Monday, March 16, 2009

Regulation vs Control

How many of you are in favor of economic fascism? If you aren't then the United States of America is not the economy for you anymore.

For clarification, I'm not throwing out this label to hammer any one administration. I'm using it to simply describe an economy where businesses are privately owned, but controlled by the government. On one end, we have the free market, where everything is privately owned and controlled, and socialism on the other end, where the government owns and controls everything. And the trend in this country for the past 80 years has been an ever-accelerating slide toward the lovely land of fascism.

Our most recent example, of course, is the battle over bonuses at AIG. Here's the short version. The company has taken 1/10 of a percent ($165 million) of their money from the Dastardly Bastardly Bailout ($170 billion) and payed bonuses to their executives. According to the company, these were bonuses that they were contractually required to pay.

Naturally, the Washington elite are bleeding outrage and pissing anger all over the company. They're screaming for reforms, and new laws, and the asses of all these executives in a big ol' sling. Barney Frank was spitting on his mic in rage. Andrew Cuomo was breaking out the subpoenas. Mitch McConnell thinks it's a big outrage that Obama is trying to justify this (on Sunday). President Obama is now wanting heads to roll.

However, didn't you guys give them this money with no strings attached?!?!?!?!
What did you expect, servitude and hand jobs?

Or was this simply bait on the hook so you could apply your benevolent guiding hand to their ass while steering them into the same place you've steered every other thing you've laid your filthy hands on?

So now that they owe big, is it time to send in the goons to collect payment or break some legs?

Here's a little thing called reality. If someone is on drugs and you give them money for a crock pot and some tofu, they're going to go buy more drugs. In other words, you're enabling them. The secret is to stop enabling them, not trying to control them until they kill themselves. If they're meant to snuff it, then they snuff it. all you can do is try to show them the right way, then leave it to them to decide which way to go.

On a semi-related side note, much of that $165 million is going to end up stimulating the economy. That's not a bad thing.

As for whether the people getting the bonuses deserve them, I don't know. Maybe it's the parts of AIG that aren't tanking. But this is the kind of thing the government shouldn't know until the executives file their taxes. Or ever once we get the FairTax.

And now, the point:

The role of the government in a free market is not to control companies or industries. This is economic fascism, where efficiency is crushed and initiative is rubbed out because one politician got a burr in his ass and decided to spank someone he didn't like. And as the government slowly takes the power to decide what cars we can drive, what guns we can own, what food we can eat, what clothes we can wear, what television shows we can watch, what Internet we can view, where we can live, who we can fuck, and whatever else they can get their hand (or other appendage) in, we lose freedom. And gaining control over the industries that supply our wants and needs is a major step in that direction (think Soviet command economy).

This is the difference between control (above) and regulation (below).

The purpose of a government of a free people is to create laws and regulations to protect the rights of every individual and company from infringement by others, including the government. Period.

Now the statement above, like any is subject to twisting, using the idea of the "common good." And I'm not going to try to argue on every single item. I'll just leave you with the idea that the only things that the government should consider doing for the "common good" are those things that cannot and will not be done by the private sector.

So here's the questions of the day:

1. If a person has fulfilled his part of an agreement, should he get paid for it?

2. Where do you draw the line when considering the "common good" in government?

34 comments:

dmarks said...

"On one end, we have the free market, where everything is privately owned and controlled, and socialism on the other end, where the government owns and controls everything"

You are definitely making the proper distinctions here.

But I think that if AIG does not want strings attached, they should refuse the massive bailout money. Obama and Congress also don't need to whine about the undeserved bonuses: there is nothing stopping them from passing a law on it.

TAO said...

I say lets make capitalism a contact sport...so off with their heads!

Name: Soapboxgod said...

The bonuses are such a flippin miniscule amount that making this big of a stink about it is a fucking joke. What's more, why don't we hold government to the same accord? Now, the AIG issue is certainly one thing but there were a number of banks that were solvent yet were strongarmed into taking TARP dollars and now the asshats in Washington are trying employing their monopoly on force to try to regulate their bonuses, salaries, and marketing events (i.e., banning say a golf tournament).

And really, the issue ought not be "Well..if AIG didn't want the strings attached they shouldn't have taken the money."

The correct premise is that the money shouldn't have been available to begin with period.

But to respond to your questions Patrick:

1. Yes. The proper role of government is to uphold contract law not rewrite the G**damn thing.

2. Common good means equal benefit. Even still, that doesn't imply that government needs to fund everything under the sun under the false guise of "common good". Why, requiring everyone to carry automobile insurance is arguably a "common good" and yet we don't subsidize everyone's auto insurance now do we? We've wandered so far off the reservation on this premise that we're now at a point where we're so focused on providing this, that and the other thing to such a degree that that very things which we ought to be provided are placed on the back burner (border security, a sound court system, etc.)

TAO said...

Oh, banks now realize that the bailout funds come with strings attached and a few of them are returning the funds...so, no one is being forced to take anything.

There is also a 'social contract' that we just might need to update because it appears that our economic system has determined that there is a clause in that contract that states that once one is too big too fail then there is an inherent guarantee that society will not allow them to fail.

Just check out how much AIG gives in total in political contributions....

Name: Soapboxgod said...

"Just check out how much AIG gives in total in political contributions...."

No..ya think?

At some point, the American populace really ought to come to terms with the fact that the political battle is no longer one between Democrats vs. Republicans, Liberals vs. Conservatives, etc.

The battle is between ALL those persons who receive a check from government and ALL those persons whose wealth is confiscated for the purposes of making good on those checks.

rockync said...

While I support governemnt regulation over government control, the money being handed out is our tax dollars NOT company funds, so in that case, if they are going to take government dole, we should be able to demand they be responsible and accountable.
BTW - Barney Franks ALWAYS spits on his mike!

TAO said...

Oh, Soapy...you are becoming such a Marxist!

Now we have moochers = people who receive checks from government = bourgeoisie

Those people whose wealth is confiscated = producers = proletariat.

Soon to be shortened to the have nots (taxpayers) and the haves (those folks that benefit from the largresse of our government which at one time was just welfare queens but now also includes Wall Stree titans!)

Ah, and they say politics makes strange bedfellows...imagine welfare queens and Wall Street execs in the same bed! :)

Name: Soapboxgod said...

My version of liberal equality is that everyone is equally afforded failure in as much as they are success.

I am many things. A Marxist I am not. Chalk it up with a fundamental disagreement with the premise:

"From each according to his ability to each according to his need."

TAO said...

Ah and that is the new motto of Wall Street and our financial system!

Marx always claimed that:

Thesis + AntiThesis = Synthesis.

Thanks to the titans of capitalism we have a socialist synthesis.

Taggart WON!

Name: Soapboxgod said...

Titans of Capitalism? Lest we forget, Capital is not something that resides on a credit card.

TAO said...

Sure it does...

That is what supply side economics has gotten us...

credit wrapped in derivatives...

Our whole economy is based upon the concept and the government is solving the problem with more debt.

Without credit and debt bankers and financiers would be nothing but clerks....rolling coins and counting bills.

Then the value of ones labor would be based on work and what one creates rather than on the skills of what one destroys.

repsac3 said...

I confess to not understanding much about economics, so I was never so sure about this whole bailout thing either way... Welfare is welfare, whether we give it to poor mothers so they don't fail to feed their kids, or corporations so that they don't fail, and end up firing that same poor woman, so she again fails to feed her kids. Personally, I want the kids to eat, one way or the other...

And yes, I am swayed a bit by the scandals that've been reported in the last several years. A few wealthy people have gone to jail, (while the rest move on to the next corporate board) but many many less wealthy people have been kicked in the teeth. I know that the percentage of crappy behavior that's been revealed is small relative to the number of corporations there are, but I think that many just hide it better, too... I don't really like giving money to corporations, because I distrust the people who run them. If we were giving out the money regardless, I'd prefer to let the corporations fail, and give the money to the employees, instead.

All that said:

1) I do think that the company needs to live up to it's contracts, and not have them "renegotiated" at the end of a government gun, whether it's AIG and the bonuses, or the auto industry (& many others) and their 401K and pension/health care/??? plans for their workers. (I'm pretty certain these bonuses will be paid... it's only the lowly worker that gets screwed in these situations.) But should we be giving anyone any more money, forgoing such things (along with the jets, the "conferences" in Maui, and the rest of the frills they can('t) live without, need to be a part of the deal. If they need us to live up to their obligations, they more'n'likely didn't earn the bonuses and the jets... And if they did, they don't need us...

Workers make contract concessions in the name of keeping their companies (& thus, their jobs) afloat, all the time... Perhaps the bigwigs might consider doing the same...

2) The common good question is a tougher one... I'd like to say no one in America should go hungry or go without basic health care or shelter, but I know that some folks are determined to do so. Still, I think that we as a government should help any who need it and (assuming they are able) are willing to try to improve their station in life. Arrest the unrepentant drug addicts (or let them die), but feed and shelter their kids, too. Help the people who lost their homes and are sleeping in their cars, then driving their new "homes" to work in the morning.

Trust me... My unemployment insurance payment isn't keeping me from working, though it may be keeping me from working at MacDonald's... ...so far. I'm sure there may be folks sitting home (or wherever) by choice, but most would much prefer a nice full time job with full time benefits.

Patrick M said...

Dmarks: There weren't strings attached to the bailout money. Other than it came from a bunch of asshatss who like making political hay.

Tao: For someone who prides himself on rationally analyzing, that's a pretty emotional reaction.

Just check out how much AIG gives in total in political contributions....

To the Obama campaign?

Soapster: On your answers:

1. Exactly and 2. Exactly.

Rocky: ...the money being handed out is our tax dollars NOT company funds...

Unfortunately, unless it is specifically written in the bill (it wasn't), the money is now company funds. Plus, there's the fact that they sent billions (with a B) overseas to other banks, but Washington is all pissed about a mere $160 million.

Repsac: I do think that the company needs to live up to it's contracts, and not have them "renegotiated" at the end of a government gun...

You've just articulated the single most important reason we should not give out bailouts. Because the government doesn't respond to the market in an efficient way. They choose the path of political expediency.

Workers make contract concessions in the name of keeping their companies (& thus, their jobs) afloat, all the time... Perhaps the bigwigs might consider doing the same...

Why do they need to when they can get $170 billion in free money to play with for a while? They just need to hire a better PR firm to cover their asses. It's called rewarding failure.

The common good question is a tougher one...

That's why I asked it. And why I leave your comment alone.

dmarks said...

" Barney Franks ALWAYS spits on his Mike!"

Who?

TAO said...

Patrick, darn, I thought my answer was pretty rational...

AIG spreads money all over the place...really need to look at who pays for the conventions and all of the PACS that are set up besides just looking at the candidates.

Need to find out how much AIG gave to Clinton and Bush libraries....

James Wolfer said...

I've said it before. Let AIG fail. We don't need it. I just posted about it. We broke up Microsoft for getting too big, let's do the same to the banks! If it's too big to fail, then it's too big.

BB-Idaho said...

I'd have to take a look at the AIG contract. Typically, most companies tie contract bonuses to financial success with some sort of formula. Perhaps at huge banks you just have to show up...some contract!

Name: Soapboxgod said...

Is it just me or should we be employing this "strings attached to taxpayer dollars" methodology across the spectrum?

Public subsidies for Pro Sports arenas?? Great! Looks like Patrick and I will be sittin' front row on the 50 yard line.

Federal Disaster insurance for those posh Hollywood hills mansions?? Even better. Patrick and I plan on arriving the first of February for our week's long stay so make sure the pool is vacuumed and you've got clean towels for us.

You want an EBT card for you and your baby daddy kids?? Fine by me but I'll be damned if they're gonna be sportin' Michael Jordan kicks and getting fat on flamin' hot cheetos and that damn fruity drink crap.

Let's exploit this shit to its fullest potential no?

I mean let's be fair here. The American people shouldn't be subjected to this "grotesque" display of irresponsibility on their dime.

TRUTH 101 said...

Lawmakers insisted teh UAW renegotiate before loaning money to the automakers. They failed to attach those strings to AIG. Where are the right wingers demanding the fat cats at AIG renegotiate their bonuses. They're not because they're looking out for their fatcat buddies. They were all for throwing out contracts when it involved the working men and women of the UAW. But God forbid a rich guy have to renegotiate. Or have lawmakersd tell him to.

TAO said...

Truth has a point...and a very valid point.

Then you have the issue of AIG calling these retention bonuses and then paying them to people that did not stay.

AIG is NOT a legitimate company any longer...we are basically winding them down.

Who cares about consumers, citizens, or labor....who cares about the little common joe?

So much for we the people....

Name: Soapboxgod said...

O/T: Patrick, kudos on Femmes and Costello on the playlist!

Patrick M said...

Dmarks: I think you're going straight to Hell for that one. :)

Tao: I say lets make capitalism a contact sport...so off with their heads!

Yeah, rational. :)

JW: The only problem with that is that the government wouldn't be DOING anything. And while that's often considered a good thing in reality, it''s blasphemy to the DC set.

BB: AIG must be employing the government model for bonuses. Pay more money to the people that fail (as in bailouts).

Soapaholic: There's only strings when it benefits the politicians, in this case, the anti-capitalist cabal.

And re: the o/t, they made my new playlist because they met the right criteria. It took a hands-on approach to come up with this list, as I only had 3-4 songs that I knew I had to get hold of. And I decided to let people turn it on manually rather than set it to auto play.

Enough double entendres yet?

101: Perhaps they should have been required to do so. But that time was back when they were building the bailout. And they didn't.

Now if I remember correctly (which happens with sickening frequency), the real conservatives were saying no to bailouts. But Bush, and McCain, and Obama couldn't be bothered to put any strings in there.

Jennifer said...

Got here late, but considering the last week, I'm glad to be here at all. I'm not really sure what I can say that hasn't already been said, but I do have to address Truth101's comment.......

"Where are the right wingers demanding the fat cats at AIG renegotiate their bonuses"

I think you would find it very difficult to find many, if any, true conservatives (right wingers) that have supported any of these foolish bailouts. Notice I say conservative and not republicans, there is a big difference. I don't want government taking my money and giving it away whether it's welfare or big ass bailouts.

TRUTH 101 said...

I should clarify. True Conservatives are not bound by party loyalty and republican central committee talking points. My ire is for the Cheney's and their ilk. Creeps that hijacked the word "Conservative" and twisted it to mean whatever they thought was convenient and would get the most votes. Please don't confuse right winger with a Consrvative such as TAO or you Jennifer.

Name: Soapboxgod said...

The didn't twist the word conservative, they merely added modifiers to it.

i.e., "compassionate", "kinder", "gentler", "moderate", and of course the dreaded "Neo".

Damn them all.

Toad734 said...

Wait, was part of the agreement to make bad decisions and run the company into the ground sending it to the feds with their hand out?

I doubt that was part of the deal.

dmarks said...

Truth: " They were all for throwing out contracts when it involved the working men and women of the UAW."

That's a pretty good idea for those making $50 an hour for jobs that are worth a lot less.... and for the money, they are overall doing a bad job and putting out crude cars. (Chrysler quality is actually going down, and even the Koreans are leaving the US makers in the dust).

Toad734 said...

You know what job is worth a lot less, being CEO of Ford, GM, AIG, Bear Stearns. Why do Republicans alwasy bitch about how much money the guys who actually do the work make but act like the money that the guy who ruins the company should be paid billions and that has no affect on the price of the end product or affect the economic viability of American made products vs. Japanese or Chines products where their CEOs make millions of dollars less than the American counterparts. Maybe we should outsource Chief Executive positions. I mean, if a CEO of Honda can work for $900,000 and makes a good product people want, why pay $14,000,000 for an American CEO who runs the company into the ground? That's what we should be outsourcing.

Name: Soapboxgod said...

Republicans would always bitch because so often the difference was that the taxpayers ended up picking up the tab when the union apparatus came to grips with its own reality; that of course being one of unsustainability.

Up until recently, we weren't bailing out banks and other financial institutions.

Objectively speaking of course, the American populace and the two major political parties have been toying with these premises for some time.

So for me, it begs the question of who is going to stand in opposition to the practice?

Who's going to tell the agricultural community that they don't get their subsidies, that the wealthy sports team owners don't get theirs, that the unwed mother of 4 will no longer be getting hers after 5 years....etc.

Who's going to ween them all off of the government tit rather than continuing the practice of justifying their own subsidy while demonizing someone else's??

dmarks said...

Toad: "You know what job is worth a lot less, being CEO of Ford, GM, AIG, Bear Stearns."

Those too.

"Why do Republicans alwasy bitch about how much money the guys who actually do the work make"

Because the wage is so excessive that it is bankrupting the companies that we are bailing out.

toad: "but act like the money that the guy who ruins the company should be paid billions and that has no affect on the price of the end product"

It does have an effect, but overpaying UAW workers has even more of an effect: it adds up to a lot more money than the billions to bad execs.

"Maybe we should outsource Chief Executive positions. I mean, if a CEO of Honda can work for $900,000 and makes a good product people want, why pay $14,000,000 for an American CEO who runs the company into the ground? That's what we should be outsourcing."

Honda workers earn a good fair wage due to the value of the work, not UAW demands that have nothing to do with any real value of anything.

As for whether or not any job should be outsourced, that is typically up to those who run the operation, as they seek the best workers possible for the job.

Toad734 said...

But the best workers possible are not themselves, clearly its the guy in Japan making 1/15th the salary of the American CEO.

Thanks for pointing out that when CEOs don't make 22 million per year, they can afford to pay their workers and design a car that people want.

If you are looking to cut your workforce to save money, what is the smart thing to do, cut 628 jobs of guys making 35k per year who are also consumers of the product you are making or cut one guy who doesn't know what he is doing anyway and probably flies around in corporate jets which costs your company even more money? I mean, the one guy by himself can't build a car.

Toad734 said...
This comment has been removed by the author.
dmarks said...

None of those guys by himself can't build a car.

What guarantees do you have that the 628 would have purchased one of the products? Since that appears to the the most important thing about those workers to you, should the company do a survey of what cars the workers own, and fire only those who did not buy a car made in the factory?

Toad734 said...

I have worked in a factory which made parts for American truck engines. No one in that parking lot had a foreign car. Employees of the Big Three get their cars at huge discounts. What moron, who was in a Union, worked at a Dodge factory, would drive a Prius to work?

That is not my main concern, I just know the guy making 20 million dollars per year isn't going to buy a Dodge Neon.

And who do you think is more valuable to that company, 628 employees who actually make the cars or the one guy who has driven the company into bankruptcy? Which of those would you keep if you were on the board? Especially if you lived in a small town such as Cadillac, MI and you know 628 guys out of work is going to devastate the local economy and your wifes little botique will close due to everyone being out of work?