Amity Shlaes over at Forbes has published an article in the October 22, 2012 issue called “The End of Behaviorism.” (If you’re unfamiliar, Amity Shlaes is the author of the very good “The Forgotten Man,” a realistic history of the Great Depression. She is also the author of a forthcoming biography of Calvin Coolidge, one of my absolute favorite presidents and a sadly all-too-often-ignored figure.)
In this article, Shlaes lays out the contrast between the economic policies of the two major political parties in simplistic terms:
Get the rat to the cheese.
That’s really what each U.S. political party is promising to do if its candidate is elected President. The rat in this analogy is the enervated American worker. The cheese is his reward. If all rats make their way through the maze and to the cheese faster, the economy will grow faster.
The only way that Democrats and Republicans differ is in the manner in which they animate the rat. Democrats take the Habitrail approach: Give the worker the equivalent of a roomy cage with a deluxe wheel, and he’ll be fit enough to pursue his cheese. Republicans focus on incentives: Double the cheddar, and the rat will navigate his turns more quickly. The rat analogy comes from modern economics, a discipline that classes itself as lab science, precious and pure.
Neither approach works particularly well. The article goes on to probe the deeper depths of the human psyche viz. “getting to the cheese.” What is it that really motivates people? I think Shlaes assertion that freedom in and of itself is the goal of many is right on the dot.
But people aren’t lab rats. They are souls, to use a pre-social-science word. Souls, pious or not, make their choices in complex fashion.
Indeed, freedom itself is what motivates many people who are not currently free. We in this country tend to get so caught up in how much money we have, how many things are available to us, whether our material situation is better now than it was four years ago – that we utterly forget to appreciate the necessary condition to material wealth and comfort.
That is freedom.
And thus, I find Shlaes’s article to be a – perhaps unwitting – explication of the libertarian position, and especially of that position’s superiority over the position of the major political parties in this country.
The cheese is not really what matters, although getting rats to cheese is a nice side benefit. What really, truly matters is whether people are free to live their own lives without coercion.
Bob Kerrey, loser of a senate race in Nebraska, has pointed out the growing climate of political hatred in the country. He says:
Sitting in his midtown Omaha home a day after Tuesday’s election, Bob Kerrey said a shout from outside made him reflect on what he believes is political hatred that has grown increasingly intense.
… “Hatred is a dangerous thing,” he said.
I completely agree, both about the growth of hatred in politics and about its danger to individuals and the polity itself. In the wake of a presidential election that split the country as never before, we have seen the emergence of class warfare and identity politics writ large.
Instead of changing the almost-universally unpopular status quo, Americans cast their votes as blocs, with blacks almost completely separating from whites, women and men a chasm apart, the wealthy and those of limited means at loggerheads like we haven’t seen in decades. So much for Obama being the great uniter.
However, I get the feeling that Mr. Kerrey and I would not agree about the causes or cure.
I believe it is a simple problem, and it can analogized as follows. If you are infested with mosquitoes, you can kill them one by one. You can curse the gods for plauging you with insects. You can suffer in silence. On the other hand, if you want an end to the problem, you can drain the swamp.
Political hatred is always and everywhere a product of political overreach. When people peacefully and voluntarily exchange without government interference, there is no political hatred. However, when politics reaches into our wallets, our bedrooms, our private lives – that is where hatred begins.
A vote for an intrusive public policy is akin to a personal attack, because although the state is used as proxy, the result is the same. If we do not want people picking our pockets one-on-one, how can it be legitimate just because enough people voted on it? If the natural response to theft is anger, why would we respond the opposite way just because the government is the middleman?
You want less political hatred, Mr. Kerrey? Try less political force.
Much ado has been made recently about the AIG bailout, and specifically about whether it has made or lost money for the U.S. Treasury. The latest numbers flying about are from Neil Barofsky, former special inspector general of TARP, and the Treasury Department itself. The New York Times, reporting on the war of words, comes down squarely on the side of Treasury.
The pat explanation is that the bailout of AIG “worked.” It is a cute story, even if it seems to be keyed to the election.
On the other hand, my contention is that is does not matter whose numbers you use, or how you massage the accounting. In point of fact, there is really no way of knowing how much the bailout really cost us; you can add and subtract stock prices and buy-in and sale, but how do you quantify moral hazard for example? Any accounting is bound to be inadequate
But more importantly, the math does not really tell us anything useful. It gives us hindsight bias, and nothing more. Compare the AIG bailout to buying a lottery ticket. (Perhaps an apt comparison, given the level of decisionmaking involved.)
It is a known and accepted fact that buying a lottery ticket is a mistake. The ex ante math tells us that we waste our dollar on the lottery ticket, because the odds are far too long to expect a payoff.
But somebody has to win. If you buy a winning lottery ticket, is it fair to declare that you made the correct decision in buying the ticket after the fact? I contend that it is not. Objectively, buying the ticket in the first place was a poor decision, and since there is no way of knowing ex ante whether you hold a winner, the decision must be deemed poor regardless of what you discover ex post.
It is the same with the AIG bailout. Ex ante, there was really no way of knowing whether Treasury would turn a profit, but we were nevertheless playing terrible odds on a tilted roulette wheel. With all of the negative consequences of this particular course of action, it is unwarranted to highlight a gain in stock price that was, ex ante, completely speculative.
Now if you’ll excuse me, I am going to go complain about how the general manager of my favorite baseball team is an idiot because he did not trade his star player before he got injured.
The news was mostly positive for Republicans this midterm election cycle (aside from the terminally hopeless California Republican party), with the red team retaking the House, recouping several seats in the Senate, and capturing several more governerships. But, tread lightly, Republicans – yours is not a mandate.
Make no mistake about it: voters did not vote for Republicans because they like them. Popularity numbers for both parties are abysmal, and interestingly enough, most polls show that Republicans are still more unpopular than their statist allies across the aisle. Voters hate you, Republicans, and they hate the other guys too.
So what are we to make of the historic rout of Tuesday Nov. 2? Voters soundly rejected the one-party rule of the past two years that brought us state-controlled health care, massive bailouts, ridiculous money creation, and ever more government interference.
This has its precedent, of course. In 2008, voters eager to get rid of the last vestiges of George W. Bush, that prime example of neocon meddling, instead ended up with a more overt, and some would argue more pernicious, form of meddling in the neo-Bismarckian Barack Obama. The whipsaw from 2008 to 2010 simply means that voters who didn’t want neocon intervention want neo-progressive intervention just as much. Which is to say, not at all.
So a word to the wise, Republicans. You may be celebrating now, but you’ll be wandering in the wilderness again before you know it unless you give the voters what they want. Here’s a hint: it ain’t Mitt Romney.
They want to be left alone.