WatchFriday I was faced with the daunting task of clearing numerous building permits on a house that I'm renovating. The stupidity of American bureaucracy (three major pointless code updates since 2009) had me thinking that in another era, I'd almost certainly be a Republican. I went home and cleaned my handguns.
Then this morning I'm reading the news and I remembered why I'm not a Republican. While Democrats are often mislead by special interests, too beholden to liberal fringe groups, and sometimes err on the side of caution for petty causes that don't benefit anyone, Republicans have become the party of slash and burn.
The key here is Republican leaders have no intention of replacing the decimated government with freedom. This is the fundamental error of Tea Partiers and other free-market Republicans. They want to replace the government with an entrenched aristocracy and use corporate power to carry out policy.
Private prisons, private police forces, private schools, private roads, private utilities, private courts, and private money.
Take a look around the country and see how things have changed:
Money
1980
Almost all transactions are by cash or check. People traveling use cashier's checks they acquire for a small nominal fee. Credit cards are almost exclusively used for dining while free store cards predominate for gasoline and department stores.
2012
Almost all transactions are by credit card. Banks take 3% of every single purchase, and to encourage this theft they sometimes kick back 1% to the buyer. (if you have good credit)
Courts
1980
Federal, state, and local courts administer all civil justice and criminal fines.
2012
Nearly all civil litigation with corporations now occurs in kangaroo court mediation sessions and deference to these private courts are now part of almost every contract. These mediators find in favor of the corporation more than 99% of the time. Traffic tickets are now collected by private companies in most cases, and sometimes these same corporations are also in charge of giving tickets for camera infractions.
I've got more examples but everyone knows the way things are going, and before someone shouts "DEMOCRATS ARE TAKING AWAY OUR FREEDOMS!" remember that deregulation and privatization are Republican (and Tea Party) wet dreams. What they need to realize is the result of shrinking government is not freedom, the result of shrinking government is private tyranny.
THIS is why I'm not a Republican. Democrats are flawed, but their faults are crystal clear and they are open to attack because government is transparent. Republicans on the other hand are flawed, but their flaws are quickly hidden by burying them in Haliburton or Blackwater or Robert Mericle.
Who is Robert Mericle? http://en.wikipedia.org/wiki/Kids_for_cash_scandal
Republicans today are the LITERAL carriers of George Orwell's "1984" Big Brother dystopia. They want it, they vote for it, and they are at least half way to achieving it. You can either push is further down that road and help kill off whatever government we have left, or you can try and put government......REAL government that can be controlled, back in charge of the country.
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iwog says
But you are ignoring the fact that the game itself is rigged by people like Warren B. You want the game to be changed, while at the very same time ignoring the root cause for why the game is the way it is.
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uomo_senza_nome says
If one were to make this argument, I would have expected some evidence that this were the case. Such as--here are the times Warren hyped up his companies and here is when he sold. But, the argument given is extraordinarily weak. WB doesn't like gold as an investment and writes an article explaining why--therefore he is trying to make his stock holdings rise?? That is VERY thin.
uomo_senza_nome says
Warren certainly enjoys some opportunities that the normal investor doesn't due to him immense wealth. I don't begrudge him that. Should he turn down good investments when they call him? Is that fair to his shareholders?
If you have evidence of Buffet's crony capitalism, please share it. (fyi--saying yes when someone calls you asking for money is not crony capitalism)
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iwog says
Robert Mericle's bipartisan campaign "donations" imply that he is mostly a Democrat:
http://www.campaignmoney.com/political/contributions/robert-mericle.asp?cycle=06
The judges in the Kids for Cash scandal were also reportedly Democrats:
http://newsbusters.org/blogs/tom-blumer/2009/02/14/aps-name-party-twist-disgraced-pa-judges-dem-party-id-disappears-after-i
I'm not saying Republicans are any better, only that this particular scandal can't be blamed on them. Republicans (with bipartisan collusion) gave us the Iraq War. Democrats gave us ObamaCare and most want to keep it even though most acknowledge it's unconstitutional:
http://blogs.ajc.com/kyle-wingfield/2012/02/27/gallup-dems-say-obamacares-unconstitutional-want-to-keep-it-anyway/
I wish we had a viable third party, because the two majors are devolving into ideologically incoherent patronage networks serving mainly the 0.1% biggest "donors" (and revolving doormen) at the expense of everyone else.
BTW, re Prop 13 and imagery, I suggest an ad campaign showing the main purpose (elderly people in their homes, afraid of losing the house and going into a nursing home) and then cutting to greedy corporations abusing the program. Solution: protect the old people by getting greedy corporations' mitts off Prop 13. Corporations live forever, people don't, so only people should be eligible for Prop 13.
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tatupu70 says
I hope you are not naive to think that it is *ONLY* due to his wealth, that he enjoys such opportunities.
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uomo_senza_nome says
My feelings on the future of gold prices is irrelevant. The crucial point is understanding the nature of gold as an investment. And Buffet does a great job explaining it.
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uomo_senza_nome says
You're beginning to sound more and more like solver...
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Nomograph says
While I disagree with FW in this thread and perhaps he does listen to a little too much AM radio, I would not lump him in with the other seemingly mindless, mentally ill and/or willfully ignorant individuals that frequent this site.
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tatupu70 says
Crony Capitalism: A description of capitalist society as being based on the close relationships between businessmen and the state. Instead of success being determined by a free market and the rule of law, the success of a business is dependent on the favoritism that is shown to it by the ruling government in the form of tax breaks, government grants and other incentives.
Read more: http://www.investopedia.com/terms/c/cronycapitalism.asp#ixzz1r0B5vjwO
Warren Buffett has bagged nearly $10 billion in interest, fees and dividends on the $5 billion lifeline he extended to the investment bank in 2008, during the darkest days of the financial crisis.
http://www.nypost.com/p/news/business/oracle_reap_big_gain_Z2M2Z6nqeIN2uapiPoBzvI
If you know that the government won’t let the bank fail, what is your downside risk? The upside turned out pretty sweet. Warren Buffett was an adviser to candidate Barack Obama and you can be sure the topic of how to handle the fiscal crisis was discussed. Buffett is now investing in Bank of America where his company, Berkshire Hathaway stands to make another killing. Would the government stand by and let Bank of America go under? What do you think?
http://libertyslifeline.com/2011/08/26/warren-buffett-crony-capitalist/
I can't believe there is even a question as to whether Buffet is a crony capitalist.
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tatupu70 says
Your naivety is rather staggering. Let's see if iwog also comes to your defense as to why Warren B is NOT a crony capitalist.
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tatupu70 says
And you missed the crucial point altogether. Gold is really not an investment, it is a hedge. Hedge against a failing government and a failing currency system. The very reason why central banks hold gold. And they have been net buyers since 2010.
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uomo_senza_nome says
To update on old phrase, and make it bi-partisan: Some men are born crony capitalists (GW Bush, Republican), some men achieve crony capitalism (Dick Cheney, Republican, Halliburton multi-millionaire), and some men have crony capitalism thrust upon them (Warren Buffett, Democrat). Buffett didn't start out as a crony capitalist, he inherited money and invested successfully. Then he reached a point at which the economy was in trouble and special opportunities were offered to him, and he said yes. It might have been better if we had all been offered the same opportunity, I suppose in fact we could have bought Berkshire Hathaway shares. The whole Goldman&BofA deals depended on the lemon socialism and crony capitalism of TARP, which got bipartisan support in 2008.
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uomo_senza_nome says
Thanks for the definition of crony capitalism. OK--as to the quote above. #1--you're assuming he knew that the government had the power and the will to stop the bank from failing. #2--there is a lot of loss potential even if the bank doesn't fail. #3--I haven't seen you provide any evidence of cronyness in this deal. Were there others standing in line to give Goldman $5B? Did Buffet get preferential treatment?
uomo_senza_nome says
Yes, I know. Your mind is obviously very closed on the matter.
uomo_senza_nome says
No naive, just open minded. Unlike yourself.
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Here's another instance of Buffet's crony capitalism:
http://www.nomiprins.com/thoughts/2011/10/31/0-reasons-to-hate-bank-of-america.html#comment15769079
The Fed was recklessly happy to approve, despite the Federal Deposit Insurance Corporation's (FDIC) misgiving about having to insure more risk, even if it can borrow from the US Treasury to do so. Meanwhile, Bank of America's stock price got so crushed that Warren Buffett scooped up a $5 billion preferred stock deal, effectively betting that the government won't let this big bank go bust .
Except that knowing Warren's history, it is rather charitable of Nomi to state that it was simply a "bet". In all likelihood, Warren is in the "know".
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tatupu70 says
LOL. I'm amused that you think so, because if I was *THAT* close minded as you put it, Why does everyone else participating in the discussion not come to your defense?
I shall wait and see.
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uomo_senza_nome says
I didn't miss it--I just don't see why gold is a natural hedge for failing currency. Beads used to be used as currency--are they a hedge? If you agree they are not, then why is gold a hedge for currency?
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uomo_senza_nome says
In all likelihood? That's the best you've got? I hope you can do better than that.
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tatupu70 says
I'm really not going to go there. You can bring up central bank balance sheets through a simple google search and check out their gold holdings.
Your point has been beaten to death so many times there's no point wasting my energy on this one.
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uomo_senza_nome says
To whom do you refer? Curious seems to be trying to find middle ground. And I agree with his post. He certainly isn't agreeing with you. Who else is there?
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uomo_senza_nome says
I'll answer it. People believe it's a hedge, so it acts as a hedge. Sounds awfully close to the greater foold theory to me.
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tatupu70 says
Present your case as to why there should be NO INKLING of a doubt that Warren B is not a crony capitalist. I have huge doubts, and obviously you are pandering for Buffet. Present your case.
I know you will chicken out, as you have chickened out before, here
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tatupu70 says
There are hundreds watching this thread and a whole bunch have already posted comments.
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tatupu70 says
Yep. They had. What was TARP all about? This is not an assumption, an actual fact as demonstrated by tax-payer backstopped bailouts.
tatupu70 says
Who said there isn't?
tatupu70 says
If there was justice in this country, a lot of fraud could be exposed. And oh yeah, it was *just a coincidence* that Buffet got a sweet deal /sarc off.
Matt Taibi has documented so much fraud around the time these bailouts happened. You just have to google to find out.
curious2 says
I agree. That doesn't make Buffet any less of a crony capitalist. I'm hoping tatupu will construct a logical argument as to why Buffet's not a crony capitalist. I'm not holding my breath on this though.
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curious2 says
But corporations ARE people.
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wthrfrk80 says
Indeed, in our very own Beloved Buffet's words:
Banks are victimized by evicted homeowners .
http://www.bloomberg.com/news/2012-02-27/buffett-says-banks-victimized-by-evicted-homeowners-who-emerged-as-winners.html
Poor banks, so much harassment they've faced from these homeowners who lost their homes.
With all the interest payments going up front in the first 10 years, the money made through these loans is not enough. Boo hoo.
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Oh those poor poor banks that get free counterfeit money from Uncle Ben when they need it. ;-)
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tatupu70 says
tatupu,
ROTFL you clearly have a lot to learn about gold. I shall present a few links from the economists that you love -- such as Krugman and other Keynesians like Larry Summers, who I think understand gold quite well.
Krugman:
with lower interest rates, it makes more sense to hoard gold now and push its actual use further into the future, which means higher prices in the short run and the near future.
http://krugman.blogs.nytimes.com/2011/09/06/treasuries-tips-and-gold-wonkish/
On Summers and Barsky's Gibson Paradox paper:
There is one correlation related to the price of gold that has been established rather well empirically.
We first need to think about the yield on long-term bonds. Naively, one would expect that the nominal yield on long-term bonds correlates with present inflation or, perhaps more accurately, with the presently expected future inflation, i.e. it correlates with the rate of change of the price level. Alfred H. Gibson discovered in 1923, however, that the real yield on long-term bonds correlated with the absolute price level . His study was based on interest rates and price levels in Britain over more than two centuries! Why would this be the case?
John M. Keynes termed this observation Gibson’s Paradox and called it one of the most completely established empirical facts in the whole field of quantitative economics . In 1988, Robert B. Barsky and Lawrence H. Summers (who later became US Secretary of the Treasury) solved the paradox.
....
Barsky and Summers also studied the period after 1971 in which the price of gold in US$ was determined by the market and floated freely. Indeed, the correlation persists as an anti-correlation between the present real price of gold and the future real yield on long-term bonds, confirming their model that resolved Gibson’s Paradox. In other words, even in the absence of a gold standard and in a monetary system in which gold is not currency, gold still serves as a store of value and as such competes with long-term bonds.
http://victorthecleaner.wordpress.com/2012/02/08/the-many-values-of-gold/
Here's Summers paper:
http://www.gata.org/files/gibson.pdf
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Gold is a bubble. The Peter Schiff feeding-frenzy factor is already priced in.
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wthrfrk80 says
Please consider the links I've posted above.
It is worth repeating. Gold competes with long term bonds for the store of value function. This is empirically established and thoroughly analyzed. No economist disputes the above fact.
Now, let's work from this fact.
What is happening to long term bonds today? If the Fed is buying up long-term bonds and suppressing yields, why should the gold price not rise?
Why would the price of gold be in a bubble, when the mother of all bubbles is still on-going?
Are you catching on yet?
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uomo_senza_nome says
You're not asking someone to prove a negative are you?
Prove I don't molest chickens.
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wthrfrk80 says
Oops I forgot, corporations are the best people of all, in fact they're Mitt's Chosen People, when he isn't looting them. They're so wonderful that they never have to go to prison (though they can buy prisons) or hell or school (though they can reorganize religious schools as for-profit universities and collect guaranteed student loans). Subsidizing them in perpetuity with Prop 13 doesn't go far enough, we should just give them all our money, all we can afford, and trust our lives and health to them. Oh wait, we did that, it's called ObamaCare.
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uomo_senza_nome says
Nope-that's not how it works. You've said I'm naive because I don't know that Buffet is a crony capitalist. The burden is on you to support that statement. I don't think he fits the definition you gave and I've clearly explained why.
uomo_senza_nome says
lol--I chickened out? I didn't think there was much more to add. I made my point and didn't feel the need to get the last word in...
uomo_senza_nome says
Have banks failed after TARP was instituted? (yes) At the time (no benefit of knowing how it turned out) would reasonable people have thought that TARP might fail? (yes)
uomo_senza_nome says
Again--I don't dispute that gold has in the past and continues to act as a hedge. It does so because people believe it does so. And it will continue to do so.... until it doesn't.
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iwog says
No I am not asking him to prove a negative, although I can see why you'd think that way. All I'm asking him is to remove any doubt that I have (for which I have presented facts backing it), the doubts which clearly he doesn't have.
He seems to believe that Buffet is not a crony capitalist and I think I have presented quite clearly why there can be enough doubts for people to think he might be one. And I don't think I got a convincing counter argument.
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tatupu70 says
There's not a single time in history when gold did not act as a hedge. LOL.
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tatupu70 says
Of course you did. I presented clearly how paper gold futures market can obscure price discovery of physical gold.
And you did not dispute any further, which means you really did not have a solid ground for your stance to begin with.
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iwog says
But CA Democrats aren't addressing these issues, not even trying. Every time they just try to sweep it under the rug instead.
Both public and private sectors have their problems, but the way public sector is ran today isn't good and it needs to change, it's as Ron Paul put it pure corporatism. Doing same thing we are doing now, inviting more and more corruption and crony sweetheart deals they got going isn't making the system better.
EDIT:
If Democrats cleaned up their act here, maybe I would not dislike them as much.
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uomo_senza_nome says
I don't think there's any evidence he's a crony capitalist. During the 2008 credit crisis, people with large reserves of cash were almost non-existent.
If you're a bank or a brokerage about to become insolvent, and you need billions of dollars of 100% liquid cash, Warren Buffett is the very first phone number in your Rolodex.
This has been the case for decades and doesn't indicate any insider dealings.
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tatupu70 says
Did any bank that got bailed out or was acquired by a bank that got bailed out fail?
tatupu70 says
If "reasonable people" thought TARP might fail, but TARP itself isn't FAIL, then I question whether they even have reason to begin with.
I think most reasonable people would have thought that the whole TARP episode was epitome of moral hazard and they continue to do so even now.
The planners were essentially trading off system resilience for system stability. Which has bad consequences. We'll find out.
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FortWayne says
California isn't just the state with the budget problems, California is the richest state in the country and one of the richest states in the world.
Yet it maintains a tax burden on citizens significantly lower than New York and places like Tokyo, London, Paris, Berlin, and Rome.
Everyone should work to eliminate corruption all the time, but trusting Republicans to do this is a pipe dream. Republicans are only Democrats that want to replace government with private industry. Corruption and graft aside, Democrats aren't going to gut the economy in a misguided attempt to balance the books.
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iwog says
iwog - please tell me you aren't really naive to think that Buffet isn't cozy with the State (regardless of who is in power).
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uomo_senza_nome says
I don't agree, but that is not really relevant to the discussion at hand.
uomo_senza_nome says
fyi--calling people naive is not an effective argument. It is essentially giving up.