Earlier in the day, R. S. McCain mentioned that I needed to read a specific book about F. A. Hayek. Believe it or not, I have read excerpts from it. I am not an economist. Heck, if I weren’t online, I couldn’t even balance the check-book. I don’t know economic theory beyond what I had in college other than the fact that I came of age in a supply-side family of obsessive business people. John Maynard Keynes was the enemy. On the other hand, my grandfather Froehlich, who was probably the most brilliant and wisest business person I’ve yet to meet considered Alan Greenspan and his economic theories to be a ticking time bomb. He felt that Greenspan was a greater threat to our economic well-being than socialism would ever be. Considering that Grandy started out with 6 borrowed milk cows and turned them into the largest independent dairy (for its day) in south Florida, I’ll go with his observations. When one also factors in to the equation that he loaned John D. MacArthur the money to buy his insurance business, then became one of his closest friends and advisers, that also speaks for my grandfather’s business credentials. He truly detested Greenspan and everything he stood for, and did not exactly like the economic theories of Keynes, either.
My grandfather believed in financial moderation. He was a huge fan of Ronald Reagan. One of his greatest fears was that Reagan was going to appoint Greenspan to be chairman of the Fed. By the time Reagan did, in 1987, Grandy had already begun having the TIA strokes that would lead to short term memory loss and dementia. But, I remember a year or two before the short term memory loss kicked in, how concerned he was. My grandfather was consistent, from the days of Jerry Ford’s Administration onward, about how disastrous Greenspan’s financial theories were.
I didn’t know, at the time, that Greenspan was a card-carrying member of the church of Ayn Rand. Heck, I didn’t even know who she was. The only thing I knew about her was that Gary Cooper starred in The Fountainhead, which I though a lousy movie. That was my exposure to Rand. Instead, I grew up listening to parents and grandparents who were still complaining about the disasters of the New Deal. I was so convinced, from the time I was in high school, listening to the doomsayers, that I basically have done a bare minimum with Social Security. I did not approve of it, and assumed it would be long gone by the turn of the century.
Until recently, I basically considered myself a ‘Reagan’ conservative, especially when it came to foreign policy. I still basically consider myself a Neocon when it comes to foreign policy. I’m basically a hawk, believing in the speak softly and carry a big stick point of view. I never approved of welfare, food stamps, and spent years lamenting Medicare. But – I also never believed in mega corporations, once again going back to Teddy Roosevelt’s breaking up of the monopolies and the subsequent dismantling of the Robber Barons of the Gilded Age.
Too big is too big. Too big to fail is too big to allow for competition. When a vast business empire has no competition, gobbling up competitors like PAC MAN, the average consumer suffers the most. This was what I learned in my American History classes in college. I still believe this. It is simple cold-blooded Vulcan logic. Fewer competitors allows for higher prices. When prices are higher, because of fewer competitors and mega corporations, the consumer is the one who gets the shaft. What I find fascinating is no matter which economic theory people embrace, very few ever consider the bottom line for the mom & pop consumer.
Try grocery shopping with mom & pop who are on a limited income and you will understand. Today, my 83 year old mother wanted some bacon. Where I live, you have two choices for shopping, Wallyworld or a local IGA. Depending on the sale flyers, the IGA, which is usually twice as expensive as Wallyworld, can be less. It takes hours of shopping two stores, in order to get the best prices. This in itself is almost criminal. So, we were at the local IGA. Bacon at Wallyworld, last year was $3.99 for the center cut I like. Today it is $5.99 at Wallyworld. The local IGA was selling it, today, for $8.79! That is pure inflation, with no logical reason for it, other than to gouge the consumer because there is no competition. My mother did not buy bacon. She did not buy chicken because it was too expensive. She did not buy a ham for the same reason. Once upon a time, she did steaks several times a week. Today, they are so expensive, she doesn’t even bother.
This is the failure of economics today. No one gives a damn about the person on the street. No one cares that there is an almost inflationary explosion in food products. While this is due to numerous reasons, there is no relieve. Because food prices are not factored into inflation reports, no one bothers to even realize that the very real inflation which is destroying the middle class in this country is in two things: food & medical.
The libertarian mindset says that a business person should be allowed to charge what they can get away with charging. As a former business person, who could not stomach business, I’m not sure if I agree. A small business owner can get away with nothing. A small business owner in today’s super-size world is DOA. Nothing matters but bigger is better, don’t tax them, give them every possible break, destroy local competition, and provide every possible break there is. The concept is beautiful on paper, but is deadly in reality. I know. I lived that reality on a daily basis for nearly five years.
The socialist mindset is just as lethal. No one has a chance to succeed, because the playing field is allegedly kept level at all times. Neither libertarian nor socialist works, not really. Oh, on paper, both are quite lovely, in many ways. In practice, they are a disaster. There is a specific factor that one never sees in either side of the argument – the human factor.
Libertarians believe that government is almost basically to be as limited as possible. It is intrusive and almost evil. Governmental interference should be kept to a minimum. Everything or as much as possible should be private. On paper, this is good. On paper, I agree with it, almost 90%, with exceptions being infrastructure, big science, NASA, and the military. That is in theory.
Socialists believe the government is good. It should regulate just about everything, with its hand in everything. On paper, this is repulsive. On paper, I disagree with 90% of socialism, the exceptions being infrastructure, big science, NASA, and the military. This is in theory.
The real disaster of both economic theories is the human equation. This is where the real downfall of both the political and economic agenda of libertarians and socialists. In many ways, the advocates for both theories are the same. They just disagree. They are ideologues, looking at the world through rose colored glasses of unreality.
Libertarians put their faith in people. They put their faith in business and the people involved, considering them almost sacred. To a true libertarian, in theory, the business person is almost pure. Libertarian practices consider that people will do what is right for themselves. By doing what is right for themselves, all humanity benefits. In other words, greed is good. If someone gets rich, everyone will benefit. Because business, in theory, is beneficial, it will do what is right for their profit and bottom line. Doing right for that bottom line is good for society.
And – this is where libertarians get it wrong. I don’t know of any other ideology where so darn much faith is placed in people and their actions. They think that people will basically do what is right, with only basic governmental interference. Unfortunately, because libertarians are so ideological, and so certain that theirs is the only way, they tend to ignore the fact that human nature is basically corrupt. Study after study has proven that people, if left alone, without fear of being caught of held accountable, will do whatever they can to get ahead and to win. That’s human nature. That’s what we are. We want to win. When there are no rules, only a few people, those with the most psychopathic tendencies are the winners. According to some studies about psychopaths, your average Wall Street success story will also be one of a person who is a psychopath, unafraid to destroy those under them, to get ahead. Again, this is human nature.
Libertarians don’t allow for human nature at its worse.
Socialists basically consider humans to be absolutely corrupt. The consider government, and expansive government the only way to regulate society and the economy because people cannot basically be trusted. Everyone should have a piece of the pie, no matter if they deserve it or not.
Neither theory works in reality. The only logical and real way to maintain a healthy economy is through moderation. That is such a dirty word – moderation. Once upon a time, it was considered status quo, from Aristotle, Horace, Ovid, Seneca, down to Shakespeare, and was perhaps best said by Alexander Pope: “He knows to live who keeps the middle state, And neither leans on this side nor on that.” Epicurus wrote “Be moderate in order to taste the joys of life in abundance.” In ancient Greece, it was considered a principle of life. It pops up, repeatedly in the Bible.
There are ironies here. Unbridled capitalism has a tendency to corrupt the capitalist, if left unbridled. Those individuals who live in quasi-socialists countries of Denmark, Norway, Switzerland, the Netherlands, and Sweden are the happiest individuals in the world. Canada, Australia, Israel and Mexico are considered happier than we are. Nations where governments spent more improving the quality of life of their population spent more on nationalized health care. They were countries with a higher level of social support.
In other words, people don’t like living in a libertarian paradise. I don’t, for several reasons. Oh, until I discovered that small business people I knew were paying 35% income taxes, and mega corporations were paying on average a percentage of maybe 5-10%, with their money being stashed off-shore, I began to change my views about taxation. Everyone should pay the same percentage, with a specific minimum of about $20K for individuals and $34K for a family of four. No one should pay more than 20% in taxes.
To me, ‘equitable’ is not exactly socialist. It is where everyone is required by law to pay an equal percentage, no matter how poor or how wealthy. The old noblesse oblige adage says that those with great wealth and great power have a greater responsibility.
“…”Noblesse oblige” is generally used to imply that with wealth, power, and prestige come responsibilities. In American English especially, the term is sometimes applied more broadly to suggest a general obligation for the more fortunate to help the less fortunate. In ethical discussion, it is sometimes used to summarize a moral economy wherein privilege must be balanced by duty towards those who lack such privilege or who cannot perform such duty. Finally, it has been used recently primarily to refer to public responsibilities of the rich, famous and powerful, notably to provide good examples of behaviour or to exceed minimal standards of decency. It has also been used to describe a person taking the blame for something in order to solve an issue or save someone else…”
Unfortunately, due to the change in my parents circumstances of life, thanks to my father’s Alzheimer’s disease, and the ravages that came with not detecting it for a good ten year, I know what it is like to live almost day by day. This month, I’ll be dropping my health insurance. The credit cards are long gone. So is my once decent credit rating. If I don’t do something fairly soon, I will end up losing my home to taxes. My sister and I are dealing with parents who went from an income of about $150K a year to $1200 a month. I’ve already gone through all of my savings to help them. My sister is now helping. On paper their property is worth about $4.5 million. That does no good when we can no longer afford the basic necessities of life.
There was a time, two years ago, when I was afraid I was going to need to go to the local food bank to help my parents. I’ve always been an advocate of our local food bank, doing what I could to help. For years, we would pick up cases of staples and donate them. I realized if I were required to ask for help, I would secure help for the parents, then I would go home and take my own life. The thought of having to go crawling on my hands and knees, like a beggar, and having everyone know my business was so humiliating I realized I couldn’t live through it.
At that moment, I ceased being an advocate for private charities and food banks. People have a right to just a little big of dignity. Sure, there are horrible abuses in the SNAP program, but from what I’ve seen working via our parish, people who need help aren’t taking advantage of it. They need help or they go hungry. They are usually the working poor.
There are things that government can do that private companies cannot do, or are not willing to do. The current mind-set within the right, the tea parties, and the GOP is one reason I walked away from the party. I know what it is to not know if there’s going to be enough money to buy your parent’s life-saving medication, and know what it is like to know that no one gives a damn if they live or die. I’ve seen my mother, who once was a socialite, having everything she ever needed, go without make-up, a hair-cut, and help in the house, because the money isn’t there. I’ve given up almost everything. Right now, my Durango needs repairs, to the point where it is almost not drivable. Their car needed $350 in repairs this week. That took care of anything my mother might use to buy a steak, or get the guy to come cut the grass, or get a hair-cut.
I know what it is like to wonder if I will have enough money to pay my power bill. I think I can pay last months’ but this month, I can’t afford it. I’ll figure out how to make ends meet, but it ruins sleep, peace of mind, and the ability to think.
Where I find the whole libertarian philosophy so repugnant is via regulations of the banking, financial, and certain other industries. If proper banking and financial rules were there, forcing people to be honest, accountable, and giving the little person a chance, we wouldn’t be in this position. My parents have lost nearly a million bucks in cash, not because of anything we did wrong – other than not diagnosing my father’s Alzheimer’s soon enough. Because of this, predatory practices took advantage of him, draining him, moving money around, not following his instructions, and in several instances, taking advantages of his failing memory to move nearly $300K from one brokerage account to another, they are in this condition. My poor trusting father, who knew something was wrong, went to the very broker who had ruined him. He asked him to keep all his financial records for him. Now, they are gone, and they are living on nothing, while the people who did this to him have a nice life.
One day, about two and a half years ago, one of the tellers at one of the banks we used gave me a call, telling me what was going on. She put her job at risk because she told me how my father was calling, to transfer money that he thought was in a money market account, to a checking account, to cover over-drafts. They money market account no longer existed. When I went to his broker, well, that account no longer existed. A specific individual was putting everything remaining in a jumbo CD. Every time he called, they would break the CD, charge him a penalty and then charge for putting it into another CD. I was able to get my mother to put a stop to this, but not until there was something like fifty thousand dollars charged off to his checking account, in service charges. That’s when I took charge. The teller is no longer employed by that company.
The person who took over what was once my father’s brokerage account called me for a meeting. “It is our considered opinion that, because your parents are so incompetent, you need to put them in a nursing home, sell everything they have, take the money, and let them rot.” It was what he had done to his mother.
My father’s accountant, who has worked with him for 25 years, spent 2 years, working on his own, for free, trying to find out what happened. According to the broker, they spent everything. According to our accountant, three quarters of a million dollars has disappeared, and they did not spend it.
I now think anything libertarian is a crock, designed for crooks to steal from those who aren’t sharp enough to protect themselves. No, I don’t believe in socialism, but I also think that the government has a role in rules, regulations, and I also think in healthcare. If Elizabeth Warren were to run for POTUS, I’d be her first supporter.
My life has been put on hold. I’ve had to abandon major, nearly completed writing projects because my mind is too screwed up worrying how to survive. I’ve been left a cynic. During this process, I’ve written a 600 page prayer journal, which I’ve now started editing. I’ve also written a book of essays on prayer and trying to survive. I think I’ll probably write the last chapter tonight.
One of the things I’ve learned, during my studies, is about the Sermon on the Mount. Unfortunately, Christ was far from conservative. He was the most radical person to walk the face of the earth. If we cannot help those in need, then we aren’t helping him. It goes farther. There are those who point to the story of Sodom and Gomorrah and the reason to oppose gay anything. During my studies I made a horrifying discovery. The downfall of those two cities had nothing to do with the homosexual lifestyle and everything to do with charity.
Ezekiel 16:49-50 This was the guilt of your sister Sodom: she and her daughters had pride, excess of food, and prosperous ease, but did not aid the poor and needy. They were haughty, and did abominable things before me; therefore I removed them when I saw it.
So, I started looking into the Jewish traditions, the Torah traditions. Sure enough, it was all about the fact that the people of Sodom refused to help those in need, on a corporate, governmental basis. They laughed when a person needed help, allowing those in need to starve. They treated strangers to abuse and death. It wasn’t about sex, it was about not feeding the hungry.
If the Bible is true, and I believe it is, this nation is in very deep shit, doomed by the very religious right who claim they are following the will of Christ. I am absolutely convinced a person cannot be a libertarian and be a follower of Christ. That’s the real difference between libertarian and socialist. I think a person can be a socialist and follow Christ. I suspect Christ was the ultimate socialist.
Oh, the irony.
My new economic hero is Paul Krugman.