| The Monday Morning Economist Independent Opinion - Unadorned |
| The Economics Election ‘08 This election started out to be about a war and national security. The economy was running a distant second as an issue. Our President, George W. Bush, was hoping to run out the clock on our Iraq entanglement. He will have accomplished that as of this coming January, leaving the mess to the next guy. What his Laissez Faire economic ideology led to, a global financial crisis, could not have even occurred to him. And so he could not have known even how to delay the impact. What Aynn Rand said was supposed to work. So this November we have an economic choice to make. It is an economic choice because it has never been more apparent that without a sound economy, one might even argue the strongest in the world, to sustain a powerful military, our little experiment in Iraq is moot. The Conservative economic policy of Reagan has been tested, twice. It has failed both times. Low taxes do not stimulate the economy and very high concentrations of wealth actually remove capital from the markets. There is no “trickle down”. There never could have been by definition, as someone who is wealthy is so by virtue of keeping everything to themselves. Concentration of wealth means that investment and therefore innovation that actually creates is at the capri of a few individuals. It is an aristocracy of wealth that cannot be trusted to act in the interest of the public or even the nation. Aynn Rand could not have been more wrong. She prophesied a tyranny of the proletariat and enabled the creation of a tyranny of the super rich. The Democratic, Liberal even, policies of shared prosperity, through leveling by taxation even, have proven to be the right formula for prosperity for 95% of the public. And if in a Representative Democracy that has not registered with people and their representatives, then the crash of ‘08 certainly will make it register. It is just too godamned bad we had to do it a second time. One would have thought the Great Depression would have taught us. No amount of hoping or believing will make this crash go away. To the adherents of Reaganism who believe that somehow Reaganism was simply not executed right, sort of like the war in Iraq was not executed right, I suggest to you that had it been done “right”, it would just have happened sooner. The candidates are more or less irrelevant. The philosophy is relevant. The fundamentals of economics are relevant. Jack innovates, either improves efficiency or invents something outright. That creates wealth. More stuff or more services in the same amount of time or effort is wealth. It mostly takes capital to enable this, therefore I am a capitalist with a small c. Big C Capitalists, Reaganites, do not believe in sharing the wealth created by innovation. Little c capitalists, Democrats, do. Examine the dynamic. If the wealth created through innovation is the sole property of the big C Capitalist, then no benefit accrues to the worker for the innovation. This is the very complaint leveled against Communism. You bust your ass and you can’t get ahead. Most people are not innovators. But the consequence of innovation is a requirement for mastery of innovations. That value, mastery, is also wealth. And is the summary value of the innovation. Computers would be useless if people could not operate them. A shovel is useless if you do not know how to operate it. So every person working with an innovative technique adds to the sum of the value of that innovation and therefore merit a share in the wealth created by it, be it a large or small share. In this way, economies are born and grow. This is at the root core of America. The Constitution alludes to the right to life liberty and the pursuit of happiness. If in that phrase is the implication of a meritocracy is debatable. If in the hearts and minds of Americans that is what is meant is a certainty. Adam Smith summed it up - quoted the front page of The Monday Morning Economist - "The property which every man has in his own labour; as it is the original foundation of all other property, so it is the most sacred and inviolable… To hinder him from employing this strength and dexterity in what manner he thinks proper without injury to his neighbour is a plain violation of this most sacred property." |