Clause 61: The Pushback Blog

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Archive for March 2016

Let’s You and Him Fight

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In 1857, a North Carolina man published a book which he expected would cause quite some trouble in his community. The book was The Impending Crisis of the South by Hinton Rowan Helper. He took an objective look at conditions in American and appealed to ordinary Southern people to act in their own economic interest to abolish slavery:

Nothing short of the complete abolition of slavery can save the South from falling into the vortex of utter ruin. Too long have we yielded a submissive obedience to the tyrannical domination of an inflated oligarchy; too long have we tolerated their arrogance and self-conceit; too long have we submitted to their unjust and savage exactions. Let us now wrest from them the sceptre of power, establish liberty and equal rights throughout the land, and henceforth and forever guard our legislative halls from the pollutions and usurpations of proslavery demagogues.
— Helper, p. 28 (http://docsouth.unc.edu/nc/helper/helper.html).

Helper set up side-by-side comparisons of northern and southern states grouped by 1790 populations: New York and Virginia, Massachusetts and North Carolina. He showed statistically how the economies of the southern states had fallen behind because of slavery. He explained how slavery reduced the prospects of the free whites of the South who did not own slaves, and appealed to them to refuse to fight a war to defend the rights of slave-owning planters to further impoverish them.

We know from history that Helper’s appeal was not heard. The economic reality he described asserted itself in the superior forces the Union would ultimately deploy against the Confederacy. After losing the war, the planters reasserted themselves in the peace. They instituted sharecropping, keeping blacks and poor whites in wage slavery for decades. They continued to play off poor whites against blacks while maintaining their own economic position. Even Helper lost his way, becoming a white supremacist later in life.

The game that the planters were playing and Helper was describing is called “Let’s You and Him Fight.” I’ll divide two parties and keep the hostility going, while I calmly walk up the middle with all the marbles. This game was described at an individual level by Eric Berne in Games People Play (1964):

The internal and external psychological advantages for [the initiators] are derived from the position that honest competition is for suckers …
— Berne, p. 124.

All my life I have seen the same game played among groups of Americans by people who want to set themselves up as the arbiters of what is fair. These latter people inflame the citizens, often along racial lines, playing one group against another while the instigators further their careers. In 1971, Lester Thurow wrote The Zero-Sum Society, providing a theoretical justification for this game at the national level:

Every time a tax is levied or repealed, every time public expenditures are extended or abolished, an equity decision has to be made. Since economic gains are relatively easy to allocate, the basic problem comes down to one of economic losses. Whose income “ought” to go down?
— Thurow, p. 17.

It is safe to infer that, by writing the book and arguing for these positions, Thurow, who was the dean of the Sloan School of Business at MIT, was humbly offering himself for the job of croupier at the economic casino he was proposing. A casino is a zero-sum institution, and every gambler knows the house always wins.

Want to see what a zero-sum America actually looks like? Here you go:

Fight during cancelled Donald Trump rally in Chicago, 11 Mar 16.

Fight during cancelled Donald Trump rally in Chicago, 11 Mar 16. Image from CNN.

I am confident that this is not what Lester Thurow had in mind when he wrote his book. Neither did the people who led the introduction of entitlements in the 1930s; they were seeking to avoid this very thing. Neither did the people who strove to broaden the reach of these entitlements since the 1960s.

They all had the best intentions — but those are what the road to hell is paved with.

Yes, Il Donald has appealed to the lowest instincts of people. But he is made possible by those who have gone before. Where Thurow says, “whose income ‘ought’ to go down?”, Trump’s followers say, “Not ours, Jack!”

Whatever level of political awareness they are operating on, the Trumpkins have sufficient common sense to realize that more government handouts for other people means less for them. A Nobel laureate economist is only starting to get his mind around this:

Put it this way: There’s a reason whites in the Deep South vote something like 90 percent Republican, and it’s not their philosophical attachment to libertarian principles.
— Paul Krugman, “Clash of the Republican Con Artists”, The New York Times (http://www.nytimes.com/2016/03/04/opinion/clash-of-republican-con-artists.html?rref=collection%2Fcolumn%2Fpaul-krugman&_r=0).

Ya think? For eighty years politicians educated people to expect handouts from the government: why do you think they’re called entitlements? Whoops, but you’re not entitled, cause we want to give them to these other people over here, who we have decided are more deserving. What happened to the social contract?

What about the Democratic con artists who are also playing Let’s You and Him Fight, asserting the moral high ground because only they know the secret of how to distribute government largesse equitably? What game are you playing, Paul? Are you honest enough with yourself to even know?

Paul Krugman looked into the future and saw Donald Trump staring back at him. This is what you get when you work very hard to build the zero-sum society. Krugman doesn’t want a class war; he wants to put his policy in place and have the people who lose out just quietly take their medicine. If we just quietly took our medicine from the authorities, there would never have been an American Revolution.

If you think this is bad, wait until you see the cage match between the mortgage interest deduction and the Earned Income Tax Credit. Two go in; one comes out.

The antidote to all this is not very complicated. It is not to demonize blacks, whites or Mexican immigrants. It is to turn them all loose to live their lives and keep your hands out of their pockets. We’ve known this for some three thousand years:

You shall not covet your neighbor’s wife. You shall not set your desire on your neighbor’s house or land, his manservant or maidservant, his ox or donkey, or anything that belongs to your neighbor.
— Deut. 5:21 (NIV)

That commandment is not there to protect your neighbor. It is there to protect you from the dark forces within you.

Every con in the history of man has required you, the mark, to want something you haven’t earned.

Written by srojak

March 13, 2016 at 12:27 pm

Who Gets the Handouts?

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In the 1930s, we experienced an economic depression like nothing we had ever experienced before. As a result, Americans demanded an activist government that helped people — but not all people. The New Deal helped white industrial workers and farmers more than it did blacks and Mexican-Americans. In real estate, the New Deal reinforced segregation and introduced redlining.

There is general consensus that the elections of the 1930s realigned the electorate, introducing what is called the Fifth Party System. Here are the election results for 1936:

1936 Presidential Election results.

1936 Presidential Election results. From Dave Leip’s Atlas of U.S. Presidential Elections (http://uselectionatlas.org/RESULTS/).

There was a broad base of support for FDR, which is why he won four elections. The people who were advocating a reduced role of government were selling a product the majority of the electorate did not want.

In the 1960s, the Democratic Party shifted focus. It began advocating a more inclusive approach to government benefits. The largely white principal beneficiaries of the New Deal saw this and they didn’t like it, like it, no they did not. What did they do about it?

1968 Presidential Election results.

1968 Presidential Election results. From Dave Leip’s Atlas of U.S. Presidential Elections (http://uselectionatlas.org/RESULTS/).

This shows the Southern Strategy wasn’t that effective: four southern states broke for Wallace, while Texas remained loyal to the Democrats. But the historical base of the New Deal coalition was alienated. In 1980, many defected to Reagan.

2008 Presidential Election results.

2008 Presidential Election results. From Dave Leip’s Atlas of U.S. Presidential Elections (http://uselectionatlas.org/RESULTS/).

2008 is a picture of the Democratic coalition at about its strongest without an incumbent to support. Let’s take that result and back it off a bit (otherwise the Democrats would be winning all the elections, which is counterfactual) to find the base strength of the support for an inclusive program of aggressive government benefits.

The role of government is the key issue of our time. Everything else that is important flows from this. Laying 2008 over 1936, and attempting to adjust for changes in demographics over 80 years, this is what I get:

Educated estimate of the 2016 electorate.

Educated estimate of the 2016 electorate.

What can we learn?

  • There has been no realignment since the 1930s. The majority of the electorate still expects big government and benefits therefrom. The big fight is over who gets their promises kept and who has to go without.
  • In order to hold the line against dilution of their benefits, the favored groups of the New Deal — who I am calling the “White Big Government” group — often team up with the small government conservatives to block the extension of benefits to others, notably blacks and Hispanics, which threatens to dilute the benefits to which the former believe themselves entitled.
  • In a straight-up referendum in the current electoral climate, the big government side would trounce the small government side. Conservatives who believe otherwise are delusional.

What has happened this year in the Republican Party is really a hostile takeover. It is as if the Reagan Democrats had come over to the Republican Party in 1980 and nominated Jacob Javits (not that there is any comparison in terms of integrity or behavior between Sen. Javits and Donald Trump). But then,

All the noise about Donald Trump’s “hostile takeover” of the Republican Party misses a key point: Such takeovers only succeed when existing management has failed massively.
— “How the Republican Party Earned a Hostile Takeover”, New York Post (http://nypost.com/2016/03/02/how-the-republican-party-earned-a-hostile-takeover/)

The Trumpkins want to take the Republican Party away from the conservatives and the establishment pols who never deliver what the former consider really important. They feel abandoned by the Democrats, and are happy to return the favor. Why did 20,000 voters in Massachusetts stop being Democrats? It’s not a massive plot to undermine the Republican Party and elect Hillary Clinton. It is a hostile takeover. We’re going over here to get the candidate we want.

The Trumpkins are fed up with the standard shuck-and-jive, where candidates blow sweet nothings in their ears, then blow their interests off once elected. They don’t want a reduced role of government. They have enough common sense to realize that there is not enough wealth to keep all the promises that have been made by successive elected officials, and they don’t want to be the ones getting the shaft. Chasing after government handouts is at best a zero-sum game. In order for me to win, you have to lose. That is what all the anger is really about. All the rest is window dressing to them, and they are prepared to ignore it.

If you think this is ugly, we haven’t even got to the difficult part. Wait until the rest of the electorate cottons on to the fact that the entitlement cupboard is bare.

Written by srojak

March 6, 2016 at 1:06 pm