What Happened to the Bootstraps?

Email Print posted by Cenk 03/18/2008 10:58:28 AM EST

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For as long as I have been alive Republicans have been saying that government hand-outs make people lazy and give them all the wrong incentives. Instead the better approach is for people to pull themselves up by their bootstraps.

So, now when the financial industry is in trouble because they took too much risk in trying to get too rich too quick, I'd like to ask one question -- what happened to the bootstraps?

Why didn't the Fed toss Bear Stearns a couple of bootstraps and tell them to piss off? Oh wait, could it be that Republican ideology only applies to the poor and the middle class? If you have a problem in your life that you need some temporary help with, you're out of luck. But if a massive company needs that same help, well, of course, the government is going to step in. It would be irresponsible not to!

Incentives matter. I agreed with welfare reform because if you give someone an incentive to take a check (even if it's a small one) for not working, you're going to produce a result where people will take that check rather than work much harder for maybe a little more money. It wasn't just a slogan when Bill Clinton said that welfare should be "a hand up, not a hand out."

If you give unchecked and unlimited welfare (unlimited in time, I know the checks were never huge), you encourage people to stay on welfare for too long. If you have no welfare, then you don't pick decent people up when they need a hand in their lives. We need balance in how the government handles this.

But the same has to be true of regulating giant companies in the financial industry. The Republicans claim to be laissez-faire - until it comes time to bail out their rich friends. Then they're knee-deep in government intervention. So, they won't bail regular folks out when they need a little help, but will jump right in to bail out some of the richest people in the country.

Don't get me wrong, I'm not a class warfare guy and I understand why the financial industry had to be stabilized in the short term. The problem isn't the bailout; the problem is what led to the need for the bailout. The government took away almost all of the regulations of the financial industry, and then is surprised when they acted in a way that needed to be regulated.

Without the government watching over their shoulder, the banks made far too many loans to investment vehicles that were far too risky. But the more loans they made, the richer they got. Except for one thing - all that risk. But what did they care? If it all crashed, the government would have to bail them out anyway.

It's all a mater of incentives. If you give people incentive to risk too much without giving them adequate disincentives, you will get too much risk. And, of course, now, we'll get the typical Condoleezza Rice line, "No one could have seen it coming."

So, what are the answers? First, if the government is going to bail you out, then the government should be regulating you to make sure you're not going to need a bail out. I'm not a fan of over-regulation (but we're nowhere near that), but no regulation at all is just as dumb, if not dumber.

Second, shut the fuck up about bootstraps. If you're going to keep bailing out the largest companies in the world, you better be prepared to do the same for the average American when they run in to some trouble. Laissez-faire my ass. This is rank hypocrisy.

Third, you need balance, whether it's a hand up for the common guy or a regulation for big business. Too much of anything provides the wrong incentives, but too little leaves people hanging in the wind. We need some welfare and some regulation. Not too much, not too little.

Finally, when someone tells you about their ideology of free markets unfettered by any government intervention, they better not come crying home to mama when they need help from that same government they've been bashing for the last sixty years.

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What Happened to the Bootstraps? | 23 comments (23 topical, 0 hidden)
Agreed! (none / 0)
If an industry is going to be irresponsible in their affairs and therefore cannot be trusted to the postion of economic responsibility that they have they should have pretty dam tight reigns on and particualry if that idnustry is so important to the stability of the economy as a whole.  The fact is that business drives the machine of modern life and prosperity and given that, the short sighted greed leading to ruin of some influential players must be checked.  Perhaps if there were disinsentives to this type of behavior such as personal responsibilty (beyond sharholder derivative suits) for driving the train full speed off a cliff this kind of thing would not happen.  Maybe the threat of divestature of executive interests might create responsible behavior.  I'm sure there is a very complicated solution out there somewhere.

As for anyone being laissez-faire, that has always been nonsense.  What is the defining characteristic of a corporation?  That's right, limited liability.  And who protects corporations and individual investors and management from having their balls sued off?  That's right, the government.  Incorporated entities exist and enjoy all the protections they have only be operation of law.  We allow them to exist and allow that their owners escape liability when things go wrong.  Are we not generous?  So the next time someone comes at you with that free market nonsense just agree and then suggest that they also then should embrace doing away with incorporated entities designed to shield its owners from liability.  After all, we have to get the government out of business's hair and truly let the free market handle it. 

by nfc on 03/18/2008 12:06:51 PM EST

Still have a little Republican to beat out of you. (none / 0)

I agreed with welfare reform because if you give someone an incentive to take a check (even if it's a small one) for not working, you're going to produce a result where people will take that check rather than work much harder for maybe a little more money. It wasn't just a slogan when Bill Clinton said that welfare should be "a hand up, not a hand out."

Most of the time I don't comment on Cenk's posts because it's boring to repeat "right on!" or "100% right, 0% wrong" - more so for the reader than the author, to be sure. Luckily, this time he repeats a conservative (yes, I am of the mind that Bill Clinton was, in fact, a conservative.) talking point which has never failed to push my button, if for no other reason than the memory of years of childhood eating peanut butter from a #10 can and cheese from a 5 lb loaf.

At the same time the restrictions were being placed on the recipients of welfare, how much money was being directed to the welfare heavy areas from private sources in order to provide an infrastructure able to sustain "productive citizens?" If you know the sound of a drop hitting the bottom of a bucket...

So, how IS that whole "hand up" thing working out?

Did the Republican White House and Congress live up to the responsibility after Clinton left? Did they strive to build the economies of the hardest hit areas of the country; did they do all they could to help people help themselves? We know the answer. Reductions in day care funding, Pell grants, etc. - the very things absolutely necessary to providing the "incentive" it takes to be able to pursue that good ol' American Dream.

Cenk, the notion that people would rather live in a barely-scrape-by existence for a governmental pittance than enrich their own lives with education and meaningful employment with a chance at earning a comfortable wage is Republican/conservative nonsense at it's bigoted worst. It displays a generalized contempt for people who happen to find themselves at the very bottom of the income ladder, often times through circumstances completely beyond their control.

Like poor people WANT to stay poor. Please. Really? Incentive? Trust me, poor people really don't need any incentives to desire wealth. It's one of the side "benefits" of being poor. 

Meanwhile, at the same time the infrastructure was being ripped out, the requirements of those seeking assistance either stayed in place or became more stringent. And the wealthy got their tax cuts. Their "hand up." Oil companies got rebates. No-bid, cost-plus contracts flew out of Washington like confetti at the inagrual ball.

Have you ever heard a good answer to the question, "What do they do after the time runs out?" There are a few million people who KNOW the answer to that question because they have had to live it - and it's rarely "good."
 
My beef is not with the idea of "welfare reform." It is with the definition currently in vogue for what "reform" entails.

by MedfordTim on 03/18/2008 12:42:35 PM EST

a counterpoint (none / 0)

"Cenk, the notion that people would rather live in a barely-scrape-by existence for a governmental pittance than enrich their own lives with education and meaningful employment with a chance at earning a comfortable wage is Republican/conservative nonsense at it's bigoted worst."

Yes, that's certainly true for many but that itself is also a generalization.  There are in fact many who will stick their hand out anywhere someone offers checks.  There are also many who will father children one after the other and then walk away and let the government assume responsibility for feeding and clothing them.  This is bad for everyone involved.  It provides a mechanism  that is unhealthy for a society because it is actually (evolutionarywise) a successful strategy.  The people who are willing to do this will tend to have more kids than the people who supply their own resources for raising kids.  The offspring of such people will be raised under tenuous circumstances at best and be more likely to be predatory themselves, a natural reaction to being raised in an environment where they perceive the world as a place that does not care about them.

The trick is to help the people that need it while at the same time thwarting those who game the system.  For the reasons I gave above I think the government must take every possible measure to avoid having to provide the resources necessary to raise other people's children.  The welfare system needed correcting.

So I do agree with Cenk on this.  It's a tough and complicated issue.  At the same time I agree with you that the Republicans (and their Democratic enablers) have not necessarily held up their end of the bargain.  If they spent money wisely there would be enough to provide options for those who are left with no options at all.

by bfaul on 03/19/2008 10:58:44 AM EST

[ Parent ]
impressive post (none / 0)
But then these lessons are abundantly obvious in the great state of Louisiana. This is the primary reason that the state finally moved from blue to red.

When you take money away from people on the right side of the curve, and give it to people on the left side of the curve, as a reward for being shiftless and non-productive, all you wind up with are more people on the left side of the curve. This model was known as the "Great Society".
iq

by KenTX on 03/19/2008 11:40:06 AM EST

[ Parent ]
Thank You Dr. Mengele, Let's line Up the Boxcars (none / 0)

and get those low IQ people out here!

LA  moved from "blue to red" because a large portion of the states African American popluation was displaced.

 "Jindal’s victory heralds the GOP’s ascendancy in Louisiana, particularly in the face of sweeping demographic changes after Hurricanes Katrina and Rita. Massive flooding sent many black Louisianans, who often vote Democratic, fleeing from the state to Texas, Utah and elsewhere." Politico Oct 21, 2007 10:52 AM EST

But no matter, I understand now. If you recieve public assistance your IQ is low . That accident of birth makes your shiftless and non-productive particularly if your..., in Louisianas case ...African American.

Your right people with low IQs should have the courtesy to starve to death so you can get another tax cut. 

Nice. 

 

by MRFred on 03/19/2008 12:10:34 PM EST

[ Parent ]
Regressive Liberalism (none / 0)
"If you recieve public assistance your IQ is low."
 
50% of all Americans have an IQ of less than 100. This is the subset of Americans who are on public assistance.

We tried the "Great Society" thing back in the 1960s and 1970s. What a disaster!

Bfaul is correct about welfare checks creating millions of welfare recipients, who begat exponentially more welfare recipients. When the government started paying women for producing bastards, we had an explosion in the number of bastards.

We've tried it your way Fred. It didn't work.

by KenTX on 03/19/2008 01:24:15 PM EST

[ Parent ]
Abject Cruelty for Fun and Profit (none / 0)

Oh come on , the real objective is get more money for Ken.

"We are all in this together" KenTX

My way? We havent tried it "my way". No matter  explain to me what happens to the subset of the shiftless and lazy population , the 5% or so,with IQs and/or mental defect who through no fault of there own are incapable of working?

In  general what about the children of the shiftless and lazy population ,  who through no fault of there own are born into a low IQ home?

If your going to use bell curves and complain about the lower IQ citizens who need public assistance and their subsequent reproductive habits then you better be ready to take the next step.

  • Forced sterilization
  • Work camps
  • State control of the  children

That sort of thing.


by MRFred on 03/19/2008 02:13:05 PM EST

[ Parent ]
forced sterilization? (none / 0)
I'm not into "forced" anything. But if we were to pay young people (20-somethings) $50,000 to undergo voluntary sterilizations, we could solve a lot of societal problems.

by KenTX on 03/19/2008 02:43:29 PM EST

[ Parent ]
Please... (none / 0)
don't piss in the pool.

by bfaul on 03/19/2008 02:21:08 PM EST

[ Parent ]
You fell for the same line (none / 0)
This is not a slam.

There are in fact many who will stick their hand out anywhere someone offers checks.

Of COURSE! How many people wouldn't? But that is certainly in no way related directly to welfare or poor people. Rich people do it all the time - and for much larger amounts. What do you think "mortgage deductions" are? "Charitable contributions?" "Depreciation?" Our tax system is FULL of "welfare" for people who make enough to file.

"There are also many who will father children one after the other..."

Sorry, but this rates a big "so what?" The reckless father isn't the one getting welfare. Are you suggesting that we abandoned the mother and child in the same way the father did? How does that make anything better?

"So I do agree with Cenk on this."

Okay, no problem.

by MedfordTim on 03/19/2008 09:46:14 PM EST

[ Parent ]
Fell for a line in what sense? (none / 0)

"Are you suggesting that we abandoned the mother and child in the same way the father did?"

No, as a matter of fact I don't feel we can, but that is the problem.  The thing is, there are finite resources available.  If excessive government debt causes economic problems the people most affected are the people who are most economically at risk.  An open welfare state creates as many problems as it solves if it isn't carefully regulated.

"What do you think "mortgage deductions" are? "Charitable contributions?" "Depreciation?" Our tax system is FULL of "welfare" for people who make enough to file."

I can't agree with your characterizations.  A deduction for a charitable contribution is calculated to encourage people to help the very people we are discussing by surrendering income.  True, you don't pay taxes on this money, but such a contribution constitutes a personal decrease in income and I don't see where it is unfair to reduce taxes accordingly.  Depreciation of a piece of equipment is practically the same thing as a reduction in income.  If I gain income by selling an item for a profit they have no qualms about taxing the increase in wealth and income,  so why not also give people a break for decreases in wealth and income caused by depreciation?

by bfaul on 03/20/2008 01:12:45 AM EST

[ Parent ]
no clever header to be had (none / 0)

We can agree to disagree, it's perfectly okay, and it's much more than merely likely that you hold the prevailing view.

I don't have the energy to today.

by MedfordTim on 03/20/2008 03:15:53 PM EST

[ Parent ]
I'm not afraid of a little class warfare (none / 0)

Except in a few cases (notably the mess that resulted in the Soviet Union), such battles have usually resulted in the creation of societies which better served the needs of their citizens.  That is, after all, the purpose of a society, isn't it?

The hipocrisy of the Republican Party can't be countered by simple policy shifts brought about by the election of Democrats.  It can begin to happen only through the elimination of the influence of money on politics.  Once that is done we can do things like create an education system that actually educates, promote economic development rather than disinvestment, and in general begin to fix the problems that Republicans have created.

But the "class war" will begin with campaign finance reform.  And it will be a class war, make no mistake about it, because we will be telling people that they get only one vote each, rather than power relative to the number of politicians they can buy.  I look forward to the battle.

by EveningStarNM on 03/18/2008 12:57:42 PM EST

Risk only applies to the common folk Cenk (none / 1)

in the US of A, everyone knows that...

Class warfare? You bet. It goes without saying that the "captains of industry" as it were take multi billion dollar risks on a daily basis. They use OPM ( other peoples money) to do so.

The assumption that they can take these risks without moral hazard is certainly part and parcel with current economic thinking in the Conservative ranks. Apparently they are above it all. Those of us down the food chain can't possibly understand sophisticated free market economics right?

Yet the same concept ( moral hazard )is rigorously applied to the poor ,socially disadvantaged, homeleass and the mentally ill and now it seems,  the middle class.

That's why they Republicans and Conservatives are so dismissive of concerns over their actions when they cut social and opportunity programs without truly weighing the consequences. They can cite tables and graphs and overall theory without addressing the human cost. Personal responsibility they call it.

The major beneficiaries of the tax cuts don't suffer the moral hazard of the people impacted. Just the benifits.

However the people impacted suffer the moral hazard, as do the citizens who are impacted by the blight, crime, loss of economic opportunity and just general misery the cuts generate.

Pull on that bootstrap.

by MRFred on 03/18/2008 01:21:24 PM EST

These are the discussions (none / 0)
I would LOVE to hear more of on TYT (both the website and more importantly, on the show).

Cenk, you know I love the show, but I would love it even more if you could replace, say, 10-20% of the foreign policy talk (note, I didn't say 10-20% of the show, just the foreign policy talk) with talk of domestic issues not relating to the Constitution.

I realize people are (rightfully) outraged, fearful and disgusted WRT the current foreign policy and trampling of the Constitution, but as many are finally realizing, screwing the economy could actaully be far more devastating to the country than terrorists could ever hope to be, or at the very least, just as devastating.

PS---Screwing the middle class and the tanking economy are not two completely separate issues.  I remember when Cenk had Barbara Einrich (sp?) on and he seemed to disagree with that concept, probably from those old conservative roots.  All of the policies that deplete the wallets of the middle class while bloating the bank accounts of the top 1-10% DO ultimately result in what we see now.

by ihavenobias on 03/18/2008 01:55:55 PM EST

[ Parent ]
How different we all are... (none / 0)
...and here I've been thinking how nice it would be for MORE discussion about things happening around the world.

by MedfordTim on 03/18/2008 04:14:13 PM EST

[ Parent ]
Oh come now (none / 0)
There's plenty talk of that Tim, foreign policy, etc. Unless of course you mean discussing the economic situations (and comparing health care, police, taxes, etc.) of other countries, in which case I totally agree.

That gives us a frame of reference for our domestic/economic policies!

See, so we agree.

by ihavenobias on 03/18/2008 04:20:47 PM EST

[ Parent ]
You guys are both wrong. (hehehe!) (none / 0)

Our problems, both domestic and foreign, get a lot of coverage on TYT, with just enough society page thrown in to keep us from getting really depressed.

As hard as it is some days, I'm actually an optimist.  I think things are getting better and will continue that way.  For instance, I really wish it wasn't so important that Obama is our first serious black candidate or that Clinton is our first serious female candidate.  But the fact that we have them and that one of them will be our next President is a very good thing.

The Republicans have held America back at the tail end of the rest of the First World countries when it comes to education and living standards -- and now even innovation.  But after decades of abuse, we finally have a real chance at real campaign finance reform, which is the key to fixing everything.  And even though they had to crush our economy to do it, Republicans are beginning to convince even Joe Sixpack that they are always bad for our country and must never achieve power again.

And in the midst of all of this, we have Senator Dodd and Congressman Wexler eloquently and inspiringly defending the rule of law.  We have voices of reason spread all over the internet, throwing Republican lies back in their faces.  We have fought -- even if we eventually lose -- a close battle against the corporatists and corrupt politicians who want immunity in the FISA bill.  And we still have hope because the rest of the world hasn't yet lost all patience with us and nuked us out of existence.

I like Republican-bashing as much as the next guy.  They're such easy targets.  But I also like what is right about our country.  We do aspire to higher ideals after all.  You two are proof of it.

Let's talk more about that!

by EveningStarNM on 03/19/2008 02:21:04 PM EST

[ Parent ]
If there is any bailout (none / 0)
from this, it should happen from the bottom up, not the top down. It seems to me that if you keep folks in their homes and not defalting on their mortgages, a Bear Stearns would get paid and not have to be bailed out. I'll bet much of that $30 billion bailout has gone to Bear Stearns golden parachutes when it could have been better spent keeping folks in their homes. If we are going to spend billions in taxpayer funds on this let's keep normal folks in their homes, not keeping greedy CEO's in theirs.

by mijoh on 03/18/2008 02:21:21 PM EST

The Dow is up 420 as I post this. (none / 1)
A hands off approach might have led to a global crash in the equities market. That is not a good thing.

Here is an explanation.

You guys need to understand a few things.

The financial corporations that caused this mess, such as Bear Stearns, will lose trillions in shareholder equity. That is a good thing.

Like it or not, we are all tied to the economy. If we suffer another Great Depression, our lives will be miserable for more than ten years. All of us. We are all in this together.

If you're not as successful as you would like to be, you need to quit blaming other people, and take a long, hard look in the mirror. 

Your Friend,
KenTX


by KenTX on 03/18/2008 04:55:10 PM EST

Bwahahahahahahahahah (4.50 / 2)

"Like it or not, we are all tied to the economy. If we suffer another Great Depression, our lives will be miserable for more than ten years. All of us. We are all in this together."

When you see KenTX say something like "We are all in this together" it's a sure sign he's worried about his stock.  He can definitely see the need for government bailouts now.

Thanks for making Cenk's point so beautifully.

by bfaul on 03/18/2008 07:37:13 PM EST

[ Parent ]
And it will down 200 tommorw then up, down.... (4.50 / 2)

You guys need to understand a few things. KenTx

Really? Apparently, the man who ran Bear Stearns needed it explained as well. On 10 Mar 2008, Bear Stearns' Alan "Ace" Greenberg, a former chief executive who currently serves as chair of its executive committee, told CNBC that the liquidity rumors surrounding the company are "totally ridiculous." 

We are all in this together.KenTX

Now that's rich...I'll remember that one. What the  chair of its executive committee of Bear Sterns understood was his personal wealth and well being was at stake. Greenberg's comments came after Bear Stearns shares had fallen more than 11 percent to their lowest the lowest in five years.

Being in this together cut both ways my friend. So when you step over that homeless guy on the street in Houston do you really think that? Or does that only apply to money?

If you're not as successful as you would like to be, you need to quit blaming other people, and take a long, hard look in the mirror. KenTx

I'm not sure what that has to do with any thing. One minute we are all in this together then...back to the bootstrap. Are we all in this together Ken. Really? Even us America haters and traitors?

The assumption that they ( Bear Stearns) can take these risks without moral hazard is certainly part and parcel with current economic thinking in the Conservative ranks. Apparently they are above it all. Those of us down the food chain can't possibly understand sophisticated free market economics right? MRFred

by MRFred on 03/18/2008 10:40:15 PM EST

[ Parent ]
Oh my god. (none / 0)

KenTX is trying to act friendly.

The world must be about to end.

by EveningStarNM on 03/19/2008 02:26:08 PM EST

[ Parent ]
What Happened to the Bootstraps? | 23 comments (23 topical, 0 hidden)
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