A Plea For Common Sense

Dear Tea Party Congressional Representatives,

In 2010, a group of conservative, libertarian and populist voters revolted against a consortium of moderate Democrats and Republicans who had slowly been chipping away at the rights of everyday individuals for roughly twenty five years. They were right to do so. The Senate and the House of Representatives had gone on a paternalism, spending, and later anti-terror binge that marginalized the rights of citizens in the name of getting people in far-away states to live the way that Washingtonians (and many elite people from the East Coast, generally) thought was best for them.

Some of the Washington paternalism goes back to Federal legislation on drinking. In 1984, Congress passed the National Minimum Drinking Age Act, which required states to raise their drinking ages to 21 if they wanted to receive federal highway funding. The legislation was sponsored by a New Jersey senator. New Jersey had a drinking age of 21, and the senator felt that it was in the interest of public health for all states to also set their drinking age to 21.

Raising the drinking age had undeniable public health benefits- but was it really fair for an establishment New Jersey Senator to override Wyoming's or Wisconsin's legislature and take away a 19 year old's right to drink? Well, if the federal government (also funded by Wyoming and Wisconsin taxpayers) was funding your highways, the Senate could claim this power. And eventually, the NMDAA forced every state to raise their drinking age to 21.

Washington's moderate Democrat and Moderate Republican paternalism continued. It legislated a federal ban on assault weapons for ten years. It forced states to reduce their definition of drunk driving to operating a vehicle with a BAC of .08. Five months ago, the NTSB has recommended reducing this to 0.05, although this recommendation is still pending Congressional response.

During the 1990s, Moderate Republicans and Moderate Democrats in Washington struck a series of trade deals that forced blue-collar employees to compete against low-wage Mexican and ultimately Chinese workers. CEOs and investors on the coasts got rich, while factory line workers in the Midwest got laid off. There are great economic arguments for free-trade, but they are predicated on internal wealth transfers for everyone to be better off. These wealth transfers never occurred, and working people in the rust belt got screwed even as the US GDP increased. (Even then, it's probably also a lot more uplifting to work for $15/hour 40 hours/week than to receive a government check for $20,000/year)

Then September 11th happened. It was a shocking, terrifying, and heartbreaking day, but Washington DC overreacted with the Patriot Act. It authorized roving wiretaps, abridged habeas corpus, and authorized searches of business records while forcing unwitting business-owners to keep the searches secret under criminal penalties. A group of far-left and far-right politicians bravely opposed the bill, but ultimately failed against a coalition of moderates willing to sacrifice liberty for a little temporary safety. Later the same coalition would authorize the US to invade Iraq over the objections of libertarians on the right and the far-left of the Democratic party. And the NSA would use provisions of the Patriot Act to tap into the private Facebook conversations of Americans without the knowledge of the public.

The same moderate Democrats and Republicans would preside over a failure to regulate FDIC-insured banks as well as the government-sponsored entities Fannie Mae and Freddie Mac. This would require the largest bank bailout in US history. Far-left democrats tried to demand more regulation, and far-right Republicans tried to push for an end to the FDIC- both would have avoided the need for a federal bailout- but the moderates prevailed, and ultimately accommodated the biggest financial meltdown in 70 years.

Finally, Barack Obama was elected in 2008 and the Democrats gained a filibuster-proof majority in the Senate, with the promise of a drawdown in Iraq. Instead, a flurry of paternalist legislation was passed, including the Affordable Care Act, which required every person in the United States to buy health insurance or pay a penalty. Reeling from a bloated federal budget and deficits that dwarfed Democrats' complaints about Bush's deficits, a group of libertarian, conservative, and populist voters revolted against the liberal Washington elite.

House Republicans forced a number of spending cuts, prevented a number of spending increases, and helped limit more paternalist legislation from Washington. Everything seemed to be going well until members of the Tea Party in the House of Representatives felt that it was worth holding America's credit hostage to achieve their political objectives.

The problem is that a failure to raise the debt ceiling won't achieve the objectives that the Tea Party is aiming for. A failure to pay interest on treasury bonds will increase stress on banks. And undermining faith in the full faith and credit of the United States undermines faith in its T-Bills, which ultimately undermines faith in the US. Dollar- since the two are so fungible in an ultra-low-rates environment. If a federal default lasted long enough, and treasury bonds went unpaid long enough, ATMs could eventually stop working and the money in peoples' savings accounts may not be available to them. The FDIC may not be able to borrow the money for a bank bailout. If a default continued in the longer-term, the US currency could fall out of use, further reducing the value of peoples' savings, and ultimately, without a currency, it would be difficult to have libertarian capitalism.

There are ways to reduce government paternalism and end Obamacare, and then there are ways to increase the possibility of USSR-style Socialism in the US. If people can't get jobs or credit because the economy tanked, and can't even get their own money out of the ATM to simply buy food, are they going to stay laissez-faire Capitalists forever? Do we even want to threaten this sort of a situation?

Some members of the Tea Party are worried about the federal government's ability to repay its debt. If the federal government needs to default, it can always print more money. In fact, that's already priced into investors' inflation assumptions. Despite a near-doubling of the federal debt in five years, inflation has remained relatively stable and the inflation spread between TIPS and Treasuries has remained low. For whatever reason, despite concerns from Tea Party Libertarians five years ago- despite my own concerns five years ago- even two years ago, the nation's creditors haven't been all that worried that we may need to print more money than the currency market can absorb to pay off our debt. For the libertarians who have doubts about the CPI calculation, gold prices have dropped significantly from their highs and have never breached their 1980 inflation-adjusted highs. Maybe it's time for us to admit that Ben Bernanke and the Federal Reserve could have been right about our ability to service $20 Trillion in debt.

I have a different idea. Let's pass a clean increase in the debt ceiling and keep the debate going about the federal government shutdown. Let's allow savers to sleep at night even as we try to negotiate the federal government's spendthrift ways. The business of the federal government is always debatable- and should ultimately be subject to consensus between the House and Senate- let's just not leave any doubt about the debt.

If Obamacare fails, we can always repeal it. It wasn't too long ago that far-left Democrats and far-Right Republicans were trying to stop the invasion of Iraq. They said it was a terrible idea- that it would be a boondoggle. They eventually proved right, and we eventually got out of Iraq. It would have been nice to save some money in the meantime, but that was never possible. If we're confident that Obamacare is a terrible idea, we should try to repeal the bill. If we can't, there are rules that keep the country ahead of politics, and we can't ruin the currency to save the country from Obamacare. We just have to wait for voters to change their minds (they will) and give us the opportunity to repeal it.

We voted for staunch conservatives who would advocate liberty, vote for limited government, and play by the rules. So cut spending and find a way to repeal Obamacare without threatening the currency.

Sincerely,

A Libertarian Voter

PS: Ted Cruz, apparently you graduated Summa Cum Laude from Princeton and got a JD from Harvard. So a smart guy like you might be as smart as us Midwestern state school folks about the economy and the currency. You should know better than to put your political career ahead of the country.

Comments (24)

Best Response
Oct 2, 2013 - 12:16am
IlliniProgrammer, what's your opinion? Comment below:

1.) My undergrad's from UIUC. I've always considered that a bigger and tougher accomplishment than anything I can get out of grad school short of an engineering PhD. I think most people- or at least most STEM majors from major state schools- feel the same about getting an MS.

2.) Meanwhile, I'm not a Senator from Texas who claims to have a bunch of redneck populist credentials to go along with his Harvard juris doctorate.

3.) I know better and Cruz knows better- this is a political stunt to help his prospects for the white house at the expense of the currency. This guy's got no excuse, and everyone back in Champaign, or Ann Arbor, or Madison knows that this guy is either an idiot or he knows this is a bad idea. He graduated Summa from Princeton- that rules out the first option- so everyone knows he's willing to hurt the country for political gain.

Oct 1, 2013 - 10:02pm
skylinegtr94, what's your opinion? Comment below:

I can add to this that speaking to an octagenarian about the current political climate there is an innate fear of a police state is being forced upon the people of the US. I think this is what you're referring to as the "paternalistic" nature of the gov't rules and regs over the past 10-15 years. I also believe the congressional 10% approval rating speaks loudly for the current state of affairs but sadly, it doesn't impact the current holders of these "elected" positions.

In short, EB, you might do better to stay in France. Nothing good seems to be on the horizon here for the next 12-18 months (or longer) with the current kindergarten country of ours.

Solid post.

Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
Oct 1, 2013 - 10:34pm
IlliniProgrammer, what's your opinion? Comment below:
skylinegtr94:

I can add to this that speaking to an octagenarian about the current political climate there is an innate fear of a police state is being forced upon the people of the US. I think this is what you're referring to as the "paternalistic" nature of the gov't rules and regs over the past 10-15 years. I also believe the congressional 10% approval rating speaks loudly for the current state of affairs but sadly, it doesn't impact the current holders of these "elected" positions.

In short, EB, you might do better to stay in France. Nothing good seems to be on the horizon here for the next 12-18 months (or longer) with the current kindergarten country of ours.

Solid post.

I think some of the voter dissatisfaction is driven by two factors:

1.) Elite people from the east coast saying "We're smart, we're educated, we know what's best for you. You need to live this way, and we're going to take away your right to live differently without any say-so from your state or your community or anyone living within 500 miles of you or anyone whose experience is similar to yours'."

2.) Elite people from the east coast also saying "We feel threatened, so we're going to tap your phones and read your facebook posts without your knowledge or consent. Then when someone speaks out and tells you the truth about what's going on, we're going to force him to expatriate."

Look, BTBanker brings up a fair point. Maybe I'm not exactly the best person to deliver this message that to much of the country, Washington looks like a bunch of elitist douchebags.

But if I can offer an analogy, they're the kid with a gigantic sandcastle on the beach who is telling the other kids that their sandcastles need to fit a certain architecture to play into his wonderful sandcastle. That's not how life works, and they're not the only people whose ideas for how to run the country matter.

So that annoyance has kinda boiled over into this rebellion first against neoconservativism and now against liberalism. And some of these same people think that the best solution is to drive a truck over the beach and knock over everyones' sandcastles, rather than just say that we're changing the architecture, New York's sandcastle is New York's, and the folks from Wyoming are free to put a sun umbrella on theirs' without violating any zoning ordinances on the beach.

Oct 2, 2013 - 9:47am
duffmt6, what's your opinion? Comment below:
IlliniProgrammer:

2.) Elite people from the east coast also saying "We feel threatened, so we're going to tap your phones and read your facebook posts without your knowledge or consent. Then when someone speaks out and tells you the truth about what's going on, we're going to force him to expatriate."

I assume by elite people from the east coast you are referring to liberals in New England/Tri-State area? If so, this statement makes negative sense.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
  • 1
Oct 1, 2013 - 10:44pm
Anihilist, what's your opinion? Comment below:

I think that this kind of shit has been going on since the inception of our nation. It is truly, a great op-ed, and I don't mean to diminish it. However, politics has always been a shit show and I really don't think much will change for the time being.

Someone will always be unhappy. There is no compromise in American politics and it seems strange to me that the best qualities of each party can't be fused into one. The recent divergence of ideologies is truly astounding to me.

People demand freedom of speech as a compensation for freedom of thought which they seldom use.
  • 1
Oct 2, 2013 - 9:38am
happypantsmcgee, what's your opinion? Comment below:

"You should never put your career above the country" is a cute thing to have on a poster but its not reality. Thats all this boils down to. Mr.Cruz is looking out for number 1, just like every other politician in this cesspool of a city.

If I had asked people what they wanted, they would have said faster horses - Henry Ford
Oct 2, 2013 - 10:34am
crackjack, what's your opinion? Comment below:

I'm sorry Illini, but I just had to laugh at your last part.

IlliniProgrammer:
If Obamacare fails, we can always repeal it....If we're confident that Obamacare is a terrible idea, we should try to repeal the bill....We just have to wait for voters to change their minds (they will) and give us the opportunity to repeal it.

I'm not sure where you've been, but Republicans in the House have been trying to repeal ACA since they regained control back in 2011. How's that worked out (except wasting time and money)? Unless you are predicting a Republican sweep in 2016, there's no way in Hell ACA is going to be repealed. And the "debate" over the budget right now is not doing anything to improve that possibility with voters.

Democrats have done such an amazing job of pegging Republicans as extremists that they seem to have fallen into the role willingly. The PR job is so amazing that, even with provisions of ACA that Democrats hate, they can still easily peg Republicans as trying to dismantle the healthcare system. Take the medical device tax for example. A significant number of Senate Democrats actually SUPPORT the removal of the medical device tax, yet the overwhelmingly shot it down when it was attached to the continuing resolution, and they (successfully) spin it as Republicans being stubborn. Democrats have no interest in fixing any part of the ACA as long as it plays to the benefit of Republicans.

The most likely scenario is that Democrats will continue to gain more power (even as I suspect ACA/Obamacare will become more and more unpopular), until the point that they have enough power to institute a "universal health care" plan, in which case they would have won. The ultimate "paternalism" program for healthcare. Then what are conservatives going to do? Continue to try and overturn that?

If Republicans wanted to overturn Obamacare, they need to start winning arguments instead of handing wins over to the Democrats. Power means everything in this game of politics. Until you see Republicans control the House, Senate, and WH, ACA is here to stay, no matter how shitty it makes the healthcare system.

No fighting on the debt or the spending on the federal government is going to win it, because Republicans can't spin it in a good enough light to win the argument. Sometimes I wonder if it would be better for Republicans to let Democrats have their way, until the entire system collapses, then come in and work on a revitalization of conservative principles. Cause right now, they're only pushing people closer and closer to a nanny state, not further away.

Oct 2, 2013 - 1:54pm
In The Flesh, what's your opinion? Comment below:

@IlliniProgrammer : you're forgetting the people who are most to blame for this mess--the ignorant, low-information voters who returned these scumbags to office despite their utter lack of leadership and accountability.

Metal. Music. Life. www.headofmetal.com
Oct 2, 2013 - 2:02pm
IlliniProgrammer, what's your opinion? Comment below:
In The Flesh:

@IlliniProgrammer : you're forgetting the people who are most to blame for this mess--the ignorant, low-information voters who returned these scumbags to office despite their utter lack of leadership and accountability.

Well, err, I guess I was one of those ignorant low-information voters.

I elected staunch conservatives because they were right when the moderate Republicans and Democrats were wrong.

I was maybe expecting them to shut down the government; I was not expecting them to default on the debt.

Oct 2, 2013 - 9:07pm
In The Flesh, what's your opinion? Comment below:

But for all the complaining about how stupid and ineffectual the leadership on both sides is, all the voting public ends up doing at election is restoring everyone to their respective places. This is practically the same government that hasn't passed a budget in four years and has the lowest approval rating in recent memory!

Metal. Music. Life. www.headofmetal.com
  • 1
Oct 2, 2013 - 7:14pm
invested_c.1993, what's your opinion? Comment below:

There are too many problems in our political system at this point. From the die-hard party voters that would vote in a dictator just as long as they were democrat/republican, to the uneducated voters who follow the popularity contests that politics have become; from the extremist left- and right-wing politicians who are apparently physically and mentally inept to negotiate something that would actually benefit the country, to the president that won't admit he's wrong and own up to any mistake he's made--who pushes his ideas for the country on to us without a vote or decision from the people. What happened to America being a country of the people? Where we were the voice and the PEOPLE made the decisions? I'm a college student, and I'm appalled by the lack of intelligence and enthusiasm in young people when it comes to voting and being educated on what the hell is going on in the country. We all see it happening. What are we going to do about it? It seems like it's "uncool" to care about our well-being. And I'll say it: KIDS ARE LAZY. The 20th century saw rallies, protests, comings of masses of people to say something. Are we scared? What is it? I think we need a spark to make everyone come together. No, we can't default. But until our president sees that what he's doing is wrong, we're headed down a bad path. Until our congress and senate see that what they're doing is wrong, we're headed down a bad path. What's it going to take? That's all I keep asking myself. When are we going to get this shit straightened out? When is a level-headed, true person going to lead us into the right place and make the proper decisions, who's going to stand up and take the hits and make something positive finally happen? That's all I keep asking myself.

  • 2
Oct 3, 2013 - 1:50am
rae2013, what's your opinion? Comment below:

"Hurr Durr, Ron Paul, Mah Freedums trumps Macroeconomics Derp".

Seriously though, if you Luddite libertarians were in charge when the financial crisis was at its appex we'd all be up shit creek without a paddle. Do you not see the how the austerity measures of the UK/Greece/et al are contracting their economy and further lengthening the recession?

On a further note, I'm assuming that if you're a libertarian, you also believe the EMH holds true. If so, then you and anyone else in finance isn't making money by your hard work and intelligence, but by sheer dumb luck. So why should we listen to sanctimonious morality lectures by people who make mad cheddar by sheer dumb luck? Like seriously, are you advocating that I should start listening to the next Powerball winner for Public Policy guidance?

Or is it possible that the free-market is irrational and prone to failure (necessitating gov intervention when stupid people invest in stupid stuff) and that the people making mad cheddar on wall st do so because of their skills and intelligence (like how do you explain buffett's success otherwise?)?s

Oct 3, 2013 - 11:35am
IlliniProgrammer, what's your opinion? Comment below:
rae2013:

"Hurr Durr, Ron Paul, Mah Freedums trumps Macroeconomics Derp".

Can you point out exactly where I made that claim?

Seriously though, if you Luddite libertarians were in charge when the financial crisis was at its appex we'd all be up shit creek without a paddle. Do you not see the how the austerity measures of the UK/Greece/et al are contracting their economy and further lengthening the recession?

We allowed about 10% of the bank meltdown to happen with the Lehman default, and 5 years later, our GDP is larger than ever, the tech sector is booming, the consumer savings rate is up, and manufacturing employment is up.

On a further note, I'm assuming that if you're a libertarian, you also believe the EMH holds true. If so, then you and anyone else in finance isn't making money by your hard work and intelligence, but by sheer dumb luck.

1.) I believe that financial workers MAKE the EMH hold true. 2.) I'm a stats programmer, not a trader; I don't make money.

Or is it possible that the free-market is irrational and prone to failure (necessitating gov intervention when stupid people invest in stupid stuff) and that the people making mad cheddar on wall st do so because of their skills and intelligence (like how do you explain buffett's success otherwise?)?s

The free market is irrational but not prone to failure in the long run. Guys like Buffett make money by correcting market inefficiencies. But overall the market is fairly efficient.

Anyways I don't get where the anti-fiscal-libertarian rant is coming from. I'm a very big proponent of civil liberties; I'm a strong proponent of thrift- everywhere- I'm a more moderate proponent of libertarian fiscal and economic policy. We probably need a fiat currency and the FDIC. Do we need free preschool educations? Do we need to make $60K/year student loans? Do we need a gigantic federal bureaucracy? Do we need to spend hundreds of billions a year snooping on phone conversations trying to catch terrorists? Maybe not. A good way of figuring out what we need and what we don't is shutting down the government and seeing who screams about what.

Oct 3, 2013 - 12:12pm
Blank999, what's your opinion? Comment below:

Haha, most of finance is essentially a friction cost. And where it isn't it provides transparency to an opaque market.

I will never understand the outrage against libertarians. This country was founded on principals of liberty. And anyone supporting more government intervention only needs to look at Congress and the White House to see how poor that would turn out.

  • 1
Oct 3, 2013 - 5:15pm
justin88, what's your opinion? Comment below:
TNA:

Haha, most of finance is essentially a friction cost. And where it isn't it provides transparency to an opaque market.

I will never understand the outrage against libertarians. This country was founded on principals of liberty. And anyone supporting more government intervention only needs to look at Congress and the White House to see how poor that would turn out.

Half the country is on the dole, and you don't understand why some of the population is anti-libertarian?

Oct 3, 2013 - 5:20pm
IlliniProgrammer, what's your opinion? Comment below:
justin88:
TNA:

Haha, most of finance is essentially a friction cost. And where it isn't it provides transparency to an opaque market.

I will never understand the outrage against libertarians. This country was founded on principals of liberty. And anyone supporting more government intervention only needs to look at Congress and the White House to see how poor that would turn out.

Half the country is on the dole, and you don't understand why *some* of the population is anti-libertarian?

I think a lot of libertarians out there think that being direct about our views brings more people to our side.

I also think some of us claim to hold more extreme views than we actually have.

I don't think this scores us political points or convinces moderates to help us politically.

The government needs to reform entitlements and bridge the gap between revenues and expenditures largely by reducing expenditures, especially on consumption. Unfortunately some of that includes medicare and social security. We probably don't need to get rid of either program; we just need to make both programs a little smaller to reflect the fact that people are living longer.

Oct 3, 2013 - 5:20pm
Blank999, what's your opinion? Comment below:

I am speaking in reference to WSO. And way more than half is on the dole. Everyone has their pet hand out.

Oct 3, 2013 - 5:23pm
IlliniProgrammer, what's your opinion? Comment below:

Sit beatae ut commodi. Ipsa non asperiores est et quidem.

Nam laborum totam eius provident doloremque. Tempora recusandae dicta temporibus rerum. Amet fugit odit in iste rerum. Quibusdam voluptatem quisquam corporis iste veritatis provident impedit. Autem quibusdam aut sunt accusantium ab atque culpa accusamus.

Deserunt omnis nemo aut iste. Alias totam ut et fugit.

Officiis ipsam qui mollitia dignissimos fuga repellendus. Optio aut sit vel amet autem. Rem quia rerum explicabo rerum voluptas et voluptatem. Qui reiciendis earum vitae odio nihil porro. Ut veniam eum ab voluptates voluptatem et.

Oct 9, 2013 - 1:01pm
HedgeKing, what's your opinion? Comment below:

Delectus ex sit autem nemo natus perspiciatis minima. Aut animi maxime officia et aliquam nesciunt. Et reprehenderit voluptas soluta assumenda numquam in autem consequatur. Officiis incidunt dolorum eum. Rerum aspernatur voluptatem illo non repellat est voluptas. Vero reiciendis iure nemo officiis.

Iste velit error iusto voluptatem voluptatem. Magnam omnis ut nihil tempora quis modi repellat. In a quis illo iste in libero.

Eum corrupti soluta commodi sint dolorem quis est corrupti. Sit dolore assumenda aut labore. Cupiditate corrupti ex qui nam saepe est.

Start Discussion

Career Advancement Opportunities

September 2022 Investment Banking

  • Jefferies & Company (▲05) 99.6%
  • Lincoln International (= =) 99.2%
  • Bank of America Merrill Lynch (▲04) 98.8%
  • Financial Technology Partners (+ +) 98.5%
  • Evercore (▽02) 98.1%

Overall Employee Satisfaction

September 2022 Investment Banking

  • Jefferies & Company (▲12) 99.6%
  • Greenhill (▲07) 99.2%
  • Evercore (▲02) 98.8%
  • PJT Partners (▽02) 98.4%
  • Macquarie Group Limited ABN (▲21) 98.1%

Professional Growth Opportunities

September 2022 Investment Banking

  • Jefferies & Company (▲05) 99.6%
  • Lincoln International (▲03) 99.2%
  • PwC Corporate Finance (▲12) 98.8%
  • Bank of America Merrill Lynch (▲05) 98.5%
  • Houlihan Lokey (▲05) 98.1%

Total Avg Compensation

September 2022 Investment Banking

  • Director/MD (10) $613
  • Intern/Summer Analyst (319) $406
  • Vice President (38) $392
  • Associates (209) $257
  • 2nd Year Analyst (130) $163
  • 3rd+ Year Analyst (19) $160
  • 1st Year Analyst (438) $151
  • Intern/Summer Associate (83) $150