Clinton's Elder Statesman Role

[Pangloss]

I happened to catch a few minutes of Rush Limbaugh yesterday at lunch (I usually try to pick up Al Franken when I'm out and about at that time, but for some reason I couldn't tune in 940). Anyway, he was ringing up Clinton for his Sunday talk show appearances, really bashing him for, in his view, bashing the Bush administration. So I popped into the Tivo last night and watched the Clinton interview (I'm a little behind in my Tivo viewing at the moment).

 

I didn't think he attacked Bush per se, and he certainly didn't cross the line in terms of race. But he did actually state that the reason for the deficit is because of the tax cuts and Iraq, which of course is hogwash when we're spending $1.5 trillion per year on entitlements and less than a hundred billion per year on Iraq.

 

He also stated that we're directly asking China to give us low-interest loans to finance the debt, which is also nonsense. The national debt is based on issuing overages of currency backed by the promise of payment to holders, not loans contracted to debt owners. Yes, foreign agencies own the debt, but they own it in the form of treasury bills and bonds which they can cash in at any time. Same thing from a money perspective, but COMPLETELY different from a diplomatic perspective.

 

He even made this ridiculous statement that this is the first time we've ever financed a war based on debt! Um, hello, what the hell does he think the revolution was financed on? What does he think EVERY SINGLE WAR WE'VE EVER HAD was financed on? Yeesh.

 

I think Clinton's a smart guy, but he's playing politics again, and it's disappointing that his perspective is so partisan. He has the ability to be an elder stateman, and he's throwing it away to get his wife elected to the throne.

 

Some of his statements were so moronic that they reminded me of his State of the Union address in which he actually proposed that the government play the stock market!

 

Very disappointing. I'm glad he refrained from personal attack or innuendo about race, so at least he's kept the debate at a responsible level. But he's a smart guy and it's a shame to see him toss out intelligent reasoning in favor of lame partisanship and false analogies.

[bascule]

But he did actually state that the reason for the deficit is because of the tax cuts and Iraq, which of course is hogwash...

 

If your liabilities exceed your revenue, you run a deficit. Now, the decrease in revenue isn't entirely the result of Bush's tax cuts, but Bush has continued to increase spending in the wake of falling tax revenues.

 

I mean seriously, cut taxes and reduce government spending or raise taxes and increase government spending. Cutting taxes and increasing government spending just doesn't work...

 

...when we're spending $1.5 trillion per year on entitlements

 

Uhh, what? Source please...

[swansont]

Some of his statements were so moronic that they reminded me of his State of the Union address in which he actually proposed that the government play the stock market!

 

Investing in the stock market is moronic?

[Pangloss]

No, investing in the stock market is not moronic. It's just moronic to suggest that the government invest in it. Simple question: What are stocks? Simple answer: Partial ownership of the company. If the "company" is partially "owned by" the government, then guess what? It's no longer a private company! Put another way, the whole entire point of the stock market is to trade in private ownership portions. So the idea that the government should trade stock is (a) based on a lack of understanding of what stock is and why it's traded, and (b) a violation of the basic principle of trading it in the first place.

 

Frankly it was the stupidest thing I've ever heard any president say that could not be passed off as miscontrued, semantics, or a slip of the tongue.

 

 

Bascule, the budget last year was something like $2.2 trillion, out of which about 60% is "entitlement" spending (Social security, healthcare, welfare, etc), as opposed to discretionary (Defense, infrastructure, etc). (IIRC this doesn't include debt-servicing.) For more information about this, I recommend Wikipedia and the Congressional Budget Office (http://www.cbo.gov/).

 

This page appears to have some good historical data which you may find helpful:

http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0

 

Regarding this statement:

 

If your liabilities exceed your revenue, you run a deficit. Now, the decrease in revenue isn't entirely the result of Bush's tax cuts, but Bush has continued to increase spending in the wake of falling tax revenues.

 

Do you have a source on that bit about tax revenues? It's my understanding that tax revenues are up under Bush, which is not surprising given a major tax cut and a booming economy. I'd be interested in reading which way it actually is. Thanks.

 

I do agree that spending is up -- an insane amount, in fact. It's not just Bush's fault, though -- in fact 537 people are to blame (every member of congress + VP Cheney (as the 101st Senate vote) + Bush).

 

My point was that it's silly for Clinton to be blaming the deficit on Iraq and the tax cut, when in fact Iraq is a (relative) drop in the bucket and the tax cut actually SAVED us from the recession. In fact if we buy Clinton's reasoning, the recession was his own fault, because of the massive increases in spending he approved in his 2000 budget in spite of serious economic indicators that were swiftly turning red at the time. So not only is he off in his criticism, he's being hypocritical at that.

[Skye]

tax cut actually SAVED us from the recession

How?

[Pangloss]

You mean how do market economies and supply-side economic theories work, or do you mean why do I feel the tax cut was responsible for the recovery to that degree?

 

Either is a legit question, I just want to answer the right one.

[Tetrahedrite]

I am not completely up on US political matters, but didn't the Federal Reserve chairman (Allan Greenspan?) come out and say explicitly that he "got it wrong" supporting the tax cuts for the rich, and that the policy had contributed to some of the current problems re the deficit?

[Tetrahedrite]

I think Clinton's a smart guy, but he's playing politics again, and it's disappointing that his perspective is so partisan......

Imagine that...an ex-Democrat president being partisan when making comments about a Republican administration.

 

*off-topic rant*

I've really got to say something that has been bugging me for a while. PARTISAN is a Weasel Word! There seems to be a perception by certain learned fellow posters that if your views lean towards one political party or another, then it is a "partisan view" and therefore not legitimate. HOGWASH! An absolute obsession with "being in the middle" or "centrist" or "non-partisan" just serves to limit your ability to make reasonable judgements. Just because it is a policy of a political party, doesn't automatically make it wrong or bad. Those who sit "in the middle" of US politics would be considered horribly right wing in most other countries.

I guess what I'm saying is that I detect a bias towards anyone who's opinions diverge from the percieved middle ground, and that the obsession with being non-partisan is sometimes misguided (and often annoying).

[Skye]

You mean how do market economies and supply-side economic theories work, or do you mean why do I feel the tax cut was responsible for the recovery to that degree?

 

Either is a legit question, I just want to answer the right one.

Well the second question.

 

But what I don't want is an explanation that's simply jamming pins into the voodoo economics doll. I'd like to have some idea of where the money is going, and how and how much it is growing.

[john5746]

I didn't think he attacked Bush per se, and he certainly didn't cross the line in terms of race. But he did actually state that the reason for the deficit is because of the tax cuts and Iraq, which of course is hogwash when we're spending $1.5 trillion per year on entitlements and less than a hundred billion per year on Iraq.

 

Bush Tax Cuts

 

The economy is very complicated and I am no expert. I understand that giving tax cuts to ALL Americans is a good thing, the poor and middle class will consume theirs and give a short kick to the economy, while the Higher classes will invest some of thiers, providing more longer term improvements.

 

I am just very skeptical when I hear something that sounds too good to be true. Keep lowering taxes and things will be great. The wealth from the rich will "trickle" down to the poor. It may have worked with Reagan, people still argue about that, but it doesn't mean it will always work, otherwise we could eliminate taxes altogether and be happy.

 

I agree with you that reduction of spending needs to be looked at more. This President hasn't vetoed anything and has a majority in the Senate and Congress. Who is he going to blame? The New Orleans Mayor? At least Clinton had the balls to fight - when he wasn't using them for something else.

[swansont]

No' date=' investing in the stock market is not moronic. It's just moronic to suggest that the government invest in it. Simple question: What are stocks? Simple answer: Partial ownership of the company. If the "company" is partially "owned by" the government, then guess what? [i']It's no longer a private company![/i] Put another way, the whole entire point of the stock market is to trade in private ownership portions. So the idea that the government should trade stock is (a) based on a lack of understanding of what stock is and why it's traded, and (b) a violation of the basic principle of trading it in the first place.

 

Companies that have publicly traded stocks are by definition not privately owned companies, so regardless of government ownership, they are not private companies. I think it's possible that you have a lack of understanding of what stock is. The reason for ownership is to share in a fraction of the future earnings of the company.

 

And the government is already involved in buying stocks, so that ship has sailed anyway. The government runs the retirement plan for federal employees, the Thrift Savings Plan, and included in that is the option to buy stocks in an index fund. It actually works quite well, and far better than the individual account proposal of Bush's is likely to.

[swansont]

the tax cut actually SAVED us from the recession.

 

That's often claimed but hard to prove. What is often ignored is the huge amount of money that was dumped into the economy by the slashing of interest rates that stimulated borrowing and induced people to pull equity out of their homes and spend it on various things.

[-Demosthenes-]

Where's Nevermore

[Pangloss]

The economy is very complicated and I am no expert. I understand that giving tax cuts to ALL Americans is a good thing' date=' the poor and middle class will consume theirs and give a short kick to the economy, while the Higher classes will invest some of thiers, providing more longer term improvements.

 

I am just very skeptical when I hear something that sounds too good to be true. Keep lowering taxes and things will be great. The wealth from the rich will "trickle" down to the poor. It may have worked with Reagan, people still argue about that, but it doesn't mean it will always work, otherwise we could eliminate taxes altogether and be happy.

 

I agree with you that reduction of spending needs to be looked at more. This President hasn't vetoed anything and has a majority in the Senate and Congress. Who is he going to blame? The New Orleans Mayor? At least Clinton had the balls to fight - when he wasn't using them for something else. [/quote']

 

 

Good post.

[Pangloss]

That's often claimed but hard to prove. What is often ignored is the huge amount of money that was dumped into the economy by the slashing of interest rates that stimulated borrowing and induced people to pull equity out of their homes and spend it on various things.

 

Yup, fair enough. The idea that the tax cut "saved" us from a recession is purely my opinion, and I happily caveat my remarks as such. The concept is legitimate, and well understood by economists, but the final extent of any such move is always interperable, no question about it.

 

 

(Skye I think that answers your question to me as well?)

[Pangloss]

Companies that have publicly traded stocks are by definition not privately owned companies' date=' so regardless of government ownership, they are not private companies. I think it's possible that you have a lack of understanding of what stock is. The reason for ownership is to share in a fraction of the future earnings of the company.

 

And the government is already involved in buying stocks, so that ship has sailed anyway. The government runs the retirement plan for federal employees, the Thrift Savings Plan, and included in that is the option to buy stocks in an index fund. It actually works quite well, and far better than the individual account proposal of Bush's is likely to.[/quote']

 

 

Ahem. No hair-splitting, please. I think you know what I meant, but I will clarify: Companies that have publically traded stocks are privately owned in the sense that the government does not own them. Yes, they're "public" in that they're owned by multiple people, but they are not owned by the "public at large". They're owned by the stockholders.

 

Regarding the ownership of stocks by federal retirement plans, that's an interesting point, and I'd be interested in discussing that further. It's not something I've considered before, and it sounds like it has some interesting ramifications that are not entirely dissimilar from the Clinton proposal. (I.E., your point is taken and appreciated.)

 

Now please address my point, which was the danger of government ownership of companies. Do you not see the inherent conflict of interest implied in such a relationship?

 

As a side note, "a share in future earnings" is not why most stock is purchased. The intent of most buyers is to resell the stock itself at a higher value. Many if not most highly-traded stocks don't even pay dividends. And the purpose of Clinton's proposal was most definitely to take advantage of trading, not long-term ownership. There was no other point to that suggestion, because that's where virtually all of the return-on-investment comes from.

 

(sigh) Has everyone forgotten The Bubble already? I've still got books on my nightstand about Day Trading that I haven't gotten around to reading yet....

 

As far as Bush and the Social Security plan, you and I are already on the same page there. (shrug)

 

If you still feel I have a lack of understanding of what a stock is, please let me know and we can discuss it further. But splitting hairs does not a lack of knowledge indicate. You know better than to say something like that, especially about me.

[swansont]

Ahem. No hair-splitting' date=' please. I think you know what I meant, but I will clarify: Companies that have publically traded stocks are privately owned in the sense that the government does not own them. Yes, they're "public" in that they're owned by multiple people, but they are not owned by the "public at large". They're owned by the stockholders.

 

Regarding the ownership of stocks by federal retirement plans, that's an interesting point, and I'd be interested in discussing that further. It's not something I've considered before, and it sounds like it has some interesting ramifications that are not entirely dissimilar from the Clinton proposal. (I.E., your point is taken and appreciated.)

 

Now please address my point, which was the danger of government ownership of companies. Do you not see the inherent conflict of interest implied in such a relationship?

 

As a side note, "a share in future earnings" is [i']not[/i] why most stock is purchased. The intent of most buyers is to resell the stock itself at a higher value. Many if not most highly-traded stocks don't even pay dividends. And the purpose of Clinton's proposal was most definitely to take advantage of trading, not long-term ownership. There was no other point to that suggestion, because that's where virtually all of the return-on-investment comes from.

 

(sigh) Has everyone forgotten The Bubble already? I've still got books on my nightstand about Day Trading that I haven't gotten around to reading yet....

 

As far as Bush and the Social Security plan, you and I are already on the same page there. (shrug)

 

If you still feel I have a lack of understanding of what a stock is, please let me know and we can discuss it further. But splitting hairs does not a lack of knowledge indicate. You know better than to say something like that, especially about me.

 

 

But shareholders don't "own" companies in the sense that they have any real say in how they are run. Most stockholders' votes are nonbinding, and while it's bad form for proposals endorsed by the board of directors to be defeated (or even anything less than overwhelmingly approved), it is the board of directors, and only the board, that has the power to implement policy.

 

So where would the conflict of interest be, if the money invested was not controlled by congress? It's social security money, so a trustee could be appointed, responsible to the people, not the government, much like any mutual fund.

 

Perhaps you could point me toward a transcript where Clinton's "trading strategy" is made clear, because I can't find it. In 1999 he mentions investing some money in the private sector and providing matching funds for private savings, like in a 401(k). So I can't find where his purpose is clear that he would be trading.

 

Yes, people invest to make money. Not like that's a surprise, right? And the reason is that companies grow, so your share of their earnings gets bigger. But you are wrong when you say that all money is made on short-term trading. That drives the day-to-day stock prices, but not the long term. I do remember the bubble, which includes the run-up and collapse. I'm invested in the market. I wasn't when I was in grad school, so I have to wonder if you are.

[Pangloss]

But shareholders don't "own" companies in the sense that they have any real say in how they are run. Most stockholders' votes are nonbinding, and while it's bad form for proposals endorsed by the board of directors to be defeated (or even anything less than overwhelmingly approved), it is the board of directors, and only the board, that has the power to implement policy.

 

So where would the conflict of interest be, if the money invested was not controlled by congress? It's social security money, so a trustee could be appointed, responsible to the people, not the government, much like any mutual fund.

 

These semantic points about stock ownership, which I've clearly demonstrated that I understand at least as well as you do, have nothing to do with the discussion at hand, and I'm in no mood at the moment for personal invective and straw-manning. Knock it off.

 

You just agreed above that there's a potential conflict of interest, which you feel can be protected by trustee participation, right? Well as I said in a previous post, I think that's a valid point that I had not considered before. Why not simply say that? Why degenerate the conversation into personal slur and deridement? There's simply no call for being rude to me when I have not been rude to you.

 

I'd like to continue a discussion about that subject, but at the moment I'm not real inclined to do so. When you can keep a civil tongue in your head, we can continue if you like.

[Skye]

Yup' date=' fair enough. The idea that the tax cut "saved" us from a recession is purely my opinion, and I happily caveat my remarks as such. The concept is legitimate, and well understood by economists, but the final extent of any such move is always interperable, no question about it.

 

 

(Skye I think that answers your question to me as well?)[/quote']

Yeah, I suppose so. I would have said "may have contributed to" but I wouldn't with any certainty ascribe it to that one legislative policy.

[swansont]

These semantic points about stock ownership' date=' which I've clearly demonstrated that I understand at least as well as you do, have nothing to do with the discussion at hand, and I'm in no mood at the moment for personal invective and straw-manning. Knock it off.

 

You just [i']agreed[/i] above that there's a potential conflict of interest, which you feel can be protected by trustee participation, right? Well as I said in a previous post, I think that's a valid point that I had not considered before. Why not simply say that? Why degenerate the conversation into personal slur and deridement? There's simply no call for being rude to me when I have not been rude to you.

 

I'd like to continue a discussion about that subject, but at the moment I'm not real inclined to do so. When you can keep a civil tongue in your head, we can continue if you like.

 

WTF?

 

You seem to be equating "disagreeing with you" with "being rude"

[Pangloss]

Well maybe I'm putting too fine a point on it, or maybe I'm being overly sensitive. I'd just appreciate it if you'd acknowledge our common ground rather than questioning whether I know anything about stocks.

 

Focus on the positive, my friends!

[swansont]

Well maybe I'm putting too fine a point on it' date=' or maybe I'm being overly sensitive. I'd just appreciate it if you'd acknowledge our common ground rather than questioning whether I know anything about stocks.

 

Focus on the positive, my friends![/quote']

 

To be frank you're kinda making that difficult. I have noticed in my brief time on the politics board that you have a disturbing habit of summarizing other peoples' points and/or actions in a way that changes the meaning of what has been said.

 

I never actually questioned whether you know anything about stocks, I asked you if you owned any. I noted that you had misused some terminology related to stocks, which you wrote off as "hair-splitting" and "semantics." I also challenged a statement about where the money is made. That's an invitation to back up your position with some facts.

 

Clinton's statements in the 1999 State of the Union speech was "Specifically, I propose that we commit 60 percent of the budget surplus for the next 15 years to Social Security, investing a small portion in the private sector just as any private or state government pension would do."

 

From that you have apparently deduced that "the purpose of Clinton's proposal was most definitely to take advantage of trading, not long-term ownership. There was no other point to that suggestion, because that's where virtually all of the return-on-investment comes from."

 

Which is not what he said. And there are plenty of examples of people and institutions that do invest for the long-term and make good money at it, which is why I disagree with your assessment of where money is made in the market.

[Douglas]

I happened to catch a few minutes of Rush Limbaugh yesterday at lunch (I usually try to pick up Al Franken when I'm out and about at that time, but for some reason I couldn't tune in 940). .

Pangloss, out of curiosity, have you ever heard anything informative from Al Franken??

 

I've watched him on and off via the Sundance channel for a few months now, I've tried to keep an open mind, but he's turning me off. He only interviews left wing Bush haters, never heard a conservative on his program. He leads his guests with questions starting with "don't you think", and his topics are usually trivial politics

[Douglas]

Investing in the stock market is moronic?

According to the democrats it is.....They want no part in a social security program that invests a portion of the taxes in the stock market.

[Pangloss]

I've never (deliberately) changed anyone's meaning, I've not misused any terminology related to stocks, and acting like I have was a deliberate attempt to make me look bad in order to demean my point, which you went on to agree with (which you could have just done in the first place). That's called a straw man argument, swansont. I guess we're done here, but I'm sorry to see it, because I thought you had some interesting points that made me think about something in a different way, but I'm not going to have a conversation with someone that's only mature on one side.

 

You're welcome to your usual last word on the subject. Enjoy.

 

 

Pangloss' date=' out of curiosity, have you ever heard anything informative from Al Franken??

[/quote']

 

Who said anything about listening to Al Franken for information? (grin) I just think the guy's a riot.