I’ve gotten tired of explaining why supply-side economics — i.e., voodoo economics — don’t actually work. So I’ve decided to write up a quick-and-dirty version that I can just link to as necessary. This is not meant to be a definitive statement on the subject. It’s not even an air-tight argument of the principles being espoused. It’s just me pointing at some pretty fundamental absurdities in voodoo economics and saying, “Hey! Look! Have you even thought about this? It doesn’t make any sense!”

(1) Money is a form of power. Power tends to accumulate more power. Thus, in a capitalist society, wealth tends to flow up, not down. The rich tend to become richer and the poor tend to become poorer. Supplying the wealthy with even more money doesn’t cause that money to flow down to the poor — it just accelerates this natural trend. Which is why, every time supply-side economics have been attempted, the divide between the rich and the poor has grown wider.

The argument has been made that a “rising tide raises all ships”, but the reason this disproportionate distribution of wealth is a problem leads us to…

(2) The modus operandi of capitalism is consumer spending. In a capitalist system you have multiple products available, and those products which have the greatest value to the consumer succeed (because they buy them) and those which have less value fail (because they don’t). In a very real sense, capitalism is a democracy in which you vote with your dollars for the products you like best. And although in practice a capitalist system can become flawed in many ways, capitalism has widely proven itself to be the best system for encouraging quality, efficiency, and innovation.

You need an unequal distribution of wealth for this system to work, but when that inequality becomes sufficiently disproportionate the reduced spending power enjoyed by the majority of your consumers results in a less efficient system. Not only are the quality of decisions which emerge from such a system degraded, but the system’s ability to encourage increased value and quality becomes quashed.

This all leads us to the fundamenal problem with supply-side economics…

(3) If you want to stimulate a capitalist economy, you should be giving tax breaks to the poor, not the rich.

The reason for this is the difference between spending and investing. Republicans argue that giving tax cuts to the rich allow them to invest in business. By investing in business, the argument goes, the economy grows and the workers end up benefitting in the long run.

But while investing is an important part of capitalism, it’s the secondary mechanism of the capitalist system. The primary mechanism of a capitalist system is spending.

If you give money to someone and have them invest it, that money may or may not eventually result in economic activity and capitalist success. (Whether it does or not will depend entirely on how the money is invested. If it’s invested in a better, cheaper product that people want, it will stimulate the economy. If it isn’t, then it won’t.)

But if you give the money to someone and have them spend it, that money immediately results in economic activity and capitalist success. This result is guaranteed.

In other words: If you give the money to an investor, you are injecting that money into the economy in an inefficient manner — that money may or may not end up growing a business producing products that consumers want.

If you give that money to a consumer, on the other hand, you are injecting that money almost directly into the economy — that money will automatically end up growing a business producing products that consumers want (because the consumer will spend it on the products that they want).

(4) The name “trickle down economics” is actually truth in advertising. Money in a capitalist system flows reliably from the consumer to the successful business/investor/capitalist. Movement in the opposite direction, however, is not reliable.

Which actually brings us full circle: In capitalism, wealth tends to flow up and trickle down. If you want to stimulate an economy, you want to make the money flow and, thus, encourage better ideas and more valuable products.

And that means tax cuts for the poor and the middle-class, not the rich.

THE OTHER FALLACY

Of course, this conclusion simply opens the door to the larger question of when such tax cuts are appropriate. The other fallacy of voodoo economics is the claim that lowering taxes will always result in sufficient economic growth to raise overall tax revenues. This is self-evidently not true for several reasons:

(1) If you reduce the tax rate to 0%, it doesn’t matter how much economic growth you enjoy as a result: You still won’t end up with increased tax revenues (since you’re not collecting any).

(2) Even if you replace “no taxes” with “infinitesimal taxes”, the conclusion is still palpably absurd. If you have an average tax rate of 30% and you lower that to an average tax rate of 1%, you’re claiming that the economy will grow to 30 times its current size entirely as a result of the tax cuts. (That means you can’t count inflation or the normal economic growth that would have occurred even if you hadn’t cut taxes.)

The underlying fallacy here is the belief that the social institutions and infrastructure created by our government have no positive role on economic growth. Common sense alone should tell you that a certain degree of social infrastructure (e.g. law and order), physical infrastructure (e.g. roads), and educational infrastructure (e.g. univeral education) is beneficial to the economy (even if one ignores all the other societal benefits). And even the most cursory analysis of history shows this to be true: Anarchy is not conducive to economic growth.

On the other hand, it is equally trivial to demonstrate that the opposite extreme is equally absurd: The benefits brought by government cannot possibly outweigh the problems caused by an average tax rate of 100%.

The inevitable conclusion is that there is a sweet spot in which both the benefits of low taxes and the benefits of the societal infrastructure provided by our government are maximized.

Or to look at it another way: The problem with both extremist libertarians and communists is that they equally fail to appreciate the sweet spot between anarchic liberty and absolute central control.

Recently, for a project I’m intermittently working on, I’ve been reading a lot of primary feminist theory. Since my thoughts on such matters have been getting regularly stimulated by this reading, it means you’re going to have to put up with me sharing some of them… particularly the ones which little bearing on my project and, thus, have no other outlet.

So let’s start with Freud’s concept of penis envy. Boiling it down to its most basic form, Freud’s theory goes something like: At some point during puberty, girls figure out that they don’t have penises and boys do. The girl, discovering this, becomes jealous that the boy has a penis and she doesn’t.

This is stupid enough — since it implicitly assumes that a vagina is the mere absence of a penis — but Freud isn’t done yet: Because the girl wants a penis, she naturally wants her father’s penis. This translates into a sexual desire for her father. And since this sexual desire for her father is forbidden, she defensively shifts her sexual desire from her father to men in general.

Freud had issues. This much is clear.

(Please note, I am not making this up. It should also be noted that, since a vagina is not the mere absence of a penis, it would make just as much sense — using Freud’s logic — to say that men are possessed of “vagina envy”.)

Which brings me to Betty Friedan’s The Feminine Mystique. Friedan makes a pretty much indisputable argument that Freud’s theory is abject bullshit: If a woman in Victorian Europe envied a penis, she did so only insofar as it represented the social justice and opportunity which was automatically afforded to men and denied to her.

In other words, Freud was a product of his time… and a sex-obsessed one at that.

However, insofar as Freud was describing in sex-obsessed and metaphoric terms a legitimate psychological facet of women in Victorian Europe — i.e., their envy of the social opportunities men possessed and they lacked — there can be valuable insight gleaned from Freud’s theory.

Because, in point of fact, Freud still isn’t done: Penis envy persists after the woman matures into a socially acceptable sexual love for men who are not her father. (I feel silly just typing that.) A woman eventually satisfies that penis envy by having a son, and thus coming into possession of a penis of her own. (I feel even sillier typing that.)

Okay, let’s strip away Freud’s sex-obsessed silliness. Metaphors aside, what the heck is he talking about?

Friedan makes the very compelling argument that, when a woman finds her own growth as an individual cut off by social injustice, she will attempt to find other outlets through which she can express herself.  And one of these outlets is through her own children: Unable to live her own life fully, the mother tries to find fulfillment through the accomplishments of her children.

In truth, we can strip the words “woman” and “mother” out of the preceding paragraph entirely: It remains equally true for all human beings. And certainly we are all familiar with both fathers and mothers trying to make their children live out their own thwarted dreams.

This is bad enough in itself, but Friedan makes the wider point that — in post-war America — the oppression of woman had reached a point in which the common housewife was becoming literally infantilized. (Her argument is lengthy, well-documented, and, frankly, horrifying to my modern eyes, even though I was already largely familiar with the societal injustices she was describing.)

In that environment, the natural impulse for women to try to live out their thwarted dreams through their children becomes even more severely damaging to the child’s psyche: The dreams and goals of the mother, having become infantilized, arrest the child’s ability to mature into an adult. The result can be grossly summarized as a “momma’s boy”.

Which brings me to the relatively random thought I wanted to share with you: I wonder how much of this emergent social phenomena in the late 1940’s, 1950’s, and early 1960’s — as revealed in painstaking detail by Friedan — resulted in both the creation and popular resonance of Psycho. In Psycho, Norman Bates is so literally trapped in an infantilized state as an extension of his mother’s will that he becomes her to some very real extent. When a woman becomes desirable to him — a symbol of sexuality and potential maturity which would break his pyschotic connection with his mother — he kills her.

To what extent did Psycho grow out of the deep social discontent that Friedan documents in The Feminine Mystique? And to what extent did audiences, experiencing that social discontent in their own lives — whether they recognized it for what it was or not — find the traumas of their own lives writ into the tragedy of the film?

Of course, on the other hand, the film can also be read as subconsciously supporting the darker side of the culture which gave it birth: Norman’s victim is portrayed, however briefly, as a successful and independent woman pursuing a career outside of the house… a direct threat to the feminine mystique of a woman finding her complete fulfillment in the duties of wife and mother. Having posed that threat to “proper womanhood”, she is violently “put in her place” by the male killer.

Did those supporting the malfunctioning society of the 1950s find as much satisfaction in the film as those who were consciously or unconsciously rebelling against it?

There is a pretty fundamental political mistake being made when it comes to McCain’s energy plan and it sounds a lot like this:

You can inflate your tires to the proper levels and that if everybody in America inflated their tires to the proper level we would actually probably save more oil than all the oil we get from John McCain drilling right below his feet there… Wherever he was going to drill.

BARACK OBAMA
August 5th, 2008

What Obama says there is absolutely true. And the broader point he made a few sentences later was equally true: “They’re making fun of a step that every expert says would absolutely reduce our oil consumption by 3 to 4 percent. It’s like these guys take pride in being ignorant. They think it’s funny that they’re making fun of something that is actually true. They need to do their homework. Because this is serious business.”

But there’s also something very important that’s being missed here. You can see it being missed even more widely in this frontpage Daily Kos posting where the author mocks McCain for being for both wind power and off-shore drilling.

Here’s the problem: There is absolutely nothing incompatible about being for both off-shore drilling and wind power. And nuclear power. And biofuels. And solar power. And proper tire pressure.

The defining quality of the energy plan McCain is selling is, quite simple, “I will try absolutely anything if it might reduce energy prices.”

There is a real and growing sense of desperation in America right now and, if McCain can successfully sell that message, it will find resonance with that desperation.

Of course, anyone with half a clue about these things knows that off-shore drilling is a joke. It isn’t going to have any impact on gas prices for at least 10 years and, even then, the effect will be minimal and very short-term. Al Gore delivered this message as a powerful political punch on July 17th when he said:

It is only a truly dysfunctional system that would buy into the perverse logic that the short-term answer to high gasoline prices is drilling for more oil ten years from now.

Am I the only one who finds it strange that our government so often adopts a so-called solution that has absolutely nothing to do with the problem it is supposed to address? When people rightly complain about higher gasoline prices, we propose to give more money to the oil companies and pretend that they’re going to bring gasoline prices down. It will do nothing of the sort, and everyone knows it. If we keep going back to the same policies that have never worked in the past and have served only to produce the highest gasoline prices in history alongside the greatest oil company profits in history, nobody should be surprised if we get the same result over and over again. But the Congress may be poised to move in that direction anyway because some of them are being stampeded by lobbyists for special interests that know how to make the system work for them instead of the American people.

If you want to know the truth about gasoline prices, here it is: the exploding demand for oil, especially in places like China, is overwhelming the rate of new discoveries by so much that oil prices are almost certain to continue upward over time no matter what the oil companies promise. And politicians cannot bring gasoline prices down in the short term.

However, there actually is one extremely effective way to bring the costs of driving a car way down within a few short years. The way to bring gas prices down is to end our dependence on oil and use the renewable sources that can give us the equivalent of $1 per gallon gasoline.

But this is not the consistent message being sent by Barack Obama, the Democratic party, or the progressive blogosphere.

McCain is, on the one hand, openly embracing every possible solution to the emerging energy crisis in this country. (Whether or not he’ll actually follow through on anything not approved by his lobbyist buddies in the oil industry is another story, of course.) On the other hand, the Republicans are successfully turning off-shore drilling into a wedge issue.

And the result, as seen over the past couple of weeks, is that, according to national polls, McCain is now considered the better candidate on energy issues than Obama — a result so absurd that I wouldn’t have believed it possible two months ago.

The problem here is the false “either-or” argument being used by progressives. As long as progressives keep framing the issue as “either you’re for renewable energy or you’re for off-shore drilling”, then McCain’s message of “I’m for both and for anything else that will help lower energy prices” is going to win. And win big.

And the reason he’ll win big is that, if off-shore drilling were truly a viable solution, then we probably should be doing it.

The reality is that it isn’t a viable solution. And, therefore, the correct response to this nonsense is to simply point out that it is, in fact, nonsense. Accurately attack the viability of the non-solution.

Because in the battle between the guy saying “you can have a piece of cake or a piece of pie” and the guy saying “you can have both cake AND pie”, the guy with the bigger dessert tray is going to win… unless you point out that that the pie is actually a mirage masking another handout to the big oil companies.

As I celebrate this July 4th weekend — one of my favorite holidays; the anniversary of this website’s birth; and the always joyous occasion of opening a play — my thoughts are consistently drawn back to the pending FISA legislation in Congress and the issue of telecom immunity. This is not unnatural, because the pending FISA legislation is a betrayal of the principles of government which were laid down by our founding fathers more than two hundred years ago. Since I consider the July 4th holiday to be a celebration of those principles and the nation those principles established, I actually consider it a celebration of sorts to take these issues under consideration.

FISA

Here’s the basic run-down on FISA: In 1978, following an in-depth investigation of the unconstitutional and illegal actions of the Nixon administration, Congress passed the Foreign Intelligence Surveillance Act (FISA). Basically, this bill allows the government to perform warrantless wiretapping within the United States for a period of 1 year, as long as the “surveillance will acquire the contents of any communication to which a United States person is a party”. If a United States citizen is involved, then the government must obtain a secret warrant from a top secret court within 72 hours.

And, for all intents and purposes, the top secret FISA court has been rubber stamp since 1978. If you go to FISA and say, “Hey, I want a warrant so that I can do some wiretapping.” Then you’ve got something like a 99.99% chance of getting your warrant.

THE BUSH ADMINISTRATION

And here’s the basic run-down on the scandal: The Bush administration didn’t want to obey the law. So they had legal opinions prepared which basically said “FISA doesn’t actually require what FISA says it requires because FISA doesn’t state the requirement the way that we think it should be stated”. They then proceeded to “allegedly” break the law. And by “allegedly” I mean “unless you actually believe their Bizarro World logic, then they broke the law”.

Now, let’s stop and think about this for a moment: The Bush administration, by deliberately circumventing FISA, basically said, “There are American citizens we want to spy on, but we don’t even want to get permission from a top secret court that pretty much automatically rubber stamps APPROVAL on any requests to spy on American citizens.”

And if that doesn’t scare the crap out of you, then you aren’t thinking hard enough.

The Bush administration claims that this was all about “protecting America” because the requirements of FISA meant that some horrible tragedy could happen while they were waiting for the constitutionally-mandated paperwork to be filed. There are two problems with that claim:

First, if you believe that bullshit then I refer you back to the FISA provision which allows the adminitration to apply for the warrant up to 72 hours after the wiretapping has already started. In other words, the Bush administration could already do the wiretapping now and ask for permission later… but whatever they were doing was so awful they never wanted to ask for permission.

Second, if you tear up the Constitution then a horrible tragedy has already happened.  As Benjamin Franklin said: “Those who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.” And our Fourth Amendment rights are, frankly, among the most essential of our liberties.

TELECOM IMMUNITY

Which brings us to telecom immunity: The Bush administration wants to give retroactive immunity to the telecom companies they used to perform the “allegedly” illegal wiretapping. There are so many problems with this:

First, the argument is made that the telecom companies had no choice. But they did. Qwest recognized that the Bush administration’s actions were illegal and refused to comply. Bravo to Qwest. If you want to support liberty with your pocketbook, get your phone service from Qwest.

Second, the argument is made that — without telecom immunity — the telecoms might be less willing to help the government perform their surveillance programs in the future. But here’s the thing: Qwest had no problem continuing to cooperate with legal wiretapping programs even while they refused to cooperate with the illegal wiretapping programs. So what this argument really boils down to is that the telecom companies will be less willing to help the government violate the Constitution and illegally wiretap American citizens. You know what I think about that? Good.

Third, it’s ethically wrong. If you or I were to break the law and then go to Congress and say, “Hey, we broke the law. Could you guys change the law and give us retroactive immunity?” We would be laughed at. It’s clearly unjust. It’s clearly nonsensical. And yet that’s exactly what telecom immunity is.

Which means, in the final analysis, it boils down to two possibilities: One, they didn’t break the law… in which case they don’t need immunity. Two, they did break the law… in which case they shouldn’t have immunity.

Either way, telecom immunity is a bad idea.

THE STAKES

Why do I care so much?

Fundamentally because any violation of our Constitutional rights is a direct and meaningful attack upon America. There is literally nothing more dangerous in this world than your own government turning against you. And when your government begins stripping you of your rights, that’s the definition of your government turning against you.

But, more generally, it’s because this is only the tip of the iceberg. For eight years now we have watched the Bush administration systematically disassemble this country. They have engaged in profiteering. They have run roughshod over the Constitution. They have shown a complete disregard for the rule of law.

And there have been no consequences.

People used to say things to me like “Bush is the worst President ever!”, and I would politely disagree. I have a rather deep knowledge of American history, and I would trot out various examples of incompetency or coruption and say “maybe one of the worst, but he’s got a lot of competition”.

But over the past four years, my opinion has shifted dramatically. We have had incompetent Presidents. And we have had corrupt Presidents.

But what makes George W. Bush really stand out from the pack is his amazing ability to be both at the same time; to fail on all fronts at once: To destroy not only our domestic economy, but to ruin our foreign reputation and our ability to defend ourselves. To not only sap the national treasury with the most heinous of cronyism; but to actively erode our civil liberties and most essential rights. To not only govern incompetently and cause the deaths of tens or hundreds of thousands; but to actively assault the Constitution itself and undermine the fundamental principles on which our government operates.

And since the Democrats took control of Congress in 2006 I have patiently ground my teeth in frustration. I have accepted the logic that impeachment is unlikely to succeed and politically inexpedient for a number of reasons. I have been (relatively) content to let the bastard rot out his term in office so that we can then get down to the work of fixing this nation.

But there is a difference between simply not prosecuting Bush and his administration for their impeachable offenses and actively pursuing the exact same policies as the Bush administration. And, frankly, that’s what telecom immunity is.

And what makes it so utterly assinine is that this is completely unnecessary. The Democrats have won three congressional elections in the past year to fill vacant seats; all of them in deeply red districts; all of them with Democratic candidates openly opposing telecom immunity. The voters have already rejected the bogus logic of the Bush administration. The bill was, in fact, already dead in the water.

So telecom immunity is (1) unethical; (2) encourages violations of the Constitution; and (3) has no political value for Democrats. The term “bad idea” is wholly inadequate.

MY DECISION

Months ago, when the issue of telecom immunity was making its first pass through Congress, I wrote to my senators — Norm Coleman and Amy Klobuchar — and told them both the same thing: “I will not vote for anyone who votes for telecom immunity.”

Amy Klobuchar wrote me back and told me that she strongly opposed telecom immunity (which, as far as I know, is the same opinion she holds today).

Norm Coleman sent me a form letter regurgitating the Bush administration’s talking points (which means that Al Franken will be getting my vote this November).

But this puts me in something of a quandary because now Barack Obama has decided that he’s going to vote for telecom immunity. He’s supposedly going to fight to strip the immunity clause from the bill, but if that doesn’t happen he is intending to vote for the bill.

So for the past week or so I’ve been struggling with this issue. If he votes for it, will I vote for him?

And, after a good deal of consideration, I’ve come to the conclusion that I meant what I said when I wrote to Senator Klobuchar and Senator Coleman: I will not vote for anyone who spits upon the Constitution and supports the illegal activities of the Bush administration.

Which means that I may not be voting for Barack Obama. If, in fact, Senator Obama votes for telecom immunity this week, he will not have my vote in November. In my opinion, a vote so blatantly against the Constitution and the rule of law is a vote which disqualifies one from serving in public office.

Even if you don’t feel as strongly about this issue as I do, I urge you to take action during the next few critical days. Let your elected officials know that this is an important issue. Let them know, whether they’re Republican or Democrat, that you find it intolerable to offer up the rule of law and the Constitution as sacrificial lambs. And if they’re Democrats, question the sanity of kow-towing to yet another “compromise” from the Bush administration in which George W. Bash gets everything he wants and the American people get the shaft.

Screw it. I’m voting Republican.

I’m voting Republican because I don’t think the President of the United States should be able to use a computer:

I’m voting Republican because I, like Jim Inhofe (Republican), believe that Iraq is an African nation:

I’m voting Republican because I’m part of the 90% of Americans who will end up paying more taxes under President McCain, and I love paying taxes.

…

It’s like Jon Stewart once said: “It’s not so much that you can’t make this stuff up. It’s that you wish that you had to.”