Michael Gerson in the Washington Post
Obama clearly believes that his brand of politics represents “facts and science and argument.” His opponents, in disturbing contrast, are using the more fearful, primitive portion of their brains. Obama views himself as the neocortical leader — the defender, not just of the stimulus package and health-care reform but also of cognitive reasoning. His critics rely on their lizard brains — the location of reptilian ritual and aggression. Some, presumably Democrats, rise above their evolutionary hard-wiring in times of social stress; others, sadly, do not.
Though there is plenty of competition, these are some of the most arrogant words ever uttered by an American president.
The neocortical presidency destroys the possibility of political dialogue. What could Obama possibly learn from voters who are embittered, confused and dominated by subconscious evolutionary fears? They have nothing to teach, nothing to offer to the superior mind. Instead of engaging in debate, Obama resorts to reductionism, explaining his opponents away.
One thing I believed about Obama was that his cerebral style would possibly lead to a bridge across the disastrous, emotional partisanship – on both sides – that is keeping us from squarely facing the important problems of the day. That’s what he said he was going to do, and that’s what he’s flatly failed to even try and do.
I wrote off the “bitter clinging” quote, because I felt that Obama was just bonding with his audience (rich Bay Area liberals). My mistake; that’s his default position.
In all my years of blogging, I’ve made it clear that what pisses me off are arguments that attempt to delegitimize opposing views. The idea that ‘relatively conventional’ liberal or conservative views should be so demonized that it’s illegitimate to even make arguments based on them is outrageous to me.
That’s what Obama has just done. And I’m outraged, on top of being disappointed. Six or eight months from now, we’ll see what he’s made of. So far, I don’t see much to be encouraged about.
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You left out the part about how Clinton is an asset.
Personally, I never thought the Clintons were much good for anybody except themselves, though they were certainly very good for themselves. They were not so good for all the 1990s Democrats who bit the dirt because of the mess they made.
So far as I can tell, Clinton totally escaped being blamed for losing Congress in 1994, except for a brief period in the immediate aftermath. Will Obama be this lucky?
Some people would be quick to say no, but remember that the Democrats are soon going to have very little left except Obama. Obama and Hillary Clinton, that is.
Clinton was a masterful politician who embraced (some would say co-opted) the change the voters announced they wanted. It retrospect, it led to some pretty good policy (and some bad, bi-partisan repeal of glass-steagall undid much of the wealth created in the 90s).
Obama is a true believer. He didn’t come to Washington to keep the country on course, he came to fundamentally change it. No matter what the voters tell him, he won’t change course. He can’t, it would invalidate everything that he is.
The coming tax fight will be the test. I think Obama vetoes retention of the complete Bush tax rates and allows the rates to go up, because that it is what he believes in. How can he sign off on something like that when intellectually he can’t square it? To do so he’d have to accept evidence that tax rates on the wealthy have major impact on economic growth, and once you accept that the entire liberal facade collapses under its own weight.
_To do so he’d have to accept evidence that tax rates on the wealthy have major impact on economic growth, and once you accept that the entire liberal facade collapses under its own weight._
Yes, tax breaks are a great way to create the next bubble. But what do you do when the bubble pops?
You gave a ridiculous oversimplification, so did I.But we can expand it if you like.
The economy was crashing in 2000-2001, so we lowered taxes and interest rates. Sure enough, the economy recovered. People had more money, so they spent. In fact, due to low interest rates and tax incentives, people bought as much as humanly possible, more than they (or their corporation) could possibly afford. The bubble grew.
But when the bubble burst, the government options are now dramatically limited. There has been some success with some increased tax breaks, tax incentives & stimulus, which have had a limited effect. Interest rates are now the lowest in my lifetime, and still buying power is down. And with the ‘deficit’ issue now looming, it seems difficult to cut further without other consequences.
I like to think of a tax cut is like a good cup of coffee. It’s a good jolt of production. But when you’re used to that cup, it has a much lower effect. You can keep increasing your dosage, sooner or later you’re going to realize that you can no longer survive without it, even when you’re well rested.
Back to the article:
Although I do agree with the Gerson article on some level, it is also funny coming from a member of the white house that used the term “terrorist-appeasers” on their opponents with such ferocity.
As I’ve said before, politics in this country has become it’s own cold war. Slander that neither side would utter 20 years ago are now become commonplace. There’s many things I thought Obama might work on that he hasn’t. It’s unfortunate, but I saw no other candidate in the primary season that even attempted ‘consolidation’. I also see no candidate possessing such tact in the near future.
I just watched “Invictus” a few weeks ago. It struck me that we need someone like Mandela in this country. Someone who can look past the party squabbles, forgive them, and look beyond the pettiness of daily blow-by-blow politics.
I’m just not sure our system would allow someone like that to get through. It’s just to dangerous to the entrenched interests.
_”People had more money, so they spent. In fact, due to low interest rates and tax incentives, people bought as much as humanly possible, more than they (or their corporation) could possibly afford. “_
If the government was taking more of their money, woulndt they have reached the threshold of ‘what they can afford’ sooner, and hence made the bubble worse?
I have not seen any evidence, studies, or economists suggesting a certain tax rate is responsible for the mortgage crash. On its face it seems like a pretty desperate attempt to tag Bush with responsibility for the collapse. Bush had some responsibility, but not because of tax policy. Did tax cuts create the lunatic mortgage policies extended by banks? Or cause them to bundle them up and pass them around?
It sounds substantially like you are saying people are too stupid and reckless to be allowed access to their own money.
I’m not saying the taxes are responsible for the boom & bust. However they were part of a number of deregulating factors (including incentives & interest rates) that encouraged people & companies to buy and sell well over demand. This worked great temporarily, as long as the market value was increasing.
But human nature suggests that encouraging people to buy also can encourage them to buy too much. That’s not to say that tax cuts are responsible for poor business decisions. But Human nature suggests some poor decisions should be expected. Similar to the stories of lottery winners who go broke in 5 years, many people buy to match their expectations, not their reality.
Again, taxes were responsible for increased sales, but once that ‘jolt’ is gone, taxes have limited control moving into the future. Even if taxes were lowered to 0, most families/companies would not proportionally increase spending, most are likely to reduce debt. For an example of this, look at a number of corporations who have money but “have decided not to invest”:http://www.washingtonpost.com/wp-dyn/content/article/2010/10/06/AR2010100606772.html?hpid=topnews instead putting the money into buying back stock.
If they have decided that investment is currently not-profitable, giving them more money is not going to change their calculations.
I should add that the ‘jolt’ was completely necessary in 2001. We needed a spending increase, and it righted the ship temporarily. But unless it’s sustainable, it causes problems going forwards.
_”I’m not saying the taxes are responsible for the boom & bust. However they were part of a number of deregulating factors (including incentives & interest rates) that encouraged people & companies to buy and sell well over demand.”_
Ah, people having money in their pockets created an atmosphere of spending it. So you’re suggesting its the government’s responsibility via taxation to dis-encourage people from spending their money foolishly.
_”But human nature suggests that encouraging people to buy also can encourage them to buy too much.”_
Is allowing people to keep their own money really an incentive to ‘buy’? Isn’t it an equal incentive to save and invest?
_”That’s not to say that tax cuts are responsible for poor business decisions. But Human nature suggests some poor decisions should be expected.”_
And hence… we should remove the _possibility_ of poor decision making by having the govment take the money before people can squander it?
_”Again, taxes were responsible for increased sales, but once that ‘jolt’ is gone, taxes have limited control moving into the future.”_
So you say. I’m not sure why you suggest if I have an extra 500$ this year, and an extra 500$ next year, I’m only going to spend (recklessly no doubt) this year and not next or the year after and so forth.
_”Even if taxes were lowered to 0, most families/companies would not proportionally increase spending, most are likely to reduce debt.”_
Didn’t you _just say_ tax cuts spur spending? Which is it?
_”If they have decided that investment is currently not-profitable, giving them more money is not going to change their calculations.”_
Excuse me, but allowing people to KEEP more of THEIR money has far greater ramifications than your assumption that you know better how they should be spending or investing it.
One thing is certain- holding sure tax _increases_ over peoples heads is a great way to discourage them from investing OR spending.
This entire thread of discussion is proceeding under the false assumption that we are and have been in a recession because people aren’t using their money efficiently. Much less that the govment could do better.
This idea that the government is somehow micromanaging the economy, keeping the spending/investing/saving/paying down debt ratio sound of millions of companies and hundreds of millions of individuals via tax policy is _ludicrous._
If you raise taxes, you impede the creation of wealth. If you lower them, you create more wealth. There is no ridiculous balancing act such that people having ‘too much’ money in their pockets is detrimental, MUCH LESS that some government egg head can possibly determine that that in aggregate is true in real time.
This idea does not come from any research or experience with reality. It comes the other direction- if you believe the government needs much more tax money in order to make life good, you need to believe the people can’t do much good with their money. Hence pretending tax policy is actually economic policy and it can be tweaked to achieve specific results more pronounced than the obvious disincentives of taking money away from people.
All of which to say, its a silly pretense that taking money away from wealthy people can actually create more net wealth, as if by magic. Sometimes we need to take it certainly, for specific government responsibilities, but please lets not pretend that by taking it we are ever doing anything constructive.
1) Sorry, AL, we’ve totally hijacked this.
_If you raise taxes, you impede the creation of wealth. If you lower them, you create more wealth._
That depends on how you define wealth. If you define it as “money”, you’re exactly right. Cutting taxes is the best way to give people more money.
I define wealth as money, stability, safety & security for me and my family. Government has a role in many of those things. If cutting taxes reduces the number of cops on the street, I am less secure, and that directly impedes my quality of life.
_There is no ridiculous balancing act such that people having ‘too much’ money in their pockets is detrimental, MUCH LESS that some government egg head can possibly determine that that in aggregate is true in real time._
The Bush admin. attempted to spur growth, as did the FED. They did. But too much growth can be a dangerous thing. The FED manages the growth of the economy all the time:both growing and shrinking. How much control they actually have is complicated, but they’re constantly trying. Which is why people spent so much time and energy trying to understand Alan Greenspan. A government controlled slowing of economic growth is very common.
_you need to believe the people can’t do much good with their money_
No, people just do different types of good. I just believe some things are only accomplished by pooling resources into a government. Individuals don’t build roads or hospitals. Individuals don’t investigate the quality of food I eat. Individuals can’t protect me from foreign powers. That’s all run by the government.
And by living in this society, we agree to put in a significant portion of our paychecks to pay for these services. I think tax cuts are great, as long as they’re sustainable and don’t impede these basic services.
Tax cuts are great in the future, as long as they’re paid for: either by a reduction of services, reduction of bureaucracy, or (other). But Bush was not interested in doing this, which is my biggest problem with them. They were not sustainable.
Furthermore, when the government takes your paycheck it’s still “your money”. it’s just involved in a larger system. It’s still used towards generating safety, security health (although efficiency is an issue). If you don’t like that system, you can take 100% of your paycheck elsewhere.
Well, getting back to the original topic….
One thing I believed about Obama was that his cerebral style would possibly lead to a bridge across the disastrous, emotional partisanship – on both sides – that is keeping us from squarely facing the important problems of the day. That’s what he said he was going to do, and that’s what he’s flatly failed to even try and do.
It was not, I think, an unreasonable hope. But I don’t think it’s shocking that it didn’t happen.
Everyone has little tricks they play on themselves, to tell themselves that something is unimportant, not worth listening to, not worth considering, etc, when the simple reality is that these things are painful and would require actually revising our belief systems.
Everyone. And if you’ve had a lot of education (as doctors, lawyers, and PhD’s of all types have, and all Ivy Leaguers think they have) it’s dead simple to think, “Bah. Unwashed, emotional peasant. Whatever it is you’re saying, it can’t be that important.”
I don’t want to delve too deeply into armchair psychology, but it seems at least possible that this grows out of what Obama tells himself, rather than as a conscious rhetorical gambit. Certainly, though, it resonates with his base because much of his base is of a group particularly susceptible to that line.
It also takes a certain level of emotional IQ– about yourself as well as about others– to broker real negotiations. You have to know what you’re willing to give up that your partner in negotiations wants, and vice-versa. That is what the post-1994, re-invented Clinton had, which Obama seems to so far lack.
It is not impossible that getting kicked in both shins during the mid-terms will bring to the fore that emotional IQ and self-awareness. But it won’t be shocking if it doesn’t.
_Everyone has little tricks they play on themselves, to tell themselves that something is unimportant, not worth listening to, not worth considering, etc, when the simple reality is that these things are painful and would require actually revising our belief systems._
And I think now we’ve gotten to the point where we think so little of our political opposition that we automatically assume what they say has no basis in reality.
It’s a fairly common line on both sides of the aisle, and it’s very dangerous, and tempting to believe.
And I think now we’ve gotten to the point where we think so little of our political opposition that we automatically assume what they say has no basis in reality.
Don’t forget, “My opponent is evil.”
Those are the big three, in my observation: Stupid, Evil, and Crazy.
bq. And I think now we’ve gotten to the point where we think so little of our political opposition that we automatically assume what they say has no basis in reality.
And it’s a safe assumption, no matter which side you’re on. The hard base of both sides is just plain old nuts. I had a rollicking discussion yesterday on a right wing site where, I kid you not, I was assured that the 14th amendment in no way, shape or form incorporates the Bill of Rights to the states. “It’s a lie”, one that was “made up by black-robed princes”. Free speech? Not incorporated. Free press, search and seizure, you name it. The tortured “reasoning” that these folks forced themselves through to justify this (it was in the context of the establishment clause in the 1A) was just mind-boggling.
_He hasn’t said anything since I pointed out that the reason she got so badly trounced was that she was a truther._
It’s a weird world we live in where we even have to ask if someone’s a truther, or a birther or a halaucaust denialist (among other things). Maybe it’s a mix of artsy southern town bordered between far left and far right… but I keep bumping into these people.
That fact that some of these views doesn’t immediately disqualify candidates scares me.
Well thanks. Clearly I’m not immune to this either, Me and Mark get into Tiffs often here, and I’m often more snarkish than I need to be. Alot of times that hurts my case (see comment #3)
On these deep-seated issues of who we are, I expect this gut-level reaction to happen. We’ve built our lives on truths that seem so obvious to us, it’s easy to look at others and see the card-castle they’ve constructed (while ignoring our own) It would be good if we could take these issues a little less seriously. We need an outlet, to remind ourselves that our dreams our silly, especially when they seem so important.
Which is why I’m such a big Jon Stewart fan. He takes despair and tries to point out the funny thing in the background. If it weren’t for him, I’d have given up a long time ago. Sometimes it’s too painful to watch our leaders fail time and time again.
I haven’t mentioned it much, but it’s been a roller-coaster year for me. My Mother-in-Law passed last Thanksgiving, and the wife is now 7 months pregnant with our first. There’s been entire months where I haven’t commented (and others where I comment furiously)but in general politics is quickly becoming less important.
The people in power don’t seem to care what I think. I should focus on the people that do care, and that I care for.
Alchemist, respectfully from a long-time (mostly) lurker, your argument seems very off base.
Time and again you imply that lowering taxes _temporarily_ increases consumer desire to spend, which can lead to economic stimulus in the short term, but also runs risks of create bubbles and has diminishing influence long-term, which is bad.
Assuming I’ve got this right…
1) Arguing that we should use tax policy to influence sovereign human beings and what they do with the fruits of their own labor is … *arrogant* doesn’t even begin to cover it. Who are you — or anyone else — to play god? What gives you (or “us”) the right to “nudge” others?
2) “Allowing” people to keep more of their own money does not suddenly convince people to spend beyond their means. It allows them more control over their own lives, comfort and security by paying down debt, saving, and spending as they wish _with *real* money they have in the bank_. You know, because it wasn’t taken to begin with.
3) The above is juxtaposed against money people _don’t_ have. *Credit* lines. Tax *credits* coming in a return next year. Giving people access to money they do not have and did not earn _does_ create bubbles. Tax credits for homes and cars and appliances are amazing incentives for people to buy above their means (free money!). That feeling is very poignant in my mind: I just bought my first house.
Similarly, lottery winners deal with a sudden increase in money. In a double whammy, this money was not earned (like with *credit*), and the winner has no experience handling that much money.
The commonality is all of this money is that it’s from the “ether”. It’s not hard cash in the bank, earned, and loathe to part from. Not like a paycheck.
4) Your suggestion that corporations “have just decided” to stop spending money and thus lowering taxes is imprudent is very, very insular, limited thinking. Businesses plan 1/2/5 years at a time.
Many people are scared to near certainty that tax increases are coming (beyond expiration of the Bush tax cuts). Both ObamaCare and Frank-Dodd “Finance Reform” lay *incredible* power at the feet of _commissions_ which are just starting to make rulings, leaving many unknowns in the future. Our current government has made it very well known its attitudes towards wealth redistribution and mistrust of businesses.
If it is not abundantly clear to you: businesses have _no idea_ what is beyond the next turn; they are holding onto their assets to ride out a storm. Note that many, many businesses who were lean on assets in 2009 are no longer.
Alchemist, I read and respect (and sometimes respectfully disagree with) your posts on WoC. But here I think you’ve really stepped out into traffic. Your point of view seems very insular and top-down on the drivers of economics, and I wonder if you understand what really has happened and _why_ November 2nd will be such a reversal.
Cheers,
Chris M
Alchemist: correcting myself in a little fairness…
1) Using tax policy to run services like, as you mentioned, is absolutely fine. But this discussion started around using tax cuts as an economic motivator.
4) Re-reading, you did not directly suggest that corporations have no reason for withholding spending. I apologize for the statement.
My reasoning follows the argument “giving corporations more money won’t necessarily cause them to spend more”. I agree completely, actually.
But lording ourselves over the economy to influence others is immoral.
And using this as a reason not to lower taxes is disingenuous. The _reason_ is government interrupting the economy with incentives, disincentives and redistribution.
Now “services” may be a reason to not lower taxes, but that’s an entirely different (and very large) ball of wax…
Respectfully,
Chris M
_Arguing that we should use tax policy to influence sovereign human beings and what they do with the fruits of their own labor is … arrogant doesn’t even begin to cover it._
Again, I think you’re over-reading my point. But yes, the FED tries to control the market (not individuals), with taxes, incentives interest rates etc. I would think this point is fairly obvious by now…
But Yes, the reason why we have to cuts/incentives is to influence human behavior. If they didn’t work, they wouldn’t exist. (Spurring the economy is the reason Bush pushed for the second round of tax cuts… or at least the reason given in many speeches). I wouldn’t say that I always agree with this, but it’s PRECISELY WHY tax incentives are written.
2 _”Allowing” people to keep more of their own money does not suddenly convince people to spend beyond their means._
I would say this a different way. Sudden influxes of cash (even cash that must be paid back) effect different personalities in drastic ways. Much of this depends on the situation (I’m having trouble finding the psychological experiments…. but I’ll keep looking) For example: Grocery store experiments where people were given $5 dollars unexpectedly often led to a significant fraction spending more than $10 in additional products. (This is why coupons are profitable).
Tax cuts in their simplest terms are a sudden jolt of money (in economic terms, “whose” money is unimportant). For most Americans, money was immediately spent. For some people (like my father) this was the reason to finally get the big screen TV. He got a check for $300, and spent $1500 extra. Not a big deal, he could afford it, but totally expected behavior. Tax cut accomplished!
When my father got the last “stimulus” check though, he immediately put it in savings. Why? “Because the market’s scary, I might need it”. Bonus tax cut this time was not incentive to spend, because of the fear of recession.
The problem, as I see it, is not “who the money belongs to”. We live in a America, and based on current standards we’re paying a relatively small tax rate (especially by the standards of my lifetime). It would be great to give people more of their money back. But we can’t do that AND provide the same level of services. Personaly, I’d rather have services than money. Clearly, you disagree with me.
But limiting government growth/services has got a lot of talk, with little action. Even Bush GREW the government by 25%. That’s a serious problem, making these cuts unsustainable. Ending the cuts was the only way to keep the CBO from showing massive deficit increases.
The reason to continue the cuts is to prevent further stagnation. But people aren’t spending money, even with the tax cuts.
(In my mind, the taxes should have been recalled in the middle of the last boom. While this might have slowed the economy, that might have limited the rapid-economy growth that fed the bubble. It would also have given more short-term revenue, which could have led to renewing the tax cut indefinitely).
_Both ObamaCare and Frank-Dodd “Finance Reform” lay incredible power at the feet of commissions which are just starting to make rulings, leaving many unknowns in the future_
That’s fair. At the same time, regulation is the weakest that it has ever been in my lifetime, and look how that worked out. Deregulation caused this mess, and the pendulum is now swinging the other way. Since the financial sector just screwed us, we need a little more protection before they screw us again.
If that regulation causes dems to lose an election, I’ll sleep safer knowing it’s there.
_Morally, that attitude quickly leads to the disregard for human rights and arrogance that I’m talking about._
I think you misunderstand. I’m talking pure economics here. I’m trying to avoid the conversation about where the money came from, (or whether it should be there) and just say either way, the consequences of that money showing up are predictable.
_You’re talking about this like it’s some kind of experiment_
This is the way the FED has worked for over 50 years. And yes, “experimental” is a good way to describe it. They take economic theories, and try to apply them to current situations to control/maximize the growth of the economy. Which is again, why people dedicated their lives to understand Alan Greenspan’s technical jargon. Fortunes rode on the minor fluctuations of interest rates.
And yes, this is also done without any consideration to individuals. Because, as Mark pointed out, that’s impossible to do. But it’s a “game” every nation plays to maximize growth. And if you don’t beleive me, pick up a subscription to “the Economist”. This stuff (and their consequences) takes up 40-60 pages of a weekly issue. EVERY president since Roosevelt has asked the FED to do this: Bush, Reagen, Nixon.
People make it sound like I invented this for my personal benefit. I’m a scientist, the economy looks like magic and pixie dust compared to my world (ie totally unrealistic). But if the world is playing a game without you, you’re really better off understanding the rules.
_”Services” tend to spend money very, very poorly_
Yes, but there are many services that the market cannot replace. Police Dept, Fire Dept, FDA, a army that protects us. There are many other ‘services’ that are badly managed, but until the market comes up with a replacement for these, I’m more than happy to donate part of my paycheck.
_The banks screwed their own money supply by making bad loans. Some people took bad loans because they did not properly respect money that wasn’t theirs (re: credit)._
Many of these loans were made with illegal claims. Either in the loanee claiming a much higher income, or the bank claiming that had collateral to cover it. Or in the rating agencies who illegally ranked them as ‘safe’.
Either way, a regulatory body with any power could (ideally) identify this, and shut this down. Prevent the actions that were Illegal, and you stop the worst of the meltdown. Ignore this, and people will try (some version of this) again in 10 years.
_Allowing or barring people from doing stupid things is not your decision_
You can if they are making claims for collateral that don’t exist. If they’re hedging bets with money they don’t have. That’s against the law.
_I think you misunderstand. I’m talking pure economics here._
Fair enough. 🙂 Honestly, this is my main point of contention. Tweaking interest rates on loans you make affects voluntary transactions, that’s one thing. Taxes are not.
—
_Yes, but there are many services that the market cannot replace. Police Dept, Fire Dept, FDA, a army that protects us._
Police/Fire aren’t even state, much less federal. Military is mandated (and makes sense) at the federal level. But I think you misstep in talking about the FDA being irreplaceable.
The FDA has a very good corollary in a mix of “Underwriters Laboratories”:http://www.ul.com/ and the “BBB”:www.bbb.org/. Or compare the “NHTSA”:www.safercar.gov/ to the “IIHS”:www.iihs.org/ratings/; IIHS information is more detailed and is often referred to over the NHTSA in automotive circles. The IIHS is run by the insurance industry.
The FDA is not unique, and is absolutely replaceable. The fact that people would freak out if the FDA disappeared over night shows the demand.
—
_There are many other ‘services’ that are badly managed, but until the market comes up with a replacement for these, I’m more than happy to donate part of my paycheck._
What’s frustrating about your statement is that taxes aren’t donations. Government doesn’t allow the rest of us a choice, they force our hand.
I think the least we can agree on is to transition these entities to the state level so that people have a choice. I’m sure my home of Texas would be much more in line with local needs and preferences, just as Massachusetts and California would be for their citizens.
—
_Many of these loans were made with illegal claims. Either in the loanee claiming a much higher income…_
I’m not overlooking that; but I do not believe we need two dozen commissions with arbitrary regulatory powers to solve it. Our judiciary was constituted for these kind of violations, and what you’re talking about is prosecutable under fraud.
The fact that Fannie and Freddie were buying up bad loans — motivated by government insistence that low income families be extended risky loans to buy homes — and were expected by industry insiders to receive a bailout should things go south I think is a wonderful confluence of unintended consequences.
Best wishes,
Chris M
_What’s frustrating about your statement is that taxes aren’t donations. Government doesn’t allow the rest of us a choice, they force our hand._
It’s the price for living in America, as it were. Sure there are nations with lower tax rates, but how many of them are ‘developed nations’? I’m sure the cayman islands are very nice, but I don’t want to live there.
_I’m sure my home of Texas would be much more in line with local needs and preferences_
So, 50 FDA’s instead of 1. That’s not at all redundant. I see what you’re saying though. In some instances it’s practical. In others, it’s not. It would really come down to a case by case basis with me.
I find myself in rough agreement with Alchemy, even though I’m in broad sympathy with Chris M. In some sense, I always have been, and it takes a certain amount of effort to reconcile those two positions.
I agree with Alchemy that certain things which (I believe) (the vast majority of) Americans strongly desire are not best provided by the market– security, regulations, grand infrastructure, etc.
I’m also very sympathetic to the idea that government often does a bad job with the services it provides because the lack of competition cripples any drive to efficiency or innovation. (There is a segment of conservative thought that thinks all regulation and government oversight translates to a reduction of freedom, and that all taxation for public works is theft; that’s not me. It can be but is not always.)
So like Alchemy, my base position is “It depends on the circumstances.”
For instance, I doubt very much that the drug companies would really want to see fifty parallel FDAs regulating drug safety– too complex, too chaotic. I know that the oil refiners aren’t keen on the present regulatory patchwork of federal, regional, state, and municipal– some seasonal, some not– which means that they have to devise and maintain complex refinery scheduling and transport arrangements just to satisfy whatever bizarre rules are in play until the next full moon.
I’m not satisfied with my own, “It depends,” though. I’d at least like to have a framework or a philosophy for saying what it depends on, and maybe how. My thought here, which is neither revolutionary nor unique to me, is that technology is what helps to determine whether a market can meet given needs, or if it takes state coordination. Three are other factors– the freedom to use that technology, a general level of affluence to power the markets, in some cases geography… but technology seems to be the most changeable element in that mix.
Case in point: In the 1960s, it took the full scale resources of half the planet to get to orbit and the moon. In the 2010s, it takes the full scale resources of second tier nations, but advanced economies seem likely to make the jump to providing orbit services by market, not by government spending. There are other examples in the past, and more that I hope to see in the future.
Now, I also agree with Alchemy that it’s a reasonable role of government to tweak the economy through the various levers we’ve given it. We’ve seen the results of not doing that, and they’re very unpleasant. Not to mention, any state not doing that leaves itself to the ravages of other states which do. There is no way out of that one.
Which leads me to this thought: My ideal government would have a sort of an active minarchist philosophy. Minarchy is an easy enough concept, even though it’s hard to define in practice what “minimal” is before it’s too little and falls apart. I think of active minarchy, though, as a government which, in a sense doesn’t want to exist or at least wants to shrink, but without leaving its citizens howling in the cold. Such a government would recognize that only through offloading functions to private industry, and critically, through funding research to make possible tomorrow whatever offloading is impossible today.
That’s why I opposed the health care business: I don’t think it’s going to work; I think the government should be trying to get out of the business by making that business more effective, rather than doubling down and glomming on; I think the government is in the tank with yesterday’s service providers to the detriment of tomorrow’s, by way of medical device taxes and the like.
I don’t know how to create such a government.
But I think we may be forced to develop such a thing. In my copious free time, I’ve been reading The Shield of Achilles again, and will be going through Terror and Consent when I’m finished. (Not that either will happen any time soon.) The one thing that really strikes me is the prescience of Bobbit’s notion that the conflicts of the future will be conflicts of markets. I’m not sure he’s right on the details (he postulates a European market based on providing liesure and welfare, an Asian one providing stability, and an American one providing opportunity) but I think he’s right in the broad sweep: The American market no longer dominates in the way that it used to. It has serious competitors.
So while we may not want to hive off our own market and regulatory regimes into fifty parallel ones (although I think we do want to allow experiments of labor flexibility) we don’t really have a choice about external competitors. They’re there, and they’re not going away. Going back to the FDA example, the whole concept of “medical tourism” depends on competitive medical regulatory regimes, no?
This is a pretty scary concept for most Americans, since anyone born after 1940 (which is to say, almost all of us) are used to be the unchained elephant with so much spare consumption capacity that we used it to weld together global military alliances. That’s no longer the case– we probably can’t absorb the productive capacity that China is developing, without becoming substantially wealthier. This is not the world we’re used to. I’m not sure the Right comprehends this, but I know that the Left does not.
On the other hand, it’s exhilarating, if you’re an optimist. Americans spook easily (because if you think about it, I just said, “It’s scary that we’re no longer number one, and the equal of numbers two through ten combined,” not “It’s scary that we’re now number two,”) and other times we got spooked were after Pearl Harbor and after Sputnik launched.
I don’t think we’re going to be left with a choice; at some point we’ll have to get more efficient. The preconditions are there internationally, and even nationally the voters are signalling very plainly that they’re fed up with both parties. Both parties will keep getting voted out until one or both hits on ideas that reform government.
(We apologize for the long rambly comment.)