Wednesday, August 17, 2011

Streams of Confusion from Stephen Rattner

Democratic operative Stephen Rattner is out with a very confused Op-Ed charging that Republican presidential candidates are far, far too extreme. If that were only true.

He writes:
Take the agreement to avert a disastrous default by cutting at least $2.1 trillion from the deficit over the next decade. Mitt Romney, Michele Bachmann and Ron Paul all opposed it. Only Jon M. Huntsman Jr. (whose poll numbers — perhaps not coincidentally — are in the single digits) supported it.
Rattner, of course, does not mention that the $2.1 trillion cut in spending is not a real cut, but a cut only in "baseline" budget increases that will lead, conservatively, to a $7 trillion increase in the deficit over the next 10 years.

This is how he, like most in Washington, would like to frame the debate. It is dishonest talk about what the deficit really is. Indeed, Romney is not likely to demand much more than this supposed $2.1 trillion "cut".

Rattner then tells us:
Not to be outdone, Mrs. Bachmann and Mr. Paul ventured still further, insisting that they would never vote to raise the debt ceiling. That may sound good on the Iowa campaign trail, but it would easily tip the economy into an unending downward spiral.
Bachmann seems to be just mimicking Ron Paul's views, with a warmonger twist, but what is wrong with not raising the debt ceiling? If revenues decline for individuals or businesses, cutting back is exactly what is done. Increasing the debt ceiling leads to either crowding out of private sector borrowing or Fed buying of the debt, which is ultimately price inflationary. These, apparently, are the two options that Rattner prefers rather than not raising the debt ceiling.

For him, crowding out of private sector borrowing or Fed money printing are never considered as part of the increase in the debt ceiling equation. To him a debt ceiling increase is magic money, without consequences, or ignored consequences.

Rattner then goes on to specifically attack Ron Paul:
Mr. Paul, who finished second in the Iowa straw poll on Saturday, has for decades sought to abolish the Federal Reserve, arguing that it is corrupt and unconstitutional. Eliminating our central bank is a crazy idea that would plunge the country back into an oscillating 19th-century world of panics and busts.
Is Rattner serious? Does he not realize that oscillating panics and busts are what we have under the Federal Reserve? Did he forget that he was named by President Obama the "auto czar" to "rescue" the auto industry during the most recent economic bust? How can guys like Rattner, in the face of the current economic turmoil, suggest that the boom-bust cycle is a thing of the pre-Fed era?

In fact, government involvement in money printing has been at the core of the pre-Fed and current Fed boom-bust cycles. It's only when the view that money printing, and the distorting effects it has on an economy are understood, that the boom-bust cycles caused by money printing will end.

Rattner's support of an economic structure based on increasing debt, on manipulative money printing that only devalues the dollar, and creates boom-bust cycles, sounds extreme to me.

The one point where Rattner does make some sense is in his views about the current Republican candidates and how they would rule if they were elected President, but there is new confusion by Rattner's not explicitly removing Ron Paul from the comment:
Perhaps these Republican aspirants are simply pandering to antigovernment sentiment and, if elected, would govern more sensibly. Franklin D. Roosevelt campaigned on eliminating “unnecessary functions of government” and then vastly expanded federal spending to fight the Depression. Bill Clinton did the reverse, pledging tax cuts in response to the 1990-1 recession but governing as a fiscal moderate.
This is likely true of all the candidates except for Ron Paul. It is dishonest for Rattner to lump Dr. Paul in with the other candidates who will change their views to win just one more vote. Ron Paul has held consistent views for decades. If he is elected, his Presidency would very much reflect those views.

A Ron Paul Administration would be very different from any other Republican Administration. It would, indeed, be an administration that would move toward cutting government spending dramatically, ending the Fed and all the other government programs and agencies that stifle economic growth and liberty.

For Rattner, to lump Ron Paul in with these other candidates is nonsense, only to be exceeded by the nonsense he rattles about in favor of an ever growing government that will somehow be financed by ever more borrowing, until the globe is totally saturated by Treasury debt. And then what?

11 comments:

  1. The whole claim that the 1800s were full of horrible booms and busts and long depressions has been discredited -- even by an Obama admin economist.

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  2. Is Rattner serious? Does he not realize that oscillating panics and busts are what we have under the Federal Reserve?

    He's probably serious because in the 38 years since I became an Austrian, no anti-Austrian has ever shown the slightest familiarity with even basic Austrian concepts. This should ALWAYS be expected.

    Speaking of which, MSNBC has gone berserk in response to Perry's anti-Bernanke rant:

    http://thelastword.msnbc.msn.com/_news/2011/08/16/7391419-perry-takes-heat-over-fed-comments

    Don't miss the "Perry takes heat over treasonous fed comments" and "Impact of Federal Reserve on Jobs" videos.

    Getting these clowns to blab their Keynesian nonsense is always a good thing IMHO.

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  3. Funny that Rattner (an appropriate name)should approvingly cite the duplicity of dictator Franklin Roosevelt to gain power. In Rattner's view, "governing sensibly" means extending the Great Depression by another decade, assaulting liberties, and tossing the U.S. into the charnel house of WWII.

    Also, government manipulation of the money supply and interventions in banking caused the nineteenth century's booms and busts, none of which was as bad as the Great Depression or the Great Recession. If the booms and busts of the nineteenth century were so horrific, then how do these statists think that the U.S. became the richest, most prosperous country in the history of the world during that time?

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  4. @Bob Roddis,

    "Getting these clowns to blab their Keynesian nonsense is always a good thing IMHO".

    Agreed.

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  5. Now here's the media admitting the real reason why Ron Paul is being ignored: FOREIGN POLICY.
    He's the ONLY ANTIWAR/POLICE STATE CANDIDATE on the right.

    Quote:

    "Some commentators, meanwhile, are dubious about the notion that Ron Paul is somehow "getting screwed," as Salon's Steve Kornacki put it, by the news media.

    "Those who believe Paul is getting a raw deal seem to assume that there should be a direct relationship between a candidate's straw poll performance and the level of media attention that candidate receives as a result," Kornacki writes. "The problem is that the straw poll isn't really about the literal order of finish. It means different things to different candidates for different reasons."

    He continues: "The experience of 2008 demonstrated that it's very easy to exaggerate the breadth of Paul's support -- and that his views (particularly on foreign policy) are so far outside the GOP mainstream that the party establishment will go to great lengths to make sure it doesn't expand beyond his base. That still seems to be the case today."

    Eric Zorn of the Chicago Tribune agrees.

    "In short, no, he will never be president of the United States and no, he is not a plausible contender for the GOP nomination, so those who are covering the campaign don't feel obliged to pretend otherwise," Zorn writes."

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  6. At what point does someone like this, who I guarantee if I asked him if Government can ever have too many monetary resources he'd respond "NO", become aware of their own anti-logic? The fact that Rattner can dismiss individuals as being extreme and then immediately advocate large scale wealth reduction via the Fed is absolutely mindboggling.

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  7. The always excellent Justin Raimondo, the force behind antiwar.com and Rothbard biographer, explains:

    Ron Paul is getting more publicity out of not getting publicity in the wake of his virtual tie with Bachmann in the Ames poll than he’s gotten to date. Suddenly everyone’s noticing the “mainstream” media is trying very hard not to notice the twelve-term Texas congressman and libertarian icon, despite his success in quadrupling his previous Iowa showing and barely being edged out by Bachmann. Jon Stewart’s takedown of the Ron Paul media blackout is devastating, and, for the most part, funny. Barring that crack about Paul being “the ‘Patient Zero’ of the Tea Party” – likening tea partiers to HIV-positives is offensive on so many levels, I don’t know where to start – Stewart’s critique of the anti-Paul bias in the mainstream media is 100 percent accurate. Roger Simon, writing in Politico, found it “amazing” and “disturbing” that “Paul almost wins the thing and he remains poison.”

    ******

    The media’s refusal to report Paul’s growing support, beyond grudging acknowledgement that he’s come in from “the fringe,” reflects its institutional bias in favor of the right-left red-blue narrative that has, up until now, dominated American politics, and in which so much of the news industry is heavily invested. This narrative doesn’t allow for any significant deviations, and certainly not on the presidential level: all must submit to its tyranny, in spite of its archaic and increasingly obstructionist character. What it obstructs is any meaningful challenge to the functioning of the Welfare-Warfare State. If one party is in power, welfare is given more weight than warfare, if the other takes the throne, then welfare is given the axe. In any case, these two aspects of the modern American state are inextricably intertwined, as “defense” spending in the age of empire becomes just another dollop of pork to be ladled out to corporate and political interests – and welfare becomes a way to keep the disgruntled quiescent in wartime.


    http://original.antiwar.com/justin/2011/08/16/the-media-is-the-enemy/

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  8. Excellent article Bob Roddis- thanks for sharing.

    I don't think the "patient zero" crack was meant as a slight to Ron Paul- of all the media talking heads, Jon Stewart is the ONLY one who has consistently given RP a fair hearing. One of his phrases during his rant- "ideologically consistent"- stood out for me. It means Stewart understands that RP is operating from deeply ingrained and passionately held principles, and won't deviate from them just to suck up to the power elite. From watching TDS over the last few years, it is obvious that Stewart loathes politicians, but his attitude towards RP seems to be different, almost respectful. I have a feeling that a lot of left-liberal people like Stewart are secretly hoping that RP does win the nomination, if not the presidency.

    Dale Fitz

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  9. I didn't take it as a slight either - not knowing how it relates to HIV, I heard it as meaning you can't go back any further than "zero." Bachmann might claim to be the "tip of the spear" (boy, am I tired of that already!), but who is the spear?

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  10. I actually think that Ron Paul would do better running as a Democrat teamed up with Kucinich on an anti-war platform.


    Also, I think the argument by the talking heads that he's "unelectable" is pretty funny, considering electability is a direct function of media attention. We only need to look at Obama, who had no experience (not that I take that as bad), admitted fraternization with terrorists and marxists, etc, to see how true that is. He won solely on media attention.

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  11. I was a lot more relaxed before I started following politics. I can't believe how dumb the people are who get into power.

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