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Economics, the Garden of Eden, and resisting the no-new-taxes snake oil

Date Published: 07/28/2011

Author: Chuck Brown, Senior Policy Fellow on Rural Issues

Economics, the Garden of Eden, and resisting the no-new-taxes snake oil

MINNPOST

OLIVIA, Minn. — The first chapter of Genesis describes a time before economics.

Economics is all about allocating scarce resources to achieve the greatest benefit. The Garden of Eden was all about abundance. Nothing was scarce. Everything needed for a life of happiness was there for the taking. There was no need to go to work. There was no need to make anything. There was no government and no taxes and there was no need for economists — maybe that's why they called it paradise. But some might also suggest that all this idleness led to that trouble with a snake.
     
Today's world is no Eden, so we look to markets to allocate scarce resources in the most efficient and productive manner. That's what free markets do, but they can't make every decision and they often fail. Some decisions require moral and ethical collective judgments, and for that we look to our political and cultural institutions to adjust the allocation of resources and to reconcile private good and common good.

Understandably, we like our private wealth best. It's the house we live in and the car we drive. It's our clothes and all our electronic gadgetry. In short, it's the accumulation of all our stuff, and as a rule we don't mind paying for it. Oh, we're always on the lookout for a good price, and we never want to overpay, but in the end we pay because our stuff is important to us. It defines who we are. It's sexy. It's about our quality of life.
     
Neglect does real damage

The common good is a different matter, harder to understand, not as immediately clear as private gain, harder to figure out why we should pay for it. As a rule we take it for granted and think someone else should pay for it. We assume that it's mostly about taking care of those who can't take care of themselves. But it's actually about much, much more than that. And if we neglect the common good, we soon discover that it does real damage to our private lives and especially the fortunes of the middle class.

When potholes threaten our cars, we complain. We don't often think about sanitary sewers; they aren't sexy, but a malfunction quickly grabs our attention. Falling bridges get our attention too, but not every neglect of the common good creates such immediate consequences. Some things take time to erode, but in the long run they are no less consequential. When we diminish education today we might not feel the impact right away, but we surely diminish our future. The common good, as it turns out, is about quality of life too.
     
As we look to allocate scarce resources for private and public good in this bad economy it appears that we're still bedeviled by snakes, or more specifically, snake oil, in the form of slogans and platitudes promising that tax cuts and shrunken government will solve every problem.
     
For a way out, look back

In our current economic and public debt crisis, the administration of George W. Bush deserves plenty of responsibility for pushing through unsustainable tax cuts and running large deficits and a major war, with the economy near full employment. Finger pointing may help vent anger, but when looking for a way out of this mess it might be more constructive to look further back to the first Bush presidency.
     
George H. W. Bush endeared himself to the tax-cutting crowd when he famously said, "Read my lips, no new taxes." But adoration quickly turned to scorn when Bush, faced with a tough economy, worked with Congress to find solutions that included tax hikes. To this day Bush is mocked unmercifully for his words and his lack of fealty to tax dogma, but history might treat him better than his own party did. Bill Clinton received much credit for the great economic expansion of the 1990s, but it's fair to say that George H. W. Bush set the table for that expansion when he found the political courage to change his mind.

In Minnesota we've seen similar wisdom and courage from Republican Gov. Al Quie and Arne Carlson, who both chose balanced solutions and modest tax increases over party dogma. They understood the value of the common good. They understood that there is grace in the common good, and that neglecting it risks a fall from grace.

Here's hoping and praying, with a biblical fervor, that today's anti-tax zealots, at the helm of majorities in Washington, D.C.,  and St. Paul, can find a graceful way to raise the taxes we need to pay for our common good.

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Chuck Brown is a resident of Olivia, Minn., a former business manager, a former city council member, and a policy fellow for rural issues for Growth & Justice, a policy research and advocacy group focused on broadening prosperity.


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