Equality of Rights or Equality of Results

C

ColonelHaiku

True Classic
Interesting video from 1980, with a discussion of the difference between equality of rights and equality of results. Thomas Sowell, Frances Fox Piven (ed. note: :nuts:) and Milton Friedman weigh in.

"Let’s get the principle right first, and take our stand with the Constitution of the United States."

[ame="http://www.youtube.com/watch?v=26QxO49Ycx0"]Thomas Sowell Dismantles Egalitarianism (Frances Fox Piven Edition) - YouTube[/ame]
 
The 80s was a long time ago...

and as it turns out there hasn't been much progress in either process or result overall. In both Britain and the USA, where a big economy has been more or less following the neo-liberal course, socio-economic mobility has been dropping continuously. In both countries the correlations between where you start and where you wind up are rising and are at about .5 right now. This means that the old American Dream of pulling oneself up the social ladder are no better than a coin toss. The culprits in this are increasingly the sheer cost of education and the lack of traditionally well paying,benefitted and permanent jobs-almost the exact opposite situation that prevailed from 1950 to about 1975. There is certainly something amiss here because neither the process nor the result is all that great. Where the changes to better opportunity did improve for certain identifiable sub sets of the population they deteriorated broadly for everyone in the lower 80% of the economic scale. Sowell, like many others is a little hung up on the magic of the word 'freedom'-the current and future political climate may show that for the vast majority 'freedom from' is going to trump 'freedom to'. Or so it seems to me anyway.
 
I think that it correct that for many of the people affected "freedom from" is going to trump "freedom to". The great irony is that it is precisely "freedom from" that has lead to the vast majority of the socio-economic imbalances that have had a negative effect on so many. "Freedom from (insert some negative aspect of life here)" tends to naturally include the freedom from opportunity as well. It's hard to have one without the other. This is why those already blessed with great opportunities are doing so much better than those who need opportunites now to improve their situation. The people will continue to demand more "freedom from" to feel more secure and to stick it to those who are perceived to be doing well at their expense. Of course this will have exactly the opposite results they are hoping for.
 
But what is their actual...

alternative? Wait for the 'invisible hand' to provide those oportunities? Depend on some gussied up form of the 'trickle down' effect? It's asking a lot. It's asking people to choose between a bird in the hand and who knows what in the bush.

Just today the GOP is starting its polemical campaign against retaining and extending the payroll tax cut. They said the tax relief was not producing jobs. Yet the same people say that sunsetting the Bush tax cuts on the rich would be job killing. How is the guy on the bottom of the heap supposed to take this contradiction? Either tax cuts are good or they are not. How can they be one thing for the rich and the opposite for the middle and lower incomes?
The sad fact is that nobody knows how to produce opportunity-they just claim that they do.
 
I think the GOP is just working from the supply-side play book which is better than the Neo-Keynesian play book but still has some significant flaws. The payroll tax cuts are certainly less likely to help job creation than tax cuts on those that create the jobs are but payroll tax cuts are more effective at buying votes. But anyway, the alternative is not pretty because the problems are too deep for a political fix to be workable. What has to be done will be so wildly unpopular that there is no way a person or a party could stay in office long enough to implement it.

The government needs to massively reduce it's size, virtually eliminate regulation of the financial sector and decentralize banking by shutting down the Federal Reserve. Interest rates would then rise significantly encouraging savings which would eventually lead to lower interest rates and sound economy. Of course the turmoil this would unleash in the short term makes it politically impossible. So instead we will continue with various degrees of the status quo until the turmoil comes on it's own through decades of stagnation or possible economic collapse and runaway (or hyper) inflation.
 
The notion that...

rich people are prima facie 'job producers' is a tough thing to prove. They may be producing jobs somewhwere but not here. After the Bush tax cuts the country enjoyed the lowest job creation in the post war period-so whatever the merits of tax cuts might be in some general model, in the particular circumstance that obtained then-and probably still do- the faith in taxing the rich less in pursuit of jobs doesn't have recent history on its side. Of course the answer to this coming from the right will be that they weren't reduced enough, but that is just theory as well. Besides which in an economy 70% driven by consumer spending putting more money in the hands of those who already have plenty to spend doesn't make even theoretical sense.
And, supply side'(let's call it what it is'tax cuts') are pure Keynesianism-not sure when or where the notion was floated that such a counter cyclical tactic is anything else.
 
It may arguably be "pure" Keynesianism but it's not Neo-Keynesianism which is certainly worse. Keynes may have been wrong about a lot of things but he wasn't a complete fool, Paul Krugman is.

Anyway jobs aren't the main issue. Rebuilding a sound economy is and that's not going to create jobs in the short run. I think Obama is correct when he says things would have been worse if it weren't for the stimulus and bailouts but short term fixes that exacerbate long term problems are what politicians do in an attempt to get reelected not what a government does when it's serious about fixing major, possibly fatal, long term problems. The problem is that everyone labels a policy a success or failure 6 months after it was implemented. Economics these days is all about the short term at the expense of the long term.

Taxing the rich less may or may not create any jobs but what it does do is increase savings. The rich save more money than any other group of people. Savings are what allow banks to provide credit so business can grow. Our entire system is set up to punish and discourage savings so the the only way the banks can provide credit at low interest rates is for the government to print a ton of money.
 
Savings are not how banks....

finance loans. That may have been true 30 years ago but no longer. Almost all debt is finance by securitization in one form or another and the risk that banks used to take as a matter of course is also sold off as CDS (whose worth is proving minimal in the Greek case right now). Also, if savings went up substantially then interest paid on them would almost certainly go down on basic supply and demand-this is already happening and has been going on in Japan for 20 years.
Saying Krugman is an idiot isn't an argument. In fact flirting with the current cliches of Newspeak-"everything and everyone we don't like is a job-killer" "everything and everyone we like is a job-creator" isn't really argument either, it is just playing into the hands of the political elite and their spin doctors.

What concerns me very deeply at this juncture is the willingness of substantial portions of the polity to retreat to comforting impossibilities-extreme libertarianism; the contradictory, platform free zone of the Tea Party and the OWS movements, the up is down and down is up thinking in the GOP where actual continued spending and actual continued revenue restraint adds up to deficit reduction. None of these is any sort of practical way forward (or any other direction for that matter) but I guess it provides something to a lot of people who would rather not deal with the long term that you very rightly highlight.
 
The fact that banking no longer works the way it is supposed anymore is kinda my whole point. And when things are extremely bad it takes extreme changes to fix it and that's not going to happen so you have nothing to worry about as far as that is concerned. A sound economy will create jobs I am certain of that. Anything else is just a crap shoot.
 
When has there ever been....

a sound economy of any duration in a modern democracy of any size?
Even irrespective of the actual constituency of the banking system.
I think the one really ugly fact that needs facing up to in this country is the fundamental disconnect between sound fiscal and monetary policy and broad based party democracy. I was a major concern of the Founders, including Hamilton who just surrendered to the inevitability of national debt and bad banking practices.
 
I can't disagree with that. We have long outlasted the founders expectation and I don't think there is anything that can be done about within our current system. Not to say I dislike the system it's just jumped the shark and it's time to start over again.
 
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