Talk About Undercutting Your Own Message

Joe Klein makes a valid point in his column:

As in most presidencies, there have been an awful lot of political hacks populating the mid-reaches of this Administration. In the Obama instance, these have shown an anachronistic, pre-Clinton liberal bias when it comes to the rules and regulations governing many of our safety net programs, like social security disability. And now they have violated one of the more sacred rules of our democracy: you do not use the tax code to punish your opponents.

Lois G. Lerner, the IRS official who oversees tax-exempt groups, said the “absolutely inappropriate” actions by “front-line people” were not driven by partisan motives.

Does anyone actually believe this?

Yet again, we have an example of Democrats simply not managing the government properly and with discipline. This is just poisonous at a time of skepticism about the efficacy of government. And the President should know this: the absence of scandal is not the presence of competence. His unwillingness to concentrate–and I mean concentrate obsessively–on making sure that government is managed efficiently will be part of his legacy.

When your basic strategy is to give federal agencies broad discretionary powers as is the case with the PPACA and Dodd-Frank, just to name two, if those powers are abused for what certainly appear to be political motives, it really casts doubt on the innocence of your intentions. Or, as Dan Drezner recently wisecracked, they’ve justified every paranoid conspiracy theory for the next half century.

70 comments… add one

  • If a declining deficit is good, is an increasing deficit bad? Or, is it dependent upon the President’s political affiliation?

    To most people it depends on the President’s political affiliation relative to that person’s own political affiliation.

    Typically, a deficit isn’t always bad, nor is running a surplus always good. Part of the problem though is that discretion in government policy is often problematic in that government’s have a hard time sticking to their announced plans.

    But don’t worry, Michael bought a pair of canali pants that, I’m told, hang beautifully. And he drove around Venice California in a convertible…Venice is pretty awesome. I like the boardwalk, can be quite a spectacle at times.

  • You’ll find more wisdom from Marx than from Schumpeter. Don’t think invoking the “soshulist” card frightens anybody; it’s not 1952.

    I’m not invoking the “soshulist” card since Socialism has absolutely nothing to do with the Reserve Army of Labor concept found in the writings of Karl Mars and Friedrich Engels.

    As for Marx, much of his stuff was built on the same flawed foundation in regards to the theory of value as those who preceded him including Adam Smith.

    The historical record shows that even despite accumulating more and more capital and that although we could make just as much to provide for everyone at levels equivalent to 1875 standards of living with probably just a few million workers, we haven’t even remotely approached that kind of outcome.

    It isn’t just “needs” as Michael talks about. It is wants. You can see it with some of his posts:

    -Canali pants
    -driving around in a convertible
    -hanging out in Venice.

    Does he need any of that? No. Does he want it? Yes. So, even though we have had technological advancement and if we wanted to give everybody goods and services to satisfy their needs we could, we haven’t. And we probably wont. At least not until the something like the singularity (assuming it goes well) and we end up with cornucopia machines. Then there might be an issue with supplying wants and needs with very little labor. But then who cares because at that point the notion of scarce resources wont really be binding will it.

    We are in a situation where it will take a considerable amount of time to solver our unemployment problem and government doesn’t have any better an idea than us crazy ass libertarians. Why? Because government is run by people that have very similar limitations as us crazy ass libertarians.

    So, nice try Ben, but for the love of God read some economics other than MMT stuff. Some history of thought would likely do you well.

  • TastyBits

    @Icepick

    … (and if Obama were all African American, like Jesse Hymie-Town Jackson, you SWPL folks would have never voted for him) …

    White liberals will only interact with the right kind of African-American. The President has light skin, “talks well”, etc. The whiter version of an African-American. The white half helps to make the “right kind of negro”. It contributes to his light skin.

    If he had a 70’s style afro or corn-rows, how many of them would have voted for him. John McCain would have won in a landslide.

    A man with more typical black characteristics and mannerisms will have fewer white liberal friends. To the white liberal, the black man is “the Other”. The white liberal will never live in a minority community. The white liberal will never send his children to a minority school. The white liberal will never allow minorities full access to their neighborhood.

  • michael reynolds

    Steve V:

    Does he need any of that? No. Does he want it? Yes. So, even though we have had technological advancement and if we wanted to give everybody goods and services to satisfy their needs we could, we haven’t. And we probably wont. At least not until the something like the singularity (assuming it goes well) and we end up with cornucopia machines.

    Which is why I didn’t just talk about needs, but perceived needs and wants.

    And look at the absolutist way you cast it. As though one day we’ll absolutely need full employment, then, suddenly, we’ll have a cornucopia. 100%/0%. I guess there couldn’t possibly be stages in between. Nope. Couldn’t be a stage where we only need 80% of workers to meet 100% of wants and needs and wildest desires. Couldn’t be.

    Why? Um. . . Because it wasn’t before. Because the past is such a perfect guide to the future. Because we can safely drive through life using only the rearview mirror. As the past makes perfectly clear, cholera will continue to decimate populations, man will never fly and knowledge will be passed down by word of mouth alone.

    The thing with smart prophets is that rarely do they make a falsifiable prediction, a prediction with way too much specificity. Here’s Nostradamus making the fatal error:

    L’an mil neuf cens nonante neuf sept mois,
    Du ciel viendra un gran Roy d’effrayeur.
    Resusciter le grand Roy d’Angolmois.
    Avant apres Mars regner par bon heur.

    The year 1999, seventh month,
    From the sky will come a great King of Terror.
    To bring back to life the great King of the Mongols,
    Before and after Mars to reign by good luck.

    Well, 1999 rolled around and yeah, not so much King of Terror. That’s yours and Icepick’s and Dave’s and Drew’s confident pronouncements on GM. That was your 1999, seventh month. We are five years into the GM bailout. GM is alive and well. It seems to be selling a bunch of cars into China. Does one of you want to bet a Romney ($10,000) that GM will be dead in 5 years? How about 10 years? I doubt any of you do. I don’t think GM will die until there’s a major technological shift to self-driving cars, and maybe not then.

    So you’ll forgive me if rather than accept your gloomy assessments on other matters, I look at facts — that the deficit is in fact coming down, that in fact there’s no inflation to mention, that in facthealth care costs are not rising as fast as predicted, that in factunemployment has leveled off, that in fact the Euro is still trading at 130 USD, that in factthe intellectual underpinning of austerity appears to be rather badly wounded, that in fact the stock market is at an all time high — and suspect that you boys don’t know any more than Monsieur de Notre Dame.

  • jan

    Michael,

    I don’t see how you can keep touting GM as some kind of government-induced economic feather in Obama’s cap. For one thing, the bail-out was initiated under Bush via TARP funds. Later GM was restructured and most of it was bought by the U.S. Government, hence it’s nickname ‘Government Motors.’ Shareholders, though, were selectively screwed, while Unions were pacified during this reorganization. And, though GM is still around and doing pretty well, the bottom line is that taxpayers will ultimately lose big on the GM bailout.

    Romney’s restructuring plan was actually fairer than the one worked out by the Obama Administration. But, it was negatively misrepresented as shutting down GM, and therefore has been a convenient albatross to hang around Romney’s neck forever more. In the meantime, the America taxpayer has little hope to have their investment (made by Obama) paid back in full

    Republican candidate Mitt Romney said he’d sell all the government’s shares in GM as quickly as possible — even at a steep loss — to get the feds out of the private sector.

    President Barack Obama was more circumspect, though he now seems to be following Romney’s advice. CEO Dan Akerson, meanwhile, has complained that GM’s status as a “political punching bag” hurts sales.

    But once the government sells its shares, GM will still be tainted by the fact that it failed to pay back all the taxpayer money used to save it back in 2009. GM initially got $49.5 billion from the U.S. government, and it paid back $23.1 billion of that after its stock went public in 2010. That left $26.4 billion GM still owed the government.

    GM’s shares have been trading around $25. The buyback will occur at a share price of $27.50, or a total of $5.5 billion for 200 million shares. But for taxpayers to get their money back, the government would have to sell at an average price of about $52. So by simple math, the total break-even price for those first 200 million shares would be about $10.4 billion. The $5.5 billion sale price amounts to roughly a $5 billion loss for taxpayers.

    As I recall, Ford refused government help, and has gone a lot further than GM in successfully recouping their sales, having a better product line IMO, and more good will with the public.

  • michael reynolds

    This quasi-religious faith in economics is wrong. The very notion of an “economy” is wrong. Economy as opposed to what? As differentiated from what? What part of the human experience is not “the economy?”

    You’re looking for a system that explains essentially the sum of human behavior and you won’t find it because systems do not understand themselves. The totality cannot explain the totality unless it is greater than the totality and able to stand outside itself, which is a contradiction.

    You want to believe that numbers will explain the world, but you can’t quantify luck , you can’t quantify innovation, you can’t quantify human nature, so you will not ever be able to use numbers to predict complex human behaviors. Economics to reduce “what happened” to simplistic formulae? Sure, why not? But to predict the future? You’re kidding yourselves. Life is far, far more random than you want to believe, and far more complex, and no system yet devised — or in my opinion that can ever be devised — will reliably predict events a week from today let alone a year or ten years.

    If you can’t get it right about a single car company, (or in Drew’s case a single election) then what makes you imagine that you understand what will define a future wrought by six billion people?

  • michael reynolds

    Jan:

    I don’t see how you can keep touting GM as some kind of government-induced economic feather in Obama’s cap.

    I’m not. I’m pointing out that the cognoscenti here predicted it would fail, that GM would need further bail-outs, that the government would have to double down and that even then, it would fail.

    It did not fail.

  • steve

    “We are heading into a world where a declining percentage of humans is required to produce all the material needs of our civilization. ”

    I think we are in a lull, or as Cowen claimed, as stagnation. It has happened before. In all probability those jobs lost through creative destruction will be replaced by others, in the long run. At some point that may not be true, but I would not bet on it now.

    “We are in a situation where it will take a considerable amount of time to solver our unemployment problem and government doesn’t have any better an idea than us crazy ass libertarians. ”

    Amen.

    Steve

  • jan

    It did not technically fail because it was bailed out, bought and enabled by the government who then put a life preserver on it. In the end, though, it will not carry it’s weight financially, will leave a bad taste in the mouths of people who initially risked money that was then arbitrarily used to placate the unions. I don’t think wrenching money from Peter to pay Paul is good business practices.

    A succinct summary is as follows:

    Instead, GM, with the heavy lifting done by two administrations, kicked bond investors to the curb in violation of centuries-old contract rights, ripped equity from dealers and suppliers who had already suffered years of GM’s mismanagement and transferred enormous wealth to their union partners, the very partners who had priced themselves uncompetitively.

    And, then we have the whole China affiliation, described in the article entitled Welcome to General Tso’s Motors, where it’s asserted that:

    American taxpayers may have rescued GM during its moment of need, but it is China that is disproportionately benefiting from the bailout of America’s erstwhile automotive icon.

    I’m sorry Michael, but the whole GM story is one of unfair deal-making, asset sell off, and benefiting other countries with government-invested money derived from this country. That is not a success by my measurement.

  • jan

    “We are heading into a world where a declining percentage of humans is required to produce all the material needs of our civilization. ”

    That may be a short term issue. But a more long term one is that we are having a declining population, period, around the world. This means fewer young people to support the large aging population that is racing demographically towards us. How is this lopsided ratio of workers to elders going to effect the work force, access to health care, and providing adequate services to the aged etc.?

  • TastyBits

    @michael reynolds

    The doomsayers ALWAYS turn out wrong because they refuse to acknowledge feedback loops. You were wrong 2,000 years ago. You are wrong today, and you will be wrong 2,000 years from now.

    If people have no income, they cannot purchase the goods made by robots. It is a fantasy created to make you relevant. The reality is that you are meaningless. The future will exist with or without you.

    Somehow, everything is based upon luck except the future. The future cannot be based upon luck, and therefore, you can predict it with certainty.

    Luck is another fantasy. Luck allows you to not be a bullying asshole. You claim that you got to where you are by luck. Were you walking down the street, and somebody asked if you had a manuscript to publish? Did the publisher pull names out of a hat? Or, did you do whatever it takes to get published even if you had to screw over a few people?

    The unemployed are unemployed because of bad luck. The poor are poor because of bad luck. Black folks were lynched because of bad luck. Because of bad luck, you are powerless to do anything. After the fact, you will bemoan the horrors brought about because of bad luck, and you will declare those who do not wail as loud as you are haters. Luck means you never need to do anything for anybody, except wail.

    If you really believed your doomsday crap, you would be stocking up on guns and ammo, or in your fantasy, are the poor unemployed people sitting around dying? I would think the have-nots would take from the haves. Of course, this may explain your problem with poor folks owning guns.

  • michael reynolds

    Tasty:

    What makes you think I see it as Doomsday? It’s just different. We’ll need to adjust. But it may be liberation, not doomsday.

    As for luck, dude, tell me exactly what I did — the actions that I took — that gave me talent. Because I don’t seem to recall them. I was dealt talent in DNA. Then I accidentally ran into the woman who would be my wife. And yes, then, I worked hard. But everyone works hard. Everyone making not enough to live on at Wal-Mart works hard. I know: I used to be that person. The difference was luck. I realize that causes severe discomfort to people raised from birth to the protestant work ethic and associated philosophical underpinnings, but it’s the truth.

  • Michael Reynolds

    Jan:

    As usual you miss the point. Not talking about the wisdom of the GM bail-out, we are talking about the inaccuracy of predictions about its efficacy.

  • Michael Reynolds

    Apropos of my own prediction that generations coming up will care less about stuff and be less consumption-oriented: fewer millennials are bothering to get licenses. And the trend began before the recession. Fewer licenses, fewer cars. That’s a change in mindset. You’ll see the same with housing and apparel. They just don’t see the world in terms of “whoever dies with the most toys, wins.”
    http://www.nytimes.com/2013/05/14/us/report-finds-americans-are-driving-less-led-by-youth.html?hp&_r=0

  • Once again, be careful of claiming victory too soon. GM light vehicle sales have yet to recover to what they were in 2008, let alone 2005. The number of employees at GM and even more so its dealers has declined and, increasingly, GM is becoming a conduit for importing Chinese cars into the U. S. Burning the village in order to save it, anybody?

    What I think we’ve learned is that massive subsidies can keep a car company alive but they can’t make it thrive. I continue to wonder if there’s actually a niche for GM. I think it’s already clear that it won’t be selling electric vehicles. Selling mediocre midrange cars?

  • TastyBits

    @michael reynolds

    For the hordes of jobless argument, you are subtly changing your position. You have not gotten to a doomsday scenario, but honestly, your histrionics are tiresome. Unless the feedback loop or options are cut or stoppered, things change to accommodate survival, and this includes employment and the economy.

    I do not believe in luck. If you know all the inputs, you can predict the outcome, but I will limit this to the physical world – coin tosses, car wrecks, dice rolls, etc. For everything else there are random events that are neither good nor bad. This may seem to be a semantic difference, and to a degree, it is. The difference is that random events require additional deliberate actions to be judged either good or bad.

    I will grant your DNA was luck, but everything else was a random event that you capitalized. Your creative talent has a vast number of applications besides books. Movies, newspapers, and magazines are some of the apparent ones, but advertising, video games, theme parks, and stage shows use some form of a fictional story. There are many women you could have met.

    In addition, the circumstances that you met her were likely not random. Shopping at Whole Foods, hanging out in books stores, managing an upscale or trendy restaurant, or anywhere publishing people congregate would make a meeting more likely. (These are only examples.)

    Either, you altered your personality for her, or she was enamored by your normal demeanor. I suspect the former, but either way the encounter resulted in a non-random outcome. You may not be aware that you are “working hard” to achieve a certain outcome, but you are. Because “working hard” is a value judgement, intervening would be more correct word.

    I equate luck with divine intervention. Your encounter with your wife was only lucky if God was involved. I doubt you would agree with this. Knitting a series of random events together to form a narrative is close determinative fate. Luck implies that the outcomes were not random. If the events were re-run with different inputs, luck would cause the same outcome to occur. This is the basis for Intelligent Design, but God is the determining factor instead of luck.

    I do not use theology as a basis for my philosophical underpinnings. I am a former rabid atheist, and many of my philosophical concepts were created during that time. This was long before atheism was cool. Every concept had to have a consistent, sound metaphysical and epidemiological base. Few of today’s atheists can reason from the ground up. Unless I am specifically discussing theology, you will never find my arguments based upon Protestant, Catholic, Hindu, Taoist, or Zoroastrianist work ethics.

  • TastyBits

    @michael reynolds

    Many of the Republican predictions do not occur, and this is because they fail to take into account feedback loops. They also overly simplify things by leaving major factors out or by not understanding how the whole works.

    The Democrats are predicting that the PPACA will bring lollipops and sunshine. (I understand you have not.) They predicted the stimulus would result in a pink pony in every backyard.

    President Obama has not caused the destruction of the US, but he has not turned the US into a paradise.

    I would suggest caution with the linked article. Parents are not letting teens get their license as soon as they are legal. Many teenagers do not have the freedom of previous generations. The unemployed youth do not have the money to buy stuff, and they probably do not have the room for a lot of stuff.

    The youth driver decline is based upon the number of licenses per age. In many places, the driving age has shifted upward, but from what I can tell, this is not considered by the linked study in the article. A better measure would be percentage based upon legal driving age, but this is probably too simplistic.

    There are very few humans that do not want more than their basic needs. This probably is true for all animals. Lions only hunt what they can eat because they do not know how to operate a freezer. It is possible that today’s youth will begin saving for their retirement, but I doubt it.

  • And look at the absolutist way you cast it. As though one day we’ll absolutely need full employment, then, suddenly, we’ll have a cornucopia.

    No I did not. A careful reading would indicate that is a possibility and until that happens we likely wont see major changes in our economy in regards to labor demands. We could, I just don’t think it is likely.

    I guess there couldn’t possibly be stages in between.

    Do you even know what the singularity is? And it is possible that the singularity is a harmful event to humans.

    TL;DR: Michael your ignorance is showing.

    Why? Um. . . Because it wasn’t before.

    Yeah, the past is often a good predictor of the future. Especially for issues like this. Can the past tell us what the unemployment rate will be with a high degree of accuracy? No, probably not, at least not too far in the future. But in looking at history, we can get an idea of how likely changes you are postulating are. Based on history, our views should be that it is a low probability event. That is it is not likely to happen. I could, but probably wont.

    So you are continuing to mis-characterize my post and displaying your lack of ability to reason probabilistically. Let me guess, you suck at gambling, don’t you?

    Well, 1999 rolled around and yeah, not so much King of Terror. That’s yours and Icepick’s and Dave’s and Drew’s confident pronouncements on GM. That was your 1999, seventh month.

    WTFAYTA?

    We are five years into the GM bailout. GM is alive and well. It seems to be selling a bunch of cars into China. Does one of you want to bet a Romney ($10,000) that GM will be dead in 5 years? How about 10 years?

    Of course not, they’ll just be bailed out again. I don’t think I ever predicted that GM would be dead. Feel free to go back through previous posts and show me as being a liar.

    So you’ll forgive me if rather than accept your gloomy assessments on other matters, I look at facts….

    Facts? That is a laugh. You are an ignorant boob when it comes to understanding economic behavior. Being good at business, no offense to Drew, does not make one good at understanding economic behaviors. The fact that you can some how manage to take some intellectual property you’ve got and re-work it to make a nice fat profit does not make your nonsensical mutterings on employment worthwhile.

    You have, in fact, dressed up the Marx/Engle hypothesis of the Reserve Army of Labor. It was false then, it is false now, and is unlikely to ever come about. I suppose it could, but based on the theory, we have accumulated several orders of magnitude more capital and Marx ever envisioned and we should have seen it by now.

    Oh, and those “smart prophets” that never make a prediction that is verifiable…they are also known as conmen.

    Congratulations Michael, you are a conman.

    As for luck, dude, tell me exactly what I did — the actions that I took — that gave me talent.

    The action that you took is that you used your talent(s). My son is a good swimmer. Is it luck? Yeah, in part. He has the right build for it, longer torso, shorter legs (than average for a boy his age) and he has good sized hands and feet (he isn’t particularly tall though, but not that big a deal since he is more of a distance swimmer). So yeah, biologically speaking he was “lucky”.

    But to say it is all luck is stupid fucking shit and whomever is saying should be slapped repeatedly. The other thing that make my son a good swimmer are, good technique. There are three things that make a good swimmer: technique, technique, technique. So he spends hours every week working on his technique. During the summer he’ll spend around 9 hours in the pool alone. He’ll also spend probably another 2 hours on dry land training (lots or core strength work). And here you’ll see another thing that makes a good swimmer: dedication. Without that nobody will be able to put in that kind of time.

    See Michael, you are a dumb fuck who is making some sort of half-assed case that you’ve had an awesome life handed to you on a silver platter. And then you are generalizing from there that others who have been successful have also had the silver platter treatment. But it is bullshit. Why? Well lets go back to my son. He has a good shot at making a Jr. National time. What does that mean? Money. Money for a college scholarship. Did he get it because of the physical features he was born with? Yeah, in part, but the bigger part is that since the age of 6 he has been busting his ass in competitive swimming. Granted it helps that he likes it, has made great friends through swimming, and the coaches/teams he’s been affiliated with have been pretty damned good. And I’ll even credit myself and my wife a tiny bit (we schlep him off to practice, meets, volunteer, etc.). But the vast majority of his success is his own…because even when he is tired, or doesn’t want to…he goes to practice and works hard.

    So excuse me Michael.

    Get over yourself. And go fuck yourself.

  • Correction: That is he’ll spend at least 9 hours in the pool/week during the summer. Usually more since he’ll go to both morning practice and evening practices. Typically, I’d say he’ll spend 14 – 15 hours in the pool/week.

  • The Age of Competence

    So you’ll forgive me if rather than accept your gloomy assessments on other matters, I look at facts

    You sniveling little shit, you can’t have it both ways. You are saying those of us out of work are fucked while telling other people that we’re the gloomy ones? You also make a point of taking credit a little latter in the same ramble for the employment market being so good! Which is it, are you telling us the employment situation is GREAT or that it is TERRIBLE, and consequently are you being a prophet of doom or a prophet of hope?

    And I’ll note that the deficit is also coming down because taxes were raised on the working poor and the middle class (funny how I’m always a rich person when you Dems want to up taxes, no matter my standing in life) and that Obama had the bright idea of a sequester, which will soon start cutting into people’s unemployment benefits.

    Or is this just another place where you want to take credit both ways?

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