FINANCIAL REFORM

Andrew Zachary: “I think you let Don C. off too easily yesterday. The Republican party was against Social Security and Medicare, and they are still aim to eliminate or gut both programs. They were against the minimum-wage bill, against child-labor laws, against unemployment insurance, against the SEC, against … well, the list is very long. Heavy-handed regulation is indeed onerous, but the absence of regulation is far worse. If there is one key lesson to be drawn from the last 2+ years of financial turmoil, It think it is this: Markets work best when they are transparent and efficient and all parties are following well prescribed, sensible rules. Unregulated or badly supervised markets inevitably fail, and they often fail in a spectacular fashion.”

☞ I share Andrew’s view. But one of the pleasures of this column is that I get to hear from people who disagree.

I don’t often change my mind much (and only occasionally change theirs), but all views deserve a courteous hearing – and it certainly helps to understand where the other side is coming from. (If we had had a better sense that 70% of those who voted to reelect Bush believed Iraq had a hand in attacking us on 9/11, maybe there would have been some way to get the truth out to more of them?)

And so I give you one member of . . .

THE WELL-INTENTIONED RIGHT

One of you – genuinely well-meaning but off-base, in my view – has been emailing me with the general argument that, “The Democrats are bad for the country. They are bad for society. They are killing us.”

“I can’t see where any of them have done much good if any to helping our society,” he writes. “Republicans haven’t been all that helpful lately either, but they haven’t hurt us as much. We’re in a bad way in this country. We need to get back to the basics of the Constitution. We need to scale down government, not grow it.”

My correspondent quotes Ronald Reagan – “the most terrifying words in the English language are: I’m from the government and I’m here to help” – without acknowledging that Reagan grew the size of government massively, both as governor of California and President, and that he started us on the path that ten-tupled the National Debt during Reagan/Bush/Bush. (Clinton, a Democrat, righted things in between the two Bushes, leaving Bush 43 “surpluses as far as the eye could see” and imploring the nation, as he left office, to “save Social Security first” – as in: shore up our finances rather than cut taxes for the wealthy.)

My correspondent blames the 2009 budget deficit on Obama, not acknowledging that the budget is set in advance of the year (Obama was not President in 2008) or that in the face of a potential global depression massive deficits are, unfortunately, exactly what you do need to run.

He decries the financial reform bill just passed as too much government – without noting that such people as Republican Hank Paulson believe the bill’s measures, had they been in place in 2005, would have spared us the meltdown.

And of course he hates the health care reforms that he sees as nationalization of health care. (If only!) When challenged that Canada and so many others are able to provide good care for just 11% or less of their GDP compared to the 17% or so we spend, he says, well, perhaps, but their care is not as good as ours (yet they outrank us in longevity), and, he says, a lot of the difference is due to the “astounding” cost of providing health care to illegal immigrants, who pay no taxes and are bleeding the country dry.

I asked him what “astounding” meant, and noted that even if we were spending $10,000 a year on each of 10 million illegals – and I highly doubt that we are – that $100 billion would account for considerably less than one of the six or more GDP percentage points that separate us and the rest of the industrialized nations.

And so a word now about illegal aliens . . .

Many illegal aliens do pay taxes – often, more than they owe. Read it here. And while I totally agree we should gain control of our borders and have a rational immigration policy, I asked my correspondent to consider whether, from an economic point of view, it makes sense to think that legal immigrants are good for the economy but illegal immigrants are not.

If, for the sake of argument, all our ancestors had arrived here illegally, would they not still have gone on to build this great country? Was it their legal status that made so many of them productive citizens – or was it their drive to better their lives and the lives of their children, coupled with their gratitude for the opportunity to be here?

And now back to the main thrust . . .

My correspondent was gracious in recognizing there was a limit to how much time I could devote to our correspondence, but he asked me to read this 2004 article, “Rolling Back Government: Lessons from New Zealand” – without recognizing that one thing New Zealand has going for it is its efficient government health care system, the very thing my correspondent thinks we must avoid.

If we had all read this article in 2004, when it appeared, and promptly rolled back coal mining regulation, would that have averted this year’s tragedy in West Virginia – or was the problem that enforcement was too lax? If we had read it in 2004 and rolled back regulation of off-shore drilling, would the Gulf Coast today be in less distress? If we had read it in 2004 and done away with FDIC insurance and the social safety net, would the financial crisis have been less severe?

My correspondent’s final (so far) email is heartfelt, and instructive – but, again, in my view, wildly off base.

He writes:

The issue for me with illegals is not necessarily them paying taxes. It is that they are illegal. I’m a second generation American. My grandparents on both sides came over from Mexico…legally. They moved around early but ended up settling in El Paso where my parents met and married. Both my parents and myself despise illegals of all nationalities. It doesn’t matter that they pick my lettuce for cheap wages. I don’t care that they make the beds in the hotels. I want them tossed back to wherever they came from. I want my federal government to do what they are tasked to do, like secure our borders, and get out of things they aren’t allowed to be doing…nationalizing health care, regulating wages, creating red tape for private businesses. The government increases the cost of doing business…end of story. And every time government passes a law, we get a bit farther away from the intent of the US Constitution as it was written….a federal government with limited powers. Liberty for our citizens.

You mention tobacco. I don’t smoke and never have. I hate smoke and being around smokers. But I voted against taxing cigarettes in California. Bad idea. [We’ve got to tax something – why not tax things we want to discourage? Good idea! – A.T.]

Do you ever wonder how many of the jobs lost to other countries is a direct result of our own government imposing laws and restrictions on businesses? Minimum wage, unions, family medical leave act, unemployment insurance, corporate taxation, civil rights act, and the untold number of other taxes and rules and regulations that are strangling business here in this country. I don’t blame any of those companies a bit for leaving. As we continue down this path of the democrats, look for our national unemployment rate to continue to rise to the levels seen in Europe. After all, we are headed in their direction. [And yet our economy was pretty good in the Nineties, even with the Civil Rights Act, unemployment insurance, corporate taxation and the rest. How to explain that? — A.T.]

I feel bad for my kids and grandkids. If even possible, they will be the ones suffering as we try to undo what has been done and what Obama is doing today.

☞ Down with public education! Down with Social Security! Down with civil rights!

What’s important (to me, anyway) about my correspondent’s views is that he is hardly alone, and quite clearly well-intentioned. Yes, the world has changed somewhat since 1789 (electricity and 300 million more Americans spring to mind). And, yes, he might be willing to go along with letting women vote and freeing the slaves. But there’s a limit to how much change is worth tolerating. A government plan to go to the moon? To fund the Marshall Plan? To provide a social safety net? To regulate securities markets? To insure bank deposits? To cut out the middle-man in college loans? To tax tobacco? Or income? Or corporate income?

To my correspondent, some of this – or anything beyond this, at least – just goes too far.

A perfect example: this crazy Democratic initiative to provide everyone with affordable health care. What other society would be dumb enough to try that? (Other than all our major competitors and New Zealand.)

We Democrats – and Independents and moderate Republicans – clearly have our work cut out for us to move good people like my correspondent closer to our views.

 

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