Presidential election, 2016

[Bob Butler 54]

(11-14-2016, 10:32 AM)Kinser79 Wrote: I will refer to Galen's signature here where he quotes Ludwig Von Mises.  "If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action."  As such, while I'm not in favor of total laissez faire, there is a need for certain regulations to prevent fraud, abuse, selling of false products, and safety but apart from those few necessary and common sense regulations--many regulations imposed federally are merely tools used by certain industries to limit their own competition.

I reject Galen's signature line.  Some government policies are better than others.  The existence of bad policies does not imply that all policies are bad.  I don't see the logic at all.

(11-14-2016, 10:32 AM)Kinser79 Wrote: I believe I've spoken on the issue of regulatory capture before--I know I have done so extensively in regard to vaping.

But let me address your overly simplistic model.  You have proposed four different sectors of the economy naming them Main Street, Easy Street, Wall Street, and Pennsylvania Avenue.

I would argue that there is no easy street sector.  There is a capitalist class to be sure, but they mostly fall into either the main street sector, or the wall street sector.  There simply isn't much in the way of an idle wealthy in this country and never has been (unless you are attempting to portray media celebrities and sports figures as an entire economic sector).  The vast majority of those you'd class as being "Easy Street" which includes Daddy either have managed inherited wealth well, or have created their own wealth.  

As to the "wall street sector" it exists and services main street or at least in theory does.  There are of course a large number of individuals who make their living simply by manipulating bits of paper (or perhaps more accurately now electronic data) on spread sheets on Wall Street.

Right now, the interaction between Wall Street and Easy Street aren't key to any points I am making.  If you wish to make the simple model even simpler, sure.  If I ever do want to talk about the interactions between the Robber Barons as individuals and the finance industry, I might use both terms, but I have no reason to insist that you use them.

(11-14-2016, 10:32 AM)Kinser79 Wrote: The simple fact of the matter is this.  Wall Street and Pennsylvania Avenue must both consume a portion of the capital to exist, but it is main street that creates all of the capital to start with.  That is created through savings and production.  In short people make things from labor and raw materials and thereby increase the aggregate wealth.  At most Pennsylvania Avenue can take capital from Main Street and give it to Wall Street or it can take it and give it back to Main Street.  Of course how that capital is given back has consequences.  And because different choices lead to different outcomes we will see that spending on necessary infrastructure (the Whigs called them "Internal Improvements") will have a different result than passing out a welfare check.

In the former once that infrastructure is built or refurbished, main street gets jobs immediately, but also lowered costs (in refurbished infrastructure) and new avenues for future investment and development (new infrastructure).  As such borrowing for such a task results in a net gain in taxes to the treasury and any debts incurred are canceled out.  

On the other hand if Pennsylvania Avenue instead buys the poor bread and circuses the money is spent without any future return.  So while the GDP may go up because of that activity, it is an economic dead end.

There are certainly good and bad ways to do demand side stimulus.  I agree infrastructure repair and development is one of the better, assuming the contracts aren't all awarded to the governor's no good brother in law.  Spending money for the sake of spending money?    No.  Any sort of demand side stuff should definitely be to achieve ends worth achieving, to give solid return.  Is building NFL stadiums with public money good demand side?  Is colonizing Mars good demand side?  Did the pharaohs do good demand side building the pyramids at Giza?  Color me skeptical, especially while the bridges need repair, but lets have the conversations.  Maybe the Obama Library needs to be built as a pyramid?

I'm not going to advocate tax-and-spend with abandon on the scale it was done during the awakening.

(11-14-2016, 10:32 AM)Kinser79 Wrote: As for something to replace what we currently have....I don't think it needs replacement.  I think the over all foundations are sound.  What needs to be done is the same thing that is done when one when one remodels a bathroom.  (An event I've learned about extensively through my son, he's for all intents and purposes apprenticed with a tile setter now.)  The first act is demolition.  during the demolition everything except the framing, main plumbing and electrical works is removed and discarded.  The next act any and all plumbing and electrical changes that must be made are made, and then finally the finishing work is started.

By and large I would say that what needs to occur before we can even talk about anything new is the removal of all of the old and broken stuff first.

I can accept your remodeling metaphor with one caveat.  I would hope your son does not start demolishing until he has a plan for what he is going to build and has all his materials on hand or immediately available.  I put in a new sceptic system last spring.  The guy came in with his crew, made some really big holes in my front yard, called the pre-cast company to say that he's ready for the main tank, only to discover that the truck driver who was to have made the delivery was out that day.  Fortunately, there is more than one pre-cast company in the area.

Easy Street,  the capitalist class owning the means of production, having the power to decide how much of Main Street's capital should move from Main Street to Easy Street, is to me (and to Marx) the core of the problem.  That's where I'd look to tear down the old and the broken.  I've a few daydreams of doing it drastically.  Declare all current stocks worthless.  Declare all the means of production to be owned by the workers.  If such workers want to sell shares of their cooperative to third parties, this is fine, but said third parties do not get to vote their shares, and the tax code for worker stock holders and retirees would be entirely different than the tax code for absentee robber barons.  Call it a marxist revolution without the revolution part.

Now, doing the above overnight, making a whole lot of pieces of paper (or electronic data) financially worthless instantly, would be traumatic to say the least.  This might compare to your son starting one of his renovation projects with a wrecking ball to the foundation.  Most would want a gentler transition.  There are no doubt other ways of going about it.  Still, if a significant effort to diminish the power of Easy Street isn't found, the life's blood of Main Street will continue to be leeched to Easy Street.  The economy will continue to be anemic.

I am not happy hearing your talk of destruction without hearing a lot more about what you intend to destroy and what you intend to replace it with.  The basic problem in most any S&H crisis is almost always to check on the power of the elite class.  You aren't presenting near enough ideas on how you might intend to do this.

S&H noted that the results of a crisis transition is often much greater than the radicals advocating transition anticipate as possible before the transition started.  When the tea was being thrown into Boston Harbor, few were picturing full independence.  When Bleeding Kansas was bleeding, few were anticipating total emancipation.  After this long stagnant unravelling where divided congresses have made any sort of movement in any direction unlikely, it is hard to anticipate a populace fed up and united sufficiently to actually force big time change.  Your father's victory certainly indicates the Republican base is getting that fed up.  The Democrats are fed up as well, though alas not fed up enough to go with Bernie rather than Hillary.  If we could just get everybody fed up by the same things we might get somewhere.