Looking ahead
There's an election coming up. We'll have to choose a new governor for the state of Minnesota, and we'll have to vote for state and federal legislators. Let's suppose that we want to vote for the candidates who will do the most to improve the economy -- to create conditions which will get the unemployment rate down and produce good-paying jobs for everyone who wants to work. There are other issues to worry about, but let's just stick to that one, and see if we can figure out who we should vote for, if that's our primary issue.
The Republicans are telling us that they will create jobs by cutting (or at least not raising) taxes and by getting rid of regulations that are needlessly hindering businesses. Part of their message is that government cannot create jobs (because the dollars it spends to create those jobs are either taxed or borrowed out of the private economy, so more government funded jobs just means fewer privately funded jobs) and that the economy suffers mainly from excessive taxes and regulations. (In other words they are advocating "supply side economics".) Here in Minnesota they want to balance the state budget (which is several billion dollars in the red) purely by cutting spending. At the Federal level they want to extend the Bush administration's tax cuts and cut (unspecified) spending.
The Democrats are telling us that we need to use government money to put people to work improving our infrastructure, educating our children, and investing in energy efficiency and in alternative energy technology (so-called 'green jobs'). [details] Part of their message is that the economy is suffering mainly from insufficient demand. (Businesses aren't hiring because they don't think they will have customers if they expand production.) So we need more government stimulus to get things going in the right direction again. (They are advocating Keynesian economics.) They want to balance the state's budget largely by raising taxes on the rich. At the Federal level they want to let Bush's tax cuts for the wealthy expire, keep the cuts for the middle class, and borrow more money in the short run. They would try to get the Federal budget back into balance only after the economy revives.
So we have starkly contrasting diagnoses and starkly contrasting prescriptions for our economic woes. Do we have the tools to figure out who's got the right medicine and who's selling snake oil? Is there a truth here to be discovered? Can we discover it (without spending years in graduate school studying economics)? Can anything we've learned in this course help us?
The Republicans are telling us that they will create jobs by cutting (or at least not raising) taxes and by getting rid of regulations that are needlessly hindering businesses. Part of their message is that government cannot create jobs (because the dollars it spends to create those jobs are either taxed or borrowed out of the private economy, so more government funded jobs just means fewer privately funded jobs) and that the economy suffers mainly from excessive taxes and regulations. (In other words they are advocating "supply side economics".) Here in Minnesota they want to balance the state budget (which is several billion dollars in the red) purely by cutting spending. At the Federal level they want to extend the Bush administration's tax cuts and cut (unspecified) spending.
The Democrats are telling us that we need to use government money to put people to work improving our infrastructure, educating our children, and investing in energy efficiency and in alternative energy technology (so-called 'green jobs'). [details] Part of their message is that the economy is suffering mainly from insufficient demand. (Businesses aren't hiring because they don't think they will have customers if they expand production.) So we need more government stimulus to get things going in the right direction again. (They are advocating Keynesian economics.) They want to balance the state's budget largely by raising taxes on the rich. At the Federal level they want to let Bush's tax cuts for the wealthy expire, keep the cuts for the middle class, and borrow more money in the short run. They would try to get the Federal budget back into balance only after the economy revives.
So we have starkly contrasting diagnoses and starkly contrasting prescriptions for our economic woes. Do we have the tools to figure out who's got the right medicine and who's selling snake oil? Is there a truth here to be discovered? Can we discover it (without spending years in graduate school studying economics)? Can anything we've learned in this course help us?
I studied economics a long time ago. I remember my prof telling us that there was really no benefit to balancing the budget and that even massive deficits did not matter. I remember how much I thought he was daft. I am not sure anyone has the tools or skills to correctly predict the best approach to today's issues. I think both the Republican and Democratic approaches are flawed. However, at some level they are simply comparing private business (owned by the wealthy) keeping the money and trying to create jobs, or the government collecting the money and having a go at it themselves. So it is a comparison of who will take these funds and do a better job. My analysis is this: 1) the government (local, state and federal) is generally very inept at running businesses and 2) in our economic structure (capitalism) it is less efficient to have the government try to get things going in the public sector, then hope that creates private sector jobs - which is what we want in the long run. I think the best approach is to tax the rich, but to structure those taxes to strongly motivate investing in new jobs and new industries. It is better for private business to handle business. They are just much more efficient and public handling eventually exhausts its resources and competence. I don't much care for the Republican platform on many counts, but I do not think (in today's situation) that government should be getting more into the business of business.
A friend of mine just lost in the primaries. He was running for a State House seat, to represent a Mn college town of approximately 60 thousand people. In previous years, he managed the campaign of the incumbent, who is now retiring after three terms. He was endorsed by the incumbent (who's never had less than 65% of the vote in the district) as well as the DFL. He did everything right, and put together a strong campaign in the last few months, but as the primary came, his opponent creamed him. Obviously everyone has their own reasons for voting the way they do, but the general consensus was a combination of two factors. The first being that his opponent simply had great name recognition, as she served many years on the school board. I can buy that. When I go grocery shopping I'll buy certain brands of items for no good reason other than familiarity. The other factor discussed was that with the primary being held in early August, a large chunk of the student population was missing. Since my friend is a young man of 30 who received both his Bachelor's and Master's degrees from the local university, it is fair to consider that he may have been favored by this absent population of voters.
Again, we can't say there are any specific reasons that affect the outcome of an election, but both of these excuses point toward the idea that elections are won by the masses of people who don't spend time investigating candidates in the first place. The idea that someone can win because more people have seen their name printed on yard signs is a scary thought. The same is true for the excuse of the student population, voting for someone because "He's/She's more like me" can't be a rational response either. I am absolutely guilty of this practice. When I vote, I generally have the 'big ones' figured out, but of course there are lots of lower-level elections that I am generally ignorant of. In the case of my friend, I could very much see this being the scenario. Voters participated because they had tunnel vision on the bigger race, the Us Senate race, and the State House race may have been more of an exercise in mindless box checking.
I personally can't seem to agree with either side. As Fay aptly put it, "beware of dichotomies." I think the "truth," or in this case, a potential solution, may lie outside the scope of simply whether to cut back or to spend more. I personally believe that we need to learn how to spend better. I think if taxpayers were given a more direct control over our tax dollars, that may incentivize us to become more active participants in directing how the state should spend its money. I agree with Curtis that especially in the lower-level elections, I do often vote based on familiarity. With my vote going to a candidate whose platform I may not fully understand, this then puts my tax dollars into the hands of someone who I don't know how he or she will spend it. If taxpayers could somehow direct even just a small percentage of the taxes we pay each year (say, 25%), I think this will help direct money to where tax payers really want the money to go. The state could provide a breakdown of where spending went for the previous few years and we can opt to have our money contributed to a sector that we feel needs more funding. Furthermore, we can also potentially restrict our tax dollars from funding a program we disagree with and feel the state shouldn't be spending any money on. I feel when people are more directly connected into the political process, that is how we could conceivably generate more interest and less "mindless box checking."
I would have to contest that there is no way to really "know" who would actually help the economic issues. I have never went to in dept with the study of economics so I cant really go into detail and assure myself I am not sounding ignorant. But the sytem is made so that they alone will not hold all the powers so they are not the full decision makers. They go out and recruit votes according to what the people want to hear. They have adapted what values they will carry just as we have.
It would not work to let everything go into the private sector. We simply must have a government structure to run certain programs and to provide structure for corporations to compete in.
When Republicans talk of getting government out of business, aren't they really referring to laws which govern how corporations can do business? We have seen the results of deregulation in different areas, the banking industry, for example. It has also been argued that deregulation has lead to the problems we have with the media that we have discussed at legnth in this class. If government were out of business, who would have stopped the banks from discriminating with mortgage lending? The examples are endless.
Further, if we leave things like social services to the private sector, many people may end up not being served because the private entities may limit who they provide services to. Access to reproductive services is an obvious example. There already exist Christian mental health clinics wherein all eployees are required to sign a statment of faith in order to be employed there and Christianity is a main focus of the treatment offered.
I think it's completely possible if you take the time to learn the issues and the economics behind them to discern which policies are more likely to work and which ones are not. Yet, I think most economic theories and ideologies probably work well in their purest form but they end up flawed because of competing theories and special interests.