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Oct 14, 2008

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Peter+

Well said. This is a water shed time.

Andy

Hey Michael,
It's been a while since I interacted with your insightful blog. But I just thought I would point out that Obama's comments to the plumber was a bit more nuanced than Fox News lends us to believe. You can see the whole 6min video exchange with plumber Joe here. http://blogs.abcnews.com/politicalpunch/2008/10/spread-the-weal.html

It should be noted that while Fox continues to try to paint Obama as some radical socialist. His advisors and economists who support him happen to be some better free market thinkers out there.

I agree that the "fairness to the middle-class" rhetoric leads to many problems but I strongly believe that the strength of any economy is the strength of it's middle class.

Alas- I am not American so won't be voting this year :) :)

Michael W. Kruse

Thanks for the link, Andy. I'm toying with doing a piece on Obamanomics. There was great piece on his thinking in the New York Times which gave great insights.

Obama studied at the University of Chicago Law School. U of Chic., which is of course, where Milton Friedman taught in the economics department. It is a Mecca for neoclassical libertarian thinking.

The article points out that Obama developed an appreciation for the role markets can play while at Chicago. But here is the critical distinction. He understands markets to be a tool in his toolbox for accomplishing his government objectives, not as a separate sphere of life from government that needs to policed.

Whether or not Obama has market components in his plan is, to me, a secondary question. The central question to me is what role markets have in society. In short, I believe Obama is promoting a form of market socialism.

I agree it is important to have a strong middle class but Obama's mantra that the middle class has stagnated is just false. The standard stat he uses is change in median household income by quintile. For a variety reasons I won't spell out here, that is a bad use of the stats. Studies that follow actual individuals from date A to date B demonstrate that people in the bottom four quintiles on average have had healthy increases in standards of living. The issues is not that the bottom quintiles have stagnated but rather that the top quintile has grown so much faster than the others.

As to not being able to vote in the election ... lucky you! :)

VanSkaamper

It should be noted that while Fox continues to try to paint Obama as some radical socialist. His advisors and economists who support him happen to be some better free market thinkers out there.

I don't think it's just FOX. The problem is that too much Obama's past, and too much of his rhetoric is laced with statist ideas and assumptions.

Andy, thanks for posting the link to the ABC blog. The transcript is, as you say, a much more nuanced discussion.

That said, it's still a statist mentality that Obama advocates, that's what the media should be pointing out.

"I don't want to punish your success...but I need to in order to redistribute wealth to much of my base, and keep things "fair."

In contrast, Obama apparently conceptualizes all wealth to be society's wealth.

This is spot on, Michael, and it's a paradigm that characterizes his and his party's rhetoric on tax "fairness", and economic policy in general. It's a view shared by his "free market" advisers.

The government has the right to decide what a fair distribution of wealth is.

The government is the source of opportunity, not individual liberty and equality before that law that's supposed to be guaranteed and protected by government.

The ongoing strategy, however, is to make people come to fall in love with and depend on an array of government handouts.

This perspective would have been utterly anathema to the country's founders.

Obama's past associations with anti-capitalist groups back home in Illinois as well as his carefully chosen words when talking about tax policy make me very (very) apprehensive about what he (and, more importantly) the Democrat majorities in the House and Senate will do once elected. California Rep. George Miller has already proposed eliminating the tax exempt status of 401Ks and IRAs of those who make "too much", which was part of a larger discussion about just socializing retirement accounts altogether, which would make all of us even further depending on the federal government for our long-term well-being.

We absolutely, positively do not want the government to have the feel entitled to dictate exactly who deserves to be wealthy, and who deserves to keep all their paycheck and who does not.

And all this rhetoric comes after Bush's tax policies wound up shifting the tax burden even further on the upper income brackets.

I fear both Obama and those his election would empower.

Andy

Or could we call it "left-libertarianism"?? http://www.guardian.co.uk/commentisfree/2008/jan/09/substancenotstyle

I would be interested in interacting with your Obamanomics piece as I think rightly/wrongly Obama is trying to carve out some interesting "economic space" that nuances the traditional liberal/conservative positions. I hand it to him for some creative imagination {something we so desperately need in the 21st Century}...but indeed I also hope it's not wishful thinking.

Cheers~

Andy

One more thing:
I was curious Michael as to whether you support the bailout plan? More specifically to-date the plan to inject capital in banks??

What are your thoughts?

Michael W. Kruse

I'm very suspicious and I question whether this was ever actually necessary. I don't believe Bush administration officials were being transparent with what has been building for months. Had the public and the markets eased into this as the difficulties unfolded in recent months, instead of a bomb being dropped on us a month ago, I think the economy could have absorbed what has been unfolding. I'm still not persuaded that it is a good idea but a can't build a definitive case against it.

The capital market plan with banks is just an extension of the bigger problem. It may now be necessary (I'm conflicted) but we never should have been in this position in the first place.

What do you think?

Andy

I am conflicted like you Michael. I believe it was probably the best of terrible options but they'll still have to address the things that allowed it to get so bad in the first place. Do either Obama or McCain really want this job? :)

Cheers~

VanSkaamper

Yes, and yes. You've got to wonder why, and most of the possible answers are disquieting.

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