So, I’ve been thinking a lot about outlining some of the economic consequences of the ideas that are being floated around during these months leading up to November. It seems to me that the American people are being set up to trade in the good ole free market system for a re-branded form of socialism. Socialism has been shown time and time again to be much, much inferior to free markets, but its allure is appealing to those who haven’t taken the time to examine its true consequences.
The American people are being led to believe that the Government should regulate and control much more than it already does. The pundits tell us that Big Brother is capable of making the best choices for us, that Uncle Sam knows how to allocate our resources and wants more efficiently than we can. Almost every idea that is being trumpeted from the lectern of the major political candidates, whether liberal or conservative, seeks to take the power from the individual and grant it in some degree to the Government. Socialism is on the rise. It helps candidates and parties appear empathetic to the masses. Free Market thinkers are seen to be cruel and uncaring.
The American people need to seriously look at the issues that each candidate supports and examine the consequences that each of those particular actions will have in the future. In the words of Thomas Sowell, we need to think beyond stage one and realize, as William Easterly notes in his Elusive Quest for Growth, that people and markets respond to incentives. Too often we take a myopic look at the issues that we face and we fail to see that Government intervention creates incentives – some positive, some negative – that have repercussions farther and farther into the future. A decision that looks good today can lead to a disastrous outcome tomorrow if the idea is not fully explored and/or understood.
Taxes, as an example, create an incentive and serve as a signal to the free markets. By implementing programs that raise taxes, a signal is sent to the market that is affected and a change begins to occur. Because there is a time factor involved, a tax may create an immediate benefit to a particular market in the short term. In the long term, however, the market will have the opportunity to adjust and the tax may ultimately yield less and provide a much worse outcome than the market would have had before the imposition of the tax. Likewise any intervention yields a result over time that is not seen in the short term.
Politicians generally have not examined the issues clearly or do not want to lay out for the people the true and ultimate consequences of a particular decision to intervene in and/or control the function and outcome of markets. Politicians focus on the next election, which means that the only outcome that the American people will hear about is the immediate outcome that will yield a positive and desired benefit. The politician will not announce the long-term consequences of the decision that is being contemplated. Thus, when the long-term effects ultimately come about, the politician may be out of office, in a different, higher office, or the causes of the now present problems may be so far obscured by time that the causes are not readily discernible to the people.
I want to look at and write about some of the hot topics being talked about these days. I want to write about the consequences that will really result from the decisions that are being touted from the lecterns, because I believe that people need to know what the current socialist agenda in our country will mean. I plan to go out and make a list of some of the ideas of both parties and their candidates and break it all down in simple, economic terms because I believe that it is irresponsible of an American to vote based on anything other than what the candidate stands for and the issues that each candidate supports.
Voting on based on a candidate’s race or gender, or voting to “make history” is unacceptable, in my opinion. Regardless of ones race, if I vote because I either want a minority or don’t want a minority to be president, then I am ignorant. If I cast a vote because I want to “see a first” (either a first black president or a first female vice president), then I have cast an ignorant vote. It is not about whether we make history or change the color or gender of the White House. It is about the issues and what our country will look like in ten or twenty years.
So, stand by for the upcoming Part II of our series, where I begin to talk about some of the “real” issues and what their outcomes will be for our country in the long term.