Easy Answers To Silly Questions
Since we’re on the subject, this is from Marginal Revolution, the libertarianoid econ blog:
The Demand Side Politics of Supply-Side Economics
Alex TabarrokFollowing Jon Chait, Matt Yglesias writes:
…the central element of the Republican Party’s tax policy — lower taxes rates will lead to higher tax revenues — is a discredited crackpot notion.
Fine, but a more fruitful question which I’d like to see Yglesias, Chait and others grapple with is why discredited, crackpot ideas can become central elements of a winning political party in the world’s most important democracy. Explain the demand side and give us your policy prescriptions.
Ah, the old meta-question thing. Well, Alex, the demand side of supply-side, as it were, is analogous to that of pyramid schemes, baldness cures, and penis-enlargement devices — i.e., it tells people something that they want to hear, and relies on the human quality of fecklessness. Specifically, it tells people that they shouldn’t have to pay taxes, because money will magically appear in government coffers whenever taxes are lowered.
Because the funny thing about the Laffer Curve, as you know, Alex, is that we’re always, somehow, supposed to be on the right (i.e., revenue-draining) side of the curve. Always-always-always. Except every time, beginning with Kemp-Roth in 1981, that taxes have been cut to catch the extra Laffer money, revenues have somehow gone down and everyone has been sad and nobody’s penis has gotten any bigger. This is why guys like Yglesias are correct in saying that supply-side is a ‘discredited crackpot notion.’ Because there is no magical cure for taxation.
The first and most immediate policy prescription is that economists, Tabarrok included, must stop arguing for the utility of vacuum-pump penis-enlargement systems. Really. I mean, this doesn’t seem so difficult to fathom. Just stop. Get a quitting partner, mark your wall calendar, schedule rewards for yourself. The pump doesn’t work.
Although perhaps a more fruitful question would be how discredited crackpot theories function in the discursive razzmatazz of the post-ampiquitous frammastan? That is, in case someone gets too close to the main point?
I’m asking; I don’t know how this particular game is laid out.
[Hanx! Jillian]
Update: Prof. Tabarrok replies, via comments:
You missed the point entirely. I accept that the idea that tax cuts always lead to revenue increases is crackpot. No economist of any stature has ever said or taught differently. It is also obvious that crackpot notions appeal to human fecklessness, stupidity, and the will to believe no matter what the facts.
The point that you missed and thus have failed to address is that crackpot ideas succeed in politics big time. This is one reason that I want to put limits on politics. I don’t want to be ruled by fecklessness, stupidity and wish-fulfillment fantasies. How about you?
What happens is that there are always economists willing to testify that in the present case, lowering tax rates will boost revenue. Not that it always does, not that such effects are universal, just that it will do so right at this time, each new time over and over again. Whenever a tax-cutting scheme comes onto the boards, a chorus of huzzahs goes roaring out.
I’m aware that some of these economists are lying. Starve-the-beast is a Trojan horse theory, such that no sensible American constituency would support a plan to willfully bankrupt the Federal government in order to end Social Security, Medicare, and other popular entitlements, and to make it impossible for anyone to fund future government programs, ever. That would be, in a word, moronic. The plan must therefore be concealed under various phony cover stories, supply-side among them.
Now, this would seem to make room for an argument that what society needs is to get rid of these damned lying economists who are concocting schemes of fiscal sabotage. I’m not going to get into that presently. Instead, here’s Xenos, from comments:
This is one reason that I want to put limits on politics.
Excellent idea. Let us start with a constitutional amendment to the effect that ‘persons’ is defined to mean real, living, flesh and blood people.
And let’s make the rule against perpetuities apply to corporations as well as trusts and other entities. After 100 years, wind it up, buddy, take your profits and pay your taxes.
And let’s put someone other than a corporate hack in charge of the labor department. Any good ideas on how to limit the Republicans from corrupting these regulatory bodies? I can’t think of one either, so let’s just cut the crap and outlaw the GOP, already.
And make the Fed truly independent, somehow, so some subservient crony like Greenspan can be kept out of the position, or have a short term limit, or let it rotate between the various members.
And let’s certainly pass a federal law obliging banks to abide by each states’ usury laws, even if they want to declare the credit card contract is ruled by South Dakota law.
Politics is the problem, sure. But I don’t think my solutions are what you have in mind, Alex.
Apropos libertarian economics, one starts to get the idea after awhile that principles and outcomes have a certain fluidity of precedence. That is, ‘putting limits on politics’ may be an ideal, but it seems in practice to yield to certain instrumental notions toward maintaining current legal guarantees on private power, no matter how special-case or artificial, while removing legal and governmental checks against private power. I.e., the real idea seems to be ‘let’s remove the political instruments that make economic reform possible,’ which would seem to be another Trojan horse, if you know what I’m saying.
That’s how it looks at this particular wahoo-zany comedy blog, in any case.
Garry Wills on how the crackpots won.
Ummm. MY penis got bigger…
mikey
The problem is that it’s still the wrong question.
The question is not “Why would anyone who is supposed to have the government’s best interests at heart think that reducing tax revenue can increase available government funds?”
The question is “Whose interests do people who promote a reduction of tax revenue actually have at heart?“
Yeah, that’s what’s really at the bottom of it all.
The other question is “How do these people keep winning elections?”
Popular /= correct.
When tax revenue is not comensurate with government spending, the government funds the deficit with “financial instruments” like bonds, essentially borrowing the funds to make up the difference.
So here’s my question. Has the fact that the American government has borrowed 3 or 4 trillion dollars over the last, what, forty years actually harmed anyone with wealth or power yet? Even a tiny bit? As near as I can tell, those chickens have yet to come home to roost.
When deficit spending comes with a bit of a sting, that’s when you’ll see them change their toon….
mikey
See, this is why I love youse guys. You always know how to ask the right questions. The one that get you to the right answer.
Just keep remembering to pay no attention to the man behind the curtain, and everything will be fine! (Oddly enough, I’ve only just encountered the Populist theory of the Wizard of Oz. I’m reaching the point in my life life where I am daily embarrassed by my own profound ignorance.)
And adb just pointed out that riverbend over at Baghdad Burning has posted again. I just read it and bawled my eyes out for a good ten minutes. As someone who has been homeless more than once in my life, reading her words shook me in a way I’m not sure most people will get.
The other reason I love you guys is that I know when YOU read it, you’ll get it – even if you can’t relate to it in the intimate way that I can.
Sadly, by the time our owners are feeling a bit of a sting we’ll be getting crushed.
And of course when that hammer drops it’ll be the fault of the American worker for our unwise spending and unclean habits and lack of self-reliance and blah fucking blah.
a more fruitful question which I’d like to see Yglesias, Chait and others grapple with is why discredited, crackpot ideas can become central elements of a winning political party
Another might be why ideas like integration can cause a political party to lose, at least among certain elements, long after having been proven sound. Maybe the answer to both of our fruity questions is that some folks vote for reasons other than logic and that whether a party wins or not says fuck all about the validity of its ideas.
Or maybe what really wins elections is pandering to people’s bigotry, combined with an educational system that doesn’t teach bullshit detection and a mass media that treats bullshit with respect.
It’s easy to talk shit about how stupid Americans are, but Americans are not born stupid…
So why don’t Democrats start promising that, if elected, they will give you bigger penises, by way of rolling back the tax breaks on the ultra-wealthy?
Then they could produce charts showing that as more and more of the national income has gone to the uppermost 1%, the uppermost 0.1%, the uppermost 0.001% of wealth-holders, corresponding middle- and working-class penis sizes fail to achieve the satisfactory bigness that new Herbal Enhance Z Now With Tax Cut Rollbacks could have delivered.
As usual, women will simply be left out of the debate, whether they be interested in penises or not.
Or maybe what really wins elections is pandering to people’s bigotry
Bigotry, fear, ignorance, tribalism, nationalism, exceptionalism.
Along with a healthy dose of impending scarcity, and a way of framing our society as a zero-sum calculation, where if you give something to someone else, you will lose something of a corresponding value.
The problem is it started out as cynical politicking, but now it’s become ingrained in our basic identities to the point where you’re not allowed to question any of it…
mikey
The authoritarian platform is lousy with such penis pumps and self-contradictory snake oil. Really, its all they’ve got, because their actual goals appeal to approximately 0.00001% of the electorate.
“We can cut taxes to increase revenue!!!”
“Fewer checks on coercive power increases liberty!!!”
“The balance of power between a worker and the company that employs her is totally equal!!!”
“Focusing solely on your self-interest is totally the path to a better community!!!”
In the end, conservatives’ entire electoral strategy boils down to declaring the basest aspect of human nature (greed, bigotry, hatred, fear of what’s new or different) to be the greatest virtues. It works because, hey, who wouldn’t like to believe that being a selfish fucker is the path to True Righteousness?
Feh. As ususal, everyone makes the same points (and better) while I’m still typing.
You missed the point entirely. I accept that the idea that tax cuts always lead to revenue increases is crackpot. No economist of any stature has ever said or taught differently. It is also obvious that crackpot notions appeal to human fecklessness, stupidity, and the will to believe no matter what the facts.
The point that you missed and thus have failed to address is that crackpot ideas succeed in politics big time. This is one reason that I want to put limits on politics. I don’t want to be ruled by fecklessness, stupidity and wish-fulfillment fantasies. How about you?
Well, let’s also not forget that “supply side economics” was introduced to the public most recently under Ronald Reagan, who was protecting a populace terrified of the imminent invasion of Harlingen, Texas by Nicaraguan Sandinista invaders and all those darkies in Mozambique and Angola who were resisting Dick Cheney’s great friends the South African Nationalists, who were themselves fighting that awful Communist terrorist Nelson Mandela.
Also, Reagan (may his name be praised) and his minions suggested that tax cuts would also help them stop giving all those Cadillacs to them fat lazy black welfare queens, which is why he gave that stirring “states’ rights” speech to open his campaign in Philadelphia, Mississippi, a state whose white residents somehow seemed to pine for a more state-righty past.
I see no reason you imply that there is even the slightest degree of unreasonableness in our politics.
Elections are all marketing, Alex. Give me a big enough marketing budget and I can get Daffy Duck elected President.
Maybe Donald Duck. Daffy is a bit… well, dusky, don’t you think?
Because we all want a pony.
I want a pony, don’t you. Let’s support the pony party.
Another edition of . . .
War is peace, freedom is…
hell, Orwell was an optimist.
Taborcrock is being pretty slippery here. There’s a post Brad did on some glibertarian nutjob who hated democracy that anticipates the “point” Gavin’s allegedly missed.
Beware the glibertarian who wants to limit the franchise. He says he’s doing it to prevent crackpot ideas from being effected by the government; actually he just want to limit the good aspects of populism, by which I mean, the righteous conviction the classic populists had that the rich and powerful were up to no good, and should be stoutly leashed by the government. Put another way, it’s easier to starve the beast if people can’t do anything about it with their votes.
(As it is, and as we have seen, the wingnuts have done all right taking the long way around; instead of limiting the franchise, they’ve simply deceived the populace with propaganda and a shitty education system. Which just goes to show that there’s more than one way for the elite to skin a democratic cat.)
Let me amend that … I can get Daffy Duck elected provided Bob Shrum is not involved.
Or maybe what really wins elections is pandering to people’s bigotry
Bigotry, fear, ignorance, tribalism, nationalism, exceptionalism.
And MONEY. Course zsa just beat me to this point.
The point that you missed and thus have failed to address is that crackpot ideas succeed in politics big time.
Those crackpot ideas happen to benefit the people with the most money. And our press corpse is broken, not because they’re all millionaires and celebrities, as Bob Somerby suggests, but because the few that own the media now are all billionaires. There in lies the problem. The feebleness of the Democratic party I believe is a symptom of this problem.
zsa,
That’s despicable — he said spluttering.
Get rid of taxes and put limits on politics? I’m your huckleberry.
Hell, don’t we ALL believe that the world would be a better place, if only we were allowed to rid ourselves of that meddlesome priest and rule the world singlehandedly?
The point is that we also ALL know that just doesn’t work. The question isn’t how to get rid of democracy; it’s how to make democracy work.
I know what I think is necessary, and I’m doing my part. It’s all I can do.
This is one reason that I want to put limits on politics.
Excellent idea. Let us start with a constitutional amendment to the effect that ‘persons’ is defined to mean real, living, flesh and blood people.
And let’s make the rule against perpetuities apply to corporations as well as trusts and other entities. After 100 years, wind it up, buddy, take your profits and pay your taxes.
And let’s put someone other than a corporate hack in charge of the labor department. Any good ideas on how to limit the Republicans from corrupting these regulatory bodies? I can’t think of one either, so let’s just cut the crap and outlaw the GOP, already.
And make the Fed truly independent, somehow, so some subservient crony like Greenspan can be kep out of the position, or have a short, term limit, or let it rotate between the various members.
And let’s certainly pass a federal law obliging banks to abide by each states’ usury laws, even if they want to declare the credit card contract is ruled by South Dakotah law.
Politics is the problem, sure. But I don’t think my solutions are what you have in mind, Alex.
Well, Jillian, the one good thing about priests is they keep the option of starting cults open for the rest of us.
I always think about that in the beginning of the school year, when the East Village is suddenly flooded with wide eyed NYU frosh practically begging you to take their parents’ money…..
Eliminate non worker-owners. Period. You want to “own” a business, in whole or in part? Work for it. And not “eat lunch at the right restaurants with the right people” work, either. Work work. The kind where you break a sweat and come home fatigued.
People who have actually worked in an industry will be somewhat less likely to support weakening the legislation designed to keep them from being accidentally dismembered at work. And if there are no non worker-owners, there won’t be the vast pool of stock wealthy people to donate their ill gotten gains to the Republican party to prop it up.
central elements of a winning political party in the world’s most important democracy.
They were winning at the beginning of the con; they’re certainly losing now that everyone’s caught on.
BTW, what ever happened to Bradrocket? Do we have to wait for the Red Sox to lose a game or two to get him back here? He must be out getting pissed every night…
Alas, poor Baltimore, poor Baltimorons. Oh, the humanity.
Well, Jillian, the one good thing about priests is they keep the option of starting cults open for the rest of us.
Diffbrad. Let’s work this. I’m an old fat longhair guy with a kind of a rumpled “worldly” sensibility. Or maybe “world-weary”. Even.
I could be our “messiah”. I wouldn’t say a lot, just your occasional non-sequiter that would sound “deep” and “primal” to our young acolytes. You’d be our high priest, “interpreting” my words for the cult to absorb and live out. We’d get high, get laid, get laid again, and hold some rituals that we’d laugh our asses off developing. Eventually NBC would do a report on all the good works we’re doing in NY. They somebody would ask about where all the cash went and we’d hightail it for some Caribbean paradise. Five years, in and out.
Set for life.
Whaddaya say?
mikey
Almost a perfect plan, mikey, but I think there’s a few places it can be improved.
First off, you’ll need to take a slight hit for the team and convince some randy widow with a brownstone in the village she should be one of your eternal brides, so we have a base of operations. Ideally, she’ll also have a place in Westchester. (No Hamptons.)
Once there’s enough brides for you n me, enough money, and some eunuchs to do all the work, then we liquidate everything and buy a massive private island somewhere off the coast of Australia. (Never gonna be a war, not likely to be a target for refugees.) Make sure a large portion of it is elevated for the coming decades.
And we bring live samples of every narcotic and hallucinogenic plant known, and invest in the highest tech greenhouse ever built.
The point that you missed and thus have failed to address is that crackpot ideas succeed in politics big time. This is one reason that I want to put limits on politics…
And *I* want to put limits on weight gain, therefore I am going to outlaw calories. Because if it weren’t for calories, nobody would gain weight, right?
“Politics” is how people in groups larger than around five interact with other people. Claiming that you can take “politics” out of the equation is either dishonest or silly, and I doubt you want to be called silly.
Actually, isn’t that the definition of sociology?
</pedantic>
I’ve always wanted someone to propose taking the Laffer Curve to its logical conclusion. Namely, since cutting taxes increases revenue, the government should implement a negative tax rate by giving money to everyone and watch its revenue increase to infinity.
By the way, Xenos’ comments are brilliant. It’s time to start opening, or in some cases reopening, a lot of debates in this country, including whether corporations should be legally treated as people (if the answer is yes, it should be yes with substantially more limits than exist now), and whether we should directly elect the president (yes) and elect at least the head, if not the board members, of the Federal Reserve (also yes).
I thought what won elections was some kind of chicanery, voting machine hackery, or disenfranchisement of voting blocks of citizens in tightly competitive districts. This is what swings a possibly blue state to red in our electoral vote system. If our elective system were purely a one man one vote scenario, then perhaps this “winning” economic position wouldn’t be getting the credit it’s being given. There’s more to electioneering that party platforms.
Just sayin.
than party platforms. (note to self: read the effing preview)
Actually, isn’t that the definition of sociology?
Politics is what happens, sociology describes/documents it.
And here I was thinking I might use Yahoo! Pipes to create a feed for the Tabarrok/Cowen site that scraped off the Cowen stuff like I do my boots when I leave the barn. After this, I don’t think I will.
I just don’t get how these people survive to adulthood without getting just a tiny insight into how the world we live in differs from the cardboard cutouts of Ayn Rand’s imagination.
“*Politics* is how people in groups larger than around five interact with other people.”
Actually, isn’t that the definition of sociology?
The mealy-mouthed glibertarians and other sociopaths know better than to run around babbling “Crackpot ideas succeed in sociology, therefore I want to put limits on sociology”. They’ve done a pretty good job of turning the noun “politics” into an obscenity, and now they’re trying to dress up their favorite schemes for taking power away from other people to enhance their own lives as “limiting politics”.
It’s the same scam, on a larger scale, as the people who say they want to outlaw “pornography” because pornographers hurt women and violate little children, and if you don’t think filth like The Vagina Monologues and anything by Oscar Wilde should be banned, you’re no better than the other baby-diddlers, are you. Kiddy porn is disgusting and political measures can be just as vile, but anyone who talks about “banning porn” or “limiting politics” is hiding an agenda that a sensible adult doesn’t want to be associated with.
Jillian, your comments about worker-owned businesses is right on the mark, and reminded me of what happened in Argentina recently (among other instances).
A different brad, the sizeable islands off the coast of Australlia are currently being used to store unwanted refugees (sorry, sorry: asylum-seekers). Except for Tasmania, which is being used by Tasmanians. If you want that, you’ll have to fight them for it, and then you’ll have to come to terms with living on an island shaped like a thatch of pubic hair.
Mind you, Tassie is one of the few islands around Oz that’ll be above sea level in a few years, so it’s got that going for it. But it may soon be inundated by hordes of desperate mainlanders escaping the drought.
And I so hope that the preview is not a fair representation of what will show up on the page, because on checking, I found this as my first sentence:
Jillian, your comments about worker-owned businesses is right on the mark, and reminded me of what happened in pubic hair
Oh, okay, wordpress hates me.
On a lighter note, just in case my post does turn up, how’s this?
Honestly, the things one finds by googling “map of tasmania” + pubic hair…
Apropos of the whole “pony” meme……..perhaps we should refer to the whole idea that reducing taxation a fortiori yields Philly Boy’s negative taxation giving infinite income as “trying to sell everyone a Trojan pony”.
Once again proof that marketing is an attempt to disprove the old saw about how you really can’t fool all of the people all of the time.
Oh, and if you’re intrigued by the notion of corporate personhood and the history therein, the starting point for checking it out is usually Santa Clara County v. Southern Pacific Railroad Company.
The Fourteenth Amendment, from which we derive our right to due process and under which the states (as well as the federal government) are bound to recognize people’s rights, was ratified in 1868. The purpose of the amendment was, in theory, supposed to be to make sure that the defeated Confederate states could be compelled to recognize the rights of their newly freed black citizens. The idea was supposed to be that if, for example, Alabama refused to grant a black man a free and impartial trial by a jury of his peers, he could then (upon conviction) have a clear and easy appellate case.
Of course, if you are surprised by the fact that it didn’t work out that way, I’d like to talk to you about this great bridge in New York that I have for sale….
In the twenty years between the passage of the Fourteenth Amendment and the end of the nineteenth century, about 90% of all cases that invoked the 14th to make it to the Supreme Court involved these newly created “corporate persons” bitching up a storm that some state had denied them their rights under the Constitution. What the African-American citizens got, instead, was not recognition of their rights, but Plessy v. Ferguson.
There’s a whole confluence of historical events that conspired to come together at just the right time to make this possible – the rise of powerful, wealthy corporations caused by the Civil War (the “military-industrial complex” is way, way older than Eisenhower), the federal involvement in the railroads leading to a series of land booms and a lot of federal legal cases over property rights (railroad easements), these legal cases leading to the creation of a new class of super-lawyer – the railroad lawyer, the rise of these railroad lawyers through the judiciary to the Supreme Court, the restructuring of certain state laws that allowed for the creation of trust holding companies, which created new kinds of corporate structures that had never been legally allowed to exist before……it’s really a perfect storm. Perhaps “perfect shistorm” is a better descriptor.
It’s a complicated story, but it’s worth the time to suss out as much on it as you can, because you can’t really grasp the magnitude of our current mess without taking some time to dig into the roots.
And if you find you sort of like the idea about getting rid of non worker-owners, I got some bad news for you, brother…..you’re about this close to being a socialist.
And if you find you sort of like the idea about getting rid of non worker-owners, I got some bad news for you, brother…..you’re about this close to being a socialist.
Got news for you, Jillian: (1), the Political Compass puts me way, waaaaaaay down in the lower left quadrant, making me a loony libertarian lefty, and (2), I’m not a brother.
In fact, here‘s what Wikipedia has to say about me in a previous incarnation. Myself and the slave are both, of course, female.
I got some bad news for you, brother…..you’re about this close to being a socialist.
Hey, I resemble that remark!
I used to be a Sensible Liberal (read: Eisenhower Republican). Bush 41 & 43 have radicalized me. I would love to be a Sensible Liberal again, but first we have a kleptocracy to break. If that means overcompensating to the leftward, so be it.
We can always privatize the oil companies after they have been defanged and set on a course of producing energy from new sources, not just militarizing the oil zero-sum game. These companies owe their legal status to the government, and when they corrupt the government and and promote war, they lose any moral right to exist as independent, privately held entities.
It’s interesting how the brightest people are on the funniest sites, such as our Xeno and Jillian. But I guess that is the converse of how the stupidest people (Little Green Snotballs and the rest of the wanker parade) don’t get humor/irony at all.
Has anyone else noted the confluence of authoritarianism and their need to give themselves manly, ever so studly site names like “powerline”? Can it get any more Freudian than that? Crap, it’s probably already been discussed to death here and I missed it.
Please resume intelligent conversation about changing the legal status of corporations…
I’m sorry, Qetesh – I didn’t mean to imply I thought you were one of those poor, accursed souls with the broken X gene. I was just trying to sound hip and stuff.
Sadly, I am many, many years out of date. Alas, I still even say “groovy” in a non-ironic fashion. And, old as I am, I was still in diapers the last time it was possible to say “groovy” without sounding like a fool.
But I still think most of the folks around here are probably closer to socialists than democrats – they just don’t know it.
same here, mikey.
Jillian, I agree with you on all points. And I too say “groovy”, completely without awareness that I should be ironic about it.
I think the unwillingness to admit to socialism is more of an American thing: here in Oz, we don’t have the same cultural terror of socialism, not having had our bejeezus scared out of us during the Cold War (duck ‘n’ cover, anyone?). Goodness, there’s even a Communist Party here, or at least there was.
And if you look at trusty Wikipedia’s List of Australian political parties, you’ll see that we have a reasonable diversity of parties, including some minorities in parliament. One of our two major parties, Labor, has roots in the trade union movement and is ostensibly social democratic, although they’ve strayed a bit in recent years. Our other major party, currently in government using a coalition with the Country Bumpkins Party, is the Liberal Party, which is probably an equivalent of the Democrats (or was, until John Bastard Howard took the reins).
My favourites, though, are the Greens (we have four Greens senators at the moment), for their politics and their honesty, and the triumvirate of The Sun-Ripened Warm Tomato Party, The Surprise Party, and the Party! Party! Party! Party. Homage to Monty Python and all that.