"Change" or More of the Same?

October 21, 2008

Senators Obama and McCain have completed a series of “debates” and the election is fast approaching.

The buzzword of the campaigns has been “change”. Obama wants to enact change to help the middle class, McCain wants to change the Republican party back into what it once was, and both candidates vow to change the greed and excess on Wall Street and in Washington.

It’s troubling that McCain now supports a lot of socialistic policies, such as spending $300b of the $700b bailout package on rescuing homeowners, thus giving a reward for a horrible decision. But what about the topics neither candidate has addressed? What about the policies and programs that won’t be touched under either campaign? Such as…

The Federal Reserve. A growing number of voters are starting to recognize the perils of allowing the Fed to manipulate our currency. But there’s still a lot of work to make everyone aware of the dangers the Fed poses to our country.

There is a real threat to our very dollar as inflation continues to eat away at the average American’s purchasing power. Let’s let the market decide when it comes to money. If people want to trade in gold, we must allow them to. We need to take back the power of the people in this country.

Allowing the Fed to increase the money supply just saps more and more power from the millions of Americans who make our country what it is. We need a real debate on whether the Fed is necessary (it isn’t), and how its actions directly relate to our current economic crisis. (More on that here.)

War on Drugs. No one even mentions this anymore, it’s pretty much a given that your tax dollars are going to be spent housing “criminals” who get caught using and/or selling drugs, sometimes in laughably small quantities that are less dangerous than a pack of cigarettes.

Education. Competition is what drives people to do great things. It gives incentives to produce and go above and beyond the basics. Right now our broken system simply feeds more money to schools and teachers unions, many of which are underperforming. Let’s cut them out and become more efficient, which is what the market demands.

That’s just a partial list. We could also go in depth about restrictions on gambling, foreign policy, the IRS, and many other topics. The bottom line is that instead of looking at the differences between the candidates, we should be examining the similarities. It’s counterintuitive, but effective. By recognizing these similarities, we can get a clearer picture of where we are headed as a country: the status quo will remain intact and citizens will continue to see their choices and freedoms erode.

The bailout is another great example of how Americans don’t really have a choice in the upcoming election. No matter who gets elected, they both supported the bailout. So it’s now a given that we will simply save companies that make risky, bad decisions? Where does it all end? Do we bail out homeless people with government sponsored food? What about the precedent we are setting?

Unemployment is a topic that many Americans have misconceptions about. In most people’s minds, jobs going overseas is a horrible tragedy. Never mind the fact that most economists agree that jobs don’t belong to the employee but rather to the employer, who by cutting his costs will save his company, and ultimately society as a whole, valuable resources. There are always new jobs and opportunities.

In the 1800s, most Americans were employed simply to bring food to the tables of the country. With improved farming technology, that number is down to something close to 3/100 people. What did the other 60/100 people do when faced with a job loss? They now work maintaining websites, trading stocks, researching medicine, designing new fashions, testing video games, and on and on. So there is both a cost (lost job here in America) and a benefit (frees up valuable resources and saves money) to this situation. But both candidates only want to focus on the cost side, which is troubling.

A “reliance on foreign oil” is also discussed by both candidates. Don’t they realize that people are choosing to spend their income on this oil? The oil only flows here because there are dollars waiting for it, in other words, people are voting with their money that yes, they want oil. And it doesn’t matter where the oil comes from. People are demanding it, they want to power their cars and SUVs with oil and don’t mind sending money overseas if that’s what has to happen. There is no difference between a barrel of oil from Canada and one from Russia.

If we want to reduce the amount of money we send to these other countries (some of whom, apparently, “do not like us” which is just buttering us up for the next great American war), we should develop our own energy technologies and/or drill here. But the people (who comprise the market) have decided they will risk the energy efficiency and environmentalism for something more convenient.

And that’s fine. Eventually there’s a point where preferences will shift. If oil hits $250/barrel, people will shift to something else. We already saw it earlier this year when gasoline was around $4/gallon. Miles driven plummeted. People switched to less bulky vehicles, etc. So the market is the best way to get us “on” or “off” of oil (foreign and domestic oil are both the same product, a fact that escaped McCain in the last debate when he said oil from Canada was “fine” but foreign oil wasn’t. Tell that to someone who wants to fill up his tank but can’t because we restricted “foreign” oil).

Taxes are a hot topic that both candidates will go into. Unfortunately, neither is in favor of fixing the broken system. We might lower taxes on one group of people, but raise them on corporations (I always wanted to ask Obama who runs these “evil corporations” and if he thinks robots are in charge or do real live people benefit when corporations get tax cuts? CEOs are people, too. And they spread their capital around very efficiently. That’s how they got to the top, by making smart choices.)

But neither candidate wants to simplify our tax code. No one knows their true tax rate. It’s basically impossible to figure out how much of your salary you actually get to spend how you see fit, without the government reaching its hands into it. Gas taxes, “sin” taxes, income taxes, and the list is basically endless. Let’s look into something simpler that encourages people to make choices with their money.