How Buffett bluster boomerangs; or, Taxosaurus Rex

April 14, 2012 2 Comments

The unvarnished rhetoric coming out of the White House over the past two weeks has been just too delectable for conservative commentators.  In a recent WSJ piece, Daniel Henninger suggests that Democrats’ furious assault on Paul Ryan’s budget plan is desperate “thermonuclear” overkill.  Indeed, all the accusations of Social Darwinism and “trickle-down” economics cannot make up for Democrats’ utter lack of seriousness when it comes to the national debt.

As the White House rolled out the practically inconsequential yet politically expedient Buffett Rule this week, I was amazed at the justification given by allied economist Alan Krueger.  The Christian Science Monitor quotes:

“In addition to fairness, in fact it’s a step in the direction of economic efficiency,” said Alan Krueger, chairman of the Council of Economic Advisors. The Buffett rule allows people to “devote more effort what their focus should be, which is to their jobs and job creation … rather than restructuring their income to minimize their taxes.”

He’s alleging that the tax increases economic efficiency.  But how does government spend anyone’s money better than they themselves would?  During the global high tide of state central planning in the 1940s, F.A. Hayek explained cogently in his The Road to Serfdom who spends money best: the one who earns it.

When given other people’s money, legislators face the temptation of buying constituents’ votes with pork rather than allocating it wisely.  Then the money goes to bureaucrats, who are not careful enough with it.  Their lack of accountability flows from the political difficulty of de-funding them.  It is the original income earner who best appreciates the sweat and effort it took to get the money.  She appreciates the reality that her income might dry up tomorrow, and so will handle it more carefully than the central planners.

According to his critics, the car elevator in Mitt Romney’s mansion is a bad thing.  But he used his own money, which he only earned in the first place by benefiting others in voluntary transactions.  And the construction provided gainful employment to all sorts of craftsmen.

President Obama, meanwhile, either had to grow our debt or tax money out the economy to give us public project flops like Solyndra and the constipated stimulus weatherization projection.  Money that otherwise would have been carefully spent in private hands was squandered by legislators and bureaucrats.

Of course, not all government spending is bad; some spending is necessary.  But Krueger’s claim that a tax increases efficiency overlooks government’s great tendency towards inefficiency.

The case against the Buffetteers may be clearer when we look at that favorite magic word of progressives and liberals, “investment.”  Any public project from education to high-speed rail becomes an unmitigated good if it can be spoken in terms of investment.  But our current, low tax rates vindicate private investments as an even greater good.  This is why Buffett and Obama pay less in taxes than their secretaries.  The Monitor quotes Marco Rubio:

“What [Americans] need to understand is the reason why he may pay less than his secretary, in terms of the rate, is that she makes her money on a paycheck and he makes his money on investments,” Senator Rubio said. “We have always wanted Warren Buffett to, instead of putting that money in a coffee can, to take his money and invest it, because that created jobs.”

As much as the Buffett-minded would increase taxes on private investment earnings, they would demolish the incentive to invest and crash the stock market.  In this way the Buffett Rule boomerangs back on itself.

Class envy can’t lift up the poor, but it can bring us all down.  Let’s all move past the Buffett distraction.

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Envy, or fairness?

January 21, 2012 2 Comments

Cogitduck #5

 

Today is the South Carolina primary.  Sometimes brilliant, sometimes bungling, but always a firecracker, Newt Gingrich has turned things around in the past couple of days.  My commentary doodle though is looking back to a moment earlier in the week.  Twice now in recent days, Matt Lauer has challenged a Republican on the idea that the President and his allies are campaigning on the divisive basis of “envy.”  Last week it was Mitt Romney, and this Wednesday was Romney supporter and New Jersey governor Chris Christie.

It’s a bit amusing to imagine that, in snapping immediately to the question of fairness, Mr. Lauer was impulsively responding to a recollection of some deep-seated childhood trauma.  My joking and his bias aside, Lauer is a pleasant enough TV personality.

But his recent spates do seem to reflect the brokenness of American culture today.  As little kids, we all learn the basic rule to be nice and share with others.  But the last couple generations of children have failed to learn how to get on in the real world.  Since bursting forth in the 1960s, a counterculture has cascaded down to us through Hollywood, progressive pedagogy, and permissive parenting, reinforcing the notion that our society is irredeemably unfair while simultaneously growing our sense of entitlement.

For every ten times a voice in our culture admonishes us about “greed,” how many times are we warned against envy or covetousness (commandment number ten)?  A cultural establishment that mistakenly sees our society as basically unfair cannot be bothered with those kinds of questions.  But to so readily dismiss those psychological motivations is to betray a major deficiency in worldview.

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Two revolutions

January 3, 2012 Leave a comment

Cogit Duck #4

You may have learned that “The Protester” is TIME’s 2011 person of the year.  This pronouncement strengthens a strange notion stretching as far back as the Wisconsin state capitol protests of February.  Back then, sleeping bag-toting proto-Occupiers were the first Americans to insinuate a connection between themselves and Tahrir Square.  In so doing, they cast their own struggle in the light of the French  Revolution.  But why would they trade the glorious vestige of the American Revolution for the deeply troubled tradition of the French?

The twin revolts left such disparate legacies because of the drastically different situations of their respective peoples.  We learn from an invaluable resource that the colonial Americans, under decades of relaxed British rule, enjoyed unparalleled prosperity and privilege.  On average, they were several inches taller, better fed, and enjoyed greater freedoms than their British counterparts.  Their corner of the New World was unencumbered by the class distinctions that hung over Europe.  The missteps of Crown and Parliment that soured Americans against the empire were insignificant and brief in comparison to the privations the long-suffering French endured under the direct rule of an inept and illiberal monarch.

The ball of class struggle started to roll with the heads of the French aristocrats over two centuries ago, but a different force was unleashed just a few years earlier in America.  That revolution was deeply conservative in nature.  The French in their revolt sought something new, unprecedented, and decisive, but the American rebels wanted to preserve the prosperity and privilege they had already gained.

Since those heady days of the late eighteenth century, the French model has been a catalyst for the radicalization of desperate masses.  The American project may have been the first decolonization movement, but the class dynamics we see in Old World power struggles are alien and tangential to the American experience.  No mind-numbing mantras should ever convince us that downtown Portland, Davis, or Des Moines is anything akin to the dire streets of Cairo or Damascus.

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Voting against your own interest

November 5, 2011 Leave a comment

#1: Voting against your own interest
Have you ever heard this kind of musing before?  The idea is that Republicans exploit social “wedge issues” like gun ownership or gay marriage to get lower-income conservatives to vote against their own  self-interest.  And that is supposed to be to get government to take money from rich people and dole it back to the poor masses of which they are a part.
I was reminded of this trope while listening to Michael Medved interview Corey Robin about his new book, The Reactionary Mind: Conservatism from Edmund Burke to Sarah Palin.  Robin himself used the worn line about voting against self-interest, and it recalled the spirit of the 2006 book What’s the Matter with Kansas?
I wonder if the people who say or write those things are ever conscious of how presumptuous they sound.  Somehow, they know what you should objectively be voting for, and you are just duped by your blind passions.  Not a very charitable view of a fellow citizen.  Worse than the attitude though is their ignorance of the fact that redistribution schemes, whether born of a patronizing benevolence or a covetous “self-interest” of the masses, do not benefit the targets of socio-political largesse  but only beget greater misery for everyone in the society.

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Deferential Discourse

July 24, 2010 Leave a comment

Recently I was fortunate enough to see a stage adaptation of C.S. Lewis’ The Screwtape Letters. I really appreciate the points that Lewis conveys in his original work, and while the play was well-produced and had its shining actors, I had some problems with the writing of the adaptation itself. In translating the letters to a more concrete narrative, Lewis’ emphasis on attitudes and distinctions is lost. For example, the patient’s early dealings with haughty, progressive friends in the book are supplanted by the devils’ conspicuous trumpeting of social class, which the play ultimately does nothing constructive with. However, it does insult liberals by making the patient’s drunken louse friend a socialist.  In introducing the parish pastor, the play brandishes its disdain for the overreach of cultural relativism with a reference to church karate classes taught by a Japanese Muslim. But since these introductory remarks show no connection to the characters they describe, they come off as cheap hits on unfavored practices. If we recall the patient’s haughty pacifist friends or the morally picky parish pastor of the book, Lewis does better by withholding direct judgment on specific issues and individuals. Whether examining social activism or church sermons, the book’s Screwtape turns our attention toward our attitudes of approach rather than the specific practices or practitioners before us.

This deference given toward individuals and institutions with which there is disagreement is something I see a lot with British writers, more so in the past than today. In The Abolition of Man, Lewis criticizes the ideas put forward in a science textbook, but chooses to leave the work unnamed in order to stem the sensational urges that come from connecting individuals to their ideas. So those whose idea he criticizes are called in his text “Gaius and Ticius.” In old works of fiction, its not uncommon to see authors go out of their way to avoid impugning real people or places by calling them “Mr. X” or  “M. S____.”  Today I see the survival of this sense of deference in people like apologist Ravi Zacharias, well-connected with Oxford and Cambridge, and British-born journalist Peter Hitchens. In his past talks, Zacharias has often left broad elements ambiguous for the sake of his audience’s attention, saying only that such an anecdote occurred in some city on the West Coast, or that a cutting conversation happened with a professor of some unnamed Eastern religion (really, how many can we choose from?). Likewise, in a recent interview promoting his latest book The Rage Against God, Peter Hitchens consistently avoids “personal” criticisms of his famously strident atheist brother Christopher. If you press him too hard on his conjectures of their personal relationship, his deference will block you and return the conversation again to the ideas, not to the people who espouse them. Peter, who claims that he is a pariah to his countrymen because of his beliefs, points to the demise of deferential discourse in his earlier book, The Abolition of Britain.

This old-style deference is remarkably rare in a sensate age where more points are conveyed with blunt images and sound bites rather than well-reasoned arguments. Yet I’m attracted to the power of shorthand that specific people and places convey. If we look at the controversies of today, so much emotion and meaning can be unpacked if you just drop some names: merely mentioning Sarah Palin or Jerry Falwell will set off a certain crowd, while mentioning Chairman Mao or Che Guevara will set off another. The deference writers do have the advantage of taking the high road and keeping their discourse focused, but I do believe there are times and places where it makes sense to be more direct. However, if someone is going to drop names, they ought to be more than just smears by association. Whether constructing a talk or writing a work of fiction, we will benefit just by being a little more careful about the specific mentions we make.

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Rule of Law, Rule of Gut

June 25, 2010 Leave a comment

The BP oil spill has provided a chance to clearly delineate between two worldviews vying for our political discernment: the visions of the liberal Left and the conservative Right.  In responding to Republican House representative Joe Barton’s double-apology gaffe, President Obama’s Chief of Staff Rahm Emanuel said as much.  And while Emanuel is correct in observing that two governing philosophies are at stake this November, it would be an error to take his class warfare bait.  The choice is not between wise, compassionate Democrats and corrupt, cozy-with-big-business Republicans.  To the contrary, this November is a chance to dump destructive Democratic impulses to rule from the gut, and empower a new, conservative Republican leadership that values rule based on law.

The rhetoric of emergency is the greatest pitfall of the Democrats’ liberal governing philosophy.  In times of crisis like the BP oil spill, inflammatory rhetorical appeals come naturally to them. At the onset of the oil spill, Democratic strategist James Carville cried out “We’re dying here!” In a recent attempt to capitalize on Barton’s apology blunder, Vice President Joe Biden chided that “people are drowning.”  As a tool of political persuasion, the appeal to emergency is dangerous.  It preys on raw emotions, leading to the loosening of purse strings and  easing the approval of impractical and downright harmful policies.  Recall that appeals to emergency during the Great Depression ushered in the New Deal.  Among the many blunders under the aegis of enlightened activism, the federal government paid farmers to wastefully slaughter their livestock, denying food to the hungry for the sake of stabilizing food prices.

Having lived through Bolshevik brutalism as well as America’s New Deal fiascos, Ayn Rand warned in her brilliant polemic Atlas Shrugged that appeals to emergency inevitably empower either unsavory autocrats or unreasoning incompetents.  The Left’s Rule of Gut is all the more dangerous given their inscrutable devotion to the cult of the political savior.  Whether as youth admiringly looking upon the iconic visage of revolutionary Che Guevara, or as older generations fondly recalling fireside-chatter FDR, Democrats and their Leftist base turn not to reasonable stewards of power, but at the gut level dream of charismatic, decisive deliverers of salvation.  Perhaps it is only slightly more tragic for a banana republic to produce a Castro or Chavez than it is for the United States to beget a starry-eyed bungler like Carter or Obama.

What then stands as an antidote to the twin appeals of emergency and charismatic deliverance?  Many people dismiss today’s conservative movement out-of-hand because they buy the idea that Republicans are beholden to big business and that conservatives are under the undue influence of social “wedge” issues.  But while the political Left relies on emotional appeal to further a hazy end of “progress” shared by the political bedfellows of victimhood, American conservatives look to widely-established and long-standing traditions as the means to preserve national well-being.  Broadly considered, these traditions share the spirit of and are inclusive of the Rule of Law.

The decisive factor in favor of conservatism may be the question of ends and means.  Not only are the ends of the Left mistaken, the means of achieving their ends leave us vulnerable to the imperfections of alliance-wrangling.  As Thomas Sowell effectively notes in Conflict of Visions, the ends are paramount to the Left, but the means are the key focus of conservatives.  With an aim to preserving the integrity of process rather than seeking to guarantee a specific result outright, the conservative vision offers the greatest chance of behavioral accountability from our leaders.  Conservative constituents demand fidelity to function, but liberal politicians, supposing a backdrop of knock-down, drag-out class war, must satisfy their constituents’ identity-based grievances by any means necessary.  And more often then not, the sausage-making that begets vaunted progress for the Left is deleterious to the national interest.

Its a paradox that those on the Left, who seek change by Rule of Gut, will always remain unsatisfied by their side’s inability to effect the immediate gratification they seek.  But we, whether at the election polls or in the course of day-to-day life, can avoid that frustration by choosing to live under the Rule of Law instead of the Rule of Gut.

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