Asymmetrical Information

NY is becoming the France of the U.S.

Which sovereign is this: politically dominant public sector unions, among the highest tax burdens in their geographic region, lavish welfare spending, 'progressive' politicians, extensive social regulations, and opposition to war in Iraq.

"Despite his broad knowlege of the Middle East"
Thomas Friedman's knowledge and understandjng of the Middle East is exactely as broad and deep as his understanding of how government provides "free" services.
He spent a long time in the ME and wrote books on it, but he understands nothing.

I'm glad you commented on this...I thought the same thing myself when I read it. Boy, that was awful.

I saw that in the Raleigh News and Observer this morning. As soon as I read that line I was done with the article.

"It's not the government's debt, it's your debt [or, rather, your children's...]". Conservative Republicans seem to be under the delusion that running up a big credit card bill makes you wealthy...

The only saving grace Friedman has is that he's not classless like Krugman.

God forbid that someone should pay for something themselves. Back in college, I took a class on professional practices for artists; I was told enthusiastically that Ohio was/is "One of the best places for an artist to get a grant." My stomach turned, and I didn't pursue. Call me old-fashioned, but grants should be for infrastructure repair and expansion - the more user-fee derived, the better - and not a cushion for art (or anything else) that can't survive in the market.

xxx,

you seem to be under the delusion that you understand conservative Republicans and the economic studies which support them.

Friedman is at his absolute worst when it comes to domestic politics, especially about Republicans.

And, yeah, he's world renowned on the ME, but he also gets it REAL wrong there sometimes. Amazingly, when its about Republicans.

There may be a theme here....

Well, self-reliance is a wonderful credo for all you coddled, sophisticated urbanites whose services for water, electricity, garbage and medical care are but a small fee away. But out here in rural America we've had 400 years of self-reliance and less government and in my 50 years of experience it has lead primarily to promoting human misery, poverty, ignorance, and disease.
Without substantial help from government, and I mean Big Federal Government, we in the Texas Hill Country would never, repeat, never have gotten even electricity. Read Robert Caro's first volume on LBJ if you don't believe me. Right now, you still see the pit toilets and lime powder sanitation of my youth at some ranches because poor people can't afford to blast septic tanks out of the limestone.
Garbage all has to be burned and water pumped from our own wells until a real drought occurs and you go without, or as happens now and again, the chickens pollute the recharge and everybody gets cholera. I've gotten malaria and dengue fever down in the Rio Grande Valley over the years because the government "can't afford" to provide mosquito control.
True, our government lets us keep more of our money but you can't afford a wastewater plant on an individual basis. Government doesn't charge much and we don't get much but life is also rather more Hobbsian than I think you city folks would find acceptable. Rural counties in America have the highest infant mortality rates in the nation and the lowest educational outcomes. There is a Third World inside America in rural areas that has embraced less government for centuries and it's not a pretty picture.

Ritchie,

Rural America has been the heart of the constituency for big government since before the Civil War.

Rural living is less comfortable than city living but it offers intangible advantages in open space and independence. And rural folks have been lobbying hard (and voting for) subsidies to provide comfort at the expense of city dwellers for generations. And because of the structure of our government in the USA, they get it.

Look at where the net tax payers are. They live in San Francisco, New York City, Seattle, and the like. Now look at where the net tax consumers are. They are the rural places like Wyoming, West Texas, Mississippi, and especially your Texas Hill Country. The Austin (and SA to Dallas corridor) private sector pays taxes and the state government, the university, and you consume them.

Big Richie,

Seems like maybe you should think about getting the F**K out. America is a big country, there certainly must be a place for you in a more appealing and prosperous area.

Best of luck,

John

Is that the same rural America that benefits from government transfer payments for ethanol, mohair, below market-value water supplies, etc., etc.? The vast majority of taxation in this country has nothing to do with providing public goods that can only be obtained through state action, but rather the transfer of wealth from faction A to faction B, or vice versa, depending on which faction's support is deemed more valuable by elected representatives. Thus, 73 year old multi-billionaires who own fast food chains benefit from having the state take the wages of the young fast food workers, and then send it back to the billionaire. Sugar beet farmers can sit on the porch of 6000 square foot homes built with government checks, and made possible by cheap migrant labor and government prohibition of the purchase of cane sugar at market values. Yeah, those backward rural hicks don't know how to get their snout in the trough at all. Of course, all of this property grabbing for purely personal gratification is rationalized by sentimental twaddle about democracy and the common good.

Big Richie --

Explain to me why it is my (a coddled, sophisitated urbanite) obligation to pay for fixing the ills you describe.

And explain to me why it is the right of residents of "rural counties" to demand that I pay for it.

"Government doesn't charge much"??!! Maybe not for you, but I can tell you that the government rakes us coddled, sophisticated urbanites over the coals. And if we refuse to assent, we go to jail.

>>Call me old-fashioned, but grants should be for infrastructure repair and expansion - the more user-fee derived, the better - and not a cushion for art (or anything else) that can't survive in the market.

Mozart and Bach would have had a pretty hard time with you, Michael.

dd

Friedman never said that "if the government pays for something, it's somehow free". His idea seems to be the more rational 'the government currently providees a lot of services you won't be getting unless you contract for them some other way.' In other words, they explicitly aren't free. You're just choosing how you're going to pay for them.

As to "You don't want to buy things yourself -- you want to give the government money to buy them for you!", this is probably true in many instances. We don't want to buy our own fire and police protection. Many of us do not want to provide our own art; we'd rather have public museums, even when we don't go to them. Those of us who seldom use libraries still want them available. It's an interesting case of the stated preference for museums and libraries, versus the revealed preference for "American Idol" (to make a strained analogy).

And do we want to go through the long list of things the government does, and decide on each individual case? I don't know. But I doubt that all these services were forced upon an unsuspecting public, who have ever since been clamoring for fewer of them. Most at least were originally seen as good ideas.

This of course ignores the fact that for many people the services *are* effectively free -- since people who pay no taxes are still welcome in the public library. In fact, I'd guess that most people who use the library don't pay their 'fair share' to support it. But that's a different question.

Chichka

True, our government lets us keep more of our money but you can't afford a wastewater plant on an individual basis.

Lets? Never forget that our property is our property. The govt is made up simply of other individuals like you and me. They do not let us keep our money. They takes by force what is ours, and whatever is left over is left over.

Government doesn't charge much and we don't get much but life is also rather more Hobbsian than I think you city folks would find acceptable. Rural counties in America have the highest infant mortality rates in the nation and the lowest educational outcomes.

Govt has been among the worst influences for much of rural America, especially Appalachia.

Mozart and Bach would have had a pretty hard time with you, Michael.

Oh, come now, d2! You know as well as I do how different artistic patronage was in the time of monetarily centralized monarchy as opposed to capitalist democracy. I don't live in the former, and don't intend to see its appendages retained. And cheer up: we still have poet laureates.

One thing's for sure: unlike the older Bach, Mozart never went Baroque [/rimshot].

Interesting, no one is interpreting the quote as I did. I believed it was simply saying, "you want those tax cuts, fine, but remember with tax cuts comes service cuts."

Some people (such as Jane) don't think that's a bad idea. Some people (such as Richie) think it's a disastrous idea.

I understood the quote to mean that when Bush offers tax cuts Democratic leaders should point out that nothing is free and the tax cuts will inevitably lead to cuts in services. I think it's a fair thing to point out. People often don't realize (and yes, this is naïve of them) that the world has a cause and effect relationship with everything. You want something, you've gotta give up another thing. I think Friedman just wants to know why the democrats aren't pointing it out.

Any yes Richie, I do think we should make sure government gives us clean water, electricity and a good education no matter where you live, because it benefits society as a whole in the long run. But what else would everyone expect from me? I'm a coddled, sophisticated Urbanite from New York City.

Many of us do not want to provide our own art; we'd rather have public museums, even when we don't go to them. Those of us who seldom use libraries still want them available. It's an interesting case of the stated preference for museums and libraries, versus the revealed preference for "American Idol" (to make a strained analogy).

Ahhhh! It's becoming crystal clear. Because you do not feel like providing your own art, you are willing to hold a gun to my head so that I can provide it for you. I admire your truthfulness.

Ritchie, pardner, I can get you discount candles pronto. ;-)

That's a fine argument -- wrong, I think, but certainly interesting -- but Friedman isn't making it. Friedman is saying that tax cuts = service cuts = paying for services yourself. Without making explicit the "We'll take money from other people and give it to you" argument, this is exactly the argument I outlined above: that giving the government money to buy things is better than buying them yourself.

An enlightened society not only allows freedom of expression Jonathan, but encourages it and allows it to be seen. If it weren't for the government subsidized art most historically great societies would have faded into dust by now.

“Mozart and Bach would have had a pretty hard time with you, Michael.”

So what? It is not the business of government to determine artistic worth. This is solely the function of the private sector. Elected politicians and government bureaucrats should stick to the essential functions of government that cannot be done by private enterprise. Milton Friedman warns that when government does what is shouldn’t---it variably fails to perform the duties that it should!

A clarification on the art topic: I'm no enemy of public museums, archives or libraries, but rather dubious of works that are more individual and private-sector-crossover than community or municipal. "Here is a grant for your painting study on gender issues" is a problem; "Here is a grant for your Tang Dynasty renovation" is not.

" I've gotten malaria and dengue fever down in the Rio Grande Valley over the years because the government "can't afford" to provide mosquito control."

Currently, government is in the business of preventing mosquito control by banning DDT.

“Any yes Richie, I do think we should make sure government gives us clean water, electricity and a good education no matter where you live, because it benefits society as a whole in the long run.”

That is absolutely false. Some towns are no longer financially viable--and it would be a disaster to keep them alive. I also live in Texas, and have little sympathy for these small areas that are irrelevant in today’s economy. It’s indeed time for that dude to move.

An enlightened society not only allows freedom of expression Jonathan, but encourages it and allows it to be seen.

Does this encouragement necessitate the use of violence?

Jane, Kate, Chichka:

I too read the article the way Kate did. And I believe (with not much to back it up) that that is what Friedman tried to say.

I agree with Jane that that is not how it reads. He does seem to be saying that somehow tax services are free. We can all agree that on an aggregate basis this is incorrect.

But it’s not incorrect on a personal basis as Chichka points out. And I would suspect that since most of the tax cuts benefits go to the wealthier households, that for many people in lower income brackets the tax cuts will, in effect, result in a cut in services they were getting for ‘free’. In fact, that may be true for a majority of voters. I see no problem with Democrats pointing that out. People can choose what they want.

Finally, I am not sure that the ‘don’t pay for services directly, pay government to do it’ is such a bad strategy (although it will have to be rephrased). In fact most Americans agree with that idea on a great many issues as Chichka also mentioned.

What do you think will happen 10-15 years from now when the children of the Baby Boomers will be confronted with their parent’s old age needs? I expect an increase in government spending of some 5 to 10 points of GDP as millions and millions of Americans gladly accept tax increases in exchange for the government taking that huge problem off their shoulders.

But it’s not incorrect on a personal basis as Chichka points out. And I would suspect that since most of the tax cuts benefits go to the wealthier households, that for many people in lower income brackets the tax cuts will, in effect, result in a cut in services they were getting for ‘free’. In fact, that may be true for a majority of voters. I see no problem with Democrats pointing that out. People can choose what they want.

That's not really true. If I do not want said govt service, I cannot choose out of it. If I would rather plan my own retirement, which I think can much better do than the govt, I cannot choose not to partake in social security. The govt uses force to make me participate in their retirement savings program.

Michael M-
Just from pure self-interest you should want to help create better public health and sanitation in rural areas so that when the hicks do come to town occasionally or the river flows down to you they don't pass on the diseases that they incubate from poor sanitation and drainage such as cholera, malaria, amoebic dysentery, etc.
From a moral perspective, all Americans should be concerned about public health to reduce the amount of human suffering in our country (try dysentery for suffering, or consoling a mother whose young child has just died from it).
When I say the local government doesn't charge much, it's true. When your property's not worth much ad valorem taxes are low, license plates only put $10 into the County and thats's about the only taxes that counties in Texas have. The State takes a fair hunk for sales tax (6.25%)and on a net tax basis according to the Comptroller we break about even. Austin and Dallas are subsidizing somebody but it's not us.

Jonathan Wilde-
I can't speak much about Appalachia as I have only driven through it. Pretty country, sad people. Just from looking, Mr. Peabody's private coal train seems to have caused a fair amount of misery as well as whatever the government has or hasn't done.

Will Allen-
There aren't any sugar beet farmers around here and the only house approaching 6,000 square feet in our neck of the hills that I know of is owned by a refugee Houston subdivision developer.
Most of the subsidies that I am familiar with are exploited by Big Agribusiness (Cargill, ADM, Purdue, etc.) and don't filter down to the peonage. Sentimental twaddle about the public good is mostly what we already receive from government instead of action.

Mike-
I love the land and always have. However, I'm not blind to its humanly-inspired problems and faults. Cities and suburbs have their problems, too, and many of the dilemmas that face South LA are just as damaging as the problems facing the colonias of rural South Texas.

I did not mean to say you can pick and choose each government program. I meant that you can choose between different government philosophies, with the GOP offering tax cuts and (eventually) service cuts and the Dems saying "give the money to the government and they will take care of these services).

For those that are happy with lower taxes and accept the cuts in services, they will be better off voting for the GOP.

Those that would prefer to keep those services, and are willing to pay the taxes to fund them, will vote for the Dems.

That's my only point.

For those that are happy with lower taxes and accept the cuts in services, they will be better off voting for the GOP.

Those that would prefer to keep those services, and are willing to pay the taxes to fund them, will vote for the Dems.

That's my only point

True, but if standards of right and wrong were all decided by vote, human society devolve to nothing but the law of the jungle. Voting does not allow choice of any kind, if you're not part of the 51% or greater. The only real choices people have are through free association, and emphatically not through voting.

For those that are happy with lower taxes and accept the cuts in services, they will be better off voting for the GOP.

Yeah... the GOP... the party of smaller government.

Hrmph.

That word "services" is being thrown around a bit loosely here. To most people it means something a little more specific than "anything and everything the government spends money on"; the phrase "with tax cuts come service cuts" resonates with them because they understand the second part to mean such things as "more potholes" or "fewer police". It loses a lot of its force when the second half turn out to mean (as it so often does) something like "smaller subsidies for Richie's flock of merinos".

Let's see.....old people already have their hospital and doctor's services heavily subsidized, if not completely paid for, along with receiving an income. Medicaid already pays for other old age needs after the recipient has first used their own resources. Is GT proposing that baby boomers not be required to utilize their own wealth prior to having the state transfer others' wealth to them? Why? So they can leave estates to their chidren?

Richie, would you agree that Iowa is among the more rural states in the nation? Why'dya 'spose the Presidential Democratic hopefuls turned up there a few days ago and did their quadrennial "I'm a whore for ethanol interests!" cabaret act? Why'dya spose Bush will no doubt within the next year turn on his own red light out in the corn fields? They do it because the good people of Iowa wouldn't dream of voting for someone who didn't promise access to other people's money, purely for the personal gratification of the good people of Iowa. Now, if you wish to argue that tax revenue spent keeping ample the rear ends of Iowa ethanol lovers could be better utilized on public health projects where you live, I might agree with you, as I might if you were to say the same about tax revenues used to subsidize the income of old people capable of providing for themselves. To say, however, that there is insufficient taxation in the United States to provide for Texas' public health needs, or that rural folk are more inept than others at using the coercive power of the state to get their mitts on the property that others obtained via mutual agreement is, to use a bucolic term, hogwash.

I strongly disagree with the original post. Friedman is equally worthless on domestic and foreign affairs. I do agree that his particular take on the nation's fiscal affairs is pretty weak.

That being said, I think the particularly damning thing for this Administration is their complete fiscal incompetence (the effects of 9/11 and the war(s) notwithstanding). The nation has, in 2 years, seen a $9 trillion turnaround in its 10-year debt projections. (Shameless self-promotion: timeline on debt projections on my web page).

That means me, you, that one year old in the next duplex, Grandpa Joe, and the pimply-faced kid at the Corn Dog Hut in the mall will all be servicing $32,000 of additional debt apiece by the year 2012. So I firmly agree with some of the posters here: IT'S YOUR MONEY! It just so happens that a Dutch Bank holds it.

"Most of the subsidies that I am familiar with are exploited by Big Agribusiness (Cargill, ADM, Purdue, etc.) and don't filter down to the peonage."

I am also against welfare for big business.

"Cities and suburbs have their problems, too, and many of the dilemmas that face South LA are just as damaging as the problems facing the colonias of rural South Texas."

The cities and suburbs should pay their own way. So should "the colonias of rural South Texas." Once again, you must consider moving. I live in Houston, Texas---and so could you. If you decide otherwise---then that's your problem. The rest of the United States is not responsible for your less than brilliant choices in life.

Kate,

"I do think we should make sure government gives us clean water, electricity and a good education no matter where you live, because it benefits society as a whole in the long run."

Sounds great in theory, but falls apart in the real world. If I choose to move to the middle of nowhere and build myself a cabin, should the government really be responsible for running power lines and setting up sewer services for me? What about a school or a library? If people choose to live in small numbers in areas where certain services are difficult to provide, at some point it is fair to say "You made your choice - deal with it or move."

We can argue over where the line should be drawn, but surely you agree there is a line.

Among the things I find most troublesome about Bush is that appears to be following a Nixonite political strategy; mountains of pork to placate numerous constituencies, while placating the social right with their favored stances. True, it is a different world than 3 decades past; Alan Greenspan is no Arthur Burns, and wage and price controls aren't on the horizon, but given that Nixon, even without Watergate, was among the worst domestic Presidents of the last century, the similarity is a little troubling.

I cannot take the $9 trillion turnaround argument. This is the worst kind of garbage.

The $5.6 trillion surplus PROJECTION was based on no recession (which started either just before or just after Bush was sworn in), no terrorism costs (obviously), and continued tax revenues almost as high as the WWII peak of 20.9% (1944).

This is not an argument against Bush, but an argument that 10-year government surplus projections should be taken with a pound of salt.

"Those that would prefer to keep those services, and are willing to pay the taxes to fund them, will vote for the Dems.

That's my only point.

Posted by GT "

But those that want to keep those services and benefit most from them are not the one's paying for anywhere close to a majority of them. The current tax system does not tax equally and therefore it is easy for those who pay little to no taxes to vote for a continuation or increase of benefits/services that they do not really pay taxes to support.

I am not one to say that there should be no taxes, but I do believe the tax system doesn't work efficiently or fairly. And I am on the low end of the tax scale.

Here is the real problem with the "services" argument. It just isn't true. The VAST majority of what the government does with money is called "transfer payments." That's when they take money from some people and give it to other people.

I don't begrudge the amount that goes to "services" - most of it, anyway. I mean, relocating some FBI lab to West Virginia may not have the most benefit to me, or to anyone, really. But the highways and the military and the CDC and NIH are all doing useful things, even if you could go and cut some bureaucracy here and there.

But more than 2/3 of my tax money is going not to a service but directly to some other person.

I'm at the top of the Gen X foodchain, 36 years old and still 31 years from retirement (I bet you didn't know that starting right now, people who are retiring at an age that creeps up to 67 for my age cohort and below - that both Bush and Gore declared they would not raise the minimum retirement age pissed me off during the campaign of 2000, because noone called them on it. It has already been done. But I digress.) I am one of those that believe it is more likely that I will see aliens land on earth than I will receive a Social Security check.

What we need is not so much tax cuts as tax reforms. Bush has made the case for it, but we as a nation don't have the stomach for it.

Besides, even if were true that the tradeoff is taxes v services, existing services still go on - it is the new services that keep accumulating.

What was that about democracy and voting to help oneself to the public treasury?

Pete: Fair enough-- I'm no big fan of 10-year projections either, if for no other reason that certain campaign promises are made on it; to wit--President Bush, in March 2001: 'Even if the slowdown were to turn into a recession similar to that of 1990 and '91, the Congressional Budget Office projects that the 10-year surplus would shrink by only 2 percent, from a little more than $5.6 trillion to a little less than $5.5 trillion.'

As for that pesky debt, he commented: 'And we can also pay down debt. I know a lot of folks around America are worried about national debt, as am I. We pay down $2 trillion of debt over the next 10 years.'

Let's cut it down to two years. The Congressoinal Budget Office estimates an additional $900 billion worth of debt ($420 billion deficit for FY 03, $480 billion for FY04). I realize this is only about $3,500 of unserviced debt per American, and there are no predictions about when we'd come out of deficits, but...

Will Allen asked "Is GT proposing that baby boomers not be required to utilize their own wealth prior to having the state transfer others' wealth to them? Why? So they can leave estates to their chidren?"

I think Will has the generation wrong. GT is proposing that Baby Boomer's parents not be required to utilize their own wealth prior to having the state transfer others' wealth to them, so the parents can leave estates to the Baby Boomers. This strikes me as a likely scenario, one that I have long suspected. It fits very well into my "Baby Boomers are a generation of spoiled brats" theory of politics.

dsquared -- about Mozart and Bach, actually Mozart supported himself very well as a freelance musician. He was very comfortably upper middle class through the 1780s when he abandoned his church/court job and sought his fortune in Vienna. Bach had a state-supported position but I can name you innumerable contemporaries who made their living in the business world. Handel, for one, made and lost fortunes repeatedly in London engaging in opera ventures.

You're just going to have to abandon this idea that the great artists of the past only functioned through "state" support. It's simply false.

Let them eat cake, David Thomson?

To David "Brilliant Choice" Thomson

As a former Houstonian, I ask you: as July rolls around, the heat index hits 110, mosquitos the size of model planes start assaulting your epidermis, and the stench of Baytown starts rolling in... um, I forgot the question.

Most of the great artists of the present make their living via the market, not the state. This results in wild surplus. We have such a profusion of music we simply cannot listen to all of it, or even nearly all of it. In fact the price of music is rapidly going to zero, as has happened to the price of, to take one example, punditry.

The marginal cost of production of information is nearly zero. Given competition, the price thus goes to zero. This is what we are seeing on the net, for all domains in which the number of suppliers is sufficiently large (which in turn is basically a function of the price of entry). The "public goods" argument for state provision of information services is false.

Sean E.

If you've gotten yourself a zip-code (which requires a post-office) then yes, I do. You don't necessarily have to actually have the clean water, electricity and eductation, just easy access to it.

Jane,

I believe GT is correct. And you are being unfair: Friedman never says that 'if the government pays for something, its's somehow free.' You are putting words in his mouth. You've also managed to squeeze in that Manhatten liberal Democrats also say such insane things as well. Am I sensing some animosity?

It's also ironic that you write " those with expertise in one area shouldn't weigh in on another". Isn't that what all good Bloggers do at some point in time?

Sorry Kate, not sure that I follow your logic there. Are you effectively saying that if I can justify a post office then the state should pay for power lines and clean water, but if I don't rate a post office then water and power are off the table too? Actually, I think that makes you more of a hardass than I would tend to be.

Obviously, I do think that communities should have power and clean water but I don't think it should be a given that the government will provide it for every backwoods hamlet on the map (speaking as someone that comes from a rural background myself). And the further away you get from truly essential services the weaker the argument becomes. To me the issue is how much should the rest of us be willing to pay to support a small number of people who choose to live at the edge of civilization?

Just a question: Is it really "my" money?

If I get in my car (bought with a bank loan from a bank that survives with FDIC backing and federally enforced interest rates using currency printed and controlled by government institutions) and drive on the highway (built and maintained by state and federal programs) to the downtown area (zoned, policed, protected from fire and vandals by government-funded institutions) to work at my computer on the Internet (largely a public university created and maintained system). Isn't some of my paycheck only possible by the existance of government intervention?

If I make my living with governmental help, isn't the 'taxes as pick-pocketing' analogy inappropriate?

bs, by your reasoning since government also protects my health, well-being and freedom through government funded police and fire departments, the military and health care, I also owe them my unquestioning service, not to mention my first-born.

Every the government does, spends or builds comes from authority and funding granted it by the people it serves, not the other way around. At least that's true in any place I'd care to live.

As as had be mentioned several times already, most tax revenues are not directed to public goods and services (without getting into a debate as to which of those goods and services can only be provided by state action), but rather are directed to individuals, for those individuals' purely personal and private enjoyment, for no other reason that those individuals belonging to a faction more higly valued by elected representatives. Every two years, or four, in the case of Presidential elections, candidates criss-cross the nation waving the money that others have gained by voluntary mutual agreement, while announcing, "Allow me to purchase your vote, with the money that I will obtain by force from citizens that are not as important to me!". If the candidate's opponent shows signs of being particularly ineptly principled, the candidate will crow, "If my opponent wins, you will no longer be given the money frocibly obtained from others!" Back in 1998, Fritz Hollings of SC had an opponent who said, "If you think that the primary job of a U.S. Senator is to grab as much money as possible from the Federal Treasury and deliver it to you, you probably shouldn't vote for me." (!) The poor sap got creamed, after, of course, Hollings took that as an invitation to brag about how much loot he delivered over the years. This is what democracy produces when it is divorced from any sense of respect for one's fellow citizens; it merely becomes an exercise in state-sponsored violent coercion, by which more valued factions grab property from less valued factions, purely for the private gratification of those more valued factions.

Jonathan Wilde -

Ahhhh! It's becoming crystal clear. Because you do not feel like providing your own art, you are willing to hold a gun to my head so that I can provide it for you. I admire your truthfulness.

Actually, I'm incapable of providing my own art -- I don't know enough, don't have the time to see all of it, couldn't afford the stuff I like, et cetera. So I'm willing to join others in creating an institution that hires experts to find the 'good stuff' and make it available.

You also mention;

If I do not want said govt service, I cannot choose out of it.

and

The only real choices people have are through free association, and emphatically not through voting.

But voting is the way people who freely associate have chosen to settle certain questions. It is true that you cannot opt out of certain things. But some things have been declared desireable, and it has been decided that everybody benefits enough from them that the cost should be shared. It doesn't work that way anymore, for many of these things, and that's something that needs to be dealt with.

There are a lot of things my money is spent on with which I disagree vehemently -- the "war on drugs" for example. I'd like to opt out of paying for that 'service', and even more I'd like to just get rid of it. You may feel the same way about museums. As long as most people disagree with us, we're screwed on these things.

But if I believe that museums are necessary, and I can't afford them on my own, and you believe that the DEA is necessary, but can't afford it on your own (and I'm not claiming you do), maybe we can work out a deal where we each agree to help the other out.

Maybe we could vote on it.

So chichka has announced that the bribe required for his vote is to have art purchased for him. Well, at least he wants it displayed in a museum, where all could potentially partake, instead of many who simply want their bribe in the form of cash. Sorry, but some people may not find it particularly comforting to observe divergent bribe-seekers logrolling with one another, all the better to increase their chances of getting their preferred pay-off, even if it occurs under the banner of democracy.

David Thomson-
If moving to one of the most polluted and dysfunctional cities in the United States is your idea of a "brilliant choice", I say have at it. In re: "...these small areas that are economically irrelevant in today's economy...", first of all, rural America is anything but small in area and far from economically irrelevant if you desire to continue to eat. Those salad fixins didn't come from an urban vacant lot.

Will Allen-
"...to say that there is insufficent taxation in the United States to provide for Texas' public health needs...is...hogwash."
Of course there is sufficient taxation in the United States to pay for Texas's health needs and that's just the point. There are, however, insufficient tax revenues in Texas to provide for Texas's health needs. I, and a lot of other folks, have been trying for many long years to get the Texas Legislature to recognize rural health care and sanitation needs but we have often been unable to raise enough money to buy their attention and in Texas you tend to get as much government as you can pay for up front. As a sixth-generation Texan, born and raised outside any municipality, I am continually ashamed at the boldfaced bribery and corruption that rule our Legislature.

Richie, the notion that, absent public subsidy of rural areas, the nation would go without cucumbers, is another bit of hogwash. Look, you obviously like where you live, and don't want to live in Houston. Fine. However, your preference does not confer upon Houstonians an obligation to pay for the things that are very expensive for you, since the costs can't be spread over a large number of users. If the Houstonians see it in their self interest to do so, to avoid what ill effects they may suffer in terms of public health, fine, and I would certainly encourage you in your efforts to convince them of this. On the other hand, if their judgement is that they won't suffer ill effects from your lack of facilities, or that the cost of providing you the facilities you desire are larger than the benefits they would receive, it is entirely moral for them to tell you that if you want all the benefits that come from living in a less remote area, then you should move to a less remote area.

Did'ya notice?

As soon as Howell stepped out Krugman and Friedman swapped jobs. It must get boring for them walking the same old beat all the time.

Reminds me of a story about how in a performance of _Private Lives_ Noel Coward and Alfred Lunt once dropped a line by accident, then figured to heck with it and switched roles for the rest of the play.

Actually his foreign affairs expertise is kind of doubtful too. His early work reporting from the
Middle East, demonized the flawed Christian Maronites, lionized Arafat, rationalized the early Shia onslaught, downplayed the brutality of the Assad regime, and was condescending at best, to the Israeli's, who were facing the face of Islamic and faux Arab nationalism, 20 years before September 11. This view was encapsulated in his work, from Beirut to Jerusalem. His basic
view has not noticeably changed, even after September 11, (re his touting of the famous Saudi
Peace Plan, his arch reservations regarding the
first and second Gulf War, and his absolute contempt for first Netanyahu, and now Sharon, as
opposed to his excuse making for Arafat & Hamas's
murderous intrigues. His own particularistic embrace of free market dogma, along with fellow
acolyte Paul krugman, was so smug, that It made almost understand the concerns of the anti-globalist protesters. That Krugman, has turned into a virtual laundry of IndyMedia/Arab Media/
Triple Brit Tabloidism (GuardIndepObser & Mirror)
doesn't really surprise me

agreed with th
first book

hi all,

i find this conversation very depressing. hang in there big ritchie, it is clear that most folks have no interest in putting themselves in your shoes. (anyway, what i find ironic is that those states that tended to support gore in 2000 are heavily subsidizing those states that favoured bush)

"That's a fine argument -- wrong, I think, but certainly interesting -- but Friedman isn't making it. Friedman is saying that tax cuts = service cuts = paying for services yourself. Without making explicit the "We'll take money from other people and give it to you" argument, this is exactly the argument I outlined above: that giving the government money to buy things is better than buying them yourself."

i think this is unfair jt, for all kinds of reasons that others have raised and i won't rehash. as for the argument made by wa, yes, a large chunk of monies disbursed are transfer payments. let us look at some figures. for 1999-23% social security; defense 16%; net interest 13%; income security 14%; medicare 12%; health 8%; other 14%.
http://www.cob.tamucc.edu/pcrowley/ECON2301_Fall/ECON2301%20-%20Handouts_files/Chap_12_Crowley.pdf

would you not agree wa that that still leaves an awful big chunk of change devoted to non-transfer payments? (and a nice penny for interest payments that will definitely be going way way up, right?) so, one can grant your argument and say: so we are still agreed that gov't expenditures matter in their own right anyway. yes?

and what of those transfer payments?

what i would like to know from all of you gung-hoh to turn back the welfare clock is this: when you have dismantled the system, so it looks like the 1890s, what will you do then when all the devastataion from economic cycle instability wanders through the economy on a regular basis. will you indeed. "let them eat cake?"

or, do you have a better plan to take into account getting services to income poor folks, or helping them to afford the services that i am quite unsure from your rhetoric how they will access? the tax code--really??? after all, isn't this what many of you alluded to when jt said friedman was arguing: "that giving the government money to buy things is better than buying them yourself."

and for those of you who think that user pays is such a brilliant way to do just about everything--how are you taking care of the free rider problem for those "so-called" pure or non-excludable public goods? or will you hold a soft spot in your hearts for defense or "homeland security" as needing public funding?

just some questions.

Cas,
Nobody is suggesting a return to the 1890s so you shouldn't either. Besides, we could turn back the clock on welfare and the result couldn't look anything like the 1890s.

As to empathizing with Ritchie, well I wonder exactly what kind of folks there are who allow themselves to live like that. The only places I have seen people living like that are in the welfare enclaves within the US (go look at a rural native village, or urban rent controlled/gov't housing) Well, and obviously the third world.

BTW I write from rural WY (yeah, ok, that would be the all of it) Here we are concerned with keeping the federal gov't as far away as possible, we chose to live in a rural area, and accept the costs that entails. One of the beauties of this rural area is precisely that it is far removed from any mass of people and gov't.

Some extreme-rural people simply do not have the option of picking up and moving. They inherited the land and run-down shack they live in now from their father, who got it from the grandfather, who built it back in the day when a little small-scale farming could still pay bills. Or mining, or whatever. Income? Not much to speak of, and no good place nearby to earn it.

On the other hand, I'm not convinced that transfer payments encouraging a continuation of this lifestyle ("here, have a community sewer system") are necessarily going to improve the fundamental problem, either. Perhaps an optional one-time relocation program of some sort...

>>It is not the business of government to determine artistic worth. This is solely the function of the private sector

"Came not by usura Angelico; came not Ambrogio Praedis,
Came no church of cut stone signed: Adamo me fecit. "

JT: Your "comfortably upper middle class" is a widely quoted biographers' "genteel poverty". Certainly, Mozart appeared to move house more often than you would have expected from someone whose finances were hunky-dory.

There are examples of great artists who prospered in the market (Handel isn't really a good one; he was "poached" from the Hanoverian court with a pension of £200 from Queen Anne). But they are surprisingly few and there is a real issue here; are we really content to let "revealed preference" be the determinant of our legacy to future generations?

dsquared,

Why should the gov't support art? That's awfully subjective, and in light of the other posts about gov't services, I would much rather my public library spend $1M on services rather than some large sculpture. (...as happened here in Tucson)

Throughout history, most art was produced as part of a craft. Consider for instance, art on pottery, wall paintings and papers, rugs, and blankets. The vast majority of this was "common man" and definitely not funded by any state or uber institution.

Artists that are beyond any hope of commercial success should look for venture capitalist angels, or non-profit endowments.

I *might* make an exception to art that documents events and history...but if any gov't spends even $1 on (other) art, I think that dollar could have been much better spent on something else.

In the US, the National Endowment for the Arts claims a budget of $115.7M for FY2003. In the context of the current sub-thread about Big Richie and the problems of rural America...I fall more on the "move somewhere else" side of the discussion...but even so, I would *MUCH* rather spend that $115.7M on building Big Richie and co a sewer system.

My guess is that people suffering from cholera and acute dysentary would probably agree with me.

hi john,

thanks for the reply. i read this as you being ironic:

"BTW I write from rural WY (yeah, ok, that would be the all of it) Here we are concerned with keeping the federal gov't as far away as possible, we chose to live in a rural area, and accept the costs that entails. One of the beauties of this rural area is precisely that it is far removed from any mass of people and gov't."

what do you make of this statistic?
for wyoming
fed gov't expenditures per dollar of fed taxes
1991 $ 1.00
2001 $ 1.14
(that means that wyoming are net beneficiaries of gov't spending)
change in spending per dollar of tax
+ 14¢
ranking 1991 30
ranking 2001 23
change in ranking +7

http://www.taxfoundation.org/taxingspending.html

guess where ny and nj are on this list? the hint is that their rankings are 42 and 50 respectively (yes, they are net givers of revenue to other states).

"Nobody is suggesting a return to the 1890s so you shouldn't either. Besides, we could turn back the clock on welfare and the result couldn't look anything like the 1890s."

i think you make a good point in theory. but, do you notice that no one is saying what they want to put in its place? the 1890s situation is logically consistent with what is being said here. i think you will find, john, that there are folks who would be quite comfortable with the 1890s level of welfare, especially given the lower level of government taxation that it would allow. on this reading, there should be no redistribution of income from wealthy to poor, for all kinds of reasons--i will not bore you with rehashing them.

as for why anyone would want to stay in some poor state, scrapping a living. it looks different if you are not taking a marginal cost-benefit analysis consistent with this age's hyper-capitalist modernist framework that we take for granted. why did amerindians want to stay in the black hills back in the 1880s when it was clear that that had extraordinary costs associated with it? general question to all: would you stay in america if economically things got really bad, or would you high tail it outta here? if not, why not?

cas, maybe I'd stay, maybe I'd leave; it would be more dependent on the degree to which liberty had been restricted, and given a largely free society, it is unlikely that economic conditions would be so bad as to cause me to desire to leave. If conditions did become sufficently awful to make it worthy of consideration, my decision to stay would not be predicated on my ability to force others to subsidize my desire to do so.

As to transfer payments, why don't we start with ending the transfers from the less well off to the better off? This is not an insignificant amount, considering, on average, the wealthiest age segment of our society is the oldest. The massive forcible transfer of wealth from young, less well- off wage earners, to many older, much better-off retirees, is not preordained by any deity or real morality. Finally, the straw-man of a return to the 1890s is pointless. People didn't suffer a lot more in the 1890s mostly because there wasn't a welfare state, they suffered a lot more because the nation was, compared to today, much, much, much, poorer. Before you counter by saying that statism was the primary cause of the increase in wealth over the last hundred years, you may wish to examine the role that central bankers and trade legislation played in the Great Depression, among other economic setbacks experienced during the past century of mostly consistent increases in wealth.

hi will,

"People didn't suffer a lot more in the 1890s mostly because there wasn't a welfare state, they suffered a lot more because the nation was, compared to today, much, much, much, poorer. Before you counter by saying that statism was the primary cause of the increase in wealth over the last hundred years, you may wish to examine the role that central bankers and trade legislation played in the Great Depression, among other economic setbacks experienced during the past century of mostly consistent increases in wealth."

will, i don't have to make the claim re statism. gov't spending was about 5% of gdp back in 1900, and about 20% nowadays in most developed countries these days, and around 35-40% when you put in transfer payments (http://www.bos.frb.org/economic/conf/conf42/con42_06.pdf) it is interesting to note, as well, that at least one study has shown that variability in the business cycle was lower than the period under the classical gold standard which was in turn lower than the inter-war period. gov't seems to have provided some counter-cyclical punch. (http://www.bos.frb.org/economic/conf/conf42/con42_05.pdf)

as for central bankers, what is your point here? that there were some bad decisions made to help "our allies"? that tariffs were bad for the country for a multitude of reasons? or that the fed reserve is an unnecessary institution that causes unnecessary hardship by its existence? my view is that, on the whole, the fed and our state institutions have done more good than harm. the fed action in 1987 showed that folks had learnt something from history. but we can agree to disagree on things like that.

i liked this summary:

"In the 1920s, the divisive issue between the two sides was whether the Fed's monetary policy would be "easy," as favored by Strong, to smooth the way for the international gold standard, or "tight," as favored by Hoover, to combat stock market speculation. The basic structure of the Federal Reserve seemed to favor Hoover since the original Reserve Act provided the Board with relatively strong powers to influence the discount rates established by the individual Reserve banks. The Act contained a loophole in the Board's control, however. Individual Reserve banks were authorized to conduct open market operations on their own. With the New York Fed playing a leading role, Reserve banks tended to purchase government securities for their own accounts when discount policy was tight. The overall result... was that the easy money policy won by default. Strong's internationalism beat Hoover's nationalism in the 1920s."

now, as for the claim that folks were worse off in the 1890s, not because of a lack of gov't intervention, but because folks were poorer back then. would you countenance this position: yes, down-turns hurt folks a lot back then. they were poorer, had fewer resources to use to support themselves when times got hard. it would have been helpful to those folks if there had been unemployment insurance. it might also have been the case that such transfer payments might also have had a substantial conter-cyclical effect that might have softened the variability of the business cycle back then (hell, we don't even have to tax the rich, we can run a deficit, though a central bank would help... then pay it back when times are good...).

To say that statism can serve a counter-cyclical role is not synonymous with saying that statism produced the increase in wealth over the past 100 years, and the statistics you reproduced tell us nothing of causation. More importantly, ignoring statism's undoubted costs, in terms of the reactionary sclerosis it inevitably fosters, thus robbing people of the revolutionary dynamism that is essential to wealth generation, while claiming that statism is responsible for the increase in wealth of the past 100 years, is a prescription for stagnation.

My point about central bankers and the Depression is that central planners inevitably screw up, because human beings inevitably screw up, but when those imbued by the state with the power to centrally plan screw up, the damage is greatly magnified. The fact that '87 was handled well is exactly zero guarantee that another situation won't be bungled horribly, because central planners don't exist in a vacuum, dispassionately doling out their wise measures. Central planners exist in a political world and are thus are subject to all the familiar human frailties, which will be with us always. The advantage of decentralization is that it prevents any one human being's failings from being forced on others, with disastrous results. This is particularly true with exceedingly complex systems, which prevents any person, or any group of people, from accumulating enough information to fully understand what is happening. Having said that, the Federal Reserve may be the least imperfect method that can be had at this time. I brought up central bankers' mistakes to show that statism has inflicted gigantic damage upon people over the past 100 years.

hi will,

"I brought up central bankers' mistakes to show that statism has inflicted gigantic damage upon people over the past 100 years."

so, are we better off or worse off for having the fed? or should we have a system where anyone can print his or her own money (including the gov't), as long as the public accepts it? or, if that is too extreme for you, what system do you have in mind?

"To say that statism can serve a counter-cyclical role is not synonymous with saying that statism produced the increase in wealth over the past 100 years, and the statistics you reproduced tell us nothing of causation."

true will, but you made an assertion. i offered some intriguing statistical "correlates" based on an assumption that a dampened business cycle will lead to better long term outcomes (with an inference that this has implications for wealth generation). i am open to the proof of your assertion.

I simply made an assertion that when a nation is wealthy, as opposed to being poor, people suffer much less, regardless of whether there is a welfare state in place. Examine the conditions the average citizen of Hong Kong endured in 1950, as opposed to 1990. Goodness, how did Hong Kong ever prosper! They had no agriculture subsidies! No transfer of wages from young to old! They must have been using Black Magic!

Also, as I clearly stated, there may not be a good alternative to the Federal Reserve System at this time, just as their is no alternative to the Dept. Of Defense, but just as there is no escaping boondoggles like the Osprey as long as there is a Dept. of Defense, there is no avoiding the foul-ups of central bankers as long as there is central banking, except that the central banker's foul-ups are far more damaging. Again, there are instances when a statist approach may be unavoidable, but when reactionaries fight any and all reductions in statism, while maintaining that we cannot prosper if any part of the statist edifice is reduced, well, again, this is merely a prescription for stagnation.

Will Allen-
I don't live in a rural hellhole but rather in a beautiful natural setting that provides a reasonable living. We have our own self-funded water and wastewater system and have since the late 1930's when we received electricity. However, many of our neighbors are not so economically fortunate and lack any efficient way of dealing with their wastes.
The rural residents of Wharton County far to the southeast of us down the Guadalupe and Colorado Rivers do suffer regularly from our problems and would like to do something about it like many other partially suburban, mostly rural counties. Their applications to the EPA for federal help for updating their water plants have been effectively blocked by a reactionary Republican/Libertarian U.S. Congressman, Ron Paul, who refuses to help them apply or receive EPA grants. Ron Paul, who is a physician and certainly understands disease transmission, believes that the few thousand people who get sick every year and the odd infant death now and again are not a sufficient constituency to justify government intervention, which he opposes on the same grounds you do it seems. Dr. Paul is eminently comfortable with Darwinian public health, especially since he can continue to get reelected to office without a single vote from those areas. When, however, the Houston suburbanites in Brazoria County were so plagued by the San Bernard River, well, they're worth a lot more than farmworkers and laborers so THEY deserve help and received it. Some folks are more equal than others in the New Republic.

Thanks for confirming my point with your story, Richie. The best reason to restrict the state as much as possible is because it inevitably becomes dominated by the most valued factions, which then have the power to force less valued factions to submit to their will, purely for the more valued faction's parochial benefit. Thus, the Federal Government can force you to pay for Houston suburbanites' services. Better that Houston suburbanites pay for the services they desire, and you do the same.

Gee, the nasty Republicans are running up the national debt.

So, I assume Democrats will be introducing balanced budget amendments to restrain these spendthrift Republicans? The ones they've been introducing for decades, but could never get through the perpetually Republican-controlled Congress?

dsquared: My comment about Mozart is based on Wolfgang Behrenbaum's "Mozart in Vienna," where Behrenbaum makes an imprecise estimate that Mozart made about $80k (USD) in the late 1780s before the Hapsburg's declared war in the Balkans and pushed the Austrian economy into recession. (And I realize that translating the Mozart family's annual income into modern terms is rife with inaccuracies, but I think it's fair to describe their income as upper middle class.) If you're having problems with finding more examples of this, it's because you don't much about the subject. Googling and finding a source that corroborates your viewpoint isn't a good research method.

Your comment about "revealed preference" is obscure. Are we supposed to trust a gov't bureaucracy to find important artists? This is a side-issue to this forum debate topic, but I really think that gov't art funding has been tremendously harmful to art music.

Maybe I'm dense, but to return to the J.G.'s original blurb on Thomas Friedman: government's money/your money vs. government's services/your services. Jane says this clearly implies that Friedman believes that if the "government pays for something, it's somehow free." Excuse me, but I don't understand the inferential jump here. It seems to me what Friedman is saying is that if I pay taxes I have a right to expect those services my taxes were allocated to(e.g., military spending, police, welfare, social security). Now, I can see someone making a complaint about special interest groups interfering with the process (and I make those complaints, too), but it doesn't follow that one thinks the services are free(at least, it doesn't follow logically. Ideologically maybe). Could you please explain the logic of how expecting services because one pays taxes means expecting services are free?

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