This is not a test. It's absolutely, positively 100% open for discussion. I hope it turns into a nice, long, meandering thread, because it should.
Question: when does it become a national security interest for the federal government to prop up the economy?
I'm sorry, but "never" is not a viable response on this thread. I want to see reasons for every response.
As most (if not all) of you know, I am conservative in my political ideals. I prefer that government be left out to the fullest extent possible when it comes to the economy, and definitely when it comes to trampling our liberties. Even as a Christian - confessional Lutheran, to be precise - I don't like religion being pushed down my throat. I'm not for tweaking or skewing the Constitution, and I despise that none of the branches of federal government utilize all of the checks and balances they've been granted. I also don't like that those state-to-federal checks and balances aren't used.
That's where I start. Which leads back to the question: when does it become a national security interest for the federal government to prop up the economy?
Wednesday, February 20, 2008
A Question
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9 comments:
Well, I'll give a short answer for now, and see if your thread takes off. I suppose if an aggressive foreign power was waiting to pounce on the US when its economic guard was down, then propping up the economy would be a "national security" issue.
Hey Rick,
Your presence would be greatly appreciated in the discussion at. I think I've clarified things and would like you to confirm. Thanks:
http://gdaeman.blogspot.com/2008/02/clinton-rejected-in-potomac-primaries.html
Looks like Patriots and Tyrants around here.
Sorry I didn't answer..."Never" is what came to mind...
I suppose if the condition of the economy is such that the military will be fleeing their posts or the citizens are violently rioting, then something might need to be done.
But without dire need, they should maintain Laissez faire.
But it's too late for that...
GDAEman, let's run with your theory for a bit. How would we prop it up?
I see the problem more as one of who is allowed to invest in the U.S., and less of what we do with the consumerism. I would say an aggressive foreign power could be anyone from China to Saudi Arabia, since financial aggression could make a greater impact than physical aggression.
I cannot quantify how the federal government would prop up the economy in a meaningful way. Tariffs? Maybe. Isolationist policy? Maybe. Retracting support for NAFTA and other such agreements? Likely. But none of these change our habits; they are more macroeconomic than microeconomic.
If you have something, let me know. Your first comment got me thinking, and this is where I'm stuck after a week of pondering.
Scott, so if China is ready to buy billions of dollars of bonds or stocks from American companies, to the point where they own 9.9% of all of the biggest (or most susceptible) companies, then that's not an economic security risk?
Looking for clarification....
Economy, or Market? Aren't they two different things?
The economy is about buying gas and food and houses and stuff. The market is about owning companies.
The economy is what you mentioned in the post. The market is what you hypothesize about in your comment asking for clarification.
Maybe that's an erroneous distinction. I don't know, I'm a simple man. :-)
My answer was based on the former, and its meltdown as a result of something other than intentional interference by foreign governments.
As for China buying majority interest (or all the stock) in a company, that would be a pretty neat feat. The company I work for has a market cap of $1.6 billion. Microsoft has a market cap of $253 billion. It would take quite a pile of money to nab up a bunch of them.
But what would that accomplish? it would not melt down the market or the economy because all the buying would create a lot of suddenly valuable stocks. (Bonds are a loan instrument, so I don't think it matters.)
But hey, the Chinese don't have to do that. They can continue to control shipping ports and continue to supply our every need through Wal Mart and they will be our overlords soon enough!
But I digress.
How would the government "prop up" in defense against a Chinese buyout ? I have no idea. Printing money won't make me not sell stocks, so I don't know how to continue.
Interesting thought tho.
So what are we talking about? $10 for a loaf of bread, or Chinese hostile takeover of US Based companies?
Does seem like P&T ...
Just pass'n thru on my way to Scott's blog to follow up on bar stool econ, (need to mark Scott's link).
You got that right on financial power... China, or a group of organized countries, could hammer the US financially. It happened in the late 1970... the oil embargo.
Aside: The US has done it, and uses the threat to do it, to countless nations. So, ya know, what goes around comes around.
*shrug* You're right. The "free market" lets China buy bonds, US banks, what ever... own the US in terms of its assets and putting us over a barrel of debt. Again, the US has done this to countless countries (Read Economic Hit Man by
I'm not sure going into the mechanics of "how" the US gov't could prop up the economy is where you had originally intended to go with your question. Rather, you asked "when does it become a national security interest for the federal government to prop up the economy?
I didn't want to ruin the fun right off the bat, BUT I gotta ask "who's" national interest? You think the people who pull the strings, the two-party elite, care about national security? They use the reigns of government to perpetuate their financial interests. Their national interest is not anything like the ideals of the founding fathers. In fact, I believe that, for the last seven years, the Bush administration have treated the US like a failing business to be stripped of its assets for a quick profit, with the remaining husk to be discarded. That's the real reason these criminals need to be prosecuted. BTW, have you seen my video?
Prosecute Bush et al. Chapter 1
But I digress. Lets pretend we're not witnessing the largest heist in world history, the electoral system and process of making laws isn't absolutely corrupted by corporate power, Wall Street doesn't have various forms of legalized gambling, the media produces excellent information through probing investigations, Yada yada. So, what was the question? Oh, yea, should this not-corrupt government prop up the not-corrupt economic system that doesn't serve the few at the expense of the many if the "national security" of ... See, that's where I get hung up. Are we talking about the common man's national security, or the jet setter's national security... I don't think they're the same.
We don't have a decent system of providing each other health care, and they're off starting a war that could have paid for our health care, and has caused gas prices to
go up yielding Exxon a $40 billion profit last year (that's our money that one could argue has been cleverly taken from all of us, and given to a very small minority by causing instability in the middle east... it was never about WMD and Osama, nor democracy, not even Israel really, though the pro-Israel lobby did twist some arms on the Hill).
Aside: One reason so many around the world don't like the US is 'cuz US military-backed corporations have doing to "them" what you theoretically propose could happen to "us" from China and Saudi Arabia. (I put quotes on "us" and "them," because the people getting the shaft are the same around the, the lower "cast." Those throwing their economic weight around are the celebrities in the corporate/government plutocracy).
OK, so I didn't exactly answer your question. oops. It's dinner time.
See ya over at Scott's blog.
Scott, I think you misread my post, and it skews your point - a lot!
I didn't say that China would buy 99% of a company, but would buy 9.9%. You know, just enough to keep somewhat under radar. And who's to say that a consortium of Chinese or Arabs couldn't independently purchase 2%...5%...8%...and collectively become a pretty significant minority owner?
So fess up and admit you read it wrong. You seem to be getting a bit snarky there. :-)
Economics deals with the moving of goods and services. You know, widgets. Supply and demand.
The economy is the orchestration(?) between the players in the markets. Therefore every market is part of the economy, whether it's an investment market (stocks, bonds, futures, ETFs) or a raw materials (commodities) market. Heck, even an online bookstore is part of a market. They all come into play in my question because they all have impact.
I don't see anything to stop a $10 loaf of bread from happening. And again, I never mentioned a Chinese hostile takeover. So, what's your point?
GDAEman,
I was hoping to address the national interest of the citizens, not the ruling class, but from the perspective of the defense of the nation. Are the Constitution and what beliefs we uphold ever at risk due to economic conditions? Is our sovereignty at stake?
I don't think there is a microeconomic event that would make me look at having the government do something to keep a good economy rolling, or to keep a bad economy from being too severe. I'm looking from the macro perspective. On that level, it's why I have a lot of issues with the green movement (gross over-generalization there, I realize that). It's not that I'm against conserving energy and being a good steward of what I have, but I'm not for the "you will do it this way and no other way will make me happy" perspective that a lot of the green folks take. There's no big picture view in that type of thinking. It's as absolutist as many conservatives are declared to be. Coal and oil can still fit into a green improvement plan. Ya gotta start somewhere.
But I digress. (There, now all three of us have done it.)
All,
I wouldn't know how to address the "how" of propping up the economy. Depends on the scenario, which we haven't defined all that well yet.
I liked P&T. Sniff. I had the same thought as both of you a couple days ago.
I'm about to turn into a pumpkin.
Scott, I think you misread my post, and it skews your point - a lot!
I didn't say that China would buy 99% of a company, but would buy 9.9%. You know, just enough to keep somewhat under radar. And who's to say that a consortium of Chinese or Arabs couldn't independently purchase 2%...5%...8%...and collectively become a pretty significant minority owner?
So fess up and admit you read it wrong. You seem to be getting a bit snarky there. :-)
Economics deals with the moving of goods and services. You know, widgets. Supply and demand.
The economy is the orchestration(?) between the players in the markets. Therefore every market is part of the economy, whether it's an investment market (stocks, bonds, futures, ETFs) or a raw materials (commodities) market. Heck, even an online bookstore is part of a market. They all come into play in my question because they all have impact.
I don't see anything to stop a $10 loaf of bread from happening. And again, I never mentioned a Chinese hostile takeover. So, what's your point?
GDAEman,
I was hoping to address the national interest of the citizens, not the ruling class, but from the perspective of the defense of the nation. Are the Constitution and what beliefs we uphold ever at risk due to economic conditions? Is our sovereignty at stake?
I don't think there is a microeconomic event that would make me look at having the government do something to keep a good economy rolling, or to keep a bad economy from being too severe. I'm looking from the macro perspective. On that level, it's why I have a lot of issues with the green movement (gross over-generalization there, I realize that). It's not that I'm against conserving energy and being a good steward of what I have, but I'm not for the "you will do it this way and no other way will make me happy" perspective that a lot of the green folks take. There's no big picture view in that type of thinking. It's as absolutist as many conservatives are declared to be. Coal and oil can still fit into a green improvement plan. Ya gotta start somewhere.
But I digress. (There, now all three of us have done it.)
All,
I wouldn't know how to address the "how" of propping up the economy. Depends on the scenario, which we haven't defined all that well yet.
I liked P&T. Sniff. I had the same thought as both of you a couple days ago.
I'm about to turn into a pumpkin.
I didn't say that China would buy 99% of a company, but would buy 9.9%. You know, just enough to keep somewhat under radar. And who's to say that a consortium of Chinese or Arabs couldn't independently purchase 2%...5%...8%...and collectively become a pretty significant minority owner?
I did ASSume the 9.9 was a typo and you meant 99.9. A "significant minority owner" still can not unilaterally dictate the course of the business, so I'm not sure what the concern is there. The 'invisible hand" is a powerful thing. I think it would come into play before too long.
So fess up and admit you read it wrong. You seem to be getting a bit snarky there. :-)
Snarky? Dude. Words hurt.
So, what's your point?
Guess I'm the proverbial broken pencil: Don't have one. I've forgotten what we were talking about?
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