Morality and Politics, British Style

Mostly, the style is clueless, as this piece from The Guardian‘s Gary Younge illustrates.  For instance,

At times the contradictions are striking.  In August 2009, when opponents of Obamacare were disrupting town hall meetings with claims of death panels, Kenneth Gladney and other members of St Louis tea party got into a fight with Democrats at a public meeting.  He had to go to the emergency room with injuries to his knee, back, elbow, shoulder and face and ended up in a wheelchair.  It turned out Gladney, who had recently been laid off, had no health insurance.  He appealed for donations.

What contradiction is this?  Can Mr Younge really not see the difference between government handouts, which by definition begin as mandated confiscations from strangers, and private donations, which by their nature are purely voluntary?

Trace a map highlighting government dependency and those most reliant on benefits live in Republican states and often Republican counties.  In Floyd county in Eastern Kentucky, 40% of the income comes from the government.  In 2008 Floyd, where almost 20% live below the poverty line and the median income is almost 20% lower than the country, voted for McCain—a 27 point swing against the Democrats and the first victory for Republicans in living memory.

Of course.  Conservatives, far more than liberals, try very hard to avoid government handouts and once having been forced to accept them, to get back off that government dependency before they become addicted to it.  Conservatives understand what it means to be dependent and what it means to be self-capable.  This is what has made America great, even if the folks in Floyd County, for instance, don’t speak of it in these terms.

On some level explaining why poorer whites would vote for the Republicans demands a resource sorely lacking in American political culture at present—particularly during election time: empathy.  There are more to “interests” than just the economic.  If someone’s core conviction is that abortion is murder or gay marriage is wrong then their decision to vote for a candidate who is against abortion or gay marriage is not an act of delusion but conviction.

Indeed.  An understanding of the nature of dependency on handouts matters; this requires more than mere “empathy.”  It requires a basic understanding of the morality of that dependency, with the demand it creates for a share of someone else’s prosperity, which is where the transfer payments that is that dependency originate.  (Never mind the conflation of conservative social policies with conservative economic policies.)

Moreover some people, despite being poor, legitimately believe in free market and small government, even if it doesn’t benefit them in precisely the same way that wealthy people may favour greater government intervention even if it doesn’t benefit them.

Hmm….  But it does benefit the poor quite a bit, if not “in precisely the same way that wealthy people” might benefit.  A free market and small government favor their opportunity to do better, rather than to be trapped into merely getting by on the government’s dole.  They favor the poor man’s work to stop being poor.  Many poor people—generally those who haven’t spent generations on the dole—understand this at a gut level, even if they don’t articulate the strict economic science of it.

Meanwhile, that greater government intervention does benefit the wealthy—but only those wealthy who buy their way into the process and so to influence that intervention.  There is no morality here, only narrow, short-sighted pecuniary interest.  And it is far from universal: the Koch brothers, whom Mr Younge carefully elides in his article, also are firm believers in free market and small government—and they’ve spent enormous amounts of their wealth on supporting those.

Finally…poverty is not necessarily a permanent state.  People fall in and climb out of it.

Indeed.  Even—especially—the poor recognize the truth of this, if only at a gut level.  It’s that desire to improve their and their families’ lot in life, and these folks recognize this is possible only with free markets and limited governments.  Government handouts are designed explicitly to block this—guaranteed bread in return for votes for the incumbent.

In the end, Mr Younge complexifies the matter far too much, and so he gives short shrift to the simple matters underlying the situation.  The moral foundation of self-sufficiency, of being responsible for seeking one’s own (Adamsian) happiness is one.  The simple economic facts of the failure of handouts (which he seems to lump, indiscriminately, with hands up) to free individuals from the outcomes of dislocations, instead trapping them in dependency, is another.  Which he acknowledges in passing [emphasis added]:

In a report…the New York Times examined the growing number of people who were simultaneously dependent on government aid and against more government spending. “Many people say they are angry because the government is wasting money and giving money to people who do not deserve it,” it concluded. “But more than that, they say they want to reduce the role of government in their own lives. They are frustrated that they need help, feel guilty for taking it and resent the government for providing it. They say they want less help for themselves; less help in caring for relatives; less assistance when they reach old age.

In a country where social mobility is assumed—even if it has in fact stalled—and class consciousness is [weak] the poor may vote in the interests of an imagined, but not necessarily imaginary future, rather than solidarity based on shared economic hardships.  A Gallup poll in 2005 showed that while only 2% of Americans described themselves as “rich”, 31% thought it very likely or somewhat likely they would “ever be rich”.

Because we still know a central truth: we’ve been through these situations before, and gotten out of them before.  We’re not used to dependency, we still decry it, and we still have our dreams and aspirations.  And successes.  Thus, we know we’ve been knocked down today, but we also know we’ll get back up.  We still have our morality to steel our backs.

Mr Younge, with his legitimization of the demand of one for a share of the prosperity earned by another, is a clear demonstration of the result of becoming used to government handouts at the expense of self-reliance, self-respect, and community.  No, “poor” conservatives aren’t voting against their interests when they vote against (or don’t vote for) an Obama or any other Progressive candidate.  These folks are voting for their (moral) interests.  Mr Younge, though, is simply unable to take seriously a moral underpinning for such voting.

Bailouts

Spiegel Online International carried a disturbing story Monday on the subject of bailouts.

The proximate item is Greece’s economic strait, and this is what Spiegel is reporting about that.  The current troika—the IMF, the European Commission, and the European Central Bank—are proposing

[a]nother partial default.  That, indeed, would seem to be the conclusion that Greece’s main international creditors have come to.  According to information received by SPIEGEL, representatives of the so-called troika—made up of the European Central Bank, the European Commission and the International Monetary Fund—proposed just such a debt haircut at a meeting last Thursday held in preparation for the next gathering of euro-zone finance ministers.

But half-measures simply prolong the problem and continue Greece’s addiction to handouts while at the same time providing no mechanism for getting the Greeks to self-sufficiency other than leaving them to their own, already failed devices—both those that drove them to this strait and those of the last three years that have had no useful effect.

Worse, though,

This time around, public creditors would be involved, meaning that taxpayer money from those countries which have stood behind Greece would vanish off the books.

But where is the justice in this?  Indeed, where was the justice, originally, in forcing the taxpayers of entirely separate jurisdictions—other nations—to indemnify the Greeks (and the Irish, and by extension, the Spanish, Italians, and Portuguese) against their own foolish decisions?  Indemnify rather than help, since no meaningful accountability mechanisms were applied.

That’s in the past; those innocent taxpayers already are dragooned into the existing bailout.  The primary question remains, though: where is the justice in compounding that prior error by extending it, by forcing responsible taxpayers to pay for continuing this folly?  And how does this enabling help the Greeks (and Spanish, Italians, and Portuguese; although these three already are attempting preemptive measures so as to avoid their own humiliation)?

Indeed,

Athens has only introduced 60 percent of the reforms [already] demanded by the European Union.

Yet,

The troika has already agreed to give Greece two extra years to meet its austerity goals, a delay that will likely result in a need for up to €30 billion in additional aid, according to the ECB and European Commission.  The IMF believes the funding gap will be closer to €38 billion.

Thus, the EU and the IMF know they’re proposing throwing money down a rat hole, and they’re proposing that anyway.  It’s true enough that cutting the Greeks off from further bailout moves will jeopardize the taxpayers’ money already committed.  However, it’s the nature of bankruptcy—which the Greeks will be better off going through—that such debts get written off and the creditors lose out.  But that’s the only way to stanch the bleeding here.  There’s no useful purpose in committing additional taxpayer funds to this failed effort.

Take careful note of the similarities to our own situation.  Failures here, too, says the current administration, need to be propped up with taxpayer money and, in our case, favored investors protected from the consequences of their decisions.

Death Tax Failure

The death tax, aka “estate tax” was, briefly, 0 for 2010, then rose to 35% of an estate’s value above $5 million for 2011 and 2012.  Next year—in addition to the fiscal cliff of the Obama tax increases and the Obama sequestration that occur on 1 Jan—the death tax is set to rise again, to a usurious 55% of anything above $1 million.

Never mind that this theft of a parent’s hard-won legacy, intended to be for the benefit of the his sons and daughters, simply leads to market distortions by those rich enough to be able to follow the Warren Buffet example of transferring wealth to, for instance, charitable organizations (good for them, though), and so avoiding—legally and appropriately—sending revenue unnecessarily to the Federal government.

Consider the choices lesser lights—Joe the Plumber with his business, for instance—are forced to make instead.

When [Mr Wurzelbacher] begins to consider retirement with perhaps $10 million of lifetime wealth, he can reinvest the profits in the business (which means growth and more workers) or live lavishly in retirement and spend the money down to zero.

In the first case, he is smacked with federal…death taxes that can take away half of the wealth.  In the second instance, he pays no tax.  A new study by the Joint Economic Committee Republican staff estimates that because of this disincentive to save and invest “the estate tax has cumulatively reduced the amount of capital stock in the US economy by roughly $1.1 trillion.”

Democratic Presidential Candidate Barack Obama insists that this is entirely fair—that death tax is needed for his redistribution programs.  Despite those choices and loopholes.

As the WSJ notes, though (the above link), there is a moral question here, too:

The levy makes Uncle Sam up to a half-partner in the proceeds of successful businesses.  That is on top of the property and income taxes and other assessments that owners pay year after year.  … What is truly unfair is when a family-owned enterprise has to be sold at auction to pay the death tax to the IRS.

Obama has yet to address this moral question in any serious fashion.  Keep that in mind as you go to the polls.

A Do-Nothing Senate

Recall the mandate to move to the right of center that our Congress received in the 2010 elections, when the people transferred 63 seats in the House of Representative and 6 in the Senate from the Democrats to the Republicans—a majority of those transfers to Tea Party Republicans, hence the mandate to move to the right.  Despite that outcome, though, the Senate remained under the control of the Democrats.  What has the Senate done in response to those instructions from its bosses?  The figure below, from The Wall Street Journal, tells the tale of the Progressives’ insubordination.

This illustrates the work the House has done these last two years in response to those instructions and the (not insignificant) numbers of House Democrats who actively supported that work.

On top of this dereliction, the Senate has refused to do its own work:

[T]he Senate failed to pass any budget in 2012. Or 2011. Or 2010. …more than 1,200 days.

And

The Senate also failed in 2010 and 2012 to pass a single appropriations bill.  …that hadn’t happened before in the 150-year history of the current spending process.  This year the Senate even failed to enact a national defense authorization bill, which almost never happens.

Senate Progressives have announced that they’ll continue their refusal to perform in 2013 [emphasis in original]:

Chuck Schumer (D, NY) warned that Democrats will stop any attempt at bipartisan tax reform next year, calling the idea “obsolete.”

We can’t afford even two more years of this Progressive refusal to perform, much less four more years of an incumbent President’s arrogance.

The Current State

…of our economic “recovery.”

Here are some numbers, from The Walls Street Journal.

  • GDP grew at a (preliminary) 2% rate in the third quarter…
  • That rate means that growth for the first nine months of this year was only 1.7%
    • Slower than last year’s 1.8%
    • Which was slower than the year before’s 2.4%
  • Consumer spending provided most of the third-quarter lift…but consumers can’t continue if the overall economy doesn’t grow fast enough to raise incomes faster
  • The other big third-quarter growth driver was Federal government spending
    • Rose 9.6%
    • Overall government outlays rose 3.7% and accounted for about 0.7 percentage points of that 2% GDP increase
  • Economist David Malpass calculates that growth in private output was closer to 1.3%. The private economy isn’t “doing fine…
    • Non-housing related investment contracted by 1.3%.
    • But business investment is a leading indicator of future job and wage growth.

Finally,

  • [T]he typical growth rate at this stage of the previous nine recoveries (13 quarters) averaged 16.8%
  • The rate for this recovery is 7.2%.
  • That’s about $1.2 trillion in foregone output.