Can't Even Agree

Hence The Divide

If you think of the current political environment, and it is toxic and tribal, is bad now, wait. It’s going to escalate tremendously in 2024.

Two reasons.

1. The Democrats want chaos. “Never let a crisis go to waste” is a mantra and by creating crisis, they use government solutions to grab more power.

2. The Republicans use it to instill fear to try and motivate. “This is the most important election in our lifetimes.”

Neither is particularly good at achieving what we need, consensus and agreement.

Each side doesn’t trust each other at all. It also doesn’t help when people on your team cave on core values to try and build consensus. See the recent immigration bill in the Senate or anything Mitt Romney says.

I always found that with reasonable people, I could find a solution if we could agree on the problem at hand. The knee-jerk reaction for a Democrat or a RINO is to create an expansive government program and spend government money to fix it.

That’s a bad solution not only because it expands the power of the government. The real danger is that it abdicates an individual's personal responsibility to think about and solve it.

Look at charitable giving and see which party’s faithful give more. There is a reason why and not because one party’s faithful is less charitable than the others. Arthur Brooks looked at this and shattered a lot of myths. When the government is the solution to everything, your taxes are considered charitable giving even though everyone of every political stripe tries to minimize them.

There are plenty of examples of disconnect and distrust.

Immigration is a hot one now. We can’t even agree on whether to close the border or not, how are we going to solve for immigration?

Education is another hot one. We can’t even agree if we want classically educated people in the US. Education has become overtly politicized.

Health and wellness is one. One side sees it as a human right. Once you go down that path, it is guaranteed and there is only one thing that can guarantee it. The other side sees it as a claim on someone’s personal innovation and labor. That’s kind of equivalent to slavery. It also avoids the fact that in most cases, healthiness is a personal choice.

Free trade is another. Trump had tariffs. They didn’t work. Biden has tariffs. They don’t work. Yesterday Trump said he would put 60% tariffs on goods from China, which won’t work. Both sides talk a good game on free trade but neither is willing to walk away from tariffs, subsidies, price supports, or price ceilings.

Maybe Trump is just making political talking points and trying to appear tough on the Chinese, but given his track record he doesn’t have to do that.

The tax system is yet another. Trump’s tax cuts expire in 2025. Both sides are angling for a fight and I see all kinds of proposals now that are on the edges. Instead of trusting the individual citizen to make their own decision on taxes, they want to implement a centralized government solution.

To be clear about where I stand, given the low optimum choices that confront me on the tableau, Trump is the least worst of all of them. There is no candidate like the Argentinian Milei in this tableau, even on third parties.

Free markets if applied correctly can restore trust, and create consensus.

The one thing I know is that the free market is objective if you let it be objective. Some of the more remarkable parts of the classic R. A. Radford paper on the “Economics of a POW Camp” is that a huge economy was created out of nothing. There was no actual government-issued currency. The prisoners used cigarettes.

Since they used cigarettes, you could make a personal choice to not smoke, or smoke far less and you were automatically “richer”. The same goes for many choices people make in their own lives today. There was no surgeon general’s warning, no government telling you that you couldn’t, and nothing was illegal.

The camp had a coffee and tea stand, and it was so busy they needed to pay an accountant to keep track. The free market economy created ancillary jobs that weren’t envisioned when it started. By the way, there was no centralized push for the market to start. It just happened because people are hard-wired to get gains from trade.

As soon as the officers started to regulate and implement control measures they thought were “fair”, the economy crashed. Centralization kills free markets.

“Oh, but we need some rules, some guardrails”, say the crowd. They see themselves in the middle between the free marketers and the government control freaks.

The only rules you need are very clear and transparent standards on trading, settlement, and how money gets transferred. All the other stuff gives rise to price ceilings and floors and gives a competitive advantage to some market participants over others.