The Bailouts are Like Paying Off Molested Children

Since I found it all interesting, I thought I’d just reproduce all of Will Ambrosini’s post about my last post here:

I’m actually with Will Wilkinson when he talks up “liberaltarianism” and I support a reasonable social safety net. I’m one of those people that thinks rising GDP indicates increasing interdependence, that that is a good thing and that self-sufficiency is the road to poverty. Today Wilkinson suggests a reason why liberaltarianism might be a non-starter:

[I]t’s easiest to get people to face up to tax increases if they don’t have the sense that they’re paying more just so the special interests of the winning coalition can get more.

Isn’t the conditional phrase an empirical fact about governments?

This reminds me of my dad and the Church. Even after all us kids grew up and he stopped going to church, he gave money to them every week. The Church does a lot of good things for people — disaster relief, poor assistance, etc — but a couple years ago my dad stopped giving. His primary reason: he thought his money was primary going to paying off molested children; it wasn’t going to help poor people. He didn’t want to subsidize corruption.

I don’t want to subsidize corruption either.

I think Will is just agreeing with me. I take it that the empirical fact about governments is this: when taxes go up, transfers to the special interests of the winning coalition go up. I think that’s probably a decent empirical generalization. But I don’t think most voters do. Now, if the increase in transfers is generally equal to the increase in revenues, then budgets balance only when revenues are underestimated. I’m not so sure that‘s true. And pretty sure most voters assume it isn’t.

What I was trying to say is precisely what Will is getting at: that willingness to contribute reflects a sense that the contribution is going to something worthwhile. Tax increases coupled with large spending cuts creates the sense that there is a good faith effort to balance the budget, which the tax increase is one part of.

As a matter of fact, I think the various bailouts have created a large problem for Democrats in generating public support for tax increases. Ideologues on the left enjoyed depicting the various Tea Parties as a ridiculous efflorescence of dimwitted rightwing ideology, and it was partly that. But it was also partly a real reaction to transparent distributive injustice. You can say that some of the bailouts were necessary to keep the whole system going. That may be true, but that doesn’t make it fair. (Maybe it was the best thing for the church to pay off molested children, but that doesn’t mean Will’s dad wants to pay for it.) That sense of unfairness, which is by no means limited to Limbaugh-loving Tea Partiers, together with the sting of the recession (even after it’s over), together with the typical American aversion to taxes increases that Obama has constantly catered to, is going to make tax increases on the middle class an incredibly hard sell even if there are also large cuts in spending, which there won’t be.

Advertisements

11 thoughts on “The Bailouts are Like Paying Off Molested Children

  1. Pingback: Spotlight on “Peppers & Pollywogs” (Giveaway) « The IE Mommy | Kids Help And Advice

  2. This whole bailout/stimulus business has radically altered my views on government spending. In the olden days, I used to think welfare spending was a negative force because it created poor incentives and instilled dependency. Now, I would feel better about $1 trillion of pure transfer payments to the poor than $1 trillion for the construction of a network of government jobs and projects that essentially go to friends and family of existing government employees and other influential people. I would rather my tax dollars go to someone who actually needs help than upper-middle class government employees with union-protected jobs and bottomless pensions. I'm now paying more attention to incentives within the government than to those of the general pop.

  3. As usual, I just find the definition of what constitutes unfairness here bizarre. We redistribute out of a desire to fix structural imbalances that unduly harm some. Of course, it doesn't always work out that way. Of course, money flows to special interest. Of course. It sucks. But to say “redistribution is unfair” in a country where the single most powerful correlative factor for whether you will be wealthy or poor is whether your parents were wealthy or poor is just strange moral logic to me. Unfair? I can see an argument where it is unfair to have your money taxed away from you. To think that this unfairness is equal or even comparable to the unfairness of being born into poverty and all of its attendant suffering just doesn't compute for me. A kid who grows up punishingly poor and hungry in a drug and crime-riddled inner city without the benefit of a stable family or proper socialization– such a person knows about unfairness on a level that someone who feels overtaxed doesn't. I am not unsympathetic, at all, to people who feel robbed by taxes. But I can't imagine a reasonable perspective that imagines that to be anywhere near the top of our society's list of injustices. People arguing against redistribution as unfair have a rather narrow definition of fairness.Here's where I can come on board with arguments to fairness: abolish inheritance. Then we can talk about fair.

  4. We redistribute out of a desire to fix structural imbalances that unduly harm some.To rip off Hanson a bit, perhaps “we” redistribute to signal solidarity and concern for the poor. Maybe not, but I buy it. For instance:“I can see an argument where it is unfair to have your money taxed away from you. To think that this unfairness is equal or even comparable to the unfairness of being born into poverty and all of its attendant suffering just doesn't compute for me.”So in this scenario being born poor and having your money are both considered unfair, albeit unequally. Taxation is necessary because some people are poor, and some people are poor because they were born poor. It would then follow that both unfairnesses have same root cause: poor people having children. The logical solution would be to require people to have the means to pay for their children before they have them. But, of course, this would send the wrong signal.

  5. Or you could work to a create a system that doesn't inherently concentrate more and more wealth into the hands of fewer and fewer people. But this is controversial.

  6. The 'whole system' the bailouts were meant to 'keep going' is fraudulent, which is why the bailouts were necessary in the first place. So not only is giving fraudulent corporations public funds not fair, the end the bailouts are supposed to achieve is itself not fair. The systemic risk premise was a threat to justify the wealth transfer.

  7. “We redistribute out of a desire to fix structural imbalances that unduly harm some.””Fixing structural imbalances” is overwhelmingly unlikely to be the reason why most people support transfers. We can see that this, because when we make a list of things that promote structural inequality in the US — such as the War on Drugs, the poor quality of public schools, regressive schemes of taxation and benefit, unfair systems of policing and criminal law — we see that there's very little constituency for fixing those problems. I suspect that redistributive policies enjoy the popularity they do, because they give money to people who don't have it, and who would suffer harm without it. Giving money to hungry people so they can buy food is popular, because hunger is a simple harm which easily triggers the sentiment of empathy. (This contrasts with the complex causal processes underlying structural inequality.) I've got no evidence for this supposition, of course, but at least it's not immediately falsified by casual observation….

  8. Every leftist and liberaltard who didn't go to a Tea Party should probably keep their mouths shut about them.

  9. Every leftist and liberaltard who didn't go to a Tea Party should probably keep their mouths shut about them.

Comments are closed.