Wednesday, June 22, 2011

Morning break, 6/22

If you want to be unconventional, by definition, you have to think in a new way. Which brings me to something I'd like to discuss here, but I don't know if I am going to be able to make the point I'm trying to make.

I said once before that ideology makes us stupid because it causes us to close our eyes to facts that are right in front of us, but with the ideological blinders on, we just don't see them.

So the next few sentences may seem "kumbaya" to those on the right side of the political spectrum. But here goes. Many years ago, I read Herb Cohen's book, You Can Negotiate Anything.   In that book, he describes negotiating styles.  One of those styles he called "Soviet".  By the way, I may have written about this before, but hang with me.  It was a type of style that required a winner and a loser.  A win-lose type of negotiation.   That was one style.  There was another style he called "win-win".  That's where the "kumbaya" comes in, because most people divide outcomes up into winners and losers.  The idea of a win-win style just doesn't seem realistic to them.  Conservatives love to describe liberals as kumbaya when the liberals start discussing peace.

By contrast, to a conservative, with supply side economics, if you cut taxes, everybody wins.  Why isn't that "kumbaya"?  They will see that cutting taxes, you raise more revenue.  That leaves more to the state in order to spread the wealth around.  But those on the left, in these type scenarios drop their "kumbaya" BS and start talking winners and losers again.  If you cut taxes "for the rich", somehow the interests of the poor are harmed.  Heck, they'll continue to believe that even when the outcome of their policy is negative because to them, it is more "fair".  Hey, that's what Obama said about capital gains taxes.

In the end, who's kumbaya and who isn't?  Depending on the circumstance, it would seem that either one could start taking on the role of kumbaya or the knuckle dragging neaderthal.    When it comes to relations with the outside world, the left will act like kumbaya, but when it comes to supply side economics, they'll act like the neaderthals.  And vice versa.

What makes for the stupidity is the failure is in seeing other's fallacies while not seeing their own.   They believe in their respective ideologies and can't see what's plainly in front of them.   Supply side economics seemed to work well in the Reagan era, but Clinton raised taxes and the country prospered anyway.  That wasn't supposed to happen.  In the late seventies, there was inflation and recession at the same time.  That appeared to contradict economic theory at the time.  It was called, the Phillips Curve, and it just so happened to not apply at that time.  This is where supply side economics seemed to work where Keynesianism seemed to fail.  But the opposite occurred during the Clinton years.  How can they both be right and wrong at the same time?

I would suggest that something else was at work which cannot be explained by the ideologues.  I would also suggest that ideologues may think that they know, but they don't.

Ronald Reagan didn't trust ideology.  Why should those who think well of him believe in ideology, then?  There are those who do.  By the way, the point is that in politics, ideology seems to become the conventional way of thinking.  Since we have a weak economy, those who favor Keynesian economic policies want to believe that those policy prescriptions will be successful.  Supply siders do too, with respect to their own policy prescriptions.  But what if the problem has nothing to do with the tax rates?  Then neither ideology will have the answer, will they?

In our discussions with each other, we should take the win win style.  This may seem too kumbaya, but it may actually be the only thing that can work.  Better find a way that everyone can win, but if you don't, we may all lose.

Update shortly later:

It so happens that if the politicians make a deal that is only for themselves, the outcome will be worse than doing nothing at all.  I think that is what happened with Glass Steagall.  When that was repealed, it opened the way for the housing mess that we are going through now.  They compromised the wrong thing and basically sold out the people, while only helping themselves.  If that happens now, we are really sunk.

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