Wise Words for an Election Year

Today my mom received an email entitled, "Wise words for an election year". It encouraged the reader, "During this election year let's be reminded of these words" and contained several aphorisms, attributing them to Abraham Lincoln. The email ended with an ominous, "Very, very wise words, written years ago and we still don't get it....." But what at first glance is an innocent list of common-sense guidelines turns out to be cereal-box marketing trying to get my mom to vote Republican in the upcoming presidential election.

The email contained the following phrases:

First, it turns out that Abraham Lincoln had nothing at all to do with these sentences, Ronald Reagan's mistake notwithstanding. They were apparently written by a conservative minister, William J. H. Boetcker, around 1916. And a closer examination reveals they are mostly glittering generalities that bias the listener but shed no light on policies of the candidates. They are so vague (and they throw in feel-good words) that it's hard to disagree with them. Then they are used to promote a particular point of view. I hope no one in America would use any of these ambiguous, trite phrases in determining how to vote in the upcoming presidential elections, but would instead attempt to understand and analyze the actual policies and plans of the two candidates.

Let's look at the first one: "You cannot help the poor, by destroying the rich." What does this mean? I want to help the poor, so this must be a true statement! And destroying things is bad, so it must be doubly true. But what does it mean? What is "destroying the rich"? The statement doesn't say—it's just left vague so you agree with it and feel good that you're helping the poor.

Now that you have this glowing feeling inside that you're not destroying things and you're helping the poor at the same time, someone will come out and say, "Hey, Obama wants to lower taxes on the poorest 95% of people in the United States, while raising taxes on a few really rich people! Goodness, we haven't learned a lot since Abraham Lincoln, have we? Remember when you vote that, 'You cannot help the poor, by destroying the rich!'"

But does Obama's policies have anything to do with that phrase? Remember, we have no idea what "destroying the rich" might actually mean, except that it sounds bad! Our government works in large part by taxes, and the way taxes are structured can provide incentives and modify behaviour and help or hurt the economy. Will Obama's specific tax proposal provide the right incentives to make our complex, interconnected economy run smoothly? How about McCain's? These little trite phrases are trying to make you ignore analyzing the actual policies of the candidates and just vote on some knee-jerk reaction to warm and fuzzy but vague words.

In recent days McCain and Palin have been trying to use the same tactics by associating Obama's policies with socialism. Like whoever originated this email to my mother, they hope that listeners won't actually look at what the plans of the candidates say or analyze their effects on the economy, but will instead be turned off by terms such as "socialism" or "destroy the rich".

The United Nations today (well, tomorrow, actually, as this just came out in the Guardian on Thursday in the UK) announced the results of a study that concludes New York is the ninth most unequal city in the world. That means there's a huge gap between those who are rich and those who are poor—similar to the inequality levels in Kenya! Surely no one believes that this is a good thing. Besides the obvious moral issues, it causes all sorts of bad effects in the economy, creates crime, and according to the report, destabilizes society. Don't we agree in principle that it would be better if there weren't such a big gap between rich people and poor people? Isn't that just common sense—and one of the cornerstones of what liberals like Jesus talked about?

But the minute you start talking about trying to lower this inequality, people try to turn it into a religious issue. You're suddenly a "socialist" trying to use government to "spread the wealth around." You can't evaluate things objectively anymore. A little ambiguous phrase like "you cannot help the poor, by destroying the rich" removes all the ability to think about the issue. It highly biases any consideration of policy, without injecting any real meaning into the discussion.

So let's talk about the real policy issues. No one is suggesting that we should have something like in the former Soviet Union, where the government tried to have everyone make the same wages and do whatever work the state told them to. But on the other hand, there is no completely free market economy in the world. Nowhere. Not even close. The economy of the United States, like all advanced economies, is carefully managed by a series of "levers" that the government has at its disposal. Raising or lowering interest rates, for example, directly effects how businesses act—whether they will hire people and invest in expansion. The "lever" of interest rates also influences how citizens act—whether they will buy stuff or stick stuff in savings. Taxes comprise another "lever" that controls the economy.

Notwithstanding another one of the simplistic phrases in the email, "You cannot bring about prosperity, by discouraging thrift," sometimes it helps the economy whem people save more, and sometimes it helps the economy when they spend more. "Levers" such as interest rates and taxes help adjust these various factors and help the economy keep moving along. This is a very basic thing you learn in economics class. The people sending out little aphorisms to influence votes are trying to play on the emotions of people who don't understand economics. Running around calling people "socialist" or saying that "you cannot help the poor, by destroying the rich" doesn't help one understand in the least how to move the levers.

The thing is, whether Obama or McCain is elected as president, the winner will surround himself with some very highly trained economists who will try to help him move the levers in the correct way. The Bush administration's advisers are doing the same thing right now; they have come up with a bailout plan that takes from a bunch of people (taxpayers) and gives it to others (banks) to keep them from going under; this is as "socialist" as anything being proposed by the candidates. Both McCain and Obama support this, and it seems to them to be the right lever to pull at the moment. The trick is to get someone in office you think will be smart enough to pull the right levers at the right time to make the economy keep going. Putting labels such as "socialism" or "destroy the rich" on some of the levers because you know some voters will react emotionally is not only incorrect, it is also dishonest.