Wednesday, November 3, 2010

That Damn Rand Paul

I came across this video on a liberal acquaintance's Facebook page.  The clip is of Rand Paul discussing economic interconnectivity in a post-election interview.  My acquaintance's comment was "easy words coming from a middle aged white man with money, power and legacy."  A friend of her's commented that this was a "damning video."  I hope they, and you, will allow me to explain why there is nothing damning about this at all.

First of all, even from a Liberal's standpoint, I'm not understanding how it's damning that he doesn't believe taxes should be raised on anybody.  We are in a position economically that raising taxes at any level will, not might, will, hurt the economy.  Beyond that, a discussion on interconnectivity is warranted.

Economically speaking the idea of interconnectivity is more true than untrue.  If interconnectivity has decreased over time it's because the government has gotten in the way of it, becoming the primary source of income for many of the poor, rather than incentivizing them to go to work.  Ideas like interconnectivity are economic arguments of efficiency.  Is it more efficient for a poor or middle class person to receive money for services rendered in the private market, or for the government first to tax the higher income person more, collect that money, then distribute back out to the poor person?

The answer to that question is answered within the question.  Of course it's faster for someone to have a job in the private market where he or she is paid every week.  The problem has become that government programs assume by default that the poor cannot rise on their own within the private market, when in many cases, history bears out that the inefficiency created by said government intervention has made it worse for the poor, rather than better.  The Chicago Housing Authority for instance, segregated black poor into the south and west sides, and cut them off almost entirely from the city's normal flow of economic activity, forcing them eventually to rely on government subsidy.  It was not the intended consequence, but it was the consequence, nonetheless.  Now the CHA is rehousing everyone, and is insisting that their tenants be spread all throughout the city, in order that they be more likely to be within the normal flows of economic activity.  They are requiring interconnectivity and promoting efficiency.

Contrary to what the folks at Kos may believe, Rand Paul does not believe that there are no poor people.  There are poor people.  Always have been, always will be.  His intent is to move us away from thinking in terms of the status quo of class warfare.  His intent is to move us away from thinking in terms that the government is the only entity that can possibly be responsible for aiding the poor.  It's an idea of economic efficiency, and an idea of promoting more self reliance within our culture, generally speaking.  And both of these are good ideas.


  1. That reminds me of the statement: "There is no such thing as corporate taxes." The reasoning is that corporations will simply pass it on to the consumer.

    Whether you tax the rich or tax the poor, one has an effect on the other. Maybe less directly in one case or the other but it has an effect nonetheless.

  2. I would imagine corporate taxes are estimated in to the price point of goods to the extent that the market will bear it. A company does still need to sell its product, after all. At the end of the day, whatever was clear profit is what is taxed. Where you see it "passed on to the consumer" is more to the effect of a sin-tax on gas or cigarettes, which is piled on top of the production price. Value-added taxes like that are passed along pretty directly to the consumer.