[Mark K]

Have the "conservatives" become so tangled in their own rhetoric
they have lost the ability to manage a government?

David Frum

Key point:

At a gathering last night of intelligent young conservatives, I was defending the point that the TARP and some kind of fiscal stimulus had been absolutely essential last year – that otherwise the world economy might have plunged into Depression – and that conservative organizations like the Heritage were right and courageous to have supported the Obama administration’s actions at the time. We can criticize some of the details of those actions, especially some of the payoffs to Democratic interest groups embedded in the stimulus and the budget for the second half of 2009. But as an AEI colleague of mine put it, in those critical hours it was more important to be fast than to be smart. And it’s not like the GOP does not sometimes deliver payoffs to our interest groups too.

This defense met some resistance. The dominant view in the conservative world rejects the decisions of last year, and even questions whether conditions were really so very dangerous after all.

One attendee said something very thought-provoking. “Maybe it was a good thing we weren’t in power then – because our principles don’t allow us to respond to a crisis like this.”

My answer: If your principles don’t allow you to save your country when it needs to be be saved, then there’s something wrong with those principles.

I think David has a point here.
Has it become critical to the survival of this nation that
what we call "conservatives" must be kept out of office
for the time being? At least until they have a clue?

[flaps15]

When have Conservatives ever been in power?

[spankoka]

Goldwater came closest, I guess. Newt was kind of neat.

[Sol Rosenberg]

Ike?

[CA Railwhale]

I am not certain that the situation is as bad as that. To make my status clear, I am somewhere between conservative and libertarian on fiscal issues and mid-range liberal on matters of personal freedom. I think TARP was a boondoggle, the money went to all the wrong places and was used in a manner not intended by the authors of the legislation. Political slant has very little to do with either political party's ability to govern. It seems to me to be a case of bad politician and worse politician. None of them represent the voters who elected them anymore.

I think that the money should have gone to support taxpayers in trouble, not massive corporations who were "too big to fail". If the problem was bad mortgages, perhaps the government should have bought the mortgages from the banks and reworked the terms so that the homeowners could afford to pay them. That would have freed up lending capital and prevented the glut of unsold houses on the market that we face now. The government could have sat on the mortgages until the homeowner's sold them in the normal course of affairs and then be repayed for the actual costs incurred instead of a lender trying to make a fast buck by getting the property off the books as quickly as possible.

As for Ford, GM and Chrysler- do something on the order of cash for clunkers, without the mileage restrictions and limit the scope to the big three. That would have helped to clear their unsold inventory and provide some of the cash they needed to convert their production lines to more sensible cars. The rest could come from tax incentives for the companys and investors to finance the rest. Let the Japanese and Korean governments help their own companys.

I've always believed that government should be as close to the taxpayer as possible- if you can get up in a politician's face and yell at him he is a lot less likely to sell his vote to the highest bidder.

[Mark K]

Sol Rosenberg, on Nov 18 2009, 02:52 PM, said:

Ike?

He was a communist compared to the current batch that bear
the label.

I think David is referring to the ideologues who call themselves
conservatives today. The real difference may be at the point
we chuck our ideology for pragmatism. These young conservatives
were so welded to their ideology as to actually say we
were lucky they were not in charge when it hit the
fan. Amazing. A willingness to disregard reality. As if ideology
were more important, to be adhered to even to the point of
excluding the occasional exeptions that "prove the rule".
This makes them actually more radical than conservative, as
defined by Webster.

I think it's rooted in laziness. Faith is so much easier than
having to gather information and think. In this state, they
can not govern. They can write books and talk on the radio,
but not govern.

[Orange Whip]

CA Railwhale, on Nov 18 2009, 02:53 PM, said:

I am not certain that the situation is as bad as that. To make my status clear, I am somewhere between conservative and libertarian on fiscal issues and mid-range liberal on matters of personal freedom. I think TARP was a boondoggle, the money went to all the wrong places and was used in a manner not intended by the authors of the legislation. Political slant has very little to do with either political party's ability to govern. It seems to me to be a case of bad politician and worse politician. None of them represent the voters who elected them anymore.

I think that the money should have gone to support taxpayers in trouble, not massive corporations who were "too big to fail". If the problem was bad mortgages, perhaps the government should have bought the mortgages from the banks and reworked the terms so that the homeowners could afford to pay them. That would have freed up lending capital and prevented the glut of unsold houses on the market that we face now. The government could have sat on the mortgages until the homeowner's sold them in the normal course of affairs and then be repayed for the actual costs incurred instead of a lender trying to make a fast buck by getting the property off the books as quickly as possible.

As for Ford, GM and Chrysler- do something on the order of cash for clunkers, without the mileage restrictions and limit the scope to the big three. That would have helped to clear their unsold inventory and provide some of the cash they needed to convert their production lines to more sensible cars. The rest could come from tax incentives for the companys and investors to finance the rest. Let the Japanese and Korean governments help their own companys.

I've always believed that government should be as close to the taxpayer as possible- if you can get up in a politician's face and yell at him he is a lot less likely to sell his vote to the highest bidder.

31 posts and i like this guy already

[spankoka]

Actually the US could likely put its fiscal house in order quite quickly with a %5 or so federal sales tax, but I'm guessing that's just not politically viable even if it makes sense. Conservatives champion flatter income taxes but when it comes to taxing spending rather than savings/investments, it's a bad thing.

[wabbiteer]

spankoka, on Nov 18 2009, 04:51 PM, said:

Actually the US could likely put its fiscal house in order quite quickly with a %5 or so federal sales tax, but I'm guessing that's just not politically viable even if it makes sense. Conservatives champion flatter income taxes but when it comes to taxing spending rather than savings/investments, it's a bad thing.

Now there's something you DEFINITELY don't want to do in the middle of recession.

http://static.seekingalpha.com/uploads/2009/2/19/saupload_jap_gdp.png

Japan raised its "consumption tax" from 3% to 5% in 1997.

It cut off their recovery at the knees.

[spankoka]

Yeah, that's interesting that you bring that up because I was selling kit homes in Japan at the time. The increase was known well in advance which led everyone from developers to car dealers to push their products before they suddenly got substantially more expensive. Thus imported homes built by imported tradesmen became a very handy way to get the job done prior to the increase, vs. the obviously limited number of tradesmen capable of building a home from dimensional lumber. Therefore the recovery that the numbers show before the increase are at least partly due to a distorted increase in housing starts and the push and to anything big ticket before it cost more. Any tax is a distortion from the ideal of the free market and will have repercussions. I don't deny that the increase had a fundamental impact on the economy, but the numbers don't tell the real story of the housing start situation/car sales in those days which IMHO caused the uptick that you cite as being destroyed by the tax increase that caused it in the first place. In retrospect the status quo or a phased in increase would have been preferable, but hindsight is easy. In any case if the US started on the path towards a national sales tax today presumably the present situation would have long passed before it ever (if ever) got done. Start now and you just might cut off the next bubble at the knees, but that would be long-term thinking. Once you are in a bubble again it will be perceived as the norm all over again.

[FlickMeIveEarnedIt]

Can compassionate conservatives govern? Absolutely, positively. Look at GWB many many successes. Two wars in Iran and Afghanistan were we were victorious liberators that have led to two prosperous and democratically controlled governments, a clean healthy environment, and a robust economy that is the envy of the FREE WORLD! THANK GOD FOR GWB, CONSERVATIVES, AND THE RIGHT-WING NEOCON BRANCH OF THE REPUBLICAN PARTY!

[wabbiteer]

spankoka, on Nov 18 2009, 06:12 PM, said:

Yeah, that's interesting that you bring that up because I was selling kit homes in Japan at the time. The increase was known well in advance which led everyone from developers to car dealers to push their products before they suddenly got substantially more expensive. Thus imported homes built by imported tradesmen became a very handy way to get the job done prior to the increase, vs. the obviously limited number of tradesmen capable of building a home from dimensional lumber. Therefore the recovery that the numbers show before the increase are at least partly due to a distorted increase in housing starts and the push and move anything big ticket before it cost more. I don't deny that the increase had a fundamental impact on the economy, but the numbers don't tell the real story of the housing start situation/car sales in those days. In retrospect the status quo or a phased in increase would have been preferable, but hindsight is easy. In any case if the US started on the path towards a national sales tax today presumably the present situation would have long passed before it ever got done. Start now and you just might cut off the next bubble at the knees, but that would be long-term thinking.

It has nothing to do with "hindsight."

It's pretty freaking bloody obvious to anyone with half a brain that increasing a tax on consumption will reduce consumption, especially consumption of items where demand is highly elastic. Of course "kakekomi juyou" distorted retail sales in the final months up to the implementation, but it's clear that Japan's economy was in a recovery phase before the tax hike, and the tax hike killed it. Japan made the mistake of thinking that its recovery was so well-entrenched that it could afford to raise the sales tax. Wrong. Timing is everything, and god save us all from the nitwits who don't have it. We're not out of the woods yet.

The time to raise a sales tax is when an economy is overheating and you want to put the brakes on. "Next bubble?" Frankly I don't think we're going to see that for a long time. It will probably take us the next three years just to climb out of this hole, let alone get things percolating into a full-fledged bubble.

[Dog]

Mark K, on Nov 18 2009, 02:13 PM, said:

Have the "conservatives" become so tangled in their own rhetoric
they have lost the ability to manage a government?

Good question but under the circumstances I think this is a better one...Have the "liberals" become so tangled in their own rhetoric
they have lost the ability to manage a government because I gotta tell you it's looking like amateur hour in Washington

[Bus Driver]

Dog, on Nov 18 2009, 09:29 PM, said:

Mark K, on Nov 18 2009, 02:13 PM, said:

Have the "conservatives" become so tangled in their own rhetoric
they have lost the ability to manage a government?

Good question but under the circumstances I think this is a better one...Have the "liberals" become so tangled in their own rhetoric
they have lost the ability to manage a government because I gotta tell you it's looking like amateur hour in Washington

Yes to both questions. Now, can the GOP field a conservative candidate? Happy Jack, Polaris, and their ilk can't asnswer until they define "conservative". My own litmus test.

[spankoka]

wabbiteer, on Nov 18 2009, 06:29 PM, said:

spankoka, on Nov 18 2009, 06:12 PM, said:

Yeah, that's interesting that you bring that up because I was selling kit homes in Japan at the time. The increase was known well in advance which led everyone from developers to car dealers to push their products before they suddenly got substantially more expensive. Thus imported homes built by imported tradesmen became a very handy way to get the job done prior to the increase, vs. the obviously limited number of tradesmen capable of building a home from dimensional lumber. Therefore the recovery that the numbers show before the increase are at least partly due to a distorted increase in housing starts and the push and move anything big ticket before it cost more. I don't deny that the increase had a fundamental impact on the economy, but the numbers don't tell the real story of the housing start situation/car sales in those days. In retrospect the status quo or a phased in increase would have been preferable, but hindsight is easy. In any case if the US started on the path towards a national sales tax today presumably the present situation would have long passed before it ever got done. Start now and you just might cut off the next bubble at the knees, but that would be long-term thinking.

It has nothing to do with "hindsight."

It's pretty freaking bloody obvious to anyone with half a brain that increasing a tax on consumption will reduce consumption, especially consumption of items where demand is highly elastic. Of course "kakekomi juyou" distorted retail sales in the final months up to the implementation, but it's clear that Japan's economy was in a recovery phase before the tax hike, and the tax hike killed it. Japan made the mistake of thinking that its recovery was so well-entrenched that it could afford to raise the sales tax. Wrong. Timing is everything, and god save us all from the nitwits who don't have it. We're not out of the woods yet.

The time to raise a sales tax is when an economy is overheating and you want to put the brakes on. "Next bubble?" Frankly I don't think we're going to see that for a long time. It will probably take us the next three years just to climb out of this hole, let alone get things percolating into a full-fledged bubble.

From what I hear some people are making some money these days, lots of the TARP money has been repaid has it not?. I lost money when the shohizei went up, I don't disagree with you when you say that could have been handled much better. However I think it's hard to argue that Japan should have no shohizei. It's taken the US 20 years or so to take baby steps towards comprehensive health care reform, so of course I realize I might not be around when the PRC insists the US had better have shohizei.

[wabbiteer]

spankoka, on Nov 18 2009, 06:49 PM, said:

wabbiteer, on Nov 18 2009, 06:29 PM, said:

spankoka, on Nov 18 2009, 06:12 PM, said:

Yeah, that's interesting that you bring that up because I was selling kit homes in Japan at the time. The increase was known well in advance which led everyone from developers to car dealers to push their products before they suddenly got substantially more expensive. Thus imported homes built by imported tradesmen became a very handy way to get the job done prior to the increase, vs. the obviously limited number of tradesmen capable of building a home from dimensional lumber. Therefore the recovery that the numbers show before the increase are at least partly due to a distorted increase in housing starts and the push and move anything big ticket before it cost more. I don't deny that the increase had a fundamental impact on the economy, but the numbers don't tell the real story of the housing start situation/car sales in those days. In retrospect the status quo or a phased in increase would have been preferable, but hindsight is easy. In any case if the US started on the path towards a national sales tax today presumably the present situation would have long passed before it ever got done. Start now and you just might cut off the next bubble at the knees, but that would be long-term thinking.

It has nothing to do with "hindsight."

It's pretty freaking bloody obvious to anyone with half a brain that increasing a tax on consumption will reduce consumption, especially consumption of items where demand is highly elastic. Of course "kakekomi juyou" distorted retail sales in the final months up to the implementation, but it's clear that Japan's economy was in a recovery phase before the tax hike, and the tax hike killed it. Japan made the mistake of thinking that its recovery was so well-entrenched that it could afford to raise the sales tax. Wrong. Timing is everything, and god save us all from the nitwits who don't have it. We're not out of the woods yet.

The time to raise a sales tax is when an economy is overheating and you want to put the brakes on. "Next bubble?" Frankly I don't think we're going to see that for a long time. It will probably take us the next three years just to climb out of this hole, let alone get things percolating into a full-fledged bubble.

From what I hear some people are making some money these days, lots of the TARP money has been repaid has it not?. I lost money when the shohizei went up, I don't disagree with you when you say that could have been handled much better. However I think it's hard to argue that Japan should have no shohizei. It's taken the US 20 years or so to take baby steps towards comprehensive health care reform, so of course I realize I might not be around when the PRC insists the US had better have shohizei.

How do you define "lots?" Of the 205 billion that went out the door through the Capital Purchase Program only 71 billion has come back in. GDP was up 3.5% in 3Q09, but one quarter does not make a recovery. Are you arguing that everything is okeydokey and now is the time to raise taxes? Seriously?

Like I said, timing is everything. I never "argued" that Japan should have eliminated the consumption tax. I said that increasing it from 3% to 5% when a recovery was just getting off the ground was completely stupid. The consequences were predictable, and they were predicted at the time.

The Chinese are never going to "insist" on a sales tax or VAT or whatever, because they want us to keep buying cheap plastic crap and disposable clothing. They last thing that China wants is anything that discourages consumer spending.

[spankoka]

Just let me know when is the time for this consumption tax, to me it's a case of tomorrow never comes-that's all I'm saying.

[Darwin]

Dog, on Nov 18 2009, 09:29 PM, said:

Mark K, on Nov 18 2009, 02:13 PM, said:

Have the "conservatives" become so tangled in their own rhetoric
they have lost the ability to manage a government?

Good question but under the circumstances I think this is a better one...Have the "liberals" become so tangled in their own rhetoric
they have lost the ability to manage a government because I gotta tell you it's looking like amateur hour in Washington

Get serious for second Dog. The Bush Bunch fucked up everything (and I mean EVERYTHING) they touched for 8 years. And you are ragging on Obama when he hasn't yet been in power for one year? He hasn't done anything remotely as egregious. C'mon I know you occupy the right side of the fence, but some perspective please.

[spankoka]

So while we are on the topic, how do you feel about GST/HST?

[Darwin]

spankoka, on Nov 18 2009, 11:48 PM, said:

So while we are on the topic, how do you feel about GST/HST?

The harmonized tax is a necessary evil IMO. Ontario needs the federal $$ infusion. They can also shift some employees onto the federal payroll and save costs there. I am not a huge consumer, so the income tax cut and the tax credit increase should balance out the addition of previously untaxed PST. I understand that BC is raising quite the ruckus.

[spankoka]

Yeah, it's a big in BC now, but I was in NB during the early HST days and it's a fact that it's kind of tough for the NDP to be all about lower taxes in any kind of systematic/coherent way. BC NDP has the same problem. Everyone would like "the rich" to pay their fair share but no one knows who these people are.

[NautiGirl]

spankoka, on Nov 19 2009, 01:27 AM, said:

Yeah, it's a big in BC now, but I was in NB during the early HST days and it's a fact that it's kind of tough for the NDP to be all about lower taxes in any kind of systematic/coherent way. BC NDP has the same problem. Everyone would like "the rich" to pay their fair share but no one knows who these people are.

Jesus fuck. Our brand new NDP government is talking about RAISING our 13% HST.

I hate the HST.

[KAG]

PoliticallyIncorrect, on Nov 18 2009, 06:28 PM, said:

Can compassionate conservatives govern? Absolutely, positively. Look at GWB many many successes. Two wars in Iran and Afghanistan were we were victorious liberators that have led to two prosperous and democratically controlled governments, a clean healthy environment, and a robust economy that is the envy of the FREE WORLD! THANK GOD FOR GWB, CONSERVATIVES, AND THE RIGHT-WING NEOCON BRANCH OF THE REPUBLICAN PARTY!

Yes Saylourbuttboy...and thank God for lying, scumbag, pieces of human shit like you to remind us that there are truly fucked up assholes living in our country. Every one who has not falsely claimed a brave marine casulty of war as his son to make political points need to realize that garbage like you exist.

It makes us all so proud that we do not sink to such a low level and that we are much better people than scum like you will ever be.

Why don't you keep the promise you made when I outed you for your lie and just get the fuck out of here. You really stink up the place...and that is saying something.

FO

KG

[Tom Ray]

Mark K, on Nov 18 2009, 05:13 PM, said:

One attendee said something very thought-provoking. "Maybe it was a good thing we weren't in power then – because our principles don't allow us to respond to a crisis like this."

My answer: If your principles don't allow you to save your country when it needs to be be saved, then there's something wrong with those principles.

I think David has a point here.

The initial thought ignores a couple of stimulus packages under W, and I think his answer presumes that a massive boondoggle was a necessary thing, and that the debt load won't cause more problems than it solves over time. Both presumptions are wrong, in my view.

[Darwin]

NautiGirl, on Nov 19 2009, 08:02 AM, said:

spankoka, on Nov 19 2009, 01:27 AM, said:

Yeah, it's a big in BC now, but I was in NB during the early HST days and it's a fact that it's kind of tough for the NDP to be all about lower taxes in any kind of systematic/coherent way. BC NDP has the same problem. Everyone would like "the rich" to pay their fair share but no one knows who these people are.

Jesus fuck. Our brand new NDP government is talking about RAISING our 13% HST.

I hate the HST.

What is really amusing is watching the Conservatives denying the fact that the harmonization initiative was their idea and they gave Ontario $4.3B to see it through. They don't want to be anywhere near increased taxes at election time.