Posts filed under “Philosophy”
It’s a Myth that Conservatives Don’t Care About Inequality
Conservatives are very concerned about the stunning collapse of upward mobility.
A poll from Gallup shows that a majority of Republicans think we’ve got too much inequality:
Two out of three Americans are dissatisfied with the way income and wealth are currently distributed in the U.S. This includes three-fourths of Democrats and 54% of Republicans.
And the conservative website Townhall.com ran a story last month entitled, “Inequality is a Conservative Issue“.
In fact, there are at least 5 solid conservative reasons – based upon conservative values – for reducing runaway inequality:
(1) It has now finally become widely accepted by economists that inequality drags down the economy. Conservatives like economic growth;
(2) Inequality increases the nation’s debt. Conservatives don’t like debt;
(3) Runaway inequality leads to social unrest and violence. Conservatives like stability and order;
(4) Much of the cause of our soaring inequality is bailouts for the big banks and socialism for the buddies of the high-and-mighty at the Federal Reserve, Treasury, and White House. The government has consistently picked Wall Street over Main Street, and virtually all of the the big banks’ profits come from taxpayer bailouts. The Fed is still throwing many tens of billions a month at the big banks in “the greatest backdoor Wall Street bailout of all time”, which sucks the wealth away from the rest of the economy. Conservatives don’t like bailouts or socialism; and
(5) One of the biggest causes of runaway inequality is that the big banks are manipulating every market, and committing massive crimes. These actions artificially redistribute wealth from honest, hard-working people to a handful of crooks. Conservatives hate redistribution … as well as crooks. In addition, religious leaders have slammed the criminality of the heads of the big banks; and the Bible teaches - and top economists agree – that their crimes must be punished, or else things will get worse. On the other hand, if the crimes of the bankers are punished, inequality will start to decline, because a more lawful, orderly and even playing field will be reestablished.
This is an area of agreement between people of good faith on the left and on the right. As Robert Shiller said in 2009:
And it’s not like we want to level income. I’m not saying spread the wealth around, which got Obama in trouble. But I think, I would hope that this would be a time for a national consideration about policies that would focus on restraining any possible further increases in inequality.
If we stop bailing out the fraudsters and financial gamblers, the big banks would focus more on traditional lending and less on speculative plays which only make the rich richer and the poor poorer, and which guarantee future economic crises (which hurt the poor more than the rich).
Indeed, if we break up the big banks, it will increase the ability of smaller banks to make loans to Main Street, which will level the playing field.
Moreover, both conservatives and liberals agree that we need to prosecute financial fraud. As I’ve previously noted, fraud disproportionally benefits the big players, makes boom-bust cycles more severe, and otherwise harms the economy – all of which increase inequality and warp the market.
And prosecutors could claw back ill-gotten gains from the criminals and use that money to help the economy:
Postscript: If you want to know the stunning truth of how bad inequality has gotten, read this.
If you want to hear what top economists say inequality does to our economy, click here.
And if you want to find out whether government policy is making things better or worse, here’s your answer.
click for updated futures Yesterday, we discussed the likelihood of an equity correction versus the end of the bull market. Today, futures are deep in the red, looking like another 1 percent sell-off or worse awaits us. European stocks are down 1 percent or more, with the IBEX off more than 2 percent….Read More
Josh has an excellent post up, titled Don’t Hate the Asset, Hate the Price, that makes several important points. I want to reiterate and expand on them here. Some of these are lynchpins of an investing philosophy I have been espousing for many years. Its a broad discussion on price and value, and I think…Read More
Lovely sentiments from Noah Smith on a few of your favorite bloggers, including Josh Brown and yours truly: Barry Ritholtz: There is a huge amount of financial disinformation and misinformation and just plain bullshit out there in the world. Most financial news is random noise, and some is even worse than that. And there’s a…Read More
“The intuitive mind is a sacred gift and the rational mind is a faithful servant. We have created a society that honors the servant and has forgotten the gift.” ~ Albert Einstein What is intuition and how might it help or hinder an investor’s decision making process? A good philosopher begins with definitions, otherwise they…Read More
Over at Forbes, Jessica Hagy (of Indexed fame) has been illustrating the Art of War, with excellent results. This observation from Ch4 tickled me: “What the ancients called a clever fighter is one who not only wins, but excels in winning with ease.” Jessica Hagy via Forbes
You go to meetings. You process your inbox. You might make a presentation here and there. You certainly seem busy. But I bet if I asked your team what it is you do all day long, most of them would say, “I have no idea”. And come to think of it, do you know how…Read More