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Thread: You have got to be f'ing kidding me

  1. #1
    God/dess Deogol's Avatar
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    Default You have got to be f'ing kidding me

    Taxpayers paying for bailouts.
    Taxpayers paying for bonuses.
    Taxpayers paying for fines.
    Taxpayers paying for buyouts.
    Taxpayers paying for subsidies.
    Taxpayers paying... the country is lost.

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    Default Re: You have got to be f'ing kidding me

    ^^^ and taxpayers paying for ( a portion of) their neighbor's new car, their neighbor's new house, their neighbor's kids' college education ...

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    Default Re: You have got to be f'ing kidding me

    speaking of which ( the Broken Window Fallacy again)

    (snip)"Cash for Clunkers Is Just a Broken Windshield:

    Now that the U.S. government is in the auto business, with a 61 percent ownership stake in General Motors and 10 percent in Chrysler, it wants to move inventory.

    So it came up with a plan, gave it a catchy name and wrapped it in a patina of environmental do-goodism.

    “Cash for clunkers” was touted as a huge success, with cars tearing out of auto showrooms, the program running through its $1 billion appropriation in one week and government servers crashing in response to overwhelming demand from dealers filing for rebates. (At least it wasn’t the drivers that crashed.)

    Was the program to induce drivers to turn in old gas- guzzlers for a more fuel-efficient vehicle a success? That depends on how you define success.

    Consumers got a “discount,” automakers sold more cars and trucks last week than they would have, and all that “stimulus” -- spending begets income begets spending -- has to be good for the economy, right?

    With success like that, why limit the rebates to $4,500? Why not give everyone a $10,000 or $20,000 rebate to turn in an old clunker? And why stop at the cars in the garage when you could get rid of a garage full of accumulated junk, with the government providing rebates to households for unloading what they’ve been meaning to get rid of for years?

    A reductio ad absurdum, to be sure. Sometimes reducing a proposition to absurdity is the easiest way to expose its flaws.

    The government is transferring money from -- guess who? -- we, the taxpayers, to car buyers. Those buyers would have traded in their cars anyway, albeit at a more leisurely pace, according to Jeremy Anwyl, chief executive of Edmunds.com, an auto information Web site. Knowing their cost would drop on July 24, buyers postponed sales so they could cash in on the program, he says.

    Sight Unseen

    Transferring money from taxpayers to car buyers is exactly that: a transfer. The money taken from taxpayers can’t be used for something else.

    This is the lesson of Frederic Bastiat’s essay, “That Which is Seen, and That Which is Unseen.” Bastiat, a 19th century French political economist, tells the story of a shopkeeper who has to hire a glazier to repair a broken window, providing work and income for him in the process. That’s what is seen.

    What is unseen is what the shopkeeper would have done if he didn’t have to pay the glazier. He might have bought shoes for his children, providing income for the shoemaker, who in turn could buy leather to produce more shoes. The glazier’s gain is the shoemaker’s loss. There is no net gain, no job or income creation, from this transaction.

    Broken Window Fallacy

    The “broken window fallacy,” as it is known, can be applied to all government spending. The $787 billion fiscal stimulus enacted in February transfers money from taxpayers to the government to allocate as it sees fit. The effect of the government’s expenditures shows up as growth in gross domestic product. Auto manufacturers produce more cars to meet the juiced demand, adding to GDP. This is what’s seen.

    What is unseen is what would have been produced by the private sector had the government not confiscated future revenue via taxation.


    An additional $2 billion to extend cash for clunkers -- the measure passed by the House of Representatives and is awaiting Senate action -- is a drop in the bucket compared with the trillions the government has spent, lent or pledged during the crisis.

    Just think of all those broken windows, or windshields, as the case may be.

    Cash ‘n Trash

    Cash for clunkers requires that trade-ins be scrapped, whether they are fully depreciated or not. How is destroying something good for the nation?

    James Hamilton, professor of economics at University of California, San Diego, says cash for clunkers adopts the worst of the New Deal policies and adapts it to today’s circumstances.

    The Agricultural Adjustment Act of 1933 “paid farmers to slaughter livestock and plow up good crops, as if destroying useful goods could somehow make the nation wealthier,” Hamilton writes on his blog. “And yet, here we are again, with the cash for clunkers program insisting that working vehicles must be junked to qualify for the subsidy.”

    What’s more, the U.S. has effectively adopted Japanese- style industrial policy, or a government-business partnership. In the case of GM, it happens to be partnering with itself."(snip)

    from

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    Default Re: You have got to be f'ing kidding me

    Taxpayers also pay for a lot of good things...necessary, worthwhile things, that make a lot of people's lives better. Let's not forget that part.

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    Default Re: You have got to be f'ing kidding me

    Quote Originally Posted by Melonie View Post
    speaking of which ( the Broken Window Fallacy again)

    (snip)"Cash for Clunkers Is Just a Broken Windshield:

    Now that the U.S. government is in the auto business, with a 61 percent ownership stake in General Motors and 10 percent in Chrysler, it wants to move inventory.

    So it came up with a plan, gave it a catchy name and wrapped it in a patina of environmental do-goodism.

    “Cash for clunkers” was touted as a huge success, with cars tearing out of auto showrooms, the program running through its $1 billion appropriation in one week and government servers crashing in response to overwhelming demand from dealers filing for rebates. (At least it wasn’t the drivers that crashed.)

    Was the program to induce drivers to turn in old gas- guzzlers for a more fuel-efficient vehicle a success? That depends on how you define success.

    Consumers got a “discount,” automakers sold more cars and trucks last week than they would have, and all that “stimulus” -- spending begets income begets spending -- has to be good for the economy, right?

    With success like that, why limit the rebates to $4,500? Why not give everyone a $10,000 or $20,000 rebate to turn in an old clunker? And why stop at the cars in the garage when you could get rid of a garage full of accumulated junk, with the government providing rebates to households for unloading what they’ve been meaning to get rid of for years?

    A reductio ad absurdum, to be sure. Sometimes reducing a proposition to absurdity is the easiest way to expose its flaws.

    The government is transferring money from -- guess who? -- we, the taxpayers, to car buyers. Those buyers would have traded in their cars anyway, albeit at a more leisurely pace, according to Jeremy Anwyl, chief executive of Edmunds.com, an auto information Web site. Knowing their cost would drop on July 24, buyers postponed sales so they could cash in on the program, he says.

    Sight Unseen

    Transferring money from taxpayers to car buyers is exactly that: a transfer. The money taken from taxpayers can’t be used for something else.

    This is the lesson of Frederic Bastiat’s essay, “That Which is Seen, and That Which is Unseen.” Bastiat, a 19th century French political economist, tells the story of a shopkeeper who has to hire a glazier to repair a broken window, providing work and income for him in the process. That’s what is seen.

    What is unseen is what the shopkeeper would have done if he didn’t have to pay the glazier. He might have bought shoes for his children, providing income for the shoemaker, who in turn could buy leather to produce more shoes. The glazier’s gain is the shoemaker’s loss. There is no net gain, no job or income creation, from this transaction.

    Broken Window Fallacy

    The “broken window fallacy,” as it is known, can be applied to all government spending. The $787 billion fiscal stimulus enacted in February transfers money from taxpayers to the government to allocate as it sees fit. The effect of the government’s expenditures shows up as growth in gross domestic product. Auto manufacturers produce more cars to meet the juiced demand, adding to GDP. This is what’s seen.

    What is unseen is what would have been produced by the private sector had the government not confiscated future revenue via taxation.


    An additional $2 billion to extend cash for clunkers -- the measure passed by the House of Representatives and is awaiting Senate action -- is a drop in the bucket compared with the trillions the government has spent, lent or pledged during the crisis.

    Just think of all those broken windows, or windshields, as the case may be.

    Cash ‘n Trash

    Cash for clunkers requires that trade-ins be scrapped, whether they are fully depreciated or not. How is destroying something good for the nation?

    James Hamilton, professor of economics at University of California, San Diego, says cash for clunkers adopts the worst of the New Deal policies and adapts it to today’s circumstances.

    The Agricultural Adjustment Act of 1933 “paid farmers to slaughter livestock and plow up good crops, as if destroying useful goods could somehow make the nation wealthier,” Hamilton writes on his blog. “And yet, here we are again, with the cash for clunkers program insisting that working vehicles must be junked to qualify for the subsidy.”

    What’s more, the U.S. has effectively adopted Japanese- style industrial policy, or a government-business partnership. In the case of GM, it happens to be partnering with itself."(snip)

    from http://www.bloomberg.com/apps/news?p...d=aBHGhk3_aakc
    Your article is based on conservative ideology rather than what happens in the real world. The taxpayers money would not be used for something else. The reason the government needs to step in and spend money is because consumers (taxpayers) aren't spending. Many consumers aren't spending money because they lost their jobs or are afraid they will lose their jobs. By spending money, the government creates jobs for workers who now have money to spend, which in turns creates additional economic growth.

    This is not just based on hypothetical theories like everything is with conservatism. This is based on studies of what has actually happened in the real world.

    I hardly consider Japanese industrial policy as something to be critical of.

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    Default Re: You have got to be f'ing kidding me

    I hardly consider Japanese industrial policy as something to be critical of.
    Your perspective would be different if you were a young 'middle class' worker living in Japan ( and probably still living with their parents )!

    By spending money, the government creates jobs for workers who now have money to spend, which in turns creates additional economic growth.

    This is not just based on hypothetical theories like everything is with conservatism. This is based on studies of what has actually happened in the real world
    Oh you mean the JFK tax cuts, the Reagan tax cuts, the Bush tax cuts ? When gov't decides to 'confiscate' fewer dollars from productive taxpayers, surprise surprise they in turn become more productive ... spending money on consumer goods but also on small businesses or investments in large businesses ... which in turn creates 'something out of nothing' a.k.a. 'added value' ... as well as economic growth and new jobs which do not stop when the gov't 'confiscation' and redistributive spending stops !

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    Default Re: You have got to be f'ing kidding me

    Quote Originally Posted by Melonie View Post
    Your perspective would be different if you were a young 'middle class' worker living in Japan ( and probably still living with their parents )!
    We were discussing industrial policy, not housing policy. Over the past 40-50 years Japan has become the world leader, or among the world leaders, in automobile production, ship building, steel production, and consumer electronics. By any measurement, Japan's industrial policy has been very successful.


    Quote Originally Posted by Melonie View Post
    Oh you mean the JFK tax cuts, the Reagan tax cuts, the Bush tax cuts ? When gov't decides to 'confiscate' fewer dollars from productive taxpayers, surprise surprise they in turn become more productive ... spending money on consumer goods but also on small businesses or investments in large businesses ... which in turn creates 'something out of nothing' a.k.a. 'added value' ... as well as economic growth and new jobs which do not stop when the gov't 'confiscation' and redistributive spending stops !
    We weren't discussing tax cuts. We were discussing whether government stimulus spending is good for the economy. When you look at what happens in the real world, rather then going by your ideology or your "broken window fallacy", then stimulus spending is good for the economy in an economic downturn. Your "broken window fallacy" also misrepresents the "Cash for clunkers" program. You said:

    "Transferring money from taxpayers to car buyers is exactly that: a transfer. The money taken from taxpayers can’t be used for something else."

    The money for the "Cash for clunkers" did not come from the taxpayers. There was no tax increase to pay for the program. Taxpayers would have paid the same amount of taxes with or without the program.

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    Banned Melonie's Avatar
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    Default Re: You have got to be f'ing kidding me

    By any measurement, Japan's industrial policy has been very successful.
    By Hockeybobby's standard of the quality of life of it's own citizens, Japan's industrial policy has clearly NOT been successful.

    (snip)"The economic downturn has had an impact on the lifestyles of more than half of Japanese consumers
    Key takeouts and implications: a 'recessionary mindset' has coincided with a recessionary impact on Japanese consumers' lifestyles
    TREND: Low consumer confidence is reflected by a generally negative outlook among Japanese consumers
    Japanese citizens' gloomy outlook about the country's overall direction is affecting perceptions about their own quality of life
    Key takeouts and implications: Japanese citizens' mood towards the direction of the country is largely pessimistic and this is having implications on their quality of life
    TREND: Japanese consumers have lost confidence in their financial security and are being more scrupulous in response
    Satisfaction with one's financial situation is low among Japanese consumers
    Perceptions about the economy, job security, financial status and the housing market in Japan have all worsened, and there is only limited optimism for the six months ahead
    Japanese consumers are managing their finances more closely, with some even struggling to pay the bills
    The majority of Japanese consumers are making greater efforts to save and continue to be vigilant about credit
    Key takeouts and implications: Japanese consumers have lost satisfaction with their financial situation and there is only mild optimism of any improvement coming towards the end of 2009
    INSIGHT: The global economic crisis has had a negative impact on the emotional wellbeing of Japanese citizens with levels of stress up and personal happiness down
    Stress levels have all been negatively impacted during the financial downturn
    Work-life balance has also worsened in combination with the deepening downturn
    The happiness levels Japanese citizens have declined in line with the global economic crisis
    Key takeouts and implications: Japanese citizens have lost satisfaction in their financial situation and there is only mild optimism of any improvement coming towards the end of 2009
    INSIGHT: Japanese consumers have become increasingly price and value conscious following the global economic downturn
    Japanese consumers are becoming more value conscious and are therefore looking to save money when buying groceries
    Price consciousness heavily influences where Japanese consumers do their grocery shopping and how they shop, but quality still matters too
    Key takeouts and implications: the general price consciousness of Japanese consumers has intensified and is reflected by how they determine where to shop
    INSIGHT: Brand loyalties are under increasing threat as Japanese shoppers give up brands and increasingly embrace private label
    Japanese consumers are beginning to give up some of their favorite brands as they make more 'considered' choices
    Private labels are becoming more attractive to Japanese shoppers in the downturn
    Key takeouts and implications: the ingrained value consciousness of Japanese consumers, combined with their current reflective consumption patterns, will create an optimal platform for private label growth
    INSIGHT: Japanese consumers are embracing money saving tactics when it comes to food and non-alcoholic beverage purchases and preparation
    Japanese consumers are adopting various responses to cut back on food and beverage expenditures, particularly by preparing more meals at home
    The majority of Japanese shoppers consider private label food and non-alcoholic beverages to be identical to famous branded equivalents
    Key takeouts and implications: a resurging desire to cook more often at home has occurred while private label and market leading brand competition in food and non-alcoholic beverages will intensify"(snip)

    from


    ^^^ as this marketing analysis clearly shows, the huge profits earned by Japanese export industries are NOT resulting in any improvement in the standard of living of Japanese workers.

    The reasons for this begin with Japan's 'lost decade', where Japanese gov't tax policies and bank bailout policies burdened the future Japanese economy with massive debts that ultimately had to be paid by Japanese workers ...


    (snip)"Japan failed to cut individual taxes enough to stimulate consumer demand. Similar to the Great Depression that permanently changed American buying habits, the "lost decade" made the Japanese tight-fisted. Japan's economy is now in a free fall because it cannot rely on domestic consumption to pick up the slack. Also it cannot depend on exports, which declined in January 2009 some 46 percent from one year ago.

    By learning from Japan's mistakes, America can avoid a dismal decade. However, it would be arrogant for those in Washington to assume that Japan's troubles simply reflected its macroeconomic incompetence.

    In the main, the Japanese followed Keynesian economic prescriptions; however they made one fundamental mistake. They refused to confront their banking system losses and inject enough funds to enliven their zombie banks.

    The Japanese stock market recently hit a 25-year low. Unless we take the right steps, we might find that even worse than a lost decade is a lost generation"(snip)

    from


    of course there is a less Keynesian school of thought that Japan's de-facto 'government / business' partnerships are the true cause of stunted economic growth, as opposed to Japan's lack of sufficient money printing / bailouts !



    (snip)"Banks and financial institutions were left holding piles of worthless paper, and the economy soon headed south. The national government responded to the crisis by encouraging more lending and spending previously unfathomable amounts of money on public works projects in an effort to stimulate consumer spending and restart growth.

    But that stimulus did not save the Japanese economy in the 1990s; far from it. The ensuing period came to be known as the Lost Decade, characterized by multiple recessions, an annual average growth rate of less than 1 percent, and a two-decade decline in stock prices and corporate profits.

    The Japanese government’s easing of credit rates, instead of spurring real demand, created artificial demand. Federal loans and stimulus spending were not economically productive, and they vastly increased the nation’s debt and prolonged the economic malaise. Worse, businesses spent critical time on the sidelines, waiting for government bailouts and other centralized actions, instead of speedily consolidating their losses, clearing their balance sheets of bad investments, and reorganizing.

    The United States in 2008–09, unfortunately, has started down the same path. Federal intervention and the expectation of additional government action are removing firms’ incentive to clean up their balance sheets by selling “toxic” assets. Why accept pennies on the dollar if a deep-pocketed new bidder (i.e., the state) looms large on the scene? The Japanese experience shows that when the government is an active participant in the market, many firms would rather accept state support than initiate the inevitable financial reckoning. Such a status quo does not provide a sustainable foundation for the economy. Instead, it restricts economic growth and creates a cycle of stagnation."(snip)


    ~
    Last edited by Melonie; 08-15-2009 at 03:05 AM.

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    Default Re: You have got to be f'ing kidding me

    Quote Originally Posted by Melonie View Post
    By Hockeybobby's standard of the quality of life of it's own citizens, Japan's industrial policy has clearly NOT been successful.

    ^^^ as this marketing analysis clearly shows, the huge profits earned by Japanese export industries are NOT resulting in any improvement in the standard of living of Japanese workers.
    That's a big leap to make based on a marketing analysis. Japanese people are more careful about their buying decisions. So? They find that generic brands are just as good as the big brands and they buy those instead? So? I guess that sucks for those big brand companies, but that doesn't = a shitty life.

    (snip)"Banks and financial institutions were left holding piles of worthless paper, and the economy soon headed south. The national government responded to the crisis by encouraging more lending and spending previously unfathomable amounts of money on public works projects in an effort to stimulate consumer spending and restart growth.

    But that stimulus did not save the Japanese economy in the 1990s; far from it. The ensuing period came to be known as the Lost Decade, characterized by multiple recessions, an annual average growth rate of less than 1 percent, and a two-decade decline in stock prices and corporate profits.

    The Japanese government’s easing of credit rates, instead of spurring real demand, created artificial demand.
    Low interest rates on mortgages and car/consumer loans...yep, that really sucks for the people. And public works projects...we wouldn't want those now would we. But GROWTH! oh ya...that's what the people need. Stock prices and corporate profits going up! Ya...that = quality of life.

    The "lost decade" is a term made up by people who don't give a shit about people.

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    Default Re: You have got to be f'ing kidding me

    Quote Originally Posted by Melonie View Post
    By Hockeybobby's standard of the quality of life of it's own citizens, Japan's industrial policy has clearly NOT been successful.

    ~
    Again, your response has nothing to do with Japan's industrial policy. All of the problems you described in this post are related to Japan's financial policies, not their industrial policies. While Japan's banking and financial sectors have done very poorly over the past decade, many of their industries have not. Their still the world leader or among world leaders in many industries, as I mentioned in a previous post.

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    Default Re: You have got to be f'ing kidding me

    many of their industries have not. Their still the world leader or among world leaders in many industries
    Yes you are correct that corporate management at Toyota, Sony, NEC and other Japanese 'export' industries are 'world leaders' in technology as well as in compensation. However, under Hockeybobby's criteria, the Japanese workers of Toyota, Sony, NEC etc. are far worse off today than they were 10-20 years ago in terms of the 'purchasing power' of their wages / their standard of living.

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    Default Re: You have got to be f'ing kidding me

    Purchasing power doesn't = quality of life. Things like infrastructure, clean air and water, education, crime, employment, public service, food, political representation among others, are all factors. How many widgets you can buy with a yen is meaningless.

    http://www.il-ireland.com/il/qofl2009/

    Note the position of the United States in this list. With respect to quality of life, you can't do much better.
    Last edited by hockeybobby; 08-16-2009 at 04:50 AM.

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    Default Re: You have got to be f'ing kidding me

    ^^^ note also the position of Japan on that list ... number 22 ... among the lowest of any major industrialized nations. Your point about America being number three on the list only illustrates the results of America doing things in a certain way in the past. Arguably, changing those past ways of doing things ... and particularly changing them in a way that more closely reflects Japan ... is extremely likely to push America far down the list in the future.

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