Saturday, October 15, 2011

Two Views

We report, you decide. First, Ace Commenter Rich, from the comments section of yesterday's post:

Granted, the targets of the tea party and OWS are very different. The tea baggers are focused on the folks in Washington, while the OWS crowd is going directly to the real source of power: The people who have the folks in Washington on their payroll. (So you could argue that the OWS is aiming their protests at much better targets).
And quite honestly, I have never understood the tea party's complaints about how a government that is allegedly too big caused all the damage. How have big government and overregulation caused the current misery, since, for the last 13 years, we've been paying some lowest tax rates in decades, we've been on a deregulatory path for 31 years, and this financial crisis came on the watch of a very very business-friendly administration?

In an interview with John Stossel, Peter Schiff begs to differ:

Schiff, who operates a brokerage firm with 150 employees, recently complained to Congress that "regulations are running up the cost of doing business, and a lot of companies never even get started because they can't overcome that regulatory hurdle."

Schiff claims he would have hired a thousand more people but for regulations.

"I had a huge plan to expand. I wanted to open up a lot of offices. I had some capital to do it. I had investors lined up. My business was doing really well. But unfortunately, because of the regulations in the security industry, I was not able to hire."

So if he wants to hire an analyst, he can't just hire him? "I had to get permission to publish their research, which I didn't get for years. And so I can't pay analysts if I can't sell their research.

People don't appreciate the number of regulations entrepreneurs face. Schiff pays 10 people just to try to figure out if his company is obeying the rules.
If you were an entrepreneur, would you rather pay for people to help you implement your business plan, or for compliance officers?

Of course, Rich passes over the reason why larger business concerns don't necessarily mind regulators -- they constitute a barrier to entry for potential competitors. Anything that keeps smaller competitors away from their core business provides an indirect competitive advantage to the larger concern. Back to Schiff:

"You can't just act very quickly, because everything has to be done through this maze of compliance. Even my brokers ... find out that maybe 20 percent, 30 percent of their day is involved in compliance-related activity, activity that is inhibiting their productivity. ... All around the country, people are complying with regulations instead of producing, instead of investing and growing the economy. They're trying to survive the regulations."

You can believe Rich, or you can believe Peter Schiff. At bottom, that's what the debate is about anyway.


Chuckwagon Boy said...

Oh, it looks like the former founder of the Tea Party is comparing the Tea Party with the Occupy Wall Street movement.

Bike Bubba said...

OK, first of all, Rich needs to learn that you don't use sexual slurs in polite conversation. Got it, Rich? It is "tea partiers," thank you very much, and I am glad to remind you that tea partiers had to look it up, unlike their detractors.

And if government action did nothing to cause this problem, tell me exactly why we're bailing out Fannie and Freddie for hundreds of billions of dollars. Sorry, you can believe reality, or you can believe Rich. (and the 1%er that's currently living in the White House)

W.B. Picklesworth said...

Rich can sometimes be pretty reasonable. He sounds foolish with this one. Using petty slurs will do that.

What is true is that neither government nor big business are white knights and neither are, necessarily, demons. Of course, the biggest problems come when government picks winners and losers through regulation and taxation. OWS folks are happy to decry the business side of that axis, but don't bother with the other.

Tea Party folks, on the other hand, want government to stop meddling so that businesses can compete. When businesses compete and the government fills its proper role (assuring a level playing field), a lot of these problems that the OWS folks decry go away.

In other words, Tea Partiers point to actual solutions while OWS folks don't fundamentally understand the problem (or economics for that matter.)

I'm sure Rich understands all this, but was just cranky that his side features so much fail.

Anonymous said...

Ah yes...those tea partiers. So full of real solutions to real problems:

Just admit it guys: The Tea Party's alleged concerns for budgetary issues were never connected to fiscal reality.

They have no more coherence than the OWS crowd. Never did. Never will.

Oh. BTW...Tea Partiers were the first people to refer to themselves as tea baggers. Not me or anyone on the left. So as far as I am concerned, they just gotta live with that bit of commedy gold.

Warm Regards,

Anonymous said...

just curious: How did we flourish and become the world's greatest economic engine, probably in history, with Glass-Steagall in place? If you want to pretend that Capitalism doesn't need to be protected from its worst impulses and the constant assault of human nature, go ahead. But you will never convince me of the same.

Also, just a quick reminder: Homo Economicus was Smith's sardonic term of derision for mankinds base monetary impulses.


Mr. D said...

I'm glad that you find a single blogger probative, Rich. Disappointed I'm not that blogger, but I'll get over it, I suppose. ;)

So lemme get this straight -- until the Tea Party solves a complex problem that even your blogger admits is nearly 100 years in the making, all by itself, the concerns of the Tea Party are by definition crap and can be ignored. Is that right?

Mr. D said...

If you want to pretend that Capitalism doesn't need to be protected from its worst impulses and the constant assault of human nature, go ahead. But you will never convince me of the same.

When I make that argument, you can feel that way. But I sense you're trying to stuff me with straw, Rich.

Mr. D said...

How did we flourish and become the world's greatest economic engine, probably in history, with Glass-Steagall in place?

Two things:

1) Feel free to find where I dismissed Glass-Steagall. It's a big ol' blog, nearly 3000 posts now. You'll not find it.

2) Remind me, who was president when Glass-Steagall was repealed?

Anonymous said...

Bike Bubba,
where did I say that government action did nothing to cause this problem? Please show me.

But governmental and quasi-governmental entities were not the main players. Or even the major players. Recent GOP debates have been rife with some very risible claims that the government caused this economic downturn. While I am not all too fond of Fannie and Freddie, or the paternalistic mindset that has spurred their growth, perspective matters.

The real estate bubble and mortgage mess were largely caused by and certainly led by an incompetent private sector.

I realize that violates the right wing world view, but it's true nonetheless. (Even Alan Greenspan has admitted as much).

Don't believe me. Read it here:


W.B. Picklesworth said...



Anonymous said...

there are multiple links in that article. And the numbers (behind the NYT paywall) on the 40,000 tea party members who were polled are very telling. They aren't serious about entitlement reform. If you don't believe me, try this link:

David French ain't exactly a leftist. Money quote:

"If our own core conservative activists aren’t on board with serious entitlement reform, how can we expect politicians to transform the budget? As much fun as it is to obsess over the election (and, believe me, I’m obsessing), the real battle is cultural. Decades of entitlements have transformed the relationship between citizen and state to such an extent that even our own conservative base can’t quite seem to bring itself to make the truly hard choices."

Now my take on all this is a little different than French's. I never really believed that the tea party was all that interested in fiscal reform. I always thought it's just the Christianist Right hiding behind a fiscal reform mantra. I think this poll is more evidence to bolster my opinion. Cutting NPR isn't going to balance the budget. BTW, I am all for defunding NPR, PBS and the NEA. I am not one to divine the intentions of the Founding Fathers too frequently, but I am almost certain that they would be quite unanimously against the notion of the government being the arbiter and one of the main purchasers of cultural and artistic artifacts. I am very uncomfortable with that. But I digress. My point all along is that OWS and TP are two sides of the same coin...with equally muddled messages ground in cultural resentment and misguided emotions.

Lastly, I never said I supported OWS. While I do find myself in agreement with some of their ill defined complaints, I share some of the same disdain you apparently feel for many of them. Drum circles. Human megaphones. What's next? Tricorner hats with teabags strung from them, and don't tread on me flags?


Anonymous said...

can you qualify "lame"?


Mr. D said...


No one disputes that entitlement reform is crucial and intractable. But the way I read the article is this:

• Blogger believes entitlement reform is crucial
• Tea Party doesn't address entitlement reform in the manner that blogger wants
• Tea Party is therefore illegitimate

He's entitled to his opinion. I disagree.

And if you think the Tea Party is the "Christianist Right," I'd suggest you don't understand the Tea Party nearly as well as you think you do.

W.B. Picklesworth said...


I'm tempted to qualify "lame" with "very," but I suppose that would be more along the lines of amplification.

Mark makes one of my points. Dismissing the Tea Party on the basis of their not yet embracing entitlement reform is holding them to an entirely different standard than anyone else. The Tea Party isn't perfect, but they are interested in solving problems. I don't get the same sense from OWS.

As for your putting almost the entire blame on the private sector (and implicitly giving government a pass) you are surely well aware that government can get pretty involved with the private sector (no doubt with the best of intentions.) Lowering lending standards wasn't the bright idea of mortgage lenders, was it? No, it was the government trying to force a particular result.

Now I'm not trying to cast the private sector as the white night and government as the demon. They are both subject to human failings. But I think things work out better when they stay in their spheres. Businesses compete, seeking profit. Government declines to pick winners and losers, assuring the rule of law, a level playing field, and protecting the public.