My politics, in a nutshell

            With the U.S. election only a few days away, I feel a need to start a political conversation here.  As most of you know, I lean in the liberal direction.  I firmly believe in the tragedy of the commons and that society has a duty to protect and aid all its citizens.  Further, when put in context, I think that Obama’s “You didn’t build that” comment wasn’t as ridiculous as many claim.  However, I would hesitate to classify myself as completely liberal.  On some points, I lean in the conservative direction, particularly on the fiscal side.  Thus, I’d like to outline my political leanings in the hopes of starting a conversation.

            Since my conservative leanings are less well known, I’ll start there.  The liberal side of the U.S.A. makes a lot of noise to the effect that we should never cut or otherwise privatize entitlements, such as Medicare or Social Security.  Unfortunately, that’s not realistically possible.  The fact is that entitlement spending is consuming an unrealistically high percentage of the U.S. budget, and the problem is only getting worse.  Will these programs be solvent in five years?  Yes.  In ten years?  Probably.  In fifty years?  Unlikely.  When the shoe falls, it will fall hard.  The best way to reduce the impact is to deal with the problem now, while we still have time to make the change gradually.  By punting, we only make the oncoming pain all the worse.  Thus, I’m in favor of entitlement reform.

            Related to the above post, I do think that the federal budget (and government spending in general) is bloated.  There should be a process or a committee that vets projects to ensure that they are necessary or otherwise useful.  I add a caveat, however, in that my idea of which departments should be trimmed may differ from conservative views.

            Finally, as far as civil liberties are concerned, I am a libertarian.  America’s civil liberties are our most precious resource, and we should preserve them to the greatest extent possible.  Do certain liberties need to be regulated?  Yes: the classic example is screaming “FIRE!” in a crowded theatre.  However, when regulations begin to encroach on a man’s ability to practice his civil liberties (obtaining permits for peaceful protests, for instance, or ignoring due process), I must object to that.

            On to the liberal leanings.  My approach to capitalism can be best described by channeling Winston Churchill: capitalism is the worst form of economy, except for all the others that have been tried.  While capitalism has an amazing ability to reduce costs and prices, it rests on some assumptions that require oversight.  History teaches us that unregulated capitalism is a sure way to channel treasure to the top tier of society and leave little for the bottom, largely because the powerful game the system.  As such, I think that some government intervention in the economy is necessary.

First and foremost, I worry about our environmental impact, and I absolutely believe that this requires federal regulation.  The reasons are as follows:

·      Environmental issues are rarely single-state problems.  Water, air, and animal movement cares nothing about state lines, so if one state has a problem, others are likely to suffer as well.

·      Industry often threatens state governments by saying that if environmental regulations are enacted or enforce, the industry (and the jobs that it generates) will have to leave the state.  Thus, in order to attract industry, states have an incentive to engage in a race to the bottom.

·      Industry is not likely to enact costly environmental protections unless forced to do so.  Ultimately, corporations exist to make a profit, and preventing, containing, or cleaning an environmental problem is likely to hurt that profit.  Most businesses have an incentive to leave environmental issues to the local community.

All this adds up to a classic case of the tragedy of the commons.  The environment is common property of every human being.  It provides resources that we need to survive, and that we cannot manufacture elsewhere.  However, since it is common property, one man’s problem becomes every man’s problem, and every man’s problem is no man’s problem.  Thus, a community body (the government) must regulate the common property in order to ensure that it remains viable for future generations.

            Second, anti-trust and quality controls are essential.  Capitalism operates on the assumption that the highest quality/price ratio will be successful.  However, this assumes that every producer is working in competition and that every consumer has enough options and information to make an educated choice.  Realistically, these consumers are very rare.  There simply isn’t enough time to research every producer, so most consumers make their choices on incomplete information (typically price).  Since looking at a package tells consumers very little about the quality of a product, producers have an incentive to cut costs in ways that are not immediately obvious (lowered wages, cut quality controls, etc).  Further, they may collaborate to set prices artificially high.  All this happened nationwide in the late 1800s, until Teddy Roosevelt declared his “war on trusts.”  Even today, we can see small-scale versions in stores that cater to a captive market (campus bookstore, anyone?).  Thus, some agency is necessary to ensure a certain quality floor, below which industry cannot go.  Further, an agency is necessary to ensure that industry remains competitive, rather than conspiring to raise profits at the expense of consumers.

            Third, I think that a social safety net is essential.  Capitalism creates winners, which is good, but wherever there are winners there are also losers.  Some system needs to give those losers, and their descendents, a second chance.  Thus, I wholeheartedly support quality public education, health care, and unemployment support.  Such aid must come with the requirement that the recipients try to obtain work again, but the opportunity to climb the socioeconomic ladder should always be available.  Education is one way to provide this opportunity; protection from illness is another.

            In addition to the safety net, the powerless in society need protection.  For example, Adam Smith notes that business owners and workers have conflicting incentives.  The workers seek to raise their wages and improve their work environment; the business owner, on the other hand, has every incentive to push the workers harder, depress wages, and neglect the work environment until the point that it impacts production.  Thus, worker’s unions are essential to press the worker’s opinions.  Such a need must be balanced with the need to efficiently produce quality goods, but worker’s rights cannot be neglected.  This same principle can be applied to almost any weaker social class in society, such as an ethnic or religious minority.

            Fourth, I think that the government can and should make technological and scientific investments.  These investments are a huge reason that the U.S. can be the richest country on the planet.  Manufacturing requires transportation infrastructure, paid for by U.S. tax dollars.  Technology relies upon scientific and engineering research that was initially paid for by government grants.  The semiconductors that let me write and you read this article, for instance, were developed using U.S. taxpayer dollars.  That kind of revolutionary technology is rarely privately funded, because the chance of failure is so high and the payoff is so far in the future.  Some incentive or public funds are necessary.

            Finally, I think that Elizabeth Warren and President Obama have a point when they claim that the wealthy have a duty to pay taxes.  As noted above, government investment is a huge reason why America can be as wealthy as it is.  All the wealth that is generated on the assumption of transportation, computers, and security (which is to say, all wealth) bears a direct debt to U.S. taxpayers, and that debt must be paid.  I’m not advocating socialism; the tax rate must allow those who are successful to gain wealth.  However, the successful owe their success in part to the investments made by the people of the United States, and they should acknowledge that.

            I’d like to start a conversation about differing beliefs here.  I don’t claim to know everything about either the economy or the government, so additional input will likely prove enlightening.