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MSM Myopia
The Cruelty of Blue
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  • ——————————

    These are the type of things that happen when humans attempt live outside of their true nature….

    • D4x

      Humans attempt to live outside their true nature? Walking the plank of sadism? Sounds like the basket of deplorables has expanded to include “Sadist!”, because Misogynist is too difficult to pronounce… (unintentional disconnected comment here – seeing ‘sadism’ with ‘racism’ was a trigger.)

      Mr. Mead’s closing line: “It is a lot of fun until the music stops.” made me hope that the rap music might finally stop. Or perhaps that is a dog whistle for NYC to annex Puerto Rico as the sixth borough.

      Too much fear for a Monday in May.

      • ——————————

        Anything ‘blue’ is against human nature. Humans are not all the same, so the playing field can never be leveled. Humans do not want to give what they have, or what they are working for, to others (“compassionate government”)…unless they do it themselves when they are in the mood, through charity.

        If NYC doesn’t want it, Cali would probably be happy to take PR!

        BTW, is it Monday?…and May?….

        • D4x

          100 years of Wilsonian ‘blue’ progressivism has failed. We are witnessing the death throes through elections, counter-protests, spin, cyber-war, …the cosmopolitans fall back to screaming “racistsadistislamophobemisogynist because, methane will kill us all in 100 years, leaving planet Earth to the beetles”

          Got it. Too bad two Mondays ago: (UN via wiki) The world population was estimated to have reached 7,500,000,000 at 16:21(UTC) on April 24, 2017. The United Nations estimates it will further increase to 11.2 billion in the year 2100.

          Time to start voting for the beetles. Or the ravens who eat the beetles?

          Mondays are tough. Let Puerto Rico eat flan.

  • Unelected Leader

    Forget about Puerto Rico. The same MSM and their trusty pundits held Venezuela up as a paragon of socialism. Now that it is in terminal D Klein they don’t want to remember that. Don’t let them forget.

  • QET

    Waiting for someone to explain how this is all the Republicans’ fault. Anyone? Bueller? We could always cede it back to Spain, beyond the reach of racist anti-science Republican fatcats. I’m surprised Puerto Rico hasn’t had a referendum seeking to rejoin Spain and rid itself once for all of tax-cutting supply-siding brown-skinned people oppressing Republicans.

    Anyone? Bueller?

    • John Stephens

      They’ve consistently turned down both independence and Statehood every time the offer’s been made. Kick ’em out of the house.

  • Pait

    I wrote this elsewhere and will repeat here: The problems of Puerto Rico are of a completely different nature than those of mainland states. Puerto Rico has a much less productive economy, similar costs and the same currency as the US, and significant barriers to personal mobility. In a way one could compare its situation to that of Greece in the eurozone.

    Puerto Rico is not like a separate country that could impose austerity via a currency devaluation, nor like a US state that can solve its problems easily with people moving in and out of the state, and via bailouts such as Florida’s after the 2008 crash or Texas after the Savings and Loans collapse. It doesn’t seem the post considered the fundamental economics of the case.

    • QET

      It seems incongruous that Puerto Rico would have the necessary capabilities to have dug itself into the hole yet not to have dug itself out.

      • Pait

        Everyone does 😉

        The list of US states that dig themselves into holes from which they had to be rescued by the Union is long. The IMF was founded to help countries that did precisely that.

        Economics is not a tale of La Fontaine.

        • QET

          Capacity and will are two different things. Clearly PR had the will to promise what it can’t deliver but not the will to retract the promises and/or rob Peter to pay Paul. PR went bankrupt gradually, then suddenly. During the gradually it had all the capabilities it needed to prevent the suddenly. The IMF is intended to ensure repayment to investors, not pensioners. The idea that investors need to be saved from the consequences of their own risk-taking or else the entire world will implode and revert to a Hobbesian state of nature was debunked in the wake of TARP, or so I thought.

          • Pait

            I’ll repeat what I wrote above: many US states have gone bankrupt and required Union assistance. It would be perhaps nice if one could never have to save governamental entities from their own errors and totally avoid moral hazard, but there are other dangers of letting governments collapse. Economics is not a tale of La Fontaine.

          • QET

            OK, well, rather than repeat what I said, I will simply rebut what you said. Economics–so-called “political economy,” more aptly–most certainly is of the same order as fables. Even economists know it. Though I would offer Cervantes as the model rather than La Fontaine.

          • Pait

            No it is not. If you punish a country, or a state, in order to make a moral point, then the state will fail, and the cost for everyone involved is much higher.

            This is why the US bailed out Texas in the S&L episode, with satisfactory results. And conversely why Europe doesn’t seem to find a way to recover from its zeal to make the Mediterranean countries pay for the misdeeds of the Greek government.

          • Tom Billings

            “Do we want Puerto Rico to become a failed state, unable to pay for health, police, and education?”

            We are already there. The only question now is what the result will be. You say that the least costly result is going to come from a bailout. Others here believe that a bailout will result in even greater costs to themselves down the line, because it will be yet another pall clicking through the progressive ratchet of greater government control of the resources generated by Civil Society.

            IMHO, the political question is, “how will political change, from the disestablishment of public employee unions, to the establishment of fiscally responsible Commonwealth government, be brought to Puerto Rico?” Massive pain will be involved in any Real World action. The idea that trying to distribute the pain across the 50 States, instead of concentrating it inside Puerto Rico, where it will get the attention of voters, and cause them to vote for change.

            The first election may not generate change in a direction that adapts Puerto Rico to the networks of Industrial Society around the world. That will mean yet more pain will have to come. It may well be that bodies will be stacked in the streets like cordwood, before people let go of their desire for non-market control of resources that they believe will hand those resources to them. Venezuela, far richer in resources than Puerto Rico, is headed in that direction even as we argue. Massive pain!

          • Pait

            You want to impose collective punishment to the whole Commonwealth because of government errors. Massive concentrated pain, you call for. I was going to say that this is bad policy which would have bad results for the whole nation.

            Then I read further that you are actually calling for genocide – “bodies stacked in the streets like cordwood” – so I have to conclude that a good outcome for the whole country is NOT what you envision. A rational dialog with your golas is not possible.

          • Tom Billings

            No, Pait, …I am not *calling* for *any* of that.

            I wish it were avoidable!

            Given human nature, and the corruption of the education system, avoidance for more than a single electoral cycle seems highly improbable, unfortunately.

            I am predicting it!

          • Pait

            For the record, I repeat that the suggestion that genocide is an acceptable outcome of a fiscal crisis ended the possibility of a conversation.

          • Jim__L

            He never said it was acceptable. He said it was possible — as we’ve seen before in places that have had upheavals.

            He is trying to warn you, and you are shooting the messenger.

          • Pait

            He just mentioned with evident glee genocide as a more desirable outcome of a fiscal crisis then the alternative of a bailout of the order of magnitude of a few dozens of billions of dollars. And you endorsed the proposition.

            Now you both can come bait and switch style say you didn’t propose it. Do as you wish.

            I’ll let better people than me continue the discussion if they want. There is nothing to learn from either of you.

          • Jim__L

            Pait, you’re ‘splaining, to avoid facing the common consequences of your preferred method of “solving” the problem. No one was gleeful. That’s you demonizing your opponent in an attempt to disregard his point.

            The fact is, that a bailout would not solve Puerto Rico’s problems, which are problems of governance and unrealistic expectations. If these are not addressed, no matter how many bailouts are given, (and especially if the bailouts are not possible because here is no money to bail them), the problem will remain, until civil breakdown is inevitable.

            Austerity while civil order is still maintainable is the best option here, and will put them on a path to whatever best-case scenario is achievable.

          • Tom Billings

            I did not and do not say genocide is acceptable.

            I *do* say that dead bodies piled in the streets is becoming less and less avoidable with every attempt to placate the government employee union monstrosity that Puerto Rico’s government has become! I consider it a horror just around the next bend or two in the road. The only solution is to get *off* the progressive road!

          • texasjimbo

            “many US states have gone bankrupt and required Union assistance” Humm. I could swear that state governments can’t declare bankruptcy. I assume when you say “union” you mean the federal government. The S&L crisis was not confined to one state, and neither the state of Texas nor the state government of Texas received any bail out.

          • Pait

            Right, states cannot declare bankruptcy. If the Union didn’t step in to solve crisis such as the S&L or the aftermath of the real estate bubble, no one knows how bad things have gone – some sort of a repeat of the Depression perhaps. The 2008 bubble was more spread out, but the S&L was fairly concentrated, with Texas having the largest failures. Without federal assistance, people and businesses would have gone under, and states would have found themselves in a dire situation.

            The government is somewhat different from the Union itself, but the terms are used somewhat interchangeable and either would be understood by anyone with at least a cursory familiarity with the Constitution.

          • Snowguy

            “people and businesses would have gone under”

            They did. AFAIK, the RTC was a liquidator, not a savior. The trustee in bankruptcy is not saving people and businesses from going under, she or he is simply administering the wind-up.

          • Pait

            A liquidator for individual failed businesses, yes; but a guarantor for society and business as a whole – one that could take on the massive debts and risks involved, a role that only the government will and can play, because it requires virtually unlimited access to capital and confidence.

    • Jim__L

      Fascinating. Pait seems to have made an extremely useful connection (“austerity via a currency devaluation”), but doesn’t seem to have connected that with anything else.

      Currency devaluation IS an austerity measure — it reduces the buying power of the people holding the currency. In some ways it’s a “stealth” austerity measure, one that doesn’t have the bad optics of cutting pensions for retirees, but as he stops just short of pointing out, it is equivalent — retirees paid in a devalued currency have effectively had their pensions cut.

      As far as moving population goes… aren’t Puerto Ricans US citizens, and can move to other states as they please? Greeks can, and frequently are, moving to other EU countries; it isn’t helping Greece much, and I seen it argued that it’s hurting them.

      As far as bailouts go… bailing out Puerto Rico would be huge, and the implications for other state’s current unsustainable debts (not to mention the moral hazard it would create) make it an economic non-starter.

      So, because “stealth” austerity measures (as well as the other solutions Pait proposes) aren’t feasible, direct austerity measures are necessary, bad optics or not.

      • Pait

        1 – Currency devaluation increases the competitiveness of the country’s exports and lowers that of its imports, thus is is conducive to generating a surplus to pay for foreign obligations. Puerto Rico and the euro countries do not have this route available. It is very difficult to generate the same effect by lowering salaries and incomes. Yes, one could in principle “decide” that all obligations get a cut, but in practice there will be too many conflicts that have to be sorted out. Currency devaluation affects all in a market-based manner, and therefore doesn’t create the distributive conflicts which the dirigiste policies you indicate you prefer would.

        2 – Puerto Ricans and Greeks can in theory move, but there are many barrier besides citizenship. In comparison, moves between the 48 states are much easier. I have seen the argument that even there mobility has decreased significantly, contributing to the persistent blues in parts of the country – former coal producing states, older manufacturing regions, and so on. In any case the obstacles against movement out of Puerto Rico are an element of the problem.

        3 – As you state, currency devaluation for Puerto Rico is not feasible; movement of people is not enough; thus a combination of austerity, debt renegotiation, and Union help will have to be used to solve the problem. I agree that moral hazard is a problem; for example, the Texas bailout in the S&L episode opened the way to the much larger nationwide housing bubble in the 2000s. But both of the other paths have problems as well; a compromise will have to be found, for the good of the nation.

        4 – What doesn’t make sense is to argue for change in other states with basis on Puerto Rico’s problems which are, as I demonstrate, of a completely different nature.

        • Jim__L

          You made a distinction between Puerto Rico and a nation with its own currency, although you could argue that paying off foreign obligations with an inflated currency is functionally equivalent to paying off pensions with an inflated currency — i.e., a “stealth” austerity measure / haircut.

          I’m not sure you really said much that distinguished Puerto Rico from the lower 48 states, and almost nothing at all that distinguished it from, say, Hawaii.

          • Pait

            1 – No, one cannot make the argument that “paying off foreign obligations with an inflated currency is functionally equivalent to paying off pensions with an inflated currency”. Domestic obligations are (almost always) in domestic currency; foreign obligations may be in foreign or domestic currency, depending on the original loan contracts.

            The point is that currency devaluation gives a way to spread the losses throughout society in a market fashion. Forced austerity requires the government to centrally apportion the sacrifices; it tends to be less fair and politically painful, as is usually the case with centrally imposed measures.

            2 – The reasons Puerto Rico is farther from forming an “ideal currency zone” than the 50 states are that movement or people is more constrained (by language, habits, and prejudices); and also that it doesn’t have the same level of tax revenue sharing that the other states enjoy. I’ll go back to the bailout of Texas in the S&L event to show how the 50 states enjoy a pretty solid implicit guarantee from the Union; the fact that Puerto Rico hasn’t been bailou out yet shows that it doesn’t.

            Thus it could be argued that Puerto Rico might benefit from having its own currency, something that politically is not going to happen – so different means of adjustment will have to be found.

            What continues not to make sense is to derive arguments about the 50 states from a case which is of a rather different nature.

          • Sam in Texas

            Perhaps I misremember, but I don’t recall either Texas or any other states receiving bailouts as a result of the S&L crisis. It is true there was a whole raft of failed S&Ls in Texas, and in other states, but those S&Ls went through bankruptcy, through acquisition, dismemberment, and sale by the Resolution Trust Corporation, and criminal prosecution. While you might argue that that “bailed out” the state economy, and that “bailing out” the state economy was an implied bailout of the state, none of that is particularly accurate and even less of that applies to Puerto Rico’s problems. In Puerto Rico’s case, it is the government itself that has screwed the pooch.

          • Pait

            Yes, the economies of several states, notably Texas, were bailed out in the S&L episode. Not the states directly – but in a way baling out private companies that acted irresponsibly creates even bigger moral hazard and market distortions. The alternative is worse.

            My point is that the situation of Puerto Rico is related to those, and unrelated to what’s going in in blue Massachusetts or other blue states.

          • Sam in Texas

            The situation of Puerto Rico is not like Texas in the S&L crisis. The Texas state government did not need a bailout. The Puerto Rican “national” government does need a bailout because of its irresponsible and stupid spending and financing practices.

            If you want to argue that some state governments, and city governments, are like Puerto Rico in that the governmental spending and finances are stupid and irresponsible, then there are any number of examples. Illinois, Chicago, Houston, Dallas, California….the US government itself, and more. But you need to be comparing government to government, not government (Puerto Rico) to industry (S&L).

          • Pait

            No 2 situations are identical. My point was exactly that “The problems of Puerto Rico are of a completely different nature than those of mainland states.” I argued that Puerto Rico is going to need a mixture of austerity, partial defaults, and Union help – or else. In that sense one should learn from the S&L and other crises, although of course there are many differences, including the fact that S&L was largely a failure of private enterprises, as you mention.

        • catorenasci

          Anent your point #2: Yes, it’s harder for many Puerto Ricans to move to the mainland, but how much of that is the result of government policy and local choice? It’s not as English instruction is not available. It’s both a policy and a choice to keep using Spanish as the primary language. Puerto Ricans have to know that in order to succeed in most of the United States (Miami and parts of California and the Southwest aside), they need to be fluent in English. Most aren’t.

          • Pait

            The point is that, because there is less movement in and out of Puerto Rico, and currency devaluation is not a possibility, other paths of adjustment have to be found – a combination of cuts in contractual obligations and Union support through shared tax revenue.

            Otherwise we end up with a failed associate state, not a desirable outcome.

          • catorenasci

            I really don’t see any reason the rest of the country should subsidize Puerto Rico’s fiscal fecklessness, any more than we should subsidize Illinois’ or Detroit’s fiscal fecklessness. I will acknowledge that a part of the problem was the expiration of the special tax breaks US companies once had for locating operations on the island, but the successive Puerto Rico governments’ refusal to live within their means is a far, far greater factor. At some point, those who refuse to repudiate the failed blue model need to be cut off.

          • Pait

            Because otherwise we end up with a failed state whose inhabitants are US citizens.

            Detroit is a good example – the auto industry. We bailed it out. It’s back to life. The government turned a small profit, from what I understand. If the US had let the auto industry fail, the costs would have been incalculable. Same for the S&Ls, or for the banking industry in 2008.

            Economics is a not a fable of La Fontaine, I repeat. Sometimes you have to choose the least bad alternative, and people who made errors benefit.

          • catorenasci

            By that logic, the fiscally responsible should always bail out the fiscally irresponsible. No. Just No.

            Actually we’d have been much better off if we hadn’t bailed out the auto industry and allowed bankruptcy law to be applied as written. And, we did let a whole lot of S&L’s go under, forcing mergers – I was peripherally involved in the S&L crisis and saw the government – rather than economics – picking winners and losers (McLame should have gone to jail as part of the Keating Six….) And the banking industry bailout of 2008-2009 was a bad deal for everyone except the bankers.

            I’ve been involved in the securities and finance worlds since around 1980 and I can’t say that I think any of the massive government interventions has had a long term salutary effect. Short term, and for connected insiders? Yeah. For the country? Not so much.

          • Pait

            Not always. Sometimes it is unavoidable, to a certain extent.

            You are completely wrong about the auto industry. The car manufacturers are more than the sum of parts. If they had gone under the supply chains would have been broken, suppliers would have collapsed, and there would be no path to recovery.

            It is the same with the banking industry. Yes, some people who are not totally deserving benefit – perhaps some crooks as well – but the alternative is to punish everyone to avoid benefitting a few. It’s a tragedy – one could perhaps get a glimpse of it by reading what Tom Billings advocates elsewhere in the thread.

          • catorenasci

            You’re the one who’s wrong. The world’s always coming to an end if we don’t bail out the insiders according to some, and you’re apparently one of them. “Saving” the auto industry was disruptive to the taxpayers and involved ignoring bankruptcy laws to screw the secured lenders in favor of the unions. The government picked the winners and losers, and the taxpayers were losers. Better to let the economics pick the winners and losers. Banking? That’s risible. Again, the government picked the winners and losers, with the burden falling on the taxpayers. Same old sh*t.

          • Pait

            You seem to be talking more on the basis of ideology than of rational calculation. You seem to be motivated more by the desire to inflict pain on states which are governed in a different manner than you prefer – most of them doing pretty well altogether – than by the search for good solutions to the country’s issues.

            If you agree with Billings that “…bodies will be stacked in the streets like cordwood…” then I don’t think that a rational argument with you would move the discussion anywhere that is good for this nation.

          • catorenasci

            The “…bodies stacked in the streets like cordwood…” remark was over the top, to be sure.

            This really isn’t about ideology, it’s about long term common sense and practicality. The way to sensible policy is for people to feel the effects of the policy directly and immediately. No one’s policy choices in state X should require the residents of state Y to subsidize them. You want high taxes and services, great. You pay for them. Just don’t ask me to pay higher taxes so you can be subsidized.

          • Pait

            The suggestion that genocide is an acceptable outcome of a fiscal crisis ended the possibility of a conversation.

          • Jim__L

            So it ends the possibility of conversation when he warns that irresponsible government can lead to horrible social upheavals?

            Pait, you’re wrongly accusing him of advocating something horrible to avoid facing the fact that your preferred method of governance increases the possibility of that horrible something happening.

            Pay attention to what he’s saying, you could learn something.

          • JackOlson

            “We” did not bail out “the auto industry.” Congress bailed out General Motors and Chrysler with taxpayers’ money. Other auto companies including Ford, Nissan, Honda, Toyota, Volvo and Mercedes (all of whom have factories in the USA) have been taxed to bail out their competitors. Next question: Now that the taxpayers have bailed out General Motors, Chrysler and the United Auto Workers, who is going to bail out the taxpayers, who now owe $20 trillion in federal debt? It would take a 50% devaluation of the US dollar to inflate that debt away. Such a confiscation of savings would invite financial ruin and social chaos.

          • Pait

            GM and Chrysler paid back the bailouts, so your numbers are not correct.

            The hole left in the debt (your numbers are wrong there too) is mostly due to the decrease in tax revenues following the crash, and the increase in unemployment compensation and other automatic stabilizers. The alternative would have been a repeat of the great depression.

  • Jacksonian_Libertarian

    Policies which can’t continue, won’t.

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