From what I have gathered over the last several years I would wager that many non-partisan progressives and many libertarians such as myself have much common ground in terms of identifying the problems that are plaguing our politics and our economy. Yet we come up with vastly different solutions on how to resolve these problems. I have always been willing to engage those I don’t agree with in discussion in an attempt to ascertain a different perspective and broaden my political views in an attempt to uncover the truth in regards to achieving sound economic policy and good government.
As such I have a few points I want to raise for discussion.
1. I have long felt that too many progressives paint an incredibly simplistic picture of “the rich” vs the poor or middle class. Partisan Republicans have called this “class warfare” but I would agree to the degree that a great number of the rich in this country have been looting the American people. We do have a corporate class that has largely taken advantage of the rest of us through special favors from government, tax exemptions, circumventing the law and getting bailouts and subsidies from the taxpayers. No libertarian I know would support such things. The problem is that there are two types of wealthy individuals. The businessmen that the market picks, meaning those that have worked very hard and gambled a great deal on an unproven idea to have success in meeting a need such that people voluntarily purchase their product or service is something to be thankful for. Such businesses, of which there are unfortunately fewer and fewer all the time, are a tremendous asset to society. These individuals are actually “job creators”. I don’t believe our rhetoric should target these individuals, instead we should criticize the “crony capitalists” or “corporate fascists” that live off of government and the taxpayer.
So, So, instead of a blanket statement like “the rich have done so well so we should target them all for tax increases or criticize them all as exploiters and parasites”, you need to understand that the market economy is an antidote to the type of crony capitalism and fascist abuses that Wall Street firms have foisted on the American people. The true entrepreneur, who gets no special benefits, and has no access to force or coercion is a tremendous benefactor to society, in fact I would argue far more than most government programs ever could be.
So, the focus should be on removing all special benefits from corporations, prosecuting firms for fraud if warranted, removing all subsidies and any cozy relationship to government. Those that produce nothing and are truly parasites will go bankrupt within a year. Many cannot exist independent of government guarantees. We want the scarce resources that have been locked up in government and parasitical banks and Wall Street firms to be freed up to be used by market oriented entrepreneurs and businesses that need to satisfy consumer demands and preferences or face bankruptcy. This is a productive use. Such market economic activity actually produces wealth and creates productive jobs, rather than non-productive jobs as when workers are hired by the government. We should seek to encourage this type of economic activity, rather than criticize all “rich” people equally.
1. 2. I do assume that many of you are recognizing the reality that we do have a sovereign debt problem and a huge budget shortfall that needs to be addressed, correct? Most progressives I have talked to have admitted as much, but they tend to resist much overall spending cuts. They will usually say that much of the problem is due to the “Bush tax cuts” and we need to cover most of the shortfall by tax increases on the “wealthy”. However, that is actually not possible when looking at statistics. Studies have been done to examine revenue based on tax rates over multiple decades. Obviously, a tax rate that is too high will discourage too much economic activity and will cause many to take their capital overseas. However, an exhaustive study of the situation has uncovered the reality that regardless of the tax rate, the revenue that can be generated will only vary between 18% to 20% of GDP. That is a hard limit on the revenue that can be squeezed from an economy regardless of the tax rate.
Therefore, any increase in tax rates on the wealthy will do almost nothing to cover the shortfall. It is actually almost irrelevant. With that understood, spending cuts will need to take place and they will be very politically unpopular. The debate needs to be how can we make these budget cuts fairly and not target those who are most dependent.
I do believe there are a number of areas of government that a reasonable progressive could support cutting, like the Defense budget. Or farm subsidies. However, it will have to be acknowledged that Medicare in particular will need significant cuts as well.
That is simply the reality of the situation. So any honest progressive should abandon the call to increase taxes to increase revenue. You might make an argument for “fairness” or to punish those who cheated somehow, but the idea that you will get significantly more revenue to shrink the deficit is a fallacy that all respectable economists have given up on.
1. 3. The conventional view of conservatives and liberals is that conservatives view government as the gravest threat to liberty, and liberals view corporations as the gravest threat. Underlying this idea from the progressive side is the notion that governments and corporations are opposing forces. The idea is that if we reduce the size of government to a limited role, then corporate power will grow in proportion to the shrinking of government power.
I completely reject this idea. Corporate power, at least in the sense that it is detrimental to society, goes completely hand in hand with the growth in government. Once you endorse a system of broad central economic planning and wealth redistribution, the special interests and the most powerful entities will always come out ahead of the middle class or the poor. Not only that, but this system of government that progressives so readily champion, actually perpetuates wealth inequality and distorts the market economy irrevocably, making it more profitable to go to Washington to lobby for benefits and favors than to compete honestly for consumers to buy their products. Even those that resist the temptation to lobby for government know full well that their competitors will, putting them at a serious disadvantage. It is this stage when corporate and business power becomes a parasite on society. No longer are businesses trying to produce products that people want and need, instead they get your money for doing almost nothing through government force.
Therefore, if you truly are opposed to wealth inequality and the concentration of corporate power, you should be focused on reducing the size of government and getting rid of the redistribution of wealth entirely because even if that means cutting off redistribution that purports to help the poor, in relation to all the welfare and benefits being sucked up by a corrupt corporate and banking class, the poor and middle class will come out ahead.
Everyone says that money is corrupting politics and everyone talks about how congressmen are bought off by business interests. But few get to the heart of the problem. The only way to fix this problem is to reduce government to the extent that it no longer has favors to pass out or money to redistribute.
If we do that, then think of all that money and resources that will be freed up for productive economic activity. Think of the reality that businesses will once again have to produce things of value and try to satisfy consumers rather than pandering to politicians.
I prefer to have consumers decide the proper allocation of scarce resources and determine which businesses succeed and which go bankrupt rather than corrupt politicians that simply don’t give a fuck about you or the economy.
4. Related to my last point, many progressives will acknowledge the problems I have mentioned, namely that government today is not “by the people, for the people” but rather has become overrun by corruption and corporate money and influence. The problem is that their solutions involve the notion of working people “rising up” and taking back our government through a variety of means. The idea is that through the democratic process we can organize labor, or poor or middle class to the extent that we can recover what was looted from us and have it redistributed back to the middle class. The idea is that we can have a functioning expansive State that will work in the interest of a majority of Americans rather than a narrow segment of ultra rich corporations and Oligarchs.
IOI I'm telling you right now that this goal is completely impossible and unobtainable. Even if democracy was a desirable form of government, which it certainly isn’t, governments always and everywhere are working against the interests of a majority for the interests of a minority. It has always been that way. Not only that, but democracy is a horrible form of government because it proposes that a narrow majority can trample on the rights of a minority.
I favor, as did the founders, a Republic where our government is constrained by the law, which in this case is the US Constitution. Government thus should have a limited role and wealth redistribution is not one of its functions.
I think many progressives have an idealized vision of government that is so far removed from reality. They tend to resist at all cost calls to strictly limit the power of the State. Many would claim that if only we could get “the right people” in charge we could have a functioning government that would look out for the welfare of the poor and not give welfare to rich, and be honest and competent.
I favor the view of Frederick Bastiat, who argued in The Law that no government should be allowed to do anything that you or I cannot do. Force is only justified in response to a violation of someone’s liberty through just and moral laws that govern all in society equally. No one is above the law. It needs to be applied to all people the same way.
But so many Progressives seem caught up in a certain myth about government, which Bastiat eloquently wrote about, “The state is that great fiction by which everyone tries to live at the expense of everyone else.”
They try but in truth government force is used for the benefit of the corporate class, and especially the bankers who loot the rest of the American people. Their power is artificial. It only comes because of government force and coercion. Take away the power of the state, and most of these powerful institutions and corporate crime syndicates would collapse.
But by perpetuating the myth of democracy and an expansive role for government, so many progressives unwittingly give strength to the corporate class and the looting of the majority by the minority.
I have more points I want to raise, but I think this is more than enough to start a conversation. I used to be left leaning and I still think that many Progressive’s hearts are in the right place. They want good outcomes. But I think it is tragic that so many promote policies that so frequently backfire on the most vulnerable in society and benefit the oligarchs that can harness the power of government force to loot the rest of us.
That is not to say that many Progressives don’t have some good ideas and values, but that until they recognize the need to limit government and reduce its role in the economy dramatically, I don’t see the conditions that we deplore changing for the better.
Bring on the discussion.