Wednesday, January 28, 2009

Why the Crow Gets the Corn...

There once was a farmer with a beautiful, hard working wife; together they toiled in their fields from sunrise to sunset. They planned and planted, watered and weeded and finally their black fields turned green and gold from the corn that sprang from the soil and reached for the sun.

The farmer did his best to guard against the crows, always perched in the trees, eying his succulent corn. But, he would always awake to find several of his plants partially devoured.

The problem was that the crows had a far greater incentive to steal the corn, than the farmer had to guard it. A devoured plant could serve as a magnificent feast for the crow, but for the farmer it was only a small portion of his crops. The crow's raison d'ĂȘtre was to steal the farmer's corn, whereas the farmer divided his time between his roles as a farmer, father and friend. So, each night the crow would be victorious.

The farmer wasn't a greedy man and figured "it's my corn...but perhaps the crows are I guess I could share some of my corn with them..."

But, with each passing day, the number of crows grew and grew and each one became greedier and greedier until the farmer awoke to find that half of his field...half of his time and labor...had been devoured.

The farmer turned to his wife and asked her "how oh how did those little bastards devour half our field?!?" His wise wife responded "each of them took so little that we barely noticed...but together they can devour half our crops..."

Substitute "hard working tax payers" for "farmer" and "crows" for the multitude of connected corporations, special interests and unproductive citizens and you have a good sense of how our redistributive state works.

When the government grants billions of dollars of direct and indirect subsidies (tarrifs, preferential tax breaks etc.) to connected company and industires, they are ultimately usurping the fruits of the labor of hard working individuals and successfull firms.

The fundemental problem is that each subsidy only costs each tax payer a few dollar, but the windfalls for the recipients are always great. So, those who benefit from subsidies have huge incentives to fight for them, whereas the mass of tax payers rarely have enough incentive to fight against them. For example, the steel industry can afford to invest $100,000 in lobbying politicians for tariffs, because they stand to gain millions. On the other hand, it's beyond the realm of reason for a tax payer to match the steel industries lobbying efforts, because individualls they stand to lose only a few dollars via costlier and lower quality services.

Not only are welfare programs a tremendous windfall for the unproductive citizenry who receive them, they also are a windfall for the rapidly expanding number of bureaucrats who manage them. The fundemental problem is that the benefits to the recipients are large, direct and immediate, whereas the cost of each program to tax payers are small, indirect and are incurred over time. Tax payers in Cook County will grumble about rising sales and property taxes, but few will connect this to the ever expanding size of the state. And even fewer have the time, energy or resources to fight for their interests.

Each instance of economic redistribution may be small, but when you ad them up, it becomes clear why the tax burden has grown for productive citizens. But most politicians have little or no reason to go against the great regimen of redistribution. After all, individuals and interests who depend on a subsidy will be beholden them. And even so called conservative politicians like Bush dare not fight against these subsidies out of the fear of losing a rapidly exanding electoral block: voters who are dependent on the state.

For all his faults, the crow is a cautious creature who knows that there's only so much he can take before the he is pushed too far. Now we encounter a new and far more voracious predator - the wolf who steals from the farmer in broad daylight. Instead of stealing indiscernible bits of corn, the wolf sweeps down and carries off the farmer himself.

Of course I am referring to Bushbama's massive, unprecedented transference of wealth popularly known as the "stimulus plan." This plan will increase our national debt by 1 trillion dollars, which comes to approximately $10,000 per family. The government will eventually have to pay this debt on the back of the public, in the form of higher taxes, less services, a dollar debased through the printing of money to pay for this debt. What makes this so insidious is that this debt is fundementally a transference of wealth from future generations to our own.

Initial figures show that a large portion of these funds will be directed towards programs that in no way constitute an economic stimulus. At best, Bushbama's bailout is a way to push through questionable, costly programs and policies without the public's scrutiny. And the $187,000 - $250,000 cost per job created indicates that a large portion of the bailout funds will be consumed by the bureaucracies that will manage and distribute the funds. So, fundementally the bailout is a massive transference of wealth from productive individuals, businesses and segments of the economy to the state and its dependents.

The farmer and wife gazed at their barren fields, turned to the crow and the wolf and said "it's all yours..." That winter the crow and the wolf starved.

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