A few thoughts about the limitations of government

By Edward Harrison of Credit Writedowns.

In this post:

A few thoughts about the limitations of government

Our founding fathers

How large should government be?

How policy helps frame the debate

Where we are headed

In a recent post, “Stop the madness now!” I voiced my growing concern with the direction in which the country is headed. I am not alone in my anxiety. Despite recent improvements in the economy, most recent polls show that Americans are more alarmed now than they were early in the year when things looked rather bleak. While these concerns have manifested themselves in various ways depending in large part on political affiliation, it is clear much of the worry centers on jobs – or the lack thereof.

Policy makers have been ‘wildly’ successful in stabilizing the economy in the U.S. and elsewhere. Given the enormity of the financial crisis, it is unrealistic to have expected a far better economic situation than the present one. Nevertheless, disenchantment with the economic direction has reached a fever pitch and put the Obama Administration on its back foot.

In my view, this is not just because the economy remains weak. Americans are angry because the economic policies used to try to fix our predicament have been both unfair and opaque. They have favored special interests like big banks and much of the maneuvering has been done in secret. All of this has increased distrust of government and weakened the Obama Administration.

The result of the increasing distrust of government has been a renewed questioning of the role and limitation of government in the American economy.

When thinking about government and its role and size, there are three camps of thought.

  1. Big Government. Supporters of big government believe that government can do good. In this view, an increase in the size of government is not just needed but necessary in a severe economic downturn in order to fill the void left by the private sector’s fragility. The large scale fiscal stimulus enacted in 2001 at the beginning of President Bush’s first term, in 2008 at the tail end of the Bush Administration, and in 2009 during the Obama Administration are examples of Big Government in action.
  2. Limited Government. People in this camp believe that government must always be held in check – even in times of economic distress. If not, a self-perpetuating bureaucracy develops, with a cadre of individuals dependent on government and wedded to institutions or programs which no longer have great value. In this view, expanding government is like moving to into bigger house;  the new space must be filled with stuff, with size justifying the need for possessions rather than the need for space justifying the size.
  3. Small Government. Individuals in this camp see government as a parasite which, while necessary in small measure, always and everywhere raises the specter of despotism and cronyism. In this view, government must be kept as small (and as local) as possible because it feeds on society and on power to usurp property and wealth for its own use and that of its cronies.

Our founding fathers

The United States were founded by individuals who were distrustful of government, many looking to escape tyranny, taxes and religious persecution. The founding fathers were largely in the limited government camp, with many falling into the third small government group. We need look no further than the U.S. Constitution for evidence of this instinctive distrust of government.

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense,[1] promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

This preamble to the Constitution is a statement of purpose. It is the answer as to why the U.S exists. It answers:

  1. who established the government: "We the People" (back then, white tax-paying citizens; now all women and men)
  2. for what purpose we established the government: "to form a more perfect union…. and secure the Blessings of Liberty"; and
  3. who benefits from this action: "ourselves and our Posterity."

The specific words were chosen carefully. The word liberty is central to this statement. Merriam-Webster describes liberty like this:

the quality or state of being free: a : the power to do as one pleases b : freedom from physical restraint c : freedom from arbitrary or despotic control d : the positive enjoyment of various social, political, or economic rights and privileges e : the power of choice.

Then there is "our Posterity" i.e. our children, children’s children and their descendants and other future citizens. They are to be a chief beneficiary of government action.

I would describe this as a document affirming great respect for individual liberty but cognizant of the need to sacrifice some individual liberty for a sustainable long-term future. You and I both know this document is more of a goal than a reality. After all, slavery was permitted in the United States until nearly 100 years later. Native Americans were persecuted and slaughtered for decades. And women were refused a vote until the early 20th century.  So, as far as execution goes, you have a few problems. The idea, on the other hand, is terrific. I consider that idea Libertarian.

To this day, Americans have a Libertarian bent and are more distrustful of power, elites, and government than many in Western Europe and elsewhere.

How large should government be?

It is with this ethos as background that most are taking in the debate about the size of government. I would argue that most Americans today are in the middle group (where I also see myself) – wary of big government but receptive to the need for more government in times of national emergency. These people were swayed toward Big Government because of a deep downturn and financial crisis but crony capitalism and bailout fatigue have discredited Big Government. And now we are witnessing a war about the proper role of government. Perceptions of recent policy decisions remain top of mind in the process.

At about this time last year, I wrote a post called “A brief philosophical argument about the role of government, stimulus and recession” which outlined how I saw the role of government.

I said:

Government, by its very existence, is always redistributive. Therefore, a key role of government is to redistribute income. This statement is self-evident to some, but provocative to many. So let me explain why this is so.

Most reasonable people would agree that a large society requires government to maintain order, provide basic services and assemble military defenses. These are all considered basic roles of government. However, to take on these roles, government requires funding and this means taxation. Now, taxes, by their very nature, are redistributive. Levying a tax on one person or one good takes money away from that person or that business and puts it in to the common pot. This is the definition of redistribution. Government cannot function without taxes and taxes are by their very nature a redistribution of income from some agents to others. Therefore, government is a naturally redistributive agent.

To my mind, the redistributive nature of government is obvious. In fact, it struck me as extremely disingenuous during the U.S. election this past year when John McCain led the Republican Party in admonishing Barack Obama for suggesting he was going to “spread the wealth” — as if that’s not axiomatic.

The real question is this: Because government must tax to fund its existence and this tax will redistribute monies from some agents to others, what are our priorities as a people as to how that redistribution should take place? Who should we tax, by what means and by how much? And who should receive the benefits of those taxes and for what purposes? These are questions actually worthy of debate and are fundamental to democracy.

My answer is fairly simplistic: how we tax and how we spend government money depends on the economic, political and military situation, on the wisdom of our leaders and on the priorities of the people. There is no ideological answer to this question. One problem I have with the small government crowd is the ideological view that the answer must always be the same regardless of the circumstances we face. I certainly believe very much in limited government. I think most people would label me a Libertarian or a fiscal conservative. However, I am not ideological. I am pragmatic and I believe public policy must adjust to the specific requirements of the time.

This is still my thinking today. We need a balanced and non-ideological approach, cognizant of the economic situation. That means that we have needed fiscal stimulus to fill the void brought about by this crisis. But we cannot allow government ‘creep’ or we risk setting up a whole new and unnecessary apparatus of government that diminishes our wealth over the long haul.

How policy helps frame the debate

Nevertheless, my thinking has changed in some ways since late last year – along with many Americans.

Barack Obama has been handed one of the worst legacies since Franklin Roosevelt. When he entered office, we had two wars, a financial crisis, a deep economic downturn, and numerous bailouts already in progress. Combine that with a desire for substantive change on health care and the environment, issues that many of his supporters felt were stymied during the Bush years, and you have a Herculean task for any person. Back in January Warren Buffet said not to expect miracles from Barack Obama because many of his supporters seemed to believe he could do it all – and with instantaneous positive results.

I don’t expect instantaneous results. I expect a decade-long struggle for the United States because stimulus is no panacea for all of our problems My expectation of a long road ahead is a principal reason I am concerned about Obama’s newfound role as deficit hawk.

Barack Obama did campaign as “change you can believe in.” However, all I have seen so far is more of the same:

This is not the change that many of us expected. I am skeptical enough that I certainly anticipated some of this. But I am surprised at how little interest President Obama has shown in ending these practices. And I suspect most Americans are as well.

Contrast this special treatment for special interests with the more ordinary treatment for ordinary Americans:

Where are the homeowners bailout packages? Where are the unemployed’s bailout packages?  Not that I am advocating bailouts; I am not. I am simply pointing out that the too big to fail banks and automakers got bailouts while ordinary Americans received next to nothing.

Now most people don’t write a finance blog with statistics and 100 different stories to rattle off about the big squander on how all of this is grossly unfair, how this is a fake recovery from which they are not benefitting but from which banks are benefitting. But people aren’t stupid, they know they are being looted. And this makes them lose faith in government.

I find it ironic that the panic which precipitated the acute phase of this crisis was caused by a loss of trust in banks by the people and banks in each other. The government told us they would fix them and we trusted they would.  They certainly stabilized the economy but at great cost and in an enormously unfair manner. So when New York Times columnist David Brooks runs a victory lap for the Administration telling us what Geithner got right, I laugh at how misguided these arguments are. It is not a question of whether the Administration has stabilized the economy, it is the way they did so.

Those in the third group I mentioned at the outset – those who support small government -  they are saying, “I told you so.” At this point in time, I have no retort.

Where we are headed

So, to those who say,” give him the President a chance – he has only been in office 10 months,” I say that is long enough to know. The President’s task is to lead irrespective of the circumstance. And despite the limitations of his office, national emergency or economic circumstance, he is the one who is expected set the tone for our nation’s policy agenda and to decide which issues we prioritize as a nation.

Fairly or not, every President is measured based on his ability to do so while improving the nation’s economic lot. And the lot of ordinary Americans is no better; it is worse. Meanwhile it is business as usual on Wall Street and in the corridors of high finance.

So I say, “stop the madness.” I still back targeted stimulus for jobs. But, despite the calls by the Krugmans of the world for yet more stimulus of the full tilt variety, this is all I want. I am less confident of government.

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About Edward Harrison

I am a banking and finance specialist at the economic consultancy Global Macro Advisors. Previously, I worked at Deutsche Bank, Bain, the Corporate Executive Board and Yahoo. I have a BA in Economics from Dartmouth College and an MBA in Finance from Columbia University. As to ideology, I would call myself a libertarian realist - believer in the primacy of markets over a statist approach. However, I am no ideologue who believes that markets can solve all problems. Having lived in a lot of different places, I tend to take a global approach to economics and politics. I started my career as a diplomat in the foreign service and speak German, Dutch, Swedish, Spanish and French as well as English and can read a number of other European languages. I enjoy a good debate on these issues and I hope you enjoy my blogs. Please do sign up for the Email and RSS feeds on my blog pages. Cheers. Edward http://www.creditwritedowns.com


  1. i on the ball patriot

    Hate to be a nag, but … it is not about the size of government — Big, Limited, or Small — its about the people’s voice in government and the integrity of government.

    The constitution was great for the racist slave owning founding fathers, but it has been corrupted through aggregate generational corruption and is out of date for the times.

    Deception is the strongest political force on the planet.

    1. alex

      i on the ball patriot: “The constitution was great for the racist slave owning founding fathers, but it has been corrupted through aggregate generational corruption and is out of date for the times.”

      Well the 13th amendment (which, controversially, I support) fixed the slave owning thing. Otherwise how is our imperfect Constitution so out-of-date? Do you really think that’s at the root of our problems? Real anti-corruption measures like publicly financed campaigns and instant run-off (or other ranked preference) voting are well within the bounds of the Constitution.

      1. i on the ball patriot

        Alex – Has the 13th amendment really “fixed the slave owning thing.”, or has slavery simply morphed into debt slavery — through corrupt purchase of government and enactment of outrageously usurious financial laws — where the slaves of all color now pay for their own maintenance?

        Our imperfect Constitution is out of date because it has been constantly overridden and amended with a never ending stream of corruptly purchased and corruptly legislated body of; federal, state, and local laws, many, many, many of which, are on their face intentionally and blatantly unconstitutional. These laws are then selectively enforced and only challenged dependent upon one’s pocket book. In effect the constitution is toilet paper.

        I favor election boycotts and a ‘jubilee’ rewrite of the constitution. Yes the constitution even provides for drafting a new constitution but the catch 22 is that it must be done by ‘elected’ representatives. That is why you will never get electoral reform from within the system. It is the electoral process, the gate that all of these fucktard loser politicians come through (and yes we get a few token ‘good folks’), that is the problem.

        The new constitution should include a death by hanging article for gross violations of the public trust by public officials. The focus should be on far, far, far greater transparency, and true accountability with more frequent democratic access to the governing process. The gang raping theft, and corruption — which everyone so meekly refers to as cronyism — must be ended.

        Jason Rines (below comments) makes some good points about broadening representation.

        Here is some old info, a book review, I posted a while back, it is worth a revisit.


        “How Democratic is the American Constitution? by Robert A. Dahl

        Dahl’s fine book attacks the American Constitution and system of government for each of the following undemocratic features, some of them unique to the US among the world’s advanced democracies, and all very rare.

        # The Electoral College.

        # A bicameral legislature.

        # Grotesquely unequal representation in the Senate.

        # Judicial review (veto) of acts of the federal legislature, duly signed into law by the President.

        # Judicial legislation (“policy making”) under cover of enforcement of the Constitution.

        # Single member legislative districts with plurality voting (so-called, “first past the post”), contrasted unfavorably with proportional representation and runoff systems.

        # The two party system.

        # A President with important powers wholly independent of the legislature, contrasted unfavorably with the much more common system of ministerial government responsible to the legislature.

        # A strong federal system imposing significant limits on the powers of the general government.

        This is a short book in which, of course, RD does not say all he knows, or complain of every undemocratic characteristic of our system. For example, he does not complain of these, and so proposes no better alternative – however hopeless.

        # Federal judges are appointed rather than elected.

        # Federal judges have effective life tenure.

        # There is no federal recall.

        # There is no federal initiative.

        # There is no federal referendum.

        # Legislation is unduly influenced, and often even written, by lobbyists in service of moneyed interests (RD does allude to this).

        # Millions of America’s mentally competent, non-criminal permanent residents lack the franchise.

        # Tens of millions of America’s people who have the franchise do not vote. (In the words of Sharona Fleming, “It only encourages them.”)

        # There is no “None of the above” option for voters.

        # The means of campaigning are almost wholly within the gift of the rich (RD does allude to this disgraceful fact in one sentence).

        # The means of political propaganda in general, from report and comment in the mass media to the productions of “think tanks,” are almost wholly within the gift of the rich.

        # Holders of high federal office – including judges, legislators, and the President – are nearly all lawyers and nearly all personally members of the wealthiest strata.

        # The legislature has only the slightest real impact on foreign policy in general, and not much even on treaties. It has none on the extra-constitutional device of the “executive agreement.”

        # The requirement of a Congressional declaration of war is not observed and is without effect.

        # There is no popular constraint on, or control over, government – and in reality Presidential – war-making power.”

        More here;


        Election boycotts! Get out on the streets now! Write your supervisor of elections!

        Deception is the strongest political force on the planet.

        1. Skippy

          Hay they did it to the Bible, why not the Constitution, seems like logical progression to me.

          Skippy…demented chimps like tradition, when they write it.

    2. Edward Harrison Post author

      We’re probably making the same fundamental argument. The question is whether government “always and everywhere raises the specter of despotism and cronyism.” Was all of this inevitable because people will always lose out to cronyism when government is big?

      I would argue that cronyism is always a risk, but it is more of a risk at some points in time than others. There certainly were the Teapot Dome scandals of yesteryear. But, history suggests there are ebbs and flows in the political process. When it comes to the power of lobbyists and special interests, we are definitely in the flow and not in the ebb.

      1. Jason Rines

        Good day Mr. Harrison. First off, allow me to compliment you on the fine writing I have seen all over the Internet these last two years! A shame the U.S. government does not have you at the economic helm.

        I have added a bit more detail onto I On The Ball Patriot’s comment. I also do hope you drop by my social network for further collaborative debate: http://ragingdebate.com/economy/a-few-thoughts-about-the-limitations-of-government-1 . But here is my commentary.

        Jason: The solution is not necessarily tied into the size of government per se, but in its inherent design flaws when the foundation was built over 200 years ago. The United States Founders such as James Madison and Alexander Hamilton had raging debates about whom controls the money supply. I do understand that the United States mints coins but the fiat currency itself is controlled by the Federal Reserve and loosely managed by Congress.

        The debate back then was would Congress directly do a better job of managing fiat currency or a Central Bank such as in Europe? The core design flaw of Central Banking is the lack of representation. The ideological debate referenced by Mr. Harrison in the article refers to the effects of the monetary design flaw at its foundation rather than the cause.

        My opinion is that Central Banking model needs to evolve. To include representation, certainly. But what must be considered in framing the debate should not be confined to the US or Europe, the debate should include all nations on earth. To frame such a debate, I tend to think in terms of concepts such as truth, freedom and justice as the necessary constructs of a solid foundation for government. Size of the government does not matter as long as the population has plenty of representation. Vast representation means wildly conflicting opinions as to how money should be spent and such decisions take ample time in such an environment.

        The USA should have several thousand representatives based on how our Founders constructed the Republic. With the Internet, what would be the problem with tens of thousands of representatives? How about many millions on a global scale? Someday, why not ALL of us?

        Where is the debate about the obvious failed duality of separating politics and money? While America came close to true freedom (at one time that is) and decent model for a Republic, it failed to finish the debate between James Madison and Alexander Hamilton on who controls the money supply, Congress or a private bank (Federal Reserve). Therefore, a fatality sequence of a typical Democracy is rapidly unfolding around us here in America. The debate should not bother focusing on restoring what is the past, but globally how we all wish to live moving forward. While America came close to true freedom (at one time that is) I do like a lot of the ideas that George Soros is presenting in regards to an Open Society. Jake Towne seems to get the debate right with his Open Office Plank. I do not mean to criticize Mr. Harrison’s brilliant writing these last couple of years. My intent was to include additional debate points which I feel are more important considerations in the current global debate on governance.

    3. Vinny G.

      Good point about our antequated constitution. Could it be more than coincidental that two of the nations whom we conquered and then gave modern 20th century constitutions (Germany and Japan) are also beating us in every area, hands down?


      1. DownSouth

        There’s more to it than a constitution.

        Some of the Latin American countries also had constitutions, but that by itself wasn’t enough to achieve any bona fide democracy.

        That’s where the term “Banana Republic” comes from–a dictatorship that comes with all of democracy’s bells and whistles.

  2. ArmchairRevolutionary

    Framing the topic in terms of Big versus Small Government is exactly the kind of dumbing down of the conversation that we do not need.

    If someone tells me they are for big goverment, small government or something in between; I think they are probably not smart enough to be worth consideration. It is the same things as not being willing to think about things. Its an ideology; a substitution for real thought.

    I am for effective government: If the government takes an action and it results in a positive return, we should do it. If not, we should not. It is that simple, but what it means is that every issue requires its own homework. Obama actually made a statement to this effect in the debates; it just does not appear that he is following it.

    1. Edward Harrison Post author

      That is my point exactly. By not following through on his point he gives credence to the view that cronyism is endemic to government in such a way that any expansion of the state must always be resisted. That is what the small government crowd is saying.

      And I have to agree that right now it certainly seems that cronyism is at a high mark in politics right now. The Obama Administration in its prosecution of the economic rescue made this clear. Why should we expand government further if we are going to see more of the same?

      1. dave

        When someone spends someone else’s money they always spend it less carefully then they spend their own. There really are no “owners” in democracy. Elected officials are agents, just like CEOs of companies. Voters are like shareholders. Unfortunately, a company with very diverse and passive shareholders tends not to keep its executives in check. Its the same with democracy, voters are rationally uninterested in keeping their leaders in check since they know their one vote doesn’t matter. Thus we can’t expect them to “be informed”, much in the way some index fund 401k sucker who owned Lehman stock wasn’t informed.

        Government is inherently corruptible since nobody is minding the store. It needs to be kept in check in order to protect people’s liberty. Elections are a horrible way of doing this, really more of a formality to grant legitimacy (“of the people”, what a joke). You need institutions and traditions which promote liberty and good governance if you want them. That often means limiting the scope of government activities to manageable and reasonable goals.

      2. Jason Rines

        The best mankind can do at this point is to extend the fatality sequence of representative government. Here is the general fatality sequences of different government types:

        Despotism = 20 YRS
        Communism = 40 YRS
        Republic = 200 YRS

        Some further food for thought by Alexander Tytler in 1775. It was believed that this was the ‘net-out’ observation of Tytler’s multi-decade study on governance:

        “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.
        Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.”

        1. DownSouth

          When Tytler wrote that in 1775, you have to remember that democracy had never been tried.

          The concerns Tytler expresses have variously been dubbed “tyranny of the majority” (Tocqueville), “the violence of majority faction” (Madison), and “an excess of democracy” (Elbridge Gerry).

          With two hundred and thirty-five years of experience under our belts, however, Tytler’s concerns have proven to be overblown. In practice, the majority has seldom proven a match for the power of money and the ability of those who have it to buy and influence politicians and government.

          Kevin Phillips’ Wealth and Democracy is a superb primer on how money has trumped majority rule throughtout the history of the republic.

          1. Raging Debate

            How I love a good debate. Let’s go over each of your points.

            ‘When Tytler wrote that in 1775, you have to remember that democracy had never been tried.’

            Greece, Rome are the two biggest example of a Democracy and a Republic. Both were representative governments.

            ‘The concerns Tytler expresses have variously been dubbed “tyranny of the majority” (Tocqueville), “the violence of majority faction” (Madison), and “an excess of democracy” (Elbridge Gerry).’

            Did you see my post about fatality sequences on this thread? Allow me to repeat:

            Despotism = 20 YRS
            Communism = 40 YRS
            Republic = 200 YRS

            Why not add in your particular solution for mankind moving forward? I provided two living individuals, George Soros and Jake Towne offering them. If representative governments are overrated, which alternative above do you suggest?

            ‘With two hundred and thirty-five years of experience under our belts, however, Tytler’s concerns have proven to be overblown.’

            How so? Is global society unraveling or reaching new heights? I suppose this point is purely speculative based on ones own individual exposure to the conditions on the ground (encapsulation effect).

            ‘In practice, the majority has seldom proven a match for the power of money and the ability of those who have it to buy and influence politicians and government.’

            Than where is the Roman Republic? Ever hear of the Bastille and the Great Fear? Feudalism conducted at the global level will have the same result as on the local, state and national level. When the productive decide en masse working for someone else is not beneficial such a government collapses. Sure, a Despot or Communist nation can force people to work under the threat of starvation but that only works for so long. Mankind pursues the opportunity to benefit first and the fear of loss second.

            Furthermore, a government will never be bigger than the people, at least in our lifetime in my opinion. Someday, that will occur and it will when every person on earth willfully runs towards the supply chain.

            ‘Kevin Phillips’ Wealth and Democracy is a superb primer on how money has trumped majority rule throughtout the history of the republic.’

            Of what Republic? Does one exist that has spanned the entire age of documented history? No? This is simple. When the people can no longer afford to live they either starve the beast that haunts them to death, they revolt physically or an enemy conquers them. In all three cases a new government replaces the former one. Or do you disagree with my assessment on that point?

          2. DownSouth

            There are many political theories, and the one you have latched onto, which seems to be based on the famous six possibilities which Plato first envisaged, Aristotle first systematized, and even Bodin still scribed with hardly any fundamental change, is only one of many. It is not the one-true-political-theory as you seem to envisage. Machiavelli was the first to think about the possibility of founding a permanent, lasting, enduring body politic, and in this he was not so far removed from his revolutionary successors in the 18th century.

            Also, to try to equate a modern liberal democracy like that of the United States to the governments of Greece or Rome is a horrible distortion. The trial and death of Socrates offers some insight into how unfounded a notion that is:

            But perhaps the most historically accurate of Socrates’ offenses to the city was his position as a social and moral critic. Rather than upholding a status quo and accepting the development of immorality within his region, Socrates worked to undermine the collective notion of “might makes right” so common to Greece during this period. Plato refers to Socrates as the “gadfly” of the state (as the gadfly stings the horse into action, so Socrates stung Athens), insofar as he irritated the establishment with considerations of justice and the pursuit of goodness. His attempts to improve the Athenians’ sense of justice may have been the source of his execution…

            He was…found guilty of corrupting the minds of the youth of Athens and sentenced to death by drinking a mixture containing poison hemlock.

            A great deal of discovery transpired between the time of ancient Greece and that of the American Revolution, and also between the American Revolution and now. To cling to ancient political theories developed over 2000 years ago seems a little reactionary, to say the least.

  3. bobh

    Granted, Obama inherited a terrible mess, but the economic crisis, the Iraq and Afghanistan wars, and our corrupt corporatized health care system, none of which have a chance of ending well, are now his albatrosses. He will have a one term presidency and set Democrats and any chance for progressive change back eight years. The only question is whether he was a willing Trojan horse for Wall Street all along, or just lost his nerve and decided to only trust and take advice from rich and powerful people after he was elected. His reluctance to put any real substance into his powerful “change” rhetoric during the campaign suggests the former. It is one of the most disappointing political developments in my lifetime.

    1. alex

      bobh: “The only question is whether he was a willing Trojan horse for Wall Street all along, or just lost his nerve and decided to only trust and take advice from rich and powerful people after he was elected.”

      Does it really matter? When you get the Big Job you stop being graded on meaning well or effort. Only results count.

      Personally I think the whole Democratic party was corrupted by the short term success of the Clinton/DLC “third way”. Was Clinton corrupted or did he really believe he was doing the right thing? Who cares – the effect on my life is the same. Being a good if short sighted politician Obama just hired the same crew (e.g. serial screwup Summers) and followed the same strategy (e.g. re-hiring the Republican’s Fed chairman). Get over it Barack – the 1990’s are dead!

      It scares the hell out of me when Ron Paul starts making sense (at least in terms of the Fed audit). Not because I think I’m losing it or because Paul is less whacked out than he ever was, but because he’s now less crazy than the other inmates.

      1. andrelee

        I, like most folks, am a feeling/thinking/feeling creature. I know how I want to feel, think of a way to get that, and then see if that is the feeling I was looking for. I think if someone voted for Obama based on that little ditty, they knew how they’d feel voting for him/thought of ways to make sure they did-fought against or rationalized reasons not to/came to terms with how they feel now that he is the preznit. I think those who voted for him, influenced more-so by their pleasant feelings towards him are trying to deal with the rising potential of their unpleasant feelings towards him now. So a statement or question along these lines should be expected-“The only question is whether he was a willing Trojan horse for Wall Street all along, or just lost his nerve and decided to only trust and take advice from rich and powerful people after he was elected.” Folks are trying to suss out how to feel about him…”was he malacious in messing up my life or just surprisingly unprepared”?

        I think if folks voted with ‘only results count’ in mind, we’d have two Clintons in the White House and tried and tested a HLOC-type plan for recovery working it’s magic.

        So, says me..

        1. bobh


          I had a choice betweem Obama and Clinton, and then between Obama and McCain/Palin, but I’m not sure what “results” I failed to consider in making up my mind. McCain always was a bought-and-sold crony capitalist, and he is a little crazy as well. I never saw much evidence to suggest that the two Clintons would ever have disappointed their power-elite friends once they got elected. Obama had less of a record and was maddeningly non-ideological during the campaigns, but it still seemed very possible a year ago, based on all of that talk about “change”, that he would rely on progressive advisers and strategies after winning the election. G.W. Bush did this for the right, running as a “compassionate conservative” before handing the power over to Dick Cheney and his evil cohort.

          So I wonder what Obama’s intentions were because I want to know if a different Obama, an Obama who really wanted to fix the things that are broken in this country, could ever have gotten elected and, if he got elected, whether he could have harnessed the general outrage over the behavior of Wall Street crooks and used it to make the economy and the country work better. Or would someone who would do that still be making speeches about change on cable tv back in Springfield, Illinois?

          1. alex

            I quite agree on your Clinton assessment – Billy helped start this whole mess.

            As far as the McCain/Hillary/Obama choice, I voted for Obama and even in hindsight think I made the least odious choice. Sad.

            “Mostly however we are looking not as size as a problem but the massive corruption which the equation of money to free speech promoted.”

            Fully agree – best government money can buy.

            “I wrote years ago that there are real consequences to government by fool.”

            Fool or tool? Methinks a fool would not be paid as well.

            “we have a healthcare debate in which the health of Americans doesn’t even occur as an issue”

            The problem with us peons is that we get too hung up on details like “the health of Americans”.

    2. dave

      Maybe he’s just not as smart as people thought he was. All of this campaign slogans were vague platitudes. His actual policies were never all that compelling, when he even bothered spelling them out. He ran on his charisma and dissatisfaction with Bush. Don’t even say you couldn’t see it coming, the asshole supported the TARP before the election.

      Our problems were big, he isn’t up to the task.

  4. James

    “When thinking about government and its role and size, there are three camps of thought.”

    I think this leaves out all the vsrious flavors of anarchism, which look to “no sovereign” all.

  5. ideogenetic

    Rereading Dean Baker’s “The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer” is prudent at this juncture.

  6. New England Aussie

    Gee, Ed, this is a hell of a big subject to tackle. A framework of “big” vs. “small” seems quite inadequate.

    Obama’s inability to fix the “Main Street” economy is disappointing and tragic, but perhaps not that surprising, given his advisors, and the massive issues behind the immediate problems.

    But fix it we must – one way or another.

    Given the results of his Administration, Republicans have a good chance next time around, and that I find really scary.

    As in many current democracies, Government is not representative – the system is just too big, too unwieldy, even before considering Mancur Olsen’s view of influence in democracies.

    The Central Bank concept has once again shown to have huge faults, yet beyond the influence of well-respected authorities like Stiglitz.

    It does not seem that things are bad enough yet for changes by force – revolution – but public opinion is quite inadequate to produce any changes either.

    And that means things are probably going to get a lot worse before we can effect any real change.

    Not pretty.

    Repudiation of debt – all debt – would free up the economy tremendously, and may be the only practical way forward.

    1. Jason Rines

      This was the best comment by far. I do however disagree with this statement: ‘As in many current democracies, Government is not representative – the system is just too big, too unwieldy, even before considering Mancur Olsen’s view of influence in democracies.’

      Actually, based on how the Founders established this Republic, the USA should have several thousand representatives. Please see my thoughts about this topic provided to Mr. Harrison on this thread.

      1. New England Aussie

        Jason, the observation about the extent to which western democracies truly represent the opinions of the people is based on observations of how policy is formulated. We usually have 2-party democracies, with less than 4% of the people being active party members. Not even that 4% gets to participate in policy formulation – only the party caucus does that. At best we get to choose between two poorly-formulated policy choices, both too generalized and too crude to be of any real value.

        It isn’t simply a question of interest, or of paying attention. We live in an extremely complex world, and you cannot expect everyone to be well informed on all issues – you could have a photographic memory, and an IQ of 200, and spend 16 hours/day trying to follow all the issues, and still not be in posession of enough information to make a truly informed choice on all.

        I specifically referenced Mancur Olsen, here quoted from Wickipedia:
        “. . . argues that individuals in any group attempting collective action will have incentives to “free ride” on the efforts of others if the group is working to provide public goods. Individuals will not “free ride” in groups which provide benefits only to active participants.
        Public goods are goods which are non-excludable (i.e. one person cannot reasonably prevent another from consuming the good) and non-rival (one person’s consumption of the good does not affect another’s, nor vice-versa). Hence, without selective incentives to motivate participation, collective action is unlikely to occur even when large groups of people with common interests exist.” So Olsen is pointing to the common phenomenon in current politics where small groups are able to shape the policy debate.

        I wish there was an easy answer – I’d be pushing it hard if I thought there was one – but it is very clear that the current system is too flawed not to look for a better way.

        1. Raging Debate

          Thank you NE Aussie for an insightful reply. I happen to be in New England as we speak.

          When you begin to boil it all down, it comes down to genetic imperfection, meaning we as a species have not evolved far enough along to find the perfect answer to governance. It is why I believe the next best thing is to extend the fatality sequence by citizens having full representation on the Cause of government actions and that begins in the money supply.

          When you don’t get to vote at the end of the day on how your own taxes are spent, it means you are already living in slavery. I have touched on this point in other comments but let me net it out: With our current non-representative Central Banking model, it always comes down to an Emperor type figure and a Chairman of a Central Bank calling the shots. The American people said no to bailouts of TBTFIB. But the Emperor and the Chairman did it anyways.

          No utopia on earth will exist until mankind has perfected genetic engineering. Most likely, by that time mankind will have the ability to store his/her consciousness in some form of energy unit. Our final evolution. For the record, I do believe in God. I just choose to practice the concepts of truth, freedom and justice which permit a population to frame the issues and details that lay beneath them.

  7. Kevin de Bruxelles

    Perhaps the question should be reframed to ask: In an economy where manufacturing is declining as a percentage of GDP, is it normal that size of the governmental sector would climb in compensation?

    The answer would seem to be yes.

    If you want to do something about the size of government then you have to do something about trade. The growth of government is the direct result of the unconditional surrender the US elites have been issuing to the world on trade for the past thirty years. A nation cannot win a trade war they refuse to fight. So the American economic march of death, the retreat of shame from the factory to the retail mall to the unemployment line continues apace. At least the French in 1940 knew they had been defeated. How many more American jobs need to be destroyed before there is a reaction?

  8. RSDallas

    Merriam Webster defines:

    Pure Democracy: democracy in which the power is exercised directly by the people rather than through representatives.

    Democracy: government by the people; especially : rule of the majority b : a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held free elections.

    Social Democracy: 1. a political movement advocating a gradual and peaceful transition from capitalism to socialism by democratic means.
    2 : a democratic welfare state that incorporates both capitalist and socialist practices.

    Capitalism: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

    State Capitalism: an economic system in which private capitalism is modified by a varying degree of government ownership and control.

    Socialism: 1 : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.
    2 a : a system of society or group living in which there is no private property b : a system or condition of society in which the means of production are owned and controlled by the state
    3 : a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done.

    It’s pretty clear to me that the United Sates is a “Social Democracy” practicing “State Capitalism” and clearly falling under the number 1 definition of Socialism.

    The question is “how do we get back to being a “Democracy” that practices “Capitaism”?

    Answer: “We the People”!

    Rise up and stop this movement NOW! TODAY! Write your elected official and clearly state your concerns, talk to your sphere of influence, attend the next tea party or town hall meeting, VOTE, influence 5 other people to vote who normally do not.

    Please, do “your children and grand children” a favor and GET GOING NOW!

    As far as your article, I just want to live in a Democracy and practice Capitalism which probably places me in between Small & Limited. But it is clear our Nation is Big & getting Bigger!

    1. David

      I’m not sure how effective voting is. I would say, vote only if you really like the candidate. If it’s Tweedledum or Tweedledee, provided for your voting pleasure by the supporters of the status quo, don’t vote but do something else instead.

      Something else, but I’m not sure what.

    2. Jason Rines

      I do not mean to act like I am splitting hairs but the USA was founded as a Republic, NOT a Democracy. The Romans adopted the benefits of representative government from the Greeks.

      Democracy fails faster than a Republic for one big reason. A Republic has a Constitution, a Magna Carter style document of rigid conceptually-driven laws that are difficult to change.

      In a Republic, all citizens must adhere to the law, no is above the law. Democracy becomes mob rule far faster then a Republic. Mob rule results in the majority 51% confiscating the property and freedoms of the 49% minority, exactly what is occurring in the USA, the UK and large swaths of Europe.

      If I was to choose a government type the USA is operating under, I would add Fascism to your list of government types and call the USA Fascist. It is a more descriptive and appropriate name for State Capitalism on steroids.

      Study of Fascism in the 20th century shows a consistent result of a government becoming Communist and final stage of the cycle is Despotism. The only good thing about a Democracy as Thomas Jefferson put it, is that they burn themselves out quickly. In the information age, the cycles are measured in decades rather than centuries like the Iron Age.

    3. Vinny G.

      Right… And how about a definition of Fascism, or Corporatism. Or is it that Fox News just didn’t mention those lately?…

      Before calling this sorry plutocracy anything remotely resembling socialism, I advise you take a look around to see what’s happening in the real America, to real Americans. Hell, if this is socialism, I say we try pure slavery next, because as slaves we’d at least get food and shelter, luxuries no longer available to millions of families and children in this nation.

      We now return YOU the the already in progress Sean Hanity show.


      1. Raging Debate

        Actually, I am an American citizen. My parents split when I was 16 and since I stayed with my mother, I did not receive the benefits of my fathers profession. Therefore, I had to self-educate myself.

        I do work longer hours than most people I know and have since the summer of 2007, roughly 16 hours a day and some weekends too. So I did know when the depression was coming, almost two years in advance: http://seekingalpha.com/article/94920-the-death-of-consumption (scroll half way down to see my comment). As others went to the lake that summer, my family flipped out on me as they watched other families go on vacation and have ample leisure time. I run two businesses currently and every cent I earned through blood, sweat and tears.

        As for the plight of ALL global citizens being yoked to some form of mass slavery and misery, I was doing something about it in 2007 and am in ways and the magnitude of which I do not wish to disclose at this time. That does not mean merely pontificating on blogs. I directly help the guy in the street as well but I do not disclose personal acts of kindness which is how we all should be treating one another anyways.

        As for your current suffering, I hate to see it and I do hope things will improve for you.

        1. Vinny G.

          Raging Debate,

          First, congratulations for your resilience after your family’s problems, your hard work, and success in business. It is young people with your attitude that built this country.

          Second, I am a US citizen too. However, I am not sure where you got the idea that I personally may be having problems — quite the contrary, as a doctor I do better than average.

          Third, your random acts of kindness, while noble and certainly appreciated by their recipients, cannot and will not make up for the gigantic ongoing syfoning of wealth out of this nation by corrupt corporations and government at all levels. You must understand that regardless of how successful you and other young people may be, if the trend of robbing this country of trillions and trillions of dollars, as is happening now, continues, it will leave you just as poor and vulnerable as the homeless guy you may have given a sandwich today.

          One more thing, I assume you are much younger than the average reader of this blog, therefore your stake in the future of this nation is much greater tham mine or others like me. Young people like you voted Obama into office, so it is insanely unfair that now the same old and corrupt Wall Street gangster types that caused this crisis dictate his policies. It takes more than voting.

          Food for thought…


          1. Jason Rines

            Please accept my apologies than on your status. I do understand the macro of our current predicament here in the USA and undertand that hard work alone will not solve the core problems. I had mentors that taught me to work smarter and that does not mean simply in my business career.

      2. Jason Rines

        I assume since your online Vinny that you also have access to Google and can look up the definitions of differing government types.

        How often do you see George Soros on Fox News? Did you catch the entire discussion going on in the thread about Soros and Open Society? Google is a wonderful invention.

        1. Vinny G.

          Hey, thanks for telling me about Google. Sounds like a great idea, although I’m having truouble understanding it…

          BTW, prior to changing careers I spent 15 years building software and online businesses, but I never came across this Google thing you mentioned… although I assume it’s an n-tier ranked, loosely-cached, and semi-indexed system of finding information, but beyond that I’m clueless…LOL



  9. Hugh

    “Policy makers have been wildly successful in stabilizing the economy in the U.S. and elsewhere.”

    This is like the old joke. The operation was a success. Complications: patient died.

    “Despite recent improvements in the economy”

    I must have stepped off the planet for a bit. What improvements? Stock and commodities bubbles fed by bailouts and greater fool pension funds? Transient effects from a weak stimulus and other short term programs? Look past these and the fundamentals are as bad as ever and getting worse.

    There may be something to the size of the country and its efficiency and responsiveness to its citizens. Regional governments might better reflect and provide what citizens wanted. This is different from the size of government per se. Mostly however we are looking not as size as a problem but the massive corruption which the equation of money to free speech promoted. This has produced a system run by self-serving and very buyable idiots. I wrote years ago that there are real consequences to government by fool. We are seeing many of them now.

    “Americans are have a Libertarian bent and are more distrustful of power, elites, and government than many in Western Europe and elsewhere.”

    No joke, but Western European governments actually provide real services to their people so why shouldn’t Europeans support them? And why shouldn’t Americans look askance at their own government which so obviously does not? I mean we have a healthcare debate in which the health of Americans doesn’t even occur as an issue. It is all about how to steer increased profits to insurance, drug, and medical companies. I have never considered myself libertarian but if to dislike that kind of corporatist government makes one libertarian then I very definitely am libertarian.

    “Barack Obama did campaign as “change you can believe in.” However, all I have seen so far is more of the same”

    Obama is a status quo corporatist. He isn’t progressive. He isn’t even much of a mainline Democrat. He is much more a Blue Dog and DLCer. Look at what he has done from this perspective and a lot of what appears confused and contradictory suddenly makes sense.

    “I am less confident of government.”

    I am less confident of our elites as in having no confidence in them at all. It doesn’t matter the size of government or the problems it and we face. With elites like ours, we will be screwed no matter what.

    1. DownSouth

      Hugh said: “It doesn’t matter the size of government or the problems it and we face. With elites like ours, we will be screwed no matter what.”

      Well said.

      To frame the issue as one of the size of government is libertarian. The discussion should be about the quality of government, not the size.

      And to talk solely about the Founding Father’s fear of big government is also a libertarian distortion.

      The Founding Father’s fear of too much power in government was checked by their great awareness of the enormous dangers of the rights and liberties of the citizen that would arise from within society. Hence, according to Madison: “It is of great importance in a republic, not only to guard the society against the oppression of its rulers; but to guard one part of the society against the injustice of the other part.”


      1. Edward Harrison Post author

        I will grant you that the frame I have put on this is biased in a Libertarian direction. But, I concede your point that the true debate SHOULD be as much about the quality of government (local, state or national) as it is about size.

      2. Jason Rines

        That is a wonderful Madison quote Down South. Now tell me, who or whom is guarding the society from the injustice of the others?

        I can’t speak for all nations but certainly in the USA I do not see many Madisons’ these days in the Administration. The result of one group operating in a vaccuum of any political flavor yields the results Madison was speaking of. You are being disingenerous in your arguments. Is this directed at me or for others here on this thread?

        Your statements are of the simple kind that remind me of these kind: ‘The fleas come with the dog so no reason to ever advance civilizations progress.’

        Evidently, you are well educated. Political labels such as Democractic, Republican, Libertarian ignore the concepts such as truth, freedom and justice. I don’t care what your political party loyalties are Down South. Do you as an individual tell the truth? Feel funny when I ask you that question? How about the promotion of freedom? Your arguments that governance doesn’t matter is not indicative of such a belief in the concept of freedom. Justice? Sure, if you can afford it in America. If not, that leaves those without the ability to pay for justice a lot of time in how to figure out cost-effective methods of rebalancing the scales.

        To directly answer your statement about Libertarians as Americans view the political party, I am not a huge fan. The politics are non-inclusive of large swaths of the population. Therefore, this group does not fully pass the smell test in regards to the concepts of truth, freedom and justice. But to me, no political party in the USA is fully inclusive. The difference between the two major political parties is like the difference between Coke and Pepsi. Both taste great going down but they will rot your stomach.

        My viewpoints side with evolution. No need to tear down the Central Banking model Down South but the model after three hundred years has a date with destiny. As we speak, BRIC is developing peer-to-peer banking system on the Internet that utilizes successful lending models of other empires past. The West will have to learn to compete, evolution at work my friend. No business man be it banker or otherwise likes competition, but it is through competition that markets stay healthy. No man can outsmart math itself but some do try, do they not?

        1. DownSouth

          Gosh, Jason, you’re like a machine gun, spraying out a stream of clichés, innuendo, accusations and outright falsehoods, all totally incoherent, with no unifying theme.

          What was it I said that set you off?

          How does one respond to all that?

          The answer if of course quite simple: One doesn’t!

    2. Vinny G.

      This “stabilization of the economy” somehow reminds me of Bush W dressed in that ridiculous paratrooper uniform, standing on the deck of that aircraft carrier under a large banner reading ” Mission Accomplished”, sporting his obnoxious smirk.


  10. ozajh


    You are using anti-government framing in your definitions, whether intentionally or not I don’t know.

    Your Big Government definition is only “Big” in the context of a basically small-government society such as the US. In many other societies this definition would be considered “Medium”.

  11. craazyman

    What I find astonishing about Obama and Team Obama is the total disregard of any notion of shared sacrifice to solve our nation’s problems — at least where Wall Street and the corporate goons are concerned.

    I believe that FDR, during WWII, made the public declaration in the context of war time rationing that no man deserves to earn more than $25,000 per year during a time of great national crisis.

    Consider how far we’ve come (or fallen) from that. Like the great Hegelian dialectic — the thing transforms into its opposite. Like the Temples of Ba’al transformed into the Vestal Virgins and the Nunnery, our notion of civic duty has come 180 degrees, to the point where a Moron in New York and in London (I know that’s in England but I’m ranting) claims that Wall Street is doing God’s work.

    If there is any technocrat in DC who takes “domestic tranquility” for granted — as a given — they should think again. They are 1 for 5 when it comes to the Preamble — providing for the common defense. They get goose eggs for all the rest.

    I can concede the need for aggressive monetary stimulus and fiscal stimulus. I can concede the expediency of temporary Big Government, but I can’t concede the failure of ethical leadership in Washington on the issue of bankster and corporate looting. I can’t concede the failure to take a moral stand — on bonuses, on executive pay, on zero interest rates, on rigged commodity markets, on starving for tamales so Wall Street traders can loot — and the acquiesence to the inevitability of it all as if it were an act of nature.

    Contra Naturam! I say Contra Naturam! No. That’s not nature. It’s the underworld of the soul.

    If Team Obama can’t see — through its Ivy League and elitist eyes — that taking money from America’s middle class and siphoning it into bankster pockets is Holy Road to social chaos, societal breakdown and anarachy — then they are blind men, tiny moral midgets on little ant hills waving their stupid lips while sounds come out like the tinny voices of idiots.

    And where will your portfolios be in the end thereof. In sewers of slavery and pools of blood. Contra Naturam!

    Easy for me to say. I’m just a message board poster. Fair enough.

    But I’d like to see the Big O try harder to reign in the looting and see that he understands that not everything that can be counted counts, and not everything that counts can be counted.

    I want to breath the air around Thom Paine on the Delaware River, the Thom Paine of the French jail cell and his Rights of Man. I want Patrick Henry with his hard choice between Liberty and Death. I want John Hancock with his big name signed in Pride. I want to see the hallowed mind ground of the other Signers, hunted, haunted, blown like leaves and blasted by mortars for their piety and grace. I want Frederick Douglas and his hard noble chin. I want Lincoln at Gettysburg and his prayer for the nation. I want Lincoln’s ghost to haunt Obama like Banqo haunts MacBeth. I want Liberty, not the tyrrany of bankster money greed death. I want to believe in Spirit power, the power of creation, imagination, inspiration, love and equality. I want a President who understands this is the Holy Spirit, who channels the Holy Spirit and not the God of Lloyd Blankfein and his demons that eat his brain like Fois Gras at a lobbyist party. Shit. What a mess.

    Other presidents have had it hard and they’ve had to make tough choices — and extend themselves in efforts of leadership, Risk failure, risk brutal failure. Nothing comes from timidity. So have other real leaders — to many to name here.

    Big government, small government, whatever government. It’s not the size so much as the Holy Ghost that permeates through every mind. It’s the Holy Ghost of the New Jerusalem, abstract, infinite, multivariate, wild, free and radical but there, like an old friend, right in front of you. Like a big smile. It was all so easy, Big O. Just you and that basketball and a cigarette and a few good speeches. yeah, what a hoot, huh? You did it. You know what you have to do. So why is it so hard? Trust yourself and us.

    1. gordon

      “I want to see the hallowed mind ground of the other Signers, hunted, haunted, blown like leaves and blasted by mortars for their piety and grace”.

      Maybe you would like to see a French army, navy, arms and financial support, too?

      1. craazyman

        dude, I don’t mean I want it blasted. I want to see it take center stage, and the rest describes what it was. My sentence structure is admittedly shoot from the hip sometimes. No the French can leave their armed forces at home, but send the women and the Steak Frites with Cote du Rhone. ho ho ho. But keep the chefs. I’ve had it with that sort of thing. I like to cook rather than go out to eat. And I’m not a big chef celebrity worshipping sort of guy, ya know what I mean. I mean Lafayette came over to see George and I bet Lafayette could do up a good Coco vin. Ya know what I’m sayin’.

  12. gordon

    I’m more than a little surprised that in debates like this the name of J.K.Galbraith doesn’t get mentioned any more. I fully understand the feelings of Hugh, who points to European social services and safety nets, but you don’t need to cross the Atlantic. Just go and re-read Galbraith on the role of Government, on private opulence and public squalor, on the way private consumption requires Govt. provision of public services, on the role of Govt. in supporting “countervailing power”. I find the contemporary despatch of JKG to the memory hole really weird.

  13. Kelly

    * In these sentiments, Sir, I agree to this Constitution, with all its faults, — if they are such; because I think a general Government necessary for us, and there is no form of government but what may be a blessing to the people, if well administered; and I believe, farther, that this is likely to be well administered for a course of years, and can only end in despotism, as other forms have done before it, when the people shall become so corrupted as to need despotic government, being incapable of any other.
    Ben Franklin (He is on the hundred dollar bill) Speech to the Constitutional Convention (28 June 1787)

  14. RC

    What? I thought Barack had ended all corruption in Washington DC the day after he took office! ( I watch MSNBC news )

  15. Brian

    Well, I had almost given up on Naked Capitalism, and I’ve seen other NewDeal2.0 posts around the web today that drove me batty.

    Thanks Edward, this is what real people think about real life. There’s just no one to trust anymore. Everything done to help us is really done to help someone that got us here. God’s work needed a bailout from the little guy I guess!

    I don’t want any more help, not from this government. Now my only choice is to play along or take my ball and go home. The latter option looks better daily.

  16. Kelly

    A bit more from Franklin, the wisest of our founders. From A letter to Jonathon Shipley, March 17, 1783

    “American will, with God’s blessing become a great and happy country; and England, if she has at length gained wisdom, will have gained something more valuable and essential to her prosperity, than all she has lost, and will still be a great and respectable nation. Her great disease at present is the number and enormous salaries and emoluments of office. Avarice and ambition are strong passion, and separately, act with great force on the human mind; but, when both are united, and may be gratified in the same object, their violence is most irresistible, and they hurry men headlong into factions and contentions destructive of all good government. As long, therefore, as these great emoluments subsist, your Parliament will be a stormy sea and your public councils confounded by private interests. But it requires much public spirit and virtue to abolish them; more perhaps, than can now be found in a nation so long corrupted.

    The select works of Benjamin Franklin
    By Benjamin Franklin, E. Sargent page 463

  17. MyLessThanPrimeBeef

    A democracy with professional politicians can’t function without well paid, highly trained professional citizens.

    When your amateur citizens have to spent 40 hours a week to feed themselves and their families, that leaves very little time for them to supervise their professional public servants.

    I suggest the government should treat citizens as professionals and pay them professional wages so they can free themselves of enough time (say at least 40 hours a week) to properly supervise the professional politicians.

    And since employed professional politicians are public servants (they are excused if out of work), the proper protocol is for them to bow to their masters, sorry, supervisors, i.e. the poeple of this great country, and not foreign potentates.

  18. Vinny G.

    One thought: isn’t it ironic that 40 years after their Cultural Revolution, China is now an almost entirely reborn nation, certainly not lacking in intellectuals and well-educated people.

    As such, would any readers here think a “Financial Revolution” in America may offer some long term benefits? (of course, this is a shamelessly rhetorical question)

    PS — as I type this, Bill Gates and Warren Buffett deliver their sorry defense of American capitalism. I tell ya, nowadays I get more comic relief from watching CNBC than the Comedy Central.

  19. anon


    Effective, durable, new family formation, the source of talent development coming out of the crucible of evolution and the articulation mechanism between human and planetary biology, is the self-adjusting mechanism of economics, which the policy at issue short circuits for the purpose of forcing talent to compete for artificial capital scarcity, driving planetary resource depletion and global declines in biological diversity.

    The laws of physics ensures that capital must chase talent on the margin, in equilibrium, or capital will become inert, subject to recycling. At human planetary saturation, the planet will no longer tolerate the error of running evolution in reverse, relative to an accelerating pace of renewal cycles, and it has repeatedly demonstrated the ability to preemptively trigger collapse of top level systems before they threaten underlying biology.

    The planetary fulcrum measures balanced biological growth, and communicates the result externally, to ensure it continues.

    Government must conform to the laws of physics. Despite its self-serving arguments, agency is not the center of the universe, and it must compete for participants, not the other way around.

  20. Jim S

    I really appreciate your writing this. I hear a lot of talk about politics, but not much about government, these days, as if we’ve forgotten they’re separate concepts. It’s heartening to see you address this in terms I’ve pondered.
    It’s sometimes fashionable to dismiss the founding fathers as obsolete, as I see has been touched upon above, but as I get older I’ve come to believe that for all their flaws, the founding fathers were an astute bunch and should not be dismissed lightly. They were keen observers of human nature. We’ve lost some of that in our modern world; for all our advances in knowledge and technology, human nature hasn’t changed.


  21. Demented Chimp

    Big Government, Small Government, Limited Government, Government for the People, the Peoples Government….blah blah blah

    The Origin of language.
    Wouldnt it be good if you could talk your fellow man in to giving you a share of his bananas without having to hit him over the head. Grunts became promises. Religion and Politics followed soon after. Now perfected into the science of Public Relations, and their sporn CNBC, Fox News and CSPAN. Words and more words, carefully crafted to con and deceive. You willingly hand over the bananas of your own free will.

    “Change we can believe in” A wonderful tag line created at great expense to enthuse a population. He made you believe in his charisma = Deceptive and mood altering words/gestures and handsome smile.

    Every word spoken is an attempt at manipulation of some kind otherwise why have speechwriters. Music and oratory are mood altering drugs filled with prenatal rhythyms. We need a new form of power communication. Every sentence carefully torn apart and referenced against accepted facts. Remove all the poetic adjectives. Fact after scientific dry fact. How many speeches would pass such a test. Yes they would be dull but should we rely on how a speech makes you feel or whether your empathise for a politician.

    Politicians should be kept behind screens we shouldnt see their faces or hear the music of their voices. Dry anonymous scientifically sound text, to be pored over for accuracy and logical construction. This is how we should select our leaders, The cult of presidential personality is absolutely the worst way to choose a leader.

    I dont care how you feel. How you feel is the problem.

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