Economics

According to Libertarian beliefs, the government should be as minimal as possible so as not to interfere with the workings of business. But how do you then prevent monopoly capitalism under a minimalist Night Watchman State?

The answer is: you don’t — which is “working as intended” to a libertarian. Both because their contempt for the government is so great they would sacrifice our very national treasures if it meant squeezing another cent out of the public coffers, and because they are fans of monopoly capitalism. Greed is good, and “competition is for losers” (according to tech billionaire Peter Thiel) — so what if the invisible hand must be made to slap around the little guy?!

Money is a religion, and these people are True Believers.

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For friends of the Open Society who, like me, would prefer not to block the movement of people, ideas, and trade — some arguments for an open world:

  • Trade agreements are net contributors to economic growth
  • Immigrants are net contributors to economic growth
  • Money spent on the security industrial complex economy has low ROI vs. education, infrastructure, and research spending
  • A diversity of ideas more likely leads to the best outcomes vs. a paucity of ideas
  • Companies with more women leaders are more profitable
  • The more the merrier!

It’s the opposite of tribalism

Philosopher Karl Popper defined an open society as being opposed to a tribal or collectivist society — one driven by magical beliefs and magical thinking. He theorized that because all knowledge is provisional, we should always remain open to alternative points of view that may offer new information and perspectives. Critical thinking is paramount, as individuals are confronted with personal decisions that have no ready-made ritual to apply to their solution.

Values of an open world:

  • cultural and religious pluralism
  • humanitarianism
  • equality
  • political freedom
  • critical thinking in the face of communal group think
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I’ve been reading John Stuart Mill’s “On Liberty” and am reminded of the quintessential liberal definition of the term:

The only freedom which deserves the name, is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it.”

— John Stuart Mill, On Liberty
(emphasis mine)

It seems to me that Libertarian proponents tend to make a systematic error in portraying liberty as only commensurate with the first part of Mill’s description: essentially interpreting it as, “I should be able to do whatever I want, and have no constraints placed upon my person by the government whatsoever.” The idea of “cancel culture” is a reflection of this ideal, whereby the right wing complains that moral constraints that apply to everyone should not apply to them.

This mentality misses completely the essential boundary established by the second part of Mill’s quote: that doing what one wants has limits attached, and that those limits are a proscription on engaging in activities which either harm others, or deprive others of their own rights in pursuit of liberty. An essential part of the social contract, the concern for others’ rights naturally stems from concern for your own — as the collective will bands together to guarantee our rights in common, everyone has a stake in preserving the system.

Harm

Being fixated with avoiding taxation, the Libertarian will proclaim that the government is coercing him out of his hard-earned monies — but this fails to recognize the real harm being done to the lower classes by the deprivation of funds to support the basic level of public goods required to preserve life at a subsistence level as well as social mobility: the essence of the American dream.

In short, Libertarian dogma tends to be singularly focused on the self-interest of the upper classes without any attendant regard to the rights of others that may be trampled on by either class oppression or the capturing and consolidation of political power in the hands of the wealthy. It fails systematically to recognize the perspective of the “other side,” i.e. those who are harmed by the enactment of the Libertarian ideology — much as a narcissist lacks empathy — and with it, the capability of seeing others’ perspectives. You could in some ways consider it yet another form of denialism, as well as a cousin or perhaps even sibling to authoritarianism.

The Libertarian narcissist Venn Diagram is practically a circle.

Libertarianism sees itself in control

It believes its ideology should dominate others despite its extreme minority status. The Libertarian narcissist wants to get the benefits of the social contract and civil society, without having to pay back into the system in proportion to their usage of public resources at scale. The Libertarian political philosophy violates the fundamental, cross-cultural principle of reciprocity — exhibited in societies through the ages.

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Gather ’round, y’all — it’s the fight of our times…

How much decision-making should be privately made, vs. collectively? Arguably, decisions that affect most of us ought, in some way, to incorporate input from the public.

But as Elizabeth Warren 2020 (!!) notes — it’s getting harder and harder to do that, even as economic opportunities dry up and the wealthy capture more and more of the political class.

With Senate giants Cory Booker, Kamala Harris, Joe Biden, and Bernie Sanders all exploring bids too, it’s shaping up to be a very interesting 2020 indeed. With so many all-star Democrats in this mix, it’s hard to imagine we won’t come out of this with an interesting campaign season — beginning approximately now, with Warren’s semi-official entry into the arena and owning the airwaves as Trump comes unhinged at “Pocahontas.”

She dressed him down easily, gracefully, and quickly — before moving on into substantive economic issues most Americans are going to want to hear a lot more about. Trump cannot speak this way about the economy, which means his ruse on the Hillbilly Elegies of the world is about to come to an abrupt end, with many of their rude awakening.

For some it will never dawn on them that the man of the golden toilets (and golden showers!) who inherited hundreds of millions of dollars from his New York real estate mogul father before bankrupting himself 4 times in the casino business, in point of fact can in no way understand their experience living in a motor home or ramshackle apartment complex in some run-down suburb in the rust belt. But many may finally see that he’s just been pretending, like all the other rich people who still rule their damn lives despite all the promises to “drain the swamp” of corruption.

Let’s hope.

Here’s to 2020! 🥂

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We have endured much together these past 2-3 years, Team America. Thankfully our civil society is incredibly robust — and time is accelerating demographic gains in an inexorably democratic direction. As Boomers give way to Millennials — slated to happen as early as this year — we are experiencing a seismic shift in the national consciousness.

Look out, Boomers!

Our values as a nation-state have always been evolving as the political consciousness and cultural landscapes shift, but in recent political times the changes have been radical, seemingly sudden, and jarring in a way that collective memory does not easily recall. I believe we are witnessing the swan song of a generation — the largest post-WWII generation dominant demo for decades, now facing only the long decline.

Much is said of the Hillbilly Elegies of our country, but to be fair these elders are legitimately terrified: of the U.S. they see around them today — bearing little resemblance to the nation of their boomingly patriarchal childhoods; of the world outside our borders and the immigrants (theoretically; allegedly) streaming into them illegally; of long disused portions of America drying up and economically (and in some cases literally) tumbleweeding away; of their own impending mortality.

We go high

Michelle Obama was right. Is right. We should make ourselves aware of the kinds of games the other side is willing to employ, but endeavor not to play them ourselves as much as we can. But beyond a moral reason to love thy neighbor, there’s the practical matter that we may find common cause in surprising territories. Non-wealthy elder whites and young Millennials who struggled through the 2008 housing and banking crash both have reason to want a robust safety net, for example. This is the essence of democratic politics done well: coalition-building — not among special interests, but among elected leaders representing their constituents in good faith.

The arc of justice

…goes at its own pace, or something like that. Fascism has a creep (or at the moment, more of an open stride), and justice has a methodical process of evidence-gathering and weighing; we can have some solid faith in the latter to do its work. Regardless of the levels of bitter partisanship in the air, we have an enormous cadre of professional civil servants who do their often thankless jobs tirelessly for years and decades out of the limelight, for sub-private sector pay and little recognition. This cohort works tirelessly for us now, investigating the many tentacles of the Trump corruption operation stretching back years and decades into American life and foreign investment.

Mr Mueller, do your worst. By which I mean your best. We understand each other, I think. 👍🏽⚖️

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Peter Thiel at Isengaard looking into the Palantir

Peter Thiel and Palmer Luckey are a particularly toxic breed of billionaire welfare queen, who outwardly revile government with every chance they get while having both sucked at its teat to make their fortunes, and currently making a luxe living on taxpayer largesse.

Thiel’s Paypal and Facebook-induced riches rode the coattails of the DARPA-created internet, while Luckey had his exit to internet giant Facebook. Now Thiel helms creepy-AF data mining company Palantir, whose tentacles are wrapped all the way around the intelligence community’s various agencies, while Luckey’s Thiel-funded startup Anduril is bidding for lucrative defense contracts to build Trump’s border wall. It’s the stuff of full-on right-wing neocon wet dreams for both men.

They follow in a long line of right-wing denialism in which Austrian School econ acolytes (and trickle down aficionados) have claimed to be self-made men while reaping untold rewards from lucrative military contracts and other sources of government funding or R&D windfall. Barry Goldwater once famously invoked the mythology of the independent cowboy to describe his successful rise (as would union man Ronald Reagan years later) — when in reality he inherited the family department store business that itself became viable only due to the public money pouring in to nearby military installations springing up in Arizona since as far back as the Civil War.

Even without the American government as their businesses’ largest client, the Libertarian ideal of disproportionately enjoying the fruits of public goods while viciously fighting against the taxation required to pay for them puts the lie to these mens’ claims of Ayn Randian moral supremacy. The ritual flogging of so-called “Great Man Theory” animates all sorts of dangerous social projects such as the world’s richest man purchasing the de facto town square and turning it into a right-wing plaything.

If we’re lucky, Luckey will create some sort of VR seasteading community that sucks the Silicon Valley Supremacists right in and traps them in a sort of Libertarian Matrix forever.

More on Peter Thiel and his right-wing political network:

  • Buddies with right-wing Silicon Valley venture capitalist David Sacks
  • Member of the PayPal Mafia
  • Funded successful Ohio Senator JD Vance‘s campaign
  • Funded loser Blake Masters’ Senatorial campaign in Arizona in 2022
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oligarchs in the 19th century

Some people like to argue that more economic inequality is a good thing, because it is a “natural” byproduct of capitalism in a world of “makers and takers,” “winners and losers,” “wolves and sheep,” [insert your favorite Manichaean metaphor here]. However, too much inequality is deleterious for both economics and politics — for with oligarchy comes the creep of fascism.

Those who amass exorbitant wealth often increasingly use a portion of their gains to capture politics. While the mythological premise of trickle-down economics is that we must not have progressive taxation, because giving more money to the already wealthy is the only way to spur economic investment and innovation and create jobs — in actual fact the majority of tax cut windfalls go to stock buybacks, offshore tax havens, regulatory capture, political lobbying, and campaign donations in the form of dark money (and regular money). All this is a runaway amplifying feedback loop that tilts the playing field further away from equal opportunity, social mobility, and democratic process — the original American Dream.

In the oligarchy, your vote doesn’t matter

Wealthy elites seek to preserve the power structures that have benefitted them, and keep them (and their descendants) in the ruling class. It is a slow recreation of the aristocratic societies of old Europe that we fought a bloody war of independence to separate ourselves from. Yet the erosion of civil values, public engagement, and collective will — largely as fomented by the conservative elite over the past 50 years in America — and the ascendancy of the myth of “rugged individualism” have conspired to create a perilous condition in which corruption operates so openly in today’s White House [2018] and Wall Street that democracy itself is in great danger. The creep of fascism is felt in the fell winds that blow.

Moreover, we have learned these lessons once, not quite a century ago, yet have forgotten them:

“Where there is a crisis, the ruling classes take refuge in fascism as a safeguard against the revolution of the proletariat… The bourgeoisie rules through demagoguery, which in practice means that prominent positions are filled by irresponsible people who commit follies in moments of decision.”

— Czeslaw Milosz, The Captive Mind
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Dictatorships generally do not foster, or even tolerate, the kind of creative disruption of the status quo necessary to the existence of a dynamic free market. Plus, the economy of the Russian state can best be described as a mafia state, or kleptocracy. Thus Vladimir Putin needs to find other ways to shore up both the national finances and the support of his cronies (much less so, of his people, who are primarily afterthoughts in the Russian power structure).

After the fall of the Soviet Union, the rapid shift to capitalism was done with little oversight and many hands in the cookie jar. The Russian land’s rich stores of minerals, oil and gas, heavy metals, and other natural resources were rapidly privatized and newly-minted oligarchs flexed wealth and power in a way never before dreamed of in the former USSR.

The combination of powerful new gatekeepers who locked up the Russian economy early via capital flight and never let it go overshadowed the capitalistic transition and, in a very real way, hijacked it before it ever really got underway. The result is, some 30 years on, an unpopular creaking kleptocratic regime reviled around the world for its stubborn aggression, subversion of democratic processes around the world particularly in Europe and the United States, support for organized crime, and significant financial crimes on the part of the state itself.

Putin’s autocratic rule from dull to terrifyingly devious has a chilling effect on hope, self-determination, self-governance, and ultimately — on happiness, freedom, and creativity. Totalitarianism is capable of exerting control, but always fails to inspire anything except for eventual revolution against the oppressors.

Here is a granular look at major indicators of the economy of the Russian Federation.

OECD Country Dashboard: Russian economy

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There is no point belaboring a “stop the identity politics!” argument because there is simply no way to excise the political clash of factions from the identities of those factions. There would be no point in clashing if there were no identities.

There is no polity without identity. The root of the word itself in ancient Greek referred to the relationship between a citizen and the state, and the rights one has in relation to that state. Whereas individual communities have historically had rights infringed — often precisely because of their identities — it is of course a logical imperative to defend one’s rights under the rule of law. You use whatever tactics are available to you and that your ethics comport with to get your rights. All factions would do the same.

Some might say the predominant historical thread since the founding of this nation is the gradual parity-seeking of the many groups that have migrated here over the past 241 years (and much longer still, before that). Most of them have had a long, hard road; many of them still do; and still new groups are becoming the focus of persecution in America as time goes on.

Economics is also identity

How does one even have a political position without an identity? I often hear “economics” presented as the “alternative” to discussing identity, as if one’s economics can be separable from one’s identity; as if economics is separable from history (or as Jefferson called it, the “dead hand of the past“); as if economics is separable from one’s nationality; as if one’s choices in life have no relation to one’s station, or aspiration. 

James Madison — the primary architect of the Constitution and the Bill of Rights — himself believed the unequal distribution of property was itself the most common cause of factionalism. There aren’t a lot of rich socialists. There aren’t a lot of poor Libertarians. So it goes.
The question isn’t whether or not we talk about identity — the political question is “whose identity(ies) do we talk about?” Who gets resources, accolades, airtime, contracts, lucrative careers, investment funds, bailout funds, bail funds, etc. etc. Who gets rights, and who doesn’t.

There are mathematically-speaking two predominant positions one can take on this question:

  1. we all have equal rights
  2. some groups should have more rights than others

The former position is the classic view of liberal political philosophy (not to be confused with liberal economic policy, with which it is much conflated to all our detriment). The latter position is a belief in supremacy. Typically, this belief is accompanied by the belief that one’s own group is, of course, the dominant group and that other groups are the inferior groups that ought to be generally submissive to the in-group. It is rooted in collective narcissism and, throughout history, has led to ill ends from abuse to genocide and everything in between.

Unsurprisingly to game theory or statistics, each faction tends to have such believers amidst its distribution of policy positions and political leanings. Some are more militant than others (quite literally). But clearly the nation’s founders in any of even the most skeptical reads believed in the former, however, and intended it to be the law of the land for their fledgling republic — as we know from the driving words of the Declaration of Independence: 

Whether we can live up to it is the question still, as it was when it began. In our time the “question” appears to loom large once again — a time when it is convenient for the powerful and wealthy to avoid even sharper scrutiny from a public set against itself like dogs trained for a fight. We all must have an answer to the question: equality or supremacy?

Your answer becomes part of your identity and thus, your politics.

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But we will grow from it, and they will not — over the long run, at least.

Things we need to improve upon and/or rebuild:

  • media literacy
  • civic literacy
  • financial literacy
  • data literacy
  • tech literacy — especially security and privacy
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Much has been said regarding the so-called laziness of the poor. Hands have been wrung, glasses have been drained, Davos hotel rooms have been trashed year after year in elite consternation over The Perennially Perplexing Plight of the Poor.

Meanwhile in the American political landscape, the answer is already clear:

THEY’RE NOT WORKING HARD ENOUGH!!!!

But perhaps there’s some confusion over what is meant by the term “hard work” — certainly it’s ambiguous, and no one takes a pause in the middle of a vigorous, breathy debate to define their terms, curiously. So, for the barely literate cretins out there who can barely manage to hold down a job much less participate in the ever-prosperous U.S. economy — a visual guide:

Working hard vs. hardly working: An Illustrated Guide to Hard Work

Working hard

(direct link: https://tpc.quip.com/00POAlXJ6I8Y)

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The creator of the also excellent Century of the Self film series released his latest film in October, 2016. Dubbed HyperNormalisation, it offers both a history lesson of the complicated relationship between the West, the Middle East, and Russia, as well as an unflinching look at the roles played by technology, surveillance, and the media on our modern condition of general confusion, destabilization, and surrealism.

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Regardless of whether or not you agree that slashing spending, fiscal austerity, balanced budgets, and a low federal deficit are good ideas, the fact remains that the Republican Party does not generally live up to its aims of expense reduction and small government.

As hard as it is to believe, there are still some people who think that Reagan cut the size of government, although Reagan was a big spender and laid the groundwork for the immense national debt we live with today.

(even the Austrian School agrees) 

Note: Full historical budget tables, FY 2015

Then there was Ol’ Dubya with his two disgraceful wars, TARP bailout, auto bailouts, fiscal stimulus, and tax cuts. Not to mention yanking the election out from under Al Gore’s popular win via a leg up from Florida governor brother Jeb.

Turns out, not even gridlock is a decent strategy for preventing escalating expenditures, under the theory that not getting anything done would prevent the government from growing. Apparently not:

“Gridlock” in DC Does Little to Stymie Government Spending

Total gridlock is the worst outcome, where impact to the budget is concerned. Total Democratic control of the White House and Congress is the most fiscally responsible since the presidency of Richard Nixon.
So the idea of Republican leanness is a fallacy whether you believe that’s a worthy goal or not — and there’s a lot of evidence to suggest the tide is turning toward a wider appreciation of John Maynard Keynes’ approach to sensible fiscal spending when there is unemployment (puts idle resources to work and reduces government welfare expense; gives people a sense of purpose; builds community), if it is accomplished by debt financing (i.e., issuing Treasury Bonds — allowing individuals, pension funds, and so on to invest in the United States as sort of national asset class) and is used to build goods and structures that benefit the public at large: infrastructure, research and development, public resources, public health services, job training, paid volunteer work, parks and public spaces, etc.

Keynesian and Classical theory have oft been at odds, but are better understood now as complements: in a healthy, roaring economy, government should take its boots off the throttle and avoid tipping over into the kind of speculatory gamesmanship that got us into hot water in 2007-8. But in a depression or recession, or when the economy is recovering sluggishly, it should be a goto solution to start thinking about where to apply government funds (i.e. our money!) to things that need doing anyway; services that invest in our economy’s greatest resource: its citizens; programs that position us for the future by having the luxury to think ahead boldly.

NYTimes: Real income gains are brief and hard to find

Although the economy has recovered nicely for some — especially those in higher tax brackets — it has clearly left a number of Americans behind. It’s only added to a trend that had already started in the 70s, when inequality began widening in the U.S. The populist white nationalist ire unleashed in the 2016 presidential election was something perhaps few saw coming, even though in hindsight the far right has been whipping their base into a frenzy for years — arguably since Reagan, if not with Nixon. That means there’s still a healthy place for government spending, especially in areas we already know we’re in sore need of a boost: roads and bridges, a public health care option, basic research, advanced manufacturing, the pivot to a renewable energy economy, to name a few.
Luckily, that’s what Hillary Clinton wants to do:

  • Use the revenue from closing corporate loopholes and cracking down on tax inversions to invest in small business, long-term growth, R&D, advanced manufacturing, and job training
  • Manufacturing Renaissance Tax Credit: to help revitalize communities hit hardest by the collapse of manufacturing
  • Paid family and medical leave in the workplace
  • Fundamentally reform veterans’ health care and build a 21st-century Department of Veterans Affairs to deliver world-class medical care
  • Close oil and gas loopholes, using the proceeds to pay for the transition to a renewable energy economy
  • Close loopholes and raise tax brackets for the very wealthy, using the funds to invest in youth services and infrastructure
  • Modernize America’s energy infrastructure, address the growing threat of cyberattack, and support clean energy job creation and innovation in the process
  • Create a Clean Power Market across the North American continent
  • Offer competitive grants for phasing out old, polluting energy infrastructure (fuel oil, propane, coal)
  • Reduce air pollution by converting / deploying high-efficiency trucks, buses, ships, and trains in the transportation sector
  • Increase public R&D in renewable natural gas, low-carbon gas, and carbon dioxide sequestration
  • Offer apprenticeship programs in high-skilled jobs in the new energy economy and construction
  • Modernize housing policy, curb skyrockeeting rents in major cities, reforge a path to homeownership for middle America
  • Create a public health care option to incentivize competition in the ACA exchanges
  • Launch a national campaign to modernize and elevate the teaching profession
  • Provide school district funding to develop computer science curriculum
  • New municipal school bonds program to help finance repairs and re-investment in unsafe and unhealthy schools
  • Offer free community college tuition and debt-free public college tuition for families who make up to $125,000/year
  • Allow student loans to be refinanced at current low interest rates; forgive any debt remaining after 20 years
  • 3-year student debt deferment for social entrepreneurs and eligibility for up to $17,500 in debt forgiveness
  • Institute a 3-month moratorium on student loan payments to allow borrowers to consolidate and refinance 
  • Make preschool universal for every 4-year old in America; double investment in Early Head Start
  • Increase child care investment significantly to ensure to family pays more than 10% of their income
  • Double the size of the outdoor economy within 10 years, adding $700 billion in new annual economic activity
  • Create an American Parks Trust Fund to invest in the country’s natural preserves
  • Restore and refresh more than 3000 city parks within 10 years
  • Create a new Water Innovation Lab and a Western Water Partnership to help manage our water challenges over the coming decades
  • Become the world’s clean energy superpower: install more than half a billion solar panels by the end of term 1; generate enough renewable energy to power every home in American within 10 years; create a grant and award-based Clean Energy Challenge with states, cities, and rural communities; Solar X-Prize; tax incentives for renewables; foster energy innovation
  • Help build the new tech economy on Main Street: create a lifelong learning system more geared towards 21st-century jobs; invest in STEM education; invest in science and tech R&D; help ensure benefits are flexible and travel with workers, not their employers; commit to 100% of households with broadband access by 2020; deploying the 5G wireless network; building free wi-fi infrastructure in punlic places and transport hubs; launch digital community projects to improve connectivity more affordably
  • Offer tax credits to companies who hire apprentices
  • Offer tax credits to companies who offer profit sharing programs to their employees
  • Public health initiatives: substance abuse treatment and prevention; expand mental health services; services for autism spectrum disorder; reduction of co-pays and deductibles; reduce the cost of prescription drugs; double funding for community health centers
  • Expand the role of national service, both paid and volunteer, with expansions of programs like the Peace Corps, AmeriCorps, Habitat for Humanity, the Red Cross, and the creation of a National Service Reserve for millions of Americans to contribute volunteer time to local challenges in their own communities

#ImWithHer
by the way: Her plan plans to finance itself by making wealthy individuals and corporations pay their fair share in taxes, and would not appreciably add to the deficit beyond any existing projections from the OMB;but here’s the best explainer I have found about why we should seriously loosen our collars over the national debt. There is no reason to pay it down; and indeed, it would be dangerous and deleterious to even try to, because we’d be starving the economy of the circulation it needs to keep operating and growing:💰money💰.

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