A friend of mine has made a lengthy response to my Obama press conference post that I'd like to address here. My responses will be in bold brackets:
I can tell that there are going to be times where we are in agreement. There are also going to be times were we are not going to be in agreement. I think that on this issue, you and I are going to vehemently, but respectfully disagree. I'll layout my observations my responding to yours.
[Thank you for writing this lengthy response. This is the type of thing I hope my blog accomplishes, real dialogue on important issues. Everyone grows that way. I understand you're on the liberal left of the political spectrum. As a libertarian, there are many issues that we can agree one, especially when it comes to personal freedoms. Those that we disagree on, most likely on certain principles of economic freedoms, libertarians find themselves allied with the conservative right. Libertarianism, I believe is the only logically consistent position when it comes to liberty and freedom. I really appreciate your thoughts below. Now to address them.]
1. Didn't Bush do the same thing with that lovely piece of legislation, the Patriot Act
I don't think that we disagree on the premise that in times of political and civil tumult, there is a tendency on the part of government to act hastily. There have been many times when the citizenry have not been well-served by the legislation that comes from a legislative knee-jerk reaction. On the other hand, there are times when potentially good ideas suffer "paralysis by analysis." Consequently, we lose out when goverment fails to act in a timely manner. Ultimately, the moderating force between these two extremes is an involved citizenry. Unfortunately, in the best of times, most people care enough to get involved. Burke stated that the people have the government they deserve. The unfortunate truth is that our government sucks because the people suck. It's one thing to pass legislation. It's another thing entirely when citizens know that it's a bad law and yet they do nothing to stop it. For those people who are unhappy about the current stimulus package, I say that they need to hound their representatives. They need to get involved with grassroots efforts. I think that these posts of yours are great in that they get people thinking about the issues. My hope is that their thoughts will spur them to action.
[I agree that we have the government we've asked for. Unfortunately, I also view a pure democracy as tyranny by the majority. I'm sure you'd agree. Of all the flaws our current system has, it's easy to say it's the best on Earth. Currently, I'd agree with that, but historically that hasn't been the case. Ireland had a libertarian-based society for a thousand years that served them well. Even on matters of security, the factional nature of their society made it very difficult for invaders to conquer them. When it comes to our government, I believe it is no longer based on constitutional rule of law. There is good evidence to support this view. When this type of thing happens, government grows as liberty yields. My foremost concern and fight is for liberty. Anything that diminishes that for anyone, accomplished by the threat of aggression, is illegitimate and unjust. I believe the foundational basis for any type of government is aggression. It must be for government to exist. For that, I don't believe that government is ever the answer to life's problems, and I won't give up my liberty for any degree of security.]
2. What a great way to start, appeal to emotion, that'll really get the tears flowing for him.
Empathy is never bad thing. Today, I have a job that I love and leaves me very fiscally comfortable. However, I grew up very poor. My mother, who was working as a school teacher, had to work two other jobs in order to keep food in my mouth and a roof over my head. Those years were lean. I will be eternally grateful to those people who showed us a monicum of kindness during those years, for they were few and far inbetween.
[Empathy is a bad thing when it's designed to distract. If his stimulus package had true empirical merit, he wouldn't need to appeal to our emotions, first. Politicians are experts at saying things and using words which at first hearing sound good, but under closer scrutiny, are found to be pretty baseless. I'll be happy to dig up several examples of this if you'd like.]
3. I agree this is a full blown crises, but is Obama going to concede that the very government he now presides over is responsible for creating it? Unlikely.
In what sense? With the exception of Freddie and Fannie, I see a bunch of private business who failed because they were over-leveraged. What responsible bank would give you a mortgage of a property that was THIRTY times your salary? I believe that the root of this crisis is unadulterated greed.
[You are right, not only Fannie and Freddie. For starters, the Federal Reserve is also a major player an monetary and economic instability. A complete analysis of this can be found on Thomas Wood's new book, Meltdown (of which I've only read reviews, my copy is in the mail). For a quicker introduction, I suggest browsing through the articles found here at Mises.org: http://mises.org/story/3128]
4. I'm not sure that it will save or create 4 million jobs. How can he know that? How can he possibly predict that? The truth is he can't. He has no idea how the market will react. It's only a guess. And if/when 4 million jobs are not created, wait for the reason to be explained as they didn't spend enough.
It sounds like you think he pulled the number 4,000,000 out of his butt. I've worked in the sciences. I am an engineer. I'm telling you that we make accurate predictions based on math model all of the time. Now, I will concede that some models and approaches have a higher confidence interval than others and I will concede that at the end of all things, the result from these methods is a guess. However, it's not a blind guess. It's a guess based on the availible data. Economists do the same thing all of the time. One of the ways in which we perfect these methods is to make a prediction based upon them and then to do a post-mortem on what worked, what didn't work and why didn;t it work. You've posted articles from people who are sure that this stimulus package won't work. I could say that they don't know and it's only a guess. However, they believe that they have very sound reasons for their position.
[They believe they have very sound reasons because those reasons are based on empirical evidence. See the link above.]
5. He is correct here, only the private sector can create true wealth. Government only spreads existing wealth around.
I can't really address this point because I don't know what you mean by "true wealth"
[What I mean by true wealth is that which is created. As can be easily observed, the amount of wealth Americans enjoy has grown substantially over the last century. This can be measured in two ways. One is the standard of living that we enjoy, from the poorest Americans to the wealthiest. The other by how much of our labor is required to obtain that standard of living. When the government takes resources out of the market and spends them less efficiently then the market would, what would be true wealth creation is hindered or even destroyed. Of all invention and innovation and economic progress, where has government contributed? In my view, it's in spite of the government that we've managed climb to level of economic progress we have today.]
6. He seems to believe here that the government has resources of it's own. He's incorrect. The only resources the government has are those it firsts extracts (by force) from the private sector.
Can you give me an example of what you mean? The Constitution gives Congress the right to levy taxes for all of those things that we expect it to do like build roads or have an army. Every state government agrees to these terms. While I would enjoy not being taxed so much, I don't mind paying my taxes.
[Wether or not the government has been given permission to collect taxes or not is irrelevant. The only way the government can spend a dollar is by first collecting that dollar. This can be accomplished through direct or indirect taxation (indirect meaning borrowing and inflating). When politicians talk about having resources or making investments, it's important to remember that those resources and investments are backed by the money first pulled out of the market. Everyone, including businesses, will spend their money more carefully than politicians will. Isn't it peculiar that when a private business struggles, it fails and goes away. It's resources are released to find more efficient uses. When a government bureau struggles, it's usually justification to receive more money. Public education is a case in point. I don't believe that throwing even a million dollars per child into public education is going to improve it. Only competition will.]
7. This was the thinking pioneered by Hoover and Roosevelt. The thinking that lead to massive government spending and interference in the market. The thinking that led to the Great Depression of the 1930s, and Japan's depression of the 1990s. Wait for the part where he admits he believed Roosevelt's actions were beneficial.
There are several points I dispute based on fact. Firstly, the idea that goverment should have a role in market regulation came with Roosevelt. This came as a result of the Great Depression, which in turn, was caused the absence of regulation of any kind on the markets. Once again, people are greedy. While I think WWII is what pulled us out of the Depression, more than Roosevelt's programs, I think that his programs, in the short-term, helped hungry people to eat. I don't think that many of his programs should have been continued to present-day. It's unfortunate that they have.
[Each point that you have made above is false and has been thoroughly refutted. For a compact introduction to the real reasons for the crash of 1929 and prolonging of the depression of the 1930s, read the article I introduce and link to here: http://truth.skylerjcollins.com/2009/01/great-myths-of-great-depression.html]
The running thread that I see through out your commentary is the idea that the market is large, powerful and if left alone, will be self-correcting. I feel that in many instances this true. However, my running counter-thread is been the idea that people are inherently greedy. The market is nothing more than a bunch of people who swap goods and services and capitol. The idea that the market is self-correcting only holds in you believe the idea the a person will act in his own best interests. Since this is not the case, I don't believe that the market can always be self-correcting. However, I definitely don't support the other extreme of having the government do it all.
[I'm glad to hear that you don't believe the government should do it all. But I'm sad to hear that you don't believe the market is self-correcting. I believe it is because a truly free market is self-disciplining. Businesses (those in a truly free-market are not politically connected) live and die at the whim of their consumers. Demand for their products allows them to make profits, but competition by other firms keeps them honest and innovative. Can a new business be started, the only one in it's industry, and misbehave? Of course, but not for long, so long as other businesses are not hampered by public policy to start up and replace or compete with the misbehaving business. What is often seen as the market being unfair is usually the players in the market acting in kahootz with the government to distort the market. Saying the market is powerful is somewhat misleading. A free market only exists by the voluntary actions of it's members. It is government, that has the monopoly on the use of force, that is truly powerful. And what is greed? I agree that greed effects everyone. An interesting but short analysis on this by Milton Friedman can be seen here: http://truth.skylerjcollins.com/2009/01/greed-capitalists-vs-politicians.html. As for self-interest, I know that self-interest is the basis for anything anyone ever does, including having faith in God. To make my point in regards to the market, I give you Adam Smith, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."]