Monday, July 31, 2017

The Racket Ratchet

There's a rule of democracy that's been playing out very publicly lately, which is that social welfare, once granted, cannot be revoked. The government can easily expand but can only contract with great difficulty. Many are condemning the Rinos in Congress like John McCain for failing to do what they've campaigned to do for eight years, and what most of them did do when they knew they'd be overruled by a veto. They should be condemned; they're absolutely despicable. And yet they're also inevitable. Someone would have to step up to sabotage democratic reform because that seems to be the law of the universe. It's like in Disney's Sleeping Beauty, when Rose is drawn to the spindle, but is blocked by a stone wall. The magic spell creates a door for her. If John McCain didn't exist the universe would have to create him, just to go commit treason against conservatives one last time before his clock runs out.

A lot of people are blaming Republicans en masse over their failure to revoke Obamacare. We should hold off on that a bit. Most Republicans actually voted for repeal. For straight repeal, even. So the majority of our R-stamped Congress critters actually supported the conservative solution, which is almost surprising given what we expect out of them. And for all the flak Harry Reid is catching, at least he got these measures to the floor, and forced the Rinos to publicly admit they've been completely full of shit for the better part of a decade. The Republicans can't do much when facing traitors in the ranks, and when they're up against the mystical forces that prevent meaningful containment of a democratic government. My condolences to those being reamed by high costs, but keeping the Democratic pile of garbage on the books to fester -- for which no Republican voted for, by the way -- is the best option in the long term short of full repeal, no replace.

Socialism is a racket. A politician can't offer to pay people for their votes, but he can offer to give them other people's money. Somehow if you bribe and steal at the same time it comes out ok, so long bureaucracy gets its cut of the deal. Once they've had a sniff, the people become addicted to the bribe. Like any unhealthy addiction, one must chase an ever-increasing dose to get the same high, and any reduction leads to manic fits of withdrawal. Democracy is a ratchet. It can only exert increasing pressure on the system until it breaks.

What is lacking is some form of pressure release. Legislative reform would relieve pressure, but it is nearly impossible, as reformers will make great enemies out of the handout-addicted voters, the bureaucracy feeding on the overhead, and the politicians and their handlers who exploit the racket for self aggrandizement.

There was pressure relief built in to the framework of our government. Federalism means there is competition between the states. States that govern well will succeed, and states that govern poorly will have to adjust or fail. Just like shops at the mall, the people vote with their feet and their dollars. But federalism is now 70% destroyed. In Missouri, 70% of the state budget is actually determined by the federal government. They tax us, then release the money back as long as we spend it the correct way. Competition between the states is only about 30% effective. But it's probably even less than that, as the scope of the federal branch is so vast. People won't quibble over whether they live in a state with 4% income tax versus 5% when the federal government charges them 30%. The state situation tends to be overshadowed by the federal behemoth.

As described in Distortions in the Financial and Political Markets, our reality-insulating bubbles are inflating unchecked. Expect that the pressure won't be gently released. The release mechanism of the political racket ratchet is broken. The voters gave the Republicans majorities in the House, Senate, and White House, virtually all of whom promised to end Obamacare, and yet it remains. Even with all the right pieces in place this government program can't get undone. Is there any reason to believe that any other pressures on our political and financial systems will be responsibly released? That's not a bet I would take. The democracy-fueled ratchet of fiscal carelessness and denial of reality is under enormous strain, and all signals indicate it can only increase. Plan accordingly.

No comments:

Post a Comment