Congratulations
While I disagree fundamentally with the perspective Obama has taken on the three core issues of economic policy, foreign policy, and social policy, it is also important to acknowledge that he ran a very smart campaign and should be congratulated for that.
And far more important than that: It is not necessary to fully agree to also very gladly acknowledge the historic importance that, for the first time in our nation’s history, an African-American has become president.
Lessons in Marketing from the 2008 Presidential Election
Seth Godin has a great post this morning on Marketing Lessons from the US Election. Well worth the read.
Here’s the quick summary:
- Stories really matter
- TV is over
- Permission matters
- Marketing is tribal
- Motivating the committed outperforms persuading the uncommitted
- Attack ads don’t always work
- We get what we deserve (ex: buy from telemarketers, and you’re going to get more telemarketers)
I would add an eight point: sometimes, we don’t get what we deserve. Thankfully.
If You Are Not Economically Free, You Are Not Politically Free
Nearly all recognize the value of freedom in the political sphere. It is wrong for the government to coerce us to speak, believe, or think contrary to our wishes, or to deprive us of our right to life without due process.
But it is equally necessary to realize that economic freedom is a necessary component of political freedom. If the government tells me how much of my money I can spend, what I can or cannot buy, where I can or cannot work, or what prices I can charge for goods that I produced, I am not free. I am being constrained to act, rather than allowed to act in accord with my voluntary and free choice.
OK, so the government doesn’t tell us what we can buy or where we can work, so there’s no problem here. Right?
Well, fortunately nobody wants to take things to that extent. But have you ever considered the subtle role that taxation plays in hindering the economic freedom of the people in our nation?
Now, I’m not against taxes. I completely affirm that taxes are necessary and it is right for the government to tax.
The problem comes with excessive and overcomplicated taxation. The higher taxes are, the less free we are economically to spend our money as we choose. This is a real restriction on freedom.
This is why I would argue that it is a responsibility of government to keep taxes low — and on all income levels. If the fundamental purpose of government is to protect life and liberty (see previous post), then it follows that government has an obligation to keep taxes low and thus prevent the reduction of economic liberty.
The integral relationship between political freedom and economic freedom is one of the main points of Milton Friedman’s classic work Capitalism and Freedom. “Clearly, economic freedom, in and of itself, is an extremely important part of total freedom.” If I am not economically free, then neither am I politically free.
This is why it is not only bad policy, but also wrong in principle (given current tax rates and the current tax complexity) to raise taxes on those earning over $250,000/year. (Plus, it doesn’t work.)
The Purposes of Government
One of the fundamentals of making good decisions is to know the purpose of what you are doing. If you don’t know the goal, you won’t make a good choice in how to get there.
In making a good decision about who should lead the country next, it would be smart to remind ourselves of the purposes of government in the first place. There are few better places to go than the Declaration of Independence. Here is what we read:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.—That to secure these rights, governments are instituted among them, deriving their just powers from the consent of the governed.
So why does government exist? To protect life, to protect freedom, and to protect opportunity. There is nothing in here–or the Constitution–about “spreading the wealth around.” In fact, the wealth is “spread around” better through the decentralized function of the free market than through centralized government control.
In the age of Google, I am amazed that there are still people that do not appear to believe this (or, while believing it in theory, do not accept it in practice). The internet revolution is an incredible illustration of the power of decentralization. Yet we still have people holding firmly to the idea that when it comes to politics and economics, the need is for greater centralized control (higher taxes on the wealthy to redistribute income, etc., etc.).
Let people be free. This is both right in principle (based on “unalienable rights” given by God) and results in greater welfare for society. Government exists to protect this freedom–not encroach upon it in the name of the “greater good.”
We cannot separate out economic freedom from political freedom, either. As Milton Friedman said, economic freedom is an essential part of total freedom.
For more on the purposes of government, I would recommend Justin Taylor’s post where he breaks down an article by Robert P. George into an interview to make it easier to skim.
The original article, Law and Moral Purpose, was published in January of this year in First Things. Robert P. George is Princeton University’s McCormick Professor of Jurisprudence, and Director of the James Madison Program in American Ideals and Institutions.
I found Justin’s post very helpful. Especially helpful was the distinction between government’s primary and subsidiary roles.
The post also covers the common objection that since the Constitution says that one purpose of our government is to “promote the general welfare,” vast and sweeping governmental powers are called for. In reality, George shows how this clause actually requires limited government–which is a fundamental principle behind the entire constitution.
Why doesn’t anyone campaign on what we should stop doing?
When a person makes something complicated, it’s usually a sign that they don’t know what they’re doing.
I was reading more on Obama’s tax plan the other day, and it’s complicated.
Why?
Because they think the government needs to be doing more.
But why would we think that way? It’s like always letting your lawn grow, and never mowing it.
The government does not need to be doing more. It needs to be doing less. It should spend the next four years getting rid of things, not adding things.
Why doesn’t anyone campaign on what we should stop doing?
Why aren’t there more bills proposed for the sake of getting rid of laws and policies rather than adding new ones, as though more is always better and “doing something” is defined by how much you can add to a gargantuan pile of tangled policy?
And then when it comes to taxes, they can be left alone or simplified, allowing millions to keep more of their own money. And the result will actually be more effective.
Let the millions of creative, innovative, hard working individuals and companies in this nation keep more of their money, and there will be a much better “return” on that money for the nation as a whole than if we take it away and put it into an already overly complicated government system.
That’s fair — and simple.
How to Pick a President
I posted yesterday on how the key to making good decisions is to understand the guiding principles of the area. Everything else follows from those principles. So if you understand the guiding principles, you will be able to make good decisions.
This has significant implications for how to choose a president. For it means that you don’t need to go through the details on hundreds of different issues. You only need to know a few things in order to pick the best candidate for office.
So, here’s how to pick a president:
1. Determine the Major Issues
You don’t need to evaluate the candidates on 100 different issues. Everything rolls up into about 5-6 major categories. The top 3 are: economic policy, foreign policy, and social policy. These three areas (along with judicial appointments) encompass the bulk of the influence that a president has, and affect the nation in massive ways.
2. Determine Which Candidate Understands the Guiding Principles of Those Issues
You don’t need to drill down into thousands of details within the major issues. Instead, you simply need to know which candidate understands the governing principles on those issues. For if a leader gets the major guiding principles on an area, then the thousands of details involved in the area are going to fall in line as well. Not perfectly, of course. But far more fully than when the leader doesn’t get the major principles. Electing someone who does not grasp the guiding principles of economic policy, for example, is like hiring someone to fix your radiator who has no knowledge of mechanics and, worse, is using the wrong instruction manual.
When it comes to economic policy, the major guiding principle is to maximize freedom to the greatest extent possible. (I blogged on this yesterday so I won’t go into more detail on that here. Some really helpful books that flesh out this principle are Milton Friedman’s Free to Choose and Henry Hazlitt’s Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics.) When it comes to foreign policy, one of the major principles is peace through strength. On social policy, the central function of government is to protect life.
So what you do, then, is ask yourself: Which candidate understands these fundamental, guiding principles of economics? Of foreign policy? And of social policy? Sometimes a candidate might not have the fundamentals down on all three areas, in which case you will have to prioritize which is most important. But generally, there is one candidate who totally blows it on all three, and the other candidate usually is fundamentally sound on at least two, if not all three, of these issues.
Now, we run into a problem here for those who feel that they themselves do not understand the fundamentals of economics, foreign policy, and social policy. My advice here is this: First, economic policy is more important than foreign policy. So if you have to choose, focus on economic policy over foreign policy. And it is not too difficult to come to a solid grasp of the fundamentals of economics. I would recommend reading one of the two books I mentioned above, or Thomas Sowell’s Basic Economics 3rd Ed: A Common Sense Guide to the Economy. You can also read Thomas Sowell’s columns online and get a good beginning grasp of things in about 30 minutes.
(By the way, Sowell points out that the basic principles of economics are not partisan–they are agreed on by economists of all stripes: “While there are controversies in economics, as there are in science, this does not mean that economics is just a matter of opinion. There are basic propositions and procedures in economics on which a Marxist economist like Oskar Lange did not differ in any fundamental way from a conservative economicst like Milton Friedman. It is these basic economic principles that this book is about” [Sowell, Basic Economics 2nd edition, 4]).
3. Consider Leadership Ability Last
Leadership is an integral characteristic of an effective president. But its consideration has to come last because it doesn’t matter how good of a leader someone is if they are leading in the wrong direction. More important than leadership ability is knowing where we should be going–that is, knowing the fundamental, guiding principles of sound economics, foreign policy, and social policy. In fact, I would say that knowing the right direction to be going is a fundamental characteristic of good leadership. Another reason that leadership ability should be considered last is because of the tendency to confuse charisma with leadership.
4. Vote
Last of all, vote. Don’t sit at home and say that neither candidate is your ideal. Good grief, when you grasp the fundamentals of economics you see that there is a huge divide between the candidates. Don’t settle for a mechanic who doesn’t know what he is doing simply because the other mechanic doesn’t match up to everything you would ideally have wanted to have in a candidate.
Some people are saying these days that if you aren’t informed on the issues, don’t vote. I don’t know if I agree with that or not. I’d rather say: Spend 2 hours familiarizing yourself with the fundamentals of economics. Read some of Thomas Sowell’s columns if you feel like you are behind on this issue and aren’t up to speed. And then make sure to understand the fundamentals much better yourself when the next election comes around.
What McCain Should Say (Update: Should Have Said)
The guiding principle of sound governmental and economic policy is to maximize freedom. That’s it. Very simple. Government exists to protect freedom, not restrict it.
This is not only right in principle, but it also works better — when people are left free to make their own choices, greater prosperity results (and I don’t mean this simply in economic terms). When people are left free, their initiative and creativity and diligence are free to create and innovate and produce. When people are restricted by government policies and excess taxation, the incredible potential of the people is also restricted.
I’m not saying that the Republicans have done a good job of living up to this in the last eight years, but when it comes to the two candidates before us McCain is much more in line with this thinking than Obama. Yet he has not been able to make an effective case for his economic principles, and has not done a good job of countering the standard charge of “favoring the rich.”
What we need is a candidate — whether McCain now or someone else later — that simply explains these principles clearly. It’s not hard. I think that a candidate that could do this, and stay on this note, would win every time. McCain simply needs to say something like this:
I am not for keeping taxes low because I am looking out for the wealthy. I am for keeping taxes low precisely because I am looking out for the little guy.
When businesses are able to keep more of the money they earn, it gets invested in jobs and other productive endeavors. The result is that there are more jobs and a growing economy–things which benefit the middle class and the poor.
But if we increase taxes on business and higher income brackets, they do not have that money available to create jobs. Instead, it gets shifted to the government, which then uses it to create ineffective government programs to compensate for the fact that the economy is not producing enough jobs.
Politicians are really good at “coming to the rescue” when all they are really doing is solving problems of their own making. Let’s stop creating more problems, and stay out of the way. This country is great because of its people and the principle of liberty upon which it was founded. Let’s trust our people, stop interfering with their liberty, and let them live their lives. This is both the right thing to do and what is best for this nation’s economy. The American people will do far more good with their money than government ever can. Let them keep it.
He could even go on further and overcome some objections:
Sometimes these ideas have wrongly been accused of being “trickle-down economics.” But that is a straw man. As economist Thomas Sowell has argued, no economist in the history of the world has held to a notion of “trickle down” economics (see Sowell’s Basic Economics, pages 388-389 in the second edition). Instead, it is “trickle up,” because the business or entrepreneur investing in the economy and job creation is the last to get paid.
For example, a small business decides to add a position to their company. They incur expense to find the right person, train them, and have them continue the ropes for several weeks or months on the job. During this time, the business is incurring significant expense and not yet experiencing a return. When the position does start to become profitable, it remains the case that the employees are paid first, along with expenses such as rent, utilities, supplies, and production costs. Finally, the business receives as profit whatever is left at the end, after paying all of these things. This is not trickle-down; if anything, it is trickle-up. The business and entrepreneurs get paid last. What the business has done is in fact admirable and, as Michael Novak argues in The Spirit of Democratic Capitalism, in some sense heroic. This is a good thing. We should not penalize the ability to do this through our tax code.
McCain could also go on to point out that this is not about materialism or greed:
Very often, people misrepresent the free market and capitalism as being about “greed” or “materialism.” I join you in saying greed is evil and materialism is empty. No thank you. But capitalism is not driven by greed. Sure, some people are, and capitalism forces their greed to be funneled to the good of society, because in order to make any profit at all, you have to think first about how to serve your customer. So capitalism is actually a very powerful check on greed, forcing it to serve the benefit of the common good.
But most people are not so thoughtlessly driven by greed, and capitalism is not about greed and it does not depend upon greed to work. Capitalism is about freedom, which means enabling people to pursue projects of interest to them; endeavors and initiatives which are of their own choosing. Capitalism is about being able to undertake what you choose, not what the government tells you to do, and to do it for whatever reason you want.
For most people, their aim is not selfish gain, but to serve their families and make their communities better. In capitalism you might choose to earn all the money you can for selfish reasons. But just as many people — in fact, more — are simply seeking to make an honest living, serve their families, and give some of what they earn to do good for the world.
In fact, capitalism doesn’t have to be about making money at all. You can choose to start a non-profit to fight AIDS in Africa, or a soup kitchen to fight hunger in your city, or an innovative new organization like Kiva. The whole point of capitalism is freedom: let people do what they choose. And multiple, numerous, incredibly creative initiatives will result that are good for society on all fronts, both economically and non-economically.
McCain could then tie it all together by closing something like this:
My campaign exists to make this vision of freedom thrive. These are the ideals that have enabled our people to prosper and serve over the last two hundred years and, yes, even grow in virtue. We don’t want to go through four years under a regime whose ideology distrusts your freedom and thinks that it is centrally planned government policies that make our nation great rather than the people themselves. Economic freedom and political freedom go hand in hand. If you are not economically free, you are not politically free. Vote for someone that will keep you free.
Gallup Poll on Income Redistribution
Gallup has a helpful article on how Americans Oppose Income Redistribution to Fix Economy. “Americans overwhelmingly — by 84% to 13% — prefer that the government focus on improving overall economic conditions and the jobs situation in the United States as opposed to taking steps to distribute wealth more evenly among Americans.”
This extends across parties and income levels:
Americans’ lack of support for redistributing wealth to fix the economy spans political parties: Republicans (by 90% to 9%) prefer that the government focus on improving the economy, as do independents (by 85% to 13%) and Democrats (by 77% to 19%). This sentiment also extends across income groups: upper-income Americans prefer that the government focus on improving the economy and jobs by 88% to 10%, concurring with middle-income (83% to 16%) and lower-income (78% to 17%) Americans.
Should the Government Raise Taxes on Those Making More Than $250,000?
It has been said on the campaign trail a couple of times now that those making over $250,000/year can “afford” to pay more in taxes. There are lots and lots of problems with this thinking. First among them is that the issue is not about what citizens can “afford,” but about what the government has a right to do with people’s money. Another issue is that this statement wrongly assumes that the government can utilize that money more effectively than the individual who earned it. We’ll talk about these things more in future posts on making good decisions in the economic and political realms. (In the meantime, I highly recommend Thomas Sowell’s Basic Economics 3rd Ed: A Common Sense Guide to the Economy.)
But if we want to talk about fairness, Hugh Hewitt made an excellent point last Friday in his post on Obama’s plan to “share the wealth:”
What Obama doesn’t understand is that behind every small business that gets to the level he where he wants to slam new taxes on it, are years and sometimes decades of hard work and low, if any, profits, deferred dreams, and large debts that need to be paid from today’s success as well as tomorrow’s retirement plan to fund.
About Matt Perman
Follower of Christ. Husband of one, father of three. Former director of strategy at Desiring God. This blog exists to help equip Christians in good works, because that's what productivity is really about.
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