Simple economics in school

When I taught high school level economics I kept it very simple. I hoped to instill in students a sense of exactly what they might deal with in real life. One such lesson involved what sales meant.

One idea was that when an item was on sale for, say, 10% off, that they did not save ten percent but only spent ten percent less on it. That doesn't make a purchase bad of course. But unless they actually put that ten off in the bank, they hadn't saved anything. I in fact had gotten that idea from me Pops years earlier, when I was maybe, heh, heh, ten. A friend of his was showing the old man something and bragging about the ten off he saved. Dad merely asked, "So's where's the money you saved?"

Another concept was the old buy one get one free come on. You aren't getting either one free: you're spending half as much on each. Again, that doesn't mean it's a bad deal. But you are not getting a freebie. Free means all yours at no cost and with no strings attached, no demands on you as a consumer.

I don't know if these helped but it was what I taught.

The LLC Connection

We have written several times herein about the political spectrum of liberals, conservatives, and libertarians. Indeed, we have gone so far as to say that libertarians are really just liberals who happen to be fiscal conservatives. This is an idea which was, it seemed, cemented at a recent time when we read that some some libertarians have come to like the term 'liberaltarians'(we must thank a friend of a friend who pointed this out). But sometimes other things come along which give us pause.

In a speech given at Hillsdale College here in Michigan and reprinted in their neat little pamphlet called Imprimis (the particular article can be found here: http://www.hillsdale.edu/news/imprimis.asp) William McGurn, a former speechwriter for George W. Bush, makes the case that libertarians and conservatives are actually much closer. Why? Due to the libertarian emphasis on economics and economic justice.

It is a fascinating speech and we will not attempt to repeat it in detail. But the gist is that what conservatives and those who share the ideal of economic freedom have in common is the belief that it is freedom which drives the machine which improves the human condition. This is because freedom allows greater innovations and deeper thought in decision making than any type of state controls might allow. Freedom invented the wheel, the cam, and the steam engine. Freedom eradicated disease. Freedom improved agriculture, advanced science, and opened minds. And why does freedom work?

Because it offers a positive trust in the individual.

This is not to say that what individuals may or may not do is boundless. But it is to say that, where there is no moral affront involved, freedom works. To be sure, and Mr. McGurn points this out, there are differences between libertarians and conservatives, and the differences matter. Still, it is at least arguable that the right wing and the libertarian are closer than the latter may be to the liberal because the liberal ultimately believes in government control of people and things despite how he may protest otherwise. That's why they go to the bureaucrats and the courts when the don't get their way. They believe in force, not freedom.

We are closer, perhaps, to libertarians than liberals are because we share, even if from different starting points, the same essential belief in individual human beings. The full bodied libertarian and the blue blooded conservative are so much concerned about human relations that it makes differences more acute, precisely because we are seeking to do and support what's right. Liberals believe in a vague, amorphous humanity, defined ultimately by their whim. Conservatives and libertarians believe in real, flesh and blood people.

Mr. McGurn suggests that we are sides of a coin. It is an idea which deserves more discussion.

Tax Cuts and the Budget

An article somewhere out in the ether, we want to say on the Huffington Post but are simply too lazy and unconcerned to look it up, asserts that the Obama White House has given up on trying to kill the Bush tax cuts and is willing to extend them, at least temporarily. The thought seems to be that that would be the only way to keep the cuts in place for the middle class. This despite the fact that it would also keep the cuts in place for the evil rich.

It doesn't matter how often it may be said, attacks on the wealthy so often are simply jealousy. People aren't bad because they're affluent, and anyone who says they wouldn't want to protect their wealth if they were wealthy is an ignoramus or a liar. It is difficult to imagine that even a full blown and true philanthropist wouldn't want to get the most bang for their buck. If you could feed two poor folks well for the initial price of feeding one, what unsympathetic character wouldn't do it?

But we digress. What all this fuss about tax cuts ignores is that budgeting is a two way street. Simply cutting direct revenue, no matter how much more in taxes that would gain in the long run (which Reagan proved rather well would happen, while the Democrats in Congress squandered the windfall) ignores the other side. It ignores the question of what government should and should not fund.

That issue tends to get set aside when budget talks go on. We fail to ask ourselves what should and should not be the province of government when we talk about the nuts and bolts of how governments acquire their gold. We cannot do that and expect any real fiscal sanity.

Mathematics teach us that both sides of an equation must balance. Likewise, we need to tie revenues and spending together if we are to get any real hold on what governments should and should not be doing. Anything short of that strikes us as intellectual dishonesty, and a recipe for economic calamity.

Smelly philosophy

Democracy is the worst political system...except for all the other political systems.

Capitalism is the lousiest economic system...outside of all the other economic systems.

Why are they the best, yet the worst? Because they are based on human freedom and dignity. People have a great capacity for good, but a terrible propensity to do ill. Freedom unfortunately feeds both these notions.

But I wouldn't have it any other way.