ACA/Obamacare: When Political Constituency Building Schemes Backfire

‘Most Americans don’t want to get rid of Obamacare. They just don’t share its fundamental goal of universal coverage anymore.

And not only did the political benefits that Democrats thought the 2010 law would eventually bring them not materialize, opposition has only grown, according to an analysis of multiple polls taken between 2010 and last month.

“There have been backlashes, but never like this,” said Robert Blendon, a professor at the Harvard School of Public Health and co-author of the analysis released Wednesday by the New England Journal of Medicine.

That backlash doesn’t appear directed at the mechanics of the law but at its underlying core principle.

Only 47 percent of Americans agree that it’s the government’s job to make sure everyone has health coverage, down from 69 percent in 2006, the analysis found. That shift is particularly pronounced among likely voters. Of those who are most likely to show up at the polls on Nov. 4, one in four believe in this principle.

The study includes a new poll of likely voters by the Harvard School of Public Health showing that while only 31 percent want to see Obamacare repealed, 23 percent want it scaled back. This coalition of Republicans and independents could represent a mandate for congressional efforts to diminish the sweeping overhaul four years after it was enacted — and with millions of people now covered under its provisions.

The debate is now “about whether or not you believe you want to get everybody covered,” Blendon said. “Something happened on the way to the forum here that made that a much more controversial value.”’ - Obamacare brings Democrats backlash, not benefits, politico.com, 10/29/2014

Link to the entire article appears below:

http://dyn.politico.com/printstory.cfm?uuid=E93E6E38-06EE-49CA-894A-7C42C716C143

Chuck Woolery on the Unemployment Crisis

The Blue Goose: Property Tax and Why Its Not Going to be Reduced After the Housing Bubble Burst

Post World War 2 US private residential real estate markets, in the main, have experience a long steady increase in values albeit punctuated by periods of mild decreases or periods of stabilization. Obviously there are outliers on both the high and low ends [San Francisco vs. Detroit]. However, over this post WW2 cycle several clear trends emerged regarding the long steady increase in values:

(1) private residential real estate became the largest investment on the consumer's balance sheet,

(2) private residential real estate became the largest debt on the same balance sheet,

(3) the mantra of “…buy real estate as they are not making anymore of it…” [i.e. what goes up, always goes up] emerged,

(4) private residential real estate became part of "the American dream” mantra. Some kind of social collective “dream” that in essence does not exist except in the abstract,

(5) politicos through the mechanism of government found more and more ways to create tax preference items to incentivize private residential purchases. That is, large amount of resources were purposely directed into the private residential real estate market by politicos,

(5a) not so incidentally politicos viewed the value of the private residential real estate as a tax revenue stream [local, state, and federal] regarding property tax and consequential sales above capital gains exemption [which has varied over the years] and estate tax calculation [which has varied over the years], not to mention the taxes associated with original construction and future renovations.

Note: the chicken and the egg. In this case the egg came first, then the chicken was given a mantra, and the chicken morphed into the tax goose.

Hence politicos incentivize a particular sector, mantras are attached, taxes are extracted and the underlying private residential real estate market eventually bubbles-up and like all good bubbles, it burst.

Problem is, during the long steady increase in values ending with a bubble, the associated tax revenue was also viewed by politicos as “what goes up, always goes up”. Politicos not satisfied with limited government piled on layers and layer of spending for assorted and asundry pet programs, projects, and political constituency building exercises. Over time public sector workers, through the both sides of the table phenomena, make more total compensation than their private sector counter parts. Then the bubble bust! Oh no! The consciously and purposefully groomed tax goose is on the skids! The goose is blue!

However, politicos being politicos, politically frame current spending levels as needed, necessary and required. Stated alternatively, spending levels are framed as needed, necessary and required as without the tax revenue the politico’s purposely built political constituency will find another politico to fund their needs -or- tax revenue equals reelection and/or perpetuation of a greater social vision supported by such politicos and their associated special interests.

Consequently, regardless of real estate value reassessments associated with the now burst bubble, tax rates will be adjusted to cause the same or even greater revenue to flow into politico directed tax coffers as the revenue is actually required to extend the politico’s needed, necessary and required spending levels in order to perpetuate their particular political constituency building exercises and/or a greater social vision supported by such politicos.

Who pays? You pay! Ah, the evil of it all!

　

　

　

Obama vs. Keystone.....again.

U.S. Senate Republican Leader Mitch McConnell made the following statement on the Senate floor Thursday regarding efforts by the President to lobby Democrat Senators against Senator Hoeven's amendment on the Keystone XL Pipeline:

“Last night the two parties reached agreement on amendments to the Highway Bill. I’m happy to report that there are a number of strong job creating measures in the mix. One that stands out is Senator Hoeven’s amendment on the Keystone XL Pipeline.

“Most Americans strongly support building this pipeline and the jobs that would come with it. And it’s incomprehensible to me that the President of the United States is lobbying against it.

“There’s a report this morning that President Obama is personally making phone calls to Democrat Senators he thinks might vote for this amendment. He’s asking them not to. And, frankly, it’s hard to even comprehend how out of touch he is on this issue.

“I mean, think about it: at a moment when millions are out of work, gas prices are skyrocketing and the Middle East is in turmoil, we’ve got a president who’s up making phone calls trying to block a pipeline here at home. It’s unbelievable.

“What we’re seeing in Congress this week is a study in contrasts.

“On the one hand you’ve got a Republican-controlled House that’s about to pass a bipartisan jobs bill that would help entrepreneurs and innovators by getting Washington out of the way. And today we’ve got a Democratic-controlled Senate trying to line up votes against amendments that would create jobs—and a President lobbying against the biggest one.

“We’ve got an opportunity to work together to create jobs. We can do that with these amendments. And we can do that by taking up the bipartisan jobs bill the House will pass later today.

“Let me just say a word about that. The bipartisan jobs bill the House will pass later today is supported by the President. It is ready to go, and I hope that once it gets over to the Senate we'll simply take it up and pass it.

“It's an example of a measure that is supported by Republicans and Democrats and the President that we believe will clear the House with a very large majority. I think the sooner we pass that here in the Senate and send it down to the President for signature, the better.

“With that, Mr. President, I yield the floor.”(1)

Upon Further Review

Many talking heads, pundits and media-types put forth the proposition that Obama is preventing oil independence, etc., and/or he is siding with environmentalists by opposing Keystone. Fair enough arguments.

What one doesn't seem to experience with the media is this public choice theory proposition: since Obama and his ilk built a massive network of crony capitalist green energy, a massive political constituency building exercise through use of taxpayer dollars, does not Obama have a vested interest to protect [reduce/eliminate competition] regarding such a purposely built massive network of crony capitalist green energy concerns? That is, given the network of constituency building exercises, Obama is merely acting rational to protect the purposely built network of crony capitalists.

Now consider this political economy proposition:

Many politicos with a vested interest in the crony capitalism regarding alternative energy also have a vested interest in environmentalists. As the formula goes, the politico through the mechanism of government uses taxpayer dollars to build a political constituency. In this particular case the constituencies are associated in that the crony capitalist of alternative energy “appear” to also be the champion of the environmentalist. Therefore the politico enabler receives a double constituency building outcome through the awarding of taxpayer dollars.

Notes:

(1) McConnell: President Lobbying Against Keystone XL Pipeline Jobs, Real Clear Politics, 03/08/2012

About Those Taxpayer Subsidies for Green Energy: Germany and the Dutch Pull the Plug

“COPENHAGEN – One of the world’s biggest green-energy public-policy experiments is coming to a bitter end in Germany, with important lessons for policymakers elsewhere.

Germany once prided itself on being the “photovoltaic world champion”, doling out generous subsidies – totalling more than $130 billion, according to research from Germany’s Ruhr University – to citizens to invest in solar energy. But now the German government is vowing to cut the subsidies sooner than planned, and to phase out support over the next five years. What went wrong?

There is a fundamental problem with subsidizing inefficient green technology: it is affordable only if it is done in tiny, tokenistic amounts. Using the government’s generous subsidies, Germans installed 7.5 gigawatts of photovoltaic (PV) capacity last year, more than double what the government had deemed “acceptable.” It is estimated that this increase alone will lead to a $260 hike in the average consumer’s annual power bill.” – Germany’s Sunshine Daydream, Project Syndicate, Bjørn Lomborg (1)

“The nation known for its iconic windmills is throwing in the towel on offshore wind power, as Dutch officials have determined the Netherlands can no longer afford large-scale subsidies for expensive wind turbines that cannot produce electricity at economically competitive prices.

 The decision is a powerful blow against renewable power advocates who have long asserted Holland proves renewable power can be practical and economical.” - Dutch Pull the Plug on Offshore Wind Subsidies, Heartlander, D. Brady Nelson (2)

Setting aside one’s political views in regards to taxpayer subsidies and environmentalism, one must examine the situation of the two way cost where the taxpayer/consumer subsidizes his/her own price increase. That is to say, when green energy is subsidized by the taxpayer a first cost is incurred. However, the green energy firm which has already collected a taxpayer subsidy goes one step further and lobbies for their energy output to be purchased by utilities [purchase is mandated/required]. The utility is then forced to buy the supply of green energy output at above market green energy output price (other sources are available at lower costs but the utility’s freedom to choose inputs has been curtailed). The increased cost is then passed onto the consumer. Therefore the taxpayer/consumer has subsidized their own price increase.

Upon further review, the subsidization of one’s own price increase is not the end of the story as the value associated with the subsidization and consequential price increase purposely appear somewhere/elsewhere. That is to say, beyond tax dollars of taxpayer A being spent to increase the costs to the same taxpayer A when acting as a consumer, the taxpayer subsidy and increase cost accrues as a benefit to an exogenous party(s).  In other words, beyond the political dupery of having the taxpayer subsidize his/her own increased cost, the cost becomes a value to another party or parties.

Before one examines what party or parties benefit from the purposeful political dupery one needs to consider third party intervention. That is, the entire dupery process of the taxpayer subsidizing his/her own increased cost, such dupery cannot occur unless a third party directs such dupery. The third party dupery enabler is the politico.

Hence the politico-dupery-enabler with taxpayer dollars in hand [subsidy] and the mandated price increase in hand, bestows the value of the taxpayer subsidy and subsequent increased cost, the value thereof, on another party. This exogenous party that receives the value is a process known as dependent political constituency building through tax payer dollars. That is, the politico bestows the value by building a voting block constituency that is dependent on the politico funnelling now and in the future, the value items mentioned above. Stated alternatively, the values of the subsidy and the mandated purchase become the dollar conduit that allows the politico to build and subsequently rule the dependent political constituency.

Meanwhile, a final step needs examined once the politico is satisfied he/she has built a dependent politico constituency at no cost to themselves and with all cost borne by the taxpayer/consumer. The “winner” [picking winners and losers] is the party with the value bestowed upon them. This remote third party gains the value not through competition, not through innovation creating a low cost and valued item by the market place; the value was gained through politico enablers aka crony capitalism.

H/T: Carpe Diem and Mark Perry

Notes:

(1) http://www.project-syndicate.org/commentary/lomborg81/English


(2) http://news.heartland.org/newspaper-article/2011/12/30/dutch-pull-plug-offshore-wind-subsidies

“Fair Share”: another name for politico constituency building through the use of other peoples‘ money.

“Fair share” or a version thereof has been used many times by politicos over the years. Two components exist: fair and share.

“Fair” has very little meaning other than what one wants it to mean in a particular context. Generally, given a context of political debate, where fair is very often used, fair is said to mean: what you are doing or advocating and what someone else is not doing or advocating. That is, “fair” is how one paints the world vs. other portraits available that conflict with one’s own painting of the world.

Examining the politico’s use of "share", within the phrase fair share, means something exists that needs divided. Now comes the introduction of an implicit underlying assumption of zero sum thinking. That is, the desire of the politico is to politically frame the talking point that one party is gaining at the expense of another party. Hence the real underlying manufactured argument is that  party B deserves additional gains from party A based upon "something" existing in the abstract that somehow was divided improperly.

Therefore, "fair" and "share", are combined into an argument ultimately of: "advocating deserve". The politico advocates deserve by selling zero sum thinking by framing the argument as one party can only gain from the loss of another party regarding some abstract something that was divided somehow improperly. Hence the loss requires restoration, additional gains, or “deserves”.

In point of fact, with a free people in a free market, exchange only occurs at mutual exchange. That is, two free parties do not exchange unless each party perceives a gain and hence we come to exchange at mutual self-interest. Party A does not cause an exchange trigger at the detriment of party B as no exchange would occur as B would not find his self-interest. B turns down the zero sum exchange and goes elsewhere to seek an exchange of mutual self-interest.

If an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can only gain at the expense of another. - Milton Friedman

The politico argument is then exposed, as regardless of the manufactured abstract something that was somehow divided improperly, exchange is mutual self interest driven not zero sum driven. There is no need to restore, cause additional gains, or “deserve” as mutual self interest occurred at exchange, not zero sum.

Regardless of the economics of exchange, the politico presses on by further framing parties to exchange as now being classes to exchange (parties suddenly, notionally and purposely become classes). The politico frames exchange as not occurring between “parties” rather occurring between distinct “classes” with particular assigned attributes with attributes either trumpeted or vilified as the debate point unfolds. It remains the zero sum argument, side stepping mutual exchange reality, however goes one step further and frames parties as good vs. bad classes and classes butting heads resulting in zero sums.

The final stage of the political argument is to substitute “shirk” for “deserve”. The politico purposely puts forth the fallacy that one class is gaining at the expense of another class as being a stone cold fact, and in order for the losing class to made whole, a shirking partner needs introduced. The shirking partner is politicos through the mechanism of government who will redistribute the abstract something that was somehow divided improperly. The power to act as the shirking partner (a partner who takes part of the value and provides none of the effort) through the imposition of a cost [tax] then allows the politicos through the mechanism of government to build a dependent political constituency class through redistribution of the value extracted.

What is purposely left out of this debate is that "work" is irritating toil. Apparently the irritating toil is required of some, and the value produced by the irritating toil becomes a "claim" or "right" which  is deserved by others. Stated alternatively, the irritating toil of work producing value, comes complete with a shirking partner, a shirking partner who then takes part of the value and provides none of the effort, and uses such value as a political constituency building exercise. That the abstract something that was somehow divided improperly is then purposely captured by the politico as a value used directly for dependent political constituency building.

　

A and B decide on what C is going to do for D [W.G. Sumner's famous formula]

When William Graham Sumner wrote the essay The Forgotten Man he outlined a now famous formula: A and B decide on what C is going to do for D. The underlying concept is that A wants to solve a perceived problem which D is supposedly suffering from. A recruits B who is of like mind. A and B then extract something from C to give to D. The Forgotten Man being C. (1)

Sumner defined the formula as follows:

“The type and formula of most schemes of philanthropy or humanitarianism is this: A and B put their heads together to decide what C shall be made to do for D. The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C's interests, are entirely overlooked. I call C the Forgotten Man”. (2)

How does Sumner define The Forgotten Man?

“….the Forgotten Man and any one who wants to truly understand the matter in question must go and search for the Forgotten Man. He will be found to be worthy, industrious, independent, and self-supporting. He is not, technically, "poor" or "weak"; he minds his own business, and makes no complaint. Consequently the philanthropists never think of him, and trample on him”. (3)

One needs to further consider A and B. Beyond A and B fancying themselves as philanthropic or humanitarians, they in practice act as third party decision makers. The “is going to do” or “made to do”, in the formula above, is the third party decision process.

What prompts A and B to think they have the presence, the knowledge, and the moral high ground to make third party decisions for others? Why must C, The Forgotten Man, need relied upon? If The Forgotten Man is self-sufficient, industrious and requires no assistance, then has not The Forgotten Man done his duty? If C, The Forgotten Man, owes some exogenous duty, would that duty not be the decision of The Forgotten Man?

The next question regarding A and B is why do they merely want to extract from C and give to D …rather than making D like C? One may want to consider that D is not like C, in the main, as D may not be industrious. That is, D likes being D. Moreover, A and B, being that A and B are in point of fact functioning as third party decision makers, may well be made up of two categories: “do-gooders” and those seeking power derived as the third party decision makers. In either case of do-gooders or power extractors, solving D’s perceived problem may well not be their aim. The do-gooder can’t feel “good” nor can the power extractor gain power, without the existence of D and the consequential “is going to do” or “made to do”, in the formula above.

The following are several observations by Sumner that might be enlightening regarding the above discussion:

…the characteristic of all social doctors is, that they fix their minds on some man or group of men whose case appeals to the sympathies and the imagination, and they plan remedies addressed to the particular trouble…

They [social doctors] are always under the dominion of the superstition of government, and, forgetting that a government produces nothing at all, they leave out of sight the first fact to be remembered in all social discussion—that the State cannot get a cent for any man without taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man.

Hence the real sufferer by that kind of benevolence which consists in an expenditure of capital to protect the good-for-nothing is the industrious laborer. The latter, however, is never thought of in this connection. It is assumed that he is provided for and out of the account.

For our present purpose it is most important to notice that if we lift any man up we must have a fulcrum, or point of reaction. In society that means that to lift one man up we push another down. The schemes for improving the condition of the working classes interfere in the competition of workmen with each other. The beneficiaries are selected by favoritism, and are apt to be those who have recommended themselves to the friends of humanity by language or conduct which does not betoken independence and energy. Those who suffer a corresponding depression by the interference are the independent and self-reliant, who once more are forgotten or passed over; and the friends of humanity once more appear, in their zeal to help somebody, to be trampling on those who are trying to help themselves.

The friends of humanity start out with certain benevolent feelings toward "the poor," "the weak," "the laborers," and others of whom they make pets. They generalize these classes, and render them impersonal, and so constitute the classes into social pets.  (4)

Notes:

(1) The Forgotten Man, and Other Essays ed. Albert Galloway Keller (New Haven, Yale University Press, 1918)

(2) William Graham Sumner, What Social Classes Owe to Each Other, 1883, chapter nine, On the Case of a Certain Man Who is Never Thought of, pages 75 -78

(3) and (4) Ibid

The Politico Painted Corner

“Those politically painful steps [in the euro zone] involve selling off state enterprises, firing tens of thousands of politically connected state employees and removing jealously guarded protections that limit competition in dozens of professions."

“Herein lays the crux of the European problem. Although most of the other troubled European countries may not have the same degree of tax evasion and nepotism that Greece has, each of these countries will be forced to implement painful reforms that are likely to endanger the jobs of many European politicians. None of these lessons should be lost in the US either”. – Michael Farr (1)

The above observation finds its root in public choice theory. That is,  politicos through the mechanism of government build dependent constituency classes through taxpayer dollars and/or special conditions. “Dependency” comes in many varieties such as direct transfer payments, crony capitalism, bloated public payrolls, creating special conditions, etc. The basic flaw with political constituency building exercise is that the process is built upon maintaining or increasing taxpayer dollars funnelled to the constituency and/or maintaining or expanding special conditions. Failure to produce the taxpayer dollars or special conditions means loss of the political constituency.

An example may better illustrate. Politico A knows the taxpayer is a widely diffused and to a major degree unorganized/an unrepresented group regarding tax increases. If the politico raises taxes by $1 on the very diffuse group and bestows the many, many one dollar tax extractions to a much smaller and focused group, then the recipient group will support the politico bestowing the taxpayer funds upon them. The highly diffused and unrepresented individual tax payer will make the rational decision that opposing the $1 tax increase is not worth the time and effort to oppose. Hence we have hundreds, maybe thousands, or even millions of taxpayers who individually will not take the time to oppose a $1 tax increase and the small incremental tax increase is then bundled and given to a smaller group which then become the dependent political constituency of the sponsoring politico.

Special conditions act in the same manner. If competition is lessen or distorted for the benefit of a small group which then causes a $1 increase in item XYZ’s  price, the widely diffused taxpayer/consumer once again will not take the time to oppose the $1 increase yet the $1 multiplied over many purchases of item XYZ is bestowed on a particular small and focused group.

A third rail occurs when the politico uses debt to finance political constituency building. That is to say, when a tax increase is unpopular, or taxes themselves will not create the needed revenue for the particular or aggregate political constituency building exercise(s) then debt becomes an optional revenue stream to bestow or create conditions. As more and more political constituency exercises are initiated by wider and wider number of politicos, debt is used in a fashion that increases at an increasing rate.

An overriding assumption by politicos is that the recipient class will not give up their advantage and hence the politico has created a perpetual constituency.  If the advantage is threatened, the politico champions the advantage with the built-in dependency constituency supporting the politico’s effort to retain the advantage for the group.

Hence it becomes problematic that the withdrawal of the incremental tax or incremental price causing special conditions will alienate the particular associated recipient class.  Therefore, the politico cannot allow, nor heaven forbid sponsor, the withdrawal of the advantage.

The alienation of losing a particular advantage [dependency] causes the recipient group to seek the advantage elsewhere. That is to say, the politico has created a Frankenstein of sorts in that political constituency building exercises are self-completing regardless of the sponsoring politico i.e. if politico A will not deliver, the recipient class will merely search and support an alternate politico that will deliver. Hence the politico perceives that the power emanates from the politico, that the politico thinks he has created the perpetual constituency that re-elects the politico come hell or high water, when in fact the politico has created something much larger that can consume the politico.

The above examples of political constituency building through taxpayer dollars, special conditions, and mounting debt occur based on the implicit assumption that unlimited taxes can be levied [which cannot] and that competition can be continuously reduced and the costs constantly passed on [which it cannot], and unlimited debt can be issued and accepted [which it cannot]

What happens when taxes are at a maximum, competition at a minimum, prices at a maximum, and debt at a maximum? The politico has painted them self into the proverbial corner. However, the momentum of political constituency building exercise continues. The recipient class demands its advantage. However, politico A-Z have nothing else to provide  when taxes are at a maximum, competition at a minimum, prices at a maximum, and debt at a maximum. To continue on the same course is assured collapse and to retrace steps is assured political defeat.

Therefore, the politico, so sure of the perpetuation of political constituency through political constituency building exercises find their self-assuredness of constituency building through taxpayer dollars, special conditions, and escalating debt was no more than a path to the eventual demise of the politico by system failure/collapse or political defeat caused by the exact same dependency recipient group the politico purposely created.

“But we have inherited a vast number of social ills which never came from Nature. They are the complicated products of all the tinkering, muddling, and blundering of social doctors in the past. These products of social quackery are now buttressed by habit, fashion, prejudice, platitudinarian thinking, and new quackery in political economy and social science”.

“The greatest reforms which could now be accomplished would consist in undoing the work of statesmen in the past, and the greatest difficulty in the way of reform is to find out how to undo their work without injury to what is natural and sound. All this mischief has been done by men who sat down to consider the problem (as I heard an apprentice of theirs once express it), What kind of a society do we want to make? When they had settled this question a priori to their satisfaction, they set to work to make their ideal society, and today we suffer the consequences. Human society tries hard to adapt itself to any conditions in which it finds itself, and we have been warped and distorted until we have got used to it, as the foot adapts itself to an ill-made boot. Next, we have come to think that that is the right way for things to be; and it is true that a change to a sound and normal condition would for a time hurt us, as a man whose foot has been distorted would suffer if he tried to wear a well-shaped boot. Finally, we have produced a lot of economists and social philosophers who have invented sophisms for fitting our thinking to the distorted facts.

Society, therefore, does not need any care or supervision. If we can acquire a science of society, based on observation of phenomena and study of forces, we may hope to gain some ground slowly toward the elimination of old errors and the re-establishment of a sound and natural social order. Whatever we gain that way will be by growth, never in the world by any reconstruction of society on the plan of some enthusiastic social architect. The latter is only repeating the old error over again, and postponing all our chances of real improvement. Society needs first of all to be freed from these meddlers—that is, to be let alone. Here we are, then, once more back at the old doctrine—Laissez faire. Let us translate it into blunt English, and it will read, Mind your own business. It is nothing but the doctrine of liberty. Let every man be happy in his own way”. William Graham Sumner, 1883 (2)

Notes:

(1)    Market Commentary from Michael Farr, 12/15/2011, Farr, Miller, and Washington.

(2)    What Social Classes Owe to Each Other, William Graham Sumner, 1883, page 72 and 73.

The Keystone XL Pipeline Meets Public Choice Theory

If one considers alternative energy schemes as crony capitalist ventures, with taxpayer dollars being profit to the rent seeking special interests, then is the postponement of the XL pipeline  merely an exercise in the best interest of the special interest?

A special interest, in this case alternative energy, can only rent seek (acquire taxpayer dollars) if the special interest has a politico or collection of politico enablers. Governments do not think, act nor react. Only politicos think, act and react. Hence politicos through the mechanism of government allocate taxpayer dollars to special interests. Therefore, politicos associated with alternative energy have a vested interest in the political constituency exercise that taxpayer dollars generate.

Many of the politicos with a vested interest in the crony capitalism of alternative energy also have a vested interest in environmentalists. As the formula goes, the politico through the mechanism of government uses taxpayer dollars to build a political constituency. In this particular case the constituencies are associated in that the crony capitalist of alternative energy “appear” to also be the champion of the environmentalist. Therefore the politico enabler receives a double constituency building outcome through the awarding of taxpayer dollars.

Digressing for a moment, consider the concept of big oil windfall profit tax. Is crony capitalism, in the area of alternative energies, a substitute as it were for a big oil windfall profit tax, which creates the same "effect" for a particular political constituency? Stated alternatively, if one champions a big oil windfall profit tax and wants to capture the political constituency such a proposed tax caters to, then if one can not achieve the windfall profit tax does one use crony capitalism in the area of alternative energy to achieve the same political constituency building effect?

Now consider a fully engaged crony capitalist exercise in the area of alternative energy with hundreds of billions of taxpayers money allocated. Also consider that these alternative energies are not price competitive. Further consider that the same associated politicos have not only subsidized alternative energy but have mandated its usage. Therefore, a fully engaged crony capitalist system generating a non-competitive above market price has been guaranteed to perpetuate as the same politicos have added mandated usage. Political dupery at its zenith!

　
Enter the XL pipeline, a facilitator of lower priced, much less subsidized, and price competitive energy source. The fully engaged crony capitalist exercise, the political dupery as it were, views competition as a threat. Competition from the private sector no less. Hence simply eliminate competition and preserve the fully engaged crony capitalist exercise.

You see, its not that certain politicos are against monopoly, they are just against “private monopoly”.

　

　

　

　

　

Obama’s Kansas Speech: Fairness, Pinocchio, and Pig Judging

"The Pinocchio Test"

"The president does not need to lard his case with such suspect data. There are few independent tax analysts who have much good to say about the Bush tax cuts. But it is difficult for Obama to justify blaming those tax cuts for being mostly responsible for today’s slow job growth, especially when he wants to retain a good chunk of those tax cuts.

To bolster his case about unfairness, the president is also relying on a suspect statistic about billionaires paying as little as one percent in taxes. Even if true, it is a clearly a rare event. Moreover, it is certainly surprising the White House would rely on such a dubious, unverified source for a major presidential address". - Glenn Kessler, Washington Post, 12/07/2011


"Moreover, it is certainly surprising the White House would rely on such a dubious, unverified source for a major presidential address".


Really? Its surprising? Whenever a politico debates "fairness" it has to be a notional argument as its rather apparent: fair is what you are doing and the other guy is not doing -or- fair is where you go to get your pig judged.


http://www.washingtonpost.com/blogs/fact-checker/post/obamas-kansas-speech-some-suspect-facts/2011/12/06/gIQAUU45aO_blog.html

Political Constituency Building in Fail-Safe Mode

Public debt in percent of GDP (2010), CIA fact book 09/2011


Particular politicos that champion more or constant spending in the face of unsustainable debt loads point out that their particular political constituency recipient groups enjoy their particular taxpayer funded transfer payment and do not want benefits cut. Go figure.

Its an interesting argument in that the politico points to their own purposely politically built constituency group, funded through taxpayer dollars, and state the recipient group enjoys their taxpayer funded benefit. Problem being the benefit would not exist without the purposeful creation of the benefit by the politico to garner political constituency. Go figure x 2.

In essence, the politico purposely created a dependent recipient class and now points to the purposely created group in its “constituency form“ i.e. in its voting block form. Stated alternatively, the political constituency building episode is a fail-safe, in that, the politico purposely built a dependency class through political promises all the while knowing that the dependent political constituency class will never give up its dependency benefit and hence act as purposely designed and call for supporting the particular politico for more or constant spending.


“The state is the great fiction by which everybody seeks to live at the expense of everybody else“.

- Frederic Bastiat

Supercommittee -or- how politicos cause the taxpayer to foot their bill

The technical name for the Supercommittee is The Joint Select Committee on Deficit Reduction. The committee is made up of six democrats and six republicans of which six are from the Senate and six from The House of Representatives. Their charge is to reduce the deficit by one and one half trillion dollars over a ten year period. The dead line for their recommendation is November 23, 2011. Their recommendation then goes before Congress for a simple up or down vote that must occur before December 23, 2011.

The debate leading up to and surrounding the recommendation, in the main, is a debate of raising taxes, reducing spending or a combination of both. One item worth noting is a particular and long standing debate point used by particular politicos that promote raising taxes. The particular debate point is: the Reagan Administration caused deficits by reducing taxes.

This long standing debate point is in essence a long standing fallacy. How so? Evidence shows that tax receipts actually increased significantly after the Reagan tax cuts and moreover during the eight years of the Reagan Administration. In the last year of the Carter Administration federal tax receipts equalled $517 billion. During the last year of the Reagan Administration tax receipts were $909 billion. Stated alternatively, with a tax reduction in place, tax revenues increased by 75% over an eight year period. (1)

Then how do particular politicos construct their argument that the Reagan tax cuts left us with a deficit? That tax cuts cause a deficit? It’s merely a fallacious debate point that does not account for “spending” during the same eight years. The debate point is carefully constructed to avoid the increasing tax receipts fact and concentrates/focuses on the actual deficit which occurred. Simultaneously the debate point carefully avoids the enormous spending increases that occurred during the exact same period. Hence the debate point links deficit with tax when in fact the link is fallacious given rising revenue after the tax cut. That the link between spending and deficit is purposely removed from the debate point.

Federal spending was $678 billion in 1981 while spending stood at $1.064 trillion in 1988. Each and every year of the Reagan Administration tax revenues increased while each and every year spending increases where above the tax revenue increase. (2)

The Reagan Administration did not make appropriations for spending, congress appropriates spending. Hence the spending outpaced the tax receipts and hence a deficit. Ops!

What is the reasoning behind making such a fallacious debate point when the evidence shows otherwise? One must examine that particular politicos depend upon taxpayer dollars to bestow such dollars upon current politically constructed constituency groups and to fund future political constituency building exercises through the use of taxpayer dollars. That is to say, in order for the politico to build a growing constituency base the politico is dependent upon growing expenditures to conserve and expand the constituency base. Stated alternatively, the politico is much like the going concern business in that growth in revenue is a basic goal. However, unlike a firm producing a valuable product that consumers voluntarily purchase, the politico merely transfers money from the aggregate taxpayer to specific special interest groups and/or recipient classes that make up the politico’s constituency base constructed by the use of tax dollars.

Hence the argument from the politico’s point of view must be directed away from spending cuts. That the debate must concentrate on conserving and expanding spending in order to conserve and expand constituency and constituency building exercises.

Notes:

(1) (2) Budget of the United States Government: Historical Tables, Washington D.C. , U.S. government printing office, 1994, page 14.

No U.S. Energy Plan? -Or- Shadow Political Energy Plan of Very Comprehensive Design?

Those that debate U.S. energy production and energy delivery have common ground in pointing out that U.S. policy makers [politicos] have no comprehensive plan for energy. Since the oil shocks of the 1970’s, for thirty plus years, no “comprehensive energy plan” has come forth from policy makers.

Contrary to popular opinion, politicos do in fact have a very comprehensive plan. It’s a political plan for energy of very comprehensive design.

Starting with FDR and his administration and minions replacing private electric production and creating “public utilities” [legal monopoly] through current subsidies, tax preferences, mandatory purchase agreements, price fixing schemes, threat of tax if profits are too high, etc., etc. a comprehensive political energy policy has developed/evolved.

Where is this comprehensive plan? Why is it not bound in a four volume set so we can peruse the plan‘s intricacies, plan direction, plan cost, etc.? Because it lies in the shadows. A shadow politico plan if you will, that specializes in pandering to special interests for political constituency building purposes. Its an energy plan based on political constituency building through the mechanism of government and funded by taxpayer dollars.

Among the many, many flaws within the shadow politico energy program there exists one major and fatal flaw: taxpayer dollar subsidy. If politicos through the mechanism of government find that all subsidies for all energy sources are removed they will find their politically built constituencies through the use of taxpayer dollars suddenly dissolve.

Pundits, talking heads, and media types like to point out Big Oil. What about Big Wind and Big Solar? What about merely calling it “Big Energy Complex”.

If it is “Big Energy Complex” who is really the big and small within this complex regarding subsidies? The political framed argument coming from many is Big Oil. Is that true?

“So I ask the question: If wind has all these drawbacks, is a mature technology, and receives subsidies greater than any other form of energy per unit of actual energy produced, why are we subsidizing it with billions of dollars and not including it in [the energy subsidy] debate? Why are we talking about Big Oil and not talking about Big Wind?” -Senator Lamar Alexander

　

　
“Well, I am one Senator who is very intrigued with the idea of looking at all of the tax breaks in the tax code. There are currently about $1.2 trillion a year in what we call tax expenditures, and those are intended to be for tax breaks we think are desirable. I am ready to look at all of them and use the money to reduce the tax rate and/or reduce the Federal debt. But if we are going to talk about energy subsidies — tax subsidies — we ought to talk about all energy subsidies.”

Renewable vs. Fossil-energy Subsidies

Senator John Cornyn of Texas has asked the Congressional Research Service to do just this. It is an excellent study, and I commend Senator Cornyn for asking for it. This is some of what it finds: According to the report, fossil fuels contributed about 78 percent of our energy production in 2009 and received about 13 percent of the Federal tax support for energy.

However, during that same time 10.6 percent of our energy production was from renewables and 77.4 percent of our energy tax subsidies went to renewables. So if we are to compare the subsidy per unit of energy, the estimated federal support per million BTUs [or British Thermal Units] of fossil fuels was 4 cents, while support for renewables was $1.97 per million BTUs.

So, federal subsidies for renewables are almost 50 times as great per unit of energy as federal subsidies for fossil fuels. [But] this would be distorted because hydroelectric power is included within renewables. Most people think of renewables as ethanol, solar, or wind and those are the renewables that actually get the subsidies, while hydroelectric does not.

So, the federal taxpayer support for renewable energy is at least 50 times as great per unit of energy as compared with fossil fuel energy. So why aren’t we including subsidies for all renewables in our debate? Specifically, if we are talking about ‘Big Oil,’ why don’t we talk about ‘Big Wind?’ The Senate seems an appropriate place to talk about ‘Big Wind.’ (1)



The subsidies are in great peril of being removed. Why? Three items have come to the surface:


(a) one set of politicos want subsidies for oil companies removed in lieu of a windfall profits tax on oil companies,


(b) a subset of the group identified in (a) above and an exogenous group want subsidies for all energy companies removed,


(c)  subsidies in general are “discretionary” spending. With the U.S. Government now at $14.9 million of national debt, spending must be cut. Subsets of both groups (a) and (b) above and yet another exogenous group want to tackle the easier aspect of discretionary spending rather than entitlements. (2)


Those politicos that have championed subsidies and the inherent ability of the subsidy [taxpayer dollars] to reward special interests and hence lend to political constituency building will find some very nasty consequences in the reduction of “discretionary spending” and the consequential removal of subsidies:


(1) those politicos championing “subsidy” will easily be identifiable as they will quickly oppose removing all energy subsidies and want to retain the particular subsidy associated with their particular constituency building exercise,


(2) the price of energy from fossil fuel will rise marginally while renewables will rise many fold,


(3) the taxpayer-voter will suddenly have transparency regarding the comprehensive political energy plan,


(4) the consumer of energy will immediately have a true price signal regarding the cost of energy choices.


Notes


(1) Energy Subsidies and Big Wind: Sen. Alexander Sets the Record Straight (renewables 50x that of fossil fuels), Master Resource, http://www.masterresource.org/2011/05/big-wind-sen-alexander/

(2) http://www.usdebtclock.org/

Class Warfare Politics: upon further review, poverty is the best policy

Each time class warfare politics raises its ugly head in regards to taxes, the rich are vilified and the vilification is used to argue for an increase tax on the so called “rich“. The argument put forth by politicos is the general and usual notional argument with concepts such as “fair”, “just”, “fair share” and so on. Purely political notional concepts that only have absolutely no meaning except in the context the politico presents e.g. fair is merely what you are doing and the other guy is not doing. That is to say, its an argument with no arguments. Vilification and notional concepts do not make for empirical underpinnings of any policy be it public or private.

Moreover, when the dust clouds of class warfare politics settle, everyone ends up paying more taxes. Stated alternatively, if one climbs on the magical bus of class warfare to tax the rich, at some point one has their very own class warfare bus ticket punched and ends up thrown under the bus of higher taxes. Odd huh?!?

Its not really that odd at all. You see, in a system of “some people” politicos want/need more money to spend. Why? The conduit of taxpayer dollars must increase at an increasing rate allowing the politico to use such funds for political constituency building exercises. Special interests and dependency constituencies [recipient class] are built with taxpayer money. The existing taxpayer-dollar-funded-constituencies, as well as any newly proposed constituency building targets, require vast amounts of taxpayer dollars flowing into the sphere of the politico. The flow must increase at an increasing rate in order for the politico to “grow their constituency”.


“Here it may suffice to observe that, on the theories of the social philosophers to whom I have referred, we should get a new maxim of judicious living: Poverty is the best policy. If you get wealth, you will have to support other people; if you do not get wealth, it will be the duty of other people to support you“. - W.G. Sumner (1)


Therefore, the politico promoted class warfare argument purposely plays James and Jane Goodfellow for saps. It sounds great as the politico weaves and frames the argument that you can have some other group of people pay for some crisis or problem. The politico is going to save you from the expense of solving a problem by merely making someone else pay for the problem.

The question one must ask oneself is: the centuries upon centuries of basically the exact same politico promoted class warfare argument has done exactly “what” to solve any and all problems? The politico wants you to judge them by their intentions and not their results. Exactly what results do we have presently? Do we have a tax problem or a spending problem? The politico wants the answer to be that we have a tax problem as they want more tax dollars to “grow their constituency”. The politico must direct the problem away from the spending side of the equation as decreases in spending means the collapse of existing political constituencies built and dependent on taxpayer dollars and disallows the acquisition of newly proposed constituency building targets.

“The good news is that, according to the Obama administration, the rich will pay for everything. The bad news is that, according to the Obama administration, you’re rich.” - P.J. O’Rourke

Notes:

(1) On a New Philosophy: That  Poverty is the Best Policy, William Graham Sumner, 1883

　

　

The Political-Economy of Politico Energy Policy -or- how to love higher prices funded by your own tax dollars!

Freedom is not simply the right of intellectuals to circulate their merchandise. It is, above all, the right of ordinary people to find elbow room for themselves and a refuge from the rampaging presumptions of their “betters.” - Thomas Sowell from Knowledge and Decisions.

　
The most common forms of competition discussed in the social studies are impersonal competition which is directed toward a goal and personal competition which is directed toward any one individual. One needs to note that personal competition can lead to rivalry and differing stages of conflict at the point of exchange during competition. A third form of competition is “cultural competition” which is competition between two or more cultural groups. (1)

Restricting one’s freedom to use pecuniary wealth to influence others, say by offering higher prices to win agreements to sell, results in greater emphasis on “personal characteristics competition.” - Harold Demsetz (2)

Demsetz is stating that at the point of exchange, during competition, impersonal competition changes to personal competition when pecuniary wealth is restricted. Likely if any competitor is restricted in some freedom at the point of exchange some level of personal competition is introduced. As mentioned above, personal competition can lead to rivalry and differing stages of conflict at the point of exchange during competition.

Note that in Demsetz’s example, implicitly assumed, is that some exogenous power restricted freedom to use, in this example, pecuniary wealth.

What if an exogenous power, such as politicos, used verbal virtuosity based on the way things ought to be and the same politicos through the mechanism of government used regulatory authorities and their inherent regulatory powers to simultaneously create conditions for personal competition and cultural competition to the exclusion of impersonal competition? What if such conditions then fostered an army of economic rent seekers aka crony capitalism rather than an army of competitors in a free market environment? Could such conditions ever be present?

Welcome to the wonderful world of politico directed Department of Energy (DOE) loans to green energy companies simultaneously accompanied by the regulatory edicts of the Environmental Protection Agency (EPA).

Lets first examine cultural competition. If certain politicos want to foster cultural competition they must frame a cultural competition debate which subdivides culture into competitors. The politico purposely draws some distinction and purposely promotes an item as being positive and another item as being negative [verbal virtuosity based on the way things ought to be]. For example, green energy is positive and fosil based fuel is negative.

Next we have personal competition. The same group of politicos through the mechanism of government purposely act as an exogenous power to purposely restrict the freedom of one cultural competition competitor in the now purposely politico made cultural competition environment. For example, raise taxes and regulation on fossil fuels while subsidizing green energy.

We now have culture competition simultaneous with personal competition. Hence the politico has created an environment in which politico-created competing cultures compete on a personal basis. Stated alternatively, rather than free enterprise competition occurring in the area of energy to create the most efficient allocation of resources with alternative uses, politicos through the mechanism of government have created a centrally planned misallocation of resources with alternative uses by introducing cultural and personal competition.

Who loses when a misallocation of resources occur? The consumer is the ultimate loser as prices rise for the item in question [energy] while the consumer is also taxed [subsidies for green energy]. Hence the consumer is not only harmed by higher prices, the consumer is paying tax dollars to in effect create the higher prices. You have been duped again? Well of course you have!

Who gains when a misallocation of resources occur? The producer that charges above market prices (when lower market-based prices are available) and simultaneously enjoys subsidies [taxpayer money]. The politico also benefits as he/she has exercised political constituency building through the use of taxpayer dollars (tax payer funded subsidies recalculate back to the politico in the form of political contributions of one type or another including monetary). You have been duped again? Well of course you have!

What has been created for you, the consumer, by politicos through the mechanism of government? Your tax dollars have been put to work! You have funded a price increase for yourself and simultaneously funded select firms and funded political contributions all achieved by politicos through the mechanism of government misallocating resources to their particular gain. Very nice!

“The government has nothing to give. The government is simply a mechanism which has the power to take from some to give to others. It is a way in which some people can spend other peoples' money for the benefit of a third party - and not so incidentally themselves.” -Milton Friedman



Notes:


H/T Cafe Hayek



(1) Nature and characteristics of Competition, http://www.sociologyguide.com/basic-concepts/Characteristics-of-Competition.php


(2) Harold Demsetz, 1988, Ownership, Control, and the Firm, page 17.

Politicos and Rent Seekers: Manipulating Variables

What if rent seeking agents, over time, have discovered that consolidating gives them a higher probability of manipulating variables. However, consolidating under one special interest umbrella might be considered or challenged as collusion. A political party, meanwhile, identifies the consolidation strategy of rent seekers attempting to manipulate variables and purposely allows the political party to be a stealth collusion vehicle.

Suppose a political party seeking control actively recruits a massive coalition of special interest groups aka rent seekers. Each group has its own interest and those interests are quite diverse. The cohesive theme of the political party is not some common thread of ideology, the theme becomes a common thread of "funding".

How does a rent seeker find funding and/or special conditions? Funding and/or conditions are secured through politicos operating through the mechanism of government. Hence a particular political party deploys a strategy of purposely attracting diverse rent seekers then acts as the consolidation agent offering funding through politicos operating through the mechanism of government. That the political party seeking control is not acting on ideology to consolidate support, rather the political party becomes a stealth mechanism of collusion leading to funding to consolidate support.

Considering the above proposition, then funding and/or special conditions must flow from the particular politicos of the political party through the mechanism of government to the special interests. Any threat to the stealth collusion, meaning any disruption of funding, reduction in funding, and changes in special conditions must be averted. If a threat appears to the stealth collusion, the political party loses control and the rent seekers lose the ability to manipulate variables.

Lets assume for a moment that such a political party acts as a stealth collusion mechanism for rent seekers. Further assume that the political party wins election and gains the objective it seeks of control. The next step would be for the politicos of said political party to immediately and generously bestow funds and/or special conditions to the coalition of rent seekers. One would then assume a massive spike in government spending with such spending falling resoundingly with the rent seekers.

However, the model of stealth collusion of a political party purposely consolidating rent seekers with the aim of manipulating variables requires constant and consistent funding. Further, the rent seekers can not sustain "growth" unless additional spending is funneled in their direction. Hence a spike in government spending as political pay back for supporting the political party must be followed by additional spending to satisfy the rent seekers and the rent seekers' particular constituency.

The model of stealth collusion of a political party purposely consolidating rent seekers quickly becomes unstable as other people [politicos] spending other peoples' money [taxpayer] on a recipient class [rent seeker] soon becomes an un-financeable proposition (run out of other peoples' money). When the spending run-up becomes clear to James and Jane Goodfellow and government finances become increasingly precarious, then popular support swings to a funding cut back. However, when funding cut back proposals emerge and before such funding is cut back the rent seekers, acting in their own self interest, spend money and manpower in organized protests against funding reductions.

The eventual funding cut back then causes the political party, sponsoring the stealth collusion, to pick winners and losers among the consolidated rent seekers. The picking of winners and losers not only causes decent among all rent seekers making up the cabal, but dissention occurs between the final chosen winning and losing rent seekers.

One must consider if the above theoretical example does or does not seem familiar to current affairs.

The state is the great fiction by which everybody seeks to live at the expense of everybody else. - Frederic Bastiat, 1850.

A Ten Minute Primer Regarding Politicos Framing the Tax Increase Argument: “The Required, the Needed, and the Necessary”.

Ruling Through Talking Points

Many politicos begin debate positions regarding Medicare and Social Security with the phrase “the government promised” or “government promises”. Other politicos begin debate propositions regarding Medicaid, welfare, food Stamps, and unemployment benefits with the phase “social safety net”.



What About Those Talking Points?

First and foremost, as pointed out long ago by Milton Friedman, government does not think, discuss, nor take action. Politicos through the mechanism of government think, discuss and take action. Hence government does not promise. Only politicos promise.

Next we have the proposition of the “social safety net”. There is a massive difference between a social safety net based upon the collectivist welfare state and the social safety net proposition being based upon a temporary nonrecurring stop gap measure.


Politico Promises, The Mechanism of Government, Political Time Horizons, Dependency Politics, and Other Peoples’ Money

One must explore the politico argument based upon required, needed, and necessary in relation to politico promises delivered through the mechanism of government based upon the welfare state dependency proposition. The politico proposition of required, needed and necessary is related to the concept of spend then tax. It is also very much related to politico promises made through the mechanism of government in conjunction with short term politico election time horizons. Finally the proposition does have an insidious long term politico horizon of developing a dependent constituency, through the use of other peoples’ money, that perpetuates the politico class aka ruling class.


Politico Promises through the Mechanism of Government

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. - Thomas Jefferson

Politicos have long known that they can promise one group that poses a special political interest a benefit by extracting value from a highly diffused group of tax payers. One dollar from a million tax payers, taxpayers that will not lobby against a one dollar tax increase, can then be easily bestowed upon a group that is of special political interest to the politico or group of politicos. Hence we immediately create the politico promise by means of the government mechanism by merely having the mechanism of government extract tax and have the mechanism of government bestow a benefit elsewhere.


Politico Time Horizons

Politicos have a very short political time horizon which is known as the next election. Three basic strategies present themselves to politicos in relation to their short term political time horizon: (a) exactly what well organized political constituency [rent seekers] can be bestowed a benefit that will result in votes, campaign contributions, and campaign volunteers? (b) what prior politico produced dependency group can be framed as though the politico is protecting or enhancing the group all the while to gain votes [prior politicos producing a dependency groups for current and future politicos], (c) create a new dependency group.

Since the politico’s political time horizon is short, any promises must have an immediate effect to fit the short time horizon. Hence long run cascading economic unintended consequences of politico promises are of no interest to the politico as short term first stage economic consequences are the quest. One might go on to say that the politico has no real interest in the benefits or costs of such promises to the affected recipients or taxpayers financing such a plan, the only benefit of interest is to the politico is votes leading to election or re-election.


Dependency Politics and Other Peoples’ Money

Politicos long ago discovered the ability to generate dependency constituency by promising other peoples’ money. Stated alternatively, through notional propositions and verbal virtuosity the redistribution of income and wealth are championed by politicos to help the have-nots and build a vibrant middle class. However, the redistribution of income and wealth has nothing to do with helping or building. Rather, redistribution of income and wealth is merely a spending conduit for politicos. Stated alternatively, politicos need other peoples’ money in order to finance spending promises.

With the spending conduit in place politicos coercively, through the mechanism of government, take monies from one group and promise the monies to another group. The receiving group, known as the recipient class, is given the money based on two concepts: (1) build a government bureaucracy to distribute the money hence creating a dependent bureaucracy [employment-dependent and hence politico-dependent upon the continuation of the promise to distribute to the recipient class], (2) a recipient class that grows dependent on the promised money and hence dependent upon the continuation of the promise. The politico then creates two dependent political constituency groups.


The Required, the Needed, and the Necessary

The summation of politico promises past and present are now framed as required, needed, and necessary. Speeches, rallies, commercials, and essays are presented regarding the dire need for the promises. That the promises are required, needed, and necessary or else ominous consequences await.

In essence the required, need, and necessary politico argument is really an argument for the continuation of the politicos’ exercise in political constituency building with other peoples’ money. The dire and ominous consequences are in fact the particular politico or group of politicos defeat at the polls as the end of the spending means the end of the promise leading to the end of the political constituency purchased though other peoples’ money.

Summary

James and Jane Goodfellow and John and Jane Q. Public have long complained that politicians are crooks. What the Goodfellow’s and the Public’s need to do is finish the thought and confess they have been systematically duped.

The state is the great fiction by which everybody seeks to live at the expense of everybody else. - Frederic Bastiat, 1850.

Government promises?

In the coming debate regarding major reductions in federal spending certain politicos will frame “spending” as “government promises”. That a reduction in spending is somehow a reduction in a promise.



There were never any “government promises“. You see, governments don’t think nor make decisions. Any promises were exactly made by politicos, with other peoples’ money, through the mechanism of government.



The reduction in spending, meaning a reduction in politico promises, creates a basic problem for politicos: they have spent the better part of eight decades spending other peoples' money to build dependent political constituency. They have constructed, maintained, and perpetuated spending as a political constituency building exercise and could care less about the actual outcome of the particular spending. Spending focus by politicos is primarily on the dependency factor to built and maintain constituency. They also grant rent seekers (special interests) benefits (taxpayer money) as a further extension of political constituency building.


The result is: reducing/eliminating other people (politicos) ability to spend other peoples' money (taxpayer) on other people (recipient class) is in fact a threat to politicos’ constructed, maintained, and perpetual political constituency building exercise. Hence reducing spending is a threat to their supporting political constituency (votes, political donations, campaign volunteers, etc.).


Therefore, perpetuating spending is paramount to the politico. Framing the argument that spending equals government promises is an attempt to portray reduced spending as broken promises. The Orwellian phrase “government promises” is merely new speak for “politico promises” as governments don’t think or decide, only politicos think and decide.