I recently received the following question...
Somebody explain to me why the Dems support Net Neutrality and the GOP is against it? I've just read the proposed rules from the FCC and it seems fairly reasonable to me. I can't see why the GOP is so upset about it?
Yeah, the Internet has worked just fine without regulation all the while... but in the last few years we've seen signs of nearly monopolistic power on behalf of several ISP's that threaten the Internet operation.
I'm serious. I don't get it. Unless somebody can explain otherwise I don't see how I support the GOP on this.
http://arstechnica.com/tech-policy/news/2010/12/throttle-away.ars
http://www.broadcastingcable.com/article/460485-Hutchison_To_FCC_Stand_Down_on_Net_Neutrality.php
http://arstechnica.com/tech-policy/news/2010/12/will-we-have-net-neutrality-rules-by-christmas.ars
While I don't speak for the GOP, I can explain why I oppose net neutrality regulation.
The main problem with net neutrality is it is government regulation of a problem that doesn't need government regulation to fix it. It is only going to create legal and bureaucratic hangups and issues and some government imposed solutions to problems that, for the most part, are easily solved through non-government action.
It also extends the governments power to interfere in a private business simply because they provide data access. If I want to allow people to connect to the internet through my lines, but I want to block spammers, pornographers, or people attempting to block copyright laws, should I not be allowed to do that? Should the government be given the power to decide what traffic I'm allowed to stop and what I have to let through? If I wanted to provide a service which only allowed people to check email, should I not be allowed to do that?
As the the "problem" of ISPs blocking or limiting certain traffic, it is quite easily solved and, indeed, already has been by many in the file sharing communities. You can always encrypt traffic and route it through "normal" ports. You can cycle traffic through multiple ports, etc. It's simple to make one block of digital data look just like any other.
Finally, as to the issue of limited ISP options, that is not true in most places and is true in many places only because the ISPs have been providing enough service that there is no need for new markets to emerge. In cities you have Telecom, Power, Cable, Long Range Radio, and Satellite as options for providing bandwidth to most homes. In most areas not all of those options are available, but there are usually at least two until you leave for the rural areas. Some options are better than others in their overall limitations, but all can provide people with broadband access and if there is demand for a service which is not being offered, those offer several companies the ability to compete for bandwidth.
The lack of competition is simply due to the fact that most broadband offered is pretty much the same except that some companies have invested more in certain areas. They have done so because there isn't demand for something else. If an ISP were to restrict things too far it would create a demand for a greater service and the barriers to entry into that market, at least in non-rural areas are not great.
The GOP are acting not only to protect the rights of business to offer their services without government interference, but also opposing government regulation and expansion of government power into an area which clearly doesn't need it and will likely be harmed by the intervention.
Thursday, December 2, 2010
Monday, November 8, 2010
Where We Go From Here
In the recent election a strong message was set to the US Government. That message was not that the Republicans should return to power or that the Democrats should be removed from power. That message, I believe, was that Democrats and Republicans need to stop playing the same game that they have been playing with each other and with the public. When it comes to fiscal policy, both parties agree that there should be a balanced budget, but for both parties it is a much lower priority than their other financial plans.
Republicans want to decrease taxes or at the very least not raise them. Democrats want to expand services or at the very least not cut them back. Each party has been ever more willing, especially in recent years, to rack up large deficits rather than go against their preferences. That is what has to stop. We are no longer in a position to keep compromising by just building up debt. Services need to be cut and taxes are going to have to increase. For too long we have been compromising by increasing debt. That policy needs to end. What I, and I believe most voters want is for this country's leadership to show some fiscal responsibility for a change. We didn't have that under the Bush administration and we don't have it under the Obama administration.
Democrats have been arguing that their spending programs will help the economy recover. They believe that without government spending things would be worse. They might even be correct. Experts wildly disagree on the subject. What they don't disagree on, however, is that large scale deficit spending is very harmful. Our current policies have been trading certain future wealth for a possible short term gain. While the idea is to take from a plentiful future and help ease a troubled present, there are no assurances. We don't know that we can afford to take from the future. We don't know how much the spending will help the present. Worst of all, we don't know when or how things will change. How long can or will the spending go on? How many of the jobs created by unsustainable spending will be temporary? Will the economy recover in time to take up the slack for decreased spending or will this spending only postpone and possibly worsen a recession? Many negative effects are likely or certain, but the positives appear to be highly speculative.
Many Republican plans are no better. Cutting taxes might help the private sector to grow the economy, but it will certainly result in increasing deficits now which leads to all of the same negatives of the Democrats plans for all of the same reasons. We don't have any more certainty that the positive effects of providing more money to the private sector will outweigh the costs than we do that direct spending will. Either way we are betting probable short term positives against certain long term costs. That is a poor investment.
Instead, we need to show fiscal restraint and responsibility. Even a good investment is not a good investment if we cannot afford it. There is always an element of risk and if you cannot afford to lose you should not play. Some deficit spending is worth the risk, as you can often have investments which pay out higher than the cost of borrowing to invest. Taking that too far, however, leads to disaster.
Both parties have worked to bring us where we are today, which is with massive debt which is growing at an astonishing rate. We have been living too far beyond our means for too long. The unfortunate reality is that we have been gambling that we could continue to outgrow our current debt with future revenues for far too long. We have lost sight of financial responsibility and have instead grown accustom to living outside our means. We need to correct that, and it isn't going to be pleasant.
For some time, I have been advocating that while compromise in politics is often a good thing, that it is also often very bad. I have applauded the fact the Republicans refused to be bargained into most of the spending programs for the past couple of years. As I saw it, the current administration was going down the same spending path as the previous one, only faster. I felt it was the wrong direction and so I encouraged an end to compromise to stop the out of control spending.
In that, I have been wrong. It had been bothering me for a bit, because I don't like the idea of not working in cooperation to make things better. I like the idea of compromise in most situations where people disagree and yet I was seeing a lot of damage come from compromises made between the parties. The problem is not compromise, the problem is the type of compromise. Rather than compromise by each party pursuing its primary fiscal goals, we need to compromise first on pursuing the shared goal of limited deficit spending and reducing the debt. Working within that shared goal we need to make sacrifices in our non-shared, but individually higher priorities.
Taxes need to be raised. Spending has to be cut. We need to shift away from the compromise of double spending and instead compromise on double cutting. Our government cannot afford to offer all of the services we enjoy at the tax rate we have. Increasing taxes will only get us so far, cutting services will eventually be far too harmful. It is in this that we need to compromise with each other and work opposing each other in the details but together in the common goal of bringing this country back into a fiscally responsible path.
That is the message I believe the voters have sent in this recent election, and it is a message that I hope both parties come to hear. We are willing to have fewer services if it means more financial responsibility. We are willing to pay more taxes, if it also comes with more financial responsibility. We are not willing to let the parties gamble with our futures with the costly and risky plans that they have been proposing and implementing so far. There may be some short term pain, but it is largely a cost of letting things get so far out of hand for so long.
We can get this country back on track, and the answer isn't to follow the ideological path of either party, but rather to shift the give and take of compromise which cause us each to sacrifice a little for the sake of financial responsibility rather than each of us gain a little borrowing against our future.
Thursday, September 23, 2010
How to Help People - Part 2 Moral Help
It is perhaps somewhat ironic that Democrats and Republicans have completely reversed positions on the government providing moral assistance to people rather than financial.
When I talk of moral help, I am referring to programs designed to help people to be better people, as opposed to financially better off. While there can be some overlap such as with education, but here I am referring to programs which deal with non-financial morality. Examples of this would be anti-drug laws and programs or things like sex education. Some public decency laws and the like would also fall into this category.
The moral issue is far more complicated than the financial one because there are several factors at play when it comes to morality. Some moral issues are beneficial to society. A clear example of this is a prohibition against murder. Other moral issues have less clear benefit to society, such as a prohibition against abortion. It is further complicated by the fact that society does not have a unified moral code, but rather has a large variety of moral codes which mostly overlap in a few major areas. While many laws are based on some aspect of a moral code their intent is rarely focused on the individual, but rather on the protection of society as a whole.
So when looking to provide moral assistance to someone, then, there are two important questions to look at. First, there is the question, as with financial help, of how much help is beneficial. Second, there is the question of which moral code to use.
Let us begin with the first question and look at one of the larger examples of moral law in US history: Prohibition. In 1920 the US nationally banned the sale, manufacture, transportation, and consumption of alcohol. Those who supported prohibition did so for both individual and societal reasons. Religious groups were split on the issue, but there were many who saw drinking as a sin and wanted the law to help prevent people from doing so. The vast majority, however, supported prohibition because they believed it would have six primary effects: reduction of crime, protection of families(from effects of alcohol abusers), reduced drunkenness, reduces cases of insanity, reduced government cost (primarily through crime reduction), and a greater general respect for the law. It was inarguable that alcohol had negative effects on all of those areas. Alcohol was at the center of a great deal of lawless behavior and caused many societal problems. What they didn't realize was that the problems created by banning alcohol were far worse.
The years of prohibition in the US showed that banning alcohol was not only worse for society overall, but it was worse in all six areas that it was intended to improve. Though there were many positive effects to prohibition, they were greatly overshadowed by the negatives. Overall alcohol consumption declined. It was the moderate alcohol consumption which disappeared rather than the excessive drinking which was the source of problems. Excessive drinking actually increased. Crime actually increased due to the creation of a vast black market in alcohol and the violence between gangs which came with fighting for control of that market. Government spending was greatly increased in an attempt to deal with the gangs. Because of the clear ineffectiveness of the government to enforce the law, and the growing unpopularity of the law as it failed to have positive effects, respect for the law greatly decreased. In the end the attempts to help improve society with a moral and very popular law proved to be harmful and lead to a less moral society.
That one case certainly doesn't invalidate all attempts to use government to help people morally, but it does show that there can be harmful unintended consequences to the attempts to do so. Any law compelling moral behavior limits personal freedom, which means it comes with a high cost. In many cases that cost is justified. There is nearly universal support for laws against murder, assault, theft, fraud, and the like. These are laws which agree with nearly everyone's moral code and which consequently have clearly seen benefits to society by most people.
These are only two examples and moral issues are always complicated. I am strongly in support of laws and programs which prevent harm to society, but I believe that should be the overriding concern. I recognize that, just as in the case of alcohol, sometimes the intent to reduce harm can lead to greater harm. Where I disagree with many of my fellow Republicans is that my focus for the law is on damage mitigation rather than either doing what is right or in coercing others to do so. While I believe their intent is good, the result would not always be.
When I talk of moral help, I am referring to programs designed to help people to be better people, as opposed to financially better off. While there can be some overlap such as with education, but here I am referring to programs which deal with non-financial morality. Examples of this would be anti-drug laws and programs or things like sex education. Some public decency laws and the like would also fall into this category.
The moral issue is far more complicated than the financial one because there are several factors at play when it comes to morality. Some moral issues are beneficial to society. A clear example of this is a prohibition against murder. Other moral issues have less clear benefit to society, such as a prohibition against abortion. It is further complicated by the fact that society does not have a unified moral code, but rather has a large variety of moral codes which mostly overlap in a few major areas. While many laws are based on some aspect of a moral code their intent is rarely focused on the individual, but rather on the protection of society as a whole.
So when looking to provide moral assistance to someone, then, there are two important questions to look at. First, there is the question, as with financial help, of how much help is beneficial. Second, there is the question of which moral code to use.
Let us begin with the first question and look at one of the larger examples of moral law in US history: Prohibition. In 1920 the US nationally banned the sale, manufacture, transportation, and consumption of alcohol. Those who supported prohibition did so for both individual and societal reasons. Religious groups were split on the issue, but there were many who saw drinking as a sin and wanted the law to help prevent people from doing so. The vast majority, however, supported prohibition because they believed it would have six primary effects: reduction of crime, protection of families(from effects of alcohol abusers), reduced drunkenness, reduces cases of insanity, reduced government cost (primarily through crime reduction), and a greater general respect for the law. It was inarguable that alcohol had negative effects on all of those areas. Alcohol was at the center of a great deal of lawless behavior and caused many societal problems. What they didn't realize was that the problems created by banning alcohol were far worse.
The years of prohibition in the US showed that banning alcohol was not only worse for society overall, but it was worse in all six areas that it was intended to improve. Though there were many positive effects to prohibition, they were greatly overshadowed by the negatives. Overall alcohol consumption declined. It was the moderate alcohol consumption which disappeared rather than the excessive drinking which was the source of problems. Excessive drinking actually increased. Crime actually increased due to the creation of a vast black market in alcohol and the violence between gangs which came with fighting for control of that market. Government spending was greatly increased in an attempt to deal with the gangs. Because of the clear ineffectiveness of the government to enforce the law, and the growing unpopularity of the law as it failed to have positive effects, respect for the law greatly decreased. In the end the attempts to help improve society with a moral and very popular law proved to be harmful and lead to a less moral society.
That one case certainly doesn't invalidate all attempts to use government to help people morally, but it does show that there can be harmful unintended consequences to the attempts to do so. Any law compelling moral behavior limits personal freedom, which means it comes with a high cost. In many cases that cost is justified. There is nearly universal support for laws against murder, assault, theft, fraud, and the like. These are laws which agree with nearly everyone's moral code and which consequently have clearly seen benefits to society by most people.
In other cases it is less clear. Take, for example, sex. There are two aspects to government involvement in sex laws and sex education. First there is an interest in protecting society. There are problems with sexual predation or teens and children, unwanted pregnancies, and disease which almost all people agree are damaging to society. Laws and programs designed to eliminate these problems are typically popular as long as they are not too extreme.
Some people wish to take the issue further. Most of the population believes that teenagers, especially those under 18 should not have sex. There is a pretty wide range on how strongly people feel about the issue and many who agree that that teenage sex is a bad idea don't support any action taken to limit it. Aside from laws which are designed to prevent adults from taking advantage of teenagers, there has not been much legal action to address the problem. Instead the focus has mostly been on sex education and subsidized birth control and disease prevention.
It is here that there is a pretty strong divide. On one side people argue that providing teenagers with condoms and other devices used to prevent disease and pregnancy will lead to an increase in teenage sexual activity. This is probably true, however, the greatest increase will be in the more responsible sex and it will result in a decline of unprotected sex. So you have both desirable and undesirable outcomes. This is further complicated by the fact that birth control and disease prevention are not completely effective. Even responsible sex leads to the outcomes society is attempting to prevent.
This goes to the other argument which is that sex should not be promoted among teenagers by supplying them with what they need to have sex more responsibly. This is mostly supported more strongly by those who believe that teenage sex is always irresponsible. They argue that there is an emotional toll on people who engage in sexual activity at an early age and that teenagers should be protected from making such harmful decisions. This is much the same rational as is used for laws against alcohol and tobacco for teens and children.
What we have is that overall teenage sex is leads to a number of problems. There are many things which can be done to reduce the problems created, but these same actions will also result in an overall increase. At the same time, strong discouragement can drive the more responsible to act less responsibly if they have limited access. In many ways this is similar to the alcohol situation, though there are certainly some significant differences. Still, you are faces with some of the same challenges. Does reducing the overall activity result in greater or less harm than does increasing the activity and reducing the harm per incident?
The real problem is that there is great disagreement on how harmful different aspects are with the greatest disagreement on the amount of harm caused by any teenage sex, which is why you have such a difference of public opinion. There are many who believe that responsible teenage sex is not a problem at all, so increasing total activity, if you decrease irresponsible activity is a good thing. On the other side you have those who believe there is still great harm in responsible teenage sex, so increasing the total to increase responsibility is not a good thing. Most people fall between the two positions believing that teenage sex is somewhat bad and that responsible teenage sex is less bad.
The result is that there is great disagreement on which path is better, which is largely why there has been little activity in attempting to pass laws in the area and instead the focus is on education and subsidizing programs.
My personal belief is that teenagers should not be having sex, I think that there is great harm to them in doing so. Ultimately, however, it is their choice and while I agree that they are often not yet responsible enough to make that choice wisely, limiting their options is not a good idea. I strongly support teaching that abstinence is the best way, but I also believe you should teach teenagers who choose to have sex how to do so more responsibly. I realize that will probably lead to greater choices which I think are harmful, but it will also reduce the most harmful ones. Finally, as much as I would like to protect young adults from making decisions which have such consequences, I don't want to use ignorance to do so. The truth is that while they may not be prepared to make such decisions wisely, they are the ones who have to make the decision. I believe we should do everything we can to help them make a better decision, even if that means fewer blindly choose to make the best one.
Tuesday, September 21, 2010
A Response: Why Levi prefers Direct Government Spending
Let's start with a question... What is more stimulative, tax cuts or food stamps. The answer may surprise you. It's food stamps, and the same is true when it comes to tax cuts for people below a certain income level. When you give rich, upper middle class or even middle class people a tax cut generally they save it or put it on debt, which doesn't have a multiplier. In order for any money put into the economy, either through tax cuts or direct social investment it must be spent.
Let's take the Bush tax cuts for example... $300.00 or $600.00 per couple. What did I do with my $300... I paid off a credit card and then closed it. That did nothing for the economy... What did my parents do with their $600.00.. they put an extra payment on the house... which did nothing for the economy. But what did my friends who were just making ends meet do? They went out, and bought food, and an Xbox to provide the family with entertainment. I didn't adjust my spending habits at all, but they did and bought a luxury and therefore stimulated the economy. So it would have been better stimulus, to give me and those who make an income higher than me nothing and double or triple my friend's tax cut. OR as many poor people don't make enough to pay any taxes, perhaps double their food stamp allowance, or increase the earned income tax credit, or... I could go on. The point is tax cuts for the rich are of limited stimulative effect.
Pivoting to direct government investment. When the government pumps money into an economy directly it had multiple benefits. Large government infrastructure investments employ people... the workers, the suppliers, the food vendors nearby... and allow for greater economic activity. Adding light rail between Seattle and Tacoma will increase the flow of people and therefore the flow of money. Adding lanes to I-5, finishing 167 or the cross-base highway will allow goods and services to flow more effectively across the region. Paying states not to lay off teachers will have the net benefit of smaller class sizes, improved education (which will pay long term benefits), and oh yeah, keeping a skilled and specialized workforce employed and spending money. The benefits of direct government spending are large, but hidden. How do you know the state worker who lives next door to you kept his job due to the stimulus? But you do see that $300.00 that you ended up using to pay off that credit card. Tell me, what has a higher long term economic benefit.. a $40,000 a year job as a teacher... or $300?
Tax cuts to billionaires will go into savings accounts, or hopefully stock portfolios to increase capital available for investment, but we really can't say because as a society we have no control over what people will do with that money. Additionally, there is a lag time. You can cut taxes, but it will take people a while to realize they have more money and spend. A $1,000 a year tax cut comes down to an extra 83.00 a month... what will you use it for? Will you even notice?
Pivoting to local issues - Why Levi opposes I-1098.
In Washington State we have an initiative this election cycle called I-1098. This initiative would impose an income tax in the state, while at the same time reducing the state property and B&O tax. In a move that has put me in the minority with my more liberal friends, I personally oppose this. This is not to say I don't agree with the general point that Washington's tax structure is regressive and that it does not serve the needs of a state to have a reliable means of income.
Washington State is primarily funded by property and sales taxes with some money being provided by a B&O tax. With this structure it is very difficult for the state to accurately anticipate tax revenues and budget accordingly. The result is that during good times, we have a surplus (and as a result start hearing from republican politicians that we need a tax cut), and and bad times we have a deficit. What compounds the problem is that we do all of our budgeting on projections. When this is based on sales tax, that creates a major problem. It's much easier for a consumer to get spooked and stop spending, which drives down sales tax revenues, than it is for them to stop working. Certainly, when the economic situation gets bad enough you'll have job losses, but it's not the same kind of volatility you get with sales tax revenues.
Additionally, when I was unemployed for a period of time last year, I took the initiative to try to start my own business. Imagine my surprise when I learned that not only do I have pay state B&O taxes on my profit, no, I have to pay them on everything! It was frightening and confusing and stopped me from trying to expand my business. The B&O tax is a major hurdle to building a business in Washington State and must be replaced.
That said, I am completely opposed to I-1098. First and foremost, it's unfair. If you are going to levy an income tax, something that I support for a variety of reasons, you do so across the board, not just on the rich. AND more importantly you remove other taxation. All 1098 does is reduce other taxation, it reduces B&O but does not eliminate. It reduces the state portion of the property tax but does nothing for the local portion. It reduces the state sales tax but does not remove. So now we have 4 different tax schemes as opposed to 3 and due to the idiotic targeting, we encourage higher income earners to leave the state. Washington has to do something with it's regressive tax structure that doesn't allow the state to adequately predict income... but this... isn't it... and this is from a liberal!
Washington State is primarily funded by property and sales taxes with some money being provided by a B&O tax. With this structure it is very difficult for the state to accurately anticipate tax revenues and budget accordingly. The result is that during good times, we have a surplus (and as a result start hearing from republican politicians that we need a tax cut), and and bad times we have a deficit. What compounds the problem is that we do all of our budgeting on projections. When this is based on sales tax, that creates a major problem. It's much easier for a consumer to get spooked and stop spending, which drives down sales tax revenues, than it is for them to stop working. Certainly, when the economic situation gets bad enough you'll have job losses, but it's not the same kind of volatility you get with sales tax revenues.
Additionally, when I was unemployed for a period of time last year, I took the initiative to try to start my own business. Imagine my surprise when I learned that not only do I have pay state B&O taxes on my profit, no, I have to pay them on everything! It was frightening and confusing and stopped me from trying to expand my business. The B&O tax is a major hurdle to building a business in Washington State and must be replaced.
That said, I am completely opposed to I-1098. First and foremost, it's unfair. If you are going to levy an income tax, something that I support for a variety of reasons, you do so across the board, not just on the rich. AND more importantly you remove other taxation. All 1098 does is reduce other taxation, it reduces B&O but does not eliminate. It reduces the state portion of the property tax but does nothing for the local portion. It reduces the state sales tax but does not remove. So now we have 4 different tax schemes as opposed to 3 and due to the idiotic targeting, we encourage higher income earners to leave the state. Washington has to do something with it's regressive tax structure that doesn't allow the state to adequately predict income... but this... isn't it... and this is from a liberal!
Sunday, September 19, 2010
How to Help People - Part 1 Financial Help
Most of the more divisive issues between the Republican and Democratic parties are among the array of domestic issues and most of those can fall into the definition of attempts to help people. These break into two main areas: moral and economic.
Let's begin with the economic side.
When I talk about economically helping people, I am referring to any programs which provide goods or services to people either without charge or at a greatly reduced price. All charity work is a form of economic assistance at some level. There are different types of charity both private and public where the aid is giving in specific form such as offering food, education, child care, medical treatment, etc. Other programs require some type of effort, competition or other form of merit. These details are important for helping to ensure that the funding used for the programs are used as intended, but they don't change the essence of what the program is about. It is about collecting or taking resources from one group to help another.
Generally speaking, Democrats are in favor of very large government economic assistance programs. Also generally speaking Republicans oppose them. Republicans are consequently often accused of being uncaring, greedy, and unwilling to help those in need, and these accusations are not always without merit. There is, however, another side to it.
Economic assistance programs are both a good thing to do and vital to a health economy and society. Circumstances often put people in position where they can be trapped in a cycle of failure with little or no ability to get out of that cycle and achieve success. Sometimes this is through no fault of their own, but even when they are culpable, it is important to allow people a way out. None of us want to live in a society where people can make a few poor decisions or simply be unlucky and have to suffer through a terrible or meager existence because of it. Prevent that is what these programs are about. Proving a safety net so that people can fall only so far is a good and important thing for society to do and Democrats rightly point this out and support programs to help people in this way.
On the other hand, providing assistance is not always the same as helping people. There is a danger in providing too much assistance. Providing assistance, even when it starts out as beneficial can lead to dependence. At a certain point, some people stop using assistance to help themselves improve and start using it to get by. When they happens they start growing dependent on that assistance and, eventually, unable to care for themselves. Taken to the extreme, the act of providing assistance even with the intent to help can actually cause harm. This is one of the issues which those of us who oppose many economic assistance programs are concerned about.
Does that seem unreasonable? People are motivated by different things but few of us like to change. We change only when our desire to have something different in our life overcomes the desires we've been following to that point. Few people, for example, are good about saving money until they want to buy something they cannot afford. People don't try to get a better job when they are happy with where they are, and the longer people go down a path the hard it is for them to change direction.
Consider someone who is out of work and starts begging to get by. At first, the people who are giving him money are helping him. Depending on the person and on how much money he is about to get begging, he will either use that charity to get back on his feet or he might continue begging. As he continues it will be harder and harder for him to change from a life of begging. Not only is it becoming more comfortable, but he is getting further removed from normal society and any work related skills or education he has are atrophying. At some point is his begging, the money he received has changed from helping him, to hurting him. Instead of being the thing to help get him on his feet, it has become the thing which is keeping him down.
Even when you look at less extreme circumstances. Just as we would lose many opportunities to see great people rise up if we provided no assistance, we can also lose the opportunities to see people thrive by providing to much. Motivation is a fine line to maintain sometimes. Provide too little incentive for people and they will not struggle to overcome challenges. Provide to great of challenge and they will either fail or not make the attempt. Providing economic assistance is one significant way to manage that motivation level for people and it is something which has to be in balance.
Despite the rhetoric, it is not about helping people or not helping people. It is about finding the right balance so that our attempts to help result in actually providing benefit and not harm as much as possible.
Let's begin with the economic side.
When I talk about economically helping people, I am referring to any programs which provide goods or services to people either without charge or at a greatly reduced price. All charity work is a form of economic assistance at some level. There are different types of charity both private and public where the aid is giving in specific form such as offering food, education, child care, medical treatment, etc. Other programs require some type of effort, competition or other form of merit. These details are important for helping to ensure that the funding used for the programs are used as intended, but they don't change the essence of what the program is about. It is about collecting or taking resources from one group to help another.
Generally speaking, Democrats are in favor of very large government economic assistance programs. Also generally speaking Republicans oppose them. Republicans are consequently often accused of being uncaring, greedy, and unwilling to help those in need, and these accusations are not always without merit. There is, however, another side to it.
Economic assistance programs are both a good thing to do and vital to a health economy and society. Circumstances often put people in position where they can be trapped in a cycle of failure with little or no ability to get out of that cycle and achieve success. Sometimes this is through no fault of their own, but even when they are culpable, it is important to allow people a way out. None of us want to live in a society where people can make a few poor decisions or simply be unlucky and have to suffer through a terrible or meager existence because of it. Prevent that is what these programs are about. Proving a safety net so that people can fall only so far is a good and important thing for society to do and Democrats rightly point this out and support programs to help people in this way.
On the other hand, providing assistance is not always the same as helping people. There is a danger in providing too much assistance. Providing assistance, even when it starts out as beneficial can lead to dependence. At a certain point, some people stop using assistance to help themselves improve and start using it to get by. When they happens they start growing dependent on that assistance and, eventually, unable to care for themselves. Taken to the extreme, the act of providing assistance even with the intent to help can actually cause harm. This is one of the issues which those of us who oppose many economic assistance programs are concerned about.
Does that seem unreasonable? People are motivated by different things but few of us like to change. We change only when our desire to have something different in our life overcomes the desires we've been following to that point. Few people, for example, are good about saving money until they want to buy something they cannot afford. People don't try to get a better job when they are happy with where they are, and the longer people go down a path the hard it is for them to change direction.
Consider someone who is out of work and starts begging to get by. At first, the people who are giving him money are helping him. Depending on the person and on how much money he is about to get begging, he will either use that charity to get back on his feet or he might continue begging. As he continues it will be harder and harder for him to change from a life of begging. Not only is it becoming more comfortable, but he is getting further removed from normal society and any work related skills or education he has are atrophying. At some point is his begging, the money he received has changed from helping him, to hurting him. Instead of being the thing to help get him on his feet, it has become the thing which is keeping him down.
Even when you look at less extreme circumstances. Just as we would lose many opportunities to see great people rise up if we provided no assistance, we can also lose the opportunities to see people thrive by providing to much. Motivation is a fine line to maintain sometimes. Provide too little incentive for people and they will not struggle to overcome challenges. Provide to great of challenge and they will either fail or not make the attempt. Providing economic assistance is one significant way to manage that motivation level for people and it is something which has to be in balance.
Despite the rhetoric, it is not about helping people or not helping people. It is about finding the right balance so that our attempts to help result in actually providing benefit and not harm as much as possible.
Friday, September 17, 2010
Income's Effect on Happiness
I previously claimed that the often sited growth in the income gap in the US is not really an issue since the dollar's ability to improve quality of life rapidly diminishes as you increase in wealth.
A recent article in the Chicago Tribune discusses study which looked into part of that effect. The study was looking into how income affects happiness. They concluded that income increases up to around $75,000 impacted happiness, but that income increases above that level did not significantly increase it. Of course, they are quick to state that there is a short term increase from any raise in income or windfall of cash, however, they found that non-income factors were the primary constrains on happiness above $75,000.
While happiness is just one aspect of quality of life, it is very interesting that the effective benefit of income to happiness is so low. I suspect that much of the reason for that due to the limits in the power of the dollar for higher prices items as I discussed in the previous post.
The largest impact on people is not the difference between rich and poor, but the difference between poor and middle class. No one, however would be willingly to openly state that they want to take money from the middle class and give it to the poor (though that is often a result of their attempts to take money from the rich as I discuss here).
So the question really should not be about the income gap between the rich and the poor. A far more valuable measure, though still not a wholly accurate one would be to measure the income gap between the poor and the middle class.
I have not been able to find a more recent graph, but this one shows that this gap is increasing very slowly even looking at purely dollar terms.
A recent article in the Chicago Tribune discusses study which looked into part of that effect. The study was looking into how income affects happiness. They concluded that income increases up to around $75,000 impacted happiness, but that income increases above that level did not significantly increase it. Of course, they are quick to state that there is a short term increase from any raise in income or windfall of cash, however, they found that non-income factors were the primary constrains on happiness above $75,000.
While happiness is just one aspect of quality of life, it is very interesting that the effective benefit of income to happiness is so low. I suspect that much of the reason for that due to the limits in the power of the dollar for higher prices items as I discussed in the previous post.
The largest impact on people is not the difference between rich and poor, but the difference between poor and middle class. No one, however would be willingly to openly state that they want to take money from the middle class and give it to the poor (though that is often a result of their attempts to take money from the rich as I discuss here).
So the question really should not be about the income gap between the rich and the poor. A far more valuable measure, though still not a wholly accurate one would be to measure the income gap between the poor and the middle class.
I have not been able to find a more recent graph, but this one shows that this gap is increasing very slowly even looking at purely dollar terms.
The article that accompanies the image is here. It, of course, focuses on the gap between the rich and the poor which shows a huge percentage change in income. Looking at the middle to bottom fifth shows very similar rates of change.
So again, while the rate of change in income is certainly widening at a very high rate, it is only rapidly widening at income levels which have a very diminished impact on quality of life. In the article it states that the top 1 percent in 2007 had an average income of $1.3 million and that the increase from the year before was an average of $88,800. How much of an impact does a salary increase from $1.21 million to $1.3 million really make in a person's quality of life? Is that change really greatly different in quality of life impact than the average increase of $800 from $16,900 to $17,700 that the bottom fifth attained? I know that when I was making under $20k a year, $800 was a lot of money which would allow me to have something like a much more reliable car. I could accept that some believe that $88k means as much to someone making $1.3 million as $800 dollars does to someone making under $18, but I hardly find it credible to believe that it means significantly more. I mean how do you even spend $1.3 million a year?
When looked at in those terms, doesn't the income comparison between the top 1% and the bottom fifth seem to be the wrong one to look at? Certainly it's draws attention, but it is a statistic that has very limited value and is used often to mislead people into the view that the poor in this country are worse off now then they were in the past. When the truth is nothing of the sort.
The above chart and article are discussion inflation adjusted dollars, so the poor have increased in wealth by 16% from 1979 to 2007. This is compared to the slightly higher increase of 25% for the middle and 23% for the second bottom fifth. That means that there is very little increase in the dollar income gap for roughly half the population. Even the next fifth showed only a 35% average increase. The only large gaps come into play with the top 20% of the country where you are talking about incomes over $200k per year. That is far above the 75k per year (over 40% of the country was at or above that income level in 2007), and it above the income level where you have very diminished increases of quality of life per dollar.
I'm not arguing that we should not have welfare programs and charity to help those in the bottom incomes. I believe we should. I even believe that the tax system should be a progressive one where the more wealthy pay a greater percentage share. What I don't believe is that things are getting worse, quite the contrary I think the numbers (when you look at the right ones) show that things are getting much better.
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