Steve Horwitz on ObamaCare:
I continue to be amazed at my friends on the left who think this bill is some sort of victory for the little guy. This will be a feast of lobbying and rent-seeking as it will be tinkered with for years if it passes. Who wins at that game? Not you and me, but Big Insurance, Big Pharma, and Big Corporations in general, who can absorb the costs and engage in the lobbying. It will kill small businesses and it will impoverish and worsen the medical care of the middle class, as well as the poor.
For all the talk on the left of being opposed to corporate power, they just don't seem to get that expanding the state's role is exactly what gives corporations REAL power through lobbying, rent-seeking and the all the rest.
I'll disagree with Steve on one thing; the left definitely gets it. From the minimum wage to agricultural subsidies to mandated benefits to this garbage, the left's economic philosophy (and recently much of the right's) is combining the redistribution of wealth with corporate back scratching, resulting in a duplicitous system that hides behind a veil of populist rhetoric and propaganda, yet ultimately ends up only benefiting the rich and powerful.
Corporate-statism is the greatest threat to liberty, democracy and capitalism, and this bill is a massive step toward that end.
Showing posts with label Redistribution of Wealth. Show all posts
Showing posts with label Redistribution of Wealth. Show all posts
I Still Don't "Get" It
Caroline Baum of Bloomberg summarizes my ideas of stimulus and government spending far better than I have. She also touches on the morality/consitutionality of this issue, something I hope to weigh in on tonight or later in the week.
Again, maybe I'm just an ignorant layman, but the arguments of Romer, Krugman and other neo-Keynesians strike me as ivory tower, academic economist-in-a-bubble wishful thinking. I'm very open-minded though, so I really want to try and "get" these arguments.
I'm trying to get at the heart of the matter, but every time I think I do, a new layer emerges. So here is where I stand now. The point of stimulus is to keep GDP and employment numbers up. And based on the way economists measure these aspects of the economy, they should go up.
Two problems. The first, as I've alluded to before, is methodology. If economists setup the model GDP = C + I + G + (X - M) and it is accepted as legitimate (whether it actually is legitimate as a measurement is a whole other matter), to counteract the fall in C and I is most easily done by increasing G. So this is done. Then economists measure it, and presto!, GDP is as it was before and G has saved the day. But this is asinine. It's like saying if my income falls dramatically I can just borrow and spend until I'm back on my feet. This isn't how the real world works.
Secondly, and more importantly, and accepting the whole spending/GDP argument to begin with (which I don't), so what? In other words, what are the real effects? What real value is being created? What is the opportunity cost of taking this money out of the private sector? What will the future costs of borrowing be?
The crux of my stance: A "job" is an action (not a thing) one private party pays another private party to perform with that party's own money because they deem the end result of that job more valuable than the price (wage) they are paying for it. When the paying party no longer feels the product of the labor is worth the wage, then the job no longer exists.
A job is not money coercively taken from some (private actors) by another (government) then paid to others (special interests) to perform arbritary tasks government deems worth paying said special interests to perform. This is not valuable. This is not productive. It is only legalized thievery and the redistribution of wealth under the subtle guise of "stimulus" and "helping the common man".
As Milton Friedman said, nobody spends money as wisely as the owner of that money when they spend it on themselves.
Rob, tell me where I'm wrong because I'm sure I'm missing something or am misrepresenting something.
Again, maybe I'm just an ignorant layman, but the arguments of Romer, Krugman and other neo-Keynesians strike me as ivory tower, academic economist-in-a-bubble wishful thinking. I'm very open-minded though, so I really want to try and "get" these arguments.
I'm trying to get at the heart of the matter, but every time I think I do, a new layer emerges. So here is where I stand now. The point of stimulus is to keep GDP and employment numbers up. And based on the way economists measure these aspects of the economy, they should go up.
Two problems. The first, as I've alluded to before, is methodology. If economists setup the model GDP = C + I + G + (X - M) and it is accepted as legitimate (whether it actually is legitimate as a measurement is a whole other matter), to counteract the fall in C and I is most easily done by increasing G. So this is done. Then economists measure it, and presto!, GDP is as it was before and G has saved the day. But this is asinine. It's like saying if my income falls dramatically I can just borrow and spend until I'm back on my feet. This isn't how the real world works.
Secondly, and more importantly, and accepting the whole spending/GDP argument to begin with (which I don't), so what? In other words, what are the real effects? What real value is being created? What is the opportunity cost of taking this money out of the private sector? What will the future costs of borrowing be?
The crux of my stance: A "job" is an action (not a thing) one private party pays another private party to perform with that party's own money because they deem the end result of that job more valuable than the price (wage) they are paying for it. When the paying party no longer feels the product of the labor is worth the wage, then the job no longer exists.
A job is not money coercively taken from some (private actors) by another (government) then paid to others (special interests) to perform arbritary tasks government deems worth paying said special interests to perform. This is not valuable. This is not productive. It is only legalized thievery and the redistribution of wealth under the subtle guise of "stimulus" and "helping the common man".
As Milton Friedman said, nobody spends money as wisely as the owner of that money when they spend it on themselves.
Rob, tell me where I'm wrong because I'm sure I'm missing something or am misrepresenting something.
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