Mitch Feels Lucky, Makes Harry's Day

October 7, 2011 7:22 PM

Last night, the Unites States Senate voted successfully to invoke cloture (end debate) on S.1619, the Currency Exchange Rate Oversight Reform Act of 2011. Senate Minority Leader Mitch McConnell (R-KY) filed a series of motions to suspend the rules in an effort to force a vote on President Obama's American Jobs Act [PDF]. That's when Senate Majority Leader Harry Reid (D-NV) nuked the Senate.

Senator Reid objected to the motion to proceed, but the Senate parliamentarian overruled his objection. To the surprise of everyone in the chamber, Reid used a procedural option known as the "nuclear option" to overturn the parliamentarian's ruling on a 51-48 vote. In addition to defeating the pending motions, the vote changed the rules of the Senate to stop the minority party from offering post-cloture amendments. This is the first use of the so-called nuclear option (previously), which came to public attention in 2005, when then-Majority Leader Bill Frist (R-TN) threatened to use it to break a Democrat-led filibuster of some of President George W. Bush's judicial nominees. Following an unusually frank post-vote debate, the members agreed to use the extended Columbus Day weekend as a cooling-off period. Votes on the currency bill and President Obama's jobs bill are expected when the Senate returns to session next week.

Article 1, Section 5 of the Constitution authorizes each chamber of the Congress to make its own rules, and the rules of the Senate are notoriously complex. The Bill Summary and Status for S.1619 includes a list of all Congressional actions which provides a play-by-play account of the maneuvering.

The scope of the rules change is very narrow, and it's not yet clear just how this will affect the body. Many observers of the Senate were shocked to see the nuclear option used over a piece of legislation that was not controversial and which enjoyed bipartisan support, particularly when it's unlikely that a companion bill will be brought up for a vote in the House of Representatives.

posted by wintermind (167 comments total)

I am glad that Reid is pushing back!
posted by PinkMoose at 7:25 PM on October 7, 2011 [3 favorites]

They pull a knife, you pull a gun. He sends one of yours to the hospital, you send one of his to the morgue. *That's* the *Chicago* way! Now do you want to do that? Are you ready to do that?

Fucking finally. 51 votes runs the Senate if 51 votes says it does
posted by crayz at 7:26 PM on October 7, 2011 [46 favorites]

Only nearly 3 years too late, but finally!
posted by hippybear at 7:29 PM on October 7, 2011 [19 favorites]

All to protect President Obama from the embarrassment of having Democrats vote down his jobs bill. Nice job Reid!
posted by BobbyVan at 7:31 PM on October 7, 2011 [6 favorites]

I am pro nuclear power.
posted by shakespeherian at 7:31 PM on October 7, 2011 [1 favorite]

People have been complaining about how this sets a bad precedent which the Republicans will build on when they're in power. Fuck that. When the Republican party gains a Senate majority they will do whatever they want, precedent or no. They are no longer a big tent party interested in compromise. This is a good move by Reid and it's something the Democrats should have used to get rid of the filibuster long ago.
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 7:31 PM on October 7, 2011 [43 favorites]

Sigh. That's great, but so close to elections? If the Rs take the Senate, now they won't hesitate to Push The Big Red Button.

Of course, considering the noises coming from them lately, they're probably itching to push it anyway.
posted by JHarris at 7:31 PM on October 7, 2011

Marc Anthony should never have been elected tribune, myself.
posted by The Whelk at 7:32 PM on October 7, 2011 [2 favorites]

Sigh. That's great, but so close to elections? If the Rs take the Senate, now they won't hesitate to Push The Big Red Button.

That big red button is called democracy. How about we let the party that wins the election actually do what they said they would do, then we see how it works out and adjust our votes accordingly the next time? You know, instead of the WHARRHARBL of procedural crap we've got now?
posted by crayz at 7:37 PM on October 7, 2011 [16 favorites]

Article 1, Section 5 of the Constitution authorizes each chamber of the Congress to make its own rules

And the Senate is the world's oldest deliberative game of Nomic.
posted by miyabo at 7:37 PM on October 7, 2011 [11 favorites]

The nuclear option as I understand it was changing the rules for cloture itself, I'm not sure why the same language is being used for post-cloture changes.
posted by furiousxgeorge at 7:40 PM on October 7, 2011 [1 favorite]

The term "nuclear option" is used for everything up to and including changing the Senate lunch menu
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 7:41 PM on October 7, 2011 [50 favorites]

I want to see the senate require all unfunded amendments introduced by singing them into the record as alternative lyrics to a well-known showtune.

Oh, BTW... Mao!
posted by pla at 7:42 PM on October 7, 2011

The term "nuclear option" is used for everything up to and including changing the Senate lunch menu

In fairness, they usually tell freshmen Senators on the first day to avoid the chili.
posted by JHarris at 7:45 PM on October 7, 2011 [1 favorite]

It seems like "nuclear option" is now the shorthand for "a permanent change to one of the longstanding rules the Senate has adopted in its history of being the brakes on the House of Representatives." This whole "minority holding the Senate hostage" thing used to be a feature, not a bug.
posted by Etrigan at 7:49 PM on October 7, 2011 [2 favorites]

I'd like to know which Democrats were planning to vote against the jobs bill because it limited tax exemptions for people earning more than $250K, and why they call themselves Democrats.
posted by rocket88 at 7:50 PM on October 7, 2011 [37 favorites]

The 'nuclear option' is the one where filibusters are prevented completely. This is not that, even vaguely. But, since the corporate-owned media is calling it that, the Republicans will now feel free to actually shut off filibustering, should they take control of the Senate at a later time.

It's the usual conservative tactic of using the opposition's toe in the water to justify a full-body cannonball.
posted by Malor at 7:50 PM on October 7, 2011 [29 favorites]

This whole "minority holding the Senate hostage" thing used to be a feature, not a bug.

If you drive around with your taillights on constantly, the brakes are going to fail.
posted by zippy at 7:52 PM on October 7, 2011 [12 favorites]

I think this (NRO, sorry) is the clearest explanation of what was going on that I've read.
posted by Chocolate Pickle at 7:54 PM on October 7, 2011 [1 favorite]

Republicans will not hesitate one second to destroy America in order to save it.
posted by Aquaman at 7:57 PM on October 7, 2011 [5 favorites]

Etrigan: “It seems like ‘nuclear option’ is now the shorthand for ‘a permanent change to one of the longstanding rules the Senate has adopted in its history of being the brakes on the House of Representatives.’ This whole ‘minority holding the Senate hostage’ thing used to be a feature, not a bug.”

Trent Lott did this when he was Senate Majority Leader in 2000. It was not a permanent change then, and it is not a permanent change now.
posted by koeselitz at 7:59 PM on October 7, 2011 [5 favorites]

Aquaman: Republicans will not hesitate one second to destroy America in order to save it.

Saving it is not relevant. They are deliberately destroying the government, miring it in debt and preventing any possibility of it paying that debt off, with the express purpose of rendering it impotent, putting corporations in charge of everything.

They're not trying to save anything. Their only goal is destruction.
posted by Malor at 8:00 PM on October 7, 2011 [31 favorites]

Sigh. That's great, but so close to elections? If the Rs take the Senate, now they won't hesitate to Push The Big Red Button.

They already did during the ridiculous debt ceiling debate back in August.
posted by KokuRyu at 8:01 PM on October 7, 2011 [2 favorites]

The term "nuclear option" is used for everything up to and including changing the Senate lunch menu

Senator Reid invoked the "nuclear option" today in a surprise move to ban the term "Freedom" as in "Freedom Fries" from the lunch menu.

"C'mon, that's just the stupidest name for a French fry ever," said the Senator through a mouthful of bacon cheeseburger. "It's a fucking French fry. Jesus Christ."
posted by emjaybee at 8:05 PM on October 7, 2011 [8 favorites]

It was not a permanent change then, and it is not a permanent change now.

"Permanent" in the sense that it's the new rule until the Senate actively changes it back, like the vast majority of other legislative actions.
posted by Etrigan at 8:06 PM on October 7, 2011

If you'd like to see video of Reid and McConnell speaking about this (in the Senate), it's on CNN: Who's angry now? Does Senate spat reflect frustrated national mood?
posted by flex at 8:12 PM on October 7, 2011

So, basically, the Dems wanted to adjust Obama's AJA before voting on it. The Repubs wanted to force through a vote on it as-is, so they could basically embarrass Obama. Reid said no, cockwads, we're not playing the gotcha game with this and wasting precious time. If you're going to pull that chicken shit, we're going to shut you down. In essence, if the minority is going to act petulant and obstructive in order to gum up the works and score political points, they forfeit the consideration of the protection in the rules for the minority.

It should have happened a long time ago. And for that matter, any time the minority tries this kind of crap, the majority should do what's necessary to take care of business. And if the public doesn't like it, they can vote for someone else next cycle.

But let's be honest. Only one US political party has a vested interest in making government as dysfunctional and distrusted as possible.
posted by darkstar at 8:13 PM on October 7, 2011 [28 favorites]

It can't be a nuclear option if no one's face melted.
posted by dirigibleman at 8:15 PM on October 7, 2011 [1 favorite]

From political scientists: what we think about all this.
posted by quodlibet at 8:18 PM on October 7, 2011 [2 favorites]

Who hides in the refrigerator, a la Indiana Jones?
posted by potsmokinghippieoverlord at 8:18 PM on October 7, 2011

I think this (NRO, sorry) is the clearest explanation of what was going on that I've read.

Greg Koger's description at the monkey cage was way more accurate.

The tl;dr version is this:

*Cloture means that we shut up about everything else and only work on the bill in question, in combination with previously registered amendments to it. Everything we do has to be germane (=relevant) to that bill.

*It's a firmly-worded rule that boils to NO SERIOUSLY, SHUT THE FUCK UP AND GET TO WORK ON THAT BILL.

*In 2010, the Senate Republicans invented a way to get around this and create a partial POST-CLOTURE filibuster. Instead of proposing a nongermane amendment (in this case, to cause an embarrassing vote for Democrats), they would move to suspend the rules and do pass their nongermane amendment. Their idea was that the motion to suspend the rules, which says that we ignore everything else for a minute, would overrule the part of the rules that talk about cloture. Suspension of the rules requires a 2/3 majority to pass, so the Republicans know that it is impossible for their proposals to pass. Their entire purpose is to create votes that might embarrass or otherwise cause problems for the majority.

*The precedent set by the Senate's majority vote overturns this and only this. It's not Reid's power play.

Contrary to the NRO article, there was no custom, in any meaningful sense, to allow postcloture nongermane amendments so long as they were coupled with motions to suspend the rules. How could there be? While it had previously been used twice, the Republicans basically invented this as a dilatory tactic last year.
posted by ROU_Xenophobe at 8:21 PM on October 7, 2011 [21 favorites]

*It's a firmly-worded rule that boils to NO SERIOUSLY, SHUT THE FUCK UP AND GET TO WORK ON THAT BILL.

QFT. Get to work and do your job, assholes. The country needs help.
posted by darkstar at 8:26 PM on October 7, 2011

From political scientists: what we think about all this.

For thems what don't know, Sarah Binder and Steve Smith are both absolute towering experts on Congress, congressional procedures and parties, and the Senate. They can speak ex cathedra on this sort of thing.

Greg Koger is too young to have their reputation, but is also an expert on the filibuster.
posted by ROU_Xenophobe at 8:27 PM on October 7, 2011

The term "nuclear option" is used for everything up to and including changing the Senate lunch menu

Senator Reid invoked the "nuclear option" today in a surprise move to ban the term "Freedom" as in "Freedom Fries" from the lunch menu.

"C'mon, that's just the stupidest name for a French fry ever," said the Senator through a mouthful of bacon cheeseburger. "It's a fucking French fry. Jesus Christ."

No way, Fallout Fries are awesome!
posted by furiousxgeorge at 8:33 PM on October 7, 2011

...it's the only way to be sure.
posted by OverlappingElvis at 8:36 PM on October 7, 2011 [3 favorites]

One of the interesting angles of this story, for me, is the split in the GOP over the China currency bill. I think there are about equally strong free-trade and protectionist camps within the GOP (a split which falls nicely along Big Business Republicans vs. Tea Partyist lines).

Obama could make hay out of this, if he wanted too. But he belongs to the Big Business wing of the Democratic party, so that's not going to happen.
posted by Avenger at 8:44 PM on October 7, 2011 [1 favorite]

Wikipedia helpfully informs me that it's been called the "nuclear option" since 2003, when Trent Lott (who had, as I noted, already invoked that option) first called it that.
posted by koeselitz at 9:33 PM on October 7, 2011 [2 favorites]

It is good to see Reid get some balls on this one. Now go all the way.

This whole "minority holding the Senate hostage" thing used to be a feature, not a bug.

There was a time when the Senate was supposed to be a collection of individuals, engaging in actual debate across party lines and within their own parties. There was dissent on all sides, and compromise could happen. In such a situation, the filibuster can have merit. This is no longer the case. The Republican party has gone parliamentarian, and votes in lockstep. In such an environment, the filibuster means that an obstructionist minority can halt all progress, and the last four years should have shown how bad a thing that is.
posted by kafziel at 10:08 PM on October 7, 2011 [16 favorites]

"It is good to see Reid get some balls on this one. Now go all the way."

Yes, yes, yes!

I keep wondering when the Democrats are going to stop rolling over for the Republicans - it's way past time for things to change.

Well done, Harry Reid!
posted by aryma at 10:31 PM on October 7, 2011

Actually a minor incident. They got a filbuster vote and lost. They wanted a second one. Reid said no.
posted by Ironmouth at 10:44 PM on October 7, 2011 [1 favorite]

...the original version of President Obama’s jobs package, which many Democrats are against because it would limit tax deductions for families earning more than $250,000 a year. The jobs package would have been considered as an amendment....

*Sigh*

---

Also, just so no one is confused they did not change the rules to get rid of the filibuster, but rather prevent some kind of post-filibuster delaying tactics (demanding votes on amendments after cloture)

The other thing this does, though, is clearly destroy the arguments of people who claim the democrats 'couldn't' pass healthcare with a public option because they couldn't overcome a filibuster. That wasn't technically true at the time (because the public option could have been passed by reconciliation) but not only that, this clearly illustrates that democrats, who actually had 60 rather then just 53 or whatever seats at the time could have changed the rules if they needed too.
posted by delmoi at 10:44 PM on October 7, 2011 [11 favorites]

This is great. It's nice to see that every bill doesn't require 2/3rds of the votes to even get considered. But doesn't this bill still have pass the House?
posted by Gilbert at 11:09 PM on October 7, 2011

JHarris: "The term "nuclear option" is used for everything up to and including changing the Senate lunch menu

In fairness, they usually tell freshmen Senators on the first day to avoid the chili."

Actually, that would be the bean soup.

_{Note: Do not try this at home. Firstly, it's awful, and secondly, that recipe makes 5 gallons of the stuff}

And, on a more serious note, I'm not sure I like that the Senate rules are being thrown out the window like this. The Senate has a reputation for not doing this, and even through all the nastiness we've been through over the past few years, I'm not sure that it's a great idea to end the filibuster. It's a convenient circuit-breaker for Congress.

Contrast to the House, which throws their rules out the window every 2 years, and makes new ones up as they go along. This year was particularly embarrassing, as the new spat of Tea Party representatives didn't even know basic parliamentary procedure, and in its first week, the House spent more time calling itself to order than anything else. Even still, the House is a fairly unruly place. (Disclaimer: I work for the Senate, and there is a bit of a rivalry there.)
posted by schmod at 12:36 AM on October 8, 2011 [1 favorite]

But let's be honest. Only one US political party has a vested interest in making government as dysfunctional and distrusted as possible.

Good luck expressing this point on MetaFilter circa 2011 and expecting a fair hearing, much less anything remotely approaching reasonable analysis. That ship sailed. I believe it is called the U.S.S. Enemy of the Good AKA GOREOBAMA-AND-BUSH-ARE-TOTALLY-THE-SAME-BRAH.

Also, Civics 101. Thanks for an actually informative post about how (even dysfunctional) legislative governance works. The pox-on-both-houses nonsense is self-serving naiveté. Again, must be nice to live in a world wherein elections do not have consequences.
posted by joe lisboa at 12:50 AM on October 8, 2011 [1 favorite]

i.e., HURF DURF ABOVE THE FRAY = the wrong side of the fray.

Which, you know, is a thing. Look it up, this fray.
posted by joe lisboa at 12:52 AM on October 8, 2011

I believe it is called the U.S.S. Enemy of the Good

you mean the u s s mediocre - and no one's going to convince me that the obama administration and congress's performance in the last few years is anything but mediocre and insufficient

you can still call it better than what the other guys would do, but don't call it good - it's not
posted by pyramid termite at 2:31 AM on October 8, 2011 [4 favorites]

The term "nuclear option" is used for everything up to and including changing the Senate lunch menu

Cool. Let's add it to our ballots
posted by hal9k at 2:56 AM on October 8, 2011 [1 favorite]

you can still call it better than what the other guys would do, but don't call it good - it's not

Better than what the other guys would do is as good as it's going to get, so I'll call it good, if you don't mind.
posted by tommyD at 4:46 AM on October 8, 2011

I'll give these guys credit. They are wizards at re-arranging deck chairs.
posted by Thorzdad at 5:53 AM on October 8, 2011 [2 favorites]

I'm a little torn on this one. Not because I don't think Reid did the right thing - McConnell pulled a dickhead, grandstanding, "we're gonna doing everything up in here but solve some problems for America" move, and Reid called him on it. It was the right move. It was the sane move.

The problem going forward is that you know the Republicans won't take this as the chastisement it was. This will be their excuse to be even bigger dicks.

Maybe that's what it will take for the apathetic public to finally take notice.
posted by Benny Andajetz at 5:55 AM on October 8, 2011 [1 favorite]

The 'nuclear option' is the one where filibusters are prevented completely. This is not that, even vaguely. But, since the corporate-owned media is calling it that, the Republicans will now feel free to actually shut off filibustering, should they take control of the Senate at a later time.

So actually changing the rules to end all filibusters would now have to be at least the thermonuclear option, or even the planet-buster or death-star option.
posted by Kirth Gerson at 6:12 AM on October 8, 2011

Anyone defending the Dems as any more effective or "good" than the Republicans has fallen for exactly the game the (party-neutral) oligarchy wants you to play.

I will stick with the best we can get. When you come up with a scenario of "better" that has the slightest chance of becoming reality, let me know. Until then, have fun in fantasy land.
posted by tommyD at 6:21 AM on October 8, 2011 [3 favorites]

So what the hell is wrong with making sure your dust doesn't blow onto other people's land and choke them half to death? I'm more interested in that than some fucking sideshow.
posted by wierdo at 6:44 AM on October 8, 2011

Anyone defending the Dems as any more effective or "good" than the Republicans has fallen for exactly the game the (party-neutral) oligarchy wants you to play.

Dems jobs plan: infrastructure investment, fica tax breaks for businesses and individuals, extending unemployment benefits, slew of other stuff.

Reps jobs plan: repeal new financial regulations, gut the FDA, dismantle the EPA.

Yeah I can't really see a difference there.
posted by Max Power at 6:49 AM on October 8, 2011 [13 favorites]

If you drive around with your taillights on constantly, the brakes are going to fail.

I think you have those wired wrong.
posted by yerfatma at 6:53 AM on October 8, 2011 [6 favorites]

Arguing "don't do X because the Republicans will be dickheads later if you do" ignores two salient points:

1) In any of these situations, X is the right thing to do; and
2) The Republicans always have been and always will be dickheads no matter how many times the Democrats let them get away with their bullshit.

The only thing that can limit Republican dickheadedness is a massive political defeat so that they don't have the power of dickishness anymore.

The only nice Republican is a severely ass-kicked Republican. It's the opposite of reciprocity. That is their rule and it's only fair to make them live by it.

The Vichy Democrats understand this. However, they prefer to be safe collaborators than risk-taking patriots.
posted by warbaby at 7:30 AM on October 8, 2011 [9 favorites]

Dems jobs plan: Champion a bill they know has no chance of passing so they can get elected again.

That's nice, but since they are going to lose seats anyway so you are pretty much screwed on the jobs thing.
posted by furiousxgeorge at 7:43 AM on October 8, 2011

It all fell apart when "filibuster" stopped having to be a filibuster. If the minority wants to play that card, it has to be important enough for them to be seen on C-SPAN actively getting in the way of democracy. If they can just vote for a filibuster and then go home, we get into this thing where all of a sudden it takes 60 votes to pass anything. Which is, by the way, not in keeping with the spirit of the constitution which spells out that the President of the Senate (the VP) has the tie breaking vote. If you modify the rules to eliminate the possibility of a tie, then you change what the founders intended the Senate to be.
posted by gjc at 7:46 AM on October 8, 2011 [1 favorite]

Max Power : Dems jobs plan: infrastructure investment, fica tax breaks for businesses and individuals, extending unemployment benefits, slew of other stuff.

Do you all really not understand that someone has to pay for ideas like those?

A "jobs plan" that puts some people to work by paying them out of the pockets of those already managing to hold a job kinda misses the point of why people want jobs in the first place. And in case that reads too subtly - Working to support you ain't it.

Basically, our so-called "leaders" - From both sides of the aisle - Have no idea how to fix this mess. And even if they could recognize the root cause, none of them have the will to actually address it rather than posturing for the next election.
posted by pla at 7:48 AM on October 8, 2011

furiousxgeorge: That's what the process is sort of supposed to be. Champion bills that the majority of the country wants. If the opposition wants to get in the way of that, then they have the people to answer to.
posted by gjc at 7:49 AM on October 8, 2011

I for one can't fathom of any sort of job that would involve people who have money giving it to people who want money.
posted by furiousxgeorge at 7:53 AM on October 8, 2011 [2 favorites]

McConnell had threatened such a motion to force a vote on the original version of President Obama’s jobs package, which many Democrats are against because it would limit tax deductions for families earning more than $250,000 a year.

Wait, what?
posted by ZenMasterThis at 7:54 AM on October 8, 2011

A "jobs plan" that puts some people to work by paying them out of the pockets of those already managing to hold a job kinda misses the point of why people want jobs in the first place. And in case that reads too subtly - Working to support you ain't it.

Money is a social construct. People need material resources, which are provided through the labors of others, to survive. We could let the unemployed die or we could not. If we don't plan to let the unemployed die, that will require we share our resources with them. And so perhaps it would make sense to give them a way to contribute back to our society in exchange for those resources

tl;dr you have 20 million people sitting on their asses doing nothing. In what idiotic worldview does organizing these people into a productive workforce harm our society?
posted by crayz at 7:58 AM on October 8, 2011 [10 favorites]

A "jobs plan" that puts some people to work by paying them out of the pockets of those already managing to hold a job kinda misses the point of why people want jobs in the first place. And in case that reads too subtly - Working to support you ain't it.


I already have a job, thank you. And I'd pay higher taxes to have better roads, plumbing, bridges etc.

If someone making 250k a year can't afford to pay 4% more in taxes, then THEY NEED TO MANAGE THEIR INCOME BETTER.
posted by Max Power at 8:00 AM on October 8, 2011 [10 favorites]

This will be their excuse to be even bigger dicks.

You know, that's fine with me. The Republicans are the ones that wanted to draw the line in the sand, not the Democrats. The Dems have made themselves a laughing stock by bending over backwards to placate the petulant Republicans and their I'm leaving and taking the ball home with me bullshit.

You can only give so much without reciprocity until you realize that you're simply being taken advantage of. Compromise was never in the Republicans vocabulary, so fuck them. Fuck them hard, with a stick.

The Democrats need to draw lines in the sand. On this side, you have social safety nets, you have compassion, you have progress, you have civilization. On their side, you have nasty, brutish, and short. Pick your side. No prisoners. Fuck the heathens. Hard. With a stick.
posted by Civil_Disobedient at 8:05 AM on October 8, 2011 [3 favorites]

pla wrote: A "jobs plan" that puts some people to work by paying them out of the pockets of those already managing to hold a job kinda misses the point of why people want jobs in the first place. And in case that reads too subtly - Working to support you ain't it.

So you think that all those unemployed people decided one day not to go to work anymore? In a perfect world, the attitude you express would be nothing more than selfish. Instead, it's also self-destructive. Until we have decided that everybody matters and that it's not OK to simply declare a large swath of our population excess to our needs, those of us with jobs will continue to have to support those who we can't employ.

I guess we could let people starve in the streets, but I, for one, prefer to have a civil society where I don't have to worry (too much) about being robbed.

Maybe I'm just a starry-eyed idealist, but I work to support myself and my country, which includes all of the people living in it. I guess it's just the difference between those of us who think of ourselves as rich and those of us who don't. We "poor" are the ones who are constantly lending (more often, giving, in the guise of a loan) money to our equally poor friends because we don't want them to lose their housing or have their electricity shut off. It sure would be nice if everybody else would share the burden. But you fucks don't literally see people starving in the street so you presume whatever problems are already taken care of and proceed to ignore it.

So yeah, while you're bitching and whining about being forced to give your money to undesirables, I'm sitting here employing recent immigrants, ex-felons, and the otherwise forgotten while trying to live on what little remains. Stop being part of the problem and be part of the solution. I promise that it'll help you out when all the formerly 'po folk have money to buy your services.
posted by wierdo at 8:08 AM on October 8, 2011 [28 favorites]

furiousxgeorge : I for one can't fathom of any sort of job that would involve people who have money giving it to people who want money.

When the government pays someone to do something, where does that money come from?

You, me, and Sam share an apartment. I work, you work, and Sam got laid off last month. We hold a vote and I vote to kick Sam out for not paying his share of the rent. You vote to keep Sam around if he'll agree to weed the garden, and of course Sam sides with you. You and I both now pay 50% more, and get nothing but a sub-minimum-wage job out of Sam as part of the deal.

It sounds just peachy to say we "created" a job. Except, we didn't. We just took a job away from a 12YO and gave it to Sam.

Progress!
posted by pla at 9:12 AM on October 8, 2011

wierdo : So you think that all those unemployed people decided one day not to go to work anymore?

Refrain from putting words in my mouth, please?

Unemployment sucks, but robbing Peter to pay Paul to fill potholes doesn't solve the actual problem.

That said, I do prefer paying Paul to fill potholes over paying him to watch daytime soaps. But going back to my original, now-deleted point - "Better" still doesn't mean "good".
posted by pla at 9:16 AM on October 8, 2011

Where does the money for the child labor gardner come from?
posted by furiousxgeorge at 9:30 AM on October 8, 2011 [1 favorite]

pla:

Here's the thing - the economy doesn't know or fucking care where the money comes from. The only way to get things moving is to increase demand ( because demand is the only thing that creates jobs), and the only way to increase demand is to get disposable income into the economy.

You can make moral judgments about what is good and bad if you want. It's an important discussion, to be sure. But we are in a serious hole. We need to stop digging and fill the hole. Once it's filled, we can make some decisions on how to keep it from happening again.

(And , IMO, the government has been put in this spot. Big business put us here and continues to refuse to help in any meaningful way.)
posted by Benny Andajetz at 9:33 AM on October 8, 2011 [2 favorites]

Unemployment sucks, but robbing Peter to pay Paul to fill potholes doesn't solve the actual problem.

When Peter has been robbing Paul to pay Peter for decades, shouldn't he face some consequence?
posted by Max Power at 9:37 AM on October 8, 2011 [2 favorites]

You, me, and Sam share an apartment.

More like you, me and Sam share a lifeboat. We're all capable of paddling, but we've only got two oars and enough supplies for two of us to eat three meals a day.

Analogies are fun. In yours, you conveniently glossed over the part where you just metaphorically made our roommate homeless because he missed a month's rent.
posted by JaredSeth at 9:38 AM on October 8, 2011 [4 favorites]

pla, if you kicked Sam out won't you have to pay his share of the rent anyway?
posted by The Violet Cypher at 9:48 AM on October 8, 2011 [8 favorites]

pla wrote: That said, I do prefer paying Paul to fill potholes over paying him to watch daytime soaps. But going back to my original, now-deleted point - "Better" still doesn't mean "good".

Seems to me that the potholes need filling, so we ought to be paying people to fill them. That may be a person's highest and best use, and there's nothing wrong with that. Given that the other choice is to let them starve in the streets, I say fill the potholes.

We all need to pitch in and get our fellow countrymen (and women, and transgendered people) back to work so they can get back on their feet. As long as we're focused on "oh noes, the government" or "oh noes, the taxxeeeesss" we're going to keep foundering.
posted by wierdo at 10:33 AM on October 8, 2011 [2 favorites]

JaredSeth : More like you, me and Sam share a lifeboat. We're all capable of paddling, but we've only got two oars and enough supplies for two of us to eat three meals a day.

Nice, very subtle. Making the situation sound more like a matter of scarce communal resources rather than having one unproductive (albeit involuntarily) member of the group - Kudos on that one.


The Violet Cypher : if you kicked Sam out won't you have to pay his share of the rent anyway?
furiousxgeorge : Where does the money for the child labor gardner come from?

By kicking him out, we can replace Sam with a paying roomate; and even if we hired Sam back as the gardener for the same amount we would have spotted him in the original scenario, we now get to divide that cost over three people instead of two.
posted by pla at 10:43 AM on October 8, 2011

Unemployment sucks, but robbing Peter to pay Paul to fill potholes doesn't solve the actual problem.

Uh, taxing those who can afford it a little bit more so those of us at the very bottom can work isn't "robbing" anyone, and yeah, it actually does solve the problem. It means those who are now employed - thanks to an extra 4% skimming on people making more than 250k - have jobs now, pay taxes, and can spend.

You seem to be coming from the point of view that taxes going to job creation is somehow unfair. If you really buy this kind of fortress mentality, then I don't know what to tell you. It just strikes me as bogglingly hyperbolic and selfish.
posted by Marisa Stole the Precious Thing at 10:49 AM on October 8, 2011 [3 favorites]

By kicking him out, we can replace Sam with a paying roomate; and even if we hired Sam back as the gardener for the same amount we would have spotted him in the original scenario, we now get to divide that cost over three people instead of two.

But where is your money coming from?
posted by furiousxgeorge at 10:57 AM on October 8, 2011

The only way to get things moving is to increase demand ( because demand is the only thing that creates jobs)

That's true. The mistake the republicans are making is they are trying to use the right solution for the wrong problem. There are economic slowdowns that can be helped by flushing money toward business- the ones that are caused by lack of capital and borrowing ability. If you have customers lined up but have no way to invest in new employees for some reason, your problem would be solved by more money. But that's not the case in this economy. Business has the money and the credit, not the demand.
posted by gjc at 11:02 AM on October 8, 2011 [1 favorite]

Pla, I find your moral attitudes towards sharing rather repugnant, but you're also being myopic and foolish. If the government doesn't invest, nobody will, and the economy will not recover. It's that simple. And if the government invests, it's going to have be done with tax dollars.

The jobs act WOULD address the underlying problem, which is low demand. That, not giving your money to lazy bums, is exactly what it is designed to do. The economy can't just pick itself up by its bootstraps.
posted by mellow seas at 11:44 AM on October 8, 2011 [1 favorite]

mellow seas : Pla, I find your moral attitudes towards sharing rather repugnant

So how long do you put up with a non-paying roomate? Six months? A year? Forever? Can I move in with you?


If the government doesn't invest, nobody will

Absolutely FALSE. Every single person with a 401k has invested in the economy. Everyone with an IRA. Everyone who puts a few bucks into a CD. Everyone who buys a car, a TV, a house, a tube of toothpaste.

The government can't wave the magic wand of economy-fixing because the economy dwarfs the government, and the because the government itself depends on the health of the economy for its funding. The government can, at best, try to infuse some cash into that feedback loop to smooth out the rough spots... Which they've done no fewer than five times in as many years, to no effect.

Only two groups of people can "fix" this - Businesses, and consumers. Consumers need to buy more so businesses can sell more and thereby hire more people who will then have the money to consumer.


The economy can't just pick itself up by its bootstraps.

The economy must do exactly that.
posted by pla at 12:01 PM on October 8, 2011 [1 favorite]

pla: "By kicking him out, we can replace Sam with a paying roomate; and even if we hired Sam back as the gardener for the same amount we would have spotted him in the original scenario, we now get to divide that cost over three people instead of two."

And what happens when there is a shortage of paying roommates? Are there perfectly good have-rent-money types sleeping in cardboard boxes that are just waiting for this scarce commodity (a house with a room empty) to become available? This is the problem after all, not enough jobs for everybody to have rent money...

This is a demand-driven economy, unless there is money for people to spend, the economy continues to tank, regardless of how many tax breaks the companies get. Bosses aren't stupid, they won't hire until they can sell more shit, so until we can buy shit, nothing will change. Getting the money for purchasing said shit will require deficit spending, that's a given. You fix that when the economy comes back, not while it's down.
posted by Sportbilly at 12:04 PM on October 8, 2011 [3 favorites]

The economy must do exactly that.

Economies do not work that way!

Good night!
posted by one more dead town's last parade at 12:09 PM on October 8, 2011 [1 favorite]

"Better" still doesn't mean "good".

I don't know, paying somebody so that they don't starve seems good to me.

Unemployment sucks, but robbing Peter to pay Paul to fill potholes doesn't solve the actual problem.

In the next decade we're going to need to deal with a fundamental issue with our current system, which is that we just have too many people and not enough jobs. We will never have enough jobs that pay enough to employ the entire population. We are going to need to find some way to supplement people's income or resources so that they don't starve outside of the purely capitalistic economic system.

So how long do you put up with a non-paying roomate? Six months? A year? Forever? Can I move in with you?

But they're not splitting the rent with just me, they're splitting the rent with the entire country.

And you wouldn't quit your job, move in with me and just slack, would you? You like having nice things, you like feeling accomplished. There are competitive and personal reasons that people work outside of basic needs. That's the fundamental flaw in that entire conservative talking point about welfare queens. People desire success and accomplishment. If we provide them opportunities to be successful and work, they will take them.
posted by formless at 12:54 PM on October 8, 2011 [2 favorites]

I'm assuming pla is just having fun trolling on a Saturday. It's much more charitable than imagining the alternative motivations.

In any event, because it needs to be said again, the banks are sitting on a shitload of cash. They're not lending much to real people (individuals or small business), because they can sit on the cash and get a nice wad of interest on the money, compared to what they're paying for it. (Remember, they got a nice bail-out and the interbank lending rate is at record lows). The resulting money tightening means a lack of liquidity in the market. Which means there is a lack of demand for goods and services. Which means businesses are laying off or freezing new hires until things improve (i.e., more people have more ney to buy more goods and services again).

But things won't improve as long as people don't have jobs and can't borrow money easily, because that's what leads to liquidity and the demand necessary for things to be pushed forward. Hence, the government, which is the only other player other than business and individuals, that can do anything. The government needs to kick start things by increasing fluidity. Which means hiring people for government jobs, using money the government either borrows (hence, the deficit) or by raising taxes on the people who DO have jobs and a lot of disposable income, whose spending habits won't really be hurt by a few extra percent tax (i.e., the rich).

That's pretty fucking simple, even if some people want to obtusely make flawed analogies that suggest the problem is really just all about lazy Sam who wants to mooch off of his roommates.
posted by darkstar at 1:24 PM on October 8, 2011 [3 favorites]

The government can't wave the magic wand of economy-fixing because the economy dwarfs the government, and the because the government itself depends on the health of the economy for its funding

The government is the set of laws and institutions we the people have created to carry out our collective will. We can do to our economy whatever the fuck we decide, thanks
posted by crayz at 1:30 PM on October 8, 2011 [3 favorites]

darkstar : flawed analogies that suggest the problem is really just all about lazy Sam who wants to mooch off of his roommates.

To repeat my admonition to weirdo - Refrain from putting words in my mouth, please?


I'm assuming pla is just having fun trolling on a Saturday. It's much more charitable than imagining the alternative motivations.

Yeah, thanks, I'll end my contribution to this thread now.

I will only point out that the fact that you need to believe I mean this as a troll, counts as quite a big part of the real problem.
posted by pla at 1:46 PM on October 8, 2011

"2) The Republicans always have been and always will be dickheads no matter how many times the Democrats let them get away with their bullshit."

I've got to disagree with you there.

The Republicans have NOT *always* been dickheads. There was a time, in living memory for some people, when they were sensible in their own way. You could be Ike and sound serious warnings about the military-industrial complex. Heck, you could be Nixon and set up the EPA.

I am grateful to Kung Fu Monkey for clarifying this for me in I Miss Republicans (and 2006's I Still Miss Republicans).

In my experience, this is part of the problem for some older Republican voters. They think these Republicans are their old, familiar Republicans.

I have had (limited) success discussing current Republican obstructionists with my Republican relatives by describing them as "extremist Republicans."

These Republicans are not your father's Republicans.
posted by kristi at 2:12 PM on October 8, 2011 [2 favorites]

pla, I know you said you've ended your contribution to this thread, but I hope you'll feel free to comment on this if you like.

Like you, I would rather not pay someone for, basically, busy work; I don't like the idea of government employees doing nothing but showing up to a desk and pushing paper just so they can get some of my tax dollars.

On the other hand, I believe there are a lot of things government can do to make my life better, from delivering mail to filling potholes to overseeing the proper uses of government-owned land to keeping airplanes from colliding at the airport. I am happy to pay people a sensible wage to do these thing, because they're services that benefit me.

So here's an analogy that's been in my head for a few months now, as I think about the question of whether it makes sense for the government to create jobs:

You and I live in a house together. Our neighbor, Sam, is a construction worker. For several of the years Sam's lived next door to us, he's been incredibly busy - but then the housing bubble burst, and his work slowed, and then pretty much dried up. He's been getting unemployment insurance (for which his employer paid, while he was employed); it'll run out next month.

Over here in our house, we've been putting off getting the roof redone. There's one little corner that, if we're honest, really needs to be fixed, but most of the roof will probably last us another 5 years. It'll have to be replaced sometime. Roofs are like that.

So, you and I have a chat. We could hire Sam for a couple of months to re-roof the place. He's short on work right now (he MIGHT even cut us a deal), so he's available. Interest rates are ridiculously low, so if we needed a loan to do pay for the work, we'd be getting a much better deal than we're likely to get in five years.

I'm a softie, so I'd kind of like to get Sam working on the roof just because I know he hates not working and it'd be nice to see him smiling at the end of a good day's work. It wouldn't be a permanent job, but a couple of months could make a real difference to him while the economy is recovering. But even just from a strictly financial perspective, it seems to me like it would make sense to get Sam - or SOMEBODY - in to work on the roof now.

If you care to respond, what would you think?

And another analogy:

Our neighbor on the other side, Liz, works at Mario's Pizza. She's a waitress, and her tips have been lower because of the economy, but at least she still has a job. When you and I went to Mario's last night, though, Mario mentioned to us that he's probably going to have to lay some people off if business doesn't pick up.

Do you think you and I might head over to Mario's for an extra pie a month if it seemed likely to help Liz keep her job? Do you think we might toss an extra dollar into her tip?

And finally:

Supposing in our town, the libraries have closed for lack of funds, so we use a private library. (There's at least one private library I know of here in San Francisco; I have a friend who pays for an annual membership.)

Suppose we learned that the library was giving a substantial discount on membership dues to celebrity members, while at the same time they were cutting hours and ordering fewer books. As a paying member of the library, do you think you might be inclined to ask the board to stop giving those discounts?

Even though they're highly imperfect analogies, I find thought experiments like these useful for myself in figuring out what I think about things, and I'm curious what you think about these.
posted by kristi at 2:54 PM on October 8, 2011 [4 favorites]

Only two groups of people can "fix" this - Businesses, and consumers. Consumers need to buy more so businesses can sell more and thereby hire more people who will then have the money to consumer.

Consumers don't have the money to spend if they aren't working or are underemployed.

Until we had social welfare we had very real problems with social unrest. Taxes are the price you pay for civilization. A small increase on the upper income levels' taxes is not too much to ask, unless you prefer this situation eventually to devolve into rioting and looting.
posted by krinklyfig at 3:07 PM on October 8, 2011 [1 favorite]

pla wrote: Absolutely FALSE. Every single person with a 401k has invested in the economy. Everyone with an IRA. Everyone who puts a few bucks into a CD. Everyone who buys a car, a TV, a house, a tube of toothpaste.

I'm going to have to quibble with your inclusion of a 401k as "investing in the economy." Most folks are in bullshit built on a foundation of bullshit which has been investing only in the hooker and blow habit of Wall Street. Which would be great if they hadn't been using the principal to pay for their hookers and blow.

And the government does in fact get to wave a magic wand if it wants to. It controls the money. It controls trade. I'm not saying it's healthy to wield the blunt aspects of those instruments, but it most certainly can do whatever it likes in that respect. As it stands, consumers can't buy more shit because they are either unemployed or busy paying down debt.

There are normally two ways to fix this problem without having an economy in the shitter for a decade or more: First, inflation. Second, fiscal stimulus. Number one fixes the problem by making the debt cheaper, thus leaving people more money to spend. It's a non-starter, because prices for most goods (and wages) are pretty much stuck thanks to lack of demand. You can (and the Fed has) create bucketloads of money and it makes no difference at all. This is not helped by the situation in Europe and the recent news of the Chinese housing market imploding, because we can't even get cheap relative to foreign goods to help export industries.

The second is all we've got left. So we've pretty much got two choices. Sit here and let people starve or take all the free money the world is attempting to shower upon us and put it to good use, employing people in the process. For some reason, we're stuck on stupid. No, we're not stuck on stupid, we're stuck on malevolently insane self-defeating fuckwaddery. We have half the country arguing that it is the fault of the unemployed that they are unemployed and refusing to use free money to help them. Sometimes I think I'm living in some kind of twisted nightmare because of the utter stupidity my fellow man is showing right now. It's puritanism taken to its most insane end.

The awful irony is that doing nothing makes the debt problem get worse that much faster. The longer the Republicans stall, the closer Grover Norquist is to finally being able to get his rocks off as the government goes down in (imaginary, but real enough since everyone believes it) flames. It's fucking ridiculous. It's even more ridiculous that we have rubes running around the country and polluting the Internet with their insistent demands to continue this shit. Clearly we need more beds in mental wards, what with all the people hell-bent on self harm.
posted by wierdo at 3:10 PM on October 8, 2011 [5 favorites]

Nice, very subtle. Making the situation sound more like a matter of scarce communal resources rather than having one unproductive (albeit involuntarily) member of the group

The scarce communal resources are jobs. I thought it went without saying but those were the oars in my analogy.

And those involuntarily unproductive members of the group, no matter how dehumanizing that sounds, are people all around us who, often through circumstances completely out of their control, can't get work. They're not spare parts we can toss aside in the engineering of some more streamlined economy. Not realistically. The question is how do you want to pay. Employing them or policing them?
posted by JaredSeth at 3:18 PM on October 8, 2011 [1 favorite]

The economy can't just pick itself up by its bootstraps.

The economy must do exactly that.

Your ideal economy violates the conservation of momentum.
posted by dirigibleman at 4:42 PM on October 8, 2011

All economies fundamentally bootstrap themselves. You can sputter, and point to places like China, using the global economy's resources to grow so quickly, but that's all just one economy. The larger part of the global economy is investing in a local area, but you can't really then call the Chinese economy separate, because it used the global economy to grow. All separate economies bootstrap themselves.... they MUST. There's no other option.

Governments can sometimes help, but government spending is typically consumptive. Where they can be a huge help is in contract and law enforcement, and infrastructure -- they can make the real economy more efficient, but governments themselves are typically very wealth-destructive when they attempt to meddle directly to get desired outcomes.

When the government borrows to fund consumption, instead of investment, yes the economy does grow, but it grows wrong, and becomes dependent on that borrowing. Not all economic activity is equally good, but when you're only measuring total activity, the waste doesn't immediately show. All you see in current-year measurements is current-year activity, you don't see the long-term effects of the liabilities being incurred to GET that activity.

Borrowing-driven demand looks FANTASTIC for the economy until the borrowing stops, and then suddenly you've got a huge, huge problem. The parts of the economy that were dependent on it will usually need to dry up and blow away. This isn't absolutely universally true, as capital investments for a consumptive purpose (like making tanks) can sometimes be repurposed into constructive uses (like making tractors instead), but the majority of the time, wealth invested to service consumptive, borrowing-driven demand is wasted and lost.

So you get a big burst of economic activity, and everything looks great, and then suddenly everything ends up much worse than if you hadn't started borrowing in the first place. This is more or less what the entire developed world is facing; they have incurred enormous liabilities, but they didn't create assets with that wealth to SERVE those liabilities. Those debts have to either be paid back or defaulted on to some degree, and this causes lower standards of living no matter how you try to do it.
posted by Malor at 5:00 PM on October 8, 2011

Governments can sometimes help, but government spending is typically consumptive. Where they can be a huge help is in contract and law enforcement, and infrastructure -- they can make the real economy more efficient, but governments themselves are typically very wealth-destructive when they attempt to meddle directly to get desired outcomes.

You repeat this like a mantra, but I fail to see where you back up your assertions. Government spending and incentives set up the conditions for our middle class economy since WWII. Our government creates the economy.
posted by krinklyfig at 5:08 PM on October 8, 2011

With a 35% tariff on imported goods, we can hire people to make stuff.
posted by mikelieman at 5:21 PM on October 8, 2011

And I'd pay higher taxes to have better roads, plumbing, bridges etc.

Sure you would. Here's where you can voluntarily pay extra federal tax online.

So how much did you give? I didn't think so.
posted by ZenMasterThis at 5:26 PM on October 8, 2011

now, people, you're really too, too rough on pla - you don't understand that he and his republican buddies are amazing magicians - really!

they use invisible hands to make the world just right for everyone, if only we'd allow them to

they turn a tube of toothpaste into an actual investment!

they not only are able to find a pair of boots with straps, but are able to pull themselves up by them

they enable consumers to spend money they don't have to so people who already have record amounts of cash in the corporate coffers can finally be able to create jobs

they cut taxes and revenues magically increase

and for their last and greatest trick, they all drink the kool-aid and WE'RE the ones who get poisoned
posted by pyramid termite at 5:29 PM on October 8, 2011 [5 favorites]

Here's where you can voluntarily pay extra federal tax online.

Not this shit again
posted by crayz at 5:30 PM on October 8, 2011 [6 favorites]

Sure you would. Here's where you can voluntarily pay extra federal tax online.

That's nice, but you can't fund the government voluntarily as if it were a charity. Not many people like to pay taxes, but it has to be done to have a functional government.
posted by krinklyfig at 5:51 PM on October 8, 2011 [1 favorite]

Malor wrote: Governments can sometimes help, but government spending is typically consumptive. Where they can be a huge help is in contract and law enforcement, and infrastructure -- they can make the real economy more efficient, but governments themselves are typically very wealth-destructive when they attempt to meddle directly to get desired outcomes.


The economy can be reoriented in very nearly an instant, if we so desire. Excess government consumption when borrowing is nearly free will put enough money into people's pockets to allow them to continue the cycle even after stimulus ends. Your statement is just another way of saying that we can provide the malefactors of great wealth unlimited sums to preserve their empires, but we can't provide ourselves jack shit. It's patently ridiculous and relies on a fundamental misunderstanding of modern finance. This ain't 1962 anymore; the gold standard died a long time ago, and arguing in favor of it at this point is tantamount to arguing that the bankers deserve yet another fucking bailout, only this time at impossibly onerous terms.

Besides, on what planet does it matter to Ford or GM whether their car is bought by the government or by me? Are the cars produced for the government somehow made without aid of labor? Seriously, what the fuck?

As an aside, Alex Jones is really pissing me off. I was talking to my tenant a little bit ago. He agrees that we're fucked and the bankers are shitting down our throats. Unfortunately, he ascribes it all to a vast Jew conspiracy thanks to that stupid fuck and his radio show. That sort of bullshit is just another smokescreen used to keep our ire pointed in places that are completely ineffective and make many of us look like kooks. Like Malor (has in the past), he was arguing for a return to the gold standard. He dropped that when I pointed out that would merely consolidate power in the hands of those he was railing against.
posted by wierdo at 5:56 PM on October 8, 2011 [2 favorites]

governments themselves are typically very wealth-destructive when they attempt to meddle directly to get desired outcomes.

This, whenever it is presented, almost invariably comes across as simply argument from belief. At best, believers generally find a few examples that support their belief, and decide they know enough. It would take such a monumental effort to ascertain whether the assertion is true or not that it's absurd to suppose that the preponderance of people espousing the view have actually done their homework. Therefore the burden is on the advocate of the view to pony up some detailed information, in their own words, that demonstrates a deep comprehension of what the heck they think they're talking coherently about.

Government can be destructive/consumptive of wealth, sure. But just to offer a counterexample, if it weren't for the EPA, a lot of engineers would not be working to make diesel-powered machines pollute less right now. In effect, the US government forced the relevant companies to create jobs. Good jobs. And guess what? Caterpillar, John Deere and Cummins are all doing great right now.

The chance that these companies would have prioritized cleaner machines to anywhere near the same degree otherwise is vanishingly small. (China, anyone? India? Bangladesh? Etc, etc. Countless historical examples.) Same with fuel efficiency standards for cars. Government regulation in these cases not only encourages more livable human habitats, but drives the type of innovation that requires a more educated work force. The Kyoto Protocol, if properly administered, would accomplish similar boons.

Maybe a less regulated, more polluted world would generate other jobs in other sectors, but would there be more of them or less? And would it be a better world or worse? Here's a little history to get you started.

The evidence strongly suggests that an unregulated market encourages technologies and practices whose long-term costs in terms of environmental and human health degradation are not absorbed by the manufacturers of said technologies. In effect, society pays more for a worse outcome after the fact, perhaps for generations to come, instead of less for a better one up front.

I'll be happy to be proven wrong. Someone please inform me of examples I'm overlooking that are equal or greater in magnitude where businesses adopted more environment- and society-friendly policies of their own accord. For bonus points, provide examples in which the policies did not predicate upon raised public awareness (often in the form of outrage) generated by governmental deliberation (i.e. "This is gonna raise my taxes!").
posted by perspicio at 6:01 PM on October 8, 2011 [3 favorites]

Government is the only thing that creates value. Money, laws, enforcement of contracts, training the labor force, health, clean water, electricity, and real estate. These are all creations of the state. There is nothing else of value. Once you remove the state, property only exists by force of violence. The suggestion that the state can't create wealth, can't move the economy, is ridiculous. Our roads, bridges, trains, and cities say otherwise. Go get a dollar out of your wallet, who made that dollar. Sure you earned it, or found it or acquired it, but who made it, the US Government.

The government run turnaround of the American auto industry demonstrates that in fact the government is perfectly capable of running a large corporation. In fact with the right elected leadership it can do a better job than the businessmen who had run it into the ground.
posted by humanfont at 6:04 PM on October 8, 2011 [2 favorites]

Sure you would. Here's where you can voluntarily pay extra federal tax online.

So how much did you give? I didn't think so.

So all taxes should be voluntary?
posted by dirigibleman at 6:06 PM on October 8, 2011 [1 favorite]

Government is the only thing that creates value.

Absolute bullshit. If I cut a stick off a tree, that has value. It is a tool, especially if I know how to also kill an animal and use its intestines to make a bowstring. That makes me a more efficient hunter.

Wealth is energy, physical stuff, and the knowledge of how to use those things.

Money, laws, enforcement of contracts, training the labor force, health, clean water, electricity, and real estate. These are all creations of the state.

Money is not a creation of the state; states took over that function, but money existed before governments. Money is just the most commonly-desired commodity. Historically, that was usually precious metals, but some tribes have used seashells. And there were very large systems of monetary exchange that existed entirely in private hands, well before government got involved. Money does not require government.

Laws and law enforcment are not value in and of themselves. They can't do anything alone. They're an infrastructure on which value can be built. They make value creation much more efficient, but they are not prerequisite.

Labor has trained itself since the dawn of time, and private enterprise continued that process. Government CAN train labor, but it is not required.

Healthcare existed long before governments.

Clean water existed long before governments.

Useful electricity (as opposed to, say, lightning or static) was created by private enterprise, and in many parts of the country, is provided almost completely by companies. At least in the US, government-owned electricity is fairly unusual.

Real estate existed before people.
posted by Malor at 6:51 PM on October 8, 2011 [1 favorite]

Metafilter: I do not know how Congress actually operates, but can afford (literally!) to pretend to treat this as a game.

Fuck the fuck off already.
posted by joe lisboa at 6:51 PM on October 8, 2011 [1 favorite]

Dear Diary:

Today I learned that we don't need government for anything, because everything we strive to achieve in modern society existed before governments did, ergo government is pointless for stuff like clean water, money and health care. Who knew! Paleo livin', here I come.
posted by Marisa Stole the Precious Thing at 7:06 PM on October 8, 2011 [1 favorite]

Absolute bullshit. If I cut a stick off a tree, that has value. It is a tool, especially if I know how to also kill an animal and use its intestines to make a bowstring. That makes me a more efficient hunter.

And then one da you wake up and the buffalo herds don't come anymore and your like wtf where did they go. And you blame some invisible sky god, and you starve to death. Meanwhile those of us who joined civilization live off our crops irrigated by our government works projects. We trade our surplus for other luxuries. We have clean water, long lives and smarter kids.
posted by humanfont at 7:08 PM on October 8, 2011 [2 favorites]

Value, humanfont, is created by people. Government is just a method of organization. It doesn't create anything itself. Only people do that. And government can inhibit the creation of value as easily as encourage it.
posted by Malor at 7:12 PM on October 8, 2011

Money is not a creation of the state; states took over that function, but money existed before governments.

Possibly. However, we're not living in that world today. As of now currency is specifically a government function. This is true across the globe. If currency were decentralized it would inevitably cause more volatility and uncertainty in markets. I can't imagine how this would work today unless you're advocating returning to hunter-gatherer tribes. Even those had primitive hierarchies. A complex world with intertwining economies of over 200 nations requires some structure.

Laws and law enforcment are not value in and of themselves. They can't do anything alone. They're an infrastructure on which value can be built. They make value creation much more efficient, but they are not prerequisite.

Our economy is predicated on our infrastructure, trade agreements, tax incentives, education, technology, etc., etc., etc. All of these are facilitated by government. The roads, tech R&D, education, incentives, trade.

Healthcare existed long before governments.

LOL! Yes, but it was primitive. Mothers frequently died in childbirth. So did the infants. Microbiology was not understood.

Clean water existed long before governments.

How naive.

I'd like some examples of how any civilization had a clean water supply and no government. Just one will do.

How can a modern industrialized economy do this without government? Can you give any examples? How does an urban center do this without government?

Government is often the only power people have who would otherwise become indentured servants or serfs. People with power and money don't need government, or so they like to believe. Until the hungry mob comes to their door.
posted by krinklyfig at 7:12 PM on October 8, 2011 [1 favorite]

Useful electricity (as opposed to, say, lightning or static) was created by private enterprise, and in many parts of the country, is provided almost completely by companies. At least in the US, government-owned electricity is fairly unusual.

Pretty much the entire national electric infastrucure was built with tax dollars. The TVA, the Rural Electric Cooperatives, the Major hydroelectric dams like the Hoover Dam and those on the Columbia River. Also the Nuclear Power plants were built with federal load guarnatees and insurance that enables them operate without fear of the liability for their waste stream and potential disaster cleanup costs. Private enterprise electrified a tiny part of the country, and then the great depression hit. Electrification was a key component of the New Deal.
posted by humanfont at 7:16 PM on October 8, 2011

Today I learned that we don't need government for anything

Marisa, I didn't say that at all. Not even vaguely. Government often makes things more efficient, but fundamentally, it's only people who create value.

I'm responding to humanfont's claim that government creates ALL value, which is, frankly, stupid.

People. Only people. Always people. Government is just one form of organization, and while organization is incredibly important for large-scale projects, government is far from being the only way to accomplish that. In some domains, it's the best way we've found. In others, it is not.

If government was the source of all value, then highly controlling states like the Soviet Union, and communist states in general, should have been earthly paradises. But it never once worked out that way... every socialist-on-the-way-to-communist state went to shit.

In general, the more central control you have, the less flexible and the less intelligent your society becomes. You end up bottlenecked on the limited intelligence of the people with their hands on the control knobs.
posted by Malor at 7:19 PM on October 8, 2011

If government was the source of all value, then highly controlling states like the Soviet Union, and communist states in general, should have been earthly paradises. But it never once worked out that way... every socialist-on-the-way-to-communist state went to shit.

Every economy which has become continuously deregulated in the name of facilitating commerce ends up in a financial crash. This is where government comes in. Governments which do not allow this to happen have less problems with their economies. Germany is far more socialist than the US and is not in the same financial mess we are.
posted by krinklyfig at 7:25 PM on October 8, 2011 [1 favorite]

People. Only people. Always people. Government is just one form of organization, and while organization is incredibly important for large-scale projects, government is far from being the only way to accomplish that. In some domains, it's the best way we've found. In others, it is not.

And the point I was making was that government is, in fact, the best "form of organization" for things such as money, clean water, health care and so forth, if we're to live in a modern, urban society. How things were and are organized in paleolithic societies is irrelevant.

I mean honestly, "clean water existed before government"? Yeah, it also existed before the Industrial Revolution. But we have factories and stuff now.
posted by Marisa Stole the Precious Thing at 7:25 PM on October 8, 2011

How about this: there are a lot of different possible tax levels. The extremes are clearly undesirable (Somalia, the USSR) but there's some large Pareto frontier where the tax level is as efficient as it can get without any marginal change hurting some group of people or another. At the very least, we should aim to have a system that's on the Pareto frontier. At best, we should have the strength to make some Pareto-inefficient decisions if they lead to a better equilibrium in the long run.

I think I'll go make a sign.
posted by miyabo at 7:47 PM on October 8, 2011

Malor wrote: Value, humanfont, is created by people. Government is just a method of organization. It doesn't create anything itself. Only people do that. And government can inhibit the creation of value as easily as encourage it

Only if it hoards money like private businesses presently are. A given dollar may as well not exist if it isn't changing hands, but that's true no matter who holds it. Even if I accept your premise that government can only consume, our present situation is being perpetuated by the lack of consumption. Therefore, I submit that consumption is precisely what we need the government to do right now.
posted by wierdo at 7:51 PM on October 8, 2011

All I'm arguing with, Marisa, is the claim that government is required to create value. It is not. PEOPLE create value. It's always people.

And yes, clean water existing before government is important. People have cleaned up their own water supplies on their own initiative before government got involved.

Now, I'd actually agree with you that government is one of the better ways to handle water. In fact, I tend to think that privatizing water is nearly always a bad idea. Governments handle cleaning and delivering water better and cheaper than any other option we've tried.

But I'm arguing the claim that government is required for clean water, which is just silly.

Every economy which has become continuously deregulated in the name of facilitating commerce ends up in a financial crash.

I think it would be more accurate to say that it takes deregulation, some kind of public mania, and bad currency policy, all happening at the same time. These things tend to happen together, but in my view, the first two are typically driven by the third -- we've gotten ourselves into this titanic debt trap because of the interventionist Federal Reserve, jumping in with liquidity any time the economy showed pain. This kept reinforcing the speculators and risk-takers, reinforcing the government's belief that revenues would just keep going up and up and up, and reinforcing the private belief that first stocks, and then real estate, could only go up forever.

Everyone took on far more debt that the economy can actually handle, because they were fooled into thinking more wealth was being generated than there actually was. We were generating lots of CURRENCY and DEBT but not lots of WEALTH, and now we're finding that we can't service our total debt load. (both private and public).

We should have crashed in 2001, after the Nasdaq bubble popped, which was itself a product of bad monetary policy. We would have been terribly seared by that experience, but we'd be on the mend now. Instead, we continue with intervention after intervention, and we keep getting sicker and sicker, while the financial sector just gets more and more powerful. The people close to the money printing are becoming rich as Croesus, while the people actually creating the wealth, far away from the money source, are being wrecked.
posted by Malor at 8:08 PM on October 8, 2011

In general, the more central control you have, the less flexible and the less intelligent your society becomes. You end up bottlenecked on the limited intelligence of the people with their hands on the control knobs.

Which is why we have to tax the rich. They have centralized control of politics and bottlenecked control leading us to our current dilemma.
posted by humanfont at 8:10 PM on October 8, 2011

All I'm arguing with, Marisa, is the claim that government is required to create value. It is not. PEOPLE create value. It's always people.

Well, governments are comprised of people, so I'm not really seeing the contradiction. Government is a way in which people are organized, and it's one of the best ways to handle resources that we enjoy in modern, urban society. I think we all too easily fall into the trap of thinking of "government" as some abstract set of principles and rules. But these rules and principles are meaningless and have no effect without people organizing to make them work. Just as our modern trappings fail us if we have no rules and principles around which to organize how we're going to use them. So while I do see where you're coming from, in a sense, I think the "value" source you're trying to make isn't very tenable when we have such a symbiosis.
posted by Marisa Stole the Precious Thing at 8:21 PM on October 8, 2011

Even if I accept your premise that government can only consume,

I didn't say that. The government is just like any other economic player; it can use wealth to create new wealth, or it can destroy that wealth in consumption. When we built Hoover Dam in the 1930s, for instance, that was an incredibly good investment, one of the best we've ever made as a country.

It's just that typically, they don't do that, because they're run based on what's popular. And it's always more popular to consume than to invest. Sometimes you get really smart guys in government, doing really smart stuff like Hoover Dam, but an awful, awful, awful lot of the time, you get the Bridge to Nowhere, or giant, useless wars.

our present situation is being perpetuated by the lack of consumption.

Well, yes, but the lack of consumption is because we've borrowed all we can to consume. We have been OVERconsuming since the early 80s, when Reagan started us on the path of the perma-deficit, and the whole economy got in on the overconsumption thing by the early 90s. We've been sucking up all the world's stuff and promising them wealth in the future in exchange, but taken across the whole economy, we've been using that wealth on plasma TVs and La-Z-Boys and enormous McMansions, instead of factories, and better schools, and superior transit systems. Or, even better, using that wealth to build basic roads and basic factories all over the world, investing in local economies everywhere. We've already got pretty good infrastructure, and the return on investment for improvements here will probably be lower than the ROI on initial buildouts in areas that could be productive, but have poorly educated people, and few ways to move goods and people around.

If we hadn't been issuing all that debt, the wealth we commandeered with our promises would have been available to, say, farmers in Niger or stall owners in Delhi or textile producers in Burma. (just pulling out random hypotheticals there, nothing real.)

Therefore, I submit that consumption is precisely what we need the government to do right now.

That would only be a temporary palliative, not a fix. That's just doing more of what got us in trouble, borrowing wealth and destroying it. We need to default on a good chunk of the existing debt, and pay down the rest. This will be horrific, but there is no other true option. We need to PRODUCE our way out of this jam. You cannot borrow and consume your way to prosperity; you have to work and scrimp and save.

We're in this enormous hole because we haven't been paying our way in the world. And that absolutely has to change. The longer we try to avoid this, the more painful the necessary adjustments become.
posted by Malor at 8:23 PM on October 8, 2011

Malor wrote: Everyone took on far more debt that the economy can actually handle, because they were fooled into thinking more wealth was being generated than there actually was. We were generating lots of CURRENCY and DEBT but not lots of WEALTH, and now we're finding that we can't service our total debt load. (both private and public).

We should have crashed in 2001, after the Nasdaq bubble popped, which was itself a product of bad monetary policy. We would have been terribly seared by that experience, but we'd be on the mend now. Instead, we continue with intervention after intervention, and we keep getting sicker and sicker, while the financial sector just gets more and more powerful. The people close to the money printing are becoming rich as Croesus, while the people actually creating the wealth, far away from the money source, are being wrecked.

You're directing your ire at the wrong place. The Federal Reserve wasn't alone in creating the money that blew up our shit. They played a bit part at the behest of high finance. As you pointed out so correctly earlier, paper dollars (or electronic dollars) are not the only things that circulate as money. We have (or had, in the case of the things I'm talking about now) secondary forms of money, like mortgage backed securities, or the CDOs built on those MBS. Or the CDO-squareds. This shit was being moved around like money and was being put up as collateral for more bank created money (not Fed created money, bank created money).

Could the Fed have intervened and reduced the supply of "real" money? Why certainly. The Bush administration could as surely have intervened to prevent 9/11. In neither case does that make the events that then transpired the fault of those with their heads so far up their asses they couldn't see what was going on. Even if the Fed had raised interest rates, the dollars would still have been flooding in from China and elsewhere to fuel the boom. It was a sure bet, after all.

High finance created the money, they created the demand for mortgages, and they created the demand for securities based on those mortgages. Their being happy to look the other way as brokers herded people into subprime loans, bait-and-switched them with higher cost products, or even made up the borrowers entirely was what hung us, not the Fed.
posted by wierdo at 8:26 PM on October 8, 2011

Malor wrote: That would only be a temporary palliative, not a fix. That's just doing more of what got us in trouble, borrowing wealth and destroying it. We need to default on a good chunk of the existing debt, and pay down the rest. This will be horrific, but there is no other true option. We need to PRODUCE our way out of this jam. You cannot borrow and consume your way to prosperity; you have to work and scrimp and save.

Again, please explain how consumption destroys wealth. The money continues to circulate.

Besides, the government doesn't need to borrow, although it does for some asinine reason that relates more to the comfort of people who haven't fully internalized the reality of not being on the gold standard than anything rational. Even if you don't accept that, we can borrow money at zero real interest. Even if your argument is that interest payments somehow destroy wealth (which they can temporarily, if they are hoarded), it falls apart in the face of free money.
posted by wierdo at 8:29 PM on October 8, 2011

BTW, if I'm coming off a bit harsh, I'm still miffed at how my tenant was convinced that the deflation caused by once again pegging the dollar to gold again would be harmful to the bankers' interests and not the public at large. I hate seeing people who are upset for the right reasons but have had their ire directed in an ineffectual and wrong-headed direction bu talk radio and the like.

Also, if I accept your premise that part of the problem is a debt overhang, as Krugman likes to call it, (which I do, incidentally) how is inflation not the appropriate solution? It seems like we need exactly that to both reduce the real value of existing debt and improve the price competitiveness of our goods/services on the international market, presuming we still have an international market this time next year.

Given that the Fed has been "printing" money like gangbusters, yet inflation still fails to rise in any meaningful way, it seems pretty clear that it's the other side of the equation that's holding us back.
posted by wierdo at 8:40 PM on October 8, 2011 [1 favorite]

Because wealth is stuff, not dollars. Dollars aren't wealth. You can't use a dollar as much except kindling or toilet paper. Once upon a time, you could trade dollars for gold, and use the gold for whatever you wanted, but you can't do that anymore.

Your house? That's wealth. The power coming down the lines? That's wealth. The food in your refrigerator? The tools in your toolbox? The knowledge in your head? That's all wealth. Energy, stuff, and knowledge are wealth.

The dollars in your pocket? They're just paper until you pull some wealth out of the system with them. They're a claim on wealth, but they are not wealth themselves.

If you use your dollars to buy a plasma TV, you have consumed the wealth that went into the making of that TV. If you use your dollars to buy a tractor, and then use the tractor to work with, you invested that money. Whether it was a GOOD investment depends on what kind of business you're in.

Fundamentally, the economy can be thought of as a bunch of energy and resource flows. Dollars are a turn counter to tap into those flows. If you use your turns to divert resources and energy into new methods of production, or to tap into new resources, or to create entirely new products, you are increasing the total amount of wealth in the world. If you use your dollars to divert resources into items that don't create anything, then you are destroying that wealth. The number of dollars doesn't change, but the amount of wealth certainly does.

The dollars are just turns. What matters is what you use your turns for. And we have been, collectively, using our turns for some remarkably stupid shit. And when other people have tried to take THEIR turns, using dollars we sent abroad, thus slowing down our economy as they diverted resources into theirs, well, we've just issued more turns, and moved back to the front of the line, using yet more resources on yet more stupid stuff.

It's their turn now. We have consumed and consumed and consumed the energy and resource flows of the world for about thirty years, and we have used them very, very poorly.
posted by Malor at 8:46 PM on October 8, 2011 [1 favorite]

Oh, and:

Given that the Fed has been "printing" money like gangbusters, yet inflation still fails to rise in any meaningful way, it seems pretty clear that it's the other side of the equation that's holding us back.

We're not seeing much inflation for two major reasons. First, the inflation figures themselves are bullshit, "hedonically adjusted" into near-worthlessness. Second, China and Japan are printing enormous amounts of their currencies and buying ours, trying to hold their currencies at par with the dollar. They are, in essence, mopping up the excess dollars, importing inflation.

And they most certainly ARE having trouble. China's fighting a very serious inflation problem, in fact... they're putting the screws to their banks, trying to reduce their money multipliers, but it doesn't seem to be working very well. They're seeing like 15% annual inflation, if I remember correctly. Japan is seeing inflation too, but I don't remember the last figures.

And food prices and energy prices all over the world have gone absolutely nuts, and that's because the demand is inelastic; people MUST have energy and food every day, or they will die, and there's a lot more currency units chasing the same amount of food and energy. Add the speculators into that mix, the guys who have unbelievable power because they can assume perfect liquidity for their derivative instruments at all times, as the Fed will intervene any time they have liquidity problems... and, well, you get the crazy price movements in commodities that we've been seeing.
posted by Malor at 8:53 PM on October 8, 2011 [1 favorite]

Real estate didn't exist before the state. Sure there was land, but land ownership requires is a legal concept created by the state. Without the state you can't own land.

If government was the source of all value, then highly controlling states like the Soviet Union, and communist states in general, should have been earthly paradises. But it never once worked out that way... every socialist-on-the-way-to-communist state went to shit.

No society is exactly a utopian paradise. If this is the rubric then we all fail. Most states and Empires in history have fallen. The obey demonstrable correlation is that as the centra government gets weaker, the standard of living falls. Consider Putin's Russia vs. Yeltsin's.
posted by humanfont at 8:54 PM on October 8, 2011

Ok, what I get from your argument is essentially that the market is incapable of correctly pricing dollars. What you're not understanding is that issuing more money, however real or fake it may be will in fact create wealth if those who are presently idle are returned to productive use, whether that use be mowing the park or whether it be working in a planning office.

The money is just an abstraction, and that's precisely the point. It can be manipulated in any way we like to produce the desired outcome of real production and full employment.

And whether you like it or not, the rest of the world is trampling over itself to be the first to get us to take their turn at the wheel, as you put it. Why should we not use the opportunity? Do we really know better than all those dumping their money into Treasuries?
posted by wierdo at 8:55 PM on October 8, 2011

Malor wrote: We're not seeing much inflation for two major reasons. First, the inflation figures themselves are bullshit, "hedonically adjusted" into near-worthlessness. Second, China and Japan are printing enormous amounts of their currencies and buying ours, trying to hold their currencies at par with the dollar. They are, in essence, mopping up the excess dollars, importing inflation.

And they most certainly ARE having trouble. China's fighting a very serious inflation problem, in fact... they're putting the screws to their banks, trying to reduce their money multipliers, but it doesn't seem to be working very well. They're seeing like 15% annual inflation, if I remember correctly. Japan is seeing inflation too, but I don't remember the last figures.

And food prices and energy prices all over the world have gone absolutely nuts, and that's because the demand is inelastic; people MUST have energy and food every day, or they will die, and there's a lot more currency units chasing the same amount of food and energy. Add the speculators into that mix, the guys who have unbelievable power because they can assume perfect liquidity for their derivative instruments at all times, as the Fed will intervene any time they have liquidity problems... and, well, you get the crazy price movements in commodities that we've been seeing

Of course China is seeing inflation, they actually implemented a large scale program to support demand in their country. As did Japan, belatedly, just a few years ago, after over a decade of deflation which has seen their economy weaken relative to the rest of the world. Why are you so insistent that we not take money that China is foisting upon us?

Also, I take issue with your claim that inflation figures are bullshit. I guess if your sole measure is gold, it's a reasonable claim, but the same could have been said using oil during the height of its bubble or housing during its turn at the merry-go-round.

And I agree that volatility is through the roof, but as you correctly point out it's the speculators (and more than a few hoarders) causing the bulk of it. It's the market-as-roulette-wheel, not the Fed, behind this. The banks have plenty of "real", not newly-printed, money to play with on this and refuse to quit.
posted by wierdo at 9:11 PM on October 8, 2011

Your house? That's wealth. The power coming down the lines? That's wealth. The food in your refrigerator? The tools in your toolbox? The knowledge in your head? That's all wealth. Energy, stuff, and knowledge are wealth.

The house built by FHA backed financing, my ownership is determined because of a deed backed by the state.
The powerlines built on right of ways granted by the state from a nuke plant built by tax dollars.
The food grown with farm subsidies, and inspected by the USDA.
The knowledge in my head which was taught to me in public school and refined thanks t a state sponsored student loan.

It is the state which us the source of wealth.
posted by humanfont at 9:22 PM on October 8, 2011

Ok, what I get from your argument is essentially that the market is incapable of correctly pricing dollars. What you're not understanding is that issuing more money, however real or fake it may be will in fact create wealth if those who are presently idle are returned to productive use, whether that use be mowing the park or whether it be working in a planning office.

Right, but it will create the wrong wealth, stuff we don't actually need. This is precisely the problem we have now; we have overconsumed, and the economy has built itself up around that overconsumption. So not only do we not have have wealth to repay the people we borrowed turns from, a whole lot of our economy exists to service the people who have been getting turns in exchange for promises (or nothing at all, in the case of entities close to the Federal Reserve.) The world economy is all built up around selling plasma TVs to Americans, which don't DO anything, instead of building roads in Zaire or factories in Congo or textile mills in South Africa. If that wealth was going into wealth-producing things, so that there was more total wealth in the world, that might be okay, but instead, we're getting a temporary boost of production, and a whole lot of investment in the world economy to sell plasma TVs to Americans. But plasma TVs don't generate wealth, so Americans, eventually, won't be able to afford any more. That whole arm of the economy then needs to die back. It was growth, but it was FALSE growth. We weren't really paying for the TVs, we were just issuing promises. And if you don't keep your economic promises, bad things happen.

What's SUPPOSED to happen is that you provide something of worth to the world, and get currency for it, and then you can take your turn and take something that someone else is making. But with our crazy debt and liquidity regime, we've been providing NOTHING to the world, and sucking all the goods and wealth out of it. All we've been giving them is promises; they've been working like slaves in exchange for goods that we will never be able to send them, because we haven't built any method to make those goods.

The money is just an abstraction, and that's precisely the point. It can be manipulated in any way we like to produce the desired outcome of real production and full employment.

But .... argh.

Okay, look. There's a certain amount of resources coming out of the system at any given time. If you print money, you change the demand patterns a whole bunch... entities that are close to the money printing (like banks) are suddenly able to redirect a lot of flows to themselves, and away from people that are far away from the money. But it's the people far away from the money that are actually creating the wealth. Prices go up, but the people getting the money from the central authority are able to buy things anyway. People out at the periphery are priced out of the market.

Printing money, in other words, is stealing from poor people, transferring turns from poor people to rich ones. This reorients the economy to serve CONSUMPTION instead of PRODUCTION, and overall living standards drop and drop and drop and drop. They will keep dropping until there is nothing left, as a few industries close to the money accumulate all the wealth and power.

We have to pay for what we use. And playing games with money fucks that all up.

I've seen economists literally argue that we should bury money and then pay people to dig it back up. If we did that, we could have full employment tomorrow.

But full employment doing useless shit just means you end up with Zimbabwe -- tons and tons and tons of currency, but no real wealth.

The economy is far, far too complex for central management. The more central control you have, the worse your economy does. If there's any universal economic truth, that's probably it. The government can serve very well as a referee, making sure the field is as safe as possible. But it can't do that properly if it's also a player.
posted by Malor at 9:29 PM on October 8, 2011 [1 favorite]

Malor wrote: Printing money, in other words, is stealing from poor people, transferring turns from poor people to rich ones. This reorients the economy to serve CONSUMPTION instead of PRODUCTION, and overall living standards drop and drop and drop and drop. They will keep dropping until there is nothing left, as a few industries close to the money accumulate all the wealth and power.

Excuse me? You're seriously trying to argue that inflation is bad for poor people? The indebted people, who get to pay back their debts with cheaper dollars?

You seem to fail to grasp that the Chinese don't want to be paid back. The Japanese don't either. They like the current arrangement, whereby we ship them dollars in exchange for stuff and they ship them right back to us to buy more stuff. It keeps their people employed. It keeps our people having stuff and buying stuff. You clearly believe that the market is the solution. Why do you disbelieve it, then, when it indicates the world desires dollars? Who the fuck are we to say no?

Why do you presume to know better what the Chinese want than the Chinese?

Gold bugs have been claiming that the world will stop wanting dollars since we went off the gold standard over 30 years ago. Somehow, their predictions have failed to materialize, even in this time of crisis.

I do agree with one thing you're saying though, and that's that we should be paying people to do useful things rather than useless things. Better to have them repave a road than to dig a hole and fill it back in. That's only because the second gets us something useful. The money paid to that worker will be used by that worker to purchase essential (and useful) goods regardless. That money will then go to either producing more goods or towards capital investment. You can't destroy money, short of burning it. It will eventually produce wealth because some amount of wealth has to be created in the process of building the factory to build the useless trinkets or digging the mine to get the raw materials to build the useless trinkets.

Is it better that we spend money on things other than useless trinkets? Yes. Is it required, so long as we are spending enough of our productive capacity on producing necessities? No. TBH, it will be very nearly impossible to convince me of the correctness of your position unless you can explain how your proposed solution does not involve leaving mass numbers of workers lying idle for several years more at minimum. I fail to see how continuing to refuse to employ them helps anything at all. They could be doing something productive, but are not for no actual reason at all.
posted by wierdo at 10:11 PM on October 8, 2011 [1 favorite]

I give up.

Plato was right.

People are stupid and lazy.
posted by joe lisboa at 10:21 PM on October 8, 2011

It is the state which us the source of wealth.

No, sir.

PEOPLE are the source of wealth. Always and only people.

Government is the source of wealth no more than double-entry bookkeeping. It's a method of organization and conflict resolution. It can be enabler, but it is people that make wealth.

You are confusing a largely imaginary structure, a government, with the people that make it up, which are real.

I mean, by the standards you're using, you can say with equal validity that the corporation is the source of all wealth.
posted by Malor at 10:32 PM on October 8, 2011

Malor wrote: I mean, by the standards you're using, you can say with equal validity that the corporation is the source of all wealth.

Not the best example, given that the corporation was created by the state and exists because the state enforces it. It owes the state its very existence, unlike a natural person such as you or I. We would at least have a chance in absence of a government, although we wouldn't likely be discussing this issue on Metafilter or any other website.
posted by wierdo at 10:39 PM on October 8, 2011

The economy is far, far too complex for central management. The more central control you have, the worse your economy does. If there's any universal economic truth, that's probably it.

You are confusing a largely imaginary structure, a government, with the people that make it up, which are real.

It sounds like you're an adherent of the Austrian School of economics, which is really more of a religion than anything else. Or Ron Paul. Same thing. I used to buy into that crap, too, then I realized that those guys are not taken seriously by most other economists for a reason. It's fine if you like preaching on a soapbox to the "sheeple." But it's largely propaganda and is promoted by the most rich and powerful interests in the US for a reason.
posted by krinklyfig at 10:44 PM on October 8, 2011

Oh, and you're totally right, Malor. People create value. The apparatus of the state is made up of people, most of whom create value, much like the rest of us. The law of diminishing returns rears its ugly head somewhere, just like it does in gigantic corporations.
posted by wierdo at 10:44 PM on October 8, 2011

Excuse me? You're seriously trying to argue that inflation is bad for poor people? The indebted people, who get to pay back their debts with cheaper dollars?

Abso-fucking-lutely. Except in very high-demand sectors, wages do not keep up with inflation. The reallocation of wealth that happens from inflation is jerky and slow and poorly done, and it is always the marginal people that suffer first. Inflation moves resources to the entities closest to the money, which means they have to be taken from someone else. And the 'someone else' is the people with the fewest available free dollars to spend.

The people that are hurt worst are the ones struggling to come up with enough money for food on a daily basis. Those people will, often, just die of starvation.

Heavily indebted people are much, much wealthier, but end up watching their few remaining dollars that aren't allocated to debt repayment become inadequate to serve their daily needs, well before their wages rise to match. And they end up going bankrupt well before their debts start to be inflated away. Typically, their wages are much higher than the really marginal workers, so they'll lose a lot of stuff, but won't usually die.

Lenders also lose badly, because they are being repaid in dollars that are worth less than they were when lent. They are also being stolen from, but they typically have more resources to draw on, and don't starve when wheat doubles in price.

Further, it's worth pointing out that these lenders were doing the right thing; they were delaying their turns at the global pool of resources to let others take their turns first, with the expectation that the economy would grow, and they'd be able to extract more value at a later time. This is wonderful behavior, and it's something we want to encourage. Printing money punishes exactly the people you need most for real economic growth, those who are willing to give of their work product, whatever it is, and delay immediate repayment. Ultimately, unconsumed resources is where all growth comes from, so if you punish savers, you will get less saving, and lending will become more expensive, choking off growth.

Borrowers that are still reasonably liquid can do well, because their debts are gradually inflated into meaninglessness, and they have sufficient cashflow to survive inflation until their wages catch up. But these are often exactly the people you don't want to reward, because they'll have taken out those debts for frivolous, consumption expenditures, instead of investment. In broad terms, debt should be a little scary, something you don't want to use unless there's a good opportunity to create wealth. Debt for consumption is just a bad idea.

You seem to fail to grasp that the Chinese don't want to be paid back. The Japanese don't either. They like the current arrangement, whereby we ship them dollars in exchange for stuff and they ship them right back to us to buy more stuff.

Did you ignore the part where they have accumulated trillions of dollars in foreign reserves? That's debt! It means that, if we get into a competitive environment, they can have anything they fucking want, and there's not a goddamn thing we can do about it. We owe them goods to the tune of trillions, and they are eventually going to want them. When they start cashing in their reserves, we're going to be so utterly and absolutely fucked.

They can't keep accumulating dollars forever. They're having terrible inflation trouble as it is. Things that can't continue forever, don't. And when they stop buying dollars, things are going to get bad.

Gold bugs have been claiming that the world will stop wanting dollars since we went off the gold standard over 30 years ago. Somehow, their predictions have failed to materialize, even in this time of crisis.

Well, I dunno, the gold price is looking pretty good to me. I think it was higher a few weeks ago, but it's still over $1600 now. Ten years ago, it was about $300. I'd say it's doing a pretty good job of holding value.

If you've been storing your wealth in dollars, especially in the US stock market, your total buying power probably has gone down a little over the last ten years. The numbers have gotten bigger, but the actual wealth you can summon from the world economy with your numbers probably hasn't changed that much. That's ten years with no real returns, a slow-motion disaster.

Obviously, you might have individual stocks that have done better... if you bought AAPL in 2001, you're fat and happy today. But if you're in a Dow index fund, the dollar's drop over the last decade has eaten almost all of your putative profits.

You can't destroy money, short of burning it. It will eventually produce wealth

Sure, but that doesn't matter, because money itself doesn't do anything. No matter how many times a dollar moves around, if the people swapping the dollar are destroying wealth, no wealth is created.

Money, even commodity money, is a terrible abstraction for economic value. Paper money is even worse, and at least one of money's primary functions, communicating relative scarcities and surpluses, has been completely hijacked by the endless floods of the stuff coming out of the central bank. For all its other problems, the weak-gold-standard money we were using did a better job of that.

Is it better that we spend money on things other than useless trinkets? Yes. Is it required, so long as we are spending enough of our productive capacity on producing necessities? No.

It is absolutely required if you want living standards to improve. If you want the economy to grow, goods, energy, and knowledge absolutely must go into things that create more goods, energy, and knowledge. This is not optional.

They could be doing something productive, but are not for no actual reason at all.

We fundamentally do not know what they should be doing. Our monetary disorder is so deep that we can't even tell what the most fundamental problems are, other than the fact that we've made a hell of a lot of promises that we can't possibly keep. The real way out is manufacturing, creating new goods, and selling them to the world, repatriating those dollar balances, paying down our debts, and restoring us to health.

But that's going to be a long and painful process. It's one we should have started about, um, probably about 1991, when globalization was first kicking into gear, and dollars really started to move strongly overseas. But instead of letting the relative lack of money constrain the economy, and force it back into balance with the rest of the world, we just kept replacing all the dollars that left our shores. We refused to ever allow any bad times, ever... we hid the pain that would have caused us to lean up and get competitive. And now we have about twenty years' worth of catching up to do, and we're already in hock up to our eyeballs, so we can't easily summon the resources and knowledge we need to bring our trade balance back to a surplus, and keep it there for a couple of decades.

We've been treating cancer with morphine, and the pain is finally getting through the drug haze. Your prescription is more morphine.
posted by Malor at 11:25 PM on October 8, 2011

PEOPLE are the source of wealth. Always and only people.

What is your evidence for this? I can demonstrate without all caps that people in areas under the control of states are substantially wealthier, better educated and longer lived. Individuals on their own create nothing. There are only few places where it is even possible to live as an isolated individual and generate enough net calories to live. Communities create surplus calories by aggregating labor and allowing for specialization and exchange. The state mediates the exchange of value and sets the rules that distributes the surplus.

Well, I dunno, the gold price is looking pretty good to me. I think it was higher a few weeks ago, but it's still over $1600 now. Ten years ago, it was about $300. I'd say it's doing a pretty good job of holding value.

From 1979 to 2000 the value of gold plummeted. It still hasn't recovered to its inflation adjusted peak in the 1970s. If you bought $1000 of gold in 1979, you'd have about $1800 today. If you put the same amount in the DOW you'd have $10,000.

I mean, by the standards you're using, you can say with equal validity that the corporation is the source of all wealth.

The corporation is charted by the state.
posted by humanfont at 12:57 AM on October 9, 2011

At the risk of taking this in another direction: Why the fuck did we hand all the power to the Chinese? Why are we buying plasma TVs and electronics from them when we invented the technologies?

To me, the answer is pretty obvious - business, when left to its own devices, will look for any way not to pay the full bill. Business has steadfastly refused to pay American workers a reasonable wage, and instead found ways to exploit cheap labor elsewhere. Now the student has become the master, and the public - who was fucked from the get-go - is now doubly fucked.

The invisible hand works - for the bosses. STRONG regulation with teeth is the only option, IMO.
posted by Benny Andajetz at 5:15 AM on October 9, 2011

Despite the rocky reception he's gotten in this thread, I'm glad Malor's continued to post, because to be honest at first I was all like o.O, but then as he explained his position more i could get where he was coming from. I don't think many here would disagree with his argument that the money or 'wealth' if you will that those of us lucky enough to be born in the west to relatively well-to-do families spend collectively on MacMansions and stupidly big TVs could be better spent, both in the short and long term, on more productive and humane things.

I think perhaps it's a question of time frames.

At the same time, my local shops don't accept gold, they prefer money. Gold itself has limited value outside of certain industrial/commercial uses, and as people have been pointing out, money spent on consumption simply doesn't disappear. When (if) I buy a big screen TV, the retailer I buy it from takes a cut. The wholesaler that sold it to the retailer takes a cut. The importer and the dock workers that moved it off the ship take a cut. The marketing people and all the other behind the scenes people take a cut. The ship makers that made the ship it came over on aren't doing it for free either. And in the end a factory somewhere had to make it, probably in China but would it make that much difference if it was South Africa? I mean we have a productive factory producing things yeah? In any case the factory workers are getting paid.

All these people use their cut to feed their family and pay their rent/mortgage - of course it would be better if what they were paid to produce was more productive, but how do we do that without instructing industry what they should produce? Your argument is with the logic of late stage capitalism, and I more or less agree on those grounds.
posted by Hello, I'm David McGahan at 6:00 AM on October 9, 2011

business, when left to its own devices, will look for any way not to pay the full bill. Business has steadfastly refused to pay American workers a reasonable wage, and instead found ways to exploit cheap labor elsewhere.

Consumers have steadfastly refused to pay high enough prices that the businesses can pay reasonable wages. And since one defines "reasonable wage" largely based on the wage-earner's ability to buy that stuff, it's a somewhat vicious circle.
posted by Etrigan at 8:04 AM on October 9, 2011

Consumers have steadfastly refused to pay high enough prices that the businesses can pay reasonable wages. And since one defines "reasonable wage" largely based on the wage-earner's ability to buy that stuff, it's a somewhat vicious circle.

I think there's a blame-the-victim reasoning there. Do you really think that outsourcing labor has been a goodhearted move on the part of business to make things more affordable for consumers? I would submit that that is just a by-product.

And the price we pay as a society is very steep. Once the factories are boarded up, we've handed control to someone else. And once we're divorced from the manufacturing we lose any ability to innovate efficiently; you can't innovate if you aren't intimately aware with the whole process.

Much better to pay higher wages, even if it makes products more expensive.
posted by Benny Andajetz at 8:18 AM on October 9, 2011

Why the fuck did we hand all the power to the Chinese? Why are we buying plasma TVs and electronics from them when we invented the technologies?

This is factually wrong. The US still manufactures far more stuff than China or any other country, unless you count the EU as a single country. (US $3.2 tn, EU $4.0 tn, China $2.7 tn.)

The world only needs a handful of plasma TV manufacturing plants. If the US had made some more strategic investments a few decades ago, they could have been US-owned plants instead of Japanese- or Korean-owned, but they'd still be in China. The vast majority of manufactured goods don't have those kinds of insane economies of scale and are still going to get produced in developed countries.
posted by miyabo at 8:56 AM on October 9, 2011

Malor wrote: Abso-fucking-lutely. Except in very high-demand sectors, wages do not keep up with inflation. The reallocation of wealth that happens from inflation is jerky and slow and poorly done, and it is always the marginal people that suffer first. Inflation moves resources to the entities closest to the money, which means they have to be taken from someone else. And the 'someone else' is the people with the fewest available free dollars to spend.

Interesting theory, but it completely fails to match the data. Wages have been flat relative to inflation since the middle 70s, but they haven't declined relative to that metric, except for short periods mainly due to volatility in energy or food prices. For a while, the marginalized were able to get by in retail and fast food, but the people who previously had good jobs and have been laid off have largely replaced them. Fix that problem by getting those folks back to work and lo, the marginalized will have jobs again.

If the problem is that we're being controlled by bankers, about the best thing we can do is inflate, which is why you see the Tea Partiers and their other mouthpieces are so hell-bent on avoiding that outcome. I mean seriously, you think deflation is going to be better for the average Joe?

You're partly correct though. Wages can't rise across the board right now due to high unemployment and underemployment. Fix that problem and wages can and will rise in real terms. Just find something for folks to do and the problem works itself out. I suggest we build and rehab infrastructure.

Did you ignore the part where they have accumulated trillions of dollars in foreign reserves? That's debt! It means that, if we get into a competitive environment, they can have anything they fucking want, and there's not a goddamn thing we can do about it. We owe them goods to the tune of trillions, and they are eventually going to want them. When they start cashing in their reserves, we're going to be so utterly and absolutely fucked.

They can't keep accumulating dollars forever. They're having terrible inflation trouble as it is. Things that can't continue forever, don't. And when they stop buying dollars, things are going to get bad.

No, I didn't ignore it at all. I think it doesn't matter. We don't have to pay them back if we don't want to. That's the wonder of owning the currency. We can inflate our way out of it or we can simply say "Fuck You, I'm not paying today." Or we can continue to let them do their thing, because again, it really doesn't matter. Who the fuck wants RMB? Almost nobody. As long as the Chinese have their economy oriented towards export, they aren't going to call back any of that money. All it will do is make their inflation problem worse by expanding the supply of their currency.

Besides, the inflation China is seeing has fuck all to do with the debt we owe the Chinese. As you rightly point out, that's what happens when you have an economy with too many claims on too little stuff. They launched a massive stimulus and it worked. Unfortunately for them, they decided that RMB interest rates should not also rise after the stimulus took effect, thus leading to inflation.

Well, I dunno, the gold price is looking pretty good to me. I think it was higher a few weeks ago, but it's still over $1600 now. Ten years ago, it was about $300. I'd say it's doing a pretty good job of holding value.

Of course the price of gold is high. Between volatility and the stagnant economy making people nervous and the pump and dump schemes perpetrated by the likes of Glenn Beck, I'd be shocked if it weren't. It's a complete scam.

Sure, but that doesn't matter, because money itself doesn't do anything. No matter how many times a dollar moves around, if the people swapping the dollar are destroying wealth, no wealth is created.

You continue to argue that wealth is being destroyed somehow, but still haven't explained how that happens.

Fiat money is more like grease than a chit worth a specific value of goods. You seem to be saying that we can't put people to work because we lack some thing that doesn't even actually exist except as an abstract tool. That's complete and utter bullshit, completely missing the fact that the money supply is backed by nothing. Again, it's grease.

The market is telling us that we need to take some of the idle capital people are shoving our way and put it to good use. You, like the Republicans, argue that we shouldn't do that. At least you disagree because you think it will actually bring harm to the nation. They disagree because they want our economy to remain in the shitter so as to force Obama to lose the election.

If we do end up with an inflation problem, it's pretty simple to fix. Take money out of the economy. Taxes are a great way to do that. Higher interest rates work, too, but that hits those at the bottom disproportionately. The Chinese don't have that luxury because the Communist government is already having trouble holding on to its power as more and more corruption is exposed. Which, incidentally, is the other reason I don't think China's in any position to call any loans at all. Their economy is even more rotten than ours has heretofore even dreamed of being.
posted by wierdo at 8:58 AM on October 9, 2011

This is factually wrong. The US still manufactures far more stuff than China or any other country, unless you count the EU as a single country. (US $3.2 tn, EU $4.0 tn, China $2.7 tn.)

I hate to see that argument, because it is so horrendously misleading.

In 1980, manufacturing was almost 25% of our economy. Last year it was about 11%. The only two countries where manufacturing has gone up relative to GDP in the last 25 years are China and Korea.

We have high aggregate numbers because we have kept some high-dollar manufacturing, such as avionics and pharmaceuticals. The manufacturing that we have kept makes money but employs few people. And the people it does employ are more highly educated than our dead manufacturing sectors employed.

In short, total dollars are meaningless. Percentage of GDP and resulting jobs are the important metrics.
posted by Benny Andajetz at 9:09 AM on October 9, 2011

Do you really think that outsourcing labor has been a goodhearted move on the part of business to make things more affordable for consumers?

That's a rewording of my point that borders on comedic. Of course I don't think it was benevolent, but it was the step that many, many companies took to remain competitive. The alternative for them was being priced out of business by other companies who were more willing to win.

Much better to pay higher wages, even if it makes products more expensive.

Again, who buys them if they're more expensive? The workers whose wage you doubled still can't afford the widget they're making, because you just doubled its price because you have to pay the doubled wage. Vicious circle.

If you think that "Made in the USA" is enough reason for enough people to pay higher prices than they have to to make a difference, well, I have a bridge that was made in Brooklyn that I'd love to sell you.
posted by Etrigan at 9:28 AM on October 9, 2011

@humanfront I've got to say that I must disagree with your conclusion that the government is the source of all wealth. And adding in the bit about how the government is made of people sounds more like Romney's "corporations are people" line than you probably want to.

Heck, one of the few areas where both Marx and Smith were in agreement was that value came from labor.

I'm certainly in agreement that we really need a government, and we really need a government to do things economically. But labor makes wealth, not government. Government, properly, serves a valuable and necessary function in protecting labor but it's the labor not the government that makes the wealth.

Where I disagree with Malor is his contention that the solution to the current problem doesn't and can't involve government spending and borrowing.

Yeah, if we borrowed money to simply give everyone a big screen TV that wouldn't much help the economy.

But we're in dire need of infrastructure work, and that not only is properly a government job to begin with, but it also facilitates the production of wealth. Government borrowing to pay for rail projects, rebuilding the electrical grid, improving network infrastructure, fix and build bridges, building and staffing schools, improving energy efficiency in buildings, etc would not only put a lot of people back to work (and thus get them consuming and helping restart industry in general) but is also critically necessary because our infrastructure has been crumbling for decades as we've squandered our national budget on wars.

Surely you aren't arguing that borrowing to fund infrastructure work is bad?
posted by sotonohito at 9:38 AM on October 9, 2011 [1 favorite]

That's a rewording of my point that borders on comedic. Of course I don't think it was benevolent, but it was the step that many, many companies took to remain competitive. The alternative for them was being priced out of business by other companies who were more willing to win.

Then the key is to make that scenario impossible. No sane system allows companies to use foreign labor to make a product that they then turn around and sell at home without a penalty. Allowing companies to do just that AND not pay taxes by booking profits offshore is INSANE.
posted by Benny Andajetz at 10:15 AM on October 9, 2011 [3 favorites]

Benny Andajetz wrote: Then the key is to make that scenario impossible. No sane system allows companies to use foreign labor to make a product that they then turn around and sell at home without a penalty. Allowing companies to do just that AND not pay taxes by booking profits offshore is INSANE

They certainly should either be paying import duties or income taxes on the overseas profits. This "you can keep it offshore until we decide to have another tax holiday" BS is..well, BS.
posted by wierdo at 10:18 AM on October 9, 2011 [1 favorite]

Context is important.

The unsustainable trade arrangements you are talking about result mainly from the US' need for the past several decades to import energy from around the world. Since we had to export our wealth to acquire that energy, we attempted wherever possible to recapture as much of it as possible through the the incursion of US-based businesses into those selfsame economies. Business has been a primary agent of US foreign policy for some time now, and will continue to be so for the foreseeable future.

The only way off this merry-go-round is domestic, sustainable energy development, which must be coupled with reduced demand. This cannot be done in a comprehensive fashion without entirely retooling the US economy away from its military underpinnings, and that process cannot be done swiftly. Moreover, doing so would shift the balance of global military might to other geopolitical blocs, which would certainly have undesirable consequences, at least for the West.
posted by perspicio at 10:27 AM on October 9, 2011

No sane system allows companies to use foreign labor to make a product that they then turn around and sell at home without a penalty.

Then we arrive back at the rest of my comment that you didn't bother responding to:
"The workers whose wage you doubled still can't afford the widget they're making, because you just doubled its price because you have to pay the doubled wage. Vicious circle."
How many iPods does Apple sell if they start at $3000?
posted by Etrigan at 10:57 AM on October 9, 2011

Then we arrive back at the rest of my comment that you didn't bother responding to:
"The workers whose wage you doubled still can't afford the widget they're making, because you just doubled its price because you have to pay the doubled wage. Vicious circle."

That's what innovation's for. In your scenario, the only solution is a race to the bottom. That's not workable, either. It's also negates our history prior to offshoring labor. The laws of economics and economies of scale still apply.

And you didn't bother responding to my comment regarding loss of control and innovation.
posted by Benny Andajetz at 11:07 AM on October 9, 2011

That's what innovation's for. In your scenario, the only solution is a race to the bottom. That's not workable, either. It's also negates our history prior to offshoring labor. The laws of economics and economies of scale still apply.

Our history prior to offshoring labor is largely prior to organized labor as well, but I doubt that either of us wants to go back that far. The few years between mass unionization and mass offshoring were also marked by global wars that allowed the U.S. to make a lot of money rebuilding Europe and Asia.

Offshoring has, in many ways, vastly increased our innovation, by reducing that need to make something cheaply locally. How far would cell phone technology be if we were still waiting for someone to figure out how to make one for less than $2000?
posted by Etrigan at 11:36 AM on October 9, 2011

@Etrigan: Even Henry Ford, thug and nasty person though he was, recognized that his employees were his customers. Ford fought unions tooth and nail and was by most reports an extremely unpleasant person to work for. But if you did work for him you'd earn a decent wage.

Also: "The workers whose wage you doubled still can't afford the widget they're making, because you just doubled its price because you have to pay the doubled wage."

Is a statement that seems to indicate you've never much studied labor cost as a function of total cost.

Take, for example, the garment industry. A sweetshop worker manufacturing cheap tshirts might, at absolute best, be making $0.25 per shirt. On a shirt that retails in the USA for $5 or so. Double their wage and the retail price doesn't have to go up more than $0.25 for all the corporations involved to be making exactly and precisely the same profit they are now. It does not, however, double the price of the shirt.

For many goods, especially stuff like electronics, labor is actually a pretty minimal part of the total cost.

Or take the iPhone 4. Labor cost on one of those is $6.54. Even the subsidized price on the iPhone 4 is $200. Unsubsidized it's closer to $500. But even if we go with the lower price, that makes the difference between an iPhone manufactured with current slave labor prices and one where we double the money going to labor only $6.54. What, really, is the difference between a $200 phone and a $206.54 phone?
posted by sotonohito at 1:16 PM on October 9, 2011 [1 favorite]

Even Henry Ford, thug and nasty person though he was, recognized that his employees were his customers. Ford fought unions tooth and nail and was by most reports an extremely unpleasant person to work for. But if you did work for him you'd earn a decent wage.

In a world that didn't have a transportation network that made it efficient to pay people in Indonesia a tenth of the same amount, yes.

Is a statement that seems to indicate you've never much studied labor cost as a function of total cost.

I admit to oversimplifying the numbers, but I did so because I didn't know the equivalent of "doubling" when you're talking about multiplying something by 14. One source says that Foxconn pays 51 cents per hour. Multiply that by 14 (plus a little, but we'll round in your favor) to get to the U.S. minimum wage, and it turns your $6.54 labor cost into $92.97. Care to argue that there isn't really a difference between a $200 phone and a $300 phone?
posted by Etrigan at 1:46 PM on October 9, 2011

For the record, I'm not a free-market absolutist by any stretch of the imagination. I believe that corporate tax rates should be higher, and the multifarious loopholes that exist for companies to pile money atop money for doing things (or pretending to do them) overseas should be closed, and preferably by people smarter and more evil (or at least more capable of thinking of evil) than I.

But moving jobs overseas is the result of competition. Without at least some level of competition, business and commerce and progress cease to exist. We cannot hope to put the globalization genie back in the bottle, nor should we necessarily want to (it may not seem like it, but we continue to live in a better world for virtually everyone than the one that existed a decade ago, or the one a decade before that, and so on and so forth). Protectionism only goes so far, and it has a tendency to make things worse. I'd love to hear an idea that doesn't rely on assuming that basic economic truths will be suspended.
posted by Etrigan at 1:59 PM on October 9, 2011

Heck, one of the few areas where both Marx and Smith were in agreement was that value came from labor.

Two of history's greatest philosophical villains. One sewed the seeds of coloniali mercantilism and the other the Bolshivics and Stalin. Very little of what they wrote stands up to real world testing. To the dustbin with them.

Surplus value is an emergent property of civilization. The state is the foundation of civilization. Only when we pool our labor do we see the surplus value.

While it is true that one's individual efforts and task completion are seen to create value, absent the state, those efforts would be meaningless. Furthermore there is almost always someone else who can do the assigned task. Individually when you balance out inputs and outputs; most individuals value add is nil.

I realize this is difficult to accept; since we are all special snowflakes here. Your contribution won't be missed. The shiny metal is nothing but a burden. You will only get value from community under the state.

To prove the point, we could put you in room 101 and put a rat cage on your head until you beg us to so it to your beloved Julia instead. We wont though, because even a leviathan has a heart.
posted by humanfont at 3:25 PM on October 9, 2011

Etrigan wrote: Care to argue that there isn't really a difference between a $200 phone and a $300 phone?

If you want to argue that a living wage makes everything so expensive most of us can't afford it, you should at least use the correct price. It would be less than a 20% increase. A factory unlocked, unsubsidized iPhone 4 costs nearly $700 for the 16GB model. Since at&t will sell it to you supposedly unsubsidized, but still locked, for $600, we can use that price. So a 16% increase in the price of the phone in exchange for the workers assembling it getting 14 times the money?

I'll take that deal any day of the motherfucking week.

Electronics would easily be the least impacted by an increase in labor cost. I've bought high end Nokia phones made in Finland for less than $400.
posted by wierdo at 3:37 PM on October 9, 2011 [1 favorite]

You Americans make me sad. Jesus has sway over your economy.
posted by dougrayrankin at 4:41 PM on October 9, 2011

Jesus has sway over your economy

Let's not bring immigration into this.
posted by humanfont at 4:43 PM on October 9, 2011 [4 favorites]

If you want to argue that a living wage makes everything so expensive most of us can't afford it, you should at least use the correct price. It would be less than a 20% increase. A factory unlocked, unsubsidized iPhone 4 costs nearly $700 for the 16GB model. Since at&t will sell it to you supposedly unsubsidized, but still locked, for $600, we can use that price. So a 16% increase in the price of the phone in exchange for the workers assembling it getting 14 times the money?

I'll take that deal any day of the motherfucking week.

Congratulations, you're more enlightened than billions of other people.

Take a look at that other example given above -- clothing, where a fourteen-fold increase in worker salary would allegedly lead to a 70-cent increase in the price (and note that we're just taking sotonohito's numbers as given). And yet, even though some person on the Internet would take that deal any day of the motherfucking week, companies still somehow find it to be more profitable to put clothes together in Lesotho and Vietnam and ship them most of the way around the world, because if the average consumer is shown a shirt for $10 and a seemingly identical shirt for $10.75 and a MADE IN THE USA sticker (which cost that extra nickel), they buy the $10 one. Companies are not doing this because they love exploiting Vietnamese laborers. They are doing it because it increases their profit margins to pay and charge $0.70 less for the same thing, because people will buy more of the thing that's even $0.70 cheaper.

People want to pay less for stuff. The vast majority of them do not motherfucking care how much the workers get for it. It sucks, but what's the alternative?
posted by Etrigan at 5:23 PM on October 9, 2011

They are doing it because it increases their profit margins to pay and charge $0.70 less for the same thing, because people will buy more of the thing that's even $0.70 cheaper.

People want to pay less for stuff. The vast majority of them do not motherfucking care how much the workers get for it. It sucks, but what's the alternative?

I offered an alternative: legislate the $0.70 away. It's protectionist and you don't like it, but it's an alternative.
posted by Benny Andajetz at 5:29 PM on October 9, 2011

No, Etrigan, they ship the production to Malaysia or wherever and still charge $10.75, but slap an MSRP of $24.95 on it so that the consumer thinks they're getting a good deal. Unless they're Wal-Mart, in which case they'll sell it for $10.47.

It would be a nightmare to administrate, but were it feasible, I'd be all in favor of using tariffs to raise the price of foreign produced goods to what they would cost were the factories abiding by US environmental and labor standards. That's a level playing field. What we've got now is, as with most of the rest of our society, a catastrophically off-kilter playing field. If we can't compete even when we're all playing by the same rules, so be it.
posted by wierdo at 11:07 PM on October 9, 2011

Benny, I'm not against protectionism. I'm against hand-waving away the fact that protectionism results in raising the price of things to the consumer and that higher prices on things means consumers buy fewer things, and that when consumers buy fewer things, the economy slows. There are certainly occasions when that is called for. But it should always be taken into account.
posted by Etrigan at 7:06 AM on October 10, 2011

Etrigan:

Normally, I would agree with you more than I do now.

We're in weird times now, though, because business is doing well and society is not. It simply doesn't matter if prices are nominally lower if people don't have jobs. It's not sustainable and it's not healthy.

I have a degree in business. I know the business playbook. We are being sacrificed at the altar of profits for the few, and shit for everybody else. It has to stop and, IMO, the government is the only player big enough to do it.
posted by Benny Andajetz at 2:27 PM on October 10, 2011 [2 favorites]

@Etrigan I'm not an economist so I can't really do much on the economic front but observe that any situation where people can't afford to purchase the goods available is one that doesn't seem to much benefit anyone including the people who own factories.

However I do have a certain degree of expertise in history, and I am therefore rather dubious as to the claims that regulations to improve the lives of workers or mandate product safety will somehow damage or destroy the economy.

The elites and their minions have made that claim every single time such regulations have been suggested and implemented. Everything from an eight hour working day to worker safety regulations has been decried as a plan that will ruin the economy and impoverish the rich. And every single time they've been dead wrong.

Every. Single. Time.

People who are that wrong that consistently aren't really people I think are worth listening to.

In fact, when it comes to track records, it's people like Krugman who are advocating exactly what you insist can't work (borrowing to fund government spending on infrastructure) who have been right most often. The economists who claim we'll be destroying the economy if we do that are the same economists who told us that the housing bubble would never pop and that Enron was the wave of the future, and generally failed to predict every single disaster of the last few decades. Why should I listen to people with such a lousy track record?

Further, the past decade has been an experiment in deregulation, cutting domestic spending, etc. I don't see that having produced an economic miracle. If cutting domestic spending produced good results we wouldn't be in the economic mess we are. So again, why should I listen to people who tell me that after a decade of social program after social program being slashed to the bone and having a bad economy result what we need to produce a better economy is more of the same? We tried that, it didn't work.

More important, regardless of economics, I'm simply not going to go along with any plan that demands that normal people be harmed and the economic elites coddled on the grounds that the government must embrace austerity. Normal folks have suffered enough, let the rich suffer for a change.
posted by sotonohito at 6:43 AM on October 11, 2011 [1 favorite]

Dems jobs plan: infrastructure investment, fica tax breaks for businesses and individuals, extending unemployment benefits, slew of other stuff.

Reps jobs plan: repeal new financial regulations, gut the FDA, dismantle the EPA.

First of all, you somehow managed to miss tax breaks in the republican plan, I assume because it would have given them a point in commmon. You also missed cut medicare in both columns, another similarity.

The real problem here is that there are no numbers. $10 in infrastructure isn't the same as $10 million or $10 trillion. The "Obama jobs plan" simply isn't large enough to put much of a dent in this depression.

So the vast majority of protestors are fucked regardless of who wins the election. And beyond that, unless the democrats re-take congress none of that stuff is going to pass anyway. And if the dems do retake congress it still won't matter because they won't get "enough votes" from fuckheads like leiberman and his clones in order to do anything anyway.

The question people need to ask is what are they actually going to do, not what action-items they put in their marketing brochure.

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Also this "everyone with a 401k is invested in the economy" thing someone said is false. If you can pick which stocks you invest in, you can buy stocks in other countries, like China. Lots of people do that.
posted by delmoi at 10:01 PM on October 11, 2011

In fact, when it comes to track records, it's people like Krugman who are advocating exactly what you insist can't work (borrowing to fund government spending on infrastructure) who have been right most often.

sotonohito, your hand-wringing about how much I hate the poor working man would be more compelling if you weren't totally making up my arguments, and in fact my topics. Please point out where I said anything that can be read as tangentially relating to borrowing to fund government spending on infrastructure, much less insisting that it can't work.
posted by Etrigan at 8:38 PM on October 15, 2011