This is my first, and probably last political post. I do have opinions, probably not hard to predict, but I believe I have very little to add to the discussion. I would not now, except that a friend of mine posted the following link on Facebook, but in a form where Facebook does not provide for a comment.
The link proposes the “unanswerable” question of why, if “trickle-down” economics works, do the top 1% need even more wealth before they create jobs.
So as much as it pains me to post something from MoveOn.org, here it is again.
“Guaranteed to stump all your conservative friends!” claims MoveOn.org. Well, maybe. More likely that no conservative will come up with an answer that MoveOn finds compelling, but that is hardly the same thing. Personally, I think the question itself displays a characteristic misunderstanding about how wealth and power flow in a non-regulated economy. They try to flow the same way in a managed economy, but the pressures tend to mount up, distorting the aims of the managers.
Now I am no economist, no politician, and not even a radical believer in free markets always. But I do believe there is a “Tao,” a natural way that things tend to work , in almost all things. In woodworking, we would call it “going with the grain.” Whether in carpentry, pharmacology, farming, power production and use, or economics, trying to “brute-force” our way around the natural inclination of things is only done by application of massive infusions of power. Even then, it often results in unintended consequences, uneven results, or sometimes, catastrophic failure.
The assumption in the query cited is that the wealthy (the 1% in the original, although it could just as well be – and often is – companies that manage 401k funds for people like me) are managers in the sense I described – they decide there should be 1100 jobs instead of 1000, so they decree that 100 jobs be created. If jobs remain at 1000, or only go up to 1030, or even drop to 990, well, the economic managers wish it to be so. Our political will can be to either reward or punish them to the degree that we are able.
Maybe that is the way MoveOn sees reality. It is probably the way they think government should behave. It is certainly the way inherent in their question. But I do not think it is the “Tao” of economics.
I have said before that part of the genius of capitalism, democracy, and the vision of the American founders is the recognition of the fallen nature of humanity. No matter what we do, people simply *will* act in their own self-interest. Not every person, every the time, but such a notion has a far better track record at predicting behavior than do schemes that rely on an altruistic vision of the innate goodness of the brotherhood of the proletariat –or of the oligarchy, or of the divine anointing of kings.
These systems, including capitalism, recognize this, they say (in effect) “given this truth, how can I use it to produce the most well-ordered and prosperous society?”
So the policies which create jobs are not necessarily those which appeal to “fairness” or “equity” across society, which MoveOn may appeal to. Of course it does not follow that an unrestrained free market will either, and not being particularly visionary about such things, it would be a mistake for me to say what will produce more jobs. But I am quite sure that the things that will create more jobs are the things that suggest to the holders of capital, whether millionaires or 401k managers, that they will make more money, at an acceptable level of risk, if they expand and hire people.
“Fairness” as a driver of social activity, is a losing proposition. Producing self-interest, in the direction I want, is much more promising.
Fairness, or at least, evenness of economic strata, is not even automatically beneficial as a goal. An illustration:
Suppose 1 person has $1,000,000 and the other 99 have $1,000.
I change policies, and the wealthy person now has only $1,200 – but the other 99 now have only $800. This distribution of wealth is FAR more even, but nobody is better off.
But suppose my new policies result in a state where 1 person has $800, 98 people have $1,500, but the 1 rich person now has $3,000,000. Obviously, this distribution is far less even. One person even has less. But the overall level of wealth has been increased significantly.
I think this second plan is far better. THEN, I would appeal to charitable impulses to help amend the lot of the 1 person at $800, or even provide something to make sure he remains at a safe level. But that is a different issue.
Again, I do not know which policies are more likely to result in “state #2” That is something worth hashing out. But from their question alone, I can tell that the MoveOn folks seem not to even understand this basic reality.