Social Question

ETpro's avatar

Is the Ayn Rand "Every man for himself" society what we want for tomorrow's America?

Asked by ETpro (34461points) October 5th, 2010

Many of us were stunned when Gene Cranick’s home burned to the ground while firefighters stood and watched. It seems he lived in Obion County, Tennessee outside the city limits of South Fulton. County residents must pay a $75 annual fee to get fire protection outside city limits, and Mr. Cranick had forgotten to pay. The oversight cost him his home and all that it contained, including his two dogs and a cat. He and his next door neighbor alike offered to pay firefighters whatever it cosr to fight the fire, but the Fire Chief refused, saying it was too late.

New conservative personalities like Glenn Beck have been cheering the situation, saying that guys like Mr. Cranick are just sponges, have-nots trying to get a free ride on the backs of the haves like Beck. Like Ayn Rand’s John Gualt, they yearn for an America where its every man for himself. House on fire and you didn’t, or couldn’t pay? Too bad. Get hit by a car and your D&B rating isn’t high enough to pay for the emergency room—too bad—just die and quit using up wealth that could be transferred to the rich if not for all the lazy sponges out there.

Here are a few of the “every man for himself” initiatives Tea Party Republicans have put forward this year. Repealing unemployment insurance. Privatizing medicare and social security. Killing the GI bill. Privatizing the Veteran’s Administration. Repealing Healthcare reform and going back to letting insurers exclude preexisting conditions, cancel policies when people get sick, and set a lifetime cap on benefits. Fighting for tax breaks for big corporations that offshore our jobs. Fighting for a flat tax so we can no longer afford to help anyone who falls on hard times. These are all Teapublican values.

Is that the sort of society we want—a King of the mountain culture where only the strongest survive? Is America better when we’re all in it together, or only in it for ourselves?

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119 Answers

Seek's avatar

That story makes me disgusted with America, and where it is going.
Actually, physically sick. Shame on those firemen, that they could stand by and watch that man’s home burn. Would they have helped if a person had been inside?

lillycoyote's avatar

@ETpro I just couldn’t believe that anyone, even Glenn Beck, would actually cheer this so I did a little search and found this. This audio at least, shows Glenn Beck and the other person on his show not so much cheering but actually mocking this guy and what happened to him. I am almost in tears; that’s how upset and disgusted I am. What hateful ugliness.

josie's avatar

Glenn Beck is a moron.
But having gotten that out of the way…
Who is supposed to pay the firemen if not Gene? He did not live or pay taxes in the fire department’s jurisdiction. He was given the opportunity to buy the service independently, and he did not.
If you feel so strongly about it, I suggest you pay the freight for his neighbors.
Come to think of it, I bet their checks are in the mail.
You would not work for nothing.
Why should the firemen?

lillycoyote's avatar

@josie Apparently, his neighbors were willing to pay but the Fire Chief said it was too late. It just seems that they could have put the fire out and sorted the rest of it out later. Decent people don’t order their firemen to stand by and watch someone lose their home. You work out the finances later. That sort of thing happens all the time when payments are involved, with much lower stakes. It’s o.k. for emergency room doctors to stand there and watch someone die? Because there may be some question as to whether their services can be payed for? If that’s what you think and if there are more where you came then God have mercy on us all.

josie's avatar

@lillycoyote Then why have taxes, fees, etc to pay for services if it is not relevant whether or not you pay them. If all Americans refuse to pay any tax at all, should soldiers defend the homeland for free?
Of course not.
If your clients or customers refuse to pay for your goods or services, will you provide them under any circumstances in spite of it?
If you say yes, I do not believe you. But go ahead and say yes if you want.

lillycoyote's avatar

@josie I’m not saying it’s irrelevant, people should have to pay for the services they receive, I’m just saying it was an emergency, the guy’s house was burning down, the South Fulton fire department authorities allowed his house to burn down and it was all over 75 goddam fucking dollars! Don’t you think that the issue of his 75$ fee could have been sorted out after they kept his house from burning down?

jrpowell's avatar

@josie :: It isn’t like they wanted a free iPod.

Corey_D's avatar

To answer your question it is what I want for America. But then the incident you talk about can hardly be described as Ayn Rand’s ideal. It was a government run fire department that sat by and did nothing. It was the local government that decided not to help someone who hadn’t paid even if they offered to pay for it at the time. In a free market there could be all kinds of business models for firefighters. They could charge a fee like this department but still help someone who’s house is on fire while charging him extra for not paying beforehand. They could charge but also take voluntary donations to use to fight fires on the property of those who can’t pay. These are just off the top of my head. Then those companies could compete with non-profit organizations of volunteer firefighters funded entirely by donations.

But then, if with all of that people’s houses still burned down because they didn’t pay then that is too bad. It is not my responsibility to take care of anyone else. Of course I don’t want to see this happen to anyone but to say that they have a right to my money in order to prevent it is ridiculous.

jerv's avatar

Yep. That’s exactly what we want.

Of course, many of the people who have the money right now often don’t have certain other skills like stalking, hunting, marksmanship, etcetera so it may end up poorly for those who are currently rich and not quick to hire some extra bodyguards. It seems to me that the rich who will be able to afford to pay all of the fees shouldn’t be the only ones supporting that sort of society; anybody with a “do what thou wilt” bent, anarchists, and sociopaths should also support such a dystopia.

@josie It’d be different if the fire department were a totally private company who received zero funding from the government even by contract to the city, but so long as they take even a penny of taxpayer money then they are obligated to protect the lives and property of all taxpayers in that jurisdiction.

@Corey_D “It is not my responsibility to take care of anyone else.”
That is a dangerous attitude to have. Are you saying that if I found you bleeding to death in the street that I would have no responsibility to even call 911 since you should be able to take care of yourself?

nikipedia's avatar

Ayn Rand was a fucking bitch and a basically insane, too. And those firefighters were fucking douchebags.

Pardon my french.

No, I do not want to live in that society. I want to live in a society where we are all kind and good and compassionate and thoughtful, and people are allowed to make mistakes and not have to lose everything they own.

I much prefer a moral system like Immanuel Kant’s categorical imperative: “Act only according to that maxim whereby you can at the same time will that it should become a universal law.”

Often, complex biological systems exhibit emergent properties, where the system as a whole produces something much greater and entirely different from each of the parts added together. When human beings function together in a society, we become a complex system that is capable of so much more than any of us on our own. I want to live in that society.

Glenn Beck is not invited.

josie's avatar

@jerv He was not in the jurisdiction.
Look, I would have helped the guy, but I suspect some of you would not work for free, and that is what we are talking about.
You are different. Me too. But I can not blame the people who figure if you want the service you should pay for it.

jerv's avatar

@josie Then the fire trucks had no business in that town at all unless it was a multiple-alarm fire and the on-scene crew called for backup. The fact that they responded to a fee-paying neighbor invalidates and refutes your argument about jurisdiction.

I can blame them so long as the service is provided by a government entity using taxpayer money. If fire protection were 100% privatized then I would agree with you wholeheartedly, but it isn’t so I can’t and won’t. Assuming that Mr. Cranick pays taxes anyways.

Hawaii_Jake's avatar

To answer the OP, no, that is not the kind of America I want. It makes me sick to think about it. That kind of life is bestial at best, and are we beasts? I hope not. I sincerely hope not.

jerv's avatar

@hawaii_jake I hope we’re not, but I have seen too much to hold that optimism much longer.

Jaxk's avatar

Interesting perspective. The fire department responds but stands there and watches the house burn down because he didn’t pay a $75 fee. And who are we mad at, Glen Beck and Ayn Rand. Hell, I didn’t even know they were there. This was your government at work. Remember those guys, the ones that you all think can do everything better, more compassionately. If this had been a private fire company they would be in criminal court. It is only the government that can stand on principle and let it happen. Private enterprise would have been fighting the fire then billing the customer (and maybe putting a lien on his property). That’s the way it works.

But maybe you’re right. Beck and Rand should have flown down there and put the fire out. Damn their eyes for not doing so.

CyanoticWasp's avatar

@josie, apparently no one else is really paying attention to the real issue here as you are.

This is how insurance works. You pay a small amount in advance for insurance that you hope you never need to avail yourself of, and when the time comes that you do need it, the payments that your neighbors made cover your need. And if you don’t pay, then what makes you entitled to receive the benefits? It’s pretty simple.

Of course, @ETpro, as is his wont, exaggerates and rides a slippery slope to hell and back to twist logic and facts beyond belief. But if we actually had the kind of society that gives him the vapors, then it’d work a lot better… and there would be more leeway to cover indigents and people who “forget” their premiums.

PS: @ETpro it’s “Galt. John GALT. You ought to read the book for comprehension next time. Ater all, “Who is John Galt?” is the first line in the book, if I recall correctly from about 30 years ago.

iamthemob's avatar

The problem here is not that they should have helped regardless of the failure of the homeowner to remember/pay the fee at all. The problem is that it appears that they were PREVENTED from helping regardless, and that they felt a duty NOT to help.

There are also some ancillary issues I don’t know were clearly addressed:

(1) there really isn’t any accounting of what percentage of the emergency response budget is funded by these small fees. It seems, and this is of course an assumption, that the department should be almost fully funded by payments from city taxes or mandatory fees. If that’s the case, then the policy takes on a new abhorrent dimension.

(2) allowing the fire to continue in that manner put other nearby properties at risk. If I had paid the fee, and my property was put in danger or actually damaged because my neighbor hadn’t paid and the department refused to respond early, I’d be pissed, and rightfully so.

(3) this should have been expected. When the policy was designed, someone had to say “Hey, it’s possible that someone who didn’t pay this fee could have a fire on their property…and we’ll look like dicks if we don’t do anything over $75.” Why isn’t there a contingency? The department could have easily informed the owners that because they didn’t pay the fee in a timely manner, fee for the response would be $75x dollars, which would be secured in a lien against the property. Considering that if the person doesn’t pay, gets their house possessed by the city, and loses their home they don’t really have anything to complain about because they would have lost the house anyway, it seems that this would be a firm way to both (a) make sure that the fire department could actually do it’s job, and (b) actually increase the revenue collected.

ETpro's avatar

@josie Both he and his next door neighbor offered to pay not just the missing $75 fee but whatever the actual cost of the firefighting effort might have been. The issue is not non-payment of taxes. We already have laws dealing with tax scofflaws. The issue is do we want to go to à la carte style Ayn Randian government where only those with enough money to pay for a given service get it, or do we want taxes paid to benefit rich and poor alike. The politicians in this particular area favor the à la carte approach. The city fire department had put forward a proposal for a very small increase in property taxes in the outlying areas, or other revenue means that would let them fight all fires. The local Randian politicians wanted no such thing.

In early times, New York City had à la carte firefighting. They figured out it was a bad idea after most of the city burned down because the first few buildings involved in the fire hadn’t paid for fire protection.

@Corey_D If you feel that taking care of anyone else is too much of a drain on your finances, there is always Somalia sitting there waiting to welcome you. Go there and you don’t have to pay a penny in taxes. You just have to hire your own private security force and firefighters, build your own roads to wherever you want to go, and so forth. So far, being tax free is working out swimmingly for the Somalians. The per-capits annual income is $600. That’s not what I want for America, and I doubt many other Americans want that either.

Ayn Rand was a brilliant woman who was sure that if we did set up a society where we all played king of the mountain, she’d be one of those at the top of the mountain, and screw all those who didn’t have the intellect to get up there with her. That’s why this a la carte government is a Randian idea and why it appeals so much to the rich who are also greedy. Not all wealthy people feel that way. Look at what Bill Gates, Warren Buffet, and Bill Clinton to name a few are doing for proof of that.

jerv's avatar

@Jaxk Of course, doing things that way would require some pretty massive reforms to the way things are done. And there would have to be some pretty hefty tax breaks to account for the drop in spending since the government wouldn’t be shelling out for firefighters, though I doubt that would happen.

Of course, then we’d run into the same problems we have with healthcare, namely poor people taking it in the ass because they are poor. Somehow, I don’t think that certain neighborhoods would ever see a fire truck under any circumstances if we went that route.

iamthemob's avatar

@CyanoticWasp

PS: @ETpro it’s “Galt. John GALT. You ought to read the book for comprehension next time. Ater all, “Who is John Galt?” is the first line in the book, if I recall correctly from about 30 years ago.

That’s not comprehension. That’s just spelling. And I would really spell check any comment you post where you’re criticizing the spelling of others. ;-)

ETpro's avatar

@Jaxk That’s the way it works when you have a government run by the new conservatives. That’s not the way I would like to see it work. I am all for private enterprise in most areas of life. But having to hire private contractors to fight fires, or to provide police protection—no thank you. If we privatize most or all of what government now does, we end up with a country where only the wealthy prosper or can even live in relative safety. The poor can’t use their roads, or call their private security firms when someone breaks in, or go to their hospital when ill—because they weren’t able to come up with the fee in advance.

@CyanoticWasp If I exaggerated anything in the question or details, point it out. And pardon my misspelling of Galt.. I have read Atlas Shrugged. I should have known better. But that has absolutely nothing to do with the validity of what I am saying, and you should know that.

@iamthemo The homeowner lived in the unincorporated county, not the city. Thus his taxes didn’t go to the city. Hence the fee. But he offered to pay the full cost of fighting the fire and the Fire Chief refused. A neighbor who had paid the fee actually did suffer some loss when his fence and cornfield caught fire, but the fire department did act to put that fire out. I completely agree with point 3. And thanks for the backup on spelling. :-)

Trillian's avatar

“I thought they’d come out and put it out, even if you hadn’t paid your $75, but I was wrong,” said Gene Cranick.”
So, he didn’t forget to pay. He straigt up didn’t pay because he thought they didn’t mean it.
“Gene Cranick asked the fire chief to make an exception and save his home, the chief wouldn’t.”
Why would he think such a thing? It goes back to that whole“entitlement” thing. As an EMT, I have met plenty like this guy. They ignore the warning signs, step over the barricades, actually get angry and raise their voices to minor employees who are stuck having to ask them to stop doing whatever is posted right there for them not to do. They ignore the sign that says “Don’t drive in standing water.”
Uh huh. I know you all know who I’m talking about. And who is hollering the loudest about “Help! Come and save me?” Yeah. Mr. Don’t tell me not to smoke next to this flammable tanker. Miss I’m taking this shortcut, fuck your sign. Mr. I’m far too importat to let an old man working this paking lot tell me where to park.
Uh huh. People like this are why I got to go out in the AMTRAK at HUR CON 2. Oh yeah. Whole houses full of Mr. and Mrs. We want to stay and have a hurricane party.
Envsioning the world of which you speak means instead of being rescued from their own stupidity at the risk of our lives, it mght have gone differently.
Ring ring “Sorry things have got a bit damp outside,whch is fine. But you see the thing is that now the damp is trying to come inside and we don’t seem to be able to stop it. What? Where am I calling from? My house, I’m calling from my house. No, we didn’t evacuate. No, we didn’t need a ride, we have cars. What? What do you man; what do I want you to do about it? I want you to come and get us. No, actually we can’t do that, the road is all flooded. When can we expect you here? Hello? Hello?”
The same people give their kids food in the store to eat while they’re walking around and don’t pay for it. And scream at the strore clerk who tries to tell them about paying for the banana first. I don’t think anything all this or all that. The guy lost his home and that’s a shame, but that doesn’ mean that he bears no culpability.

iamthemob's avatar

@ETpro

You spelled my name “iamthemo”? That’s a hate crime. ;-)

Aside from that – no, that he was outside the city was clear. Point (1) was more a response to the Glen Beck argument (what the WHAT is wrong with that man) that if they had saved the house, no one would pay the fee. If the fee is a negligible portion of the departments funding, then that’s not really an argument. However, it could be something to talk about otherwise (although I think point (3) addresses that at least partially).

But as to the more general question…again, the problem is that the policy prevented people from helping. I’m all for personal accountability and being held responsible for your decisions – but this limits people ability to make decisions that would be motivated by common human decency.

lillycoyote's avatar

@iamthemob, @CyanoticWasp and @ETpro I’m just the girl here, but I know you are all perfectly capably of arguing without getting personal. Please, prove me right.

iamthemob's avatar

@Trillian

This isn’t the case of someone ignoring an obvious risk, but rather failing to insure himself against an unforeseen, if potential, risk.

I would also like to know what this family’s income is. Regardless, if he was unable to pay the fee, would the argument be the same? I don’t think it should…

I don’t think asking the chief to make an exception is an act of entitlement, but desperation. In the video, I’m amazed at the man’s reserved and calm manner, and the fact that his wife went out of her way to try to discourage people from blaming the firemen for just “doing their jobs.”

Personally, I think they look exactly like the kind of good natured, hard working, traditional American citizens that we SHOULD be trying to support.

iamthemob's avatar

@lillycoyote – don’t censor me! :-).

But just for clarification, my spelling rib was motivated by this thread and thought it was just a hilarious coincidence.

lillycoyote's avatar

@iamthemob LOL. I was just about to edit my response to read: Removed by me because I am not your mother but now you’ve responded to it and it’s too late. :-)

Or is that iamthemo! I get that now.

ETpro's avatar

@Trillian I listened to the whole interview. He called 911 without even thinking about the fee. They told him he was not on the list of people who had payed the fee. The fire department dod go to the scene becausae his neighbor who had paid also called in the emergency. Mr Cranick contacted the FIre Cheif and offered to pay whatever the emergency response and firefighting costs were in full. That’s what the Chief refused. And Mr. Cranick most clearly said he had forgotten to pay the fee. Of course, it is possible he is lying about that. But at no time did he say anything in the interview to indicate he deliberately skippped the fee thinking he could get a free ride.

But the question here really isn’t about psychoanalyzing Gene Cranick. It is about what we expect of government, and what we think should be outsourced to private enterprise. Should only those wealthy enough to afford their own private security detail have police protection? Should all roads be toll roads, and only those with enough money for the tolls be allowed to use them? Where do we draw the line on government downsizing always being a great idea?

@iamthemob Thanks for the clarification. You would know better than I would. Clearly, I’m not the one who gets to decide how to misspell words. :-)

iamthemob's avatar

@ETpro – I don’t know…after that first paragraph above, you seem to be gunning for it. ;-)

ETpro's avatar

@iamthemob Argh. My spell checker failed me.

lillycoyote's avatar

@ETpro don’t want you to think I am favoring @iamthemob. A mother should never favor one of her children over another, at least she shouldn’t let them think she is favoring one over another. I adore you too :-)

And that goes for you too, @CyanoticWasp , my problem child :-)

CyanoticWasp's avatar

@lillycoyote I try. I really do. Normally I don’t even read his garbage (that’s not personal, is it?) because it so rankles me. But once in awhile…

The thing is, I know that he’s not stupid. There, that’s personal, but in a good way, right? But representing any kind of world as “Randian” that is “every man for himself” is the epitome of wrongness. Anyone with his amount of reading would know absolutely that that is a Hobbesian world: nasty and brutish. A Randian world is one of complex organization and free trade. And that’s what so pisses me off: He knows this! And yet he chooses, for whatever motive he has, to misrepresent it and call it something else. “Every man for himself,” indeed.

In point of fact, as minimal review of the facts of this case point out, it was the local government that prevented the fire department from acting. Whether or not they really wanted to is beside the point. Since he’s normally such a champion of government I thought he’d take particular pride in this courageous and principled—though unpopular—stand of a local government.

I won’t even start the argument that if “the fire department” hadn’t been a government-funded entity in the first place, then there might have been (at least) two competing private fire fighting outfits, and at least one of those (and more likely both) would have accepted a bid offer at the scene to fight the fire. Won’t even go there…

iamthemob's avatar

@CyanoticWasp

Of course I agree that it was not the fire department, but rather the government in this case…but how would this be a principled stand? For me, it’s a stand that needn’t be taken if there were appropriate contingency plans in place. Also, it’s privileging abstract rules, potential future harm over actual, real danger and damage (and the loss of animal life, which I can’t help being soft over). This seemed like it was more a little p rather than a capital p principled stand…

or are you attributing this assumed belief to @ETpro… then the question might be directed at him

Cruiser's avatar

As cruel as this is, I don’t see how this is any different than evicting a family out of their home because they didn’t pay the rent or mortgage. I don’t see how this is any different than all other local governments that allow for peoples utilities to be shut off for non-payment of their bills. Of course there is more to this story but it is no different than a hundred thousand other stories of people suffering because they didn’t pay or simply don’t have money to pay for the things they might need.

Gene chose to live outside the area of designated city services, Gene forgot or chose not to pay to have those services provided. The real story is not a Randian issue or Tea Party issue…it is all about their local government which had this to say….

“South Fulton Mayor David Crocker told the newspaper that if the city allowed people to pay after the fact there would be no incentive to subscribe. As an analogy, he said an insurer won’t pay for an auto accident if insurance lapses.”

wilma's avatar

It’s a very sad situation, but if everyone didn’t pay their share, the fire department wouldn’t exist at all. So who gets to not pay and get away with it? me? you? him?

@iamthemob wrote this and I agree with it.

(3) this should have been expected. When the policy was designed, someone had to say “Hey, it’s possible that someone who didn’t pay this fee could have a fire on their property…and we’ll look like dicks if we don’t do anything over $75.” Why isn’t there a contingency? The department could have easily informed the owners that because they didn’t pay the fee in a timely manner, fee for the response would be $75x dollars, which would be secured in a lien against the property. Considering that if the person doesn’t pay, gets their house possessed by the city, and loses their home they don’t really have anything to complain about because they would have lost the house anyway, it seems that this would be a firm way to both (a) make sure that the fire department could actually do it’s job, and (b) actually increase the revenue collected.

iamthemob's avatar

@Cruiser

There is a significant difference, though, between your examples and the one presented – your examples are acts by which the owner fails to hold up his end of the bargain in the ownership of the home. Clearly, we need to hold people accountable, in such situations, unfortunate as it may be.

This is disturbing because there was no actual cost to the city or the fire department, and a potential profit to them – but bound by this hypothetical situation where people will stop paying, they watched a family’s home burn slowly.

You could probably find a way to make the penalty price for an emergency call to an non-paying owner punishing enough that people would be more inclined to pay the smaller fee, year by year, when it didn’t hurt. And we still haven’t seen anything about whether the department relies on this money to support it.

If the money is just superfluous to the budget, well…I’m even more depressed, as the family lost the home “just because.”

@wilma

thanks!

Cruiser's avatar

@iamthemob I am not sure your argument is valid as Mr. Cranick here clearly failed to “hold up his end of the bargain in the ownership of the home” as you pointed out by not paying this fee which IMO is no different that a mortgage or rent bill or utility bill. Fire protection is a service and that service requires a service fee to be paid for in advance of services provided. And here again the Mayor himself justified this decision that if the city allowed people to pay after the fact there would be no incentive to subscribe.

I am not thrilled by this Mayors or Fire Chief’s decision, but I would bet there were a lot of new checks in the bursors office this week for fire protection services.

jerv's avatar

@Cruiser Banks do not blatantly and directly threaten lives the way fire does. A person can live in poverty, but not in flames. And if it was about the money then they could save the house and then put a lien on it.
Nope, it’s purely a dick move.

wilma's avatar

The fees for my fire protection are a part of my property taxes. If I don’t pay them, the city does put a lien on my property until they are paid. If I fail to take care of this in a couple of years then my property is confiscated and sold.
It seems to me that it’s the way this local government handles paying for fire protection needs to be changed.

iamthemob's avatar

@Cruiser

I’ll lay out the differences as I see them:

(1) the mortgage payments represent payment to the bank on the interest and principle of the loan of money the bank provided in order for the owner to buy the house. The home itself is essentially the collateral for the loan. If the owner defaults on the payments, the debt is directly owed to the bank, which can thereafter determine the action it wants to take with the property. Therefore, this is a debt owed directly to the person taking the home.

(2) utility bills represent payment for a service already provided to a homeowner. If the service is provided and the homeowner doesn’t pay, then he or she is in debt to the utility provider, and therefore it is not obligated to provide more services for which it is uncertain it will be paid. Therefore, it is a debt owed directly to the entity making the home uninhabitable.

(3) the fee represents a pre-funding for services which may or may not be provided. It is, in essence, a deposit. Therefore, the department is freed from the responsibility to travel out to the house and provide rescue services to that individual address when payment is not made, but it still has enough for its services generally. When offered a premium on the amount that was originally to be paid, the department chooses instead to do nothing. Therefore, an entity which has lost and will lose nothing by acting is refusing payment for services over the amount expected and allowing damage FAR in excess of that payment to occur.

In the first two, there is a preexisting debt. In the last, there is no debt – in essence, the owner is simply trying to buy the services of people already there…

The thing that is EXTREMELY disturbing about this is that it is likely that if no one actually paid the premium, the department would continue to function based on the tax payments from the city residents. Therefore, the potential “loss” that they are fearing has yet to be justified…because if the department can function regardless, then the department has essentially burned a house to the ground in order to scare other nearby tenants into paying them money that they don’t need to function.

To me, that actually sounds a lot like terrorism. Of course, that’s extreme – but in the end, it really seems a gross example of greed.

iamthemob's avatar

@wilma

It seems that should have been the way it was handled to begin with.

lucillelucillelucille's avatar

You need to check your premises.You don’t understand Objectivism.
Glenn Beck and these Tea Party people are not Objectivists.

iamthemob's avatar

@lucillelucillelucille

I don’t think that Objectivism is really brought into play here – I think that the John Galt character is used simply as an easy (if not wholly appropriate) reference to the every-man-for-himself personality.

Cruiser's avatar

In case anybody here really cares about this issue…here are some numbers for you…

South Fulton Fire Dept
Non-emergency Calls

731.479.0213

City Manager
Jeff Vowell
Phone Number

731.479.2151

Mayor David Neil Crocker
700 Milton Counce Drive

South Fulton, Tennessee 38257

731.479.2151

Seek's avatar

^ Best post ever, @Cruiser.

iamthemob's avatar

@Cruiser

I agree with @Seek_Kolinahr. Informational and a call to arms. :-) Good show.

wilma's avatar

Thanks @Cruiser that is perfect.
I hope those folks change their way of paying for their fire department.

Jaxk's avatar

@ETpro @jerv

I think you misunderstand how privatization works. Just because something is privatized it doesn’t mean it isn’t paid for by tax dollars. We have privatized many of our prisons. They’re still paid for by tax dollars. When we allow charter schools or school vouchers, it still comes from tax dollars. Privatization is a cost benefit analysis.

By privatizing the fire department, the tax dollars would still have been used to pay for the city residents and any residents that paid the $75. The difference is that when they were used at a non contracted residence, the fire department would have been looking to make some extra money. Basically the $75 is an insurance contract. Just like any extended coverage on you car or health insurance. If you car breaks down the repair shop doesn’t refuse to fix it, they just don’t fix it for free. That’s how private companies work. In the public, government doesn’t have that same incentive. So instead of making money on the fire, they let the house burn down. Government at it’s finest.

iamthemob's avatar

@Jaxk

I don’t think that emergency services, though, should ever be an industry where there’s a market-based profit motivation. Schools I can understand. Prisons are so messed up I don’t even want to talk about it. But privatizing these types of services brings in conflicts of interest that shouldn’t be involved.

Cruiser's avatar

Apparently this guy knew how the system worked as he was quoted on tv as saying…

“and another thing about it, they have waived these fire fees before. they waived them at my son’s house three years ago in it december. they waived them over on another road over here out of town. and saved the guy’s house . i know they waived them before. so, therefore, they could have waived mine. i would have paid it.

Sure why should this guy have to pay the fee like everybody else does and just like anyone else who milks the “system” all is good by them until they get caught. It would be interesting to see if Gene ever paid the fee.

I think a better solution would be to levy an “Oooops I forgot to pay the fee clause” where the homeowner pays all expenses for the fire response plus a healthy fine in situations like these. Either way IMO this town’s administrators should be ashamed of themselves.

iamthemob's avatar

I think a better solution would be to levy an “Oooops I forgot to pay the fee clause” where the homeowner pays all expenses for the fire response plus a healthy fine in situations like these.

Exactly. Why this wasn’t already the system, I don’t know.

Jaxk's avatar

@iamthemob

Emergency services are so far down my list of priorities, I can’t even find it. The point was to show the difference in mentality between the private and public sectors. Private industry generally makes a lot more money on a time and materials rate than it does on a contracted rate. Therefore they don’t turn down that work. If there was a conflict however, the contracted work takes priority. In this case there was no conflict as the fire department stood idly rather than doing the work. Government has no incentive to do anything more than they are contracted to do. Private industry sees the opportunity. It’s a different mindset.

And by the way, you can’t fine someone for not doing what they didn’t have to do. But you can charge them a much higher rate. Sounds like semantics but I think it’s a significant point.

iamthemob's avatar

@Jaxk

I’m completely in agreement that there’s a distinct difference between the private/public sectors…much as you described.

And I think that your result is probably what would have played out if it had been private industry at work. But my concern is that emergency services shouldn’t be run as a private business. It’s one of the few industries that pretty much requires a monopoly, and needs to be administered in a democratic manner. This doesn’t really bode well for it functioning in a free market any differently than the government.

Jaxk's avatar

@iamthemob

I don’t necessarily disagree. Truth is, I could argue the issue but my heart wouldn’t be in it. Privatization works best when there is competition. In most communities there is not enough business (fires) for two let alone more. Also, they are already local (my preference for most government functions). Too bad we can’t combine the benefits of each but they really are completely different mindsets.

ETpro's avatar

@cruiser He didnt just offer to pay the fee. He was standing there with checkbook in hand and offered to pay whatever the costs of emergency response was. He says he forgot to pay the $75 fee. What about people who honestly don’t have the money when the fee rolls around. Should they just be out of luck? His two dogs and cat died in the fire. What if his kids were in there. Do we just stand by and let people die because they forgot or couldn’t afford to pay a fee?

@Jaxk You might find that I understand privatization far better than you would wish to hear about. The for profit prison industry is a perfect example of why some things are better left to the government. The US now incarcerates a larger percentage of our citizens than any other nation on Earth. Even repressive states like China, Iran, North Korea and Myanmar, which lock up people for simple political dissent, don’t incarcerate as large a percentage of their citizens as we do. The for profit prison industry has a tough time boosting profits by increasing prices. They must undercut what government prisons with no requirements to pay taxes or deliver profits cost. So the way to boost profit is to cut costs and to increase “productions”. They actively lobby for harsher sentencing and for more things to be made illegal.

Did you know that the Papers Please law in Arizona was largely written by, and pushed through the legislature and governor’s office by the nation’s largest private prison corporation? Had the bill not run into trouble in Federal Court, that corporation would have provided the holding tank for all the people detained under Arizona SB 1070

Privatize policing and fire protection, and it will not be long till it is like higher education. The good stuff is only available to the ones that can really pay. The Party of the Rich is really big on privatizing things. Social Security, for instance. Never mind that this is one retirement plan that is highly efficient in government hands. Administrative costs are 0.9%. The typical for-profit plan runs 5%, and most for profit retirement plans would end up in investments that could easily crash leaving retires living in cardboard boxes and eating dog food. But that would only happen to the poor retirees, so the Party of Privatization could care less about that.

Profit is good. I do my level best to increase profit in my business. But profit before people can lead to pure evil.

I understand privatization perfectly.

Ron_C's avatar

When I was younger I read (and believed) all of Ayn Rand’s books. As I aged and saw the results of her ideas brought to life by people like Reagan, I realized that there must be a better more human way. I hope that Rand and Reagan are enjoying their time in hell.

Jaxk's avatar

@ETpro

Prison populations are exceptionally high and it is a problem. Having more people in prison than and other country is a blight on our society. Blaming prison privatization for it, however is way too much of a stretch for me. But I’m sure if your basic premise is that corporations are bad and government is good, you can rationalize anything. That rationale has been used in countries throughout the world, and it has never ended well.

I would make one point about you Social Security argument. Most people I’ve heard (and everyone I know) thinks that SS will not be enough to sustain you in retirement, even liberals. They think you need to put something extra away for retirement. And that something extra would be into a private fund of some sort. Both liberal;s and conservatives believe this. Yet it is only the liberals that fight tooth and nail against having any private part to the SS system. They want it all to go to the government so that congress can continue to raid that cookie jar. But that cookie jar is now empty and congress doesn’t have the money to pay it back. Let’s just ignore the problem for a while and maybe it will go away.

ETpro's avatar

@Jaxk I do not blame prison privatization alone. But I do know for a fact that it is a factor. THe for-profit prison industry has lobbied heavily for tougher sentencing for drug offenses including marijuana and has poured millions in advertising and psuedo-science into fighting efforts to decriminalize pot. Privatizing prisons is an inherently bad idea. There is a horrible potential for an evil conflict of interest in the prison corporations’ drive to increase profits and the society’s interest to incarcarate only those who truly pose a threat to public welfare and safety.

If a for-profit company can operate a prison, pay corporate taxes, and make a profit; then we need to find out why government, with no taxes or profit can’t operate its prisons more efficiently. Fire protection, police protection, prisons and our military absolutely need to stay in the hands of government. Same goes for social security. And we should expand Medicare to cover all citizens. A single payer health insurance system works far better and less expensively that private enterprise. Keep doctors and hospitals private, but insure everyone with a government, single payer system.

Jaxk's avatar

@ETpro

I’m not trying to argue for prison privatization let alone fire or police. There are areas where government serves us better than private industry, costs are not one of those areas.

I find it a little interesting that you would suggest that we keep the doctors and hospitals private but insure everyone with Medicare. Doctors are abandoning medicare at an alarming rate. What good is insurance if no one accepts it.

CyanoticWasp's avatar

@Jaxk you’re right, of course. If the argument about Medicare / single-payer health insurance held water, and was “so important” that it needed to be funded and controlled by government, then obviously grocery stores should be at the top of the nationalization list, food being more important to everyone, every day than medicine is to all of us all of the time.

Personally, I think that private prisons are a good idea. Having no first-hand experience of any prison, I can only go on what I’ve read, and I admit that I haven’t studied the issue. I’ve read purportedly objective accounts, and those make the private lockups seem superior in many respects. And I’ve never had much of a problem with private security (rent-a-cops)—no more than I have with regular cops.

Jaxk's avatar

@CyanoticWasp

Damn, why’d you have to bring up grocery stores. Now every one’s going to be clamoring for government run grocery stores :->

iamthemob's avatar

@CyanoticWasp

I don’t think that logic holds. Health care costs, although not regular, can be drastic all at once, so that people can’t afford it. That’s why we pay regularly into insurance so that when the time comes we’re covered (like we are required to do with groceries).

jerv's avatar

I thought e had food stamps to feed those who cannot afford food and income caps on them to make those who merely have to shop wisely pay for our own out of our meager paychecks.

ETpro's avatar

@Jaxk & @CyanoticWasp The reason I like single payer healthcare insurance, government run, provides the best healthcare outcomes on Earth. The number one system is in France. We pay 17% of our GDP and leave over 50 million people uninsured. The only thing we are number one in is cost per capita. In costs, we are far ahead of the rest of the world. The French pay 10% of their GDP and even insure tourist while on French soil. They have private doctors and hospitals, just a national insurance system. On such issues, I am a real conservative, not an ideologue. Conservatives go with tried and true solutions that have already proved themselves to work.

I am perfectly happy with our current approach to food distribution. As @jerv correctly noted, we already have a system in place to ensure Americans do not starve. We can always look at making that system more efficient and less prone to abuses, but it’s there and it works. I have absolutely no desire to put the government in control of what everybody must eat. Far from it, I would forcefully fight any such move.

I am curious about your interest in privatizing Social Security or parts of it. What advantages would you expect that to yield?

While we are on the subject or government versus private enterprise, take a look at this question about how to improve the efficiency of those services we all agree government should provide.

Corey_D's avatar

@jerv Not calling 911 for someone would be a douchebag thing to do but you certainly have that right if that is what you prefer. I was certainly not advocating such behavior though. Just because I don’t want to be forced to be charitable doesn’t mean I have no concern for anyone’s welfare.

@ETpro I never expressed a desire to live in an anarchic society. I do believe in the necessity of government. Specifically the necessity of a police force, an army, and of courts of law. And if you think that Somalia represents the sort of government that Ayn Rand was arguing for then you completely missed her point.

jerv's avatar

@Corey_D In other words, a world driven entirely by profit with every person for themselves would be a world full of douchebags. I hate to break it to you, but at least in this country, there is such a lack of altruism and empathy that there are actually laws in some places requiring people to render aid is such circumstances. We live in a world (or at least a country) where you can have dozens if not hundreds of people walk by a dying person and not lift a finger to save them.

@ETpro The benefits of privatizing Social Security are the high rate of return. ~And we all know that there is absolutely no chance of losing money on Wall Street.

Jaxk's avatar

@ETpro

First the most obvious answer. The government has bankrupt Social Security, Medicare, Medicaid, and any other program the have ever managed. Another entitlement is destined for the same fate. Without any action towards cost control, there is no chance of reducing our costs. The current plan and any of the Democratic initiatives completely ignore anything that would reduce costs. The move to a medicare system for everyone seems to be based on the notion that we can dictate the payments to doctors and hospitals and they will just learn to live on the reduced payments. Hopefully you’re not one of those.

The administrative costs so widely touted for government programs is simply misrepresented. Collection costs are obviously not included they are counted in the IRS budget. Fraud and abuse are costly for private industry, government spends much less in this area and gets what they pay for.

I find it interesting that the discussion you referenced talks about the VA, and the military among others. Both of which get much reduced labor costs, no insurance premiums, free rent and absolutely no state taxes (or federal for that matter). There is so much cost hidden and distributed throughout the rest of government, anybody could make it look good on the surface.

When private industry takes over they have to account for ALL the costs, they have to pay the property, income, and sales taxes, they have to pay insurance, and full labor costs (that includes state), and make a profit. Even after all this they provide as good or better service at lower cost. And the government pays less and gets more revenue in taxes. I don’t see a loser here.

Social Security is a problem. Everyone wants it to be secure, but it’s not. If they need to cut benefits, they will. If they need to raise the retirement age, they will. There is no security in Social Security. Even with the recession the returns from the Dow would outstrip the SS benefits. If you used the SP 500, you’d do even better. Even if you used a reasonable portfolio of bonds, you’d do better. But even if you don’t like any of that (or don’t believe it), there is another issue that I can’t get past. Social Security is not really yours. If you die prematurely, nothing is returned. If you want to retire early, you’re on your own. If Social security is not enough to support you and you earn extra money, you are in danger of losing some or all of the SS. Frankly I like the idea of having some or all of my SS benefits owned by me rather than congress.

ETpro's avatar

@Corey_D OK, I no more want to go back to the days for the robber barons and massive cartels controlled by a handful of billionaires buying up every profitable business for themselves than to to to a government free situation like Somalia. Ayn Rand was arguing for complete laissez-faire capitalism and insisted that government can’t do anything right—can’t make the trains run on time. Here ideal world would be one with a handful of uber-rich elites surrounded by hundreds of millions of paupers. No thanks.

@Jaxk Social Security is not bankrupt. It has assets enough to pay full benefits through 2042. All we need to do to keep it solvent after that is raise the cap on FICA withholding. We wouldn’t even be facing that issue if administrations from Reagan on, both parties, had not been raiding the social security fund to cover for their tax cuts. The same goes for Medicare and Medicaid. The economy was doing just fine under Bill Clinton. In fact, we enjoyed the longest boom since WWII and created the most jobs in those 8 years. We were paying the deficit down, instead of doubling it under Bush’s tax cuts. And the revenues we were bringing in during the Clinton years would have kept Medicare and Medicaid well funded. We have to give up the idea that taxes always need to be cut, especially for billionaires, and get our government back on a pay-as-you-go formula. We have done it before, and it never wrecked business. Far from it, it kept business healthy.

The cost savings you mention for the VA and Military are EXACTLY why those activities should be government programs. That, and also the fact that if we outsourced our military to Blackwater Erik Prince w=ould proclaim himself emperor of the World.

Jaxk's avatar

@ETpro

SS is bankrupt. This year for the first time payout exceeds income. The government does not have the money. They are borrowing to pay the bonds with bonds. The truth is there is no social security fund, only taxes.

The Dotcom bust happened at the end of Clinton’s term just like the housing bust happened at the end of Bush’s term. Both drove down the economy. Bush also suffered 9/11 which drove down the economy even further. If you look at the deficit however, it began declining when the 2003 tax cuts were passed. you can see that here. It continued to decline until the housing bust in 2008. The tax cuts did not hurt the economy they spurred growth.

If you believe that the Clinton taxes were great and helped to grow the economy then fight for them. Just don’t pretend they are bad for some and good for others. Don’t argue that those you want to vote for you need the Bush tax rates and those you don’t need to vote for you need the Clinton tax rates. That’s a political argument with no basis in reality. And if you want the government back on a pay as you go basis, cut the spending. Obama has added a $Trillion a year to the deficit and all you can think of is to raise taxes to pay for it. If you don’t spend it you don’t need to pay for it.

Apparently, I didn’t explain privatization very well. I’m not sure I’d have any better luck with a second go around, so I’ll let it go.

Ron_C's avatar

@Jaxk I think that you have your time frame a little off. Our current economic decline and the deficit problem with social security had its beginnings in the Reagan era, Clinton just exacerbated the problem because his political philosophy is closer to Nixon than to FDR.

Reagan and with Greenspan’s support started to borrow from the Social Security fund to finance his huge tax decrease for the top 2%. Clinton helped loosen rules in the stock market that allowed extended trading in derivatives. Of course both houses of congress are equally responsible, mostly because they went along with the “trickle down” economic ideas. I suggest that if we kept on the path blazed by FDR, none of the current problems would exist. Granted we wouldn’t have had the giant booms, but we also wouldn’t have had the crippling busts. Instead we would have enjoyed a steady but slow and probably sustainable growth in manufacturing and in agriculture. Banks would have remained engines of economic growth instead of generating profits from the casino that the stock exchange has become.

Corey_D's avatar

@jerv There are many different kinds of profit. Ayn Rand never said that money should be your only, or even your primary, value. It is not a desire to benefit oneself that leads to devaluing others. I think when people are left free to do whatever they wish with the money they have earned they are far more likely to be benevolent. When others are said to have a claim on what is yours because of their need then it forces you to see people in need as a threat to what you have rather than a person to empathize with.

@ETpro The so called robber barons were among American history’s greatest heroes. Or at least some of them were. They did more to bring this country forward, economically and technologically, than anyone. It was the entrepreneurs of that time that created the wealth that would lead to higher wages for everyone. Without the contributions of the “robber barons”, as well and later generations of entrepreneurs, there never could have been a middle class. Ayn Rand’s ideal world is one where everyone is allowed to keep what they earned. Whether that means wealth being highly concentrated in the hands of a few or more distributed is irrelevant. The goal of Objectivists is not to establish a particular distribution of wealth. Our goal is to obtain freedom.

mattbrowne's avatar

I think the most vocal Tea Party Republicans should be send 20,000 years back in time. Each one of them gets his own cave, while all other caves are populated by larger groups of people. Let’s see who’s faring better.

Seek's avatar

^ I’d settle for Imperial Rome, but they have to maintain the social status equivalent of that day. See how long they believe in “Trickle-Down Economics” when they’re under the government they’re hoping to get here.

jerv's avatar

@Corey_D You underestimate the number of greedy, power-hungry bastards in today’s society then. If anybody else has anything then you don’t have everything and therefore are entitled to do whatever it takes top fuck everyone else over. Okay, that is slightly overstated, but people have been killed for parking spaces, babies have been sold for beer, etcetera.
My experience is that people who are left free to do whatever they wish with the money they earn are far more likely to be self-centered, selfish, and basically big pricks. Very few are philanthropic or altruistic, though many have nice cars and sweet cribs. And they get worse when they realize that they can’t afford what they want (or don’t have enough money to have power and demand respect) so they seek more money like a crackhead seeks rock.
Of course, many people will never enjoy that freedom since we have to work like field slaves just to get food on the table, or a table to even put food on.

ETpro's avatar

@Jaxk Social Security is not bankrupt. It has been running for 65 years now, to the great irritation of Republicans who fought its establishment and have constantly wanted to privatize it ever since. They would funnel all that money to the rich, instead.

Social Security will, assuming we recover from this economic downturn, be able to pay full benefits to all retirees till 2042, meaning it will have succeeded for 100 years. After 2042, if we do nothing to fix it, Social Security benefits will have to be decreased a bit for retirees in the later half of the 21st century. Some simple changes that will hurt none of us can put Social Security on track to continue full benefits in perpetuity

The Republicans can continue to fight to save our poor millionaires and billionaires at the expense of everyone else. It’s a fight I truly welcome. But every lie they use, like Social Security is bankrupt, or it’s a Ponzi scheme, I will call out for what it is. Propaganda designed to serve the rich at the expense of everyone else.

Corey_D's avatar

@jerv Well I think you put your finger on the problem when you said “or don’t have enough money to have power and demand respect”. It takes certain virtues to honestly create wealth for yourself and many people don’t have those virtues and don’t want to achieve them but want to gain money in whatever way because it allows them to fake those virtues and gain prestige. The desire for prestige is the desire that corrupts people, not an honest desire for money.

But in any case there will always be dishonest and disgusting people in the world regardless of what social system they happen to live in. I happen to think that the social system that I hope for would do less to encourage such things than the current one we live under but I doubt I will ever get a chance to test it in my lifetime.

Jaxk's avatar

@ETpro

I’m not sure if you don’t understand how a ‘Ponzi Scheme’ works or if you don’t understand how Social Security works. But they both work the same way. The returns are paid by the new investors. There is no underlying asset or business to support them. The money historically paid into Social Security has been spent. There is no underlying asset or business to support the returns. The returns now out strip the income.

Ask yourself this, where is the money going to come from between now and 2042. And if we make no change to SS, where would the money come from after 2042. It is exactly the same. Borrowing. Solvency was lost this year when income outstripped payments. That’s a Ponzi Scheme. And it’s also bankrupt.

jerv's avatar

@Jaxk And this differs from the Federal budget from the last few decades… how? In other words, what is the practical difference between the deficit spending that many Republicans claim is so good and a Ponzi scheme?

ETpro's avatar

@Jaxk I am perfectly aware of how Ponzi schemes work. I am also aware of how political propagandists work. Calling Social Security a Ponzi Scheme is a BIG LIE.

Here is the definition of Ponzi Scheme;
“A fraudulent investment plan in which the investments of later investors are used to pay earlier investors, giving the appearance that the investments of the initial participants dramatically increase in value in a short amount of time.”

“A Ponzi scheme is a type of investment Fraud that promises investors exorbitant interest if they loan their money. As more investors participate, the money contributed by later investors is paid to the initial investors, purportedly as the promised interest on their loans. A Ponzi scheme works in its initial stages but inevitably collapses as more investors participate.”

Social Security is not an investment fraud. It does not entice investors with promises of returns too good to be true, and it was not set up in such a way that it would need an infinitely progressing number of investors in order to last more than a few years. As I pointed out, even though unscrupulous politicians have pillfered from the fund to give tax cuts that appeared to pay for themselves, it has been in operation for 75 years now and has not defrauded a single citizen.

We could reasonably debate whether the government should put some of the debt obligation at risk in order to potentially earn a profit on it. The government would just have to be willing to use deficit spending to cover any loss if there were a sudden market downturn. But the system certainly was not set up to defraud.

@jerv Social Security obligations are part of the National Debt. It is a single line item and is separated out in some uses of the term, but it is a government obligation. Thus the challenge to cover distributions when we have an aging population and terrible unemployment numbers.

jerv's avatar

@ETpro Yet it is acceptable to drain to rack up debt and enslave our great-great-great-great-grandchildren? While it’s true that the government can’t create jobs (hell, they are laying people off last I checked, except for those dealing with aid programs like Unemployment and Food Stamps who don’t have enough workers to keep up with the demands of our growing joblessness and poverty) it seems to me that deficit spending is just as unsustainable in the long term.
Sure, you can get away with it for a while, but it’s like living on credit cards; the buying power ends while the bills pile up and will need to get paid eventually. And at some point the whole system collapses, leaving somebody in poverty. In this case, us taxpayers.

ETpro's avatar

@jerv Of course deficit spending is unsustainable in the long term. But it did get us out of the Great Depression. And after it did, we successfully paid down the debt it ran up.

It is n*ot true* that government can’t create jobs. It’s just one more Republican lie. That’s about all the Teapublican Party is now running on. The government can hire people, for one thing. That’s creating jobs. But a far better way for the government to cr4eate jobs is to fund infrastructure programs that produce things that yield economic benefit for years to come. Look at all the jobs President Eisenhower’s Interstate Highway System created. And it’s still here 57 years after he took office. How much poorer as a nation would we be if we had never built the Interstate Highway System?

The stimulus will have created or saved 3.5 million jobs when it is completed. We should be investing in new infrastructure, repairing existing and investing in the next generation of sustainable energy instead of just ceding that to China and India so we can keep right on shipping supertanker loads of money off to foreign lands for the energy we need to keep our country going. But with the Party of NO! blocking any effort to put people back to work, that won’t be happening.

jerv's avatar

@ETpro When I say the government can’t create jobs, I am talking more about their competence and the current situation than a general statement.
Sure, it’d be great if they approved infrastructure programs or something beneficial like that, but realistically that isn’t going to happen and we both know that.

ETpro's avatar

@jerv No, we don’t both know that. The Stimulus is on track to create or save 3.5 million jobs and many of them are construction jobs building or repairing infrastructure. Today, Republicans killed an extension to the Temporary Assistance for Needy Families. That will cause 240,000 people to lose their job this month.

Jaxk's avatar

@ETpro

Let me try to explain a few things that you seem to have confused. First a Ponzi Scheme is a system where the returns are paid by new investors (whether or not the returns are Great). When their are no longer new investors or there are no longer enough new investors to pay the returns, the scheme falls apart. It fails because there is no capital creation or savings to pay the returns. Same as a Pyramid Scheme. The investments do not increase in value at any point. And it doesn’t collapse because more investors participate but rather because there are not enough new investors to pay the returns. Whether it’s legal or not doesn’t change the scheme. Gambling is illegal in most states unless run by the state such as the lottery. That doesn’t mean it’s not gambling.

And just to clarify your spending statement, no spending did not get us out of the Great Recession. FDR did his woks programs and spending for ten years during the depression and it didn’t work. WWII put 12 million men in uniform and that brought down the unemployment. But even that was only temporary as they eventually came home. It was the post war boom the finally ended the depression and only because we were rebuilding the entire world. During the fifties we generated a full half of the entire world’s Gross Product. That’s what created the prosperity. Private enterprise brought us out of the depression and it was after FDR was long gone.

You can tout the interstate highway system all you want but the government only creates temporary jobs with these projects. The problem is they don’t produce anything. Government jobs don’t create wealth they drain it. All the jobs you think were saved by the stimulus program weren’t saved at best some of them were delayed. The money he gave to the states to save jobs is gone and the states are looking to cut back. We didn’t fix anything but we spent a $trillion to delay a small piece of it. Same with his cash for clunkers, housing bailouts, and every other hair brained scheme he’s cooked up. And the way to stop shipping tankers full of cash overseas, is to open up our own reserves. I have no problem with researching new energy sources but the idea that we can speed it up by making our existing energy unaffordable is asinine.

Clinton left office with a $1.9 trillion budget. Bush left office 8 years later with a $2.9 trillion budget. Obama’s first year soared that to $3.8 trillion. It wasn’t the entitlements that did that. Nor was it TARP. It was the massive spending to pay off all the support he got from unions and cronies.

In the 90s Canada cut spending across the board by 10% and their economy soared. Their debt to GDP ratio dropped from almost 70% to about 30%. Some of that reduction was the reduced spending, some was from reduced interest on the debt, and the rest was economic growth. Obama took the other path and increased spending by 30%. I think we all see what happens when you do that. A bleeding heart and a huge government won’t create jobs. It only drives down the economy.

ETpro's avatar

@Jaxk I am not confused about the definition of a Ponzi scheme. I quoted the definition for you. In a number of vital ways, Social Security does not fit the definition. If, for ideological reasons, you feel the need to make up your own definition so that you then become right and Social Security being a Ponzi Scheme, so be it. I will stick with dictionary definition. Claiming I am confused or unable to read with comprehension is merely argument by assertion on your part—a logical fallacy and one highly unlikely to win me over to your ideology.

The statistics are very clear on the GDP and unemployment in the Great Depression. Herbert Hoover presided over a steady decline in employment and GDP for 4 years. From the time FDR took office forward, both metrics improved. The only exception was the period from 1936 to 37. This was called the recession within the depression. It was a brief time when, trying to placate Republicans enraged by his spending, FDR backed off on works pragrams. THat only further serves to prove that spending did work.

The fact is that the GDP had recovered to where it should have been by early 1941, before Pearl Harbor was attacked. All of these things are facts Only in a world where ideology trumps facts can you learn from the Great Depression that Hoover’s approach worked, and FDR’s failed.
Here are graphs illustrating how both GDP and Unemployment reacted to Hoover’s policies and to FDR’s.
Gross Domestic Product
Unemployment Rise & Fall

The same holds true of the last 30 years of mostly Republican rule. With tax cuts for the rich, Reagan, Bush I and Bush II added $9.6 tillion to the National Debt. The statistics show that Clinton created more jobs than Reagan and the two Bushes together and a booming economy as well. Clinton was paying the national debt down. Then Bush gave the rich a massive tax break and ended up driving the economy into the ditch. Ever since, Republicans Senators have been doing their best to cut off the tow line every time we try to drag the economy back out of the ditch, then complaining that it’s not back on the high road yet. And now they want the keys again.

I agree that overspending and overtaxing both can destroy an economy. But so can raising too little revenue and under investment. The stats are crystal clear. George W. Bush’s economic policies were a miserable failure. There is no way you are going to convince me that we should return to those policies.

Jaxk's avatar

@ETpro

“A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.” Sure sounds like Social Security to me. It goes on to say “The system is destined to collapse because the earnings, if any, are less than the payments to investors.” Again sounds like Social Security. You can read about it here. And as far as changing your ideology, I have no such expectations. You’re way too invested in yours.

I get the impression you think I would defend Hoover. That is a complete misread. Hoover made the same mistake in that he raised taxes in the face of a depression. FDR did the same thing in ‘36. The effects of reducing government spending are hard to find since it is so seldom done. But there are good examples. The 10% cut across the board in Canada is one such example. But if you really want to look at a comparison, the recession of 1920 is the best example. The recession was severe and the financial systems were locking up. Harding cut the budget in half and lowered taxes. The result was tremendous growth and prosperity. Japan had the same issue in 1920 but took the other route. massive spending and shoring up the financial institutes. They suffered another seven years of recession. You can read about it here.

If you want to have an intelligent debate, you’re going to have to let go of the Democratic talking points. You don’t want to go back to Bush’s economic policy, OK what is it you want. You love the Clinton era taxes but want to keep the bush tax cuts in place, or at least 98% of them. Sounds like you support the Bush tax cuts. There is no tax increase possible that would pay for the Obama spending. It’s simply too high. If you take all of the money earned over $200K, not a high percentage but all of it, it still isn’t enough. The only way out of this is to cut spending and grow the economy.

The deregulation you all scream about flat didn’t happen. The only pertinent piece of deregulation was Glass-Steagall. If your intent is to put that back in place, I would support that. Instead your guys are wandering all over the place with new regulation that will only cost the public more money with less service. Your talking points are cute but very unproductive. If your argument is that Republicans did everything wrong and Democrats do everything right, then we have little room for discussion.

ETpro's avatar

@Jaxk Let’s quit debating what a Ponzi Shcem is. I quoted the dictionary defnition. As I said, if you insist on making up your own definitions for words, discussions with others are meaningless, becuses you can always jest redefine words to make your ideology come out being right. Social security was absolutely not designed to defraud anyone. It has not defrauded anyone in 75 years. It needs adjustments to remain solvent past 2042, but those adjustments are minor. It will, by 2042 have been running for 107 years without defrauding anyone.

I am glad you are honest enough to state you want to privatize it, because most Americans do not, and they need to be aware this is a Republican goal. Yes, private investment funds might offer hogher returns depsite their higher administrative costs. But they also would lose substantial portions of their value whenever there is a big market downturn. If Social Security had been private when the stock market crashed in this past recession, many sneiors would have had to survive on half their customary monthly check. That would have thrown millions out of their homes without the money to rent another.

Medicare privatization would be an ever worse idea. Few seniors 65 and over could even get insurance from private insurers at any price. Those who could get insured would pay premiums of 3 to 5,000 a month. Only the Party of the Rich could think that’s a great idea. The underlying idea is as long as the very wealthy get theirs, screw the rest of you.

Now about Hoover, his first action was to drastically cut government spending. Exactly what Tea Baggers and the Republicans they are taking over now propose for our economic crisis. He did not raise taxes till the very end of his term. The higher rate did not even beciome effective until FDR was alreeady in office. The Hoover was too progressive argument is just more Republican revisionist hostory.

I do agree we need to cut spending. We just can’t do it before the economy fully recovers. When the economy does recover, we should let all the tax rates reset to the Clinton era level.and cut spending on things that don’t grow the economy. But cutting spending in the middle of bad economic times is just as damaging as raising taxes on the middle clas in a bad economy. Worse, actual.

jerv's avatar

@ETpro In @Jaxk‘s defense, the official indicators for a recession are no longer there, and the rich are earning more than ever, so it could be argued that The Recession is over (or never existed) regardless of the increasing rates of poverty or the fact that the real reason unemployment went down is that certain portions of the jobless are no longer counted.

Jaxk's avatar

@ETpro

Your understanding of a Ponzi Scheme leaves a little to be desired. There is a difference between quoting the definition and understanding it. That seems to be the case throughout your arguments.

For instance, if you privatize Social Security at the bottom of the recession, that is actually the best scenario. You would be buying whatever assets you want to invest in at thier lowest. The growth from that point would be the best you could expect. And the returns from private invest even with the downturns still out perform Social Security. And I hate to even bring this up since you don’t really like to evaluate the details, but any plan suggested does not privatize all of social security but only a small portion of it. For instance the Bush plan was to privatize 5% of your contributions. That is to enable implementation. Your all or nothing arguments don’t really cut it.

Medicare is another example of where you miss the boat. You pay into Medicare your whole life to reap the benefit at retirement. That money should be available to pay medical bills when you retire. It’s not. The government has spent it just like any other tax. Health care will work the same way. The money from extra taxation and Medicare reductions is being used to fund Obama’s massive spending. It will not be available for medicare for low income as it was designed. Just more debt.

As for Hoover, he did not reduce spending. If you look at the chart, you can see the reduction in spending from 1920 to ‘22 but there is continual growth throughout Hoover’s term. If you look at spending as a percent of GDP, the growth is even more dramatic. It is always difficult to make an intelligent argument if you ignore the facts, use someone else’s talking points, or try to argue from the extremes. The revisionist history is a product of the Democrats and has no basis in reality.

Ron_C's avatar

All that it would take to fix Social Security is to insure that only people that paid into the system and their children benefit from it and get rid of the income limit for paying the taxes. Simple, everything is o.k. then congress can address the needs of people that were removed instead of warehousing them in Social Security.

ETpro's avatar

@Jaxk I am not going to argue back and forth about whether I understand English or not. I have writen my views and quoted the definition. You have written your words. Each reader can make up their own mind who whether Social Security is, as you claim, a Ponzi Scheme. The more salient point is they can also see that in your heart of hearts, you would end Social Security and Medicare as we know them. You are in good company with your felow Republicans in that desire.

I will gather some statistics together and present what both Hoover and FDR did, and what results they got. More on that later.

Jaxk's avatar

@ETpro
Just to be clear, The definition is not my own making. I gave you a link to where it is defined. What is in my heart of hearts is that I would take the cookie jar away from congress. There are numerous ways to do that. You will always run into trouble if you think I’m saying something other than what I mean. I have no incentive to mislead anyone.

And just to be clear, I’m a Conservative. I tend to agree with Republicans more often than Democrats but Republicans can swing awfully far to the left and I don’t support them when they do. As a final point, try weaving the 1920 recession and the tactic Harding took into your theory. Also look at the actions of the Japanese both in 1920 and the 90s.

jerv's avatar

@Jaxk Compared to the rest of the world, even our Democrats are rather Conservative, so I must wonder how far to the Right you really are. Apparently further than our GOP.

Cruiser's avatar

I am sensitive to the Social Security issue as I have watched my benefits move further and further away from the pot and the end of the rainbow that was promised to me as I signed my Social Security card when I was 12 years old. To now know that I will not be able to cash in until I am 72 years old instead of 65 as originally promised and that now for 2 years running SS recipients are not being granted cost of living increases tell me the system is more than flawed…it is in self destruct mode.

jerv's avatar

@Cruiser That seems to transcend political affiliation. The government has been flawed since long before the US even existed, and the system we have now is merely continuing the tradition of failed leadership that extends back many centuries across many nations and empires.
Or am I just cynical?

Cruiser's avatar

@jerv No…you just have not yet been ruled by a really great King! Hang in there…don’t give up hope! ;)

ETpro's avatar

@Jaxk One thing we fully agree on. Get congress’ hands outr of the Social Security fund. If that alone had been done 30 years ago when they first dipped their hands in there, we sould have no shortfall now and 2042 wouldn’t be a looming date when benefits would need to be reduced.

As to Hoover and his response to the Depression, here are the numbers, including 1928 for reference
1928—$3.7 billion
1929—$3.8 billion
1930—$4.0 billion
1931—$4.1 billion
1932—$4.3 billion
1933—$5.1 billion
Hoover’s spending was virtually flat, just following the growth of the nation till his last year when he did begin to act to reverse the economic decay that had then gone on for four years.

And Under FDR
1934—$5.9 billion
1935—$7.6 billion
1936—$9,2 billion
1937—$8.8 billion (Recession within depression when spending cut back)
1938—$8,4 billion
1939—$9.3 billion
1940—$10.1 billion
1941—$14.2 billion
1942—$15.5 billion
1943—$35.5 billion
1944—$100.5 billion
1945—$106.9 billion

Again, here is a link to what the GDP did under Hoover and Under FDR. You can see it went straight down from 1929 to 1932, dropped less when Hoover started spending in 1933, and began to recover in 1934 when FDR really began to spend. You can also see the drop for the two years when FDR backed off spending.

The graph of unemployment tells a similar story.

Steady as she goes made the depression worse. Spending ended it. But it left us with the probl;em of paying down the debt. We were fotunate to have a perfect climate in which to do that.

jerv's avatar

Okay, this is getting tedious and I don’t think it’s resolving anything.

@Jaxk You said,“If you want to have an intelligent debate, you’re going to have to let go of the Democratic talking points.”
Well, that door swings both ways; if you want to have an intelligent debate, you’re going to have to let go of the Neo-Conservative talking points.

@ETpro “I am not confused about the definition of a Ponzi scheme. I quoted the definition for you…. If, for ideological reasons, you feel the need to make up your own definition so that you then become right and Social Security being a Ponzi Scheme, so be it. I will stick with dictionary definition. Claiming I am confused or unable to read with comprehension is merely argument by assertion on your part—a logical fallacy and one highly unlikely to win me over to your ideology.”
and
“As I said, if you insist on making up your own definitions for words, discussions with others are meaningless, becuses (sic) you can always jest redefine words to make your ideology come out being right. ”

If you can’t even agree on definitions with someone then you can’t have any sort of rational discourse with them. You know this, and pretty much said it outright, so heed your own words. Well, unless you are really bored and actually deriving some pleasure out of prolonging this no-win argument.

Jaxk's avatar

@ETpro

It seems we have different takes on the data. At least my graph and your list shows the same numbers. Of course you look at the slight dip in spending and I look at the increase in taxes in ‘37 as the culprit. Too bad they happened at the same time, makes it difficult to prove one way or the other. But let’s analyze your spending position.

Between ‘34 and ‘40 FDR almost doubled the spending. We did not fix the problem. Even if the spending was responsible for the slowly declining unemployment we never got below 14% on an annualized basis and we had to keep spending just to keep bad unemployment figures. In other words we didn’t fix anything but we affected it.

Now if I extrapolate that to Obama’s numbers, he will have to increase spending to about $6 trillion annually by 2014 just to keep the unemployment rate from rising. And still won’t have fixed anything. We are staring at a tax hike next year (even if Obama gets his way it will be a hike on the upper class). And his budget shows a dip in spending in 2012. If your analysis is correct (looking at ‘37) we will experience a double dip recession. Am I missing anything here?

Jaxk's avatar

@jerv

I’m not sure where you think I’ve used anyone’s talking points. But I can show you where the ‘car in the ditch’ or ‘party of the rich’ sort of things have been used. Those are talking points and they are intended to shut down debate.

jerv's avatar

@Jaxk First off, talking at each other isn’t really a debate. As for the talking points, if you can’t see it yourself already, I’m not sure if you would see it if I shone a spotlight on it.

ETpro's avatar

@Jaxk Hoover actually dropped the tax rate by 1% in 1929. He increased it to 25 % from the 1928 rate of 24% in his second year, and kept it there till the end of his tenure. His increase to 63% did not actually take effect till FDR had replaced him in office. So it can hardly be true that Hoover made the economy steadily worse over his 4 years by tax increases.

When his tax increase did kick in in 1934, the economy under FDR began to recover, both in job growth and in GDP growth. The tax increase of 1937 was from 63% on the top bracket to 79%. But the 63% rate had applied only to income over $1,000,000 a year and the new 79% rate of 1937 only touched those earning over $5 million a year. In 1937 during the midst of the recovery from the great Depression, that raise affected only a tiny handful of people, all of whom were already fabulously wealthy.

On the point of Obama letting the tax cuts expire while cutting spending, I agree. Wrong move. Hos problem is he did too little when he could do something, and now he’s politically boxed in so he can’t right that wrong. I do expect a double dip recession.

jerv's avatar

@ETpro Is it really a double-dip if one of those downturns is a freefall?
Of course, The Recession never let up for many.

ETpro's avatar

@jerv Like Harry S. Truman said, “It’s a recession when your neighbor loses his job; it’s a depression when you lose your own.” When a downturn turns into a free-fall, as it did in 1929, it’s a Great Depression for us all. I don’t really think that will happen. The world’s financial system is too interconnected now. If we fall off a cliff, we’ll drag everyone else with us. So every nation has a vested interest in seeing that a second great depression doesn’t happen. I trust that whoever is in power at the point something like that threatens will be wise enough to set ideological arguments designed to gain power aside and do what is actually necessary to the our economy rolling.

Jaxk's avatar

@ETpro

You have a couple of errors in your post. First the Hoover tax hike was passed in June of ‘32. I believe was effective for ‘32. Here is the listing of tax rates. The tax hike in “36 was a lot more than you say. FDR not only raised the top rate but also reduced the deduction from 25% of income to 10% of income as well as the 2% SS tax. That affected everybody and was a major tax increase. Here is a short synopsis of FDR’s tax hikes.

“Between 1930 and 1940, the corporate income tax rate
was doubled from 12 percent to 24 percent, and an “excess
profits” tax was added on top. In addition, Roosevelt
imposed an excise tax on dividends, a capital stock tax,
and liquor taxes, and he increased estate taxes. Finally, the
Social Security payroll tax was imposed with a 2 percent
rate beginning in 1937.”

This is an except from this article. It should be very clear that FDR did a lot more in raising taxes than merely the high end. Just like Obama. Scary similarities.

The tax change in ‘29 was insignificant and wasn’t intended to do anything except inspire confidence in the economy. It didn’t work.

The Hoover changes were not the cause of the recession they only made it worse. Same as Obama’s. I’ll say it again, the biggest problem with this theory of spending to fix a recession is that you have to keep doing it. If you ever stop the spending, you drop right back into recession. It doesn’t fix anything, it only disguises (and prolongs) the problem. And raising taxes to compensate for all that spending kills any chance of economic growth, not to mention jobs.

jerv's avatar

@ETpro “I trust that whoever is in power… will be wise enough…”
I don’t, and I don’t care what their political platform/affiliation is.

”... to set ideological arguments designed to gain power aside and do what is actually necessary to the our economy rolling.”
Unlikely in 21st-century America. If nothing else, that will end a person’s political career. The instant we start doing anything that resembles cooperating with other nations, those in power will be ostracized by a vocal minority who has an uncanny knack for rallying loonies. That places those in power with the choice of doing the wrong thing, or being replaced by someone who will after the next election.

@Jaxk Just out of curiosity, what is the price of letting 20% of our population starve in the streets? Think of all the potential customers that all sorts of businesses would lose; the reduction in consumer demand for pretty much everything.
What is the price of letting certain things fail, like Bank of America, or a major US automaker? How long would it take to recover from such a hit?
You raise some good points, but neglect others.

ETpro's avatar

@Jaxk I went back and checked. The Hoover tax increase applied to the taxable year of 1932, so would have actually been paid in 1933 when FDR was in office.

The recessions and depressions that spending can reverse are ones that start with fear which leads to money hoarding. That is the only kind of recession or depression Government spending can reverse, and when the fear abates and hoarding stops, the spending can stop too. Economic problems like Germany faced prior to WWII, precipitated to a large extent by the huge war reparations demanded by the rest of Europe, are not ones you can spend your way out of. The only way out of that sort of problem is the way through.

Jaxk's avatar

@jerv

I guess I’m curious as to how 20% of America is staving in the streets. And I’m not sure how you assign that to my belief structure. I’ve been fairly clear in that my whole point is to create jobs. There are ways that have worked historically and ways that have not. I choose the ways that work. Now if your point is that we should have government support everyone whether they work or not, I have a problem with that.

As for the bailouts, there are good arguments on both sides. We bailed out GM so that it wouldn’t go bankrupt. Guess what, it went bankrupt anyway. As for the TARP, I actually agree with the original point. I don’t know for sure if it was necessary but it was worth the price of the insurance. If you recall, TARP was intended to buy troubled assets. It turned into loans and then into buying the companies. I was on board all the way until they used the money to buy the companies. If it was used as loans the money gets repaid and we incur no long term debt. Most of the banks have repaid the loans. The money we invested to buy the companies may or may not be repaid. Either way TARP was not a bad idea (in my opinion).

The rest however was a bad idea. Stimulus, the pork in Omnibus, the home mortgage modifications, the cash for clunkers, etc., etc. All this spending is keeping the country from recovery. The housing market can’t find a bottom, business is floundering, and no one is investing. Consequently, there is no job growth. What the administration is doing, is diverting all our resources to social programs that feel good but don’t create jobs.

We have already past the period of recession and recovery. If we had done nothing we should already be emerging from this recession. The policies of wealth redistribution and the war on business is not letting that happen. I don’t know if you have a job or not but if you are looking for one, the best way to get it is to stabilize the business environment. Everything the left is doing is counter productive to that end.

As I’ve said before, regulation bothers me more than anything else. I spent enough money last year on equipment and installation, to comply with new regulation, to hire another person. Which I could use but couldn’t afford. I spent enough this year to hire another person as well. Still could use one but still can’t afford one. And if the credit card upgrade is mandated next year, it will happen again.

If you want jobs, this has got to stop. If what you want is welfare because there are no jobs, then we’re on the right track.

Jaxk's avatar

@ETpro

I’m not sure what point your trying to make. The taxes paid in ‘33 for tax year ‘32 affect the business and private incomes in ‘32. Just like at tax hike in 2011 won’t be paid until 2012 but will affect everyone in 2011.

As for the fear argument neither the Depression nor our current recession were caused by fear. In fact I can’t think of any recession that was caused by fear. The fear doesn’t raise it’s ugly head until the recession has materialized. And it is usually justified. We want to think that if everyone (business included) would just start spending the recession would be over. Frankly, I don’t see it that way. The things being done with regulation and taxes, have real consequences. I described my personal issues above and fear doesn’t apply. I simply can’t get ahead of the regulation. And I certainly won’t borrow money to hire another employee. That would be crazy.

BTW, I don’t see the connection to post WWI Germany.

ETpro's avatar

@Jaxk I fear we are boring all by belaboring this. The stats are clear enough on what worked in the Great Depression and what didn’t I just posted a chart of how the stimulus has helped. What would you have proposed we do in 2008, and where are the proofs that remedy would work?

Jaxk's avatar

@ETpro

There are numerous examples of where tax cuts were implemented and unemployment declined. The chart you posted has been used many times and appears to be impressive but is a bit misleading. The shape of the graph makes it appear that things are getting better. They’re not.

A couple of points. When a recession hits business tends to shed jobs quickly. Basically take the hit up front instead of continuous layoffs over time. Take their medicine and wait for the economy to improve. This graph shows the pattern for the last 6 recessions. Note that the typical pattern is a sharp decline, then a sharp recovery. The 2001 recession is a bit longer but if you recall we got hit twice, the dotcom bust and then 9/11 before we actually recovered from the first hit.

Now compare those past recessions to this one. Here is your same chart with the unemployment rate next to it. The difference in the shape of the unemployment should be clear. A sharp increase in unemployment then instead of a recovery, it stays high. Similar to the Great Depression which is no surprise, since Obama is using the same tactic FDR used. Given the history, this tactic should produce a long and sustained recession.

And just for clarity, the minuscule private sector job growth is actually losing ground. We provide permanent residence for 100,000 LEGAL immigrants per year, plus our natural population growth. We need to produce somewhere above 150,000 jobs/month just to break even. Obama shouldn’t be bragging about 60,000 jobs since we’re still losing ground.

ETpro's avatar

@Jaxk The graph you posted might be described with the story about statistics never lying, but…

It shows the first 12 months of job losses in the recession of 2007. In other words, the change in employment during the Obama administration is missing in action. It’s probably not intentional. It was probably just drawn when that is all the stats that were available. I’d be the first to agree we aren’t back to full employment or anywhere near it, but would love to see what it would look like if we added the missing 21 months to it.

Jaxk's avatar

@ETpro

That’s why I posted the other graph as well. It shows the shape of the unemployment for this recession. Basically if you look at the unemployment rate it goes up and stays up.

It’s always difficult since I have to use the graphs I can find other than creating my own, but the comparison is there in the two separate graphs. Unfortunately the first graph was done early last year so there wasn’t much data for this recession. The unemployment graph (the second link), however has 19 months of data for this recession. Not clean but they are comparable.

ETpro's avatar

@Jaxk There is no question that we are dealing with an economic collapse this time much more like the Great Depression than the run-of-the-mill downturns we have had from time to time throughout recent US history. Both the Great Depression and this Great Recession were touched off by years of tax cutting, deregulation and Casino Capitalism on Wall Street. So far, this one hasn’t been allowed to become a four-year long free-fall. But what we do in the coming months will determine whether that remains the case.

Jaxk's avatar

Actually, it is not the worst recession since the Great Depression, but it can be. At least we can agree that what happens in the next year will determine the severity. We can grow out of the recession or we can prolong it.

Your reasons for the recession are unsubstantiated ideology. I was hoping we were getting past that. This may be a good point for me to bow out of this one.

jerv's avatar

@Jaxk I don’t think deregulation is exactly the problem, but rather regulating the wrong things the wrong way. Personally, I would prefer it if the academic requirements for an MBA required more Ethics classes.

I thnk we both agree that business is fully capable of regulating themselves far better than government can. The problem is that they don’t. That means that someone has to regulate them, and often times it’s the government; an entity that is rather inept as it tries to be all things to all people.

If your kid came home drunk and told you they wrecked your car, would you let it slide, or would you change the rules such that they don’t do that again? Let’s leave punishment out of it; I am merely after preventing future repeats here. The same holds true here. If business had done a better job policing themselves then they wouldn’t have to worry about government regulation nearly as much, so I feel that they brought it on themselves and are being a bunch of cry-babies about it.

Sure, it may only be a few bad apples, but if the private sector can’t exert a little peer pressure then either someone else has to pressure them or we run into even worse problems, like robber barons running wild. And since people don’t have much power (mostly due to a lack of organization), the government pretty much gets suck with the job of protecting the people who turn to them for protection. (If you want to argue that the government’s job has nothing to do with protecting people then you are anti-military and anti-police as well.)

If this were a perfect world then you and I would agree on more things, but am far too realistic (or cynical; take your pick) to see eye-to-eye with you on many issues.

Jaxk's avatar

@jerv

I can’t believe you sucked me back into this one. But your points are so commonly believed that I have to present the downside. Not theoretical but real life. Every time a regulation or law is passed, there is an upside and a downside. Very little attention is paid to the downside and the ‘Law of Unintended Consequences’ is running rampant. We’re forcing companies to either try and avoid the regulation or do the wrong thing in order to comply.

I have a small space behind my store for the garbage and storage. I use it for the dumpster, piling up empty boxes etc. I average a truck load of cardboard every two weeks for recycling. And I have to pay the guy to pick up the cardboard. The environmental inspector came by for an inspection and one of his points was that I had to cover the cardboard so that rain water wouldn’t wash anything off the cardboard into the drains (they were boxes from food stuffs). That meant I had to build a shed over the area. Not realistic. What I told him was that I could not afford the permits let alone the building of that structure. If he wanted to press the issue I would simply throw the cardboard into the dumpster. In other words stop the recycling which would actually save me money. The regulation was incentivizing me to do the wrong thing. He relented and didn’t press the issue. This is one small issue that came up recently but I think demonstrates the problem when government passes regulation on top of regulation.

We have 532 representatives in congress that have nothing to do other than write legislation full time. Each sits on multiple committees which also do nothing but think up legislation. hundreds if not thousands of committees that do nothing but think up ways to legislate the activities of citizens and business. In addition there are thousands of agencies that also think up ways to regulate. And I haven’t even gotten to the state level.

When you over regulate, when you over complicate, you force business to do the wrong thing. So to fix that you need more regulation and more complexity to handle the new problems. It is a self fulfilling prophesy.

And I do wish government would get out of the business of protecting people from themselves.

jerv's avatar

@Jaxk I agree that the government gets ridiculous, but I see that example you cited as an over-reaction to companies dumping toxic chemicals straight into the rivers.

“Very little attention is paid to the downside and the ‘Law of Unintended Consequences’ is running rampant.”
That door swings both ways. Allowing some of your fellow businessmen to get away with murder with impunity and not policing yourselves has the consequence of government doing the policing for you (and doing a bad job of it). And when execs of tanking companies take multi-million-dollar separation packages while shoving their employees out on the street with nothing, that also causes enough outcry to make people write their Congress-critters and come up with even more half-assed ideas all because someone somewhere didn’t think of the consequences of their actions.

I hate the government trying to protect me from myself. I almost stopped wearing my seat belt when it became a law that I had to. But I appreciate being protected from entities with millions of times the power and assets I have, like predatory lenders. Unfortunately, who will protect us from the government?

I have a few more thoughts and wish I had the time to clarify myself a bit better, but I have to go pick up my wife; I promised her lunch.

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