Politics

Brandon Vindicated (and Relieved!)

Brandon Christensen Current Events, Economics, Politics , , , ,

I read a lot of blogs in my spare time, and one of my favorites is the Monkey Cage, a blogging consortium made up of technocratic, internationalist-minded Left-wing political science professors. They rarely disappoint. I know what you’re thinking, but if I could choose which faction of the left I would want opposing libertarian policies it would be the technocratic Left. It a movement that has individual liberty in mind and is, as I mentioned, internationally-minded.

Notice also how I take into account the fact that an opposition to my own views are a necessary component of my utopia. Too many advocates of liberty don’t realize this when they argue about politics. Which factions would play the role of opposition in an anarcho-capitalist paradise, for example? It seems to me that the quality of one’s perfect opposition is actually quite a good gauge for measuring the quality of one’s political ideal (if I do say so myself!).

Anyway, Patrick Egan, of NYU, has a new post up explaining that the economy was indeed the central issue of the election, and then busts out the data to back up his argument (and help me save face!). I think this is an important point because I’ve already made the rounds around the blogosphere and many otherwise smart, competent people seem to want to chalk up Obama’s victory to something other than the economy.

From Egan’s post: Continue reading →

From the Comments: Social Conservatives Need to Go

Brandon Christensen Comments, Current Events, Politics

Longtime reader –Rick observes:

The Republicans need to re-brand and delete all social conservative positions from their platform. If the God freaks don’t like it, too bad. Let them stay home, vote Democrat or Republican as they wish. So called conservatives should be concentrating on small government, a strong military, a philosophically principled foreign policy, and a secular judiciary that ignores all religions and judges based on the facts and the rule of law.

Their new platform needs to be more inclusive, particularly with Hispanic concerns, not out of a sense of pragmatics, but if America is to develop an expanded trade relationship with Hispanics, how willing will their governments be to participate with radical xenophobes who treat their southern neighbors with disdain in juxtaposition to the favorite status given to our neighbors to the north?

It’s economics. They need jobs, we need workers and an expanded tax base as well as new trading partners. Let the Xenophobes vote with the KKK as a bloc. Their absence won’t be missed. The Constitution states that all men were created equal – not just U.S. citizens and Canadians.

However, I won’t get my hopes up that the leadership will suddenly turn rational and see the possibility of gaining 2 or 3 new voters for every one bigot they ignore in constructing their philosophical/political planks.

I couldn’t have said it any better myself. The sooner the GOP turns its back on social conservatives, the sooner it can get back to being a national political party again. Be sure to check out –Rick’s blog here.

Obama: Any Silver Lining?

Warren Gibson Current Events, Politics , , , ,

So it’s four more years of Obama.  What can we expect?

Obama makes me, a libertarian these last 40 years, nostalgic for the sort of “liberals” who until recently dominated the Democratic Party.  At least those folks have some respect for facts and tolerance for other points of view.  Obama is different.  I know longer think it an exaggeration to say that Obama hates America, as Rev. Wright preached to him for twenty years.  I have a new understanding of Obama thanks to Dinesh d’Souza’s book “Obama’s America.” Barack Obama had an epiphany at the grave of his father, a man who was a leader among the anti-colonialists of Kenya.  The man was a no-good drunkard who deserted and abused more than one wife and child, yet Barack was able to put aside these faults and hitch his star to his father’s cause. His first term in office gave us numerous actions that exemplify his quest to bring America down.  He likes to stir up class hatred.  His tax proposals are all about fairness, as defined by him, of course, and never mind the ensuing economic damage.  That they punish the most productive among us is all to the good; that they damage all of us in the long run doesn’t matter. He has seized control of health care.  He has acquiesced in a brutal war on medical marijuana patients, waged by his Northern California District Attorney and others.  He has ordered assassination of U.S. citizens and condoned domestic spying.  The CIA continues its massacre of civilians in Pakistan, a supposed ally.  All of this would make a high-class liberal like Adlai Stevenson gasp with horror.

Thank God we still have a Republican House and a Senate where they can filibuster.  Gridlock will probably prevent any new atrocities of the scale of Obamacare.  But the door remains open for a great deal of evil-doing.

First off, there will be at least three Supreme Court appointments in the next four years.  It’s a sure bet that Obama will appoint “social justice” types, the sort who have no concept of the Constitution as a document intended to limit the powers of government.  These are life appointments so the new appointees could be wreaking havoc long after Obama is gone.

Second, the President has a great deal of latitude in foreign affairs. Just look at the damage George Bush inflicted on the world with his senseless wars in terms of casualties, hatred of America, and insolvency.  But there is a ray of hope here.  The warmongering neo-cons are on the sidelines and Obama’s ineptness in foreign affairs may spare us some future dustup that Romney might have provoked.

This isn’t the silver lining I had in mind, however.  I present here, with misgivings, a viewpoint suggested by my colleague Jeff Hummel. He likes Obama’s victory because he thinks it will hasten our Götterdämmerung – the collapse of Social Security and Medicare and default on Federal debt.  Out of the ashes will come a new order in which Social Democracy has been rooted out of the polity, as the paroxysm that was the Civil War put an end to slavery.  This is a viewpoint with which I have a great deal of sympathy while continuing to hope for some sort of “soft landing” instead.

Social Democracy is the idea that individual choices of all sorts must be decided by voting and enforced by the government, the agency of compulsion and coercion as Mises called it.  I wouldn’t contest the proposition that Social Democracy is a cancer on our society that ranks with slavery in its banefulness. I dearly hope that a future upheaval might root it out but I’m not so sure.

I hasten to emphasize that I say “ashes” metaphorically.  We will survive the demise of the Federal government.  The sun will still rise and physical assets will remain in place.  The damage done to the social fabric will be lessened if people see the collapse coming.  That private individuals can and do step in when government collapses was illustrated on a small scale by a recent incident involving the California park system.  A list of parks scheduled for closure was published and it looked like private groups had raised enough money to keep at least some of them open. (Then some bureaucrat found $50 million lying around in the Parks Dept. and the private groups gave up in disgust.)

I confess to being a bit more conservative than Jeff Hummel.  I’m slightly older and may have more to lose as things get worse.  I continue to hope that libertarian ideas will continue to infiltrate the public discourse and that the respect for productive people that is still held by a substantial though declining segment of the population will rein in Obama and his hangers-on.

The End of the Conservative Media? Or Why Brandon Was Right (Sorta)

Brandon Christensen Current Events, Politics

Conservatives should be familiar with its contours. For years, they’ve been arguing that liberal control of media and academia confers one advantage: Folks on the right can’t help but be familiar with the thinking of liberals, whereas leftists can operate entirely within a liberal cocoon. This analysis was offered to explain why liberal ideas were growing weaker and would be defeated […]

Conservatives were at a disadvantage because Romney supporters like Jennifer Rubin and Hugh Hewitt saw it as their duty to spin constantly for their favored candidate rather than being frank about his strengths and weaknesses. What conservative Washington Post readers got, when they traded in Dave Weigel for Rubin, was a lot more hackery and a lot less informed about the presidential election.

Conservatives were at an information disadvantage because so many right-leaning outlets wasted time on stories the rest of America dismissed as nonsense. WorldNetDaily brought you birtherism.Forbes brought you Kenyan anti-colonialism. National Review obsessed about an imaginary rejection of American exceptionalism, misrepresenting an Obama quote in the process, and Andy McCarthy was interviewed widely about his theory that Obama, aka the Drone Warrior in Chief, allied himself with our Islamist enemies in a “Grand Jihad” against America. Seriously?

Conor Friedersdorf has more here. Do read the whole thing.

I was wrong in my prediction that Romney would win, but only because I hadn’t been paying attention to the most recent jobs reports. Unemployment rates are low enough for Obama to win re-election. So my overall point that the economy trumps everything else is still spot on. Can you imagine Obama winning re-election with unemployment at 8.5%? Me neither.

The GOP could have taken a lesson from Tocqueville’s Democracy in America, though, and realized that while Americans respect wealthy people more than most other societies, such respect hardly ever translates into political success (rich people already boss us around at work, why would we want them bossing us around in the political arena as well?).

And, in case you are wondering, I didn’t vote. If I had, I would have voted for Gary Johnson, “no” to tax increases and “yes” to abolishing the death penalty.

Any Thoughts on the Election?

Brandon Christensen Politics

I made my predictions earlier this year. I stand by ’em.

Jacques Delacroix shares his thoughts here.

What about you guys?

Jews and Palestinians: Is the Elusive Peace Close By?

Brandon Christensen Current Events, Links, Politics, Religion , , , , , , ,

A couple of days ago I came across this fascinating article in the Wall Street Journal. It’s about the expulsion of Jews from Arab lands around the same time as the expulsion of Arabs from the new state of Israel and how the Israelis have finally gotten around to bringing this issue up in negotiations. Among the excerpts:

Within 25 years [of the establishment of Israel], the Arab world lost nearly all its Jewish population. Some faced expulsion, while others suffered such economic and social hardships they had no choice but to go. Others left voluntarily because they longed to settle in Israel. Only about 4,300 Jews remain there today, mostly in Morocco and Tunisia […]

And this:

Many of the Palestinians who fled Israel wound up stranded in refugee camps. Multiple U.N. agencies were created to help them, and billions of dollars in aid flowed their way. The Arab Jews, by contrast, were quietly absorbed by their new homes. “The Arab Jews became phantoms” whose stories were “edited out” of Arab consciousness […]

I think that the Israelis were right to bring these expulsions to the forefront of the debates with the Palestinians. A lot of people on both sides have suffered and it is a good thing that the plight of the Arab world’s Jews is now being highlighted. But now that this historical fact is being highlighted by the Israeli state in its negotiations with the Palestinians, will it do any good for the peace process?

The reaction by one of the Palestinian negotiators is telling: Continue reading →

Bizarre Conservative Ideas About Immigration

Jacques Delacroix Politics

I have told several people on the Internet that Gov. Perry was inaccurate in calling Social Security (SS) a “Ponzi scheme.” That’s because what’s morally and also legally objectionable in a Ponzi scheme is that sooner or later the scheme runs out of late investors, or rather, investments, to pay off early investors. Whether SS will so run out depends entirely on two things: 1 Whether fewer late investors may provide large investments to pay off early investors. This may even happen painlessly given high economic growth. 2 Whether there will be many more late investors in SS than mechanically (dumbly) prolonging demographic trends would predict.

The US population may rise much faster than it is now growing through natural increase, including through natural increase fomented by deliberate economic measures. Or the American population may rise suddenly and healthily because our immigration policy is transformed. This could happen overnight and the beneficial effects on SS could be nearly instantaneous. Let me concentrate on this scenario.

Imagine that Congress and the President (not this one, maybe another) decide to admit each year for ten years 100,000 additional healthy and literate foreigners age 20 to 35. Solid research suggests that such a selective opening of borders might aggravate unemployment initially but that it would shortly spur economic growth. The effect of adding one million new people in the best of their working years over ten years would make the fear that we are running out of workers to support the non-working population considerably less relevant. Of course, I am selecting the low number of 100,000 per year deliberately to avoid causing panic without a name. (Numbers admitted legally each year in recent years were about 1,1 million.) In fact, there is no obvious reason why the new immigration could not comprise 200,000, or even 500,000 people annually. Certainly there are sufficient reservoirs of potential immigrants worldwide to achieve such numbers.

My monitoring of talk-show radio leads me to suspect that many conservatives think that if this could happen it would already have happened. This misconception in turn is rooted in the bizarre ideas conservatives tend to entertain with respect to our immigration system.

There are two main bizarre ideas: One regards who is allowed to come into this country (legally, I mean); the other strange misconception has to do with how aliens become US citizens.

The system by which the US admits immigrants is a little complicated and its description relied on a specialized legal jargon. In my considerable experience, few people have the patience to sit through a lecture on American immigration policy. So, let me cut to the chase:

There is no way, zero way, the average married Mexican can legally immigrate into this country.

There is only one way the average married Irish man or woman may immigrate into this country: Winning a lottery. In 2008, only about 48,000 people, all from Europe and Africa, gained admission on the basis of winning that lottery.

That’s it, folks. If you want to know more about the raw numbers, study the relevant pages in the Statistical Abstract of the US.

So, contrary to what I suspect is a widespread idea among conservatives, it is not the case that there is an orderly, wide-open legal way to immigrate into this country that illegal immigrants perversely ignore. Illegal immigrants are not rudely jumping to the head of the line; they come in trough a side-door we don’t seem able to close.

Instead of the present  admission policies (plural)  based on viciously absurd selection we have, we could take a page from the Australian and from the Canadian playbooks. That is, we could coolly decide what kind of immigrants we want and tailor a door to those precise dimensions. Presently, we are doing very little of this, however unbelievable it may sound.

Incidentally, I am a product of a rational immigration policy myself.  I was admitted on merit alone. I rest my case!

On to the next misconstrued idea: In fact, in reality, to be allowed to become a US citizen, to take American citizenship, requires several years of residence in this country after being legally admitted.

Hence, personal preference plays little role in determining which immigrant does not become a US citizen. I don’t have the numbers but I am sure that, as a rule, the vast majority of legal immigrants adopt American citizenship shortly after they are legally empowered to do so. It is true that, in theory, some hesitation, some problems may arise in connection with some countries of origin who do not wish to recognize dual nationality. In practice, depriving anyone of his passport is low on the list of priorities of all countries from which new US citizens originate.

The consequence of this scenario is that, contrary to what I think is a widespread notion, there is no horde of legal immigrants living in this country and peevishly and disloyally refusing to take American citizenship.

It also follows that there is no mass of illegal immigrants who obstinately refuse American citizenship. It’s not available to them, period.

If follows from these simple observations that with simple changes in the laws governing immigration, you can modify profoundly the prospects of SS. Conservatives have given this solution essentially not consideration. Yet, contemplating significant policy changes is more dignified and more in line with conservative seriousness than are gross and self-defeating exaggerations as employed by Governor Perry.

Incidentally, at this point, hours before the third Republican debate, I would vote for Perry.

If you want more thinking material about immigration, there is a direct link on this blog to my co-authored article on immigration published in The Independent Review: “If Mexicans and Americans….”

Atlas Shrugged Part II

Warren Gibson Current Events, Liberty, Politics , , ,

I got around to seeing the movie this morning along with about ten other folk. I was reminded of why I don’t go to movie theaters: they’re run by sadists who like to torment people with a quarter hour of promos following the advertised starting time, meat-locker temperatures and ear-splitting sound. I didn’t bring my wife knowing she couldn’t have endured the torment but I’ll get the DVD later.

So, what of the movie? Quite good, mostly. The screenplay is faithful to the novel, thanks, no doubt, to David Kelley. The special effects, notably the tunnel disaster and the airplane chase and crash, are powerful. I wasn’t bothered by the change to an all-new cast. Rearden’s trial was done well. The acting, however, is mixed. Rearden is good and the bad guys are good but Dagny, who is really the central character, was a disappointment. She looked almost bored as she piloted her plane toward what increasingly looked like death. Only later did she crank up the intensity.

Just a couple of nits: two men can’t lift a concrete railroad tie. Galt tells Dagny not to move because she’s hurt and then extends a hand to drag her out of the wrecked plane. A few others but nothing substantial, really.

I give it 3.5 stars out of 4, but I’m sure the critics won’t agree. It looks like the movie will follow Part I into oblivion, sad to say. One only hopes that DVD sales will pick up and that it will enjoy the same sort of underground success that the novel enjoyed following its scathing reviews.

Illegal Immigration: Bad Faith and Mental Confusion

Jacques Delacroix Politics , , , ,

When I have insomnia, I watch the news and news commentaries in a language other than English. Looking at the same object from different angles makes you smarter, I think. So, the less I sleep, the smarter I become, and the smarter you become, indirectly (to a very small extent, I realize).

Early in the morning, there is a long interactive discussion about immigration on Univisión’s “Despierta America “(“Wake up America”) First comes a badly illustrated, falsely descriptive jeremiad by a Hispanic immigration advocate. He is what I called in academia, a “professional Mexican.” I don’t know what he is getting at. He is not doing anything useful. He only perpetuates a sort of 1970s exploitation narrative that does not even make me feel young. The advocate complains bitterly of course, that today or yesterday, several hundred illegal immigrants, presumably all with a rap-sheet, have been gathered nationwide for deportation. The charming and beautiful anchorpersons play along. Everybody refers to “immigration.” No one ever says, “illegal” immigration or even “undocumented” immigrants. Next comes an immigration lawyer. He takes questions on-air from callers who want help to fix their status as people who entered this country illegally, some, several times. Still, there is no reference to illegal immigration in general; the topic is still simply “immigration.” The show remains on “immigration, “ no qualifier. It makes you wonder if there are any people from Spanish-speaking countries of the Western Hemisphere who ever entered this country legally.

The confusion between immigrant and illegal immigrant in this largest of Spanish-language television networks in the whole world, Univisión, constitutes a massive exercise in collective bad faith. It’s not going to help in the next political stage. No wonder conservative stay pissed off. No wonder their anger at illegal Hispanic immigrants sometimes comes to resemble anger at Hispanics in general.

Speaking of conservatives and of their distaste for illegal immigration, it does not help that they are confused on several important points. The fact that this country does not seem to be able to control its borders, the fact that its official immigration policies do not serve our interests, that’s all bad enough. We, conservatives, don’t need, in addition, to entertain and to propagate false notions of the burden immigrants, legal and illegal impose of us.

First, let me repeat that immigrants earn slightly more money on the average than the native-born. In our economic system, this means straightforwardly that immigrants contribute more, on the average than the native-born. Second, there is a widespread idea that illegal immigrants (illegal) consume government services while they don’t pay taxes. However common this belief, it does not withstand the most superficial examination. Here is why: It’s probably true that illegals avoid paying the federal income tax and also what state income taxes there are. That would be because they fear that filing government paper entails a risk of detection and of deportation. They routinely exaggerate the risk but it’s understandable.

Illegal immigrants however cannot avoid any indirect taxes or most other taxes, be they property taxes (that support schools), sale taxes, or excise taxes, including both federal and state tax on fuels. You might think that’s not much until you remember that 46 or 47 % of Americans do not pay any federal income tax. It’s likely that the % of Americans not paying state income tax is identical or, even higher. Thus, only illegal immigrants who situate themselves somewhere near the top 50% income bracket or within it would have to pay income tax at all if they filed. How many can that be? Think it through, don’t dismiss the thought out of hand.

What am I telling you?

It’s likely that illegal immigrant pay something close to their normal share of all taxes. I mean of the taxes they would have to pay if they were legal immigrants or US citizens. Not worth getting into a tizzy over, I say!

I know I have not dealt with payroll taxes, including taxes that support Social Security and Medicare. It’s likely that, by and large, illegal immigrants don’t pay those either. Reason is fear of detection again (see above). I know what you mean. I am with you. I wish they would pay those, right now, or at least, tomorrow. Please, follow through with this thought also. You will be amazed.

Bad faith, intellectual dishonesty on the one side; utter confusion fed by angry indignation on the other. It does not look good unless some conservatives will come to their senses. (Hint: The Wall Street Journal does a good job on the topic of immigration but it’s doing it so quietly hardly anyone is paying attention.)

PLEASE, THINK OF FORWARDING TO YOUR CONSERVATIVE FRIENDS.

Big Horrors, Small Horrors

Jacques Delacroix Current Events, Politics , , ,

“Militia” members guided by official Syrian “security” forces massacre civilians in their houses.They use both tanks and knives. About fifty of the civilians – all terrorist opponents of the Assad regime, of course –  are children under ten. The response of nine rich countries including the US is severe: They call in the Syrian ambassadors, Assad’s buddies all, and they tell them severely to pack up and leave. No ifs and buts; teach the child-killers a lesson; the bastards will get the message now! Every one of those countries has an air force capable of destroying all Syrian tanks within three weeks.

Not so long ago, Arabs of all provenances were infiltrating into Iraq though Syria, precisely. They were on their way to kill the American oppressors who had destroyed that great assassin, the mass murderer of Arabs, Saddam Hussein. Where are the Arab volunteers now infiltrating Syria to go and protect Arab children from Assad’s slaughterers? If I were an Arab man from any country today, I would be dying of shame. Or I would consider donning the hijab. Here is a question: If the violent jihadists could do it, enter Syria clandestinely, why can’t you?

I am repeating myself, I know: When Arabs massacre Arabs it’s not so bad, right?

And, by the way, the silence of the Israeli political class regarding the atrocities next door wins Israel no friends I would guess. Continue reading →

Race in America Right Now

Jacques Delacroix Politics , , , , , ,

I live in Northern California where Indian restaurant food and French restaurant food taste alike. That’s because the first is Mexican Indian food and the second is Mexican French food. All the cooks are Mexican. That’s an interesting economic fact. That’s not the whole story by a long shot. America is a great country where menial jobs have for generations led to entrepreneurship and in time, to dignified economic independence. So, Mexican cooks sometimes become Mexican-American restaurant owners.

In my town, there are dozens of Mexican restaurants and taco places. One full-fare restaurant stands among all others. It’s located downtown. It’s spacious and clean. The food there is reasonably good and moderately priced. The restaurant is also perfectly organized for the kind of fare it serves. Scarcely more than five minutes elapse between the moment you place your order and the moment it’s brought to your table. The table is cleaned within one minute of your leaving it so that the next customer does not have to wait.

This Mexican restaurant does not belong to a junior college drop-out, aging surfer as is often the case around here. It was launched and it is staffed by Mexicans immigrants and by their grown children and their buddies. You might say that it’s a great American entrepreneurial ship with a wholly Mexican crew.

One day, I noticed there an old Chinese man bent over a broom, laboriously sweeping the restaurant’s floor. Continue reading →

Ron Paul and the American Right

Brandon Christensen Current Events, Politics , , , , , , ,

It boils down to foreign policy. President Obama has proved more competent than Bush in this area, but being a more competent beehive whacker does not take a whole hell of a lot of work. Most of Rep. Paul’s domestic policy proposals would have to go through that beautiful, awe-inspiring labyrinth of constitutional checks-and-balances created by the Founding Fathers of this great republic. However, Presidents have much more leeway when it comes to foreign policy. This is something that Ron Paul has talked about checking, but it is also something that could convince independents on the Left to vote for Ron Paul.

Think about it: he would (unfortunately) have a tough time getting some of his domestic policy proposals passed, but as President he commands the military, and he wants to bring our troops home.

My main concern upon writing this little blurb is the Right’s reluctance to embrace Ron Paul’s foreign policy of freedom, commerce, and honest friendship. The following is meant to convince those of you on the Right who would otherwise vote for Ron Paul if it weren’t for his foreign policy views.

The reluctance on the Right to yield to both superior reasoning and common sense on the issue of American foreign policy stems from three basic points: Continue reading →

Karl Marx and Special Interests

Brandon Christensen History, Politics , , , , , , , , , ,

[Note: this is an old musing of mine written back in May of 2011. I hope it is still as fresh today as it was back then.]

Karl Marx’s economic theories have long been disproved (theoretically as soon as they came out, and practically with the fall of the Berlin Wall), and tens, if not hundreds, of thousands of individuals have perished under communist regimes.  People were either murdered, “relocated”, or starved to death through the attempts of Marx’s acolytes to remake man in their image.

Despite this horrific record, his theories continue to persist throughout modern political discourse.  In the United States his myths are still promoted in the academy and among the hard Left, but very few take them seriously (unfortunately).  However, in much of the rest of the world his ideas are still prevalent in everyday political action.  In order to go about showing you why this is may be the case, I am going to switch from Marxist economic theory (the labor theory of value is so out of step with reality and public discourse that I feel it is unnecessary to debunk it here) to Marxist political theory.

In fleshing out Marx’s political thought, I hope to show my loyal readers (all two of you) a couple of things: 1) that Marx’s ideas on political organization were nothing new (in fact Marxist thought on political organization is actually very old), and 2) that although Marxist ideas on political organization are not taken seriously by most Americans, the few who do take them seriously are very smart people in very high places.  Failure to recognize the subtle exposition of Marx’s political thought in public discourse could lead to dangerous consequences if we are not more aware of what it is that Marxists are attempting to destroy and what it is that they are attempting to replace it with. Continue reading →

Look Who’s Practicing Trickle-Down Economics

Warren Gibson Economics, Politics , , , , , ,

Thomas Sowell is one of the clearest contemporary thinkers on economic and political issues, both as a theoretician and a commentator on current events. His recent piece on “Tax Cuts for the Rich and Trickle-Down Theory” is an excellent example. In it, he shows how tax rate cuts for the highest earners can actually increase the tax revenue collected from that group. He also recalls challenging his readers to name a single economist who advocated a “trickle-down” theory of economics. No one did so.

Trickle-down is the idea that when the highest income-earners keep more of their income, some of their spending will eventually reach lower-income workers. Their purchases of luxury items will bolster employment in the production of those items. Leftists are fond of setting up this theory and then attacking it on the grounds that the benefits to the wealthiest overshadow the benefits that trickle down to those at the bottom. Government spending cuts hurt low-income people the most. Therefore, they say, tax cuts for the highest earners are a disguised scheme to siphon yet more wealth from the bottom to the top.

The “trickle down” phrase has been around at least since the 1930’s and was restated recently by the current White House occupant when he attacked what he called “The economic philosophy which says we should give more to those with the most and hope that prosperity trickles down to everyone else.”

Does the theory make sense? First off, it ignores the morality of the situation. As T. J. Rodgers, CEO of Cypress Semiconductor, puts it, “I’m proud of my wealth. I earned it.” He explains how increased income taxes will not reduce his personal consumption but will instead reduce his investments in Silicon Valley startups and his charitable activities. Just what is the benefit, he asks, in taking money away from these uses and giving it instead to programs like Cash for Clunkers or Solyndra?

Secondly, trickle-down theory ignores the fact that high-income people like T. J. tend to invest a greater portion of their marginal income. Capital accumulation is the key to higher worker productivity and thus higher wages and higher standards of living.

There is actually one institution that does practice trickle-down economics. That would be the Federal Reserve System. The Fed recently announced its QE3 program under which it will purchase $40 billion of mortgage-backed securities each month for an indefinite period of time. One aim of this program is to push down long-term interest rates and thereby encourage businesses to borrow. But those rates are already historically low. Can we really expect further cuts to have any significant stimulative effect given the current high level of regime uncertainty?

The other purpose mentioned by Chairman Bernanke is to keep the stock and bond markets propped up. The idea is to pump up the “wealth effect.” This is the idea that when people who see increases in the market value of their holdings of investment or real estate, they will be more inclined to spend, even with unchanged income. Their spending will then trickle down into the economy. As an investor I ought to say thanks but as a citizen I would say to the leftists, look to the Fed to find a real example of exploitative trickle-down economics.

Facts Matter: Irrationality Among the Sane, the Intelligent, the Well-Educated

Jacques Delacroix Liberty, Politics ,

I have been engaged in an incessant informal study of the irrationality of otherwise sane, intelligent, well-educated people. Obviously, the question of why the insane are sometimes irrational is not riveting. Less obviously, it’s possible to think of irrationality in the unlettered as a substitute for real knowledge. (Say belief in the virtues of tea made from the penis bone of tigers instead of Viagra.) When the sane intelligent, well-educated talk or act irrational, there is a puzzle worth solving.

Since I left academia, I have stopped being the rigorous sociologist that I used to be. “Rigorous” in this context means using reliable tests to determine the relationship – if any – between ideas and facts. In this sentence, “reliable tests” means “well-tested tests.” Tests who are known to give results you can trust almost all the time. The tests that the social sciences use have not lost any credibility in my eyes. There is zero rejection involved in my shift of interests. Thus, if there is appears to be a difference in incomes between the criminal and the law-abiding and if it’s not statistically significant, I still believe one should assume that difference in incomes has no effect on criminality. (“Poverty does not cause crime.”)

I have simply shifted my interest to issues that are interesting but that the social sciences seldom address. One of the reasons is that some interesting questions seem to not lend themselves to rigorous testing, precisely. (There are other reasons I will address if someone asks.) So, I am searching for hypotheses and immediately assessing their plausibility. Plausibility is now my central criteria of judgment. Correspondingly, I am careful not to affirm. My quest for an understanding of the irrationality of the usually rational is a part of this endeavor. In this context,I am using, exploiting shamelessly several young people I know well. They are superior specimens of the human race from the standpoint of intelligence, interest in ideas and propensity for hard work. I am not picking on the feeble-minded! Continue reading →