Tuesday, August 2, 2011

It's All About Balance AKA Boy Are We Selfish

I wouldn't consider myself an expert on history, but I have been reading quite a bit to try to better understand how things in the economy, politics and our government work so I can make better decisions in the voting booth. I also want to start being more involved in the process so that I feel that my little voice somehow makes a small difference in making things better. This summer has been a learning experience. I have come to realize one of the biggest biases in politics, the economy and government is our own personal selfishness. Being selfish does not make one a bad person, but not being aware of it is where problems can arise.

David Frum posted a great blog yesterday about how the ideological stance of the Republican party is harmful to the American economy and political process. Mr. Frum worked for President Bush (43), has written books on the conservatism and believes in smaller government. He also understands that the political process is about balance and getting there is sometimes about compromise and leadership, and not always about getting through all of your ideals. It is a great read and not very long - I recommend checking out the link.

The other thing I've come to realize is I am thinking that for all of his flaws that President Clinton really was a great President because he understood our selfishness, and somehow was able to find bits of leadership and find ways to make it work for everyone. We had a balanced budget, yet for the rich and conservatives he signed welfare reform and a massive cut in capital gains taxes. For the middle class he raised income taxes on higher incomes. For the military protectionist types, we went to war in the Balkans. There was some level of gun control with the Brady Bill. There was something for everyone in President Clinton's policies, and he knew it. Everyone got a little of what they wanted, and it fed their selfish desires.

Certainly there were things that people didn't like about the policies. Not everything was perfect. I don't think the policies of Clinton would have prevented a tech stock bubble or the housing bubble. In fact, a case could be made that the capital gains cut made that problem worse. The overall point is that leadership and political discussion requires understanding we are all selfish. If we start with that premise, then we know to be careful anytime we want to start or change a government program or give the government more money.

I wanted to cover that after a Twitter discussion I had with State Representative Ryan Winkler this morning. I thank the Representative for taking the time to discuss some issues with me. He seems to be reasonable in his views. But the initial post that brought on the discussion was his tweet this morning that said:
Moody's downgrade of MN finances due to 'political intractability'. In other words, GOP obstructionism lowers our credit score.
I stated that intractability simply means "complex." His response is the government needs to spend more money on education and taxes should be raised based on the ability to pay (later stating the rich should pay more). Now there is no doubt that education is important. But there is a selfish bias to assume that the rich who already foot over half the bill for education should pay even more for it.

The other point is that if taxing more and spending more were the solution to our economic problems, then why not do it ad infinitum? There must be a point in taxation and government spending (and government hiring for that matter) where the benefit stops or we would just have the government tax us 100% and hire all of us so unemployment would be 0%. Obviously that doesn't work. So we have to realize that it is our very selfish nature, the desire to make more money, that drives our economy. The government must exist to protect us, so it will always be a cog in the machine that is our economy. It is not easy to find that point where it isn't doing enough, and when it is doing too much. In either case, it is hurting our economy. The danger on the "too much" side is that can also affect our freedom.

Look at it another way. If unemployment benefits were a great driver of our economy, then why not just start sending checks to everyone so that they could go buy more stuff? If government work was a big driver of the economy, then why not double the government work force? Now don't take this as me saying to stop those benefits or saying we don't need government workers. What I am saying is that there is a point where government money becomes ineffective in the economy. We have to be aware of that. Based on the last 20 years and my humble opinion, government is probably spending about enough. What we need to do is get the size of the federal government reduced and get more spending brought back to the state and local level. We are going to need to raise taxes to get the budgets balanced. That would do much more for the economy than what is happening now.

So you can see, I will freely admit we are going to have to raise taxes in order to ensure that our standard of living doesn't suffer during this economic malaise we are in. Likely, that is going to fall on those with higher incomes more. We can debate on how we should accomplish that, which I think can be done by fixing the tax code more than by raising the rates. But we are going to have to go back to the rates of 10-15 years ago to make sure we don't lose all we have gained. But we have to be careful that we don't allow those taxes to be spent on other things due to selfish motivations.

Do You Really Think We Are That Selfish?

I'd like to ask all of you how many televisions you own? How many iPods? How many PCs? How many pairs of designer jeans? How many times did you eat out this year so far? How many magazines do you subscribe to? Do you have cable? Premium cable? How many major sporting events have you attended? How many of the things in your house are made in the US? How many of you have mutual funds in your retirement accounts that benefit from the very corporate profits you are now claiming to despise.

My point is we are all selfish - rich, middle-class, and poor alike. We must first admit that we are selfish and step outside of that selfishness before we start shouting about the problems we face in our country. We must also realize that part of being free is the right to be selfish and the only way to maintain that freedom is to make sure that whatever we do, it is applied equally.

We need to do things to support and encourage freedom and success, but we cannot buy success through wealth transfer. We cannot spread out way of life throughout the world to people who do not want it.

Name calling and demonizing a group of people or one certain party is not going to solve the problem. that is what these politicians want, and you are playing right into their hands - they want this polarization, as it solidifies their base for the next election. Realize we all have our own self-motivating factors, and lets all work to try to bring out the better in people instead of continuing to grow the self-interest.