Sunday, July 06, 2008
If you hang on the right you are well aware of old jokes about the personal transformation to conservativism. "A conservative is a liberal who... (1) has to meet a payroll, (2) has been held up..." and so forth. Well, at least on the question of drilling for oil in environmentally sensitive areas, a conservative is a liberal who wants cheaper gasoline. The Pew Center's latest survey reveals that it is self-identified liberals who have most changed their attitude about drilling. Indeed, a slightly higher percentage of Democrats than Republicans now say that more energy production is important.
This is a handy bit of information to know. It is not that liberals are opposed to new energy production, they just demand a higher clearing price. The question is whether they understand that raising the cost of capital (through, for example, the imposition of a windfall profits tax) will prevent new exploration rather than promote it. Probably not, since they've never had to meet a payroll...
The most recent Pew poll I could find quickly, from 2005, lists at least a quarter of people in all income demographics being Democrats, (including those top earners with economic concerns,) and this is with substantial no-affiliation reports (about 25% in each quintile).
Given these numbers, in order to make your (admittedly snarky and jocular) metaphor work, we'd haver to assume that a full quarter of top earners either 1) never deal with payroll, budgets, or affiliated things, 2) are stupid, or 3) both. ...Really? The big example that seems to make people crazy is George Soros; if he made billions of dollars by not knowing what the hell was going on in the currency markets, he must have been the luckiest man to ever come across a financial instrument.
Assuming that affiliation reflects a values difference rather than an intellectual or experiential one, it might make sense to consider what these values are and why they should be that way (with the returns-on-capital argument being an important one.) Two other things that might be worth discussing: the relevant "Churchill "quote and this graph.
Leaving the graph and blog post to speak for itself, the quote I am referring to is mentioned here. What I find most interesting about this "quote" is its parallel to a quick and dirty investment strategy: stocks when you're young, trading to bonds as you age. In this financial planning, you hold things with high volatility and longer-term expected value when you have the time, and trade the expected value for lower volatility when you have less time for the investment to recover before retirement. This has a suspicious parallel with political affinity because radical change, (which many of my liberal friends think can be found in govt research, sanctions as a primary weapon of diplomacy, or longer-term social action,) behaves much like a stock (with all payouts in the long term) while low taxes, small government and the like (ie the typical not-social conservative positions) behave kind of like bonds; not much can happen, because there isn't much going on in govt. So the selfish excuse for conservatives above 35 might be "we don't care, we'll be dead before we get a payoff."
Admittedly, there are many dumb liberals (just as there are many dumb conservatives) who make bad arguments based on the feel of the position rather than the impacts, but it may be helpful to address those impacts and analyze policy rather than defame the speaker.
It good that even the left wants to increase energy supply. However, it's bad that they're only now reacting in crisis mode. More drilling for oil will eventually increase supply above what would have been available without the drilling, but 1) bringing a new well online takes time and 2) more wells are always required just to offset production declines from existing oil wells. Prices may stay fairly high for years. Private energy companies are very good at delivering products everyone wants, earning large amounts of money in a relatively low profit margin business. If the left wasn't constantly trying to gum up the works with lawsuits, energy companies could work even harder to increase supply.
Regarding the plot of income growth vs. presidential party, I'd like to see a plot of inflation adjusted after tax income vs. party, Congress or President, controlling the adgenda that year. Income growth isn't useful if it's offset by inflation and higher taxes. In addition, relative numbers, percentage changes, can be misleading.
Its seems to me that liberals generally don't care so much about "what" is done, as to "how" it is done.
Conservatives generally don't really give a damn how something is done, so long as they can maximize profits.
Perhaps there can be a middle ground where the two can meet.
FYI there are many liberals meeting payroll every week.
Sovereign said: "The big example that seems to make people crazy is George Soros; if he made billions of dollars by not knowing what the hell was going on in the currency markets, he must have been the luckiest man to ever come across a financial instrument."
Sovereign apparently has never read Taleb's Fooled by Randomness. But he should. So should anyone else who wishes to avoid the fallacy of affirming the consequent...or who in general appreciates wicked-smart dissections of how the world actually works.