Hows That Spread The Wealth Doing - Road to the Middle Class

Back then Joe Wurzelbacher was worried that Obama’s plan to raise taxes on the wealthy, those making more than $250,000 per year, would hurt folks like him. Wurzelbacher planned to buy a plumbing business and he was afraid that he’d end up in the $250,000 bracket that Obama wanted to penalize. No, no, Candidate Obama replied, Joe would get all kinds of tax breaks and credits for his business.

It’s not that I want to punish your success... I think when you spread the wealth around, it’s good for everybody.

How’s that “spread the wealth” going, Mr. President, in this summer of recovery? Time for the Fed to print a trillion or two in new money?

Spreading the wealth seems like a good idea, rather like Mom spreading frosting on a cake: tasty and yummy. In reality, of course, governments don’t ever spread the wealth. They take money from some people and give it to others. It’s more like leaf-raking. You rake the leaves together, and then you hand them over to your political pals for disbursement among their supporters. It’s a bit like passing a $26 billion bill to save the jobs of well-paid teachers and state government workers.

The Republican retort to “share the wealth” is “grow the economy.” The trouble with that is that, nine times out of ten, it means easy money, targeted tax cuts, easy money, pet projects like green energy, easy money, and “shovel-ready” projects for politically connected government contractors.

Even the conservative favorite, across-the-board tax-rate cuts, has its problems. The Mellon tax cuts of the 1920s ignited a tremendous boom that ended in the sorrows of the Great Depression. The Kennedy tax cuts of the 1960s ignited a tremendous boom that led to the recessions and inflation of the 1970s. The Gingrich capital gains tax cut of 1997 led to the tech bubble bursting in 2000, and the Bush tax cuts of 2001-03 led to the 2008 banking panic.

The problem with each of these tax cuts is that they were combined with easy money. Only the tax-rate cut of St. Ronald in 1981-3 led to a twenty-year boom. Could that boom have been possible without the hard money of Fed Chairman Paul Volcker to stiffen the Reagan tax cut?

Don’t look for our political leaders and their bribed apologists in the academy to figure that out any time soon.

So my recommendation for economic policy is “do nothing.” You could call it Douglass-onomics, after African American Frederick Douglass and his memorable cry: “Do nothing with us!” The only thing that government has succeeded in doing with just about anything, from the Negro to the economy, is messing things up.

As I work out the argument of my American Manifesto: Life After Liberalism, I find myself comparing the liberal culture of compulsion against the conservative culture of friendship. You know what I am talking about. Liberals give us an America of a million laws, compulsion and mandates, comprehensive and mandatory programs everywhere you turn, with special exemptions only for liberals and their darlings.

Conservatism is different. Against liberal compulsion conservatives offer cooperation. Against liberal suspicion of corporations conservatives offer trust but verify. Instead of liberal rigidity conservatives offer friendly compromise. In place of liberal government programs conservatives offer mutual aid, prudence, and charity.

To build a better America upon a foundation of friendship we must relax the close-coupled economy that drives everything off the government’s central bank debt machine. Years ago, after the Three Mile Island disaster, liberal Charles Perrow in Normal Accidents showed that complex close-coupled systems like nuclear plants were accidents waiting to happen. When something went wrong at Three Mile Island the operators just couldn’t grasp what was going on inside the reactor and its coolant loops. Too many things were happening too fast. Yet liberals are quite happy to run the financial system flat out to service their clients with affordable housing. In the economy, high debt-to-equity ratios are the equivalent of close-coupled control systems in nuclear plants, and liberals swear on their Keynesian operations manuals that nothing can go wrong with borrow and spend.

In the difficult years ahead we conservatives will be called to clean up the mess and the heartbreak that a century of liberalism has created. It will be a daunting challenge, but we can do better than the dead hand of the culture of compulsion and its “spread the wealth” poison. We can replace it with a culture of friendship and a government that serves the people instead of bullying it.

Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

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Action

The incentive that impels a man to act is always some uneasiness... But to make a man act [he must have] the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness.
Ludwig von Mises, Human Action

Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.” —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison

China and Christianity

At first, we thought [the power of the West] was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity.
David Aikman, Jesus in Beijing

Churches

[In the] higher Christian churches� they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm

Civil Society

“Civil Society”—a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churches—builds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust

Class War

In England there were always two sharply opposed middle classes, the academic middle class and the commercial middle class. In the nineteenth century, the academic middle class won the battle for power and status... Then came the triumph of Margaret Thatcher... The academics lost their power and prestige and... have been gloomy ever since.
Freeman Dyson, “The Scientist as Rebel”

Conservatism

Conservatism is the philosophy of society. Its ethic is fraternity and its characteristic is authority — the non-coercive social persuasion which operates in a family or a community. It says ‘we should...’.
Danny Kruger, On Fraternity

Conservatism's Holy Grail

What distinguishes true Conservatism from the rest, and from the Blair project, is the belief in more personal freedom and more market freedom, along with less state intervention... The true Third Way is the Holy Grail of Tory politics today - compassion and community without compulsion.
Minette Marrin, The Daily Telegraph

Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh

Democratic Capitalism

I mean three systems in one: a predominantly market economy; a polity respectful of the rights of the individual to life, liberty, and the pursuit of happiness; and a system of cultural institutions moved by ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is plural and, in the largest sense, liberal.
Michael Novak, The Spirit of Democratic Capitalism

Drang nach Osten

There was nothing new about the Frankish drive to the east... [let] us recall that the continuance of their rule depended upon regular, successful, predatory warfare.
Richard Fletcher, The Barbarian Conversion

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E. G. West, Education and the State

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