Pelosis Politics - Road to the Middle Class

I OFTEN like to say that the Democrats have learned nothing from the last 30 years of Reagan/Bush economic policies. But I have to admit that, privately, I don’t believe it. Surely they must have learned a thing or two about the economy, and twigged onto the 140 year old notion of marginal value that was invented in the single year of 1870 by about three different economists in three different countries.

But when you read Nancy Pelosi in the Washington Post saying, according to Paul Kane:

"Put me down as clearly as you possibly can as one who wants to have those tax cuts for the wealthiest in America repealed[.]"

Well you have to wonder. Doesn’t she get that income tax collections on the wealthy have soared over the Reagan Bush years as marginal tax rates were decreased? Doesn’t she get that when the government increases marginal tax rates as she wants to do then economic growth will be reduced and less jobs will be created?

I know why she doesn’t get it. It’s the politician’s version of reality. Nothing really exists except reelection. That means that nothing exists except having more money with which to buy votes. So why would anyone give up revenue with tax cuts?

Well, the absolutist monarchs of the Enlightenment loved revenue as much as anyone, but they came to realize that you got more revenue with a healthy economy. In their day, they wanted the lovely lolly for their armies. Today, of course, politicians want the money to pay their armies of entitlement beneficiaries. But the principle is the same. Bigger economy equals more revenue equals more money to slosh around among your supporters.

According to Larry Kudlow the Obama people seem to get this. Sort of. His “stimulus” package is still full of pork, of course.

However, it’s interesting just how much the Obama plan has changed since the election. The size has been roughly constant. But the mix of tax cuts and spending increases is now totally different.

Instead of $100 billion worth of tax credits, there are now $300 billion worth of tax cuts. This includes a big new piece for business, more cash-expensing for small-business investment, and a restoration of the five-year tax-loss carry-back, which will especially help banks and homebuilders. It might even result in tax refunds for businesses, and might also allow banks to rid themselves of toxic assets, since the losses will now be spread over many years.

And the Obama people are talking about keeping the Bush tax rate cuts until 2011. Unfortunately the Obama guys are still living in the pre-1870 world. “The problem is that they’re not reducing marginal tax rates on large and small businesses or individuals.”

I say, chaps. How about getting with the consensus on marginal tax rates? The science is in on this, you know. And anyone who is holding out on Marxian labor theories of value, or the prior notions of “exchange” value and “intrinsic” value is really dealing in superstition.

You might even call them “deniers.”

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

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Faith & Purpose

“When we began first to preach these things, the people appeared as awakened from the sleep of ages—they seemed to see for the first time that they were responsible beings...”
Finke, Stark, The Churching of America, 1776-1990

Mutual Aid

In 1911... at least nine million of the 12 million covered by national insurance were already members of voluntary sick pay schemes. A similar proportion were also eligible for medical care.
Green, Reinventing Civil Society

Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State

Living Under Law

Law being too tenuous to rely upon in [Ulster and the Scottish borderlands], people developed patterns of settling differences by personal fighting and family feuds.
Thomas Sowell, Conquests and Cultures

German Philosophy

The primary thing to keep in mind about German and Russian thought since 1800 is that it takes for granted that the Cartesian, Lockean or Humean scientific and philosophical conception of man and nature... has been shown by indisputable evidence to be inadequate.
F.S.C. Northrop, The Meeting of East and West

Knowledge

Inquiry does not start unless there is a problem... It is the problem and its characteristics revealed by analysis which guides one first to the relevant facts and then, once the relevant facts are known, to the relevant hypotheses.
F.S.C. Northrop, The Logic of the Sciences and the Humanities

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

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

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

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

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

Living Law

The recognition and integration of extralegal property rights [in the Homestead Act] was a key element in the United States becoming the most important market economy and producer of capital in the world.
Hernando de Soto, The Mystery of Capital

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