I’m reading an interesting book, “The Myth of the Rational Voter” by economist, Bryan Caplan.  Simply on Chapter 2, I was struck by some interesting insights that I immediately felt compelled to share.

In Chapter 2, Caplan discusses types of economic and social biases that individuals have including anti-foreign bias: a “tendency to underestimate the economic benefits of interaction with foreigners” in economic decisions.  Among them, the insight that there are two technologies for producing automobiles in the US: 1) to manufacture them in Detroit or to 2) GROW them in Iowa.  This is actually an excerpt from “The Armchair Economist” is diagrammed here on a facebook post quite well.

America-the-international-trader is more efficient for individual productivity than America-the-“first”

The crux of the idea is that people intuitively assume that trade with a foreign state is a zero-sum game, one loser and one winner.  This sentiment is logically incorrect, however as world output or total output can be increased for everyone by trading in accordance with one’s comparative advantage.  In other words, if the US has an advantage in producing corn and Mexico has an advantage in producing automobiles (due to cost efficiencies presumably), then the US producing more corn to trade for more cars from Mexico will benefit both countries more than an isolationist, do-it-ourself approach.

Think of another analogy: how productive would you be if you had to grow all of your food in addition to your other responsibilities (assuming you’re not a farmer, etc)?  And how productive would you be if you had to build you own car from parts?  By exchanging a few days of work pay for a month’s worth of food, your time is freed up to do other things.  Everyone benefits.

Segue from this to Trump’s (not-entirely-logical, but feel-good) populist message about America first.  Clearly Trump (and his adherents – those who simply believe him without being skeptical or thinking for themselves), are clearly falling prey to an economic misconception/ bias – anti-foreign bias.  If we’re not careful and intelligent with our economic policy and trade, retreating into our own national shell of “let’s grow everything and make everything here”, will – in a world that has the internet, trains, cargo jumbo jets, and international shipping ports, make our country and society less efficient relative to other countries that participate more freely in trade.

Our trade deficit is also our Goods surplus!  Lots and lots of cheap goods.

Our trade deficit with China is a common refrain that feels right, but is only half the story.   A trade deficit with China in which cash (I assume without googling it, US treasury bills or some-such currency proxy) is going into China is half the equation.  What do we get for our US treasury bills; clearly we get Goods.  iPhones, machine components, dishes, glassware, etc.  The US is massively goods rich if China is massively US treasury bills rich.  The equation balances.

But after a certain point, lots of cheap goods do not a society make happier…

Where the nationalist message does maybe hit nearer the mark of reason is that (and it’s never really stated by Trump), goods, I mean a lot of cheap goods does not after a certain point make the average US citizen feel happier or give them a sense of purpose.  Your cheap(er) iPhone is a nice nick-knack, but if you’re perennially unemployed, it’s not enough to give you a sense of purpose in life.

The next step in the logic is where Trump and the “Republicans” veer far off the mark.  They retreat back into a nationalistic “us first!” approach.  Certainly, we could “reset” the world order and become agrarians again.  A Luddite society with no airplanes, no internet, just revert to 1810 technology… or.. we could strive to innovate in the economically depressed rust-belt regions – the regions that voted (narrowly) for Trump, and more disturbingly tolerate his chaotic anti-democratic “leadership” in exchange for the chance of something different.

Caplan explains that being out of a job hurts the person in the short term, but can (and will eventually) benefit the society.

Think about it: America created and commercialized the innovative technology that has and is reshaping the global economy.  And just when that innovation has lead to global shifts and those global shifts start to reverberate back home (and not just on the coastal regions (i.e. Silicon Valley), where they largely originated)), the US suddenly pulls back to reinvigorate Coal technology!?  The better solution is for depressed Michigan and South Carolina to embrace the service and high technology industry (computer and biological) and become a new engine of innovation.  Afterall, having read further in the “The Myth of the Rational Voter“, another economic bias is “Make-work”‘ bias.  That simply doing a job is itself productive.  The myth of Sisyphus lets us see the fallacy of this train of thought. Sisyphus was eternally busy rolling a boulder up a hill, only to have the boulder roll back down and have to start all over again.  He was doing a job that bore no fruit.  Caplan explains that being out of a job hurts the person in the short term, but can (and will eventually) benefit the society.  A person who is out of work, will generally seek new work.  Which is why we used to have a lot of horse shoe makers and black smiths, but now we have lots of computer coders and marketers.  Economists call the cycle of change, “churn”.  When Trump extols the virtues of coal and puts coal miners “back to work”, he is actually hurting Coal Country’s chances at innovating into the future.  He is holding them back.  It would be like subsidizing wooden catapult makers for the military or making sure we keep our brave oil-lamp-makers productive.  It’s a populist message that makes people feel happy today, but just will perpetuate a cycle of boom and bust for an industry that employs technology from the 1880’s in a world awash with hydrogen fuel cells, gas fracking, and elegant wind and solar technology.  Not to mention sequencing the genomes of cancers and developing technologies for remote doctor visits, etc.

Which finally led me to another train of thought – and the title of this post.  What are “Republicans” or “Conservatives” actually doing?  Who are they?  Ideally, such a broad topic is deserving of its own post.  The same parts of the country most hurt by Republicans/ Conservatives over the past 40 years are also the regions that continue to steadfastly vote them back into power each election.  The rust belt/ Michigan/ coal regions of the country are, I contend,  duped by the populist message; duped by economic misconceptions and biases that seem correct but are actually wrong.  Not touched in the above, but of central importance is also taxation (revenue generation for the public good) (also, deserving of its own post).

Imagine the following: a Republican lowers all taxes by 10% across the board.  The little guy feels great – he might save an additional $600/ year.  Where as the big guy who earns above $200,000/ year might save $10,000/ year, and the very big guy who is a millionaire, will net $100,000+ per year in savings.  What the little guy is not considering is that when we defund societal services, we have no money left over for trains and subway systems (for example).  Communities get spread out and now the little guy must own a car and drive long distances everywhere or take an expensive, dirty, loud, unsafe, and very slow bus from point A to B.  The little guy, in voting to reduce his taxes, also votes to defund his own community.  He saves $600 per year via a tax refund (for example), but now has to pay $300/ month to lease a car and pay $50 in insurance and another $50 in gas per month.  He saves $600 in taxes in order to pay $4,800 ($400 X 12 months) for the pleasure of owning a car.   This is sacrificing the social good (the good of the many) for the individual potential good (the good of the very few).

This is a call for a change from Plutocratic Individualism to Balanced Democratic Collectivism; for social inclusiveness (i.e. tax the rich … please)

I understand this conclusion is somewhat hastily arrived at, but the essence of all of this is that if we’re going to refer to a political party by a term, let’s call them what they actually are.  Conservatives conserve the wealth of the wealthy.  They sacrifice the collective welfare to maximize the potential of the individual.  In reality, we can’t ALL be millionaires.  I know the dream is seductive.  I can do it!  The reality is, even the middle class are now struggling with student loans, stagnant wages relative to housing prices.  We should dream, but we should also balance individualism with pragmatic collectivism.  Are we, America, an ultra-individualistic society, prioritizing the illusion of individual gain over the very real gains that we could realize with more collective action.  This is not a call for extreme socialism.  It’s a call for a change from Plutocratic Individualism to Balanced Democratic Collectivism; for social inclusiveness.  Past politicians extolled this virtue; united we stand, divided we fall.  When we wildly unbalance our economic prosperity such that the top 10% of earners in the US hold 3/4 of all of the wealth, and the entire other 90% of people hold all but 1/4 of the wealth, we destabilize the whole fabric of society in the long run.

To put it right, people were duped into electing Trump.


To put it right, people were duped into electing Trump.  As we’ve seen in just 100 days, this will deepen misery for all of us, especially the Trump voters who – once again – have voted against their own self interest.  Next time, vote for your self interest – vote Independent or Liberal – vote for social and economic inclusiveness, not for plutocratic individualists.


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