Tag Archives: Money/Economy/Taxes

Critique of Bill Moyers Show

I’m a long-time fan of Bill Moyers, but I think he’s been completely off the mark on economics. I posted the comments below on his website. After a couple hours, they vanished.



0:00 – Don’t even get me started about Michael Moore’s movie. He blames Capitalism for government bailouts of wall street, even though that’s the opposite of capitalism. Then he tries to make a point for socialism at the end without providing any support for it, or acknowledging the ruin it has sowed all over the world.

4:15 – SIMON JOHNSON: Remember Wall Street convinced us that trading derivatives without any regulation, that all these kind of crazy housing loans, which are very dangerous for consumers. That all of this was sensible. All of this was a good way to sustain growth.

My reaction: Trading derivatives would not have been a problem if the traders were allowed to fail. GOVERNMENT did not let anyone fail. That’s why there was recklessness. We don’t need more regulation. We need to let irresponsible people fail. The example of “crazy housing loans” is even more glaring. GOVERNMENT REQUIRED BANKS to hold a certain portion of bad loans, mostly in minority neighborhood. REQUIRED! Also, almost all loans were subsidized by Freddie Mac and Fannie Mae. These institution were run by government regulators – thousands of them working forty hours of week. It is government intervention that failed, not a lack of regulation.

4:45 – BILL MOYERS: ‘Does this crisis reflect something about the disproportionate influence of a few incompetent investment bankers or a deeper breakdown of capitalism?’

This is not capitalism. It’s socialism for the rich.

6:10 – SIMON JOHNSON: . . . the Obama Administration has is leaning in a better direction.

WTF? Obama, Bush W., McCain were all unanimous is supporting the bank bailouts. Obama is running the biggest deficit in history, he’s appointing the same banksters to top jobs, and he’s ignoring the most important opportunity for ‘change’ which is Ron Paul’s bill to audit the Federal Reserve.

7:30 – MARCY KAPTUR: [story about JP Morgan Chase]

Instead of encouraging people to break the law, how about encouraging Congress to STOP GIVING JP MORGAN OUR MONEY.

12:00 – MARCY KAPTUR: . . . And we know the basic rules of economics. Housing leads us to recovery. Housing was the precipitating factor in this economic downturn. Unless you dealing with the housing sector, you aren’t going to have growth in this economy.

This statement is nonsense.

12:30 – SIMON JOHNSON: This is capitalism, Bill.

No, it’s not.

15:00 – PRESIDENT OBAMA: . . . Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall.

You should not have given them MY money to begin with.

16:30 – MARCY KAPTUR: . . . with the largest financial crisis in American history, in the largest transfer of wealth from the American people to the biggest banks in this country, that every committee of Congress would be involved in hearings, that this would be on the news, that people would be engaged in this. What we’re seeing is– tangential hearings on very arcane aspects of financial reform . . . rather than hearings on the fundamental new architecture of reforming the American financial system, so that we have prudent lending, capital accumulation at the local level again; that we encourage savings and limit debt by the American people. Our country needs this. Those aren’t the hearings that are happening.

I don’t doubt her sincerity but I doubt her understanding. This conversation seems almost irresponsible with it’s non-mention of the money printing federal reserve. If she wants to encourage savings, stop printing money (end the fed), so that the purchasing power of somebody’s savings will be preserved. If she wants to limit debt, stop printing money (end the fed).

To me this interview seems like a “tangential hearing on a very arcane aspect” of the financial crisis.

17:15 – MARCY KAPTUR: If you want a marker at the Federal level of how serious we are to get justice out of this financial crisis, look at the F.B.I. Look at the number of people who are really prosecuting and investigation mortgage fraud and securities fraud. It is so small . . . And until those numbers increase, we will not begin to get justice.

Much easier (and cheaper) than prosecuting people is simply letting them face the consequences of their irresponsibility. Stop subsidizing bad loan, stop bailing out corrupt banks.

21:00 – MARCY KAPTUR: . . . When they messed up during the 1980s, they put their bill through the savings and loans crisis on the American people. $140 billion. . . . But that, you know, it opened the flood gates. They go, ‘Oh, we can get away with $140 billion?’ This time how many trillions have they gotten away with?

Here the conversation swing sooooooo close to the truth. The next sentence should be “We need to stop bailing them out,” or “The problem is government involvement,” or, “If we only let people fail . . .” Instead, the next sentence is a call for more government.

25:30 – MARCY KAPTUR: [discussion of cover contracts with the Federal Reserve]

Say the words, Congresswoman. END THE FED. or, at least AUDIT THE FED. SAY IT, Dammit!

27:30 – MARCY KAPTUR: [talks about restricting fundraising]

If government wasn’t controlling everything, industry wouldn’t need to lobby.

In general, this discussion is grossly incomplete. It completely ignores the federal reserve, and the cause of the financial crisis. The crisis was not cause by corrupt banks, although they certainly had a lot to do with it. The crisis was caused by artificially low interest rates set by the Federal Reserve which flooded the world with cheap money and created an unsustainable boom. This is the Austrian Theory of the Business Cycle with has predicted this and many other crashes caused by artificially low interest rates. It is almost universally ignored by governments and media.

Jim Rogers on letting people fail, and why we don’t need even more regulation:

Goldman Sach’s taxes drop from $6 billion to $14 million

Taxes are for little people!

In December 2008, the bank holding company Goldman Sachs reported its first quarterly loss. On the heels of this announcement, Goldman Sachs issued a statement confirming that its tax rate was dropping from 34.1 percent to 1 percent. Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the US government in October 2008, expects to pay only $14 million in taxes worldwide for 2008, compared with $6 billion in 2007. The New York-based Goldman Sachs cited “changes in geographic earnings mix” as the reason behind the decrease.

According to US Representative Lloyd Doggett, the shifting of income to countries with lower taxes is cause for concern. “The problem is larger than Goldman Sachs,” Doggett said, “With the right hand out begging for bailout money, the left is hiding it offshore.” (Read more from projectcensored.org)

AIG’s Payback to Taxpayers in Doubt

One year after the biggest corporate bailout in the country’s history, a government watchdog office Monday warned that American taxpayers may not recoup the full $182 billion given to embattled insurance giant American International Group.

“AIG’s ability to restructure its business and repay the government is unclear at this time,” the Government Accountability Office said in a new report released Monday.

As of the start of September, the company’s outstanding balance of taxpayer aid was $120 billion. (Read more from abcnews.go.com)

Surprise, surprise. Not that any of the bleeding hearts who cried “save our financial system” are paying attention anymore.

The Case of the Bad Museum

A dear friend recently send me this article about the Skidmore Historic Society Museum.

Initially, I assumed he was praising their independence, and cited Hillsdale College as another example of an institution refusing to feed at the government trough.

But my friend had sent me the link to ridicule it. I guess he found the museum’s sign and lawn shoddy. He also called Hillsdale College a “creepy, backward college run for and by religious nutbags, and a place where no sane person would send their kids, ever.” Such vitriol is sadly typical among advocates, witting and unwitting, of government power.

My friend’s larger point was illustrating the failure of private institutions to provide a public good, because, he said “it cannot be done profitably.” This, of course, is a combination of economic fallacies.

1) The argument is a version of the “the broken window fallacy,” because it ignores what might have happened if people were allowed to keep their money.

Say, I rob a group of people, and build a decent museum with their money. They scrape together the little bit of money I did not take and manage to build a crappy museum alongside mine. Now, I use the disparity not only to justify the robbery, but to argue for more of it.

2) If a museum is not profitable, i.e. if people do not willingly exchange their wealth for the service a museum provides, then we do not value it. We don’t want it, and shouldn’t be forced to give it money.

In this example and elsewhere, the rhetorical challenge for liberty advocates remains, as Frederic Bastiat put it, comparing the unseen to the seen. My friend sees government museums, but doesn’t see and fails to imagine the goods and services that never came into existence because money was confiscated for the museum’s construction and operation.