Flutterby™! : On Romney and the future 2012-09-18 00:06:22.603784+00

On Romney and the future

2012-09-18 00:06:22.603784+00 by Dan Lyke 18 comments

Mother Jones magazine is reporting, with video, that Mitt Romney said:

All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them.

and that

Romney went on: "[M]y job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives."

And you know what? That right there is how I went from being a hard-ass right-wing Objectivist to voting Democrat. Because I went from believing that I could convince people to take personal responsibility and care for their lives, to believing that in order to make that behavior change stick we had to provide a safety net and an example so that people can see that, yes, they can take personal responsibility, and give them the room so that they can see that they can indeed care for their lives.

Because there are two problems with writing people off and not continuing to try to convince them that they should take personal responsibility, and they're kinda linked: The first is that they're out-reproducing us, and I would like to take this moment to point out that the GOP policies on healthcare and abortion aren't helping that. The second, and I don't wanna Godwin the thread to early or anything, but the second really is: What are you going to do with those people?

Because either we can educate them and elevate them to our level, or they're gonna overrun us. I mean, there is a third option: We could spend over half of our Federal budget to build mechanisms of destruction and killing and try to wipe them out faster than they're reproducing. But, wait, it turns out that we'd need to spend more than that, because... well... how's that foreign policy working out for us? How much more would we need to spend on bombs to make that work out domestically. And has that ever worked for a nation?

Cambodia, Germany, North Korea, China... yeah, I'm not coming up with any good examples here.

So it looks to me like if we want to have a society that doesn't look like Somalia, we need to step in to change the culture where the parents involved weren't up to the task. We must "...convince them they should take personal responsibility and care for their lives." The future depends on it. Our future depends on it.

That Mitt Romney believes that he can't means that he has abandoned hope for any sort of future that seems rationally possible. It's going to cost more to protect our enclaves against the angry masses than to bring them into the fold, and my life's too short to stand with principle rather than adopting pragmatism.

And I also realized that I reacted to Shadow's comments rather than thinking them through, and so in some ways reacted to a straw man of them rather than their actual intent, pushing a "lesser of two evils" response.

I need to think this through a little more deeply. I believe that the government provides commodity services very effectively, with less economic overhead than a monopoly driven market can provide. I believe that the government does not innovate very well, and when it does it does so inefficiently. I also believe that there are collective investments that are best made by government. Obviously the beliefs of where and how are still evolving.

I think it's fairly well thought that the Long Depression happened because of the defaults on the federal loans to the railroads. So that part seems like it can be traced to government intervention. I'm not sure about the other elements.

And I agree that gutting the government because of a drop in GDP will cause problems, I'm also not averse to the government providing services: When we lived on the private road out in West Marin, the county gave us the best bid for re-paving. Municipal broadband seems to be shaking out as a really good deal, when the telecoms are unable to rig the legal game to their own benefit. If profits are going to be invested in innovation, then, yeah, the private sector is where I want to go. If they're going to be invested in yachts and mansions then... well... the difference between a mansion in Greenwich and Versailles is largely that Louis XIV had better taste. Both exist because of a legal structure which makes that wealth imbalance possible.

I wonder how much of the economic cycle is due to the government. The Great Depression, by my best understanding, occurred when government was pretty much non-existent. But the recovery from the Great Depression was facilitated by the New Deal and WWII. Further, I don't ascribe the budget surplus to anything Clinton did. The creation of new classes of industry and the Tech Bubble caused tax income to increase beyond levels anticipated by the government. The current recession ostensibly is the result of the housing bubble bursting. The housing bubble may be traceable to the relaxation of regulations on mortgages but it can also be traced to the "irrational exuberance" of home buyers.

Based on these examples, if my understanding is correct, reduction in reduction in Government oversight can facilitate recessions (and depressions). Large Government spending programs can facilitate recovery. But its really hubris that drives the economy. "I can create this new business." "I can buy a $5,000,000 house with no income and sell it in six months for $6,000,000."

As for the "current burden is too large"... The reason Government seems big now is the same reason Clinton had a surplus. The Government operates at costs independent of GDP. When GDP is high, Government seems cheap. When GDP is low, Government seems expensive. Gutting the Government because of a drop in GDP will cause serious problems long-term.

Oh yeah, Bush Jr was horrible on regulation. Clinton was actually not bad on spending. Reagan and both Bushes were pretty bad. Obama is bad too.

My own political and economic opinions are in great flux right now, so I want to take some time to get a bit more info before I pursue this too far, but I will note that the Cato Institute(!) says of Clinton that (PDF):

Dan, I agree with some of your analysis of our economic woes, but I have to disagree with your ideas on fixing them. Higher income tax rates, and more importantly regulations and accounting requirements, select more for larger companies and against individuals. Clinton was riding off Reagan's and Bush Sr's tax and regulatory simplification. His tax increases were moderate, and with the Obamacare rules we're already back up to that level; allowing Bush's cuts to expire will push us past that point.

I specifically included that premise, rather than glossing over it, because I wanted your opinion on it. I will admit that *some* government management has been run acceptably; I also hold that in general it's a bad idea, that limited accountability tends to stack up bad management.

Large companies enjoy economies of scale, but also typically wind up with operating inefficiencies that smaller companies can skate past. The reason we've recently tipped towards big box, national chains, is IMO government regulation. Large companies can centralize and combine governmental liaison departments, while small companies struggle with it.

Another problem is corporate liability limitation. We have large holding companies and mutual funds with big blocks of voting stock in major segments of the economy; despite not having paid for the stock directly, they can dictate the operations of our producers while being isolated from the responsibility.

In my opinion we need the following three major changes to keep the economy in private hands while preventing harmful exploitment:

(1) Eliminate limited liability. If you own voting stock in a company, you should be jointly and severally liable for its misdeeds. (If you're screaming right now, there are ways to transition to such a system without too much disruption.)

(3) Reduce the size of both Federal and State governments. This is going to be needed in any case, the current burden is too large.

#Comment Re: made: 2012-09-19 23:41:15.64478+00 by: Dan Lyke [edit history]

Actually, I think there's an addition to your premise. It's not just "if you want to keep the economy privately owned and managed" (and as a Californian I've got to admit that some sectors of our publicly run economy are amazing, so the question is "how much and which sectors of the economy should be privately owned and managed"), but it's also "which economic strata of the economy do you want to extract that money from"?

Right now at the high end I'm watching private equity firms take companies that middle-income people started and built, "extract the value" from them, and turn that value into yachts and mansions. That builds economic growth only in a "broken windows" theory of the economy.

So, yeah, I'm totally cool with letting the Bush tax cuts expire and heading back to a Clinton era of growth.

(On that California comment: As I've mentioned, I think that part of my libertarianism when I lived in Tennessee stemmed from very poorly run state and local governments, and that out here we actually get really good service for our money (and we'd be doing better if we didn't have the Central Valley politics dragging us down).)

"Grow the economy faster than inflation" - well, if you want to keep the economy privately owned and managed, then raising taxes percentage-wise is going to discourage both new investment and reinvestment. (Allowing revenues to rise due to economic growth is different, but...)

Shadow, so far as I know the two things indexed to inflation (besides the fact that stuff in general will cost more) are Social Security and pensions. Social Security is an amusing talking point considering that back during the boom the "privatize retirement" folks (yes, me included, sigh) were complaining that the return from it wasn't high, and pensions... well... yeah, labor costs (although California municipal contracts with CalPers have their own issues, but that's not Federal).

The solution to both of those things is to grow the economy faster than inflation. If we can't do that, we're destined for bankruptcy regardless of debt. Pragmatically, the way to do that seems to be more consistent with the historical performance of Democratic Presidents and Congressweasels than Republican ones.

But I'm totally with m on the civil liberties issues, and because I don't live in a swing state will likely be voting for Gary Johnson.

Unfortunately the Democrats are no better. While I held my nose and voted for Obama after the insult of McCain and Palin, I shan't do that again. "None of the Above" is the only viable vote. My reasons for not voting for Democrats go back to their consistent failures to even function as if they want to stop the rule of stupidity. But two recent Obama administration moves are anathema.

The successful appeal of the NDAA to allow the indefinite detention of citizens without trial or charges.

The Executive order implementing the voted down Congressional Cybersecurity Act with none of the privacy measures that Obama promised were necessary or he would veto the act (had it passed). The hypocrisy is incredible.

Taxes are only money. To go from a top marginal rate of 35% to 40% is really kind of immaterial to me. Rather not, but it will not change my life in any significant way. But the destruction of civil liberties, and the growing police state, are incredibly troublesome.

ebradway: When you have payouts promised to people which are indexed on inflation, and not enough resources to cover the purchases these people wish to make... Something's going to break. That's bankruptcy.

In the vein of "where are they going to go?", I have friends moving to Canada and various EU countries. I have no idea if it's a trend, but at least one couple going to Canada is doing so because they're concerned about how strident the GOP is getting here. If we don't have a human capital drain problem already, it's still conceivable.

I am concerned that we're spending as much above our means as we are, but as you point out: When China starts to think that bankruptcy is an issue, they'll stop buying our debt. Interest rates will rise, which means we'll have inflation. Which means the debt portion denoted in dollars will, relative to GDP, shrink. I'd love to see a return to the Clinton era when we were running a surplus, but I don't think the way to do that is international belligerence and multi-front wars while slashing investments in our future.

I don't want to derail Dan's discussion that focuses on how to help build the foundations that lead to personal responsibility... But I get really annoyed by the whole "US Bankrupting Itself" spiel. It is based on the idea that individual nations function separately from the rest of the world. They don't.

Economics has to do with the distribution of resources, not money or debt. The US controls a significant chunk of the natural and human capital resources available in the world. The only way for the US to be "bankrupt" is to lose those resources. But that means the resources have to go somewhere else on the planet. Where would they go?

China is a fair answer but how much of our natural and human capital resources do we export to China? If you take dollars out of the equation, the US is doing an amazingly good job of drawing on China's resources, not the other way around.

It's like trying to move water inside a tub. It's possible to create waves. Unless you are taking water out of the tub, it's not possible for any portion of the tub to stay dry. And the Godwin Law solution is akin to taking the water out of the tub.

Shadow, I don't think the U.S. will bankrupt itself maintaining chronic welfare recipients. We're going to bankrupt ourselves on defense spending first, and then maybe on healthcare, and then bad transportation decisions, and then somewhere way down there we start looking at welfare.

And, yes, welfare has some problems, but if we can organize it as an investment in the future, it will pay off. If you want an example of a government program that pays off in orders of magnitude beyond its cost, look to Head Start. For instance. To make greater inroads, let's put a real healthcare system in place and provide free contraception and better sex ed. We have strong numbers of how that has paid off in other countries, many of which still allow augmentation of that healthcare system with private insurance, and it's a huge return on investment.

We also have to look at how we've structured welfare to totally fuck over people who try to get off of it.

Of course part of this is reworking the narrative from what "the poor" "deserve" to one of "help the next generation achieve more than their parents", and "break the cycle of poverty". This is not a message that sells easily: middle-class liberals don't want to hear that poverty is a result of bad culture which leads to bad decisions, and the poor don't want to hear that their parents fucked them up (although part of my change of heart was meeting and interacting with people who know how badly they were raised and are trying desperately to change themselves).

Steve, I don't think it is a stretch from "rile up the extremists" to death camps. What's the difference between Romney telling his base what they want to hear, and David Duke telling his base what they want to hear? Especially when the respective bases are that similar?

I wonder how much sense it makes for all of us, on both ends of the political spectrum, to go all shouting and arm-waving about something a poitician says at a private event to his campaign supporters. Those folks were there for Republican red meat, and Romney gave it to them. Kind of a stretch from there to death camps for the 47%, innit ?

"[M]y job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives."

Unfortunately, that means they're going to vote against Romney. Along with most of the people in government jobs. And people like you too, Dan. Which means Obama wins.

The problem is, though Romney sucks, Obama sucks too. Further, the US will bankrupt itself maintaining both big government and chronic welfare recipients.