignorance, are a major part of this problem, and I don’t think I’m capable of putting up with this shit right now.

Jaxk's avatar

@Cruiser

Here is just a short list of job killing regulations imposed by Obama and bypassing congress in the process. I will spend some time adding additional regulations, as I find this project quite informative. Others obviously find it less so.

A Democrat is quoted as saying: “There are more than 4,200 new environmental, financial, labor, and other regulations pending at the federal level today, which are causing uncertainty and ultimately harming small businesses and their ability to create jobs.”

Cruiser's avatar

@Qingu Start giving a shit because it is businesses like mine that create new jobs, pay paychecks, make sacrifices to keep the employees employed DESPITE the BS shenanigans of Washington. And I do understand this demand crisis you refer to but you fail to acknowledge why it might be that consumers no longer have money to spend?? You do provide ½ the solution to provide payroll tax relief to the worker who you intone will spend that new found money but the real magic will happen if you extend that same school of thought to the businesses that employ these people. Imagine if you will a payroll tax cut AND a corporate tax cut or the very least tax breaks for hiring new hires, doing innovative projects or capital improvements above and beyond what already exists. Money will be flowing again…that is if Obama removes these ropes he tied around the banks ability to lend money.

You and I seem to have the same ideals for ending this misery just sitting on opposite sides of the fence. Personally I think we can do both but I also believe it is time for the Government to step up and make it’s own sacrifices that would be needed to make both your and my ideas for job creation to work. There simply isn’t enough money in our economy or in rich peoples pockets to tax to continue to support this monstrosity in Washington except by extending the debt ceiling.

You asked what lending regulations Obama did to rain on my parade….
“The proposal will restrict lending, increase risk, decrease stability in the system, and limit our ability to help create jobs,” warned Steve Bartlett, president and chief executive of the Financial Services Roundtable, which speaks for the big banks. Link

@Jaxk Thanks for the links…To my surprise on the way home from work I heard even the Liberal talking heads are talking about the job killing regulations and one even suggested lowering the minimum wage to stimulate job growth. Perhaps people are starting to wake up to the enormity of the problem this country faces.

tom_g's avatar

Ducks head in, despite saying I wanted to stop doing shit like this, and asks, “anyone up for a socialist revolution yet?”

Jaxk's avatar

@Cruiser

Another link for you. It adds a few regulations and puts some dollars with them. Includes mileage standards, appliance efficiency, and building standards. The list is adding up. Unfortunately there’s just too many to list them all.

Qingu's avatar

@Cruiser, if you have the ability to hire people but are not because you are scared of scary Obama regulations, you are not only deranged but are actively doing harm to this economy, and you should be ashamed of yourself.

Why don’t consumers have money? Because of the recession. It cannot be overstated just how devastating it was to people’s finances. And having a tenth of the work force unemployed (and even more underemployed) also contributes hugely to lack of demand.

I’m not against low taxes for corps. I’m for high taxes for millionaires. But I honestly don’t give a shit about that right now. I give a shit about stimulating demand.

And what do you mean by government sacrifices? You do realize that government jobs are jobs, right? You do realize that when the government spends money it can create jobs, right? You don’t appear to be making any sense. ON one hand you seem to internalize that spending can create jobs, and you seem to agree that creating jobs is our number one priority… but then you go right back to talking about austerity. Can you please try to be consistent?

And I asked you to be specific. How did the new financial regulations make it harder for you to get a loan? Before financial reform it was also next to impossible to get a loan because the credit markets were frozen. Are you complaining about something distinct from that? Or are you simply confusing “bad credit market” with “Obama regulation”?

Qingu's avatar

Finally, bitching about “Washington” makes no fucking sense. It’s such a lazy, obnoxious way to whine about our problems and it solves nothing.

There are two main groups in Washington. One would like to spend money or even cut taxes to create jobs. THe other is obsessed about trimming the size of government and have made no effort to create jobs, and is actively obstructing every single action that Washington can take. Which ones do you support, Cruiser?

Qingu's avatar

Also @Cruiser, do you realize that Obama has dedicated a lot towards trying to make it easier for banks to loan money to small businesses? See here, for example.

The entire point of TARP was to free up credit markets.

I mean, what do you think? That Obama wants to freeze credit markets? And can you please cite the specific regulation that you believe is making it hard for your bank to lend you money? You quoted a lobbyist, that doesn’t exactly count.

Cruiser's avatar

No @Qingu I am perplexed why a person with good credit along with a good business and good credit and a great history of good business and good credit would have a NEXT TO IMPOSSIBLE time borrowing money?? I understand fully how predatory lending practices were the root of the banking collapse but why on earth penalize the very entities that are looking to expand?? Didn’t and still doesn’t make any sense to me.

To your second question…I thought I made it pretty clear I support neither party and for one reason and one reason only in that they are both beholden to the corporate dollars that lobby cash into their parties to further specials interests and pork projects in the long run we all could do without or at the very least be better off letting the private sector handle. Bulldoze “K” street and you will make me the happiest man alive.

To your 3rd point I already gave you the link above to give you an overview of the changes that occurred Jan 2010. Please take the time to do your own research as you have made it more than apparent that only your POV matters here.

Qingu's avatar

@Cruiser, you said: “I am perplexed why a person with good credit along with a good business and good credit and a great history of good business and good credit would have a NEXT TO IMPOSSIBLE time borrowing money??”

We know the answer to this question. What you are referring to is a “credit market freeze,” and it started in the financial crisis. It hasn’t recovered yet. Again, a large part of the rationale for TARP—as tremendously flawed a program as it was—was to inject cash into the credit market so banks could loan money. TARP “worked” in the sense that it helped unfreeze the credit market. But unfreeze is relative. During the worst of the 2008 financial crisis nobody could get credit. It was actually looking like there was going to be a run on banks Depression-style. TARP succeeded in that it increased banks’ capacity to loan money. But that capacity is still far lower than it was in 2007.

It has nothing to do with Obama’s regulations. The reason you cannot get credit is because every bank since 2008 has been extremely risk averse. That includes even people with good credit, like yourself.

“Bulldoze “K” street and you will make me the happiest man alive.”

I’m mostly with you. But I wonder how helpful this rhetoric is right now. I think it’s more important to try to understand the nuances of how money is influencing power right now, and the extent to which “big money’s” interests are actually aligned with the greater public. It’s true that moneyed interest groups often fuck over poor workers (class warfare exists) but it’s in nobody’s interest to have a double-dip recession right now. To some extent we need to work together because everyone is in the same boat.

“To your 3rd point I already gave you the link above to give you an overview of the changes that occurred Jan 2010. Please take the time to do your own research as you have made it more than apparent that only your POV matters here.”

Your link was a series of talking points by a bank executive fighting regulation that is not in his monetary interests. It did not list any specific regulations nor did it explain how any regulations would actually result in a credit market freeze.

And, I am truly sorry for lashing out at you. To be honest, I’m sort of freaking the hell out about this. I do respect that you’re not an ideologue, too.

Cruiser's avatar

@Qingu Even better would be to publicly fund the presidential election or at the very least overhaul campaign funding. It nauseates me to no end that they are projecting Obama to spend upwards of a billion dollars on his re-election campaign. That is a billion promises he has to try and keep. If we could limit the special interest donations things just might be a little cleaner during their terms….or am I dreaming here??

Back to your responses about the bank tightening their lending policis IMO is precisely why we are in this mess! Nobody can borrow the money they need at the very least it is difficult at best and severely curtails small business like myself who are the backbone of job growth. Makes no sense to me. It’s a stranglehold on the very solution to our problem me thinks.

Jaxk's avatar

@Cruiser

Just a note of information. The Dodd-Frank act has had a chilling effect on the finacial industry. Whether you believe it is good or bad, there are so many unknowns that it makes doing business difficult. The Act is categorized into sixteen titles and by one law firm’s count, it requires that regulators create 243 rules, conduct 67 studies, and issue 22 periodic reports. Not exactly an incentive to loan.

swuesquire's avatar

@Jaxk Sorry to sneak in at a random moment, but do you think the financial system worked better during the relaxed regulatory regime of 2001–2008? If so, why and what benefits have we seen from it? Please be as specific as possible.

Qingu's avatar

@Cruiser, I agree that the banks’ credit freeze is a huge problem that needs addressing. But:

(1) earlier you said the credit market freeze was caused by the Dodd Frank act (or some other unspecified Obama regulation). I still haven’t seen you point to any specific regulations. (In fact very little of Dodd-Frank has even taken effect yet). Are you willing to admit that regulation is not the problem here?

(2) What do you think is the best way to further unfreeze the credit market? My knowledge is a little sketchy on this point, but to be perfectly honest, I don’t actually see any way that policymakers can attack this problem further beyond “making the economy better” in general. We are in a terrible economy and there are no consumers to buy products. Banks know this. Therefore, there is simply nothing that is going to make banks eager to lend money to companies that want to expand in this climate, because they know that investment today is inherently much riskier than investment during a growth period.

So I think this question reverts by necessity to “how can we grow the economy quickly so investment is not seen as risky by banks?” And I think we’re in agreement: deficit-spend (and payroll tax cuts) to increase employment, with infrastructure, schools, etc.

Jaxk's avatar

@swuesquire

First let me say, I think that’s a fair question. I will try to address what I think are the issues without blaming anyone and stick to the facts. If it sounds sarcastic, it’s not intended that way.

First the 2001–2008 period was not a period of deregulation. It has been estimated the Bush regulation added $60 billion annually to the regulatory burden. I think it was much higher. For instance Sabanes-Oxley was passed in 2002 as a respoinse to the Enron scandel. Estimates range from $1 million-$5 million per public company per year. Start up costs for the first year are even higher. Most analysts agree that small businesses are hit much harder than large. Since there are about 15000 public companies in the US even a conservative estimate would pu the cost at $15 billion annually. At most the Enron bankruptcy cost $11 billion. The cure may be worse than the disease. And keep in mind that what Enron did was already illegal. One guy commited suicide to stay out of jail. And it certainly didn’t help with the Bernie Madoff scandel. You call it, good idea or bad. Personally I hate it. Some companies have privatized to avoid the costs and others have merged with larger companies to defray the costs. I’m at a loss to show one example of where this fixed anything.

Mark to Market is another issue that came up in the recent recssion. During the 90s comapnies used the accounting new rules to revalue thier assets as the market rose. Specifically real estate.was a great target because as the market rose the value of the banks assets rose with it. Their loans appeared more secure and their assets followed the market. In 2006 the rules were clairified (FAS 157) which didn’t appear nasty at the time but caused problems in 2008. When real estate began to tumble, the banks were forced to revalue thier assets everytime a property sold or was foreclosed. The assets droped like a rockand the banks were forced to value the assets at fire sale prices. Consequently, the banks had to come up with cash to cover the losses. This contributed greatly to the banking freeze. If I recall, Obama relaxed this rule in 2009 providing some relief to financial markets.

Glass Steagal was effectively repealed in 1999. This allowed comapnies like Citi Group, to begin providing a wide range of financial services. The combination of Investment Banking, Commercial Banking and Insurance, previously outlawed, allowed the banks to leverage their huge assets in all three bussinsses and created the very essence of ‘Too Big To Fail’. The Dodd-Frank act contains some language to limit this but not much. Frankly I’d prefer to just break up those conglomerates and go back to the Glass Steagal arrangement.

What I’m trying to show here is that it was a period of deregulation that caused our troubles. It wasn’t even the period of 2001–2008. Rather it was a lot of legislation that built up over the years to create problems. We don’t need to eliminate all regulation. Nor do we need to regulate everything. Some of the regulation passed contributed to the problem and some of the regulation repealed contributed to the problem. One point I will make and totally believe, is that when you go through a period of massive regulation, industry tends to freeze while the details are worked out. It’s hard to continue with business as usual when the rules are changing.

I Hope this answers the question.

Jaxk's avatar

Sorry

What I’m trying to show here is that it was a period of deregulation -S/B – WASN’T a period of deregulation.

Ron_C's avatar

@Jaxk you have the amazing ability to put so many wrong things in one answer. I don’t have time to go through the list. You are correct that we would have more jobs if we had fewer regulations and lower pay but why would you want them? The unions are almost the sole reason we have a middle class therefore the more unions the better. As it stands now, a CEO of a non-union shop is essentially the king of all he surveys and the sole beneficiary along with investors in the profit the company makes. Unions say that the people that produced the product deserves some of that profit, that’s democracy. Anti-union rhetoric must be the opposite. Look at Texas for example. It is a right to work state with low regulation and no income tax. What you end up with is a state with dwindling primary education, high accident and death rates from industrial accidents, a high employment rate but with more (per-capita) underemployed people and growing poverty rates. The rich are doing very well the middle class and poor are paying for their success with their treasure and lives. Texas is well on its way to becoming North Mexico if you look at similar living conditions. I don’t want “the Texas Miracle, for the rest of the country.

Jaxk's avatar

@Ron_C

I have no problem with you taking a cheap shot but where are you getting this. It’s a fairly long thread but I’m struggling with the union rant. Which post are you objecting to? There’s no question that I’m no fan of unions. At the same time I have no problem if workers want to organize (except public employees). But Card Check is merely a way to unionize without a vote. All of you safety rules and work week hooey are at best a hundred years old and more likely not pertinent at all.

I’m no fan of Texas (too many Texans) but people are flocking into the state. Apparently they don’t see it as bad as you do.

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