As previously mentioned elsewhere on this blog, I used to bunk with liberals in the ever waging battle of fake politics. This past foray with the left gives me a good idea of how they think. Liberals, I believe, have a lot of the same end goals for society as those of us of the more libertarian persuasion. Liberals, like their libertarian brethren, want peace, but they think that requires picking off dictators and sticking our noses (and drones) into the affairs of others. We think it’s as simple as leaving them alone. Liberals, also like us, want prosperity for most, but they believe that the only path there is through bureaucratic manipulation of capital and a nanny state. We think such tactics are immoral, dangerous and counterproductive and that free markets achieve optimal resource allocations more effectively. Liberals too want progress, but they think we would have never made it to the moon without a Federal Agency. We think if that was true it’s probably because there was no good reason to in the first place. Liberals have a list of grievances that looks like a carbon copy of ours but while we agree on the symptoms, the prescriptions vastly differ. What separates us is not our motivation, it is our execution. How we achieve peace, prosperity, and progress.
Admittedly it is a difficult task to prove what works best. Economics is a social science composed of explanations impossible to definitely prove using the scientific method. As a social science, it relies mostly on deductive reasoning based on reasonable assumptions about different variables. It is impossible to run a lab test on societal changes and chart the outcome. Even if it were, correlation would prove impossible. There are occasions in civilized living, however, that show us some stark results of a kind of quasi-scientific economic testing. I think we are in such a rare position these days. We have seen a century or so of state directed economic policy and its effects over that period. Although obviously not a complete picture this is a decent sample size for an economic experiment or about as close as we can get to one. Right now, we are living through the results of this experiment in state directed economics. The tendencies and failures of such policies have resulted in a situation rather similarly hypothesized by free market economists. The empirical evidence piles up daily: perpetual inflation, decreasing real wages, sustained unemployment, a laughable series of booms and busts. It’s these tangible results that have hastened the recent reemergence of the freedom principles in millions, particularly ex lefties.
One such shred of the empirical evidence is the daily reminder of government bankruptcies. Every day we hear another newsbyte about a town, state, or nation going bankrupt in a tune that doesn’t even sound like news anymore. These bankruptcies are excellent concrete results of lofty progressive policies meeting the road. Contemporary American liberal thought is all good intentions without scientific reasoning. It makes promises that sociology, psychology and nature cannot abide. For example, the crux of all these deficits, according to most coverage of them, is the mathematically defying pension plans promised to millions of employees. Sure it was a nice political promise to offer a hefty pension after 25 years of service, but an impractical one as logic, and eventually time, would reveal. This is in no way a judgment on anyone that enjoys such advantages; it’s simply a discussion on facts. I have no intention here to argue whether a tenured teacher of 25 years “deserves” 90k a year for the rest of his life (from the potentially ripe age of 47!), but rather to argue that such promises should be based on reality. They were not. They are not.>
Take an example like the financial situation of the ironically labeled Golden State. Pretend they weren’t running a $16 Billion deficit and that would still leave them with about $500 Billion hole in unfunded pension liabilities. That’s right, a state is on the hook for half a Trillion dollars in promises made to retiring Californians. California is not alone. US States are not alone. Townwide, countywide, statewide, nationwide, and worldwide such political promises that didn’t account for reality are coming due. All across the country states and local governments are running into staggering budget deficits and mounting unfunded liabilities. To further aggravate results, governments use a less stringent accounting method for estimating their liabilities than they require for the private sector. The less conservative accounting methods required by private businesses calculates the results dramatically higher. Governments can’t even effectively estimate how terribly run they are! Just using the California example it is unfathomable to think of the consequences of that much money not reaching the people who are counting on it. Liberals still think it’s unreasonable to change course on pensions and wages, but what are the options? More empty promises that will leave yet another generation dependant on money that doesn’t exist? Federal Aid, despite the fact that the Fed Govt is in even worse shape with Social Security unfunded liabilities alone around $20T by some calculations? By the way, that is ONLY Social Security which is not alone on the left side of that balance sheet and faces some stiff competition from Medicaid and Medicare in the category of most irresponsibly funded promises ever.
Reality has to be accounted for when suggesting fixes to social ills. Social Security sounds like a great idea, but put in the hands of bureaucratic thieves, it becomes a Ponzi scheme. Keeping food safe and sanitary is a necessary goal, but creating zombie agencies that make it impossible to do business or grow the correct amount for market demand is an unnecessary burden. Guaranteeing decent wages is a noble cause, but doing so with price controls distorts labor markets and creates supply surpluses (i.e. unemployment). Helping the less fortunate attend college is the right thing to do, but subsidizing its cost through increased aid creates prices that have risen 10 times faster than general price inflation. I hope some lessons are learned from what we have seen and what we may be about to see. We share your lofty goals, liberals so help us implement a strategy based on reason. Give up the alchemy; we have good science now to help us prescribe the right remedies.