How Americans voted in this election can be directly correlated to whom they trust more (or whom they distrust more): business or government. How did your trust and distrust impact the way you voted?
[poll id=”145″]
Discuss.
Agency, America, economics, Europe, Politics, Uncategorized
Government vs. Business: Weekend Poll
Wheat & Tares 
I trust business, almost every time.
Part of the problem is that when people hear “business” they think of Enron trying to screw everybody over. What they don’t realize is that it also represents my FIL who’s run his own business for 30 years. Your corporate tax rates (designed to take down evil business profits) directly screw my family by bleeding the business dry and making new hires prohibitively expensive.
There’s your trust, for you. Thanks, 99%. Thanks for choosing government. You’re really helping us little guys out.
Assuming the economy is GOING to get better, of course. 😀
#3: FireTag,
The economy is getting better. I see it all around me. Yes, America is in a big transition, and maybe 10% of it’s people will be damaged badly.
But when I am caught in a traffic jam on the freeway, I see a hugh number of new cars, and no one selling apples on it’s edge.
That’s because it’s illegal to sell apples on the side of the freeway.
“New cars” is a laughable piece of “evidence” of economic uptick. All you need to “buy” a new car is a pulse and a moderate credit score. Very few of those new cars have been bought by the drivers inside them.
The two are inextricably linked. When governments lack the savvy to regulate businesses wisely, unfair practices result and can have dire consequences to the economy. Regulations on lending ease and a few years later we have an irresponsible public overextended on mortgages and a housing bubble. Is that the fault of business for loaning above sustainable housing value to risky loanees? Partly, and they certainly paid for it (Lehman did anyway). But it didn’t happen until the lending regulations were significantly reduced under Clinton.
The problem is that government doesn’t have a product. Its “revenues” rely on citizens having jobs at businesses (that do have a product) so they can pay taxes to support public services like schools and defence. Government can only create jobs that have salaries paid for by those who work for businesses.
The pizza guy who is telling people he will pass on the cost of health care to his customers and have to cut jobs if pizza sales goes down may be impolitic, but it’s exactly how things work. The 14 cents per pizza (cost increase he’s passing to customers) would otherwise cost his company 25 million dollars per year in profits. How long would the board of directors stand for that? He’d be gone before the ink was dry on the quarterly report.
False dichotomy, much?
#4: Bethany,
People try to sell me fruit and flowers on the edge of the freeway all time.
“a moderate credit score” means the have a job or good money. The cars were bought by the ones driving inside them. No one gave the car to them.
If your FIL is in the 1%, he not a little guy. )(#1).
I trust God, which is what both business and Government should do if we are to thrive.
Bob:
The government released its preliminary estimate of third quarter growth a couple of weeks ago. The economy was growing at a 2.0% annual rate.
You can find the historical data here:
http://www.data360.org/dsg.aspx?Data_Set_Group_Id=354
You will note from the table that we’ve ALREADY reached this level of growth for eight quarters — once for five quarters in a row — only to have the “recovery” stall again. Maybe the ninth time will be the charm, but I think my skepticism is warranted at the moment. I think the recovery is likely to tip into another recession before we see sustained robust growth, but even stumbling along like this makes the problems of Federal, state, local, and individual debt insurmountable.
To be honest, I don’t really trust either, but if I had to pick: Gov’t. Businesses are too selfish.
#9: FireTag,
You baffle me. Are you a believer in a failing/hopeless/insurmountable debt. Or “sustained robust growth”?
If you are talking big ups and downs, we agree. But in the end, I am a growth believer.
Bob:
Sustained robust growth over the next couple of decades is necessary to avoid debt collapse. Even the Obama budget projections versus the House Republican budget only disagree by 2030 +/- a few years about WHEN the collapse comes — not WHETHER it comes.
But, of course, I’d certainly consider that as falling within a “big down”. We had a Great Depression and World War in my parents generation, and another one is certainly within reason. I can certainly believe that the next generation will think life sucks, while still being confident that God’s desire for the Kingdom will triumph in the longer term.
It is somewhat ironic. I have a friend who owns a small business. They are mad at Obama and say that their business is almost half of what it was under Bush.
The problem is that there’s nothing Obama did that specifically hurt them. Capital gains taxes are 15% – the lowest they have been since 1933. Putting it in perspective, when under Bush II they started at 21.2%. Under Clinton, they were 29.2%. Under Bush I they were 28%. Under Reagan they were 20%. Under Carter, 28-39%. Under Nixon, 27-39.9%.
The reason businesses are having a hard time now is NOT Obama’s policies – it’s because businesses gambled with our economy to maximize their profits – and we lost. That is the role of business – to maximize profit. But without some sort of regulation, we get what just happened.
But businesses did just fine, even when capital gains rates were double what they are now. Hearing that the rates need to go lower rings hollow to me.
#14 – Mike, have you ever RUN a business, hired employees, paid taxes, and seen how changes in administration can have a huge effect on business fortunes? It’s likely NOT capital gains that your friend is upset about, since there has been precious little capital appreciation anywhere since 2007. It’s the myriad of increasing Gov’t regulations and favoring of some businesses (re: those that contribute to the DNC) versus others that has your friend in a tizzy.
Fifty percent of the electorate is utterly clueless about where wealth and opportunity come from. Forty percent have some idea but are willing to use Government fiat to vote themselves largesse at the expense of others. Only about ten percent seem to understnad that Government was NEVER intended to steer or direct the economy as envision by our founding fathers.
Douglas:
Yep – I run a business in one of the most regulated parts of the economy – healthcare.
Unfortunately, most of the regulations in healthcare exist because someone was too greedy somewhere so a regulation was made to rein this in. The regulations in the banking industry exist because of excesses and a lack of self-control there. Regulations exist against monopolies, etc.
#16 – That’s right, the doc. You have my respect for being a part of the healthcare system “in the trenches”, so to speak, and my utmost sympathy for attempting to stay in private practice. The feedback I get from physicians is that it’s almost impossible nowawadys, due even more to nightmarish legal issues than opressive Government interference, as if the latter wasn’t bad enough.
Someone was “greedy” somewhere…more than likely, dishonest at least to unethical behavior, more likely downright criminal. Law enforcement IS the legitimate duty of government at all levels. Where we differ is not necessarily equality of protection under the law, or necesarily “opportunity” (we might differ as to what constitutes said opportunity), but that Government, especially not the Federal, should not be working to ensure equality of results. That is, the inherent God-given right to the “pursuit of happyness” (Will Smith’s best film, IMHO) carries with it the ‘right’ to also fail, or at least the risk.
Don’t get me wrong, we DO have a Gospel directive to care for the “poor”, to help the able-bodied find gainful employment and/or increase their skill set, and to succor the disabled. Where I differ most vehmently is that it should fall to private effort to solve these problems, such as the Church does, rather than rely on the coercion of Government. Especially bad is when politicans promise unearned and in most cases undeserved benefits at the expense of other taxpayers, re: Obama stumping Obamacare and Romney stumping Obamneycare. They sell it to the ignorant voting public because they con them into believing that someone else (e.g. “the rich”, or the “Greedy white guys” or whatever group they get away with demonizing at the moment) will pay and not them! In essence, these politicians appeal to envy, greed, and theft. That alone is ample reason to oppose whatever crackpot scheme these yo-yos devise. And I don’t damn only Democrats. Republicans are likewise despicable in this regard. The sad thing is that in most cases most of the tax monies end up in the pockets of the wealhy and connected that back these socialist ideas, with the politicans getting their cut. Else how do you think the Clintons built that Hamptons estate on twelve years at the Arkansas Governor’s salary (topped at $45K) or the President’s (went from $250K to $400K at the end).
Time to pause for the cause…good post, Mike, et al. keep ’em coming!
#7 Douglas
The fundamental flaw with your argument is that you have completely mis-identified causality. The economy didn’t go to hell because of the Obama administration. And to say that the Obama administration has exacerbated this problem… well, that’s complete malarkey.
Our economy went in the toilet because of the recession of 2007. The 2007 recession (more specifically the events that caused it) screwed up the real estate and construction markets so bad that it’s taken four years for the markets to correct. When construction and real estate account for 10 to 15% of our GDP, well that’s a big deal.
The Obama administration walked in to a complete pile of shit. We had a ballooning deficit that was caused directly by the Bush administration. America was fighting two unfunded wars. A huge entitlement program had just been introduced. And Bush did these things at the same time he cut taxes. [Note: Remove these four items, and the US deficit is rather small, even with this recession.]
Only now are we seeing the first signs of a construction and real estate recovery. Once we see a full recovery here, the economy should start to move forward once again.
So let me ask Douglas, who do we blame for the recession of 2007? Because it was this recession (and the corresponding collapse of the construction and real estate markets) that caused our current challenges?
Joe S – Bill Clinton is certainly not blameless in the housing bubble: http://www.businessweek.com/the_thread/hotproperty/archives/2008/02/clintons_drive.html
“A recently re-exposed document shows that his administration went to ridiculous lengths to increase the national homeownership rate. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It’s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place.”
It goes to the heart of the problem with term limits. No president deals only with his own decisions. Every president cleans up for those who went before.
Another culprit, IMO, that has led to our swing toward domestic benefits and two terms of Obama is the overreaction to 9/11 in terms of defense and military spending. Perhaps that’s the real threat terrorism poses to the US: bad economic policy. If so, Mission Accomplished indeed.
#19 Hawkgrrrrl
I read the article you present, and all I have to say is “WOW”. That article makes a HUGE STRETCH. Based upon the logic Coy uses, you could blame a high school driver’s education teacher every time one of his students gets arrested for a DUI (10+ years after taking their class).
Here is Coy’s main quote from the article: “For many potential homebuyers, the lack of cash available to accumulate the required down payment and closing costs is the major impediment to purchasing a home. Other households do not have sufficient available income to make the monthly payments on mortgages financed at market interest rates for standard loan terms. Financing strategies, fueled by the creativity and resources of the private and public sectors, should address both of these financial barriers to homeownership.”
It takes a pretty big reach to go from that quote above and re-interpret it to read: “Do whatever you must do (creatively)— regardless of how corrupt, stupid, or damaging it may be—to ensure that any financially irresponsible schmuck can get a mortgage. After all, we (meaning the lenders) are too big for the government to let us fail. So let’s line our pockets. Because no one will care if we hand out stupid loans… just so long as we are using ‘creativity’ to get our fellow Americans into homes.”
My point is this: The Republicans held the Executive (Bush) and the Legislative branches from 2000-2008. They Republicans controlled the agenda in Washington. So they deserve the brunt of the blame. It was not rocket science seeing where the housing market was headed. But Bush and the Republicans chose to ignore it.
Where was the leadership?
Joe S – I agree Bush could have done something to curb what Clinton had put in place. You may see it as a stretch, but in my experience, working in financial services, I found many of the regulations shocking and ill-conceived in the early 2000s. I didn’t predict the housing bubble per se, but I worked for a company that was very conservative with internal controls that were far more fiscally responsible than required by law. That was not the case at most of our competitors.
I think we should also blame the myth of home-ownership, that somehow owning is better than renting, and the notion that one’s home is a sort of retirement package, an asset to borrow against.
#21 Hawkgrrrrl
Once again, you have completely misunderstood what I am saying. Blaming Clinton for the problems in the housing market in the aughts is absurd. Let’s go back to my drivers Ed analogy.
Judge: How do you plead?
DUI Defendent: Not Guilty your honor. You see when I was in high school (13 years ago), I had a drivers education teacher who told me driving was easy. So I figured if driving was easy, then it would be okay for me to drive buzzed.
This logic is absurd.
The quote Coy refers to only says that home ownership is a good thing that we should try to help people achieve it. It doesn’t say we should de-regulate, nor does it say we should turn a blind eye and allow the financial market to run crazy.
How you keep connecting these two issues is beyond me.
Again, you and Douglas keep associating the wrong cause for events. It is a completely ridiculous stretch to say that the Department of Housing issued a statement in 1994 saying we should try to help people achieve homeownership… and that statement led to the irresponsibility in the Bush administration. Frankly, the association is plain silly.