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Dec 06, 2009

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Roch101

According to Fox News, the Hadron Collider is being sabotaged from the future -- so things must have got (will get?) better.

Spag

"Maybe the aftermath of Hurricane Katrina will come to symbolize the death of government-is-always-the-problem conservatism."

Show me a conservative who actually believes that, and you may be on to something. But for the sake of argument, if there is such a type of conservatism, then maybe you can enlighten us on the other types of conservatism. Unless of course you are conflating conservatism with a bastardized and non-existent adjective.

I think you meant anarchy. That is the only ideology that I am aware of that believes that government is always the problem.

Beelzebubba

Where is the archetype of conservatism, Walter Peck, when you need him.

Ed Cone

From Reagan's famous quip about the scariest words being I'm from the government and I'm here to help, to Greenspan's mea culpa-inducing stance on the role of regulators, to yesterday's LTE in the N&R parroting the "government doesn't do anything right" meme, broad-brush dismissals of government's role have been a staple of American political rhetoric.

I think that Katrina, and the failed effort to privatize Social Security, helped show that the pendulum had swung too far in that direction.

Spag

That's not the same thing as saying government is "always the problem". Further, as we saw with Katrina, there actually was a huge failure of the government at all levels, so I'm not really sure what point you're trying to make except "conservatism = bad".

Again I ask, if there is such thing as "government-is-always-the-problem conservatism", are there other forms of conservatism? If you can't answer that, aren't you the one painting things with a broad (and inaccurate) brush?

Andrew Brod

Credit Spag with a good try at creating a straw man. But the question isn't whether government should do everything or nothing. Ed understands that, and he assumed (apparently wrongly) all of his readers understand it as well. What matters is what goes on at the margin. Should government do more than it does, or less? When the subject is domestic policy, you can find a lot of conservatives who always answer no to that, in the spirit of St. Ronald of Reagan. That's the conservatism that Ed's referring to. You may disagree (as I do) that we haven't seen the end of this conservatism, but let's not muddy the issue.

Ed Cone

I think most readers will understand my vernacular speech and rhetorical devices pretty easily, and engage on the issue at hand, which is the movement toward post-Reaganite good government.

I don't think we've seen the end of a desire for limited government, or even of the overdone anti-government meme. Suspicion of government is part of American politcal DNA (on the left, too, depending on the subject).

You can see it at work in the healthcare reform debate now -- but I don't think it's as effective as it was a few years ago.

Katrina, social security privatization, and Greenspan's disaster were key moments in reversing the pendulum, although I'd say it began turning with Sununu's no-more-domestic-issues statement under Bush I and Newt's government-shut-down Waterloo a few years later.

Economies and societies are dynamic systems. We address big messy problems with imperfect solutions, often overdoing things in the process. I think we'll look at this era as one of reassessment, and I believe some reassessment is long overdue.

Steve Harrison

"Again I ask, if there is such thing as "government-is-always-the-problem conservatism", are there other forms of conservatism?"

Of course there's such a thing, Sam. It's called Libertarianism, an offspring of the Republican Party. And even though they are (in my opinion) borderline anarchists, I think they are speaking the (maybe hidden)thoughts and ideals of the vast majority of Republicans, even the bible thumpers.

There are some kinks in the relationship, such as military deployments (or even the existence of a standing Army), but true Conservatives are (supposed to be) isolationists,right? So maybe the differences aren't so deep.

I think Libertarians are successfully setting up two possible Conservatives: Themselves, and quasi-liberal, big-government-loving, tax-and-spend fake Conservatives, who call themselves Republicans. I don't think they're right, but they are convincing enough to shape the debate.

There are a lot of B.J. Lawsons out there, otherwise smart as hell but steadfastly believing in a fantasy future. Unless you do want them to succeed in changing your party, you guys need to have the guts to call a fool a fool.

Spag

I get the use of hyperbole, but it still appears from the responses that the use of a broad brush was intentional. The use of Reagan, Gingrich, et al to illustrate the argument is inaccurate, probably because there aren't conservatives as Ed describes.

Andrew writes "the question isn't whether government should do everything or nothing. Ed understands that.." Does he? Why then did he set conservatives up as in favor of doing nothing?

James

Steve,

Thumpers are an odd amalgamation, ranging from the Sarah Palin crowd (a twisted version of prosperity gospel with a big dose of profligate thrown in) all the way over to white bread Puritan, with a ricochet through Mormonism along the way.

If there's something "false" about a religion that worships markets, there's something false about every religion. That's the fundamental problem with faith-based anything.

greensboro transplant

"Andrew writes "the question isn't whether government should do everything or nothing. Ed understands that.." Does he? Why then did he set conservatives up as in favor of doing nothing?"

it's the favorite liberal, um, progressive device these days spag. setup a straw man and knock it down.

and i don't see too many conservatives that are suspicious of the govt the way the truthers and greens and some of the left is. we just think that the fed govt is inefficient, ineffective, and overreaches.

imho, we haven't reassessed anything this decade. we've just doubled down on the concept that large govt is best.

Ed Cone

I'm comfortable using "government is always the problem conservatism" to sum up the mindset described by the examples I've given in this thread.

And I'd guess most people understand what I'm talking about.

Similarly, I think most people would not argue that "I'm from the government and I'm here to help" is literally more terrifying a phrase than "a nuke is about go off" and "oh, crap, my husband," or insist that no babies were involved when Rubin, Gramm, Cox, Greenspan & Co. threw out the regulatory bathwater.

In any case, we've been in era when saying "the government does nothing as well as the private sector" has been a powerful truism. I see evidence that this era is ending, and that more productive questions about good government can be addressed.

Spag

What does the government do better than the private sector, Ed?

Ed Cone

So much for "nobody thinks government is always the problem," huh?

Just to choose from items already listed in this thread: run a low-cost retirement program, regulate financial markets, and facilitate access to pre-emergency health care.

I'd add some basic research and protection of civil rights, and at the local level, police and fire-fighting services, just to help fill the low-hanging-fruit basket.

The great fiction of the era is that there is one threat to individual liberty, and that is the government. In reality, government can be a threat to individual liberty, but it can also offset the power of large corporations and provide a buffer against the dislocations of a healthy free-enterprise system.

Anthony

"What does the government do better than the private sector, Ed?"

I don't often literally LOL in front of the computer, but after all the protesting up until that point, I LOL'd at that comment.

As far as the alleged existence or non-existence of conservatives who think government is always the problem, wasn't there some influential guy who wanted to drown the whole thing in the bathtub?

Jim Caserta

The things that Ed lists as gov't being better than the private sector can still be done poorly. No one would claim that financial regulation over the past 10 years was near optimal, but few want to reduce the role of gov't in such regulation. Disaster preparation is another role that can be botched.

I think the lesson of the naughts is that things that we expect never to happen, happen. We need to prepare for such events, which is advice people only seem to listen to immediately after a disaster. Our financial system & mortgage market was not prepared for not just a fall in home values, but a leveling off in prices. Expecting the unsustainable to continue forever is the same as thinking the possible will never happen - at least not in my lifetime.

Someone saying, 'things are different' is just like someone saying, 'I don't mean to insult, but', or 'Let me be totally honest' you should be cautioned more than comforted.

What a decade means is different for everyone. For me it was starting a family and two careers getting going. The big picture is made up of lots of little pictures.

Spag

Ed, I have a more detailed response coming when I have more time, but in the meantime answer this:

Of those items you listed, which ones did "conservatives" dispense with and which ones has the government established itself as being "better" at running and how? I don't accept your premise in the first place, but I'll save that for when I have more time.

Ed Cone

"No one would claim that financial regulation over the past 10 years was near optimal, but few want to reduce the role of gov't in such regulation."

I'm mystified by this statement, JC.

Reducing the role of government in financial regulation was exactly what Greenspan, Cox et al wanted to do, and did.

They believed that the magic markets would regulate themselves.

Hence, Greenspan: "Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity are in a state of shocked disbelief."

Sam: conservatives tried hard to privatize social security, a low-cost, high-impact program that's functioned well for more than 70 years. I'd argue that this failed attempt was a critical defeat for the government-always-bad meme. The failure of financial dereg/market reg is discussed in this very comment. Healthcare: one explicit fear of private option is that it will be cheaper and more attractive than private plans, which exist to make profits from healthier people and exclude less-healthy ones. Civil rights enforcement speaks for itself. Etc.

I'd add that the brand of conservatism in question is not, to my mind, very conservative in some important ways. But it does market itself as "conservatism," and has helped defined the agenda of the GOP for a generation, even as Democrats like Rubin have played a key role in certain aspects of its ascent.

Jim Caserta

Ed, I should have written 'few, NOW, want to reduce' or 'far fewer now want to reduce'. Even Greenspan, Paulson & Co acknowledge the need for tighter government regulation. Regulation is the price for playing in the market as it is now, with lots of gov't insurance.

I'm thinking about the boring/exciting banking dichotomy with boring banks having explicit guarantees (FDIC insurance), while exciting banks are left to fail. The exciting banks could just replicate the businesses of the boring banks, and with extra risk can charge just enough less to grow to be huge.

I fear the regulatory framework won't soon be made strong enough. I also have a feeling that a large or semi large bank that has repaid tarp will need more govt funds and will be allowed to fail (I have no information pointing to this, just a gut feeling not to be mistaken for advice). At that point there will be renewed interest in truly strengthening the system and not just the players.

Because crafting a good regulatory system is hard doesn't mean that we don't need it. If it were easy we wouldn't need it as much.

greensboro transplant

"Sam: conservatives tried hard to privatize social security, a low-cost, high-impact program that's functioned well for more than 70 years"

lol. if private investors ran something like social security it'd be called a ponzi scheme.

"The great fiction of the era is that there is one threat to individual liberty, and that is the government."

i don't buy that premise. bush expanded fed govt. bigger education. homeland security, etc. huge military buildup.

what evidence do you have aside from the push for private retirement plans?

Ed Cone

JC, understood. But I fear the number of true believers remains irrationally large.

GT, you are right that small government often is honored more in theory than practice.

But the move to privatize social security actually happened, as did the dereg regime for financial services, and the no-public-option battle is being fought now.

And of course those things flowed from the movement exemplified by that Reagan quote, so I'm not really sure what's supposed to be in doubt here. Government has been demonized past the point of effective policy, and I think voters recognize it.

Also, my point about the government being cast as the one threat to liberty is relative to non-government threats, e.g., corporate power.

Which is to say, government is held up as the only danger by people who ignore other dangers for which government might be a useful counterweight. That does not mean that too much government is not a real risk, just that there are other risks, too, and sometimes government is the less-bad one.

Spag

Ed, isn't it possible that government has been in bed with those corporate interests and that's why things got so screwed up? Too me, that is more evidence that government generally makes matters worse. Perhaps if private enterprises didn't really believe in the notion that some were "too big to fail", they would have acted more conservatively. However, because government has intertwined itself so far into the corporate world (thanks to BOTH parties), it's no wonder some businesses felt they always had an out. If there was less government involvement, then perhaps behavior of businesses and individuals would change.

More later if I have time...

greensboro transplant

ed,

thanks for elaborating. i must've missed the context before.

as far as health care goes, as a conservative, i believe that competition strengthens markets and produces better results. i don't think the public option focuses competitive pressures on health care. it may focus pressure on insurance companies. but i also believe the employer based/insurance company approach is anti-competitive.

we've got a kluge system that neither contains costs nor optimizes health. we've got a congress and president who are aching to make a deal. to me, it's a sure fire formula for disaster. time will tell.

Jim Caserta

Most of what people call the market today is a construct of the government, and that is related to one of Ed's posts today. Lehman Brothers was not a family, but an corporate entity endowed with some benefits by the government. One such endowment is bankruptcy protection. No one is going after former employees of Lehman and Bear to make more whole the debts of the bankrupt corporations. If your upside is proportional to how much debt you can accumulate on a business, but your downside is just losing your job, you might as well go all-in all the time. This rectification of gains - upside mine, downside yours - creates an incentive to increase the amplitude of swings.

This phenomena rears itself with hedge funds, which often have a clause where gains for a year generate no extra fees until a fund goes above its high point. The solution from hedge fund managers - start a new fund!

Roch101

"What does the government do better than the private sector, Ed?"

In addition to the other areas mentioned above, I would think there would be an immediately obvious one to you, of all people, Sam: The administration of justice.

Ed Cone

Sam, bad policy is not an argument for no policy, and in this case, some of the bad policies (e.g. moral hazard) were set up in part by lack of regulation (e.g., financial supermarkets, shadow banking).

I'm not always for more government, but I am for good government -- and good government gets lost when people are saying that government is always the problem.

GT, the pressure on insurance companies from a true public plan suggests one answer to the question of what government does better than private industry: provide low-cost insurance for a broad pool of people.

I agree that markets find efficiencies and are often the best solution, and, in a free country, should be the default answer.

But health care strikes me as a different beast. Private insurance naturally seeks the most profitable customers, and leaves those in need aside. If the market does not provide adequate non-emergency care to a large number of people, then perhaps a non-market solution is needed.

If there's a solution that does a better job for a broad population while buying gold-plated jets for insurance execs, fine by me. I'm more interested in the result than the ideology, and from what I can tell we need some measure of reform to get the results I see as imperative.

Spag

So Roch are you saying that conservatives tried to dispense with the "administration of justice"?

Spag

"good government gets lost when people are saying that government is always the problem."

That's the flaw in your premise. Nobody on the Right that I am aware of has ever claimed that "government is ALWAYS the problem." You really stretch Reagan, Gingrich et al to reach that conclusion.

If you were to say "the private sector is the problem", which you do seem to be saying to a certain degree- should I conclude from that that Ed Cone's ideology is that the private sector is ALWAYS the problem?

It was a broad brush, and an unfair one.

Roch101

"So Roch are you saying that conservatives tried to dispense with the "administration of justice"?" -- Sam

What?

Roch101

I guess I don't get a straight answer, which speaks for itself unfortunately, when I cannot even get an acknowledgment that government handles the administration of justice better than the private sector -- perhaps if I had suggested the government is better than the private sector in making reproductive decisions.

greensboro transplant

"In addition to the other areas mentioned above, I would think there would be an immediately obvious one to you, of all people, Sam: The administration of justice."

Better'n Judge Judy? No Way!

Jim Caserta

There is no 'the problem', there are 'a problem's. The private sector is not 'the problem', but there are problems that arise in the private sector. Our natural impulses are not solely altruistic, or even net positive. Lots of markets operate with very limited gov't involvement - mine, the semiconductor business, is an example. It's boom-bust, or at least used to have booms, but never took the whole economy with it, and has never required a bailout, at least in this country.

Banking is different because of its required leverage and ubiquity. Banking has been the source of panics & depressions in the past which is why it was regulated fairly tightly. Loosening regulations, many different ones, definitely contributed to the problems we have today.

That said, I don't like the mortgage market being controlled by the government, precisely because it has the capacity to eat a near infinite amount of default risk. People didn't worry about mortgages backed by Fannie defaulting, and Fannie was more concerned about prepayment than default. The implicit guarantee was always there and it didn't help things. I would like to see an exit strategy for breaking Fannie/Freddie into 4-10 similar pure-private, no guarantee explicit or implicit.

Banks need either explicit guarantees - FDIC insurance, or be left to fail. Sam will argue that we should have just let AIG fail and see where the chips fell. If Lehman caused an amount of damage to the markets, the next failure would have produced far more than just double the damage.

If we aren't comfortable with an institution failing, we shouldn't be comfortable with that institution existing in its current form. Regulation needs to work to shape banks so that we are comfortable with their failure. Just telling them they won't be bailed out won't prevent them from becoming sources of systemic risk, that's where we were last September.

Spag

Roch, the reason you didn't get an answer is because the answer is already out there. What was Ed's premise, Roch? Do you know any conservatives who were in favor of getting rid of the "administration of justice"? If the answer is "no", then your comment has no bearing on this conversation other than to possibly illustrate that Ed is wrong when he labels conservatives as being opposed to any government duties- but even I won't argue that is what Ed meant with regard to traditional government functions.

For the VAST majority of our history, government did outlaw abortion Roch. I guess America was a terrible country during that period. Regardless, that debate is not as simple as you try to make it and there is no point in going there because it has been rehashed. Looks like a little diversion tactic to me.

greensboro transplant

Nice post Jim.

Ed Cone

Well said, JC.

Roch101

Sam, you were the one who posed the question, "what does government do better than the private sector?" You can scold me for answering by saying my answer has no bearing on the conversation, but it appears to me as if what really happened was you found the all-to-relevant answers inconvenient to your ideological myopia.

Spag

What really happened is that you must have not been reading the whole thread and that is why you don't understand that your response isn't really relevant to the discussion. It was a nice attempt at "gotcha" except that it didn't. But if it makes you feel better, I will concede that government is better at the administration of justice than the private sector. One reason for that might be that the private sector doesn't perform that function or compete with the government for it, which is why your answer is irrelevant to the discussion and not probative at all on the question I posed to Ed.

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