Wednesday, June 27, 2012

How the Left Screws the Poor

The Left is always saying "It's the right thing to do," writes Michael Walsh.  But what does it mean?  Usually, it just means that the Left wants it.
[T]here is in fact no moral basis for the Left’s bogus morality; it’s just its usual lust for power dressed up in Judeo-Christian trappings in order to seduce the gullible, the devotional, and the feeble-minded.
Actually, he's wrong.  The Left does have a moral basis for its program.  It is what I have called the Exploitation narrative.  In the general case, it says that because there is inequality there must be injustice, and the government must act to mitigate the inequality and the injustice.  In the specific case, it says that some people can't afford health insurance, so we must force everyone into a one-size-fits-all government program to ensure that everyone can afford health care.  It's the right thing to do.

On the other hand, he's right.  If you are a political activist with a lust for power, the Exploitation narrative gives you a carte blanche to rage against almost anything and propose an increase in government power as a solution.  You can't really tell whether the lefty in question is really fired by a rage for justice or a rage for power.  He would be saying the same things in either case.

The problem is that the Exploitation narrative doesn't lead to justice.  It leads to ObamaCare.  You may say that you want to help the people who can't afford health care, but you end up with Springtime for the Special Interests.  Jay Cost:
[T]he individual mandate represents an enormous transfer of wealth, completely independent of income or social status. It transfers resources from the healthy to the sick, from the young to the old, without regard to who has more money to begin with.
On top of that, the Obamis, in building support for ObamaCare have had to buy off a whole rainbow of special interests from the docs to the nurses to Big Pharma.
Medicare is like Obamacare too.  It takes money from the workers and gives it to the seniors, irregardless of wealth.  Some seniors are poor, but most seniors have carefully saved for their retirement, and are much richer than the young folks that pay the payroll taxes.
Then there is government education.  Guess which schools are the worst in the nation: the ones that serve the poor.  Guess who don't send their kids to the local schools: middle-class inner-city teachers.

You may start your fight against inequality with the best of intentions, but you end up servicing the special interests.

Now I feel personally that the Exploitation narrative has been rather overdone, certainly where it is invoked to de-legitimize the workings of the free market.  The free market is like democracy.  It is the worst system of economic cooperation you can imagine, except for the alternatives.  The free market is a mess, but it eventually works things out.  Even lefty Juergen Habermas in The Theory of Communicative Action agrees:

The market is one of those systemic mechanisms that stabilize nonintended interconnections of action by way of functionally intermeshing action <i>consequences</i>[.]
If the market will work things out, then we should be careful about applying the Exploitation narrative.  The Exploitation narrative should only be applied to the grossest kinds of exploitation, like slavery and serfdom. 

Once you start applying the Exploitation narrative to affordable housing and affordable health care, you enter a wilderness of mirrors, and you will probably end up comforting the comfortable and afflicting the afflicted.  Guess who made out like bandits in the affordable housing mania?  Wall Street, with big bonuses and bail-outs.  Guess who lost their shirts?  Ordinary American underwater homeowners.

Let's sharpen this idea further.  You should only apply the Exploitation narrative to naked injustice due to direct government policy.  Things like slavery, racism, monopolies, subsidies.  There may be reasons to help people with government programs, but the rectification of inequality is not a good reason.  That's not because inequality isn't a shame, and isn't unjust.  It's just that the record of government on inequality is miserable; it almost always gets it wrong and gets captured by special interests.

On the other hand there is the competing narrative of the Invisible Hand.  Since Adam Smith invented the concept, average daily per-capita income in the developed West has gone from $1-3 per day to $120 per day and more.  What about the US?  According to, GDP in 2011 was $15.6 trillion and population was 314 million.  That's $136 per person per day.

President Obama is conducting a national experiment to demonstrate what happens when you concentrate on the "the right thing to do" according to the Exploitation narrative and ignore the Invisible Hand narrative.  

What a surprise.  You get a stagnant economy and huge deficits that lead to sovereign default.  And guess what happens then?
It's the same the whole world over
It's the poor what gets the blame
It's the rich what gets the pleasure
Ain't it all a bloomin' shame?
Pity about that. 

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