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Posts Tagged ‘Handouts’

Economists often do a crummy job of teaching people about the impact of fiscal policy on the labor force, largely because we put people to sleep with boring discussions about “labor supply” decisions (my blog post from last year perhaps being an example of this tendency).

From now on, I will try to remember to use this cartoon. It’s a parody of Obama’s policies, but the last slide (or is it a panel?) is a great teaching tool about what happens when politicians turn the safety net into a hammock.

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On rare occasions, I dream about being a politician or high-level international bureaucrat. Not because I want to be a moocher (please put me out of my misery if that ever happens), but because I periodically read about some sleazy interest group making petulant demands for handouts and I think about how much fun it would be to tell them to go jump in a lake.

In some cases, the sleazy interest group is an entire nation. Greece recently took a bailout from both the European Union (i.e., European taxpayers) and the International Monetary Fund (i.e., all taxpayers). In exchange for getting a handout, Greek politicians agreed to implement a bunch of deficit-reduction policies.

But like many welfare recipients, the country of Greece has an entitlement mentality and is now whining and complaining about having to live up to its side of the bargain.

All I can think about is how rewarding and satisfying it would be to say, “okay, a__h___s, have it your way, we’re revoking your bailout. Have fun becoming Argentina on your way to becoming Zimbabwe, you bloodsucking leeches.”

Actually, if I had that power, Greece never would have received a bailout in the first place, but I think you know what I mean.

Here are some excerpts from the Reuters report about Greece’s chutzpah.

Greece accused the EU and IMF of interfering in its domestic affairs on Saturday after the international lenders said Athens must speed up reforms and sell more public assets. On Friday, EU and IMF inspectors visiting Greece to monitor the implementation of a bailout plan that saved Greece from bankruptcy, approved more aid for the country but adopted a more critical tone than on previous visits. In rare harsh words, the Greek government said the inspectors’ approach was unacceptable, after coming under fire from local media for not reacting to criticism of the pace of reforms and the call for privatizations. …Earlier in the day, government spokesman George Petalotis said: “We asked nobody to interfere in domestic affairs … We only take orders from the Greek people.”

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I’ve always rejected coercive redistribution, particularly when imposed by the federal government.

But some types of redistribution are worse than others, and when big business and big government get in bed together, ordinary people are the ones who get screwed.

This is why Obama’s supposed “move to the center” is a bunch of nonsense.

Tim Carney is the go-to guy on this issue, and his column this morning in the Washington Examiner exposes the real meaning of Obama’s recent appointments of a “banker” and a “CEO.”

Let’s start with Bill Daley, the supposed banker who will be Obama’s new Chief of Staff. Does this signal a move to the right, as some left-wingers fear? That might be the case if Obama had appointed a real banker like John Allison of BB&T, who wants government to get out of the way and believes banks should sink or swim without bailouts or subsidies. But, as Tim explains, that is not the attitude of Bill Daley, who is more akin to Jim Taggart, the rent-seeking businessman in Atlas Shrugged.

Check out Daley’s resume. In the 1990s, he ran Amalgamated Bank, owned by a union and described by the Chicago Sun-Times as “one of the city’s most politically connected financial institutions.” Bill’s brother, Mayor Richard Daley, kept the city’s money on deposit at Amalgamated. Later, Bill held a seat on Fannie Mae’s board, pocketing six-figure compensation from the government-sponsored enterprise that used a housing bubble and an implicit government guarantee to fill a slush fund for well-connected Democrats — until taxpayers bailed it out in 2008. This is Obama’s kind of businessman: a banker who leverages his political connections for profit.

Or what about Obama’s appointment of Jeff Immelt of General Electric? Does this mean Obama wants to unleash the power of free enterprise? That would be welcome news, but GE has morphed into a corrupt company that specializes in fleecing taxpayers (a very sad development since GE once sponsored Ronald Reagan). Once again, Tim hits the nail on the head with a devastating indictment.

GE, which marches in sync with government, pocketing subsidies, profiting from regulation, and lobbying for more of both. …Obama bragged GE would be selling to a power plant in Samalkot, India. That sale is no triumph of free trade — Obama’s Export-Import Bank is providing at least $400 million in subsidized financing to grease the skids. Subsidies are GE’s lifeblood, and Immelt’s own words make that clear. In his op-ed announcing his appointment, Immelt called for a “coordinated commitment among business, labor and government…” He also advocated “partnership between business and government…” This is Immelt’s style. …wherever Obama has led, GE has followed. Obama has championed cap and trade in greenhouse gasses, and GE has started a business dedicated to creating and trading greenhouse gas credits. As Obama expanded subsidies on embryonic stem cells, GE opened an embryonic stem-cell business. Obama pushed rail subsidies, and GE hired Linda Daschle — wife of Obama confidant Tom Daschle — as a rail lobbyist. GE, with its windmills, its high-tech batteries, its health care equipment, and its smart meters, was the biggest beneficiary of Obama’s stimulus. To get these gears in sync isn’t cheap: The company has spent $65.7 million on lobbying during the Obama administration — more than any other company by far. So much for Obama’s war on lobbyists.

In other words, appointing Daley and Immelt does not mean a change in policy. These are people who want a bigger government because these are people who have learned to line their pockets when government has more power. They may have different motives than traditional leftists, but the result is the same. As I’ve noted before, my former Cato colleague Will Wilkinson said it best when he wrote that, “…the more power the government has to pick winners and losers, the more power rich people will have relative to poor people.”

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