Left vs Right
SUMMARY/TALKING POINTS
1. Fundamental Personal Differences
Democrats, if they offer a solution at all, often propose solutions that focus exclusively on the emotional part of an issue and do not consider other important variables such as alternative solutions, how to pay for their solution, implementation details, the inefficiency of government, the benefits of a free market, and unintended consequences.
2. Political differences: Free market capitalism, taxes, income inequality
Liberals want government to help equalize the outcomes for all (spread the wealth). Conservatives believe in providing a framework with minimal Federal government interference where everyone can attain their full potential in terms of success and happiness.
One of the freedoms in this country is the right to get rich, via a new idea, hard work or both. History has shown that financial incentives encourage innovation and lead to new products, industries, and jobs. Contrast this with the Democrats/Left who are oriented toward filling existing needs which leads to little or no innovation. No one knew they “needed’ a car, a television set, a computer, or a smart phone.
Capitalism inspires creativity and cooperation because in capitalism you don't succeed unless you meet the needs and wants of other people.
Besides incentivizing new ideas, free market capitalism solves problems, prevents shortages, and produces cheaper solutions and more options because of competition.
The typical way for liberals to spread the wealth is to raise taxes on successful people and businesses. But taxing something results in less of it. Taxing income from work results in less work and less income. If you subsidize something, for example poverty, you’ll get more of it.
Wealthy people do good things with their money: Stimulate the economy through purchases and business investments; and donate it to hospitals, universities, medical research, and charities. Letting them keep and spend their money is more efficient than inefficient governments taxing and taking their cut before allocating the money to its end use.
Tax cuts eventually lead to increased tax revenues due to increased business activity, employment and wages.
Across the board tax cuts are both fair and good for the economy. The top 1% of filers pay about 40% of the total taxes, a share greater than the bottom 90% combined. The top 10% pay about 2/3 of the total taxes. Doesn’t that sound fair?
It is not a good idea to over tax the productive, job creating part of the economy. But Democrats have made several proposals to do just that: take money from wealthy people who invest and innovate and let the inefficient government manage it.
Income inequality has been miscalculated and misunderstood. (Inflation has been ignored.)
Wealth disparity can be reduced by regular investing of money that might otherwise be spent on unimportant discretionary items.
3. Liberals Today
The far left who appears to be taking over the Democratic party is driven by extreme liberal emotion and irrationality. They claim to embrace diversity. But they don’t like diversity of thought and hate anyone who disagrees with their political or societal views, including Donald Trump and all his supporters—more than 40% of Americans.
Many minorities are walking away from the Democrat party because they realize Donald Trump and Republicans are now doing more for them than Democrats (who have perpetuated a victimhood mentality) ever did.
Any group that feels they are treated “different” by society should focus on the many paths to success that are available to them, not on the few that may not be.
DISCUSSION
Contents:
1. Fundamental Personal Differences
2. Political Differences
a. Free Market Capitalism
b. Taxes
c, Income/Wealth Inequality
3. Liberals Today
1. Fundamental Personal Differences
Most liberals have a good heart, mean well, and genuinely care about people—they say they believe in fairness and equality for all. But fairness is a nebulous concept--fairness to one group of people may not be fair to another group and could be bad for society as a whole.
Liberals tend to let their hearts dominate issues to the exclusion of sufficient rational thoughts. They often oversimplify a problem by focusing on the emotional components of the problem. If they offer a solution at all, they don’t rationally analyze such variables as alternative solutions, how to pay for their solution, implementation details, the inefficiency of government, the benefits of a free market, and consequences including unintended consequences.
(Unintended consequences don’t have to be unanticipated. For example, an unintended consequence that could have been anticipated is that providing more welfare to single mothers than to married mothers encourages women not to get married and leads to fatherless children.)
Examples:
1. Nancy Pelosi says her three highest priorities for the border crisis are “The children, the children, and the children,” but offers no practical solution.
2. Key liberals like AOC didn’t want Amazon and Jeff Bezos to benefit so Long Island City turned down a deal that would have created 25,000 local jobs.
3. Some democrats have suggested banning fracking. That would immediately put a million people of work and the effect on global temperatures in 50 years would be essentially zero. (Better is to wait for new technologies. As discussed in the next section Political Differences, free market capitalism is good as solving problems because financial incentives encourage innovation.)
Liberals ignore such people as Thomas Peterffy, the founder of Interactive Brokers, who said: “I’ve lived under socialism and capitalism. Under socialism rich people have less money but so do poor people.”
The main reason liberals focus on the emotional aspect of problems is this: People who are more emotional are more likely to join a movement (liberalism) that says everyone is equal and entitled to everything, while less emotional people will want to know how that will be achieved, is it legal, what it will cost, how it will be paid for, alternative approaches, and the full range of consequences.
We’re not saying conservatives are more intelligent. Liberals and conservatives are equally intelligent and equally capable of being rational. But in general, because liberals are more emotional, and emotion reduces one’s ability to think rationally, liberals tend to be less rational about political and societal issues directly related to equality and fairness. Their biases are constantly reinforced by left-biased news sources—See this site’s Media, Academia, and Online Bias web page.
2. Political Differences
a. Free Market Capitalism
Liberals and conservatives care about people and want everyone to be successful and happy. They believe that food, shelter, water, health care, education, and equal treatment are basic human rights and that regulations on businesses are required to ensure health, safety and fair competition and to prevent the kind of greed and stupidity that caused the Great Recession. But they have different ideas on how to achieve those goals.
Liberals want government to help equalize the outcomes for all (spread the wealth). Conservatives believe in providing a framework with minimal Federal government interference where everyone can attain their full potential in terms of success and happiness, realizing that some people will do better than others due to family circumstances, their intelligence, creativity, talents, motivation, and work ethic. If these people are allowed to rise to their full potential, flourish, raise money for their ideas, it benefits everyone, all of society.
One of the freedoms in this country is the right to get rich, via a new idea, hard work or both. History has shown that financial incentives encourage innovation and lead to new products, industries, and jobs. Innovation leads to a lower cost of living and better life for everyone.
Contrast this with the Democrats/Left who are oriented toward filling existing needs via government action now which leads to little or no innovation. No one knew they “needed’ a car, a television set, a computer, or a smart phone. The TV show Shark Tank shows how capitalism allows ordinary people to get their ideas financed. Without financial incentive, there would have been no investors for Steve Jobs and Steve Wozniak, and they would still be producing computers in a garage. Instead, Apple employees 132,000 people and over 2 million more via their 9,000 U.S. manufacturers and suppliers.
Capitalism inspires creativity and cooperation because in capitalism you don't succeed unless you meet the needs and wants of other people.
Besides incentivizing new ideas, free market capitalism solves problems (which it sees as opportunities), prevents shortages, and produce cheaper solutions and more options because of competition.
President Obama didn’t understand this when he said, “The government can do things cheaper than private industry because the government doesn’t have to make a profit.” This sounds good to someone who doesn’t know anything about for-profit businesses, but is totally wrong because the government has little or no incentive to control costs. Private industry does because a dollar saved in costs is a dollar more to use for expansion or add to its profits. So in almost all cases, private industry can do things more efficiently and more cheaply.
Further, rich people are good for the economy because they do not put their money under a mattress. They use it to buy goods and services, start new businesses, help existing businesses expand by buying their stocks or bonds, or they put the money in the bank where it is loaned so businesses can expand or individuals can make purchases like homes and cars. All these actions stimulate the economy directly without the (inefficient) government taking a cut.
Note to liberals who don’t believe in free markets. At 8:11 of this clip Elizabeth Warren says: “I believe in markets. I believe in all of the wealth that markets produce.”
Most conservatives are more compassionate than the Left credits them for. However, they advocate a different approach for helping those in need and this illustrates a fundamental difference between liberals and conservatives. Whereas liberals tend to see more government as the solution to every problem, conservatives see bigger government as the last resort, and they know that any “free money” program will be abused. For example, they point out that there were no entitlement programs in the United States before the 1930’s. Those in need were helped by family, neighbors, friends, and their community as long as they needed help. This principle is still practiced by the Amish and many Mormons.
Another thing wealthy people do with their money is use it for charitable activities. (For example, Warren Buffett, Bill Gates and other mega wealthy people have committed to give away most of their fortunes. And look at all the charity events taking place every week in cities all across America and all the hospital wings and university buildings named after wealthy donors.) Again, these direct contributions are more efficient than inefficient governments taxing and taking their cuts before allocating the money to its end use.
A basic liberal idea is that the government can do things better than alternative methods, but
wealthy people helping directly is much more efficient than this sequence which involves inefficient government:
• The Federal government takes their money via taxes.
• The Federal government takes its cut.
• (In many cases) the money is sent to states whose governments take their cut.
• In the end there’s little left for the original purpose.
For example, your city needs a $100 million bridge. It’s a better, more efficient use of capital to sell bonds to wealthy people, pension funds, etc., to raise the money then charge the users tolls to pay it off than to tax wealthy people $200 million, and after the federal, state, and possibly city governments take their cuts there’s $100 million available for the bridge.
The Blight Authority is another example of a private non-profit organization working with cities to remove and eliminate all blight elements in a community.
https://www.theblightauthority.com/
b. Taxes
The typical way for liberals to spread the wealth is to raise taxes on successful people and businesses. But taxing something results in less of it. Liberals know this because in several cities they have increased taxes on cigarettes to reduce smoking and high sugar content sodas to reduce their consumption. Taxing income from work results in less work and less income. Example: In the early 50’s when Ronald Reagan was a movie star, he was offered a million dollars to make a movie. He turned it down saying that he had already made a million dollars that year, so between the federal tax rate of 90% and state taxes he would make nothing. That movie was a potential business that would have employed hundreds of people for several months, but it never got off the ground.
(A related economic principle is that if you subsidize something, for example poverty, you’ll get more of it.)
Another benefit of tax cuts is that they eventually lead to increased tax revenues due to increased business activity, employment and wages. We learned this in the 80’s when Ronald Reagan slashed the top tax rate from 70% to 50% in 1981 then to 28% in 1986. Here are two excerpts from this article:
https://www.wsj.com/articles/SB10001424052748703989304575504192870395162
“By the time President Reagan left office, the economy was generating more tax revenue at a maximum 28% rate than many on the left forecast it to generate at a maximum 70% rate.”
“The official government tax revenue and economic forecast models … do not capture most of the incentive and long-term effects of tax-rate changes. As a result, they give the wrong answers. These models missed the revenue gains from the 1978 and 1997 capital-gains rate cuts.”
Democrats always call Republican across the board tax cuts “tax cuts for the rich.” But across the board tax cuts are both fair and good for the economy. The top 1% of filers pay about 40% of the total taxes, a share greater than the bottom 90% combined. The top 10% pay about 2/3 of the total taxes. Doesn’t that sound fair? And the Reagan tax cuts led to the top 1%, top 10%, etc., of individual tax filers paying more taxes with a top tax rate of 28% than they paid with a top rate of 70% because they earned more money in a better economy!
(The effect of tax cuts is a complex topic with much disagreement among economists. This Politifact article
is a comprehensive discussion of the data and various opinions. In it we see this: “the two economists (Christina and David Romer) found that a tax cut of $1 raises the GDP by roughly $3 over the following three years.” And the “results suggest that the maximum potential impact of cutting taxes may actually be up to three times bigger than Obama's advisors assumed it was during their policy simulations.” Also in the article: “Finally, economic researchers Andrew Mountford from the University of London and Harald Uhlig from the University of Chicago wrote in a July 2005 paper that "the best fiscal policy to stimulate the economy is a deficit-financed tax cut.")
One thing liberals often forget is how important jobs are. If everyone who wants a job can get one, that solves a lot of the country’s economic and societal problems. It is not a good idea to over tax the productive, job creating part of the economy—to take money from wealthy people who invest and innovate and let the inefficient government manage it. But Democrats have made several proposals to do just that.
They have proposed extreme increases to the tax rate for those earning more than $20 million dollars per year—up to a 70% federal tax rate. Those making over $20 million per year have proved they’re good at making a business work or knowing what businesses to invest in, resulting in many new jobs. If they can suddenly keep only 30% of post federal tax profits, they will stop investing as soon as they’ve made $20 million and no new jobs will be created. (See the Ronald Reagan story earlier in this section.) Then instead of the government getting 38% of a lot of money they’ll get 70% of zero and there will be fewer jobs.
One head of an organization that promotes liberal ideas defending the 70% tax on annual incomes over $20 million was a guest on CNBC when a host said: “But Steven Spielberg won’t make a third movie this year if he’s already made $20 million and will make only 20%-30% (including state tax) on the next one. The guest’s response was that people like that love what they do and will do it for 20-30% profit. Like many liberal statements, that sounds good but is totally wrong and shows a lack of real-world experience. Not every project is a success. So investors have to allow for (possibly huge) losses on some projects. Maybe Steven Spielberg whose projects are mostly successful would make a third movie, but many who have made $20 million would not take the risk for such a small potential profit.
Democrats have proposed raising the minimum wage to be a “living wage.” One proposal would set it at $15 per hour. There is a lot of data suggesting that this would result in a lot of layoffs. And why does a 16-year-old working at a summer job and living at home need a living wage? Entry level jobs are important to learn the basics of how to successfully hold a job. We need as many of these as possible, and raising the minimum wage too high too fast could eliminate millions of these jobs.
To be fair, there are some adjustments to the tax code that should be discussed. These include:
· Taxing carried interest (income flowing to the general partner of a private investment fund) the same as wage and salary income
· Eliminating the income cap on which social security must be paid—currently $137,000.
· Eliminating stepping up the basis for inherited securities.
c, Income/Wealth Inequality
What about income inequality? Inflation is perhaps the biggest reason that income inequality appears to be getting worse, but we don’t hear this discussed. Let’s say hypothetical person 1 made $5,000 per year in 1965 when a loaf of bread and a gallon of gas were each 25 cents and person 2 made $10,000 per year then. Now, due to inflation, a loaf of bread and a gallon of gas are each approximately $2.50, having increased by a factor of 10. If each person’s salary increased by a factor of 10, they would now be $50,000 a year and $100,000 a year. It’s wrong to look at the income inequality in absolute numbers and say it went from a $5,000 difference to a $50,000 difference, because each person can still buy roughly the same amount of goods and services. The correct way to look at change in income inequality is to look not at raw numbers but at percentages. Person 2 originally made twice as much and still makes twice as much, so the income inequality has not increased at all.
(College tuition and in some areas real estate (mainly due to the desirability of the best places to live) have gone up more than bread, gas, etc., so are real contributors to income inequality. The excessive increase in college tuition is largely due to administrative “bloat” and government supported student loans. (When it became easier for students to get loans, it became easier for colleges to raise student costs.) Such problems are ripe for disruptive solutions and some are beginning to show up, for example tiny and other easy to assemble houses.)
Wealth disparity is greatly affected by investing. Wealthier people are more likely to invest in the stock market and benefit from compounding returns.
Here's a specific example investing in the Dow Jones Industrial Average in a taxable account. The amount of $50 invested monthly in the Dow Jones Industrial Average starting in 1965 with dividends reinvested and after mandatory taxes on dividends and distributions would have been worth approximately $214,000 4o years later in 2005. This period includes 7 recessions (1960-1961, 1969-1970, 1973-1975, 1980, 1981-1982, 1990-1991, 2001) when the stock market went down significantly, including two drops of about 50%.
When one is making regular investments, recessions are good because the investor is getting more for their money with each investment.
Increasing the amount of invested funds with increases in salary will of course lead to a much higher end result.
The average annual return of the S&P 500 since its inception in 1926 through the end of 2020 was about 10% a year. A calculator at this site
https://americanfundsretirement.retire.americanfunds.com/tools/calculators/investment-calculator.htm
allows you to see the results of regular investments for various numbers of years assuming hypothetical rates of return. For example, $50 dollars a month at 10% a year for 40 years grows to $282,000, for 35 years grows to $177,000, and for 30 years grows to $105,000.
So if a 25 year-old adds $50 to an S&P 500 index fund in a non-taxable account like a 401(k) plan or an IRA every month for 40 years, increases the monthly amount to $100 at age 30 and to $150 at age 35, at age 65 they can retire with $282,000+$177,000+$105,000=$564,000.
We and our schools need to teach our children about these benefits of regular investing. By investing 1/2 the money spent on expensive beverages (for example, coffee), alcohol, cigarettes, drugs, tattoos, lottery tickets, and gambling, most individuals and families could be millionaires by the time they retire.
The key to this “How everyone can be a millionaire” plan is to “pay yourself first” every month—after paying essential bills, make your investment before discretionary spending begins.
And of course every worker should take advantage of tax free investment returns by maxing out their 401K and IRA’S.
Section a. Free Market Capitalism explained the superiority and benefits of free market capitalism. Some people making more money and becoming wealthier than others should not be vilified. It is an unavoidable consequence of capitalism, like 40,000 deaths per year is a consequence of Americans driving cars. Attempts to reduce income or wealth disparity must be fully evaluated to determine any adverse effects on the economy and society.
3. Liberals Today
Nowhere is liberal emotion and irrationality more extreme than in the far left today who appears to be taking over the Democratic party. In the abstract they claim to love everybody. They talk about human worth a lot, and they claim to embrace diversity. But they don’t like diversity of thought and hate anyone who disagrees with their political or societal views including Donald Trump and all his supporters—more than 40% of Americans.
No one describes this group better than Brandon Straka who founded the #WalkAway (from the Democratic Party) movement. In this brilliant clip
https://www.youtube.com/watch?v=4Pjs7uoOkag&feature=youtu.be
he says: “For years now, I have watched as the left has devolved into intolerant, inflexible, illogical, hateful, misguided, ill-informed, un-American, hypocritical, menacing, callous, ignorant, narrow-minded, and at times, blatantly fascistic behavior and rhetoric.”
He points out contradictions such as:
They reject racism but blame all society’s problems on white people.
They advocate gender equality but hate and are intolerant of white men.
He goes on to say:
“I have watched as the left has allowed themselves to become hypnotized by false narratives and conclusions, perpetuated by social justice warriors who misrepresent and misconstrue facts and evidence and events to confirm their own biases that everyone who does not comply with their prejudicial conclusions and follow their orders is a racist, a bigot, a Nazi, a white supremacist, homophobic, Islamophobic, xenophobic, misogynist, and alt-right extremist. And I've watched as they've used these heartless and carelessly assigned labels to intimidate, threaten, bully, silence, attack, un-employ, blacklist, and destroy anybody who dares to fight back.”
In another interview he said, “The Democratic Party has taken for granted that it owns racial, sexual, and religious minorities in America. It has encouraged groupthink, hypocrisy, division, stereotyping, resentment, and the acceptance of victimhood mentality. And all the while, they have discouraged minorities from having independent thoughts, open dialogue, measured and informed opinion, and a motivation to succeed.”
Black women with a large social media presence like Diamond and Silk and Candace Owens frequently agree with Brandon’s claims. Specifically that the Democratic Party has encouraged minorities’ acceptance of the victimhood mentality and have discouraged independent thought and a motivation to succeed.
Here’s one example of liberal behavior today. They focus on what they consider differences in privilege and not on constructive solutions. As Scott Adams says in his book Loserthink, “if a white male in America has ten ways to succeed and an African-American only has eight, it isn’t productive to focus on the difference. It is more productive to pick a path to success and take it.”
Former President Obama has recognized how the left today, especially college students, attacks (“calls out”) even good people for perceived flaws. Here he is criticizing that type of behavior.
https://twitter.com/i/status/1189349299118
One glaring characteristic of many liberals today is their disdain for capitalism and support for socialism. This site’s Media, Academia, and Online Bias web page, documents that 70% of millennials would likely vote for a socialist candidate. Furthermore, 19% of them see The Communist Manifesto as a surer guarantee of freedom and equality than the Declaration of Independence, and 15% think that the world would be a better place if the Soviet Union still existed. This link at that web page
https://www.zerohedge.com/economics/4-reasons-why-socialism-becoming-more-popular
explains that a big reason for this is the extreme left bias of our universities today. The article at that link concludes: “In light of this data, it should not be a surprise to us that students who have gone to college in this age of ideological extremism have come out radicalized and … socialized.”