Life gives you clues, your job is to pick them up. – Dr. Phil McGraw
OK, Paul, it seems pretty clear by now that you’re fully invested in your particular dogma of ever-more stimulus spending (read him at your leisure here). The trouble, we might imagine, comes from the readily apparent logic trap that all of your theories exhibit: that all things economic begin and end with the uber-state. (Corollary #1: When these theories produce consistently bad results, it’s because they weren’t applied with sufficient gusto.)
We, of course, might suggest that you try thinking outside the box for a minute or two. We might suggest that you ponder how we might ever simply print and spend our way out of a massive debt problem or how more regulatory control of the free market or redistribution of wealth schemes will do anything but punish initiative and promote the worst kinds of graft and indolence.
Of course, the simplest and best departure from this trap would be to consider the extent to which your economic theories are “informed by” your politics. Because, if it really is politics first for you (as it so clearly appears to be), then, no-way, no-how, can you really be an actual economist, Nobel prize notwithstanding. More like a party hack or a political sock-puppet. Economist? No, not so much.
So, here’s your first clue: Productive capacity and demand for products co-exist harmoniously in nature whether or not a government or central bank exists to “mediate” this wholly natural and productive relationship. This is a pretty simple fact, don’t you think? The market is (over time, almost perfectly) capable of determining for which products, in whatever capacity, there is real demand.
And, as to scarce resources, well, the market has that one figured out as well. Having thugs with guns handle the distribution of these, no matter how well meaning they might be, won’t result in a miricle of loaves and fishes. The government’s job here is to not bugger up the process with ill-conceived political social engineering. Prevent or protect us from crime and war, but don’t pick winners and losers for us. And, for God’s sake, don’t imagine for one second that bureaucratic skimming off the top will somehow result in a society that is even remotely “fair”.
It’s an old saying, but nonetheless true of all public policy: What you tax you get less of and what you subsidize you get more of. How is it, then, that after decades of fighting poverty and wealth disparity with money printing, business regulation, and progressive tax policies, we only get more poverty and wealth disparity? Might it have something to do with the very tools that you are so eager to employ with ever more scale and frequency?
Now, personally, I’d love to start a business, create jobs and wealth in my community, not to mention my own pockets. I’m still young enough, have a little capital to work with, and have one or two “good ideas”. And, were it not for the buggered up regulatory, financial, and inflationary economic environment that you and your ilk have created, I might actually have sufficient passion (or courage) for these ideas to take on the risks of such a venture.
But, here’s the rub: I can’t and won’t, so long as developing even the simplest of ventures would require the hiring of attorneys and tax specialists, procurring 27 different permits, hiring and training unqualified labor with state-determined wages and benefits, and 4 times the investment that might otherwise be required. These costs, you see, tend to dwarf the rewards that might be produced, even before considering the punitive taxes that would accrue.
Oh, Warren Buffett is surely correct when he observes that the super-rich benefit from a wide variety of tax advantages. Afterall, they can afford the tax attorneys, lobbyists, and, dare I say it, the politicians themselves, to both create and exploit this government maze of regulations. That, I’m afraid, isn’t sufficient justification to ensure that we all become ever more unequally yoked. If, after all, it is the middle classes that end up bearing the brunt of your policies, should we be altogether surprised that they are shrinking? More to the point, if only the super-rich can successfully navigate the regulatory hazards you’ve engineered, should we be surprised that they get ever richer?
Some things really are just that simple.