Why the tea parties don't matter

[bovil]

The "Tea Party" movement is a symbolic failure.

The original tea partiers engaged in criminal acts and risked arrest and imprisonment to destroy product from a company being propped up by unfair reduced taxes by the government, at the expense of what, at the time, amounted to "small business:" the domestic importers of tea who competed with the East India Company.

The current teabaggers are buying tea and throwing it around. That's it. When the DC teabag crew showed up with a truckload of tea bags (yes, I'm serious) to dump in Lafayette Square (because dumping in the Potomac is illegal, can't do that, after all) they were informed that they didn't have the correct permits to dump their load.

So they took it away. They're a bunch of pussies. "Civil disobedience" and "protest" are just words to them. They'll always cave in to authority rather than take a risk for their alleged principles. Samuel Adams would have dumped the tea right then and there.

If they wanted a real symbolic connection with the original Boston Tea Party they would be stealing Chrysler and GM cars and trucks from distribution centers and dumping them in the drink.

But they're not.

Pussies.

Comments

[chuckles48.livejournal.com]

Yeah, they're upset NOW, but where were these huge protests when Bush was racking up the huge debt in the first place

You _do_ realize that Obama has added as much to the national debt in _90 days_ as Bush did in _8 years_?

And frankly, there were a lot of people there with a much more concrete grasp of real-world economics than you might want to realize or admit to.

[bovil.livejournal.com]

The conservative movement enshrined consistency in modern politics, so you're a dirty stinkin' flip-flopper.

The "Oh, but those deficits aren't as big" argument doesn't hold water. Common sense shows that you can't turn around a series of record deficits in just a few months. History shows it's much easier and faster to turn a series of small but comfortable surpluses into record deficits.

It's right up there with the "Oh, but this is evil socialist spending, not good defensy spending" argument.

If you're a deficit hawk, you're a deficit hawk. If all deficits are bad, all deficits are bad.

[madoc62.livejournal.com]

Andy,

Again with the "conservative" stuff! George W Bush Jr. was _not_ a "conservative!"

Not in the traditional Republican sense you cite. A self-described "compassionate conservative" he practiced none of that "enshrined" fiscal restraint which the GOP used to be known for. One result of that was that the GOP lost its majority in Congress.

And come on Andy, despite the Dubya's never seeing a budget bill he didn't like and somehow couldn't stop himself from signing, there's a world of difference between his fiscal lack of discipline and Obama's spending it like there's no tomorrow.

Madoc

[bovil.livejournal.com]

You forgot appropriating funds without including them in the budget to make the budgets and deficits look smaller. Funny, when we look at other governments doing that, we call it "corruption."

Obama is being honest about what's in his budget. Part of the reason the numbers are so shocking.

[madoc62.livejournal.com]

Obama? Honest? Oh puh-leaze!

Is this "honest" like his promises to make his administration "transparent" and then shutting it down tighter than Bush even dreamed of?

Is this "honest" like his promises to keep all those e-vile lobbyists out of his administration and then going on to hire as many of them as he could get his hands on?

Is this "honest" like his promise to shut down GTMO? Oops, I see that's still open.

Is this "honest" like his promise to forsake "Extraordinary Renditions?" Oops, I see he's just signed off on keeping those available.

Is this "honest" like his promise to not allow the use of torture in his administration? Oops, he's signed off on that too.

And let's not even get into his warrantless wiretap stuff and his embracing of other Bush policies that he "honestly" promised never to do.

So, with such "honesty" abounding in the Oval Office you should be able to understand why so many other folk don't exactly trust the guy as he racks up the deficit at a faster rate than any other President in US history.

Madoc

[bovil.livejournal.com]

Nice misdirection there. None of your complaints (which, for the most part, I happen to agree with) contradict the fact that this is the first budget in 6 years that includes all the spending Bush had been hiding off-budget.

Off Budget?

[madoc62.livejournal.com]

Andy,

Off budget? Like what, exactly?

Madoc

Re: Off Budget?

[bovil.livejournal.com]

They're called "emergency spending measures" and they're the mechanism that the Bush administration used to fund the wars in Afghanistan and Iraq. They appropriate money outside the budget process.

Now we've seen two emergency spending measures since Obama took office; the stimulus bill and the recent emergency spending measure to support the wars in Iraq and Afghanistan (which has strong bipartisan support). We're still operating under Bush's last budget, though. You expect this sort of stuff at the beginning of an administration, particularly one that's trying to change direction quickly and decisively.

You expect this kind of thing at the beginning of a war, too. They tend to not be budgeted for at the outset. It doesn't make sense, though, to not include funding for an ongoing conflict in the budget after this point. Sure, there will likely be emergency spending measures needed to close gaps, but funding all war efforts? The phrase is "spending tricks."

The new Defense budget that Gates & Obama submitted includes funding for war efforts. First time since they started.

[sarcasm-hime.livejournal.com]

Okay, so what's *your* solution for trying to bolster the US economy if Obama is doing such a terrible job?

My point is that Bush ran up that huge deficit when the economy was stable. Do you think Obama WANTS to put the US into even more debt? People seem to think he's sitting around going "ooh what ways of ruining the country can I think of today?". He inherited a shitty situation and in all likelihood ANYBODY would have had to do a lot of the same things.

[madoc62.livejournal.com]

SH,

One thing Obama could do is stop trying to spend our way out of the recession.

You'd think that for a guy as bright as Barrack Obama likes to portray himself as being he'd know this. Spending yourself out of an economic downturn is but failure writ large.

The US tried it back in the Great Depression and FDR's policies had all about crapped out by the late 30's. Things were looking pretty bleak for the US economy about then and it was only the advent of WWII that stopped us from entering another multi-year recession / depression.

The Japanese tried spending themselves out of their economic downturn in the early 90's. Even to this day they're still trying to dig themselves out of the ensuing mess and economic disaster.

According to the non-partisan OMB last Fall, the US economy was largely on track to recover in late '09 and early 10. This was before Obama, Pelosi and Reid decided to break the bank and lay their hands on it all. Now? Numbers released today show the recession as _deepening_ and getting _worse_ over the next _several_ years.

That, folks, is change we can believe in!

Yes, we can!

Thank you Barry Obama!

And that's the central motivation for the Tea Party protests.

Madoc

[bovil.livejournal.com]

What was WWII if not massive government spending?

[madoc62.livejournal.com]

Andy,

WWII for the US was spending to win the war. The economic effects of that were nice but entirely secondary to the necessity of winning that war.

The things which made a difference for the US and made for lasting economic growth from that period were the hundreds of billions of dollars' worth of _foreign_ governments spending in the US. This, back when a billion dollars was worth something.

That was money _added_ to our economy and not simply dropped into the loop by the Treasury Department.

Further, the US economy could only _but_ grow after the war if for no other reason than the economies of all our former competitors were utterly shattered by that war. And I'm talking about England, primarily, here and not the economies of the countries we physically shattered.

If government spending to win a war as a bona fide means of making a nation's economy better than it wouldn't have taken Britain and the rest of the world a quarter century to catch back, economy-wise, up to the US after WWII. And that massive government spending on defense wouldn't have seen the collapse of the Soviet Union either.

With the current fiscal "policy" coming from the White House and Congress we're not even getting anything as priceless as national security. Instead, it's a multi-TRILLION dollar exercise in partisan spending, pork spending, and government growth.

And that's just in the past three months. Looking ahead, Obama is promising even _larger_ deficits.

That's something worth protesting alright.

Madoc

[bovil.livejournal.com]

"Pork" is just the opposite of "nimby."

[madoc62.livejournal.com]

Andy,

Noope, pork spending is pork spending. Period.

If you were against the Bush administration's pork spending, if you were against the Bush administration's fiscal restraint failures, then you should be outraged at the Obama administrations pork spending extravaganza.

Hell Andy, if you were consistent about such things, you'd have been down there amidst the Tea Party folk shouting your support for their cause.

Instead, you've gone out of your way to attack and dismiss the civic protests.

What ever happened to that "dissent is patriotic" bit?

Or is that only true when the dissent is coming from the left?

Madoc

[sarcasm-hime.livejournal.com]

It's the hypocrisy of the right that's getting me here. These people didn't say boo when it was Republicans doing the irresponsible spending and removal of civil liberties, but now they're screaming "government oppression" just because it's the other party in power. Anybody that criticized Bush's policies was tarred as "unpatriotic", "un-American" or even "traitors", but now that the shoe is on the other foot they can't handle it?

[bovil.livejournal.com]

I don't have to be consistent. I'm not a consistency fetishist. Never have been. I like thinking things over and changing my mind if compelling new evidence comes to light.

You miss the point, though. I'm talking about definitions. Pork is very malleable. "Pork" is only pork when it's being spent somewhere else.

Take a look at Senator Inhofe, screaming about how the entire defense budget is being gutted and how America is being put at risk when, in fact, the overall defense budget is being increased. Look a little further, and you'll see one of the cuts in the new defense budget is an expensive "weapons of the future" program that's being developed in his state. Some people might call that spending pork. I might look at the budget and project realignment that Secy. Gates is proposing and think as a whole it's actually increasing Defense's readiness.

Say we've got a sewer project that we haven't got the money to fix locally, and our rep is looking for a few million out of the federal budget to make up the difference. Is that pork? The folks who have screwed up sewers and who are paying local, state and federal taxes probably don't think so. The folks in Oklahoma who want that big weapons program might have a different opinion.

I feel comfortable being conflicted about the bail-outs. Really, I do. Part of me would love to see GM and Chrysler and AIG go under, and see their management suffer for their screw-ups. Part of me looks back at the Chrysler and S&L bail-outs which were expensive but produced a net profit for the government in the end, and thinks it's not all that bad. Part of me looks at what would happen if Chrysler and GM do fail, and thinks not just of all the skilled union jobs in the Midwest that will be lost, but also all the skilled at-will jobs that would be lost around the country when the dealership networks fall down with it (in interest of full disclosure, none of my mechanic or car-sales friends work for Chrysler or GM dealerships).

I also feel comfortable criticizing the tea party movement. There may be some real grassroots upwelling there, but it's been heavily astroturfed by Dick Armey's lobbying/consulting business and Fox News and exploited by GOP speakers (who, I hear, were booed at some events by the tea partiers for their hijack attempts) to get a boost for the party. I hear a lot about how this was the conservative movement's (or the Republican's, depending on reportage) great embracing of the internet to catch up to the Obama campaign's online prowess, but I don't see that in the results. They aimed high, going for a strong symbol of American history, but they didn't figure out how to translate it effectively to their issue. Hell, they embraced "teabagging" and then wondered why people laughed.

[chuckles48.livejournal.com]

My solution?
(1) TARP is and was a bad idea. Rather than handing the banks money, either (a) the money used should have been used to take an equity stake in the banks, or (b) the money used should have been used to buy and rehabilitate the "toxic assets" (which, note, I deal with on a daily basis).
(2) That load of crap called the Stimulus bill should never have been passed. If you're going to take on that kind of deficit, use it for capital improvements that enhance the national economy. Among other uses:
- educational grants for either workforce skills or needed degree programs. NOT for "soft" arts, but for, say, engineering (to address the HUGE shortfall in engineering talent coming down the pike) and advanced skills training.
- BUILD stuff. Rebuild roads that serve critical transport needs. Build power generation capacity, and transmission capacity. Subsidize/build/buy national, interstate, and urban broadband... and subsidize rural broadband efforts as well. Build theatres. Build reasonably-priced starter homes. Require everything built to meet LEED Basic standards. Fix water supply and delivery systems. Build inshore/coastal power generation capacity (wind and wave transmit a HELL of a lot of energy). Fund development of next-generation and generation-after-next energy technologies - "clean" coal designs, clean nuclear power, and the more esoteric stuff, like dark energy taps and nanotech-based solutions

Notice, during the Depression FDR put people to work, via the WPA, et al. Now, we're funding extended unemployment draws - longer dole. Spending the same money, but at least the first time, we got something useful out of it.

Lets be realistic: this crash was going to come, regardless of who was in office, and regardless of what Bush did for the last 8 years. Ultimately, it's a demographic hit, as the Boomers check out.

Do I think Obama wants to put the US into even more debt? Honestly, I don't know. As a means of pushing an agenda? Yeah. That being said, purely IMHO, while he may be doing something approaching the right thing at a meta level, his strategic and tactical approaches are, frankly, going to make things worse, not better.

And you seem to be forgetting that Bush 'inherited' a shitty situation too at the end of 2001. Or are you forgetting the 1-2 punch of (a) the dot-bomb, and (b) the post WTC attack hammering of the economy.

[bovil.livejournal.com]

Wait. You don't think FDR's New Deal was evil?

1. I love the equity option for TARP. I just about pissed myself when I heard that somehow that provision was snuck back into the Senate bill that was passed, turned back to the house and signed by the President (after the bank lobby fought tooth and nail to have it removed twice). Nobody noticed it was there until two days later.

On the down-side, it's been used unequally to take equity stakes; some equity stakes (in stronger banks) were bought for near book value, some equity stakes (in weak banks) were bought at well above value. The numbers I've heard vary from $100 in equity for $100 of TARP for strong banks to $60 or less in equity for $100 TARP. Remember also, though, that the mere idea of government buying equity stakes is equal to socialism in many tax protesters' eyes.

The actual "toxic assets" handling? That I've got concerns about. Remember how long Resolution Trust's handling of toxic assets from the S&L meltdown depressed real-estate values. I'd rather not see that happen again; the value of my house has dropped enough already, thankyouverymuch.

2. Those are all great programs (well, except nanotech, K works in nanotech and it's not what a lot of people wish it was). They're also "big government" and "government intrusion" and "hippie environmentalist agendas."

It all still comes down to pork, and what pork is. To a lot of people, pork is spending money somewhere else, on any agenda they don't agree with. Let's say the administration had gone forward with the ideas you like. These protests still would have been inevitable; you just wouldn't have been there.

As to what Bush inherited when he took office?

The dive in the stock market right after Bush's election was just a pothole in the dot-com deflation, a big one, but just the middle of a greater process. No argument there (although it was a sadly amusing punctuation). He inherited the beginnings of a bear market. Ugly? yes. Necessarily resulting in the conversion of a series of budget surpluses to madcap deficit spending? Hardly.

The economic fallout from the WTC attacks isn't Bush's fault, but it did happen entirely on his watch, so it's not something he "inherited."

[chuckles48.livejournal.com]

I think some of the stuff FDR tried to do was evil. Put "packing the Supreme Court" right at the top of the list. It's not a small list, either. But neither was everything he did bad - though some, in retrospect, made things worse, not better. Hindsight is 20/20, and we can learn both from his successes and his failures. Problem is, we're ignoring a bunch of lessons, both from FDR and from other, similar scale messes (JAPAN).

I'm not so sure I prefer the equity option for TARP. Frankly, I've been looking at what the banks refer to as "toxic assets" and drooling. At book rate, wouldn't touch 'em. Discount 'em so they'll market, and there's frankly a LOT of money to be made. I've been offered multi-million $ portfolios of bad debt that I would have _loved_ to buy, at the price offered (70% discount from face). I could have kept, oh, 80-90% of those people in their homes, and _still_ made money hand over fist. Didn't have the $16m required to play. But if I can do it, you're damn skippy the feds could to. They could _make a profit_ on the deal even. Instead, we got the worst of both worlds - no unfrozen credit, but huge raids on the public fisc.

The value of your house, to be quite honest, has depressed enough to get it back into reality. Overall, long-term growth average for Bay Area real estate is right about 7%. And in that I'm talking about a 100 year average. So if you got 3-4 years of 20-40% growth... why don't you think you'll have to cough it up?
[more]

[bovil.livejournal.com]

Yeah, it's really toxic paper; the real estate is just fine, it's just not worth what the bank has in it.

I actually understand that the market value of my house has dropped from insane to merely absurd. I moved to CA from the midwest, where my place would be valued at maybe $60k, even in a big city. Prop 13 and population pressure has had very odd results on the economy of the housing market.

Still, flooding the market with discounted "toxic assets" would depress it even further.

[chuckles48.livejournal.com]

Not really. You might note that real estate sales right now are booming... because prices have come down to something reasonable.

And yes, Bay Area real estate takes a little getting used to. One thing I have to point out to many people is that where, in most cities, you would have an urban core, we have water. Most cities have, essentially, a bell curve for valuations. Ours is a wierd annulus, due to our oddly-constrained geography.

[chuckles48.livejournal.com]

Part 2.
I know about nanotech. My brother's doing a project up at Stanford nanofab. He's also holder of the first (ever) Casimir-effect patent granted in the US. I help him brainstorm some of his design issues, and I'm supposed to edit the paper he's working on, if we can pry the underlying data loose from the guy he's co-writing with.

As to pork... no, it doesn't all come down to pork. It comes down to economics.

Here's the thing. All the money borrowed eventually, theoretically, has to be paid back - and interest has to be paid while it's out. So, if you're going to borrow the money, you need to use it in places that will generate positive returns. Preferably, you need to use it on things that generate positive returns that are one-time charges (aka capital expenditures). You need to NOT use it on things that don't generate positive returns. And you REALLY need to not use it on programs that don't generate positive returns, but that also have continuing, multi-year (or endless) draws. Because the deficit spending is a one-time infusion of funds. As such, it needs to be spent in a one-time manner. Educational grants? Building stuff? That's all one-time. Infrastructure is really good, because it's (a) a one-time expense, and (b) something that improves productivity, increasing overall systemic returns.

Think of it this way: if someone hands you a one-time payment of $5000, are you going to use it to pay for a thing, or are you going to use it to pay for a $200/month service? In either case, what do you do in year 3?

As to 2001-02...We had, at the same time:
- a recession
- a war
- and an unnatural disaster.
Take a look at a chart of the Dow from 2000-2002. We had a big drop in late 2000 another in early 2001, the post-9/11 slam, then another in mid-2002, leading into a triple bottom, with the third round of that in early 2003.
http://thepatternsite.com/dj2000.html

The dot-bust, and the end of _that_ bull market? Yeah, that's entirely inherited... and it would have necessarily meant the end of budget surpluses, without significant cutbacks across the board (and yes, that includes social programs).

[bovil.livejournal.com]

Here's the thing. All the money borrowed eventually, theoretically, has to be paid back - and interest has to be paid while it's out. So, if you're going to borrow the money, you need to use it in places that will generate positive returns. Preferably, you need to use it on things that generate positive returns that are one-time charges (aka capital expenditures). You need to NOT use it on things that don't generate positive returns. And you REALLY need to not use it on programs that don't generate positive returns, but that also have continuing, multi-year (or endless) draws. Because the deficit spending is a one-time infusion of funds. As such, it needs to be spent in a one-time manner. Educational grants? Building stuff? That's all one-time. Infrastructure is really good, because it's (a) a one-time expense, and (b) something that improves productivity, increasing overall systemic returns.

I'm not saying that's not sound economics. It's grade-a textbook theory with a boatload of evidence to bolster it.

But that doesn't matter.

Do you honestly believe if you took the microphone at a tea party protest and proposed a strong and detailed plan that involved a great deal of deficit spending that the crowd would believe in it? Do you honestly believe that it would be received as anything other than a big-government tax-and-spend initiative?

I don't see that. I see in response a barrage of boos and rotten tomatoes.

[chuckles48.livejournal.com]

You should have been there, then. There were a LOT of small business owners. They get this kind of thing. There probably would have been a lot of disagreement about details, but... they grok the concept of capital investment. The disagreement would be over targets and amounts.

Regardless, that isn't what we're facing.

[bovil.livejournal.com]

That's doesn't answer my question, though. One-to-one discussion is different than speaking to a crowd, and disagreement over details can scuttle a greater agreement.

How would the crowd have reacted if you presented the ideas you just described here on the microphone?