Choosing Winners and Losers

Most of what people believe about government protection and spending is innocent nonsense. Take the example of tarriffs such as that recently imposed on Chinese tires. Does the government really punish the Chinese with these tarriffs? Of course not. It punishes American consumers by reducing the buying power of their hard work.

Most Americans think businesses are profitable and government is not. Government resources, however, have ballooned exponentially in my lifetime, dwarfing the growth of any corporation, while government has been pretending on paper to have indebted itself. Just try to imagine for a moment what actual exchanges of goods and services would have to be accomplished to repay the debt. Would we be shipping air force bases to China? Not likely. As I have said many times economics happens in real time, while money is pretend. The government pretends to promise, as it has in general spending, Social Security and Medicare, and with the pretense of future promises get us to hand over our hard work today. Voila! A huge profit masquerading as debt!

In both of these instances, and in countless others, the real greed of government is for the power to choose winners and losers. Sometimes, as with pretenses of debt, it empowers itself. Other times it empowers favored friends.

The perpetrators of these machinations from on high will generally deride markets as "impersonal". Markets, however, give you a day-to-day influence over who will succeed and who will fail. Did you prefer Fed Mart, or Montgomery Wards over Wal Mart, or Pan Am over United Air Lines? They'd still exist if millions of others had chosen as you would. Government proposes to take that choice from you, to make "wise guides" distribute resources more intelligently. Thus it is that hip replacement surgery is, except in cases where life is directly threatened, "elective" surgery in Great Britain. Choices like these mean the government in Britain is choosing to make older folks losers, making choices for them they clearly would not, in a market-driven situation, make for themselves.

Why do we make these innocently foolish errors? One reason is that we tend not to trust those who don't already have a presence in our minds. I love to wander into discussions of cognitive modelling in humans and this is an instance in which we have a cognitive model for the government but none for the faceless market resource. The government becomes for us a sort of person while the market resource is a stranger. It's hard to trust strangers. We imagine we can see the mechanism of the "person" of government helping us. It is classic primitive religious thinking. We know and trust the witch doctor.

That is why we've given power to the witch doctor and the astrologer who drove off the dragon that ate the sun to decide who among us will do well. That is why we are considering giving the same bunch the ability to decide who among us will live and die.

Posted by Lee Emmerich Jamison at September 15, 2009 10:00 AM
Comments
Comment #288151

Lee wrote: “Does the government really punish the Chinese with these tarriffs?”

No, not with this single action. But, the very act of raising tariffs on tires, raises the prospect of tariff wars, and that DOES give the Chinese government reason to pause and consider.

This tariff was not a lark. It was a communication, not a punishment. With this tariff, OBama said and I quote: “trading agreements must be enforced in order for trading systems to work.” China has not lived up to its trade agreements, and the tariff said, play by the your agreement rules or there will be consequences without rules, like this tire tariff. It also communicated to the Chinese in no uncertain terms that if they choose to toss the rules, the U.S. will not be bound to rules either, and that can make Chinese predictability over their trade and revenues from trade a very uncertain guessing game.

Obama was right to impose these tariffs. And yes, there can and will be a price paid by consumers here at home for such action, but, the American consumers have been taken advantage of by the Chinese for years. It is time it stopped, and Obama is communicating that message loud and clear.

Pres. Bush warned China about the rules of currency exchange. The Chinese subtly implied to Bush’s mediaries, if you want gripe about our exchange rates, we would be happy to entertain the notion of selling American treasuries on the open market, all 1 trillion dollars of them. Pres. Bush never uttered another warning to the Chinese during the rest of his term.

Obama is at least acknowledging the fact that the Chinese can attempt to intimidate us, but, it is quite another thing whether or not we respond as intimidated. His tariffs say, we will not be intimidated. I think that is the right message to send. China will only be stronger in the future relative to our own economic position. If there is to be reconciliation between the Chinese and the U.S. on trading agreements, NOW is the time to forge those resolutions. Not later, when we are in an even weaker bargaining position.

Posted by: David R. Remer at September 15, 2009 11:49 AM
Comment #288154

Lee,
Isn’t this a legitimate excuse to protect american business and american jobs? Isn’t doing that and not being accused of against free trade the best of both worlds?

Your sympathy for chinese manufacturing disguised as concern for the U.S. consumer and your view that the U.S. government is really a huge profit machine are two ideas that I don’t think will get much support.

Posted by: Schwamp at September 15, 2009 12:59 PM
Comment #288169

propitiation, your comment is entirely baseless and wrong. The International Trade Commission levied the tariffs after reviewing the surge of tires China was dumping on the U.S. markets. Has nothing to do with unions and your comment only demonstrates a bias and prejudice lacking any objectivity or curiosity about the facts.

Posted by: David R. Remer at September 15, 2009 3:50 PM
Comment #288183

Personally I think it’s funny that we support one of our industries by retaliating against the Chinese for forcing their people to artificially support one of their industries with subsidies not by artificially supporting one of our industries with subsidies but by artificially supporting our government with a subsidy.

That seems to say it all to me.

Posted by: Lee Jamison at September 15, 2009 6:54 PM
Comment #288201

Lee Jay, I respectfully suggest linking to websites a little better than blogs. Your second paragraph is almost unintelligible. “dwarfing the growth of any corporation,” I don’t think so. I did prefer “Montgomery Wards over Wal Mart”. Some people here are still angry that Macy’s eliminated the Marhall Field name on all of their stores except the one in the Marshall Field building. I was a supporter of PanAm against the airlines run by the governments of the countries where PanAm flew, when our government wouldn’t let them sell tickets on domestic routes.

I don’t know what witch doctor you are referring, but here’s something about medical hexing.

Posted by: ohrealy at September 15, 2009 10:29 PM
Comment #288203

WOW
Indeed through the looking glass. Here we have the right supporting a communist country over the welfare of American workers. US workers can do just fine on a level playing field. We cannot compete with slaves.There are rules in our trade agreements,rules that mean nothing without enforcement. These tariffs are only moves to start the enforcement mechanism that has been ignored by the previous administration and helped bring about the near collapse of the economy. This is a sea change the the Chinese should well take note of. I,for one, am proud that we finally have administration willing to stick up for America, willing to pay attention to the rules and willing to reject the Walmart view of economics, you know, the view that says we have to screw workers so we can get cheap products.We have to have them because that is all the workers we screwed can afford because we screwed them. Why does the right hate America?Why would they rather brown nose a bunch of communist dictators than protect jobs in the US?

Posted by: bills at September 15, 2009 11:05 PM
Comment #288205

Propitiation,
“Care to comment why only car and light truck tires are effected?”

Well, if you must wonder than how about this for an idea. The American Auto Makers are gearing up to produce about 250 million cars and trucks in the next 10 years that will greatly impact the tire industry. Howeber, not wanting to continue the practice of producing tires that keep finding their way to the junk yard, I would look for American Tire Companys to start coming out with tires that can get 100,000 miles and more at an affordable price.

So you see, raising the tariff on China Tires is not only good for our environment, but has the added bonus of helping the Consumer save money by not having to replace tires so often. Because you do know that tire technology has changed a whole lot from what can be produced by China Factories?

Lee,
Americas’ Government may be a Giant and mage of Great Wealth, but that Wealth is a result of Generations adding to the Treasury and not believing that one generation should have it all.

Now, seeing that the Youth of the 60’s and Silver Spoons of the 70’s are posed to be the first generation to pass on a burden od debt to their grandchildren why should “We the People” give “The Corporation” another chance?

For if Management believes it is better for the American Consumers to have cheaper tires made in another country than help the American Small Business Owner build a Better Tire. I fear that many Conservatives need to have an Adult talk with their Pundits and Leaders. Especially since President Regan drove home to the “Me Generation” that buying America was a Good Thing.

Posted by: Henry Schlatman at September 16, 2009 2:26 AM
Comment #288234

“WOW
Indeed through the looking glass. Here we have the right supporting a communist country over the welfare of American workers. US workers can do just fine on a level playing field.”

I am no lover of the Bush administration, but I believe the exporting of jobs started before Bush. Wasn’t it Clinton who signed NAFTA? You can’t have things both ways; either we have open markets or we have closed borders. You on the left loved Bill Clinton, how did you feel when he signed NAFTA?

Just who gets the tariffs that are paid for these tires? Does it go into the hands of the American tire makers. Or perhaps it goes into the hands of the government? Is it really about American workers or is it about power and money?

Posted by: propitiation at September 16, 2009 3:44 PM
Comment #288235

bills:

I might also include, you are concerned about slave labor in China selling their goods in America. But are you equally concerned that the Obama administration would sell billions in US bonds to China? Are you concerned that the fed is printing money, like it’s going out of style, and this same China, who has created an unfair market, owns us lock, stock, and barrel. Obama’s outrage is nothing more than window dressing.

Posted by: propitiation at September 16, 2009 4:02 PM
Comment #288240

Obama’s tariffs have only one purpose, and that is another payoff to the unions.

I don’t know. Should we be taking conservative advice, given the sorry state they put the country in during their reign of terror? From the NYT:

The middle class also took a major hit. Median household income fell in 2008 to $50,300 from $52,200 in 2007. That is the steepest year-to-year drop since the government began keeping track four decades ago; adjusted for inflation, median income was lower in 2008 than in 1998 and every year since then.
Posted by: Mental Wimp at September 16, 2009 7:14 PM
Comment #288246

Mental;

Nothing like quoting an editorial from the opinion page of the NYT, and the author is not even named. Sounds like a credible source to me.

It also says:
“Congress and the Obama administration must extend certain components of the stimulus package until employment does revive, including unemployment benefits, food stamps, tax breaks for working families with children and fiscal aid to states.”

I guess they better start doling out that stimulus money, because unemployment is going to be with us for a long time:
http://news.mync.com/site/news/story/41815/economist-recession-improving-unemployment-to-remain-high

At what point does Obama start accepting responsibility for his actions?

Posted by: propitiation at September 16, 2009 9:11 PM
Comment #288248

propitiation
“At what point does Obama start accepting responsibility for his actions.”

The BHO administration has never been reticent about accepting responsibility for its actions. That is so much blah blah blah. Sounds “smart” but it is meaningless nonsense.
You mentioned Chinese bond sales. These huge bond sales occurred primarily under the Bush administration. Should BHO be held responsible for that?Apparently Bush thought it better to kiss commie butt than to tax rich people fairly. One hopes BHO does not follow suit.

Posted by: bills at September 16, 2009 9:37 PM
Comment #288258

propitiation offered the following partisan claptrap: “But are you equally concerned that the Obama administration would sell billions in US bonds to China? Are you concerned that the fed is printing money, like it’s going out of style, and this same China, who has created an unfair market, owns us lock, stock, and barrel.”

It was the Bush Administration with a predominantly Republican Congress for 8 years that doubled the national debt from 5.65 trillion to 11 trillion in 8 years, and left whomever was to become the next president with ABSOLUTELY NO CHOICE but to deficit spend or stand idly by while the economy melted down to a depression.

Trying to lay the blame for deficit spending in 2009-2010 at Obama’s feet is a blatant partisan donning of blinders to results of the Bush administration.

I will back your play on criticizing Obama for the pork in the Stimulus bill and 2010 budget. But, that constitutes a very small percentage of the total deficit requirement required to set the economy back on a productive track.

Also, it must be noted, that UNLIKE the Bush administration which tried to hide from public view his deficits by offloading enormous expenditures from the annual budget, Obama has put the war funding and all other non-emergency spending BACK INTO the budgetary process, requiring offsetting revenues to be created to pay for the spending.

The trickster Republicans are history, thank Buddha, and the American people now have an administration that isn’t hiding the true cost of the nation’s needs off the budget books. I reject ALL Republican attempts to now cry deficits, after the they created more than 5 trillion in deficits in 8 years through their bag of tricks, and deceptions.

Posted by: David R. Remer at September 17, 2009 7:15 AM
Comment #288259

David,
Keep digging on the budget and what was done by President Bush. For why I can’t say for sure that he did more than hide the true cost of the wars by taking them off line, but given the fact that the stats were worse than the Obama Team in the first few months. I’ll wait to see what you discover since I do not have the expertise to read the dual books.

Posted by: Henry Schlatman at September 17, 2009 7:41 AM
Comment #288274

DR

I believe I have stated in other places, I did not support Bush’s policies. The problem with the left, is that they are never willing to recognize the faults of Obama. When faults are brought up, the left immediatly tries to change the subject by bringing up Bush. But since you brought it up, at Obama’s current rate of spending, how long will it take for him to surpass the deficit created by Bush? I must disagree about offsetting spending with cuts, that will never happen.

Let me throw out another thought, since the title of this post is “Choosing Winners and Loosers”. What do you think about ACORN? For months or years, the left has been defending ACORN. All I ever read was, “there is no proof” or “unsubstantiated accusations”. Well is there any proof now? What a corrupt organization? Any takers on this? If I were a writer on Watchblog, I would post an article on this. Thank God for Glen Beck, Michelle Malkin, and Breitbart who have done the investigating that the media should have done. In fact the NYT new many of these things a year ago and sat on the story. Charlie Gibson didn’t even know there was a problem with ACORN. Charlie “YOU LIE”. The main stream media is now called the “fringe media”.

Posted by: propitiation at September 17, 2009 6:36 PM
Comment #288332

“Thank God for Glen Beck”…that says it all about those on the fringe right. Take a close look at their slobbering, whining, bawling fool, caricature of a man, an entertainer who uses his arse as his research tool, hero. It doesn’t take much to understand the no-mind consequences of the hero worship.

ACORN has some bad apples in it, and those bad apples have cost the non-profit a great deal in good will and income. The income ACORN is losing can only hurt the poor, not the people who have paid into it, as the amounts are almost insignificant against the backdrop of our current financial mess which ha ALL fallen on the backs of taxpayers.

You don’t have to thank God for Glenn Beck…Glenn Beck thinks he IS God. And, apparently he’s sold YOU on it too!

Posted by: Marysdude at September 19, 2009 12:42 PM
Comment #288336

Fox news holds the top 5-6 cable news slots. Glen Beck is second with 4 to 5 times as many viewers as the drive-by cable news shows.

I see the dems are diving for cover concerning ACORN. How come you guys still want to defend this corrupt organization, have you no shame?

Posted by: propitiation at September 19, 2009 2:29 PM
Comment #288356

A few bad apples don’t nullify the good the organization has done through the years. And, I guarantee you that if you are not ashamed of Glenn Beck, I’ll never be ashamed of ACORN. Beck has never, to my knowledge, done anything positive or good in his miserable life. ACORN has done a variety of good things and has had a very positive impact on poor neighborhoods, in several towns and cities.

I hate that a few have spoiled the ACORN good, and know that it will take many decades to replace that good. Shame…no…disappointment…saddness…regret.

For Beck…disgust, and for those who believe in his regurgitations…more disgust.

Posted by: Marysdude at September 19, 2009 11:53 PM
Comment #288357

PS:

Add nausea to my reaction to Beck.

Posted by: Marysdude at September 19, 2009 11:55 PM
Comment #288374

MD

“A few bad apples don’t nullify the good the organization has done through the years.”

How much corruption has to be uncovered before you guys can admit there is a problem. How many states have voter fraud investigations, how many ACORN employees have already been sentenced to prison, how many videos have to be taken? The head of ACORN was on Chris Wallace today, she now recognizes a problem, but it is with the “stupid” ACORN employees. What a joke, they are doing what they were trained to do. Last week she wanted to sue the reporters and FOX News, but today she sees a problem. And all Obama, could say about the subject was, “I didn’t know they were receiving federal funds”, what a croc, he was a lawyer for ACORN. I guess “you lie” again, mr president.

Again, I say, thank God for the 20 some year old reporters and Glenn Beck. Two previous bills, banning federal tax dollars to ACORN, failed. But now, because of the efforts of these patriots, the house and senate, all of a sudden, decided to drop funding. That makes the politicians who dropped funding smarter than liberals who deny the truth.

Posted by: propitiation at September 20, 2009 8:54 PM
Comment #288382

Glenn Beck wouldn’t make a pimple on a true patriot’s arse.

Much like those shouters at town hall meetings, who usurped one first amendment right of the many, with a noxious other for the few, your supposed twenty-something reporters and Beck have killed a good program with a problem, that could have been healed by taking two aspirin. It’s called ‘over-kill’, and is the usual result of over-zealous nuts who have the ear of the lynch mob. A mob made up of seriously flawed, ignorant nay-sayers (those who say no to everything without thought for the result of their negativity).

Posted by: Marysdude at September 21, 2009 4:47 AM
Comment #288440

Markets, however, give you a day-to-day influence over who will succeed and who will fail. Did you prefer Fed Mart, or Montgomery Wards over Wal Mart, or Pan Am over United Air Lines? They’d still exist if millions of others had chosen as you would. Government proposes to take that choice from you.

This is so off base I don’t know where start. First off, there is no choice today in many states. There’s only one provider. That’s why costs have gone up 80% in just a few years time. That’s the point of the plan, to provide a new competitor to keep the other companies honest and prevent price fixing. Second of all, “choice” doesn’t really apply to healthcare. Who amongst us chose their provider? When you get in an ambulance, do you stop to decide which hospital to go to, or do you just go to the closest one?

Posted by: Max at September 23, 2009 3:22 PM
Comment #288449

I made $74,000 last year. I have no health insurance and would really be put off by the idea of having to pay for it.

Why are we not just looking to help insure the 5 million who want it but can’t afford it? Oh taxes I forgot.

Posted by: matt at September 24, 2009 5:50 AM
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