Cause and Defect.

May 22, 2012

Watch the Sunday morning news programs at your own risk.
These conduits into the hearts of the American family room provide a platform whereby one earnest-looking politician after the next can over promise in hopes of winning the right to under deliver.
The Senator smiles, sips his coffee and empathizes with the middle class. He expounds upon a range of issues. Promises a return to traditional values. Alludes to his grand designs for change. And concludes by condemning the opposition party's lack of sensitivity.
These shows are a blessing and curse. Without the blessing. They provide a torturous reminder of bureaucratic ineptitude. Not to mention a doctoral-level course in lying and deception.
They are certainly no cure for cynicism.
Many politicians consider getting elected and appearing on Sunday morning television their two biggest political accomplishments. Because getting elected and appearing on television share one requirement: the ability to talk a lot about a little.
One need not thoroughly understand history. Foreign affairs. Or economics. One obviously need not have ever accomplished much aside from gaining election and an invitation to the Sunday morning studios.
Fact is, most politicians have no more a grasp on economics than Paris Hilton. Only, when Paris flies to the Big Apple to make an appearance, she's spending Hilton family money. When Nancy Pelosi crosses the country to appear on Meet The Press, she's spending yours.
Both parties excel at sipping coffee and confidently explaining, ad nauseum, their plans. Only, neither has been effective in doing it. "It" being a euphemism for "anything at all."
Pelosi. Boehner. Bush. Obama. Promised to cut the deficit. Then spent like drunken sailors.
If one has the patience to withstand the Sunday Morning Political Promises, one eventually reaches an epiphany. The Budget Deficit is no more the problem than sidewalks are to Lindsey Lohan.
Ms. Lohan may, on occasion, find herself face down on the concrete. Yet, rational observers realize that the "cause" was actually Ms. Lohan's inability to forgo the 16 drinks consumed that evening. The "effect" of such consumption was the intersection of her face and the pavement.
One can hardly blame the sidewalk.
Similarly, the deficit is not the problem. Politicians, seeking to say something meaningful yet do little of meaning, have oft equated the budget deficit as the enemy. While also confusing the hell out of us.
"In times of economic distress, it becomes necessary to run a deficit in order to prime the pump via stimulus programs as we place the nation back on a more productive course. I do, however, worry about our opponent's refusal to trim expenditures on ______________, and the long-term consequences to be incurred by future generations."
What?
Yet this distraction method works. We now loathe the budget deficit. And don't quite understand why. Forgetting all the while that, without the symbiotic brotherhood between republicans and democrats, the budget deficit would likely be a surplus.
Closer inspection reveals that the budget deficit is simply an effect. Thecause, rarely volunteered by politicians, is the inability to cut spending.
"Ms. Lohan, these sidewalks are safe. But, walking home from the club after fifteen drinks at 3 am may not be such a hot idea."
Like the Real Housewives of New Jersey, leaders of both parties cannot control their spending. Consequences be damned.
This has little to do with the economics Sometimes people drink less Coke. Yet, Coca Cola remains immensely profitable.
A booming economy may temporarily mask the fact that our federal government spends money like M.C. Hammer in his hay day. But it does not change the fact.
Simple cause and effect.
In booming economic cyles, spending does not create wealth. If it did, Greece, Spain, Italy and California would be wealthy. Instead of falling apart at the seams.
Need evidence?
California has a $16 billion deficit. That's 18% of state revenues. Additional tax dollars will not help. Less spending will.
Yet, humans are a needy bunch. Once the handouts begin, we do not abdicate them gently.
Tocqueville, in his seminal work, "Democracy in America," explained that, as public spending increases, the public's motivation decreases. That the public, once accustomed to feeding from the federal teat, will not reacquire its motivation, independence and taste for competition.
He wrote that in the 1830s.
When governments provide handouts with impunity, character traits like motivation, self-reliance and accountability erode. Again, another cause. The effect? Progress, growth and achievement become more difficult.
Yet, voters in Greece, Italy and California jump behind politicians who promise to end austerity and return to handouts.
Welfare spending in 2010 reached nearly $900 billion. That represents a 25% advance from 2008.
Say I get elected. I then hand out money to some people who need it. Just dole it out.
The following year I hand out money to 25% more of the people who need it. Think I'm likely to curry a little more favor with a few more people if I say, run for reelection?
Cynical? Yes. But accurate?
The alternative is that politicians are simply an altruistic bunch who happen to be very generous with other people's money. Not to mention, completely unconcerned with productive results.
Last week the media went wild over a $2 billion trading error made by a bank that earned $5 billion last quarter. A bank that, unlike California, Greece or the United States of America, is very profitable.
JP Morgan is suffering a crisis of confidence. What a morality play!
$2 billion? Your federal government runs a deficit of $3 billion dollars a day. Yet, we vote these drunken sailors back into office.
Again, if one continually drinks so much that he repeatedly falls down, rational people don't lobby government to pad the sidewalks. You treat the problem and get a friend some help.
Not in politics. Big deficits due to massively out-of-control spending? Let's raise taxes and spend our way forward. Additional stimulus spending will right the ship. Keynes promised!
Sounds good enough to convince around 50% of the nation.
Don't feign surprise. We are past that. Nor should you be surprised when you hear news of a growing movement to better cushion California's sidewalks.
Somebody's gotta protect us. It's becoming the American way.

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