I Finally Get It! I Think...

[ElectricPaladin]

Thanks to this awesome video (http://www.youtube.com/watch?v=GTQnarzmTOc) - and the explanations of my friend Gavin - I think I finally understand what fiscal conservatism is supposed to mean. It's incredibly refreshing. Allow me to summarize what I've learned:

1) They don't hate poor people! At least, they aren't supposed to. The idea isn't that the safety net is bad, it's that the safety net needs to be accompanied with measures that create jobs for people in the safety net to work so they can get back on their own feet ASAP.

2) They don't love big business. They think that big corporations that can't compete should be allowed to fail. Of course, the people who work in those businesses should have an effective safety net to protect them for absolute poverty (see above). Because...

3) Individuals have a natural desire to work and be self sufficient, but companies don't operate that way. A trick of human psychology allows large groups of people to happily create companies that exist, solely or partly, to leech of the government. The individuals still feel like they have jobs, even though the company doesn't actually contribute to society and should be allowed to fail.

4) Poor communities need support, but locals are better at knowing what the community needs than the government. One of the easiest ways to help locals start the businesses the community needs is to allow for targeted deregulation to lower startup costs. It might be scary to say, for example, "these five recently started grocery stores in Oakland have permits to ignore health code violations for the next ten years," but cr@ppy grocery stores are better than none at all, and can help change the nature of a community so that eventually it can afford grocery stores that don't need the target deregulation.

5) One of the biggest problems of capitalism is cronyism, nepotism, and the rise of an elite that is insulated from the market. You can prevent this through a reasonable rate of taxation, ensuring that even in the wealthiest families, each successive generation must continue to contribute or lose their elite status. Also, as I wrote above, companies that stop being competitive (and, therefore, contributing) must be allowed to fail! That will stop wealthy cadres from benefiting from their political influence, rather than their power to contribute through entrepreneurialism.

I don't know that I agree with all of it, but it's a fascinating set of ideas. The focus on grassroots energy and getting the government out of the way so local communities can solve their own problems is really attractive. I don't know if it's enough to seduce me away from my commie-liberal ways, but if there were a candidate proposing this kind of action, I'd give them a listen, and potentially vote for him/her, regardless of party affiliation.

Now, if only there were actual politicians who actually promoted this kind of policy... :(

[Wolfshade]

4) Poor communities need support, but locals are better at knowing what the community needs than the government. One of the easiest ways to help locals start the businesses the community needs is to allow for targeted deregulation to lower startup costs. It might be scary to say, for example, "these five recently started grocery stores in Oakland have permits to ignore health code violations for the next ten years," but cr@ppy grocery stores are better than none at all, and can help change the nature of a community so that eventually it can afford grocery stores that don't need the target deregulation.

I might have to dissagree with this point, in Spain each area has complete control over its fiscal policies, they are almost completely autonomous of each other and yet each "state" is engaged in building this grandios civic projects that are over costed and are often just not requried by the populous.http://www.bbc.co.uk/news/magazine-18855961

[ElectricPaladin]

I might have to dissagree with this point, in Spain each area has complete control over its fiscal policies, they are almost completely autonomous of each other and yet each "state" is engaged in building this grandios civic projects that are over costed and are often just not requried by the populous.http://www.bbc.co.uk/news/magazine-18855961

The point of the policies I learned about last night is that the state doesn't build these things. They use targeted deregulation (and, I imagine, in a best-of-both-worlds approach, also grants and microloans) to incentivize the people to build things for themselves. The state doesn't do any building - it just decides where and how to get out of the way.

[Wolfshade]

We do that sort of things in the UK, they were called PFI (Private Finance Initatives) but that became a dirty word. Though they were not without their issues, quite often the performance indicators for such contracts didn't actually drive what was expected as the indicators were poorly thought of. The other issues that they run into is that often have to interact with governement agencies which is a bit of a nightmare in itself as the civil servants and the private workers have a different ethic. The other problem is that when the private enterprise then delievers the contract with a "project surplus" they are castigated for providing bad value.

[ElectricPaladin]

To be honest, I'm not approaching this as the solution I've been waiting for which will solve all our problems. What I think is that this is the second half of an effective policy - a complementary technique - which our country hasn't been trying at all for a while now because the party that's supposed to champion that side of the equation has gone completely freaking insane...

[Wolfshade]

Oh noes!
It is strange, the idea of PFIs was a Labour idea (leftish wing) so it is a little weird.
I also find that both main parties in the states are both conservatives.

[Psychosplodge]

Well they're both to the right of our mainstream political spectrum.

[eldargal]

The main problem with fiscal conservatism is that it has been given a bad name by various political parties in the UK and USA who claimed to be fiscal conservatives but really weren't.

[DarkLink]

1) They don't hate poor people! At least, they aren't supposed to. The idea isn't that the safety net is bad, it's that the safety net needs to be accompanied with measures that create jobs for people in the safety net to work so they can get back on their own feet ASAP.

Add in abuse within the system, and bingo. Helping the poor should be directed at the people who actually need it, and should focus on solving the root cause of the problem rather than slapping a band-aid on it.



2) They don't love big business. They think that big corporations that can't compete should be allowed to fail. Of course, the people who work in those businesses should have an effective safety net to protect them for absolute poverty (see above). Because...

Yep. A monopoly is not capitalism, it's a dictatorship of economy. Capitalism thrives on competition (and by competition we mean highest quality product for the lowest price), and if there's only one game in town who can compete?

Conservatives and liberals use the word capitalism for two different things. For conservatives, capitalism describes how things should work, that is anyone can start a business in an industry and if they produce adequate quality at a reasonable price they will be successful, and that competition will result in the best products becoming available to the customer while the bad products fail, and everyone wins at the end of the day. For liberals, capitalism is all the ugly tenancies of individuals to try and game the system for personal benefit, which actually undermines the system and is contradictory to what conservatives desire.

Both sides think the other is using the same term, and hold each other in contempt for it.



4) Poor communities need support, but locals are better at knowing what the community needs than the government. One of the easiest ways to help locals start the businesses the community needs is to allow for targeted deregulation to lower startup costs. It might be scary to say, for example, "these five recently started grocery stores in Oakland have permits to ignore health code violations for the next ten years," but cr@ppy grocery stores are better than none at all, and can help change the nature of a community so that eventually it can afford grocery stores that don't need the target deregulation.

Broad strokes and unilateral bureaucracy is clumsy and inefficient, both of which are inherently bad for business. They have their place, but there are also places where they do more harm than good. Ever heard of stories of a kid setting up a lemonade stand, only to have some bureaucrat threaten them with a fine?



5) One of the biggest problems of capitalism is cronyism, nepotism, and the rise of an elite that is insulated from the market. You can prevent this through a reasonable rate of taxation, ensuring that even in the wealthiest families, each successive generation must continue to contribute or lose their elite status. Also, as I wrote above, companies that stop being competitive (and, therefore, contributing) must be allowed to fail! That will stop wealthy cadres from benefiting from their political influence, rather than their power to contribute through entrepreneurialism.


Yes. Competitiveness is based on merit, rather than the ability to talk politicians into bailing them out when they fail.

Fundamentally, capitalism is a simple trade. The company has an item (product), and the customer has another (money). The company makes a quality product to earn money, and the customer trades the money for a product that improves their lives. Both sides win, and because the company made a profit they can make more product to sell to more people, or invest in creating new product. A competitive company, under capitalism, inherently creates wealth, not only for themselves and their investors but for their customers and employees. There are various things that can derail this, such as barriers to entry for new companies (onerous bureaucracy and regulations, inability to compete with monopolies, etc), excessive risk with a low quality product effectively designed to con people out of money (wall street banks leading up to the sub-prime mortgage crisis), or sacrificing a long term investment in favor of short term profit, among other things.

The purpose of regulation, ideologically is to prevent the things that derail capitalism, without actually hindering capitalism. This is a model that, due to its simplicity, humanity always reverts to in favor of more controlling and complex economic systems. A handful of politicians cannot effectively control the incredibly complex flow of economics of an entire nation. History has pretty consistently shown, even as recently as China's newfound economic growth, that free markets are the key to economic growth and increased standards of living.

Edit:
I think this is relevant: http://www.newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx?RelNum=5409

[DarkLink]

Similarly, things like 'trickle down' economics have a dual meaning. Ideologically, you give money to investors, and investors distribute that money to small businesses, which distributes it to employees and new products, which feeds back into an increased standard of living and increased profits, which goes back to investors who then reinvest the profits into even more businesses. On the other hand, you have to keep that money from pooling at the top, because if that money doesn't actually get invested then nothing is trickling down.

[Sean_OBrien]

Thanks to this awesome video (http://www.youtube.com/watch?v=GTQnarzmTOc) - and the explanations of my friend Gavin - I think I finally understand what fiscal conservatism is supposed to mean. It's incredibly refreshing. Allow me to summarize what I've learned:

{lots of stuff}


More or less. A report came out a few weeks ago which added up all the spending on the various social welfare programs in the US and calculated how much actual cash money they would be able to give to each person who was at or below the poverty line...it ended up being around $60,000 per family.

Now, the vast majority of that money never actually makes it into the hands of people who will actually use it to help someone in need or to the people who need it. It gets eaten up by Federal planners with excessive salaries and huge staffs. It gets sucked up by lawyers and other types who manipulate the system to allow them to take a chunk from the pool (ever wonder who pays those Social Security claim lawyers you see the commercials for?). It gets stuck in the hands of State level bureaucrats who use it to buy favor by looking like they are doing something useful but are about as helpful as tits on a boar.

The idea that they could actually go through and do more with less if they got rid of all the various Federal and State level talking heads and left it to the local communities is really at the heart of the objection. I would much rather give $15K a year to a charitable organization like the Salvation Army who helps the needy in their local areas (and because of other volunteers have a much lower overhead) as opposed to having the government take $10K from me and having half of it eaten up by red tape before it actually gets back to helping someone who needs it.

Of course, there is a certain level where the local economy is not able to fully fund the safety net (extremely depressed areas) - in those they do need a bridge of sorts...but it must be clear that it is not unlimited. Throughout the history of our nation you can find boom towns (and the subsequent ghost towns). If a city like Detroit has made itself unattractive for economic activity, then it should be allowed to fail as well. For a temporary impact, State or Federal funds...ideally in the form of an actual, real, funded insurance program as opposed to the current unemployment "insurance" to cover local expenses. For an obviously prolonged problem (Detroit again as a good example) - a bus ticket out of there to an area which has jobs. You don't have to force it upon them - some will want to stay for what ever reason...however, if you stay - you take your future into your own hands, the government will not prop up localities which are working against their own future.

The ability to let a company (and anything else) fail is important for the system to actually work though. When a company is prevented from failing, it removes the need to actually be productive. If a company is forced to make good business decisions, they tend to make decisions which are good for their local community as well.

Just a quick example of that is that right now, I have an installation team in Newark, New Jersey. They have weathered the storm well enough, but the facility that they were sent to do work at is flooded. In order to avoid loosing money on them (will likely be several days before I can fly them back here at roughly $4000 per day) - we have subcontracted them to a company in New York to help get the cellular service back online and a couple of other smaller jobs. Being nimble and able to adapt quickly allows me to make a good business decision and it helps the communities my company is interacting with by providing trained personal who have a lot of experience dealing with the aftermath of hurricanes (we are based in Florida and much of our business is located in the Gulf states). Many of the local technicians are having to deal with their own problems - so having the aid available is good for the region.

However, the government is actually working against my instincts. FEMA allows me to file a claim against the losses if I let them just sit there. If they work and help out, I have to make good business decisions. If they do nothing - the government will pay me.

Regarding a candidate who promotes those ideas - likely in another 10 years or so you will see one of the fiscal conservative-social DILLIGAF groups break out. The center of the electorate is largely already there - there just isn't a strong force to cause it to coalesce into something capable of running a campaign.