The Republican’s favored mode of economic “stimulus”, whose justification comes from the “supply-side” school of thought (conservative Keynesianism), consists, as we all know, of tax cuts for corporations and the rich. Associated mostly with Ronald Reagan, this idea never fails to elicit a sneer from liberals, and whenever it is mentioned, the phrase “trickle-down” is likely to be brought up. As Bill Maher described it, “They’re literally saying, ‘we’re pissing on you’.” Well, yeah, sort of. I mean, as a libertarian anarchist, I think that nobody would pay any coercive tax whatsoever or be forced to pay for any service they did not want. I don’t believe in enforced charity, or that anybody should be punished for their success, economic or otherwise. On the other hand, not only do most of these corporations and rich getting the tax breaks owe their wealth to the State anyway, directly or indirectly, but the very existence of the State makes the presence of the super-rich all the more dangerous. And surely it is unjust to cut welfare for the poor while the rich receive much greater welfare, and leave the tax burden mostly to the middle class.
At any rate, the liberals don’t seem to realize that they embrace a form of “trickle-down economics” too. They tend to endorse the Keynesian theory of deficit spending to stimulate a flagging economy and achieve full employment. They tend to think of this as helping the working-class. But does it? Rationally, it follows that if we are trying to provide the most jobs through spending, we will have to spend the money on those who will be doing the employing first, and benefits will “trickle-down” to the working class in the form of jobs. But what they don’t realize is that inflation works by a kind of ripple-effect. Those who get the money first (government-favored employers) benefit the most, since prices have not yet gone up, and those who get it (working wage-earners) last will recieve the least bang for their new bucks.
So if you don’t tax the rich as much, you’re endorsing a “trickle-down” theory, but if you give the rich money, you’re providing much-needed work for the masses. It neatly fits the liberal psychology of wanting to better the poor, but wanting that betterment to depend on a very important political class consisting mainly of themselves.
But I know they will reject this formulation, because they are not giving handouts to the plutocrats, but rather important civic and public works. You know, teachers, cops, and other friendly neighborhood spider-people. They’re not only restoring economic health, but our uplifting the civic soul as well.
Well, that’s the idea. Reality falls well short of it. I suggest reading Kevin Carson’s article on “shovel-ready” projects and “cockroach caucuses”- good ol’ by networks that run local politics, diverting these funds away from public interest and into their own pockets, subsidizing sprawl and the inflation of real-estate values. He writes:
That’s the problem with liberals’ faith in the state as a tool for promoting the “public good” and “general welfare.” They haven’t looked closely enough at how the sausage is made.
One part of this article really caught my attention, since it happens to affect me quite directly. He quotes a Bloomberg opinion piece on Obama’s stimulus plan:
Utah would pour 87 percent of the funds it may receive in a new economic stimulus bill into new road capacity.
Well, the traffic is pretty bad, right? I have lived in Salt Lake City off and on for about eight years, and Utah for well over ten, and I have seen multiple expansions of I-15, as well as neverending Kafkaesque road construction around the valley. And the traffic has just gotten worse and worse. How is it that we just don’t have the road capacity? Because the traffic just expands to fill the new space. Carson describes a similar situation in is neck of the woods, Arkansas:
twenty years ago the region built Hwy U.S. 471, itself a western bypass intended to relieve congestion on the old U.S. 71 that ran through the centers of all the major cities of NW Arkansas on a north-south corridor. And guess what? As anyone but an urban planner or traffic engineer might have predicted, the new subsisized highway didn’t alleviate congestion at all! Instead it generated new congestion, filling up with new traffic from the new subsidized subdivisions and strip malls that grew up like mushrooms at every single exit. And assuming that previous patterns persist, the new bypass, even further to the west, will generate even more congestion as it fills up with traffic from the new sprawl along its route.
Why does this affect me so much? Because Salt Lake City happens to be situated between the Rocky Mountains and the Great Salt Lake, creating the perfect natural conditions for a temperature “inversion” in the Winter, keeping pollution locked in a kind of bubble over the city. I have asthma, and my health depends a lot on the pollution-level, and therefore I am extremely sensitive to weather conditions. I spend most of every Winter here sick. I can hardly stand the thought of even more cars on the road.
Not for a minute do I think this has anything to do with the “free market”, since we live under a regime of Road Socialism. In fact, one of the first objections to a real free market (anarchy), will likely be “What about roads?” Road construction bears no link whatsoever with demand and available resources (by definition, in the Keynesian system). Since roads are essentially a free resource- or, at least, my use of the roads has nothing to do with how much I pay for them- nobody has to economize on use. It’s a perfect example of the tragedy of the commons.
If it clears out the air, I’m perfectly willing to consign all those new construction jobs to perdition.
P.S.- A few days after writing this post I saw an obnoxious commercial on t.v. promoting the road expansion project, one of those “man on the street” types with people saying things like, “Hey, I don’t like it, but we’ve gotta drive right? And we don’t want to pay for it, do we?” Okay, so when it’s subsidised health care, it’s communism, but subsidised driving is just the American way, huh?