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Samizdata quote of the day

Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

- Ronald Reagan

29 comments to Samizdata quote of the day

  • Brad

    It’s sad that the last great shot we had to limit the size of government wasn’t remotely successful. Sure Reagan reduced taxes which spurred the economy, but under his watch, debt ballooned (though today’s figures make it seem quaint). I can’t fully blame Reagan if he couldn’t effect putting his beliefs into action, he had to deal with a Democratic Congress for example. It simply proves that over the last 8 decades we’ve moved inexorably toward a complete Statist economy, Democrats and Republicans both are responsible for it, and Reagan had little effect in stopping it. Put into context the quote seems to be empty rhetoric. It may not be fair to call it such, and perhaps most of our mild grandiose schizophrenics really believe the axioms they put forth, but it’s obvious that they really can’t get much of anything done practically.

    From an individual standpoint it’s great examine the quote and the concepts it entails, but knowing it to be true, having an idea of the corrosive effects it has on culture, knowing that it isn’t going to stop, and only get worse, is really just depressing.

  • MlR

    I feel you Brad.

  • Laird

    Brad is correct, and I share his depression.

    Fundamentally, the problem began when politicians learned that they could pick the pockets of the productive and use the money to buy the votes of the indolent. The votes they buy are (by and large) those of people who have no real stake in the government because they don’t pay for it. Ours has become a government by and for leeches. Such people shouldn’t be permitted to vote at all (which would cure much of the problem), but of course if you say that you’re branded as “undemocratic” (or worse).

    I think history will conclude that our experiment with popular democracy is a failure. (Of course, the Founders could have predicted that; to them, the word “democracy” was fairly close to a curse.) We don’t have the government they bequethed to us, and haven’t for a long time. Sad.

  • Thon Brocket

    the problem began when politicians learned that they could pick the pockets of the productive and use the money to buy the votes of the indolent

    Yup. I hafta keep plugging away at this. I reckon the fundamental flaw should be addressed by separating the powers of legislation and taxation – one elected legislature that can pass laws, but not not raise taxes, and another – separately elected – to raise taxes to pay for them, but having no power to legislate outside the tax regime.

    That way, the ability of legislators to bribe the electorate in the tax-and-spend circus we’re all so familiar with would be severely circumscribed, and the state might even be reined in.

  • Frederick Davies

    Thon,

    That way, the ability of legislators to bribe the electorate in the tax-and-spend circus we’re all so familiar with would be severely circumscribed, and the state might even be reined in.

    And who/what will stop the voters electing people on both chambers to overturn the constitution (or overturn it themselves) and return to the tax-and-spend circus. After all, the US Senate was originally supposed to be all appointed rather than elected, and then the people, in their wisdom, voted for the XVII Amendment. In the end, Laird has a point: as long as sovereignty lies in “the people”, individual rights will be in danger. The problem is not establishing a good constitution; the problem is making sure it cannot be overturned.

  • Laird

    Thon, I like your idea in theory, but don’t think it would work in practice (at least not for long). Pretty soon the two “houses” (or whatever you call these separate bodies) would be colluding to “scratch each others’ backs”, just as our current solons collude to pass pork barrel projects in each others’ legislative districts.

    The only real solution I can see is to give voting rights only to those citizens who actually pay taxes. Of course, that has no more chance of passage does your idea.

    I’m still depressed.

  • Lee Kelly

    How about capital punishment for any politician or bereaucrat who attempts to change or ignore cnstitutional law?

    That’d be fun.

    The trick, presumably, would be to turn politicians natural proclivity for backstabbing against the system, so that by internal conflict they could never find enough unity to corrupt the system.

  • RRS

    Assuming the expected continuing balance in Congress, the U.S can expect increased efforts at redistribution via regulations, since the tools of taxation will be out of reach until 2010 (if then).

    If we get a Democrat in the Executive Office, then that will certainly be the program.

    Ross Perot: “They’re bribin’ ya with y’own money!”

  • manuel II paleologos

    The thing that strikes me more and more about Reagan is how odd it is that these days he’s almost universally admired.

    Maybe it was just me growing up in the North of England and also spending time in a liberal New England posh school, but at the time I never met anyone who didn’t think he was a dangerous moron. Not one. First one I ever met with anything remotely positive to say about him was maybe Norman Stone at a debate in Oxford right at the end of this reign, and I almost fell off my chair at the sheer audacity of such a train of thought.

    Groupthink, eh? It’s a scary thing.

  • Frederick Davies

    manuel,

    Just think about it this way: compared to the presidents that were elected before and after him, he was good, really good. Nixon (sleazeball), Carter (useless), Bush I (non-entity), Clinton (even bigger sleazeball), Bush II (let’s not go there). And Reagan at least knew what he wanted (win the Cold War with the USSR) and almost was there when it happened. In hindsight, he was probably the best president in the last 30 years (which is not saying much, but comparatively…)

  • RRS

    Does it occur to others, as it does here that most of those “in politics” are almost constantly and principally engaged in trying to manipulate, control or create the perceptions that others have of them? Not that we all do not to some usually lesser degree.

    In the case of Reagan, he seemed to concentrate more on developing a perception of the relation of individuals to government; on the possibilites of human capacities, and of the great need to concentrate efforts on both.

    How odd for a man whose profession had been taking acting roles to create perceptions. Perhaps realizing how ephemeral that was, it was easy for him to leave that behind and to others less endowed.

  • Thon Brocket

    FD:

    And who/what will stop the voters electing people on both chambers to overturn the constitution (or overturn it themselves) and return to the tax-and-spend circus?

    Nothing, if that’s what they vote for. They’ll have voted for it twice, which makes it doubly legitimate.

    But the point of the scheme is that it is much more difficult to make happen. Consider a statist administration trying to get its agenda into the law book – some illiberal tripe about garbage recycling or ID cards, whatever. They can pass the law, just as they do now, and claim democratic legitimacy for it, and the electorate may even applaud it. That’s what they voted for, after all. But now to implement and enforce it, they have to bring it to the taxing chamber, which is elected solely on its promises and performance in taxation. Even if the same party controls both chambers, and, NewLabour-like, conducts its foul business in corridors and back rooms, the electoral sticks and carrots affecting individual MPs are now pulling the two houses in opposite directions. The legislators may get elected on promises of pie in the sky for skoolznospitals, but the money voted for them by the taxers had damn well better be spent openly and honestly and efficiently, or it won’t be voted again next year, if the taxers want to keep their seats at the next election.

    The tax-and-spend equation would be democraticly adjudicated, directly and openly. Right now, that adjudication is anything but open and democratic. Drill down through almost any statist horror-story reported on this blog, and at bottom you’ll find abuse of the power conferred by the ability to tax. Take that power from the executive, and invest it elsewhere, and I believe we’d have a hell of a lot less power-freakery blighting our national life.

  • Thon:

    but the money voted for them by the taxers had damn well better be spent openly and honestly and efficiently, or it won’t be voted again next year, if the taxers want to keep their seats at the next election.

    You seem to be forgetting that the taxers are voted in by the same voters that vote in the legislators, and also that most voters object to higher taxes.

  • Thon:

    but the money voted for them by the taxers had damn well better be spent openly and honestly and efficiently, or it won’t be voted again next year, if the taxers want to keep their seats at the next election.

    You seem to be forgetting that the taxers are voted in by the same voters that vote in the legislators, and also assuming that most voters object to higher taxes.

  • Damn. The second comment is the correct one.

  • Frederick Davies

    Thon,

    You are also asuming that voters are rational and will not vote for the same party in both chambers out of loyalty or just plain habit. It is something that is not talked much these days, but a lot of voting is tribal and not easily subject to rational argument. The party system exists for a reason; it works (at least for the party leaders, that is).

  • Midwesterner

    But Thon may be on to something.

    We have something very similar to the dynamic he is proposing here in Wisconsin. The state government set a legal cap on the amount that a school district may levy in taxes. To overcome this limit requires a referendum. Typically the same voters who will vote for a very spendy school board, will vote against giving them any extra money to do it.

    The school boards will then go to amazing lengths to reduce voter turnout, and they will keep sending back slightly altered referendums again and again. One of the most extreme cases in my district was when they held a special referendum vote on a Saturday(?). We almost never vote on Saturdays here. We always always vote on Tuesdays. And there was a Tuesday vote for something else coming up a few days after the taxing referendum. Apparently the school board’s plan in that case was to hope everybody assumed there was only one vote and that they would miss the Saturday referendum, thinking it would be on the routine ballot on the coming Tuesday.

    Around here, we have started calling them not ‘referendums’, but ‘neverendums’. All the same, they are very effective at stopping spending and also reducing the base level of extravagance by school boards. Separating taxing authority from spending authority is actually a pretty good tactic.

  • RRS

    Given the drift of this commentary, some might be interested in exploring:

    The Myth of the Rational Voter by Arnold Kling of George Mason University (a libertarian).

    Also of interest is the decision yesterday (29 Feb 08) of the Virginia Supreme Court declaring the granting of taxation powers to a regional authority (for transportation) unconstitutional; and that all taxing powers have to remain in the hands of elected bodies. Something over $8mil collected so far (brief period) must be returned.

    If you link up with (Google) Liberty Fund and the “Library” spot, you will find Kling, and a reference to finding the Mueller Test that falls right on some of the above commentary.

  • Cynic

    The author of that book is actually Bryan Caplan.

  • RRS

    I am terribly sorry, I mis-spoke and put in the name of Arnold Kling, when it should have been Bryan Caplan in my prior post.

    They both blog together.

  • RRS

    Ah Cynic, You beat me to it.

    I got shifted over to reading Productivityshock.com when I realized what I had done.

  • Paul

    Brad is absolutely right. What does our (faux) populist friend Barack say when asked how he’ll get the money to pay for all his government programs/subsidies? Oh he’ll “tax the rich, but reduce the tax burden on the middle class” or some bullshit in line with that. As this week’s Economist points out, though, the “rich” in America already pay MOST OF THE TAXES. The whole basis for economic populism is exactly what Brad says: The have nots using the government to take property from the haves. This, though it seems superficially fair (and takes a lot of scoialists/economic lefties in) is terrible. It leads to a bad economy and statist authoritarianism. But what can we do? If we only allow those with money to vote, we can easily allow them to take advantage of the poor. That’s what Marx was afraid of, hence socialism/Communism and, populism/progressivism (which developed relatively independently). The only solution, in my opinion, is to decrease government’s power and taxes. We need a higher authority than the rule of the majority. The founders knew this, hence the Constitution. They were smart enough to allow for an Amendment process. So what are we to do now? All well. What do you Brits think? After all, it was your colonial protectionist and statist ways (almost as bad then as they are now) that gave the founders their chance. ;)

  • Thon Brocket

    Alisa:

    You seem to be forgetting that the taxers are voted in by the same voters that vote in the legislators, and also assuming that most voters object to higher taxes.

    and FD:

    You are also asuming that voters are rational and will not vote for the same party in both chambers out of loyalty or just plain habit. It is something that is not talked much these days, but a lot of voting is tribal and not easily subject to rational argument. The party system exists for a reason; it works (at least for the party leaders, that is).

    The point of the idea is not to alter the behaviour of voters – they’ll vote in their own interests anyway, whatever happens – but to change the motivations of politicians so that those who tax us are not afforded the power to do anything with the money but pass it on the executive, who in turn have no power to tax anybody, and so politically are forced to live within their means. The clear conflict of interest between taxing and spending which in my view lies at the root of almost all the abuses we suffer would be ended.

    It’s a structural problem which has arisen wherever representative democracy obtains, and it needs a structural change to fix it.

  • Laird

    No, Thon, what is needed as an acknowledgment that “straight” democracy does not, and cannot, work as a stable long-term political system. The whims of popular passion, and the ever-present desire to receive something for nothing, are simply too strong. The Founders tried to avoid the problem through a system of representative democracy (i.e., a “republic”) with a Constitution that recognized that some things are simply not subject to majority vote. Unfortunately, that system was hijacked early in the Twentieth Century and perverted into the current mess. At this point I don’t think there’s any going back; we’ll just have to wait for the inevitable collapse, and try to rebuild out of the rubble. Not a pleasant prospect.

  • Thon, Mid: I don’t know. I am mostly working from my gut feeling here, rather than any practical points. To my defense, making practical points about something that has never taken place is always subject to the law of unintended consequences, so there. My gut feeling is that the problem is not structural, but rather rooted in human nature (which is about the only parameter that can safely be predicted to avoid that nasty law I just mentioned). Now, if that is the case, then the only structural changes that have a chance of turning out positive are those that work with human nature, rather than against it. Thon’s solution may be it, but I do see two specific problems:

    The point of the idea is not to alter the behaviour of voters – they’ll vote in their own interests anyway, whatever happens – but to change the motivations of politicians

    Motivations of the politicians are arising from the voters interests. Elected politicians cannot be separated from voters in any discussion, however much we would like to see them separated. If a politician satisfies his voters’ interests, he stays in power.

    The clear conflict of interest between taxing and spending which in my view lies at the root of almost all the abuses we suffer would be ended.

    There is no conflict of interest, as there is only one interest (on the part of the voters): to get as much as they can, for as little as they can.

    As to Mid’s example, it is instructive, but I am not sure it can be extrapolated from to national politics.

  • Laird nails it. And Mid, I also am an optimist: I am optimistic that we will come out of that inevitable collapse that Laird mentioned, and learn our lesson – until the next few generations manage to unlearn it again:-)

  • Thon Brocket

    FD, Alisa: So your best strategy is to await the Apocalypse and hope for better luck next time? Last time round it took 1300 years to get from the sack of Rome to John Stuart Mill. That would be too long for David Icke’s space lizards, let alone a standard Homo sapiens like me, so I’m voting against that one.

    Besides which, there’s no sign of the collapse of society you desire so ardently. Never happen. The magic of free enterprise is so powerful that even the neutered version we’re allowed is making us steadily richer, dickheaded economic policy notwithstanding, and the cattle are by and large happy voting for democratic socialism and social democracy in alternate decades. What you’re looking at, in engineering terms, is slight oscillations around the natural rest-state of the system. Even the most violent perturbation won’t stop the system returning eventually to its rest-state. To change that you have to change the properties and constraints of the system. And that is what my advocacy of separation of taxing and spending powers addresses.

    The central dynamic of the system we have now is the power-freaks’ ability to soak whoever and whatever they want for taxes (which is power in itself, and a big part of their thing) in order to further exert power over us through legislation and administration. Power is what it’s all about, and the doctrine of separation of powers is specifically aimed at this perennial problem of human affairs. I’m simply advocating an extension of this principle.

    Returning to the engineering analogy, take a heavy pendulum, and attach two springs to pull it to the left. Give it a jar and it’ll jiggle a bit and settle to the left of centre. Now leave the “spending” spring where it is and switch the “taxing” spring to pull to the right. Now the pendulum will settle at the centre. See? Change the constraints, change the final state.

  • Thon: I have no strategy, I simply suspect that your strategy will not be effective.

    the collapse of society you desire so ardently

    Huh? Besides, I never said that your strategy should not be tried. By all means, go ahead,. If we are doomed and headed for a collapse, it really makes not much difference how we get there, and if I am wrong, no one will be happier about that then me.

    As to oscillations, they are there, of course, only they are much more complex than that. Imagine any number of sines with different frequencies and amplitudes, “superimposed” one on “top” of the other. In other words, imagine that your pendulum contraption is located inside a box, that box, in turn, is hanging as pendulum with two strings with properties different from the inside strings, then put it in another box…

    But, all that said, I come full circle to the sentence with which I opened my previous comment: I don’t know.

  • ‘Springs’, not ‘strings’…