Monday, August 16, 2010

Private Or Public


There are those who fear big government and see it as inefficient and riddled with special interests.  There are those who fear big business and see it as ruthless, unethical, and inhumane.  Some are hard pressed to find a legitimate role for government; others are hard pressed to find a legitimate role for business.  Most of  us would like to have a system that respects the individual and protects the societal framework; a system that unleashes the creativity of the individual while respecting the benefits that come from cooperation and altruism.

Here in the U.S. and elsewhere, we carry the burden of our history and the countless decisions that comprise those histories.  A zig here and a zag there and our present is a shade different.  But we are what we are because of those decisions and despite our fondest wishes to the contrary.

Language has bearing here.  Anarchy, licentiousness, and liberty are shades... colors... of a philosophy or orientation that places the individual above all else.  Cooperation, social responsibility and communism are shades... colors... of a philosophy or orientation that places the group above all else.  The different words... the shadings... represent the degree to which one or the other is given preference.

Most individuals want some degree of order in their lives.  They want to be able to rely on a system and structure that does not force them to consider every variable as they go about their activities... anarchy.  On the other hand, they don't want to be constrained by a system that so limits choices and possibilities that the choices and possibilities become mundane and joyless... North Korean style communism.

When it comes to the political spectrum, most people seek a pleasant balance... not all, of course.  Most people want a system that allows personal choice for personal matters, but collective choices for collective matters.  That is what, historically, has made the U.S. system so dynamic and so desirable that millions have left the systems into which they were born to become part of this one.  But this system is being assaulted by both extremes.

On the one side are those who want a system to guarantee welfare and security and are willing to forgo choices for those guarantees.  On the other side are those who want a system that demands little and gives little in return.  It's not just a matter of followers versus leaders.  It is a matter of what seems to be important... seems to be.

Here's a few choices from the extreme:

  • Which is better, a society run by big corporations or big government?
  • Which is better, a society with no rules or a society with no protections?
  • Which is better, a society that rewards only the strong or a society that supports only the unproductive?
  • Which is better, a society based on profits or a society based on guilt?
Having a hard time here?  You should be.  None of those societies were envisioned by those that came to this country to realize their hopes and dreams.  None of those societies were envisioned by those who risked everything for that one great new start.  There may not be a perfect representation of the balance envisioned by those who founded this nation.  Even they could not perfectly agree... although enough were willing to sign their names to a document expressing many of the tenets to which they could mostly agree.

From that point on we, as the citizens of the United States, have struggled to find that perfect representation of what we believe to be the vision of those who founded this nation.  Was it the sense of community and cooperation of the pilgrims and the Quakers or was it the individualism and self-reliance of those that carved their places in the wilderness?  Most people will answer yes to both.  Most people will struggle with how that should best be accomplished.

Do I want private armies in charge of national security?  Do I want government selecting where I can work, what I can eat, and with whom I can associate?  Do I trust the robber barons or do I trust the corrupt government and union officials?

Most of us don't need experts to tell us that something is amiss.  We know it when we hear the wrong questions... and the wrong answers.

UPDATE:  Check this somewhat long article at NRO.



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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
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Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)