Wednesday, June 4, 2014

A Prisoner's Dilemma

Today I was thinking that there is something like The Prisoners' Dilemma at work with the divide between "the rich" and "the poor."  The Reagan years demonstrated (to conservatives, anyway) that supply-side economics go a long way toward reducing the divide.   The rich got richer and the poor got richer too.  The gap between African American incomes and average American income got smaller.  The rich got richer as they invested in jobs (and paid people to work) and everybody's jobs and retirement plans reaped the benefits.

So why do those much richer than middle class and much poorer than middle class tend to vote for things like "the gesture of taxing the rich" and increased deficit spending if it is worse for everybody?  As in the Prisoners' Dilemma, each person settles for a bird in the hand than many birds in the bush.  The less evenly the wealth is distributed, the more each person protects what they have.  The more the economy tanks, the more the "little guy" is going to vote for whomever provides the most immediate relief, regardless of the consequences for the nation.

The more troubled the economy, the more the very rich will depend on government lobbying to edge out the competition, creating regulations that are too difficult for any but the most expensive legal teams to navigate, creating too much infrastructure for smaller companies to pose a threat.  Because face it, if I'm Warren Buffett, I'm going to be okay no matter what happens.  But I'm definitely going to be more than okay with higher corporate taxation and higher income taxes: the first will choke the competition (allowing my companies more leeway to charge higher prices for lower quality), and the second will force me to simply depend more on tax shelters, a trick to which the smaller fish are less privy.  Which means I'll invest less in American jobs, but that's the average American's problem, not mine.  If I make 0.3 billion instead of 0.5 billion, what does that matter if the people on the next tier made 0.1 billion instead of 0.2 billion?  The rich could've got richer, but more importantly, the divide got wider.  (Ever wonder why a billionaire who gives millions to law firms to keep every last nickel away from the IRS is trying to change the laws to "pay his fair share"?)

So part of the way The Big Corporations are actually "corporationy" (as the fictional Tim Robbins put it in Team America) is by lobbying for more regulations (with some favorable touches) and taxation that protects their status in the market.  Which is part of the march toward fascism, that hybrid of statism and corporatism that makes it increasingly difficult to know the difference between the market leaders and the federal czars.  Kind of like the current American situation in aerospace/defense, education, journalism, and banking.  It's getting harder to know where the state ends and big business begins; the thicker the regulations, the more tentacles are connecting these institutions.

There's Big Business on the spending side too: subsidized industries like the criminal justice system, DMV- and emissions-related boons to the auto industry (how many of us are being forced to replace our still-working Toyota?), drug law enforcement, abortion "health services," now healthcare (mandatory), insurance, defense subsidies, green energy boondoggles, railway and transportation boondoggles, roadwork welfare, bank bailouts, and every "too big to fail" industry you can imagine.

So while the rich are making sure that the power of the State increases in a way that protects their advantage, the poor are making sure that the power of the State increases in a way that will give them any immediate advantage no matter the impact to the general economy.  If there was any rallying cry among "independents" in 2012, it was "I'm getting mine, Jack!"  "Gee, I'd like to vote for a sounder fiscal practices, but it's been such a tough year, I'm going to vote for whomever will promise the most help."  "My wife doesn't want me to vote that way, because she's worried about the rising costs of college tuition."

 GIVE ME LIBERTY, OR GIVE ME ... on second thought, who wants to buy my vote?  Who wants to throw a few thousands bucks at me from the public purse?  My vote is all yours, honeysuckle.

The economic instability and the resulting economic divide (between rich and poor) caused by the increased government intervention tends to result in more support for increased government interaction.  It's a vicious cycle, one that many statists and collectivists hope will soon cause a collapse of property rights in America.  And still, many so-called "independents" act like the only thing at stake their vote is their immediate gain.

In the mean time, the rich and the poor are trying to protect themselves from the other, and the only ones who win in the long run are the statists who are pitting one against the other--well, and the crony-corporatists that conspire with them against thefree market. That's why the President is running between off-the-record behind-closed-doors meetings with lobbyists and fundraising at at opulent and exclusive elite celebrity dinners, all the while supposedly defending us from the interests of the rich.  Class warfare is a lucrative business, as the "dead broke" Clintons can tell you.  They laugh all the way to the bank.

When I was a boy . . . bourgeois meant "not aristocratic, therefore vulgar." When I was in my twenties this changed.  My class was now vilified by the class below it; bourgeois began to mean "not proleterian, therefore parasitic reactionary." Thus it has always been a reproach to assign a man to that class which has provided the world with nearly all its divines, poets, philosophers, scientists, musicians, painters, doctors, architects, and administrators.
    -- C.S. Lewis
I've never quite been able to figure out why liberals self-identify with qualities such as 'bright', 'non-conforming', and 'hanging loose', then turn around and demand a system of government that represses creativity and initiative, stifles individuality, robs the productive to support the slothful, and demands a high degree of unthinking conformity. ... Liberals seem to think they are libertarians, but until they learn that economic freedom is more important to the health of a free society than sexual license, they will remain Stalinists in drag.
   -- Mr. Jeeves

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