Voting is Irrational, But if Voting, Be Rational about the Irrationality

Voting is a highly irrational exercise when a large numbers of votes are cast. Really? Yes, spending enormous amounts of time, the price/cost thereof, to become familiar with issues, is greater than the value of one vote as the chances of one single vote affecting the outcome of an election, where a large number of votes are cast, is tiny. Politicos are always harping that one needs to vote. However, a very good question is: Why do so many people vote in the first pace given its irrationality. (1) (2) (3)

But many people feel a responsibility to vote. If you feel that responsibility, and considering local politicos and their associated ilk and the spending habits thereof, complete with the assertion that such spending creates prosperity, one might consider the following when casting a vote:

“Government spending cannot create additional jobs. If the government provides funds required by taxing the citizens or by borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other. If government spending is financed by borrowing from the commercial banks, it means credit expansion and inflation. If in the course of such inflation the rise in commodity prices exceeds the rise in nominal wage rates, unemployment will drop. But what makes unemployment shrink is precisely the fact that real wage rates are falling”. - Ludwig von Mises, Socialism, An Economic and Sociological Analysis, 1951, page 530.

Or stated alternatively:

“The government has nothing to give. The government is simply a mechanism which has the power to take from some to give to others. It is a way in which some people can spend other peoples' money for the benefit of a third party - and not so incidentally themselves". - The Invisible Hand in Economics and Politics, Milton Friedman, Institute of Southeast Asian Studies, 1981, p11.

However, politicos rely on Keynesian analysis, as Keynesianism gives them the right or duty to intervene and spend. How so? Try this:

“Keynes was exceedingly effective in persuading a broad group—economists, policymakers, government officials, and interested citizens—of the two concepts implicit in his letter to Hayek: first, the public interest concept of government; second, the benevolent dictatorship concept that all will be well if only good men are in power. Clearly, Keynes’s agreement with “virtually the whole” of the Road to Serfdom did not extend to the chapter titled “Why the Worst Get on Top.”

Keynes believed that economists (and others) could best contribute to the improvement of society by investigating how to manipulate the levers actually or potentially under control of the political authorities so as to achieve desirable ends, and then persuading benevolent civil servants and elected officials to follow their advice. The role of voters is to elect persons with the right moral values to office and then let them run the country.” - Milton Friedman, Richmond Federal Reserve Economic Quarterly, volume 83/2 Spring 1997.
http://www.richmondfed.org/publications/research/economic_quarterly/1997/spring/pdf/friedman.pdf


　

So are “we all Keynesians now”? That is an oft cited quotation, from a source one would not expect, one Milton Friedman. Problem is, it is merely an excerpt from the entire statement. Here is the entire statement:

“In one sense, we are all Keynesians now; in another, no one is a Keynesian any longer. We all use the Keynesian language and apparatus; none of us any longer accepts the initial Keynesian conclusions.” ^- Milton Friedman, “Why Economists Disagree,” Dollars and Deficits (New York: Prentice-Hall, 1968), p. 15.

What about those Keynesian conclusions?


“For policy, the central fact is that Keynesian policy recommendations have no sounder basis, in a scientific sense, than recommendations of non-Keynesian economists or, for that matter, non economists.” After Keynesian Macroeconomics (aka After the Phillips Curve), Robert E. Lucas and Thomas J. Sargent, 1978, page 57

http://www.bos.frb.org/economic/conf/conf19/conf19d.pdf



　

We end this exercise with lots of lever pulling by local politicos spending tons of taxpayer money year after year yet total employment in Guilford County has been flat or declining since its peak in the year 2000. Go figure. (4)

Beware of the non-statistic statistic by the moniker “jobs saved or created”. It is a known-known that government can’t create jobs. What about “saved jobs”. What in the devil does “saved jobs” mean? Saved jobs is a rather recent politico creation that in somehow and in some way bailing out or subsidizing particular industry (aka corporate welfare) with taxpayer dollars is some sort of net positive. Oh please spare us.

So if you feel that responsibility to vote, and considering local politicos and associated ilk, the spending habits thereof, with the assertion that such spending creates prosperity, maybe one doesn’t pull that lever next to that politico’s name so as not to empower particular politicos with the ability to “manipulate the levers actually or potentially under control of the political authorities”.

Notes:

(1) Congressional Incentives and Government Failure, Chris Edwards, CATO Institute, September, 2015.

(2) The Myth of the Rational Voter: Why Democracies Choose Bad Policies, Bryan Caplan, 2007.

(3) Government Failure: A Primer in Public Choice, Tullock, Seldon and Brady, 2002.

(4) The Nussbaum Center for Entrepreneurship, Job Growth. Comparison of Guilford, Mecklenburg and Wake counties,

　

Tall on Intensions Short on Results: Greensboro’s Thirty Year Political Odyssey on the Road to Cacotopia

‘Economic “planning” is one of many politically misleading expressions. Every economic activity under every conceivable form of society has been planned. What differs are the decision making units that do the planning - which range from children saving their allowances to buy toys to multinational corporations exploring for oil to the central planning commission of a communist state. What is politically defined as economic “planning” is the forcible superseding of other people’s plans by government officials.‘(1)

　

It is a known-known in political economy that politicos want the focus on their intentions not their results. Results are politically inconvenient. Intentions are politically paramount.

If one ponders and reflects for a moment about the inconvenient results of economic “planning“ regarding Greensboro, NC, results of over thirty years of economic “planning” regarding a parade of politicos of basically the same ilk, the aggregate intensions thereof, the result is a +21% poverty rate and one of the highest tax rates in the state. Sweet!

One might further consider that the inconvenient result might be an indicator that the aggregate intensions are a monumental flop.


How in the world can one manage to achieve, simultaneously, the results of mass poverty and max tax? One would have to really work at achieving such a result. One would have to deploy the world's worst policy, on a consistent and constant basis to achieve mass poverty and max tax [see Detroit, Michigan].

Moreover, the powers that be, the non-resultant, keep deploying the same policy over and over. Better yet, they gleefully introduce more of the same e.g. music hall, mega site. Gleefully introduce more of the same as if their past track record is something to crow about.

One would be hard pressed to assign a moniker to a public policy process that results in the poor becoming poorer and the taxed become more taxed. However there are terms that describe the result: cacotopia aka dystopia.

On the thirty year road to cacotopia, one would be remise to only identifying the losers i.e. the poor becoming poorer and the taxed becoming more taxed. Winners surely occurred and are occurring. One can’t spend a gazillion dollars of taxpayer money over thirty years and find the only result being the poor becoming poorer and the taxed becoming more taxed. The taxpayer money went somewhere and that somewhere is the realm of winners. In other words, the plans of the few supersede the plans of the many with the result being a particular and select few winners and many losers. Very nice indeed.

The government has nothing to give. The government is simply a mechanism which has the power to take from some to give to others. It is a way in which some people can spend other peoples' money for the benefit of a third party - and not so incidentally themselves". (2)




Notes:

(1) Thomas Sowell, Knowledge and Decisions, 1996 edition, pgs. 213 and 214.

(2) The Invisible Hand in Economics and Politics, Milton Friedman, Institute of Southeast Asian Studies, 1981, p11.

Economics is Fun, Part 17: Public Choice

Elvis Presley, The 180 Empty Mega Sites, And Then There Was 181

What if one considers marginal economics and empty mega sites? Huh?

Elvis Presley was purported to have purchased seven Cadillac(s). One for each day of the week. Sweet! Actually Elvis purchased over one hundred Cadillac(s) during his life time (he may be still buying as he’s sighted every day).

Elvis purchased the seven Cadillac(s) with private money (or one hundred Cadillac(s) if you like that example better). Elvis did what he wanted with his private money. Any gain or loss from owning seven Cadillac(s) was Elvis's business, and only his business.  

Did Elvis get the same satisfaction with the seventh Cadillac purchase as the first purchase? Depends, but…in the main, and upon normal occasion, less satisfaction is expected per unit consumed. That is, Elvis’s marginal satisfaction fell with each purchase, with the first purchase likely creating the most satisfaction and the last purchase the least satisfaction.

That said, consider the aggregation of all taxpayers and their marginal satisfaction thereof. What kind of taxpayer marginal satisfaction is derived from the first empty mega site? The second empty mega site? The 181^st empty mega site?

Are taxpayers like Elvis and whereas Elvis wanted seven Cadillac(s) for each day of the week, taxpayers want 365 empty mega sites for each day of the year? -Or- Are politicos like Elvis, and whereas Elvis wanted seven Cadillac(s) for each day of the week, politicos want 365 empty mega sites for each day of the year?

Are you being served?

Price Ceilings: Government Imposed Shortages, the Story of The Oil “Shortage” of the 1970’s

Veterinary Science on the Skids: More Expensive Pet Care Saves You Money

“Cutting the Gas Tax, Giving Teachers a Tax Deduction

Raleigh, N.C. – Maintaining a strong transportation system is crucial to preserving a growing and productive economy. North Carolinians deserve roads and bridges that safely connect them to their jobs and families, and businesses need high quality infrastructure to move people and products and keep our economy thriving.

But the lack of certainty in North Carolina’s gas tax makes it very difficult for the state to plan and fund road projects. One of our state’s most volatile revenue streams, the gas tax, makes up nearly 70 percent of the fund to maintain roads and bridges and approximately 60 percent of the state Department of Transportation’s budget.

That’s why, with wide-ranging support, the Senate passed a bipartisan bill to cut and freeze the gas tax to 35 cents per gallon effective March 1. The bill changes how the gas tax is calculated, providing much-needed funding stability to help protect critical transportation projects. It also provides a tax deduction for teachers who purchase classroom supplies out of their own pockets.

Members of the business and transportation communities – including the North Carolina Chamber and AAA Carolinas – along with local governments have all come out in support of the bill.

This balanced plan provides tax relief for all North Carolina drivers while helping ensure the state has the long-term resources necessary to build and maintain safe roadways, bridges and economic corridors.

A recent report released from NCDOH provided a list of projects in both the Highway Fund and Highway Trust Fund that will be delayed if the gas tax drops to projected levels.

Potential project delays included in the list for Guilford County total $20,527,242 ($5,422,982 from Contract Resurfacing, $743,214 from Pavement Preservation, $412,060 from the Bridge Program, $6,550,490 from Primary and Secondary Maintenance Activities and $7,398,496 from the Powell Bill).”

District 27 Newsletter - Volume 2, Issue 2 - February 24, 2015‏

　
Senator Trudy Wade
300 N. Salisbury Street
Room 521
Raleigh, NC 27603-5925

　

　

Being an expert in one field by no means makes one an expert in another field. Hence Veterinary Science might just, maybe, be a stretch regarding public policy in the field of infrastructure and taxation thereof (public finance).

One might consider engaging in a public choice theory adventure and examine the above news release to see if one can indeed understand pet care more thoroughly:

　

“Maintaining a strong transportation system is crucial to preserving a growing and productive economy. North Carolinians deserve roads and bridges that safely connect them to their jobs and families, and businesses need high quality infrastructure to move people and products and keep our economy thriving.”

Got it, safety and economic growth are the main concern. Very warm and fuzzy stuff!

　

“But the lack of certainty in North Carolina’s gas tax makes it very difficult for the state to plan and fund road projects. One of our state’s most volatile revenue streams, the gas tax, makes up nearly 70 percent of the fund to maintain roads and bridges and approximately 60 percent of the state Department of Transportation’s budget.”

Ah, politicos don’t have enough money and said politicos need a steady stream of other people’s money. Go figure.

　

“That’s why, with wide-ranging support, the Senate passed a bipartisan bill to cut and freeze the gas tax to 35 cents per gallon effective March 1. The bill changes how the gas tax is calculated, providing much-needed funding stability to help protect critical transportation projects. It also provides a tax deduction for teachers who purchase classroom supplies out of their own pockets.”

Oh, new zeniths in rationalization of somehow and in some way all the James and Jane Goodfellow(s) across North Carolina wanted their gasoline tax raised. Yep, politicos just raised your gasoline tax:

Senate bill could push NC gas tax 7 cents higher in future years, news observer.com, 02/10/2015


http://www.newsobserver.com/2015/02/10/4545808_senate-bill-could-push-nc-gas.html?rh=1


　

“Members of the business and transportation communities – including the North Carolina Chamber and AAA Carolinas – along with local governments have all come out in support of the bill.”

That’s the ticket! When notorious special interests and other politicos support tax hikes that makes for good public policy...errr...politics!

　

“A recent report released from NCDOH provided a list of projects in both the Highway Fund and Highway Trust Fund that will be delayed if the gas tax drops to projected levels.”

Great! Raise a regressive tax on the poor and have them build the bridges. Brilliant!

　

One should strongly consider that regardless of the letter appearing after the politician's name, be it D, R or I, they are politicos first and foremost. And as such, one would be well served to consider this quotation:

“So it’s no surprise that governments with vast powers routinely behave stupidly: they are attempting to do the impossible while being overseen by the ill-informed.” - Don Boudreaux

$280 Million “Rainy Day” Fund, The Shirking Partner Fund

Sinking funds used by government are generally misused. That the funds are generally not used for emergency purposes or the purpose originally intended. Rather the fund is used to cover up extravagant expenditures or failed government endeavors. - Book Five, An Inquiry Into Nature and Causes of the Wealth of Nations, Adam Smith, 1776 (1)

　

How does a political taxing authority accumulate $280 million? What is the mechanism? How can they do it? 

To figure out the process one’s first stop is at the proposition of: Government produces nothing. One should consider that government produces nothing that would not have otherwise been produced in the private sector, absent tax. Meaning, with tax, the basket of goods and services produced is made up government and private. Absent tax, the basket of goods and services is all private. Hence the government produces nothing, merely the privately produced revenue is “taxed” with the resulting tax moved from private to public.

One’s next consideration is that somebody or some entity produced income that was then coercively taken away, as tax. Since the tax was extracted from somebody or some entity that produced and owned the income at some point in the process, then such extracted income (tax levied) is being set aside unspent. Meaning the basket of goods and services morphs into: government - government unspent + private. (2)

Consider the process another way. Political taxing authority G taxes James and Jane Goodfellow at tax rate T + PPA, with T being taxes spent on services provided by G, PPA being a premium paid above T that renders no services from G, yet produces a rainy day fund for G. -Or- political taxing authority G taxes James and Jane at tax rate T - SF with SF representing services forgone that otherwise would have been produced at tax rate T.

The rainy day fund, in essence, comes into existence due to a premium paid above services rendered, services provided below taxes rendered or a combination of both phenomena.

Ponder for a moment that the stratagem of  premium paid above services rendered, services provided below taxes rendered or a combination of both phenomena, the mechanism thereof, is not being deployed to pay down deficits or debt. Nay, nay! The process is rendered to build a fund for G. Meaning G now possesses a fund that represents a premium paid above services rendered, services provided below taxes rendered and/or a combination of both phenomena.

The next step is to put the process into an action phase. G now buys a basket of government services. The basket is either over priced (premium paid) and/or the basket is shorted (services not rendered). The result being G ends (Eureka!) with a “shirking partner fund”. Very nice indeed!

In the first case of premium paid above services rendered, one would then consider that all taxpayers to G, of all the varying taxes paid to G, need reimbursed. In the second case of services provided below taxes rendered, then all citizens are due services paid for, but not rendered.

A question to ponder is exactly who’s money is the $280 million? Who has claim? Can’t be society’s claim as society is an abstract entity. Is it the past, current and future politicos of G’s claim, due to some mumbo-jumbo legislation (legislation by and for politicos)enacted by another set of politicos representing a greater political taxing authority bestowing authority, the very, very fuzzy concept of political authority, upon G and its ilk? Is it bureaucrats claim so they can increase scope and authority? Or is the claim of the many? The many, many that are not being served?

　
Beyond the likely misguided consequentialist account of political authority and its coercive nature, even this view of political authority and coercion takes the view of: “It [state] may not take a little extra to buy itself something nice”. (3)
　

　
Notes

(1) An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith, 1776

     http://www.amazon.com/Inquiry-Nature-Causes-Wealth-Nations/dp/0226763749/ref=sr_1_8?s=books&ie=UTF8&qid=1424529660&sr=1-8&keywords=the+wealth+of+nations       

(2) Applied Economics, Thinking Beyond Stage One, pgs. 11-14, Thomas Sowell, 2004 

    http://www.amazon.com/Applied-Economics-Thinking-Beyond-Stage/dp/0465003451/ref=sr_1_1?s=books&ie=UTF8&qid=1424531460&sr=1-1&keywords=applied+economics+thinking+beyond+stage+one              
　

　(3) The Problem of Political Authority: An Examination of the Right to Coerce and the Duty to Obey, pg. 95, Michael Huemer, 2012

http://www.amazon.com/Problem-Political-Authority-Examination-Coerce/dp/1137281650/ref=sr_1_1?s=books&ie=UTF8&qid=1424529805&sr=1-1&keywords=the+problem+of+political+authority