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Unavoidable Betrayal
Unavoidable Betrayal
In electing our political leaders and in particular our presidents, we are a lot like pathetic people dating. We think that though that last boyfriend/girlfriend let us down, the next one will be the key to our happiness. So we fall for the one with the prettiest promises, enter the relationship with sky high expectations and giddiness, and when the inevitable reality comes we feel betrayed. Then, and here is the pathetic part, we learn nothing and fall for the same joke again and again.
This election is no different. John McCain thinks that anyone who disagrees with him is corrupt and Barack Obama has made it clear in recent speeches that he is essentially the Second Coming (“Generations from now people will remember that this was the moment….”). Megalomania is alive and well in presidential politics and we are falling for it, as usual. There can only be one outcome.
Arthur Laffer (famed economist of the Reagan Era) wrote both in a recent WSJ editorial and in his newest book that this is the end of prosperity. By this he means that the enormous amount of government intervention now taking place will end in massive taxation thereby crushing the economy. There is no way to avoid it under the present political structure and leadership. And in addition to the cost of the programs themselves we must add at least another 30% for the cost of administration, so for every $100 billion it is really $130 billion. This money can only come from taxation or just plain printing it.
Here is where I differ from Laffer. I think that the politicians won’t have the cajones to raise taxes as much as necessary and so they will just print the money. Either way the choice is awful, economic stagnation versus rampant inflation. Or we may just get that marvelous throwback to the Carter era, stag-flation. Barring a miracle, these are the only choices that we can look forward to.
As a person who wants to not only survive but prosper in this environment, we must take a variety of actions. First, when you vote choose the most libertarian choice possible. By this I mean vote for the person promising the least and hates taxes the most. I know that sometimes the only choice is between bad and worse, but we have an obligation as a citizen to vote for someone so choose in that instance the bad. This is why I endorsed McCain who overall I don’t like. The alternative is worse.
Next, though I have said it before it bears repeating, cut costs as low as you possibly can. This is going to be a bad period and the worst is yet to come. Finally, if you are thinking of making a new plan remember that in a bad time life still goes on. If you can serve a basic need cheaply and efficiently then you may have a winner. People are still going to eat, go to work, drive their cars (longer), care for their children, etc. Stay away from selling extravagances like organic products that cost more but do the same thing as a cheaper alternative. When times get rough people buy the cheapest product possible that can do the same job as a more expensive alternative no matter how cool or green. Wal-Mart is going to prosper; Whole Foods is in trouble. Get it?
The point is not to freeze. Engage and prosper.
Posted by Herb Kay on Thursday, October 30, 2008
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