Voter Understanding

Way back in my teens I was a conservative thinker about all matters of government. At the time I really was concerned about government taking over more control of our daily lives. I was young and not filled with many facts, but I read the intellectual articles published by conservatives.  At the time these people were only allied tangentially with the republican party. They really felt establishment politicians were serving for their own personal reasons and not for the good of the country. Patriotic themes were common in those days, and conservatives announced their purity of love for country more than most people.

I had deep interests in a career in business and industry. I observed the connection – intersection, really – of economics and politics. A lot of theory was discussed, and government manipulation of the economy was something conservatives complained bitterly about. Especially Keynesian economics, placing a burden on the classical economist of British origin. Born there in 1893, he died in 1946. His economic theories were the most popular at the time and continue to influence public policy today.

Keynes' primary theory believed that nation’s suffering a strong recession or depression, could correct the situation by creating public debt, spending it on economic goods of long lasting value, and thus boost the economy measurably. As the economy improves, tax collections and other returns on the investments purchased by government debt were to be used to repay the debt.

That last bit of policy is often omitted in a recall of Keynesian Economics. You see Mr. Keynes was continually blamed by conservatives in America for growing public debt. In the 1950’s and 1960’s republicans and conservatives blamed inflation on runaway federal debt. They also believed that government economic policies were too interventionist and accumulated too much power in the hands of the federal government.

How much of this was factually true is arguable. The case can be made, however, that the American depression of the 1930’s would never have been successfully battled if it hadn’t been for massive federal spending on public infrastructure under the Public Works Administration (WPA) and several other far-reaching programs that flooded the economy with money, jobs and a general lifting of the depression. Before that happened, however, World War II entered the scene and government military spending went through the roof.

Once the war was over, the American economy was on fire with growth and reinvestment in new industries, inventions, new careers, expanded education for the masses, and a host of other developments. The future was bright and with victory over communists on two sides of the globe, America could do no wrong. The economy was beyond strong; it was dynamic and massively able.

Somewhere along the way conservatives still complained about government interference in all matters relating to business and industry. Regulations were argued over. Deficit spending was broadly condemned. And Keynesian economics was considered the bad boy theory of all time!

Truth be told Keynes was correct. Spend public money – even loan dollars – to build new highways, bridges, dams and public infrastructure, and the economy will perk up. The investments will create even more economic activity and more jobs will result. Standards of living will rise along with the economy. All of this was true.

And yes there were some drawbacks. If politicians promised too much and financed their promises with borrowed public funds, the economy could become overheated and produce an endless chasing after goods and dollars creating inflation. Keynes had an answer for this: pay down the public debt, shrinking the very thing that grew economic activity in the first place. So slowing the economy was only a matter of reducing the debt, paying it down, and raising the cost of money. The latter required the Federal Reserve to increase reserve requirements for banks to off set their risk dollars in loans, and to raise interest rates that would make it more costly to borrow. In turn loan volumes would decline and along with that a general slowdown in economic activity.

When needed, the process could be reversed and tweaked and tuned endlessly to produce a fairly balanced economy. For decades the nation generally did well managing the economy in this manner. But political philosophers felt the quiet hand of competition would work better.  It truthfully never has worked all that well, but supply and demand does work to keep things balanced in the economy.

At any rate, once I was in college and studying economics seriously I learned that the political pundits were mostly wrong. Politics had distorted political philosophy AND public economics. Distorted in major dimensions and almost all untruthful.

That’s when I began to realize public discussion about complicated things can easily go astray and be manipulated by people of ill will. Conservatives became those people of ill will. They talked of dishonest economics and pretended to understand the complexities of economics all while spinning a political ideology built on nonsense.

It remains pretty much the same today. Conservatives think they understand the economy when in truth they only understand the facts affecting their own livelihoods, businesses and household finances. That is only one half of the economic story, however. The role of government in economics is critically important and it requires management by knowledgeable people with no axes to grind. Try finding those types of people in the Congress of today. Too much flippant political language destroys our trust in them. We must still find good people to trust and give them the authority to manage the affairs of public economics with fairness and intellectual honesty.  It really is too important a matter to leave to politicians.

So, with an understanding of economics and a college degree in the field to show as my credential, I became a much more sober, understanding person willing to observe public policy formation in an increasingly political age. Here’s what I learned.

The republican party doesn’t truly understand economics as well as it claims. It does understand power politics and where the levers of power reside: banking, industry and regulations. Their too simplistic approach, however, is to eliminate regulations, leave banking alone to define affordable risks, and support industry to create jobs.

What they forgot was the inherent greed of the key players in all of this. Left on their own they usually turn policy to favor their own interests. And thus it has. Banks and investment firms rejoiced at the repeal of the Glass-Steagall Act; that occurred in 1999 with an unholy alliance of politicians trying to compromise between Democrats and Republicans. By 2007 the real estate industry was nearly dead, so too were banks, and the debacle had spread to all of Europe and most of Asia as well. A world financial meltdown was created by bad policy decisions.

In the aftermath a new President was tasked to fix the mess. And he did even as the same old politicians bitterly complained. So with most people against him at every turn, Obama managed to wrest enough control from the kooks and fix the system. He literally saved the world from its own greed! But you won’t hear very many people thank him for it.

No, it is in their interest to maintain the purity of their hatred against John Maynard Keynes and liberal economic policy. Bosh and Nuts! It is not liberal economics at all. It is just economics, plain and simple. What others have made of Keynes’ theories is on them not him. His theories have been proved right time and time again.

What hasn’t been proven is the idiocy of politicians who misrepresent theory, education and science to feather their own nest of issues and ideologies.

But we have heard this all before and yet where are we today? Still in the same place, listening to do nothings and know nothings and letting them screw up the public nearly every time.

Shame on us for letting them. Shame on them for pursuing the greed. For themselves, remember; all for themselves.

March 18, 2016