Tuesday, November 18, 2008

"Remember To Quote It In My Memory"

From this NYT article about the latest "amicable departure" from National Review by a dissident voice (David Frum):

William F. Buckley — and this will probably always be the case — still towers over the magazine. As Mr. Lowry sat down in a conference room to be interviewed, a former assistant to the founder was scouring archives for material for a forthcoming article in Vanity Fair about him and his wife, Pat, also deceased, who was a Manhattan socialite.

"With the bailout, I’ve been wondering what he would have thought, because conservatives were so divided," he said.

That's strange. Anyone even a bit familiar with WFB's well-known contempt for capitalists gone wild shouldn't have to wonder too long, I think. In 2005, Buckley wrote:

Every ten years I quote the same adage from the late Austrian analyst Willi Schlamm, and I hope that ten years from now someone will remember to quote it in my memory. It goes, "The trouble with socialism is socialism. The trouble with capitalism is capitalists." ...

What dismays is the utter lack of class in such businesses and businessmen here parading their skills in distortion. Michael Eisner appears twice in the table of the 25 largest compensation packages paid in a single year. In 1993 he took home $203 million. In 1998, $575.6 million.

That money was taken, directly, from company shareholders. But the loss, viewed on a larger scale, is a loss to the community of people who believe in the capitalist free-market system. Because extortions of that size tell us, really, that the market system is not working — in respect of executive remuneration. What is going on is phony. It is shoddy, it is contemptible, and it is philosophically blasphemous.

Read the rest here. I could cite similar columns spanning several decades. Buckley was so disgusted by the periodic failures of unbridled capitalism, most recently with regard to executive compensation at poorly-performing companies, that he wished to be remembered for his opinion on the subject. It's not too hard to guess how he would have felt about using taxpayer money to bail out those same companies and their executives.


Anonymous Anonymous said...

Fantastic quote from Buckley!

I wonder if he would say that the fact Eisner was paying a 39% marginal federal income tax rate in 1998 was Marxist?

I will never understand how the Republicans managed to fool so many people for so long.

- Whammer

11/18/2008 12:24 AM  
Anonymous Anonymous said...

The greatest achievement of the Republican part in my lifetime has been convincing people to vote against their own (and their childrens' own) self-interest.

They did it by fear mongering at many levels - external and internal "enemies" - and getting folks to focus on social issues that wouldn't matter to most of them anyway.

A suggestion - "If it's too big to fail, then it's too big to go unregulated."

11/18/2008 10:09 AM  
Anonymous John Papola said...

"The greatest achievement of the Republican part in my lifetime has been convincing people to vote against their own (and their childrens' own) self-interest."

Give me a break. What can appear to be in your self-interest in the short run, like, say... highly protectionist union labor contracts in Detroit, can ultimately be against your interest as said companies implode under the weigh of their own uncompetitiveness.

From what I can see, both parties have been getting drunk off of Federal Reserve monopoly money while kicking the inflationary can to China. They've both been financing clearly unsustainable federal projects and bipartisan corporate welfare like the farm and energy subsidies while letting the average person pay at the pump and the grocery store.

The asset and commodity bubble appears to be principally the result of loose monetary policy compounded and magnified by MBA quants and "portfolio theory" hacks convinced that they had risk under control in their computers. All along both parties have been fanning these flames.

The partisan framing of our current problems fundamentally misunderstands what I consider to be the root causes of our trouble. Our nation has been living beyond it's means on the back of funny money and foreign borrowing. We've been masking our inflation through the exporting of our productive capacity to the third world. Now the chickens are coming home to roost.

Banking and insurance (include credit-default-swaps) as high-flying industries built on gambling with our savings must stop. The change we need that will end "too big to fail" has nothing to do with oversight and everything to do with fundamental changes like considering the Gold Standard, private currency, 100% reserve requirements (the end of fractional banking), and other truly bold ideas.

The current politicians will never accept these ideas because they inherently limit their ability to buy votes through subsidy.

As for the anger over executive pay... it's all fair and fine. I'm not going to carry water for greedy, incompetent CEO's.

But, Eisner and others stole from their shareholders, said victims have the means to deal with it. That they chose not to is something worth studying, but not grounds for the breaking of contracts by The State in the name of "fairness". That's just emotional ignorance of the systemic issues.

It's a tragedy that these abuses undermine the inherent soundness of competitive free markets. But it doesn't change the fact that government collusion and subsidy does more to prop up the bad guys than any other force in history... and these bailouts are once again proof of that.

Now, who wants to bet on how ugly a monster our current credit expansion is readying for a few years from now?

11/18/2008 12:42 PM  
Anonymous John Papola said...

Sorry for the hijack. Love the blog and the quotes.

11/18/2008 12:58 PM  
Blogger Jimmy the Saint said...

John Papola:
Your rant is way off. The union has been giving back for a few years now. The union even agreed to a two tier wage structure. Newbies would be paid at the same level as the foreign automakers who have plants in the South pay their workers($12 to $15/hr). The Wall Street banks aren't unionized and yet they would all be going under if it weren't for Uncle Sam. What does that tell you? It's not the fault of the unions, so get over yourself.

11/18/2008 1:56 PM  
Anonymous John Papola said...

Sorry you ignored 90% of the rant and focused on an admittedly glib example.

Believe what you want about the roots causes of American auto's troubles. There's plenty of blame to go around for their failures. But when the labor contracts, among other things, prevent the use of robotics in the name of "protecting jobs" and lead to cars with dramatically worse quality than your competitor... that's not a recipe for success. That is part of the protectionist medicine that was ultimately NOT in the worker's interest. It certainly wasn't in their children's interest. That was my point. I know things have improved dramatically now, but the damage to the brands was already done for years of failure.

On a personal note, my wife's entire family lives in the Detroit area and my heart and prayers goes out to the state of Michigan and it's workers. That said, I don't see why the taxpayer should subsidize yet another broken business. Farms, Airlines, Wall St... autos. When is this madness going to end?

Six weeks ago, the treasury secretary should have come to the american people, explained the credit tightening and explained that the fed would NOT bail out ANYONE. Let these masters of the universe figure it out for themselves.

Instead, we've gotten chaos that has frozen the entire economy in uncertainty as we all wonder what Washington will do next. What a complete disaster.

God Bless.

11/18/2008 10:17 PM  
Anonymous Anonymous said...

What's starting to get to me is the leap from "helping the auto industry" to "if they all shut down, it's disaster." We don't have to engage in all or none thinking here.

I could make a good case for supporting Ford - who has made many of its own difficult choices and has managed to create some truly world-class vehicles.

I could make a case for supporting GM - who more than others has legacy costs and business model (especially dealer networks and retiree benefits) that were committed when the whole country was euphoric about increasing living standards, and thought the environment would that friendly forever stay forever.

BUT - why on earth would we give a single dollar of my money to Chrysler? Taxpayers bailed 'em out once, and they did well enough. Daimler couldn't make 'em work, and now Cerberus can't either. Sorry Cerberus, but that's your problem.

And, now, Cerberus "generously" offers to give up profits on a future sale.... let me just imagine how THAT accounting would work. Bankrupt the bastards now, please.

11/19/2008 7:31 AM  
Anonymous Anonymous said...

I can make it even simpler.
GM and Ford are in most of our portfolios somewhere - lots of our retirement plans probably own stocks.

Chrysler is private equity - that means private losses, kiddies.

11/19/2008 9:59 AM  
Anonymous John Papola said...

Excuse the elitist tone of this quote, but it's all too applicable.

"the State, it is the great fiction through which everyone endeavors to live at the expense of everyone" - Frederic Bastiat

If everyone is on welfare, corporate or otherwise, from whom will the money be taken to fund this support?

Think about it.

11/19/2008 11:07 AM  
Anonymous goldhorder said...

Wow...John dude is pretty smart. I've got nothing more to add. LOL...great posting

11/21/2008 11:29 AM  

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