And the Darkest Hour is Just Before Dawn

Many quotes to talk about here, although yours may have been my favorite: referring to the bailout and the subsequent gov't spending plans a "Marxist wet dream".

That quote leads me to ask you about how the candidates handled the whole situation, particularly McCain's adamant support of the bailout plan.

McCain has been blasting Obama's tax plan as socialist every since "The One" talked with the plumber. Palin manages to mention his socialistic tendencies in every rally speech she gives. And as far as the right-leaning media outlets, fuhgedaboutit. They seem convinced Obama's election will lead to all out socialism on a national scale. (Hannity and Hume especially)

That being said, I simply do not understand how the bailout package is not completely and utterly, socialist economic policy. If McCain is so proud of the plan to buy up banks, how can he go on attacking Obama's tax plan on the basis that it is "wealth re-distribution"?

Sorry about tying this back to election politics. I'm just so confused as to how this plan is not socialism in its most basic form.

my second favorite quote would have to be from Mingus. It was good of you to acknowledge the distance from its context. Here Mingus was discussing Jazz Music and how an audience experiences it.

What Mingus was talking about was the inherent complexities in jazz harmony and rhythm, and how these complexities can be interpreted as simplicity when a skilled performer presents them. He was basically rephrasing the old saying, "He makes it look easy!" (something audience members might say when watching someone like Charlie Parker play hundreds of note per minute without flinching).

I would have never thought to bring Mingus into a discussion about economic theory, but you managed to do so quite nicely.

You raise 2 major points I believe. First the bailout.

There is no distinction between either Obama's or McCain's support of the "plan". Hence I chose not to bring that aspect into it. How each chose to play the politics of it ("rush to DC", or "be above the fray")does not interest me. They both voted for it. Technically speaking, there is no aspect of the plan which has any coherence to it regarding any theory of economics. These are ad hoc actions for which there is few precedents and for which one can only guess as to their consequences. It is an economic non sequitur of sorts.

It is not socialist in the slightest. Frankly, I don't know what it is. To be very specific, Socialism is when the Government owns the means of production and manages the allocation of capital of the enterprises they own.

This was clearly not that. It was a purchase of passive capital by the government (they may include some cosmetic limits on CEO pay) based on their belief (justified or not) that the banks needed this capital and that somehow the private sector would not provide it. The intent is ultimately to get out and be paid back with a profit, not to control the companies either now or later. This type of Government intervention, which I generally am very skeptical about, has one precedent in the US when the Reagan administration bailed out Chrysler and ended up making a huge return. However, it has no precedent in economic theory at all.

My sarcastic comment regarding a Marxist Wet Dream ironically is linked to your unfortunate incorrect statement that this is "...completely and utterly, socialist economic policy". Politically, this is a camel's nose under the tent of government intervention in private business. The slippery slope argument then comes easily. Since many people have not learned economics, or misunderstand it (recall my Herbert Stein quote) a true socialist can demagogue this action to justify actions where the state really exercises increasing allocation of resources control and point to this action as precedent, however illogical the actual link is.


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My sarcastic comment regarding a Marxist Wet Dream ironically is linked to your unfortunate incorrect statement that this is "...completely and utterly, socialist economic policy". Politically, this is a camel's nose under the tent of government intervention in private business. The slippery slope argument then comes easily. Since many people have not learned economics, or misunderstand it (recall my Herbert Stein quote) a true socialist can demagogue this action to justify actions where the state really exercises increasing allocation of resources control and point to this action as precedent, however illogical the actual link is.


Your second point distinguishes the 2 tickets views on tax and redistribution policies. Obama 's stated policy can in no way be called socialist. The one clear exception is his continuation of the failed 1992 Clinton policy to nationalize health care. While the democrats have gone to an incrementalist approach, including Obama, his approach is by far the "biggest step" yet in that direction.

However, while not yet a socialist, he is a redistributionist and a severe one at that. he really he is giving transfer payments to individuals. In fact, the Government will not be able to record these payments as tax cuts but will have to record them as expenditures. These are European polices. The reason European's per capita income is 66% of the United States per capita income is largely due to these kinds of policies. The pie gets more equally shared but it does not grow nearly as fast. A 30th percentile person in the US is as wealthy as a 50th percentile person in Europe. Obama's original tax plan was the ultimate.

I could never understand the young person's attraction to such policies. It is so limiting. Palin should call him a redistributionist, not a socialist--except for his health care. Remember, Obama's original tax plan was outrageous and he has temporarily been forced to back off.

First of all, for a single person, 180k is when taxes rise, not 250--that is his current policy. His old policy increased the following taxes. 1) Doubled capital gains taxes and taxes on dividends; 2) for single people making more than 180 and joint filers making more than 250 increase the federal tax rate from 36 to 40%; 3)For those same people, uncap social security taxes (thus eliminating forever the notion that SS taxes are a retirement plan). This would be 12-15%. So now anyone making over 180/250 would be paying 52-55% to the federal government. Add state taxes (NJ is 9.5) and after federal credit add another 5.5%. we are now up to 58-60%. Why not just take it all. believe me, this will create a counter reaction of figuring out how to hide income or not grow businesses here at all. He had to back off from this. But what do you think his real view is?

Now a very simple question is this. Who do most people work for? In this country, while the number of businesses impacted by this is a lower percent, the number of people who work for businesses who are impacted by this is perhaps 40% of the work force. This is because a small number of private business are very large. Do you really think that if an owner's taxes goes up by that much, he will continue to either hire as many people or pay them as much as he would without paying those taxes? Would you? Think about it.

Many geniuses in many fields have invoked the notion that at the very end of the path of a very complex problem lies the answer which appears so simple. Once it is understood, it really does seem easier to understand. It is a great paradox. Einstein used it famously as well. So did Lincoln. Always in different contexts bit always the same idea