"Bush's Market-Liberal Scam"

This is from the Ludwig von Mises Institute. They are pleased Bush wasn't able to get his Social Security plan implemented because it would have undermined free market capitalism:

Bush's Market-Liberal Scam, by Llewellyn H. Rockwell, Jr.: President Bush began his second term with a big push for "Social Security privatization." ... Let's say Bush had actually achieved his goal of creating private accounts..., and a sizable swath of the American public had invested in safe mutual funds spread across many sectors.

What would have been the result? Look at the state of the financial markets. The Bush administration would have holy Hell to pay. The public would have turned against the "market liberals" who gave us this scam. Capitalism would have been denounced as having generated yet another shock-therapy failure. Investment standards would have been ever more regulated. The companies that held most of the "private" funds would be declared too big to fail. The subprime bailout would have become a full-bore stock market bailout. This would have been declared the ultimate failure of free markets.

I think we can be pleased that Bush was unable to muster public enthusiasm for the program. ... It's hard to be grateful for anything during the Bush presidency, but the failure of a phony privatization that would have discredited free markets is one.

Of course, their point is that the government shouldn't be in the business of providing social insurance at all ("abolish it completely and instantly"), but once you accept that won't work, and it won't for a variety of reasons including significant market failures, these are some of the reasons why Social Security privatization schemes should be avoided.

Comments

[odograph]

Can't we abolish it now, and then do a bailout plan later?

[Jay]

Lets not be too narrow minded and realize there are more than 2 choices (abolish S.S. immediately or keep it the same). I'd love to hear a democrat stand up and be pro-choice (when it comes to something besides abortion). Enroll everyone in S.S., but give them the option by the age of 18 to opt out (with no recourse) if they want to be responsible for their own retirement savings.

Of course we know freedom and personal responsibility are two words absent from a socialist's vocabulary.

[Patricia Shannon]

Jay, you are living in la-la land, where 18-year olds have the wisdom to decide something like this.
The optimism that is required for progress is the same thing that keeps people from realistically planning for the long-term future. And you might be able to see into the future, and know that you will never have a stroke, or have a child with cancer, or get paralized by a drunk driver, or all the other things that happen to real live human beings, but most of us can't do that.

[Mark Thoma]

No recourse? Will you let them die on the streets? If not, some will opt out, won't pay a dime, and then you will pay to support them. That's one of the market failures.

Wouldn't you rather have them pay along the way so you won't have to pay for their retirement when they can no longer work?

[Patricia Shannon]

Jay, evidently the average person is supposed to be wiser and more knowledgeable than the "experts" who have gotten our country into the current mess.

[Patricia Shannon]

A lot of people won't die quietly in the streets. They will do what they have to do to survive. Some will be so stressed out they snap and commit violence. It's no coincidence the crime rate has started going up again.

[ken melvin]

Only in America is ignorance held to be equal science and science considered by many to be ignorant. Back to the subject at hand, ignorance, some need to read a few books about how it really was in them thar good old days. Took a long to to rise up out of the muck; why in the hell would someone want to go back?

[James Killus]

One wonders how the von Mises Institute feels about the Medicare Prescription Drug Plan. That was an expansion of Medicare benefits carefully crafted to skim off as much Medicare tax money as possible, stuff it into the pharmaceutical companies' profits (by specifically disallowing use of government market power to bargain down the costs), then use the resultant increases in projected Medicare payouts as more evidence that "Social Security is in trouble!"

Quite good work, actually, if by "good" you mean "lying greed-driven class warfare."

All pension schemes transfer goods and services from one generation to another. The important questions are primarily a question of how much toll-taking occurs along the way. Social Security has a minumum of toll-taking, which bothers the toll-taking class quite a lot (those who prefer econospeak substitute "rent seeking" for "toll taking").

[ken melvin]

Figure Bush's Social Security Plan was prescient. Foreseeing time when inflating housing scam/economics would collapse, it was his backup/replacement economic model.

[donna]

Yes, according to the Republicans, we are all supposed to make it on our own and pay no taxes whatsoever - until we need to be bailed out by the Fed, if we are too big to fail....

[Jay]

"All pension schemes transfer goods and services from one generation to another."

James: Not necessarily. If the institution fully funds the pension so that it can invest with reasonable risk it is a transfer of ones production to that same person later in life (and often voluntary). Now of course the way the accounting for S.S. works, that system is blatantly a coerced transfer of goods and services from one generation to another.

"No recourse? Will you let them die on the streets?"

I guess as a philanthropist I am more optimistic of the effectiveness of charity. If we didn't have S.S. and Medicare, I'm sure Oprah, Bill Gates and others would voluntarily help those in need. Since medical technology has progressed it has become near impossible for charitable (mostly religious) hospitals from helping the needy, but that doesn't mean that other institutions will not step in and fill the void.

"Jay, you are living in la-la land, where 18-year olds have the wisdom to decide something like this."

I default to evolution. Rather than the law of large numbers (get as many people crammed on the face of the Earth to hopefully increase survivability) I prefer to allow wealth to transfer to individuals with the highest probability of survival.

"They will do what they have to do to survive. Some will be so stressed out they snap and commit violence. It's no coincidence the crime rate has started going up again."

Nice explanation Patricia. Using extortion to justify the confiscation of wealth. As for the crime rate, you might want to exogenize the Roe v. Wade factor on crime. The 1973 decision lowered crime during the 1990's as abortions are disproportionately skewed towards those that would be prone to criminal activity and the first Roe abortion would have otherwise hit the prime age of criminal activity in the 1990's. Likely the effect over shot and is now settling in at a new equilibrium slightly above its nadir last decade.

[Jay]

More accurately it should read:

"Nice explanation Patricia. Using extortion to justify the confiscation of ones private property."

[ken melvin]

Survival of the fittest? The homeless who survive 15 years on the street be the fittest.

[anne]

What is important, always important, always most important, is to be as vbicious, as disgusting, as sickening as possible. Always but always be vile.

[anne]

Possibly the sickeningly vile comment ever; destruction for the sake of destruction. Imagine my suprise.

[Jay]

Whats is important, always important, always most important, is to respond with emotional empty rebuttals when one is completely devoid of ideas.

Your reliance on subjective faith based arguments would make a (insert religion) fundamentalist proud.

[Jay]

BTW: There is nothing compassionate about going to your neighbor, pointing a gun at them and demanding that they transfer some of their private property to someone else with less.

[Andrew]

'Coercion and Extortion.' Two words used above to describe the cost of living in an advanced democratic society. Fortunately there are still alternatives to living in a democracy.

[degustibus]

Not to worry, good Christians will step up and help their less fortunate brothers and sisters.

Then there's that loaves and fishes thing....who says there's no free lunch....

[evagrius]

"No recourse? Will you let them die on the streets?"

No. What you do is charge them with fraud and then execute them.

[Jay]

"No. What you do is charge them with fraud and then execute them."

Nah, a much better idea would be to turn doctors into slaves of the state. Government officials will then tell the doctors which procedures they can provide and which they can not, and the doctors will receive whatever compensation the slave owners (politicians) decide they deserve.

[Jay]

"Then there's that loaves and fishes thing....who says there's no free lunch...."

No, but I do hear their is such thing as free healthcare from people like Michael Moore. Moore's previous job must have been an auditor with Arthur Anderson that led the team overseeing the Enron books. Then the Enron scandal wasn't as much fraud from the auditors side as it was having an auditor oblivious of basic accounting responsible for ensuring that the books weren't cooked.

[Icarus]

The fitting irony of Michael Moore was that he recently discovered vegetables. 100 pounds overweight, and screaming it's the govt's fault for keeping midwesterners unhealthy. Sad, and ironic.

The day when personal responsibility is an expectation, will be the day we can make a dent into the cycle of poverty. Until then, we will only have closet socialists who express unlimited greed of other people's money.

[esb]

Jay, my good man,

would you say that "its every woman/man for her/his self" accurately describes to core of your value system?

[Andrew]

The day when personal responsibility is an expectation, will be the day we can make a dent into the cycle of poverty.

This is precisely the sort of thing that drives me nuts about libertarians and the right. I have never heard anyone discount personal responsibility as an important virtue, but when events occur across a broad swath of a population over a relatively short period of time, the problem is systemic, not individual.

When unemployment rates go up 3% over the course of a year or two, millions of people did not suddenly become obstinately lazy. Diabetes and obesity reaching epidemic proportions over the course of a couple decades is not rooted in the sum of a disconnected lot of individual failures. There is a systemic issue which ought to be addressed.

The incessant referral to some spirit of rugged individualism (which was never an actual component of achievement in the United States of America) as the key to success is absurd.

[Jay]

"but when events occur across a broad swath of a population over a relatively short period of time, the problem is systemic, not individual."

Andrew go read some Nash on how individuals should rationally make decisions.

"would you say that "its every woman/man for her/his self" accurately describes to core of your value system?"

Don't discount that in such a system individuals in their own self interest would form voluntary collectives. And the best part about voluntary collectives is that they are self enforcing (the threat of one member leaving keeps others from defecting). Of course as Chinese farmers learned the hard way, once you form a coerced collective and there is no threat of exit, your marginal production is negligible and output is not shared based on your input, everyone does nothing and millions of people starve to death.

A government that , protects life, then liberty, then property (in that order) would be fine by me. Such a government would actually follow our Constitution. The 10th Amendment is the most abused part.

[esb]

Well, Jay, this nation is a voluntary collective, inasmuch as individuals can depart voluntarily (still with their money, since currency controls are not [yet] in effect).

So, why should not this voluntary collective elect to insure itself and all of its members in various ways, through the intermediation of a federal government, resulting from the operation of the political process, the participation in which is also voluntary?

[Conrad]

How will the US ever regain it's competitive edge and break out of the spiral of globalization job losses, profligate war spending, and recession, unless we endorse the value of education and healthcare for all American workers, not only those who can afford the market rate?

[esb]

The pooling of risks is then that of the entire voluntary collective, and assuming the absence of certain corruptions, should actually present greater efficiencies as well as greater justice.

Agree or no?

[Jay]

esb:

Remind me what P(my vote swinging a federal election) = ????

Mob rule is not a voluntary collective. If my employer and I agree that I will not pay payroll taxes we go to jail. And I'm not sure you can consider the U.S. a voluntary collective when every time a locality tries to secede the Union, an oppressive president sends in the military to kill enough people that the locality rescinds its intentions of secession.

[Jay]

esb:

"assuming the absence of certain corruptions"

Now that is the talk of someone in la la land.

The pooling of risk in practically all instances, has the same properties as summing multiple variance functions where perfect anti correlation does not exists.
The law of diminishing returns applies, and as you increase the size of the collective you increase the economic distance between the individuals in the collective, which increases the probability of fraud. At some point the costs of adding an additional member to the collective is greater than the marginal gain from adding another member.

A more concrete example. Once you've created a reasonably diversified portfolio of 20-30 stocks the decrease in diversifiable risk from adding the 31st stock becomes so small it is overshadowed by the commission payed to purchase said stock.

[esb]

Well, think of this.

In a family with a husband/father, a wife/mother, a son and three daughters, the father and one daughter are not really what can be termed a collective. It is the family itself.

The family does a much better job of pooling its risks than would the father and one daughter, the mother and son and then the two other girls acting as different units (under most circumstances).

The mob only makes its appearance in the USA (as it did during the race riots of the late 1960s) when subgroups find themselves totally (and unjustly) excluded from the benefits that are (to an extent that many fail to fully understand) actually generated by the operation of the collective as a unit rather than by the separate actions of the individuals of which it is composed.

[bullbust]

A government that , protects life, then liberty, then property (in that order) would be fine by me.

And why should it be like that?

I mean, you are born naked, as an animal. Everything else is an intervention in the natural order.

You think that a govt that does X,Y,Z is good. I think that a govt that does A,B,C,D is good.

You may come up any rationalization that X,Y,Z is better, but I don't have to accept it.

How will you resolve that?

Maybe you should think a bit more, about power and conflict and give up you adolescent fantasies. As Blake said, One law for the lion and ox is oppression. Why should the laws be written to protect you, the ox, from the lion the predator. Why should there be a govt so that "life, liberty and property" of the oxes be protected from the lions?

You can come up with whatever justification you want, but it will never be acceptable to the lions.

And why should the oxes not set up a govt to protect themselves from the lions? You can come up with whatever justification you want - that it is natural that the lions eat the oxes, and a govt is evil - but it will never be acceptable to the oxes.

You seem to be under the delusion that everyone will accept a system that works out for your good. They don't have to. Why? Just like that. They dont even have to give you a reason.

Frankly, I cannot understand the paradox of your beliefs - Your argument is "every man for himself". But you depend on the benevolence of others - that they should give it a fair hearing and then act justly - to accept your ideas.

The natural response to "everyman for himself" is "screw you".

Why should anyone even listen to you?

[Andrew]

go read some Nash on how individuals should rationally make decisions.

Ah, avoiding the issue with an implication of ignorance. Not a unique tactic.
Go read Rawls on how people should rationally make decisions. Go read Locke on how people should make decisions. Go read Heinlein on how people should make decisions. Go read Harry Potter on how people should make decisions. Go read the Bible on how people should make decisions.

If everyone behaved as they should rationally behave in game theory, then life would be just dandy. Now that's real freedom. A bunch of robots acting exactly as they should in some theory 99% of the population has never heard of. What a unique solution: if everyone were simply rational, political and economic structures couldn't possibly affect societal outcomes and we could all live happily ever after in the knowledge that Calvin was right, and material success is a reflection of your virtue. No need to subject ourselves to this 'mob rule' called democracy.

[anne]

"As for the crime rate, you might want to exogenize the --- v. ---- factor on crime."

What is important, always important, always most important, is to be as vicious, as disgusting, as sickening as possible. Always, but always, be vile. Possibly the sickeningly vile comment ever; destruction for the sake of destruction. Imagine my suprise.

[anne]

"I'd love to hear a -------- stand up and be pro------- (when it comes to something besides --------)."

What is important, always important, always most important, is to be as vicious, as disgusting, as sickening as possible. Always, but always, be vile.

[Cyrille]

Well, with regards to the advice of reading Rawls on how people should ethically (I changed that word -rationally is too loaded a word, if you accept the game theory definition, then of course the outcome IS the game theory one -by construction) make decisions, that is a very, very good suggestion.

If only USA could be more Rawlsian...

[reason]

What Jay is proposing sounds a bit like left Libertarianism with two very important omissions.
a. He fails to acknowledge that property rights (especially on land) are enforced, exactly the same as taxation, by the state's monopoly on violence.
b. He failed to notice the special and artificial privileges granted to corporations.

Now me, I add a third issue - in nature protection of property (i.e. territories) comes at cost. This naturally limits the accumulation of wealth. Accumulation of wealth should be tolerated for pragmatic reasons, but at a cost which increases with the accumulation.

[reason]

P.S. I'm not a left Libertarian, but I have some sympathy for their position. I find right Libertarians are just trying to use questionable arguments to make their taste for paying less taxes sound like a moral position.

[Gil]

Heh heh. Who knows what the argument everyone likes to use but doesn't like getting used against them?

'Love it or leave it' - heh heh heh.

I'm a believer that quite frankly Libertarian Socialists are more consistent than the Capitalist ones. I reckon this because the Libertarian Capitalists types seem to have this thing against government yet don't seem to care when businesses can exercise its own power. "Oh but with businesses you get a choice" or "the government's choices seem more unfair" or something like that.

"The government won't let us secede". What do you want that to mean? Is that akin to keep a rental property to yourself arguing you live in the house and do all the work and the landlord only collects the rent? Or you don't like the farm owner's rule so you take a piece of fertile corner of his land that isn't being used and farm that? Or if you leave one government-controlled country just to find more land run by more governments, so what? Or if all the good land is under the rule of some government and the only unclaimed land are the crappy parts of the world, so what? Somehow I don't feel any more warm and fuzzy when Libertarians use choice argument when people are faced crumby choices too.

[akatsuki]

Only a partisan hackery website could promote laissez-faire style economics on the one hand while using the failures of private mostly-unregulated markets as their evidence.

[Jay's Mom]

"The natural response to 'everyman for himself' is 'screw you'."

You killed him with that one bullbust. The finest one-line rebuttal to eye-glazing libertarianism I've seen lately.

Thanks.

[degustibus]

I like this version: Each for himself and God for all of us, said the elephant as he danced among the chickens....

[Holly W.]

Interesting. I'd read that one reason for the Bush push for private social security accounts is a generally held belief among GOP honchos that getting people to invest in the stock market will by and large turn them into Republicans, with all the implied embrace of free markets. But here the von Mises Institute seems to be arguing pretty much the opposite -- forcing people into the stock market will turn them against free markets when things go bad.

I love their horror at the thought that if all Americans had personal SS accounts right now, the result of all this financial markets ugliness is that "investment standards would have been ever more regulated." It looks to me like we're probably heading that direction anyway.

[John V]

reason,

Now me, I add a third issue - in nature protection of property (i.e. territories) comes at cost. This naturally limits the accumulation of wealth.

How so?

[Holly W.]

James Killus: All pension schemes transfer goods and services from one generation to another.

Not true. The Singapore Central Provident Fund hinges on making citizens put away 20% of their income every year, with an additional 14.5% contributed by their employer. Singaporeans are expected to pay for homes, medical care, and retirement out of these personal accounts.

I can't see this kind of scheme ever being popular in the US, though.

[ken melvin]

Most don't think. Trained at an early age to plug everything into a handed down paradigm, they keep getting the same results.

[anne]

Holly:

"The Singapore Central Provident Fund hinges on making citizens put away 20% of their income every year, with an additional 14.5% contributed by their employer. Singaporeans are expected to pay for homes, medical care, and retirement out of these personal accounts."

Please add a reference if possible; I keep hearing about this interesting program, but have found no clear description and evaluation of the program.

[Holly W.]

Anne, a Singaporean friend of mine recommended this web-site when we had a discussion about Social Security when Bush was trying to privatize it; I found it very informative: www.vandine.com/cpfa.htm

[Holly W.]

Also, http://mycpf.cpf.gov.sg/Members/Gen-Info/Con-Rates/ContriRa.htm, which shows contribution tables.

[anne]

Excellent; I will go through the references in a little while. I have also heard considerable praise of the move to a universal health care system in Taiwan, which wes reasonably recent, and I need a reference here as well which I will come by.

[rufus]

"James: Not necessarily. If the institution fully funds the pension so that it can invest with reasonable risk it is a transfer of ones production to that same person later in life (and often voluntary). Now of course the way the accounting for S.S. works, that system is blatantly a coerced transfer of goods and services from one generation to another."

"These problems have received particular attention in America, where the Pension Benefit Guaranty Corporation (PBGC), which insures corporate defined-benefit schemes, seems perpetually in danger of insolvency. Although its reported deficit has eased thanks to improving markets and legislative reform, the difference between assets and expected liabilities is near $19 billion. This deficit is unsurprising. According to the report, companies insured with the PBGC have a collective unfunded liability of $340 billion. While this is slightly less than in 2005, America’s corporate schemes are still far from solvency."

http://www.economist.com/finance/displaystory.cfm?story_id=9172498

"I guess as a philanthropist I am more optimistic of the effectiveness of charity. If we didn't have S.S. and Medicare, I'm sure Oprah, Bill Gates and others would voluntarily help those in need. Since medical technology has progressed it has become near impossible for charitable (mostly religious) hospitals from helping the needy, but that doesn't mean that other institutions will not step in and fill the void"

"you might want to exogenize the Roe v. Wade factor on crime"

"And I'm not sure you can consider the U.S. a voluntary collective when every time a locality tries to secede the Union, an oppressive president sends in the military to kill enough people that the locality rescinds its intentions of secession"

"A government that , protects life, then liberty, then property (in that order) would be fine by me."

So I guess we should rely on the benevolence and faith based decisions of philanthropists like yourself, when corporations fail to complete the employment contract in properly funding pensions.

Donating money to 'right to life' organiztions or the NRA does not make you a philanthropist, just as you blowing smoke up my ass does not make me a baloon.

[Patricia Shannon]

The reason we have government programs such as Social Security is that relying on private charity did not work. Another example of failure to learn from history.

[Patricia Shannon]

Holly W. says...

Not true. The Singapore Central Provident Fund hinges on making citizens put away 20% of their income every year, with an additional 14.5% contributed by their employer. Singaporeans are expected to pay for homes, medical care, and retirement out of these personal accounts.

There's something wrong here. They must make a lot of money to be able to pay for home, medical care, and retirement on 20% of their income. A lot of hardworking people in this country don't make enough to live on w/o including medical payments and retirement savings.

[swells]

Jay,

Don't fret. The folks here have some strange ideas about how good coercion is for people. Personally, I don't get it. After all, human society began as a means of insulating people from the coercions imposed by nature; i.e., starvation, depredation by predators, etc. We've progressed to the point where the coercion of all by all has become an end in its own right. Hey, we could've just forgone getting all civilized in the first place.

Of course, my problem with the coercion of all by all is that it's mostly just for a few, the ones with their hands firmly on the reins of political power. Has anyone else checked out the corporate welfare stats lately?

[Patricia Shannon]

Swells, did you think we would forget you're the one who said (1) that people shouldn't depend on social security, they should live with their children when they got old, and later that day, or the next day, said (2) people shouldn't have children unless they could afford to pay for any possible outcome. I wish I could say that such contradictory "thinking" were "strange", but it's quite common, as both observation and scientific studies have shown.

http://www.npr.org/templates/story/story.php?storyId=19231906
Dissecting People's 'Predictably Irrational' Behavior

[swells]

Nice to see I'm remembered but I don't see the contradictions there. I think the positions are consistent. I don't think I said "unless they can pay for any possible outcome". After all no one is able to predict the future with perfect accuracy. I think I said something along the lines of should have to demonstrate some threshold ability to pay for the children they have. And I do think old folk should live with their children. I'm not opposed to charity for old folk who had no children or whose children died. In fact, I'd even contribute voluntarily. Where's the inconsistency?

Let's get real here. Any current surplus soc sec money gets spent as soon as it gets there. The surplus gets spent mostly on corporate welfare of one sort or another. What takes its place is an IOU drawn on future generations.

[me]

"Capitalism would have been denounced as having generated yet another shock-therapy failure."

There will already be hell to pay when all the stolen pensions that were replaced partially with 401Ks prove woefully insufficient.

I think the failure of the 401Ks will go a long way to dispelling they myth of market millionaires with social security.

[Cyrille]

What if said children are less than enthusiastic about the idea?

[anne]

"And I'm not sure you can consider the U.S. a voluntary collective when every time a locality tries to secede the Union, an oppressive president sends in the military to kill enough people that the locality rescinds its intentions of secession."

Shamefully, shamefully the Civil War was fought for the right to enslave others, fought when those determined to enslave others chose to attack and kill American soldiers beyond any and all attempts to maintain peace. The Civil War was begun by slave holders for the right to enslave others anywhere and everywhere.

[swells]

You got that right Anne. I just LOVE the apologists for flying the confederate flag around here (I work in SC where it still flies). They justify the war as being about "states rights". Most of them have no idea how silly that argument is from an historical perspective. States rights were the last thing the states that formed the confederacy wanted when it came to enforcing the fugitive slave laws. Then, they wanted all states to be forced to return slaves that had managed to escape their bonds. Hypocrites every one of them.

[swells]

Cyrille, well you have a point. I guess I would ask how it is better to force some stranger to take care of the parents in their old age then when their own children don't want to do so. Force the children to do it if somebody HAS to be coerced.

I just want to be clear here. I don't think people should be coerced into doing things. Concomittantly, I don't think anybody deserves to benefit from any social scheme they won't participate in voluntarily. I want participation in social schemes to be voluntary as a check and balance against the abuse of such schemes by those who administer them. Right now, for instance, the social security excess is being mostly spent on one form of corporate welfare or another. An individual has no effective recourse against the fruits of their productivity being abused in that manner because you can't "vote with your feet" by removing yourself from that abuse.

[anne]

Swells:

"States rights were the last thing the states that formed the confederacy wanted when it came to enforcing the fugitive slave laws. Then, they wanted all states to be forced to return slaves that had managed to escape their bonds."

Interestingly and importantly argued.

[Cyrille]

"I guess I would ask how it is better to force some stranger to take care of the parents in their old age then when their own children don't want to do so. Force the children to do it if somebody HAS to be coerced."

Aside from the deliberately biased language (calling redistributive programs coercion is deliberately biased language), it is obvious that it is much WORSE to impose anything on the children -who may have a lot of problems with their parents, possibly even mutual hatred, than to have a global system with pooled revenues, and no one is directly, identifiably, paying for one specific person.

Anyway, saying "I don't think people should be coerced into doing things" is just a longer way of saying "I want anarchy". Trouble is, anarchy is not a stable situation in the human world (if you create a situation of true anarchy, you will immediately see local relationship of domination occur, probably around those with the greatest potential for physical harm). So it's almost like saying "I want the ability to fly, to live forever without needing to breathe, and to grow a seventh arm".

[long time healing]

My siblings and I were physically and psychologically abused by our parents. They remained continually verbally abusive after we grew up and left home. (After I started hanging up the phone, or walking out, they became less so to me.) I would rather have been aborted than to have lived in such misery and black depression for years. Now that my remaining parent is elderly, I am grateful he is financially independent. I wouldn't let him starve. They did send me to college, and have helped me financially at times. I'm happy for my tax money to go to his social security and government pension. But if he came to live with me, I would have to listen to his constant criticism, in a tone of voice which would be appropriate in speaking to a serial sadistic murderer of children. When the rest of the family forced my grandmother to go live with them when she was dying, she stopped eating and was dead in less than 2 weeks. I would rather die than live with my family.

[swells]

Cyrille, well I don't have any objection per se to redistributive programs. I do have a problem with redistributive programs wherein participation is coerced. Are you saying that redistributive programs cannot exist without coercion? I have no problem with global systems with pooled resources. I have a problem with coercion. I recognize the need for eminent domain, strictly construed with fair recompense. But take that for an example. A genuine requirement for a civilized society over time is manipulated and the result is some guy who gets the government to condemn family farms so he can build a baseball stadium to line his own pockets (George W. Bush).

says...

long time healing, You point is taken. However, I have to wonder why such an a##hole shouldn't be left to starve in their old age.

[long time healing]

says,
Well, when I read letters to Ann Landers from people whose parents had psychologically disinherited them for such things as marrying outside their faith, being homosexual, or otherwise not cow-towing to their parents demands, it made me realize that I could not imagine my parents doing that, even though they might make me so miserable I tried to commit suicide twice while dependent on them. While mostly they were abusive, in crisis they stood by us. I feel that although my parents were very destructive to us, there was also a loyalty that we, consciously or subconsciously, were aware of.

[Cyrille]

Well, once and for all, tax are not coercion. Neither are dedicated revenues like SSFICA.

So the use of word coercion in that context is purely emotional, and meaningless.

As Lafayette explains in much better English than I can do, no wealth is gained in isolation. And the tax system, as well as government benefits from it, are part of that environment. So it's you're after tax income which you may consider as having earned (although some business models around make the word "earned" somewhat undeserved). It's not the Government coercing you into giving away part of what's yours. What is taxable isn't yours, and any scheme to keep some of that is thievery.

Social Security, Medicare and other such programs are not coercion.
Which is not to say that there should not be daily rioting against a Government that dares to throw so much money and lives away in Iraq when there is so much to be done that would be worthwhile.

[swells]

Cyrille, no knowledge is gained in isolation. All knowledge comes from one's environment. Therefore, there are some subjects that one cannot think about under one's own volitional control. On some subjects, one simply must accept that one is to believe what one is told to believe. A fairly senseless argument don't you think? How is your formulation any better.

I am all for people paying their dues as part of society and I am all for making sure nobody games the system. What I am not for is forcing fundamentalist christians (who by and large I despise) to give their money for purposes they find to be morally reprehensible (irrespective of the fact that I find their morality to be anything but moral). I am particularly incensed that my productivity is perverted for the production of nuclear weapons that cannot be legitimately used in self-defense for precisely the reason that their effects cannot be limited to an aggressor.

How easy would it be to set up a system that says something like, you must pay 50% of your income to the state for public purposes but you get to explicitly direct how that money is spent. In the computer age, that would be pretty simple to do. But no, that will never do. You know why? Because that would remove the political classes ability to direct funds toward specific ends and there would be no money from lobbyists coming their way for influencing which specific ends are selected.

I also hold that while I benefit from my participation in society, society also benefits.

[swells]

long time healing, I understand what you are saying. I am sympathetic to your position. I guess my bottom line is that the amount of support someone gets in their old age should probably be decided by someone who is in a position to make some informed judgement about how much support they OUGHT to get. I think it is perfectly fine if someone suffers the consequences of being an a##hole by being made dependent on those they earlier abused. Sounds like justice to me.

[Cyrille]

"How easy would it be to set up a system that says something like, you must pay 50% of your income to the state for public purposes but you get to explicitly direct how that money is spent."

Like that would produce a workable country...

[Cyrille]

"I think it is perfectly fine if someone suffers the consequences of being an a##hole by being made dependent on those they earlier abused. Sounds like justice to me."

Sounds like vengeance to me.

[anne]

Swells reminds me to look in coming days to Reinhold Neibuhr's "Moral Man, Immoral Society" as a response to the wish to be individualistic an allow olther to be so.

[anne]

"and allow others to be so."

I really do need a new "D" key, and likely an "S." Sorry, but I am afraid of tech support.

says...

Swells said: "Of course, my problem with the coercion of all by all is that it's mostly just for a few, the ones with their hands firmly on the reins of political power. Has anyone else checked out the corporate welfare stats lately?"

Speaking of corporate welfare, David Cay Johnston has a new book out- Free Lunch: How the Wealthiest Americans Enrich Themselves at Goverment Expense...
For those of you in the Portland, OR area, David will be speaking at First Unitarian Church this Friday evening at 7 PM.

[swells]

Cyrille, been to any ghettos lately? Like the system you propose has produced a workable country? Let's be clear here. Implicit in your position is the proposition that people are stupid and venal. If that is the case, exactly which magic wand is it that gets waved that makes decisions more rationally when this stupidity and venality is exercised in the aggregate. Any argument you could make is at its essence an argument for the averaging effects of large numbers or for the desirability of the rule of ever noble philosopher kings. My proposal would yield an averaging by virtue of large numbers (less the corrupting influence of concentrated power).

Anyone who wants to be king is demonstrably not noble nor much of a philosopher.

[dale]

the above comment about DC Johnston was mine.

[swells]

anne, thanks for the heads up on Niebuhr, I haven't read that but intend to. Don't know how I missed it to date.

[swells]

Dale, can't wait to get my hands on Johnston's book. Thanks for mentioning it.

[Andrew]

anne, thanks for the heads up on Niebuhr, I haven't read that but intend to. Don't know how I missed it to date.

You may peruse this book for free. I love the intertubes.

[swells]

Andrew, thanks very much for the link. I've read a few pages now and I can tell that this will be fertile ground. I've just finished re-reading Popper's The Poverty of Historicism along with his preceding The Open Society and Its Enemies Vols I and II. There are remarkable concurrences between Popper's thesis and that of Niebuhr. I can't believe I never read this work by Niebuhr before now. Then again, I was educated in America.

[Cyrille]

"Cyrille, been to any ghettos lately? Like the system you propose has produced a workable country?"

I wasn't aware that I had proposed any system at all.

But, systems like social security in place in a workable country? Hell, yes, all the countries in Europe for example (I have some problems calling USA workable).

Whereas your system, even if it were technically feasible... What are the odds that a critical but obscure function would not end up awfully underfunded? That funds would accrue to some areas that wouldn't know how to spend them? That media would not influence people (they managed to make quite a few people believe that Saddam Hussein had something to do with 9/11 didn't they...)?

[anne]

Andrew, that was kind of you and I was just about to list the Google reference having forgotten the name of the book and not even spelled Reinhold Niebuhr correctly. I want to reference a helpful review, but have never found a review I liked on Google. I have to look further.

Moral Man and Immoral Society
A Study of Ethics and Politics
By Reinhold Niebuhr

[Patricia Shannon]

Yes, we do need coercion on some things. People aren't necessarily evil, but they do see things from their own perspective. Since you think so much of voluntary organizations to do what needs to be done, I'm sure you're in at least one - Not. I've been in in several volunteer organizations of various kinds, and I've only met one libertarian, in an Amnesty International group, where all we had to do was write a few letters a month. As they say, 90% of the work in (most) of these organizations is done by 10% of the people. 90% of people need blood at some point in their life; 10% give blood at some point. The people who run these groups are mostly kind and caring people who don't inquire whether someone who needs the help of the organization has helped others when they were able to, or were uncaring jerks. So the kind of people who go thru life never helping others will get help. So they have an advantage, they eventually come to dominate society, and society falls. Your ideas only work in small societies, where everybody knows who pulls their fair share and doesn't, so everybody knows they won't get help if they don't get it. If you are in the work force yet, you should have noticed that there are people who will cheerfully take pay for little work, while thinking themselves worthy of it.

[swells]

Cyrille, your latest points are well taken. I'm thinking off the top of my head here and don't have all the particulars of the idea fleshed out. It might be unworkable and never be fleshed out. Most radical ideas don't pan out and it seems particularly so when the radical ideas are mine.

Nonetheless, I think there is great moral hazard that is not sufficiently addressed in state sponsored schemes where participation is coerced. I say this based on experience. We have a lot of coerced participation in social schemes in this country and, to be blunt, the results don't look so attractive to me. The education system is not, in too many cases, educating. Ah what the heck, the examples are too numerous to tediously recite. What does seem to be working with remarkably well-oiled precision are the mechanisms that funnel coercively extracted tax payer funds to narrowly focused special interests. There's a lot wrong with that picture in my world view.

[Patricia Shannon]

I admit I wouldn't mow my yard if I weren't under threat of getting it mowed by my mobile home park manager and getting charged $50 :) I like tall grass that waves in the wind.

[swells]

Patricia, well here's the basics. I work a job at a non-profit for about 50% of what I would/did make in the for-profit world. Mainly because I think the non-profit is doing something that is good to do. I volunteer for my local hospice program. I contribute funds to the ACLU. I was a Big Brother for some time. I suppose I could do more but my days are pretty full. Oh, and I donate blood frequently.

[Patricia Shannon]

swells says...

Nonetheless, I think there is great moral hazard that is not sufficiently addressed in state sponsored schemes where participation is coerced. I say this based on experience. We have a lot of coerced participation in social schemes in this country and, to be blunt, the results don't look so attractive to me. The education system is not, in too many cases, educating. Ah what the heck, the examples are too numerous to tediously recite. What does seem to be working with remarkably well-oiled precision are the mechanisms that funnel coercively extracted tax payer funds to narrowly focused special interests. There's a lot wrong with that picture in my world view.

You have a valid point. And I appreciate thought experiments and sharing of ideas. I've learned much by conversations here and elsewhere. But, as you are realizing, that doesn't mean going to opposite extremes will work, either. Some countries seem to be more successful than we are at it, some less. We're never going to have perfection. We have to do the best we can. I have more thoughts, but have to get back to work. Chances are someone else will say things better than I do. If I gave you a hard time, it's because you were sounding for a while like the libertarians on the right, some of whom leave comments on this board. I do think this board is helping nudge us in the right direction.

[swells]

Patricia, well if I had to put a label on myself it would be libertarian although I don't think the label quite fits.

[James Killus]

I'm sorry Ithat I was out for a day, as everyone seems to have misunderstood what meant when I said:

All pension schemes transfer goods and services from one generation to another.

People seem to believe that money is a good or a service. It is neither. It is the promise of purchase of a future good or service. Likewise, "investments" are also promises of value transfers in the future.

No pension scheme socks away food, clothing, housing, medical care (as if that were possible) to give to pensioners later in life. All pension schemes depend upon future claims to those things, transfers between generations, just as a bond is a promise to transfer money later, and money is a promise to transfer goods and services later.

People tend to be so hypnotized by the propertarian, monetarian world-view that they forget just how contingent all these things are--until some crisis comes along and reminds them that promises are still just promises, laws can and are changed, and "every man for himself" works exactly as long as that man is the meanest son of a bitch in the valley, and as soon as he falters, his bones are striped and left for the vultures.