Economy

It's time to label conservatives for what they really are

by JS O’Brien

Somewhere in the 1970s, the right had a stroke of genius.  Cognitive theorists have long known that guilt-by-association or virtue-by-association is an effective persuasive technique.  Tie a candidate to a scary image – like Willy Horton – and tie your own candidate to a beloved image – like the flag – and you stand a very good chance of winning.  And if you can create a lasting negative image of your opponents by using a simple slogan (four words or less preferred, and the fewer syllables the better) that sticks, and that requires a complex argument to refute, you win.  You win big.

Enter the phrase:  “Tax and spend liberal.”  The phrase is marvelous in its brevity and semantic weight.  First off, no one likes to be taxed or pay taxes.  “Tax” is a strongly negative word, even when we may know, on some level, that taxes are necessary to provide such services as police, fire, military, safe food, schools, and the like.  “Spend” is also a negative word buried deeply in the American public’s psyche.  Notice that the right didn’t call the left “tax and invest liberals,” or “collect money for necessary services liberals.”  The word “spend” is short, to-the-point, and implies profligate behavior.  Coupled with a secondary message attacking those who are “lazy” and on welfare – a program that was always a drop in the bucket in public spending – and the phrase was and is closely associated with taking money from hard-working Americans and giving it to the shiftless.  Moreover, conservatives were also able to paint liberals as those who buy votes with giveaways from wealth transfer programs.

It didn’t help, of course, that there was a kernel of truth in the allegations.  The most effective propaganda is always built on a kernel of truth buried in manure pile of big lies.

Liberals were very poor at responding to this.  In their defense, Americans are so badly educated that they can be easily manipulated by demagogic statements like these, but that doesn’t excuse liberals’ misguided and amateurish message strategy.   Some liberals tried complex messages in rebuttal and fell flat on their faces.  Others went with the old tried-and-true strategy of offering ever more largess from government as a result of higher taxation, but the public mood had shifted strongly toward less taxation, and the strategy was clearly explained and discredited by the phrase, “tax and spend.”

The politics of giveaways wasn’t dead, however, and the conservatives understood this.  Taking away government services takes away votes, and conservatives weren’t about to do that (remember the uproar when Newt Gingrich shut down the federal government?).  Instead, they maintained government services while cutting taxes, effectively buying votes with tax cuts while maintaining votes with unfunded spending.  The strategy even had a semi-intellectual underpinning in the Laffer Curve, the idea that reducing taxes leads to greater tax revenues, which it does if one is climbing the Laffer Curve.  Unfortunately, this was not the case, and deficits increased under the conservative administrations of Regan, Bush I, and Bush II.

But what are deficits, after all?  How can one explain to Americans the effect of burgeoning deficits on credit, dependence on foreign investment, the long-term effect of spending more and more tax dollars on servicing debt instead of on investment in infrastructure?  I mean, the average American is voting for a president based on who he’d most like to have a beer with, right?  The conservatives got to buy votes with tax cuts because it’s hard to attack popular things like tax cuts and maintain any political capital whatsoever.

What’s needed is a phrase all Americans will understand; a phrase that points out how badly the conservatives have been mismanaging America.  We need a phrase that resonates with voters:

Something for nothing conservatives

It’s succinct (four words or less, remember?).  The words aren’t inflammatory or even accusatory.  They speak to common sense.  Everyone knows you can’t get something for nothing, right?  We all know that’s wrongheaded.  The phrase allows liberals to talk about how conservatives have been buying votes by running up debt, and how that debt affects us now and will be a crushing burden for our children.  It paints conservatives as being dishonest vote-buyers, using an entire course of action beginning in the Reagan years.  It puts them on the defensive, and allows liberals to put forward taxes for investment in the common good while fending off the tax-and-spend labels with an equally effective slogan.

I’m going to start referring to conservatives as “something for nothing conservatives.”Â

Won’t you join me?

49 replies »

  1. I like it. I think I will start using it. I wish it also spoke to how conservatives are trying to convince voters they care about values while the country is disintegrating. “Our economy may be near collapse but at least we’re fighting abortions and gay marriage!”

  2. I’ll use it till we come up with something better.
    Damn. I’m a Republican by registration….
    still. This latest batch of Republicans ain’t no Abe Lincolns.

    It fits.

  3. GOPickpockets…GOPetty Crooks…

    picture a grinning McSame scampering around, chained to the organ-grinder (still Rove), while various reprobates slither through the crowd cutting purses … thomas nast could have done it justice.

  4. I guess I’m nothing then. However, when tax time comes every quarter, I sure pay something….usually quite a lot of something. I pay so much something, that it hurts.

    Jeff

  5. Jeff,

    Paying taxes every quarter hurts me to, but I don’t know what that has to do with what I said. The GOP has become the something for nothing party because it not only wants to cut taxes, thereby buying votes, but it also wants to avoid cutting services, which would cost it votes. Instead of paying for things by raising taxes to fund its spending on things like … well … wars, the GOP decided to borrow and let our children do the paying.

    It’s the something for nothing crowd.

  6. Another assumption conservatives make is that “tax and spend” is bad for the economy. taxing can be bad for the economy if they are too high or put too much burden on the Middle Class. But, spending on infrastructure and education is good for the economy in the long run. Denmark has a high tax rate, yet also has one of the strongest economies in Europe. Go Figure!

  7. JS:

    Quarterly taxes are interferring with my business plan and a writing a high 6 figure check every 13 weeks is hurtful. It the taxes go up, I’ll have to find another baseball field to play in that’s a bit more friendly. Then I’ll also have to pay myself a dollar a year salary, and perhaps go on the dole:)

    JS:

    Have you seen what the Euopean inflation rates are, and their net borrowing is per GDP?. Thet make us look like pikers.

    All currencies are going down the toilet.

    Jeff

  8. I like it. I have a question for Jeff, though, since he’s mentioned the Laffer curve previously, and JS mentioned it above too.

    Assuming that the Laffer curve in some shape accurately represents the economy, how do you know where you are on the Laffer curve, what shape it is, and whether the curve shape and location are stable from one day to the next in response to external factors?

    I’m curious, because while the general idea make sense – you get more revenues from higher taxes up to a point, after which higher taxes negatively impacts the economy – I’ve never seen anyone explain exactly how they know where we are on the curve at that moment in time. Not only that, but there’s no guarantee that the model inverted parabola shape you see in textbooks is accurate – for all we know, the curve could be squished to one side or another (it probably is, for that matter) or could have multiple local maxima and minima in addition to a global maxima. And it seems likely to me that non-taxation factors such as the weather and climate, immigration, education, trade imbalances, international conflicts, unrelated legislation, etc. could all change the shape of the curve, where the maxima and minima are, and where we are on the curve at any given moment. And if that’s the case (and I’ll happily admit that while the curve’s response to different variables seems logical, it may not actually be right – I’m not an economist), I don’t see how anyone can use the Laffer curve – it would have too much variability to be economically useful in any meaningful sense.

  9. But do you think JS made an accurate assessment of the “cut taxes, maintain services” vote-getting ploy of conservative administrations? In the end, doesn’t someone have to pay something? Or is deficit spending a workable plan in the long run? And do you consider your own taxes unfairly high or bad for the economy in general, since they put a damper on your business activities and therefore inhibit growth?

    Honestly, I very likely don’t know enough about economics to understand whether you’ve actually addressed the main contention of the post, but it doesn’t seem like it. And since you’re a conservative, yours is the take which would be most interesting to hear.

    Edited – well, Brian is asking my question much more intelligently than I just did.

  10. Brian:

    To the best of my knowledge, there is not a hard-and-fast formula for determining the optimal point in the Laffer Curve. Which is why so many people can make such spurious “supply side” claims about cutting taxes to increase tax revenues.

    Jeff:

    I still don’t get the connection. I wasn’t writing about Europe or any of its many nations. I was writing about the US. And I wasn’t writing about how high taxes are or aren’t. I was writing about the fact that the Republican Party is spending like revenue doesn’t matter, and refusing to give up votes by making the cuts that need to be made to reduce the deficit. It’s a something for nothing party.

    What’s your position on what I actually wrote?

  11. I have two objections to JS’s “something for nothing” label, as much as I like it.

    First, consider the quality and quantity of the “something” during conservative rule, er, leadership. Look at FEMA, food safety, product safety, veterans’ health care and so on. That argues for this label: “Something less for nothing” conservatives.

    Second, so much responsibility is avoided by conservatives by transferring it to the religious sector. That argues for this labe: “Take it on faith” conservatives.

    Nice piece, JS. Ain’t rhetoric grand?

  12. Denny,

    I hear you, but some of the “somethings” are the ruinously expensive and ill-conceived prescription drug expansion for Medicare, continued SS payments that will quite likely bankrupt the system, eventually, a massive expenditure on military adventurism, and all the other expensive “somethings” that haven’t been cut and that we borrow money to pay for. I did see another blog (and I can’t find the link, now, for which I’m heartily sorry) that suggested “borrow and squander,” but I think those words are too strong for the common sense crowd. I think understated works best in this context.

    I like “take it on faith,” except that so many people do. I don’t think “take it on faith” hits a nerve with most Americans the way “something for nothing” does, but maybe focus groups would say differently.

    Thanks for the feedback, Doc. It’s always appreciated from you.

  13. JS,

    Got a question for you here. You site continued SS payments that would eventually bankrupt the system. What would you suggest, that we cut off all our elderly that have paid into SS their whole lives just because the government has borrowed from SS so many times without paying it back, or by paying only the principle and not the interest back that the entire program is shaky?

  14. JS:

    My response about Denmark was in answer to George’s claim about Denmark’s strong economy. Ir wasn’t meant to you.

    In regards to spending, I agree with you that we’re spending too much money. The Democrats in congress hold the purse strings, and could take care of that, but haven’t. Perhaps that’s why congress polls lower than the president. As for the “something for nothing conservatives,”in the 90’s there was a conservative driven bi-partisian effort to overhaul welfare. That’s one program that had reasonable success.

    One forgets that when Clinton left office, that we were already in the midst of an economic downturn. The excesses of the dot-com bubble caused a ripple effect throughout the entire economy, all the way to the fed and balance of trade. The so called budget surplus of the Clinton years was a Svengali manipulation of figures. Was government revenue high at that time? Of course it was, but the capital gains taxes from the dot-com boom fueled much of that.

    As far as the Laffer curve, in simplistic terms, it’s purpose is to increase the velocity of money, thus allowing the government to collect money faster, more times, because of increased transactions. The position we’re on at any point in the Laffer curve is better left to the guys at the University of Chicago. One really doesn;t know where we are until 3 quarters later…..kind of like knowing a recession happened after the fact.

    Again, they talk about all the US debt owned by foreign entities such as China. I rarely see much data revealing how much foreign debt that the USA owns. Check out how much we foreign debt we own, and you will be astounded. The sky isn’t falling.

    As for defecits, all governments run at a defecit, at one time or another, as shown by the borrowing activities and bond markets of virtually every country in the world.. Governments should run at defecits, because they should be involved in non-profit activities, leaving the for-profit enterprises to the private sector which will run them more efficiently and with better margins.

    As for your catchword,”Something for nothing conservatives,” I have no problem with that, as “Tax and spend liberal” probably doesn’t bother you. As conservatives, businessmen, and speculators, we’re used to being pilloried by those who are out of the loop, and the ones left behind..

    Dr Denny, as for the religious conservatives, we take them with a grain of salt…I’m sure that the left has similar red headed stepchildren among their fold.

    I onl wish that the liberal bloggers wouldn’t label conservatives as a unified group, poised to ruin the world, take your money, destroy liberty, and bankrupt the nation. Most of us aren’t like that at all…we’re the businessmen down the street, the guys that really pay most of the taxes, and are the ones who take the risks, and pay the bills so liberals can take advantage of direct wealth transfer such as the Earned Income Credit(EIC). The idea that most conservatives share is that we are happy with the status quo, and are comfortable with it. We also are comfortable with dealing with facts, figures, and numbers…..many liberals like to deal with feelings more than anything.’

    Conservatives are also more individualistic than liberals, and lack a collective behavoir.

    However, I respectfully submit that conservatives and liberals all want the country to be a better place, with more opportunities for all. We just differ in the means of achieving those goals.

    Jeff

  15. Jeff: Conservatives are also more individualistic than liberals, and lack a collective behavior.

    I try to avoid overgeneralizing when I can, but this is a generalization I kinda have to ask about.

    To wit: you’re joking, right? Seriously, you can look at the last 25 years of conservative political ascendance and say, with a straight face, that there’s no collective behavior?

    You’re a smart guy, Jeff. If we’re ever having a public debate in front of a large audience, PLEASE feed me that line…..

  16. Rho:

    I make no suggestions except to imply that we, as a nation, stop letting conservatives buy our votes by giving us tax cuts that mean we’re not paying for the services we receive. Whether the solution is higher taxes, less spending, and where we would apply those taxes and spending cuts are worthy topics, indeed, but were not part of the point I was trying to make in this limited blog entry.

    Jeff:

    I’ll get back to you on your points when I have more time.

  17. Thanks for that astute analysis, JSO. Most helpful to me. Slogan needs work, though. While I freely admit to having a learning disability (brain fog), I can’t quite grasp the “nothing” part until you explain it. I probably wouldn’t be the only one.

    Regarding taxing the rich, I’m sympathetic to the frustration they must feel when they write off a substantial part of the income on which they’ve expended massive amounts of sweat and ingenuity to accumulate. More progressives need to acknowledge that.

    Would that there were a way to reduce taxes on entrepreneurs versus the corporate rich and those who inherit wealth. The last thing we want to do is inhibit the entrepreneurial instinct, which is already, in recent days, at a premium in this country. Those of us who call ourselves progressives don’t fully appreciate what a rare breed entrepreneurs are.

    Note: If entrepreneurs already get tax breaks aside from writing off losses, please feel free to fill me in. Thanks.

  18. Jeff

    I loved your answer. Only, a small point.

    I really, really thought that the one thing that conservatives were exceptional at was coming together as a bloc force. You know the conservatives and their herd mentality – the herd implying, perhaps, a thicker outlook on life by those who have a dislike of herds.

    Some of the richest businessmen and WST are not conservative…

    http://en.wikipedia.org/wiki/Steven_A._Cohen

    …and the richest endorses Obama even if he has not declared whether he is personally a Democrat or not.

    http://en.wikipedia.org/wiki/Warren_Buffett

    Elaine

  19. Russ:

    It’s hard to tell how things will play to wide audiences until one’s done research, which we haven’t the resources to do. “Something for nothing,” however, as a pejorative phrase, seems to me to be embedded deeply in the American culture in which I grew up and worked. It’s echoed in Friedman’s “there’s no such thing as a free lunch,” for instance. But it’s subjective. You could be right for a large segment of the population, and you’re certanly right for you.

    As for frustration over writing a check for taxes “on which they’ve expended massive amounts of sweat and ingenuity to accumulate,” you’ll just have to spare me. I write a check every quarter for taxes too, and I don’t enjoy it. Who does? And I’m an entrepreneur who takes risks and whose family depends a great deal on his coming through in the clutch, even in economies like this one. But I don’t whine and complain, and while the total amount I pay is less than Jeff’s, I’m betting that the marginal tax rate is the same.

    Hell, I guarantee you that Warren Buffett pays a LOT more in taxes than Jeff, and HE thinks his tax burden is too low!!!

    If Jeff is paying quarterly taxes in the high six figures, it means he is earning something in the neighborhood of $1.5 to $2 million per quarter or $6 to $8 milllion/year. He’s not hurting for disposable income. Others, with far less disposable income than Jeff who are struggling to pay for the increasing cost of food, don’t complain at all.

    Hmmm.

    Jeff:

    Why does Congress have a lower rating than the president? Because it’s an evaluation of a mass of people instead of an individual. The first study I’ve seen on this phenomenon is from the 1930s, so I know that it’s been known for 70+ years. People rate doctors and attorneys low, as well, but rate their own doctor and attorney high. They rate Congress low, but their own congressperson high. I was dealing with this when implementing managed care in the 80s and 90s because we knew people would tend to take a dim view of the institution because of a less-than-thrilling experience at a single contact point. EVERY single-issue voter out there will rate Congress low because it hasn’t done what they think it should do on their single issue.

    Clinton? Why is it that everything that goes wrong in the here and now is Bill Clinton’s fault? If we have deficits, blame it on William Jefferson Clinton. The war in Iraq and its ruinous cost? WJC. The Taliban that grew from over 8,000 Koran study schools on the Pakistan/Afhgan border half funded by the CIA under Reagan and Bush I because they wanted a rise in radical Islam to counter the Soviets? Clinton’s fault. The prescription drug benefit we can’t afford that was pushed by Bush II? It was Bill Clinton.

    Tell me, Jeff, when you make a bad trade, do you blame it on yourself? Others? Bill Clinton? I mean, George W claims not to have made a single mistake during his entire 8 years in the White House. Is that the way you feel, too? Perfect?

    As for deficits, you appear to be saying they don’t matter, correct? We can overspend the budget until, eventually, every tax dollar goes to service the debt and/or we just print new money to pay it off? Is that what you’re saying? Please be clear. When, if ever, do deficits matter?

    As for “labels,” this whole point of my entry was that the Republicans (YOUR folks, Jeff) started this labeling business, and the liberals screwed up by not understanding mass communication well enough to respond in kind. It’s time to respond in kind. You would have liberals just stand there and take the GOP bullet to the head, the same way you’d like us to let your prosecutors and judges send us to prison on trumped up charges without an outcry, and the same way you’d like us to let you apply affirmative action for underqualified conservatives in the Justice Department.

    I’m suggesting we fight back and fight effectively against you and the other something for nothing conservatives.

    That’s all.

  20. JSO, Regarding taxes, would that everyone were as noble as you.

    Also, yes, “something for nothing” is resonating better for me now.

  21. Russ:

    It’s not an issue of nobility. Police, fire, park rangers, roads, schools, soldiers, social security, courts, prisons, and the like cost money. I expect to have to pay for them. I don’t always have to like everything the US spends money on, but that’s part of being in a society in which I don’t always get my way.

  22. I have another option, one that includes not just the “economic,” but every aspect of their behavior, and it’s only 2 words, easy to grasp:

    Pathological liars.

  23. JS:

    Seriously, our defecits really don’t matter. No matter what the media pundits say, they really don’t matter at all. Money is just paper, and since every currency in the world is losing purchasing power, the defecits don’t matter . Inflation is rearing it’s head this cycle, especially in countries other than the US. Our inflation is much less than that of the other G-7 nations, and the rest of the developing world….and with a weak dollar…..imagine that.

    People need to realize that the world economic system in it’s entirety is just a big game. The markets are a game, investing is a game, banking is a game, insurance is really a game, interest rates are a game, debt service is a game, and borrowing is the biggest game of them all. Despite the supposed credit crunch, there is so much cheap money out there, it’s unbelievable. Brokers are falling over themselves to loan out cheap money, as much as you need….if you know how to play the game.

    I only blame myself when I make a bad trade, which is around 40% of the time. My taxes are high because I put on huge spread positions and am very consistent with my earnings. Spreads suffer an additional tax bite when held over the quarter, without benefit of being treated as marked to market. The quarterly payments are a serious handicap on my ability to maximize my performance.

    I still disagree with everyone here who suggests that Republicans are a single block, marching in unison. I have more in common with y’all than I do with a member of the Religious right.

    As for Warren Buffett not feeling we pay enough taxes…..He also has issues also with taxes….not paying them. Do some research on exactly how his corporations work, and you will see a pattern of agressive tax avoidance. The Sage of Omaha isn’t this folksy, aww shucks guy that he portrays for the media. He’s a shark, and a great white at that. His Capo, Munger also is someone that I would not want to piss off.

    Pookapooka:

    You’re just downright insensitive.

    Dr Slammy:

    I stand corrected….Conservatives are more RUGGED individuals than liberals, and tend to whine less, except when it comes to taxes:)

  24. Jeff:

    Thank you for making your position clear on deficits. You think they don’t matter. Alan Greenspan disagrees:

    http://articles.latimes.com/2005/nov/04/business/fi-green4

    Ordinarily, I’d just stick with a well-respected economist on this one, but I’m interested in your assertion because, as I read it, if deficits don’t matter, then any size deficit is just peachy. Taking this to its logical conclusion, I think, would mean that we actually don’t need to collect any taxes at all. We could simply borrow the money for government services forever. The deficit could grow to a million, bajillion dollars and it wouldn’t matter a bit.

    Am I reading you correctly? Deficits don’t matter?

    As for Warren Buffett, he’s gone on record as saying that he won’t pay more taxes than he owes under current tax law, but that he thinks he and other super rich people pay too little under that law. I didn’t suggest he’s folksy. I simply related something he said.

    http://business.timesonline.co.uk/tol/business/money/tax/article1996735.ece

  25. JS:
    Greenspan is worried to death about defecits, good……Since he was a pretty bad Fed Chairman, statistical evidence that has been quantified, shows a good return on trading the 10 year note if one fades his comments two days after the comment, holding for a 15 day period. I run these these kind of tests every day.

    Arthur Burns made a great case about the irrelevancy of defecits, and Friedman basically agreed with Burns in principle. I respected those guys and would never fade them, the same being with Paul Volcker. Although I disagree with Burns(his expansive monetary policy) and Friedman’s rationale, their expected outcome is supported by my models and systems.

    As long as all of the industrialized nations run defecits, the defecits become irrelevant in the long run. If I was a member of the general investing public, I’d probably respect the word of a leading economist like you do. However, I prefer to make money and generally like to fade guys like Greenspan. So far it’s worked, but past performance is no guarantee of future results.

    The investing public doesn’t really make money in equities, aside from capturing the upward drift of the market if they actually buy and hold. As for the investing public investing in the safety of bonds, holding anything with a maturity longer than 6 months is tomfoolery.

    As for Buffett….he has several huge operations that book trades in tax havens for the sole purpose of evading US taxes. While it’s perfectly legal to do what he does, it’s certainly not in the spirit of progressive economics, and flies in the face of what he preaches.

    What the public really doesn’t get, and I’ve said it before, it’s all just a big game. How one plays the game, (and everyone is playing it whether they know it or not) will decide whether they prosper or fail.

    Ultimately, hyperinflation, devaluation, and monetary dislocation will make government defecits irrelevant. You heard it here first.

    I’ll be glad to discuss this further, but just got back from a trip a few hours ago, and am quite jet lagged.

    Jeff

  26. Jeff:

    Thanks for your input. I’d really like it if you’d address a point I made earlier. If deficits don’t matter, then we should have to pay no taxes whatsoever, right? We can just borrow and borrow and borrow and never pay it back, can’t we?

  27. JS:

    As far as taxes are concerned, we all need fire,police, local services, schools, etc. We should all pay some taxes, even the poor. My arguments, which have been misconstrued, are about the excessive taxes certain segments of society are forced to pay, and the forced transfer of wealth from the productive to the unproductive. I think the 14th amendment would agree with me if tested properly. Before you label me as a heartless SOB, it is the duty of government and society in general to provide for the truly needy, the mentally and physically handicapped.

    Defecits and government debt are one thing, private debt is a whole other animal. The disconnect between government debt and demonetization might take a generation or so to set in. Not knowing the timeframe,, meanwhile, we need to be good citizens and pay our taxes, live lives of thrift, and save assets in whatever form we think will hold value. I spend as much cash on things that will hold value, as my budget will afford. I buy expensive art, yet use coupons at the grocery store. I pick up nickels on the street, as a nickel is more than the interest on a dollar for a year. Pennies turn into dollars, which can ve converted into real assets. I’m a strong believer in thrift.

    If you sign a note agreeing to pay, and borow and borrow, then don’t pay it back….you’ve broken your word and that’s a bad thing. When it comes down to it, a person is as only as good as his word. Although it’s a rare commodity these days, I still believe in the concept of honor, and paying one’s debts. I regularly borrow lots of money to carry my positions, and always make sure the nargin loan gets paid first, win or lose….that’s just good business practice.

    Jeff

    PS:

    Seriously, I’ve gotta get some sleep.

  28. Jeff: “…the forced transfer of wealth from the productive to the unproductive.”

    This is a canard, an article of rhetoric and ideology (and occasionally intentional misdirection) masquerading as fact.

    It falsely associates the following: wealth = productive and unproductive = poor. It insists that I believe that people have what their abilities and efforts merit.

    Which, of course, is hogwash. Many of our wealthiest citizens produce nothing and never have. Some of the hardest working, smartest and most productive people I have ever met live modest lives, and that puts it mildly. I’m sorry, but I’m being asked to set aside what I know – know – from over 20 years as a working adult in favor of dogma that bears almost no resemblance to reality.

    Honestly, I’d give anything to live in a society where the productive were truly unleashed and the willfully unproductive left to their own devices. I don’t lose a lot of sleep over those who have no interest in making something of themselves. But what of those who are industrious, creative and relentless in search of a break who never get one?

    Of course, this means we’d have to do something about people who are born into wealth and live unproductive lives, wouldn’t we?

  29. Jeff:

    I hope you get a good long rest. To the best of my ability to interpret what you way, though, I still don’t think you’ve answered my most recent question. If deficits don’t matter, then all of us should get to pay no taxes, n’est pas? We can just borrow it all, can’t we?

  30. Dr. Slammy,

    The forced transfer of wealth exists in the form of the Earned Income Credit.

    You said:
    “Many of our wealthiest citizens produce nothing and never have. Some of the hardest working, smartest and most productive people I have ever met live modest lives, and that puts it mildly. I’m sorry, but I’m being asked to set aside what I know – know – from over 20 years as a working adult in favor of dogma that bears almost no resemblance to reality.”

    A plurality of our wealthiest citizens have produced a lot, since inheritors are being replaced by producers. The Forbes 400 list gives good evidence of this.

    Hard working is a virtue thjat I respect and admire. However, there is a difference between working hard, or working smart, and be willing to accept risk. Risk takers earn every penny they make.

    JS retorted in a very condescending manner, “I hope you get a good long rest”

    I’ll say it again, defecits don’t matter. We have to pay taxes for services, and should pay those taxes. “Rend unto Caesar…..” Repeating myself, sometime in the future, there will be a monetary dislocation and hyperinflation that will render government defecits irrelevant. The mint’s printing presses will be fired up, just like post WWI Germany, and there is good evidence the world’s monetary system will collapse within the next 50 years. The monetary system started it’s trend towards collapse in 1971, for that matter. However, it is the law that we must pay taxes, and all good citizens should be law abiding and pay taxes. If you chose not to pay taxes, that’s your business, but I’ll continue to reluctantly pay mine with complaints attached.

    If I borrow money, personally, I will keep my word and pay it back. That’s just good business.

    International monetary collapses have happened before during 1400’s, 1600’s, and 1800’s. History tends to repeat itself and during those times, people still went to work, and the crops got planted. A collapse is just a bump in history.

    Jeff

  31. Jeff:

    I didn’t mean at all to be condescending. You said you were tired. I really wanted you to have a good long rest. That’s all.

    I think you have contradicted yourself, though, if I fully understand what you are saying. You first say that deficits don’t matter. I deliberately used a reductio ad absurdum response to see if what you say is true in all cases. You have responded that deficits, when high enough, lead to hyper-inflation, and you use Weimar Germany as an example.

    Now, as you know, Weimar Germany fell to political extremism in the form of the Nazi Party. It might also have fallen to the communists. It could have gone either way, but it was probably going to go one way or the other. Economic suffering was so intense that political moderation was a very remote possibility.

    In the case of the Nazis, I think we all know what happened. Mass murder; maybe 50 million deaths. Destroyed industry bases. Economic dislocation on a meta scale. We could expect the same thing of a future international monetary collapse, only this time, the world has nuclear weapons.

    And you say this wouldn’t matter? Really, it wouldn’t matter? This is what you’re saying?

  32. JS;

    Sorry, but I am just a bit sensitive these days.

    I gave the example of post WWI Germany, because it was the most recent big scale meltdown. Yeah, it was a clusterfuck, but that’s the only dislocation I’ve seen with such enormous consequences. Other dislocations have had minor effects such as the Holland Crisis, the Bank of England Crisis, the Medici failure, and 7 others I’ve studied. Is there risk with a dislocation? Absolutely….even a fool could see that. However, the monetary system, overleveraged as it is, has gone beyond the tipping point, and this isn’t just in the USA. Seriously, I’ve never seen easier, cheap money being offered in my life. There’s more liquidity being pumped into the system every week, and this is a concerted effort by all the central banks(lowering the value and purchasing power of their money) My mentor, who’s in his 90’s and seen it all, hasn’t seen anything like this either. Yet, despite all of this potential for dislocation, I remain firmly bullish on the prospects of the USA. We still are the gold standard everything else is measured by. Another way to look at it is that we’re too big to fail. The average US citizen will be affected in the pocketbook by a monetary dislocation, but like always, will emerge on top.

    Although I might seem heartless to some, a detached, dispassionate viewpoint is a necessary element for successful trading.

    As to whether it would matter or not…….It depends on whether you are long or short. As I’ve said before, it’s every man for himself. I don’t like human misery any more than anyone else, but one must accept that there will be a certain amount of misery at any given time. Pragmatism is a necessity for these times.

    Jeff

  33. Jeff:

    Let me just be sure I understand what you’re saying.

    First off, are you saying that monetary dislocations in the primarily agrarian societies of 200+ years ago are equivalent to monetary dislocations in primarily urban societies of today? I can buy that a yam farmer in the wilds of New Guinea might not notice an international monetary crisis, but I would find it harder to make that argument for a factory worker in Des Moines. I know people who lived through the Great Depression, and I can assure you that they would not say that the Great Depression didn’t matter. And as dislocations go, the Great Depression was far better than, say, the food crisis in Biafra.

    And are you saying that an economic meltdown in the 21st century is likely to be more like the Medici failure than like Weimar Germany? Why would this be so? What part of today’s interlinking world economic system more resembles Medici Italy than Weimar Germany?

    Jeff, I have to say that, when you say deficits don’t matter because economic meltdowns don’t matter, it sounds to me like you’re saying something to the effect that, as long as you, personally, weather the storm, the only inconvenience will be having to smell the unwashed beggars in the streets thrusting their children at you in the hope that you’ll provide a morsel of food that might let them live another day.

    By all means, let’s hasten that day. Let’s eliminate taxes completely and borrow until we make it a reality.

  34. JS:

    One has to remain dispassionate if one is willing to put themself at risk. I view economic meltdowns as fascinating, catalytic events, just like I looked at the Oct.19, 1987 stock market crash, the currency dislocation of 1991, and the market crash after 911. Detachment allows one to survive and learn from such an event.Many lessons can be learned from market crashes.

    And, yes, I hope to personally weather any storm, and profit if possible.

    As far as the unwashed beggars comment, that was hitting below the belt, as I have great empathy for the poor, and believe very strongly in charity. I’ll match my charitible record with that of anyone….and it’s not charity out of guilt, but out of kindness.

    Jeff

  35. Jeff:

    You and I will just have to disagree. You don’t think deficits matter because, even though they lead to hyper-inflation and conditions in which billions of people may encounter untold suffering, that’s all perfectly OK with you. I believe deficits matter precisely for that reason. I find it difficult … nay … impossible to treat human misery so cavalierly.

    Thank you for reminding me why it’s worthwhile to fight people like you. For your sake, it might be a good idea to hope that people like I am win, because you don’t want people like Lenin winning. I’m sure many in the Russian upper-class thought they would weather the storm, too. But the mob has a funny way of dealing with people who think dreadful human suffering is “fascinating.”

    I have compassion, however, and I hope that never happens to you.

  36. JS:

    I never, ever said that human suffering was fascinating. You’reagain putting words in my mouth. I was describing the market actions as fascinating, much like any good scientist would view any abnormal phenomena. Whatever, despite what will happen in the future, the free market system will prevail, and that’s what’s important.

    I’m glad you have compassion, even while you’re beating me up. I guess we’ll just have to agree to disagree.

    I’ve endured enough intolerance, and closed mindedness from the progressive crowd…..Y’all make the religious right look like open minded people. Progressives have an elitist attitude, and don’t even realize it. Progressives think they are just a little smarter than the rest of the mob, and a little better than the everyone else. Progressives look at the glass as being half empty. The real object of your quest is for raw power. You want to run things your politically correct way, no real dissention allowed…..kind of like Lenin, Stalin, and your other role models. The negativism of y’all could make one go crazy. Look at yourself in the mirror…..Every bit of bad behavior that you accuse conservatives of is mirrored by you….Every single bit……….

    Good Bye.

    Jeff

    Jeff

  37. Jeff,

    If “goodbye” means you will not be back to grace our board, I regret that decision. You have added much here, especially when explaining the way markets work in ways the rest of us don’t understand or, at least, don’t fully understand.

    You will be missed.

    I first started pressing you on the topic of “deficits don’t matter” because I thought there would be one of two outcomes. The most likely, I thought at the time, was that you would simply not answer. What I hoped for, however, was that you would acknowledge that very high deficits do lead, at the very least, to hyper-inflation that causes economic and social disruption on a massive scale. I thought we could then explore exactly how much of a deficit was too much, go over historical precedents in the way deficits destroyed powers like Spain and Rome, etc.

    I was looking forward to the possibility of a great conversation in which I could learn something. “Learning something” is how I define great conversations.

    I think my jaw must have dropped when you said:

    Repeating myself, sometime in the future, there will be a monetary dislocation and hyperinflation that will render government defecits irrelevant. The mint’s printing presses will be fired up, just like post WWI Germany, and there is good evidence the world’s monetary system will collapse within the next 50 years.

    I really didn’t believe my eyes. Here you were saying that deficits don’t matter because the human misery caused by monetary systems collapse was no big deal, and you used Weimar Germany as an example of that. It was such a “no big deal” that you called it a “bump in history.”

    I suppose I should have realized at that time that there was something very wrong with the conversation, since you took a genuine expression of mine hoping you got some rest as “condescending.” I’ve looked back over that statement of mine several times, and have no idea how you read condescension into it. You must have been very upset at that point for some reason I don’t understand.

    I started asking for clarification because I just really didn’t believe that you could mean that the misery caused by monetary dislocation, caused by deficit spending and government borrowing, was not big deal, especially as it relates to the rise of Adolph Hitler after Weimar. Stunningly, you didn’t repudiate what you said, just saying you find “economic meltdowns fascinating.”

    I’ll discount your last message. The final bit is petulant and can only have been from someone so angry that he lost control.

    I have learned something from all this I didn’t expect to learn. I have worked with big business for more than 22 years, now, often at the board level. I believe in a capitalistic system modified by the governors of widespread suffrage and vigorous journalism. Such a system works well, and I have often been at odds with those who believe the worst of businesses and businessmen and women. Many times, I have been your defender both publicly on threads here and privately in e-mail exchanges among the scrogues, though not lately, I admit.

    I’m beginning to wonder, however, if Jesus of Nazareth didn’t have it right. Perhaps there’s some basic human mechanism that short-circuits the heart when the brain starts to accumulate great wealth. Maybe capitalism really does have the seeds of its own destruction implanted deeply within it. Maybe greed, by itself, ensures the rise of Hitlers, Lenins, Maos, and the like.

    And, no, Jeff, those are not my role models. My role model in cases like these is probably FDR, who managed to preserve our capitalist system by restoring balance with democracy and oversight when many wanted to tear capitalism down and start over.

    Good luck to you, and fair sailing in whatever endeavors you choose.

  38. I’m a little late on this conversation, but I was thinking something like “cut and squander conservative” fits the bill pretty well…

    Or even just “squander conservative”. That’s brief enough.

  39. Jason:

    The exact right term, I guess, is the one that rings truest and has the largest cognitive impact on the greatest number of people. That takes research, of course, and I’m sure not gonna pay for that.

    “Squander” may be the right word, but it rings a bit wrong to me because it’s too strong. It seems to me that the beauty of “tax and spend” is that these are everyday words with deep roots in the brain’s verbal center. For that reason (and I could definitely be wrong), “something for nothing” feels better to me.

  40. JS:

    I like the concept you’re going for with “something for nothing”, but I feel that it actually lacks some strength when it comes to establishing a label. I sense that phrase being contorted into a defense argument that would allow them some benefit. I guess it just seems a bit amorphous. There’s nothing amorphous about “tax and spend”.

    Subconsciously I can’t resist the use of strong words in relation to today’s conservative politics and policies. Perhaps something like “waste and reward conservative” is simpler but remains strong. And utilizes verbiage that is common and relevant to these corrupt and hypocritical times. I suppose I won’t be chipping in for research either.

  41. Jason:

    Well, we’re both guessing, but if you want something stronger, I might suggest something I saw on another website: “borrow and squander.”

    Cheers.

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