Showing posts with label Big government. Show all posts
Showing posts with label Big government. Show all posts

Tuesday, August 21, 2012

Quote of the Day: Neoconservatism Represents Big Government

Neoconservatism is not the philosophy of free markets and a wise foreign policy. Instead, it represents big-government welfare at home and a program of using our military might to spread their version of American values throughout the world. Since neoconservatives dominate the way the U.S. government now operates, it behooves us all to understand their beliefs and goals.

This is from congressman Ron Paul on Neo-conservatism

Tuesday, July 31, 2012

Progressive Ideology: The 10 Paths to Nirvana

Progressives or the neo-liberalsm who account for populist politics in the US, unwaveringly embrace big government

Professor Robert Higgs enumerates the Progressives’ 10 paths to nirvana.

An economist notes in particular that progressive ideology now embraces the following default conclusions:

  1. If a social or economic problem seems to exist, the state should impose regulation to remedy it.
  2. If regulation has already been imposed, it should be made more expansive and severe.
  3. If an economic recession occurs, the state should adopt “stimulus” programs by actively employing the state’s fiscal and monetary powers.
  4. If the recession persists despite the state’s adoption of “stimulus” programs, the state should increase the size of these programs.
  5. If long-term economic growth seems to be too slow to satisfy powerful people’s standard of performance, the state should intervene to accelerate the rate of growth by making “investments” in infrastructure, health, education, and technological advance.
  6. If the state was already making such “investments,” it should make even more of them.
  7. Taxes on “the rich” should be increased during a recession, to reduce the government’s budget deficit.
  8. Taxes on “the rich” should also be increased during a business expansion, to ensure that they pay their “fair share” (that is, the great bulk) of total taxes and to reduce the government’s budget deficit.
  9. If progressives perceive a “market failure” of any kind, the state should intervene in whatever way promises to create Nirvana.
  10. If Nirvana has not resulted from past and current interventions, the state should increase its intervention until Nirvana is reached.

The foregoing progressive predispositions, and others too numerous to state here, provide the foundation on which the state justifies its current actions and its proposals for acting even more expansively. Progressives see no situation in which the best course of action requires that the government retrench or admit that it can do nothing constructive to help matters. They see the state as well-intentioned, sufficiently capable, and properly motivated to fix any social and economic problem whatsoever if only the public allows it to do so and bears the costs.

The Philippine social democracy version can be reduced into three: namely, change the leader, tax and regulate, and finally, throw money at the problem. Anything beyond these have been deemed as blasphemy.

I wrote about them here.

Wednesday, June 27, 2012

Italy’s Regulation Choked Labor Markets

Here is another example of the normative way of how politicians deal with problems: They treat the symptoms rather than the disease.

From the Wall Street Journal,

Prime Minister Mario Monti has issued a new "growth decree" to revive Italy's moribund economy. Among other initiatives, the 185-page plan proposes discount loans for corporate R&D, tax credits for businesses that hire employees with advanced degrees, and reduced headcount at select government ministries.

Will any of this solve Italy's economic problems? Only in the sense that one could theoretically drain Lake Como with a ladle and straw. Allow us, then, to illustrate why Italy's economy stagnates.

Imagine you're an ambitious Italian entrepreneur, trying to make a go of a new business. You know you will have to pay at least two-thirds of your employees' social security costs. You also know you're going to run into problems once you hire your 16th employee, since that will trigger provisions making it either impossible or very expensive to dismiss a staffer.

But there's so much more. Once you hire employee 11, you must submit an annual self-assessment to the national authorities outlining every possible health and safety hazard to which your employees might be subject. These include stress that is work-related or caused by age, gender and racial differences. You must also note all precautionary and individual measures to prevent risks, procedures to carry them out, the names of employees in charge of safety, as well as the physician whose presence is required for the assessment.

Now say you decide to scale up. Beware again: Once you hire your 16th employee, national unions can set up shop. As your company grows, so does the number of required employee representatives, each of whom is entitled to eight hours of paid leave monthly to fulfill union or works-council duties. Management must consult these worker reps on everything from gender equality to the introduction of new technology.

Hire No. 16 also means that your next recruit must qualify as disabled. By the time your firm hires its 51st worker, 7% of the payroll must be handicapped in some way, or else your company owes fees in-kind. During hard times, your company may apply for exemptions from these quotas—though as with everything in Italy, it's a toss-up whether it's worth it after the necessary paperwork.

Once you hire your 101st employee, you must submit a report every two years on the gender dynamics within the company. This must include a tabulation of the men and women employed in each production unit, their functions and level within the company, details of compensation and benefits, and dates and reasons for recruitments, promotions and transfers, as well as the estimated revenue impact.

I earlier posted the labor markets of France and Germany compared to Spain.

Such astounding maze of regulations has been one of the major dynamics for today’s crisis. This has produced a huge bureaucracy that has been draining productive resources from entrepreneurs. This has also increased the costs of doing business. Reduced the incentives of entrepreneurs to expand. Shifted many activities to the informal or shadow economy.

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Italy has one of the largest informal economies relative to the OECD nations

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As well as encouraged corruption. Italy ranks as one of the most corrupt in Eurozone. Overall, such regulations has reduced Italy’s competitiveness.

So reduced competitiveness leads to diminshed output (income) – ballooning government (expense)= crisis (deficits)

And how does the Italian government intend to fix the problem?

Among other initiatives, the 185-page plan proposes discount loans for corporate R&D, tax credits for businesses that hire employees with advanced degrees, and reduced headcount at select government ministries

Gosh, 185 pages of more regulations and more bureaucracy.

Note: reduced headcount at “select” government ministries looks more symbolical and seems like a loophole.

Yet the mainstream advice of solving this problem by inflation will only worsen the situation, as this does not address the root: asphyxiation from big government.

Doing it over and over again and expecting different results only reinforces the worsening of this crisis.

Saturday, June 09, 2012

Big Brother now a Reality in the US

The Philippines has a popular reality TV program, called the Pinoy Big Brother (PBB) which is a local version of a foreign reality show.

The basic concept of which is that a select number of participants, who are called “housemates”, live in a camera ubiquitous house and strictly according to the "entertaining" rules of ‘Big Brother’. These housemates competes to survive through elimination rounds, as nominated by Big Brother, where audiences determine the victor, who receives material prizes. Of course, the other implied goal for these participants is to be "discovered" as celebrities.

PBB, according to Wikipedia.org, follows the same premise as its many foreign counterparts around the world: twelve Philippine residents are forced to live with each other inside a house for about 3 months or at least 100 days. (italics mine)

So the sublime message of these shows has been one of generating social acceptability for people to forcibly live under the dictates of a “big brother”, a.k.a despot or a tyrant.

Once people are seduced to the idea of condescension and submission, then the implementation of social policies under a 'compassionate' “big brother” regime becomes easier.

In the US, the city of San Francisco has reportedly started using cameras to supposedly prevent crimes

From the New American,

The United States continues its slow morphing into Big Brotherdom, this time through the use of cameras that predict crimes before they take place based on “suspicious” behavior. The cameras will then summon law enforcement to help pre-empt the crime from taking place.

The Daily Mail (Britain) reports, “Using a range of in-built parameters of what is ‘normal’ the cameras then send a text message to a human guard to issue an alert-or call them.” They can track up to 150 people at a time and will build up a “memory” of suspicious behavior to begin determining what is inappropriate.

BRS Labs, the company behind the camera, indicates that the cameras “have the capability to learn from what they observe.”

BRS Labs President John Frazzini said that the technology involves 11 patents that deal with the camera’s ability to learn.

They are also equipped with the technology to adjust for poor light or shaky imagery, and have a series of “trip wires” that become activated and then alert a human supervisor. The footage is then sent over the Internet to employees with a text message summarizing the details.

“The video surveillance technology we have invented is distinctly and materially different from the simple recognition capabilities found in video analytics solutions currently available from a number of vendors in the physical security market,” Frazzini said in astatement. “Generally speaking, video analytics software receives video data from cameras, and issues alerts based on very specific and narrowly defined human programmed rules that have failed to provide operational value in the video surveillance market. In strong contrast to those limited and deteriorating solutions, the patented technology of BRS Labs does not require any human pre-programmed rules, thereby providing an inherently scalable enterprise class software platform to the video surveillance market.”

The cameras have already been installed in prime tourist attractions, government buildings and military bases, and are now being prepared to be installed throughout the transportation system in San Francisco, including buses, trams, and subways.

According to the company, the cameras will eventually be placed in 12 San Francisco stations, 22 cameras per station, totaling nearly 300 cameras in all.

The San Francisco cameras include a special feature that turns the footage into code before they are analyzed.

The reality is that such measures are designed not really to prevent crimes or terrorism, where policies have always been marketed under the cover of some pretentious public good, but about the slippery slope towards the establishment Big government, if not totalitarianism, for the benefit of the political class and their cronies. Shades of George Orwell's dystopian society of 1984.

Tuesday, July 20, 2010

Top Secret America: How Big Government Feeds On Fear

The Washington Post investigates how the infamous 9/11 has nurtured a leviathan.

Here is the Washington Post, (all bold highlights mine)

The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work.

These are some of the findings of a two-year investigation by The Washington Post that discovered what amounts to an alternative geography of the United States, a Top Secret America hidden from public view and lacking in thorough oversight. After nine years of unprecedented spending and growth, the result is that the system put in place to keep the United States safe is so massive that its effectiveness is impossible to determine.

The investigation's other findings include:

* Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States.

* An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances.

* In Washington and the surrounding area, 33 building complexes for top-secret intelligence work are under construction or have been built since September 2001. Together they occupy the equivalent of almost three Pentagons or 22 U.S. Capitol buildings - about 17 million square feet of space.

* Many security and intelligence agencies do the same work, creating redundancy and waste. For example, 51 federal organizations and military commands, operating in 15 U.S. cities, track the flow of money to and from terrorist networks.

* Analysts who make sense of documents and conversations obtained by foreign and domestic spying share their judgment by publishing 50,000 intelligence reports each year - a volume so large that many are routinely ignored.

More:

This is not exactly President Dwight D. Eisenhower's "military-industrial complex," which emerged with the Cold War and centered on building nuclear weapons to deter the Soviet Union. This is a national security enterprise with a more amorphous mission: defeating transnational violent extremists.

Much of the information about this mission is classified. That is the reason it is so difficult to gauge the success and identify the problems of Top Secret America, including whether money is being spent wisely. The U.S. intelligence budget is vast, publicly announced last year as $75 billion, 21/2 times the size it was on Sept. 10, 2001. But the figure doesn't include many military activities or domestic counterterrorism programs.

At least 20 percent of the government organizations that exist to fend off terrorist threats were established or refashioned in the wake of 9/11. Many that existed before the attacks grew to historic proportions as the Bush administration and Congress gave agencies more money than they were capable of responsibly spending.

The Pentagon's Defense Intelligence Agency, for example, has gone from 7,500 employees in 2002 to 16,500 today. The budget of the National Security Agency, which conducts electronic eavesdropping, doubled. Thirty-five FBI Joint Terrorism Task Forces became 106. It was phenomenal growth that began almost as soon as the Sept. 11 attacks ended.

Nine days after the attacks, Congress committed $40 billion beyond what was in the federal budget to fortify domestic defenses and to launch a global offensive against al-Qaeda. It followed that up with an additional $36.5 billion in 2002 and $44 billion in 2003. That was only a beginning.

With the quick infusion of money, military and intelligence agencies multiplied. Twenty-four organizations were created by the end of 2001, including the Office of Homeland Security and the Foreign Terrorist Asset Tracking Task Force. In 2002, 37 more were created to track weapons of mass destruction, collect threat tips and coordinate the new focus on counterterrorism. That was followed the next year by 36 new organizations; and 26 after that; and 31 more; and 32 more; and 20 or more each in 2007, 2008 and 2009.

In all, at least 263 organizations have been created or reorganized as a response to 9/11. Each has required more people, and those people have required more administrative and logistic support: phone operators, secretaries, librarians, architects, carpenters, construction workers, air-conditioning mechanics and, because of where they work, even janitors with top-secret clearances.

The response by a former military official:

Underscoring the seriousness of these issues are the conclusions of retired Army Lt. Gen. John R. Vines, who was asked last year to review the method for tracking the Defense Department's most sensitive programs. Vines, who once commanded 145,000 troops in Iraq and is familiar with complex problems, was stunned by what he discovered.

"I'm not aware of any agency with the authority, responsibility or a process in place to coordinate all these interagency and commercial activities," he said in an interview. "The complexity of this system defies description."

The result, he added, is that it's impossible to tell whether the country is safer because of all this spending and all these activities. "Because it lacks a synchronizing process, it inevitably results in message dissonance, reduced effectiveness and waste," Vines said. "We consequently can't effectively assess whether it is making us more safe."

Read the rest here

As General Douglas MacArthur once said,

"Our government has kept us in a perpetual state of fear -kept us in a continuous stampede of patriotic fervour -with the cry of grave national emergency. Always, there has been some terrible evil at home, or some monstrous foreign power that was going to gobble us up if we did not blindly rally behind it."

Wednesday, April 21, 2010

SEC-Goldman Sachs Row: The Rising Populist Tide Against Big Government

Professor Arnold Kling writes,

``perhaps it is not so crucial to bolster a financial sector that was misallocating capital or to bolster a state and local government sector that has been captured by unions. Perhaps these heroic efforts undertaken in the name of saving the economy only served to reward the looting classes. Perhaps we have arrived at a point in this country where looting is the most rewarding economic activity. In that case, it will not take many years before the wealth available to loot starts to shrink." (emphasis added)

He scorns the transformation to cronyism, which we totally agree. And that's why I see the latest Goldman controversy as part of the ploy to camouflage the "looting classes".

I guess some charts of Pew Research captures prevailing public sentiment.


From Pew Research, (bold highlights mine)

``By almost every conceivable measure Americans are less positive and more critical of government these days. A new Pew Research Center survey finds a perfect storm of conditions associated with distrust of government -- a dismal economy, an unhappy public, bitter partisan-based backlash, and epic discontent with Congress and elected officials.

``Rather than an activist government to deal with the nation's top problems, the public now wants government reformed and growing numbers want its power curtailed. With the exception of greater regulation of major financial institutions, there is less of an appetite for government solutions to the nation's problems -- including more government control over the economy -- than there was when Barack Obama first took office.

``The public's hostility toward government seems likely to be an important election issue favoring the Republicans this fall. However, the Democrats can take some solace in the fact that neither party can be confident that they have the advantage among such a disillusioned electorate. Favorable ratings for both major parties, as well as for Congress, have reached record lows while opposition to congressional incumbents, already approaching an all-time high, continues to climb.

``The Tea Party movement, which has a small but fervent anti-government constituency, could be a wild card in this election. On one hand, its sympathizers are highly energized and inclined to vote Republican this fall. On the other, many Republicans and Republican-leaning independents say the Tea Party represents their point of view better than does the GOP."

In contrast to those who see and think in terms of their political party lines, the polls suggest that there is ballooning discontent about bi-partisan polity.

And it's why perhaps both the Democratic Party and the Republican Party have felt the backlash from the public and thereby has seen their approval ratings plummet, which has mostly been a reflection of the performance of the US congress.

And it is also why the Tea Party has spontaneously emerged.

Yet some would stubbornly argue that more government activism is likely the answer. For instance more regulation in the financial sphere. This camp never seem to realize that in politics, what you see isn't what you get.

As Heritage's Conn Carroll comments on the proposed financial reform bill, ``So whenever Sen. Chris Dodd (D-CT) says his Wall Street Bailout Bill "would have prevented that kind of events from happening" he needs to explain how. If anything, the Dodd plan will only make future Wall Street bailouts more likely and more costly while also stifling consumer choice." (emphasis added)

This only goes to show that the proposed "new" regulatory reforms are being shaped to even benefit MORE (and not less) the looting class!

Not to mention that the controversial John Paulson who helped inspired the Goldman brouhaha, has been a generous political contributor.

According to Ben Smith of the Politico, ``Though many hedge fund managers lean Democratic, Paulson has split his giving, offering maximum six-figure contributions both the the Democratic Senatorial Campaign Committee and to the Republican National Committee. Paulson, ranked 45 on Forbes' list of America's richest individuals, made maximum contributions to the presidential campaigns of Mitt Romney, John McCain, and Rudy Giuliani in 2008, but has also given to key Democratic senators for the finance industry, including Chris Dodd and Max Baucus.

``Paulson hasn't given directly to Schumer, though he maxed out to Schumer's committee. But he did host a fundraiser for the senior New York senator earlier this month, describing him in the invitation as "one of the few members of Congress that has consistently supported the hedge fund industry." (bold emphasis mine)

And all these (lobby groups, contributions, biased laws, regulatory capture etc...) seemingly add to the reasons on why the public's attitude on politicians seems to have tipped over. Instead of big government, which they had earlier hoped to work, they now seem prefer "smaller" government.

Again from Pew, ``Despite the public's negative attitudes toward large corporations, most Americans (58%) say that "the government has gone too far in regulating business and interfering with the free enterprise system." This is about the same percentage that agreed with this statement in October 1997 (56%)."

The point is that the polls suggest that there seems to be a growing public recognition that the previous "big government" or "activist government" experiment has noticeably been a failure, from which is being manifested in politics, as shown in the intratrade.com prediction markets chart courtesy of Bespoke Invest.

And this gives even more motivation for the ruling political class to use the Goldman caper as a likely prop as the "fall guy" role for political ends.

We just don't oversimplistically regulate cartels out of existence, not when the cartel itself is lead by the government via the Federal Reserve.

To quote Dr. Antony Mueller, "There can be no honesty in a dishonest monetary system".


Wednesday, April 22, 2009

Corruption Is A Symptom of BIG Government!

Filipinos have long been seduced to the notion that the only way to get rid of corruption is to elect or put in place a "virtuous" or "moral" leader or what I call "personality based" politics. Hence, the political cycle of hope and despair: great hope in a new leader and eventual despair from the unrealized expectations on the incumbents.

And this vicious cycle has seemingly translated to a perpetual fantasy or the ever elusive goal of good governance.

Unfortunately, hardly anyone including media and our experts in the academe or in private institutions would deal with political realities.

As the following video from Daniel Mitchell of Cato.org would show, corruption is only a symptom of excessive government interventions, welfare system wrought dependency culture, bloated bureaucracy, stifling web of regulations, scores of counterproductive hardly implementable laws, and government policy instituted handpicking of winners and losers.

In short, big government puts in the incentives that rewards corruption which leads to economic bondage. Ergo, the bigger the government the bigger risks of corruption. We partly dealt about this in our previous post
The Economics of Philippine Election Spending.

Although the following video is referenced to Americans, this big government -corruption causality has a universal application. Just replace Malacanang with Washington and the political dynamics are all the same.

Anyway this introductory quote by Mr. Mitchell from Cato.org,

``Washington is riddled with both legal and illegal corruption, but why?

``Perhaps it is because government is too big and has too much power. The federal budget redistributes $3.5 trillion through more than 1,800 subsidy programs. The regulatory burden is $1.2 trillion and there have been 51,000 new regulations since 1995. And there are more than 70,000 pages of tax law and regulations.

``These are the reasons why Washington is a hornet’s nest of deal-making, influence-peddling, and back-scratching."