Friday, Jan. 7, 2011
The Money Paradox
If there's
one thing you can still count on from today's increasingly erratic politics, it
is pure unadulterated paradox. In a Washington circus that features as many
morons as oxymorons, we have self-described deficit hawks who promote tax cuts,
alleged war opponents who back war escalations, and supposed anti-government
conservatives who press to expand the National Security State. Heck, we even
have senators who famously brag of voting for things before voting against them.
That said, for sheer Ringling Brothers-grade flamboyance, none of those contradictions matches the one relating to money. With spectacular regularity, cash is now simultaneously billed as both all-powerful and completely powerless, depending on whom the particular definition serves.
Exhibit A is the December fight on Capitol Hill over spending and tax cuts. A standard back and forth over macroeconomics, the debate saw politicians of both parties assert that different ways of deploying taxpayer resources would guarantee different results from economic actors. Pass more tax cuts, said Republicans, and profit-seeking small-business owners will be motivated to hire more workers. Provide more unemployment benefits, said Democrats, and the jobless will be moved to spend more on consumer goods.
These messages, unflinchingly transcribed by a servile press corps, all echoed the basic assumption that money is the prime motivator of human action. The underlying theory is simple: Cash goes in, actions automatically come out. It makes basic mechanical sense ... until you listen to what else is being said at the same time.
A week after the tax cut bill passed, the Washington Post reported that Montana Sen. Max Baucus (D) had held a big fundraiser on the day the Senate was voting on the legislation. Since the measure disproportionately benefited Baucus' rich donors, the question was simple: Did the campaign cash influence his "yes" vote in the same decisive way that his Senate colleagues said tax-cut cash would affirmatively influence employer hiring?
"Money has no influence on how Sen. Baucus makes his decisions," said the senator's spokesperson.
The refrain epitomizes how Washington regularly writes cash out of the political narrative. But it's merely one of many examples, and not just from politicians either. The whitewashing pervades much of the political press, too.
Last week, for instance, The New York Times' Matt Bai penned a slobbering paean to Rahm Emanuel that simultaneously omitted the Chicago mayoral candidate's investment banking career and aggressive corporate fundraising, while definitively declaring that Emanuel has "spent most of his adult life doing the people's work."
This week, most of the political press touted two prospective White House staffers, Bill Daley and Gene Sperling, primarily as "former Clinton officials" rather than as a JPMorgan executive and a Goldman Sachs contractor, respectively. Next week, you can bet it will be more of the same.
"The political and media class says money never motivates anyone in politics at the same time they insist we live in a free market whose only motivating factor is money," says MSNBC's Cenk Uygur, summing up the paradox.
Which is reality? Does money play a major role in human behavior—and specifically in both economic and political decision-making? Or does money play no role at all? It simply cannot be both at the same time. So which is it?
The answer should be obvious in this golden age of political corruption. As alien and bizarre as Washington, D.C.'s culture has become, money is still money—even in the nation's capital. It buys, incentivizes and persuades, no matter if the transaction is documented on a grocery-store receipt or a campaign finance report. The paradox may distract us from that axiom, but it is, indeed, an axiom—and it holds true regardless of whether a widget or a congressman is up for sale.
David Sirota is a best-selling author whose upcoming book "Back to Our Future" will be released in March of 2011. He hosts the morning show on AM760 in Colorado and blogs at OpenLeft.com. E-mail him at ds@davidsirota.com or follow him on Twitter @davidsirota.
That said, for sheer Ringling Brothers-grade flamboyance, none of those contradictions matches the one relating to money. With spectacular regularity, cash is now simultaneously billed as both all-powerful and completely powerless, depending on whom the particular definition serves.
Exhibit A is the December fight on Capitol Hill over spending and tax cuts. A standard back and forth over macroeconomics, the debate saw politicians of both parties assert that different ways of deploying taxpayer resources would guarantee different results from economic actors. Pass more tax cuts, said Republicans, and profit-seeking small-business owners will be motivated to hire more workers. Provide more unemployment benefits, said Democrats, and the jobless will be moved to spend more on consumer goods.
These messages, unflinchingly transcribed by a servile press corps, all echoed the basic assumption that money is the prime motivator of human action. The underlying theory is simple: Cash goes in, actions automatically come out. It makes basic mechanical sense ... until you listen to what else is being said at the same time.
A week after the tax cut bill passed, the Washington Post reported that Montana Sen. Max Baucus (D) had held a big fundraiser on the day the Senate was voting on the legislation. Since the measure disproportionately benefited Baucus' rich donors, the question was simple: Did the campaign cash influence his "yes" vote in the same decisive way that his Senate colleagues said tax-cut cash would affirmatively influence employer hiring?
"Money has no influence on how Sen. Baucus makes his decisions," said the senator's spokesperson.
The refrain epitomizes how Washington regularly writes cash out of the political narrative. But it's merely one of many examples, and not just from politicians either. The whitewashing pervades much of the political press, too.
Last week, for instance, The New York Times' Matt Bai penned a slobbering paean to Rahm Emanuel that simultaneously omitted the Chicago mayoral candidate's investment banking career and aggressive corporate fundraising, while definitively declaring that Emanuel has "spent most of his adult life doing the people's work."
This week, most of the political press touted two prospective White House staffers, Bill Daley and Gene Sperling, primarily as "former Clinton officials" rather than as a JPMorgan executive and a Goldman Sachs contractor, respectively. Next week, you can bet it will be more of the same.
"The political and media class says money never motivates anyone in politics at the same time they insist we live in a free market whose only motivating factor is money," says MSNBC's Cenk Uygur, summing up the paradox.
Which is reality? Does money play a major role in human behavior—and specifically in both economic and political decision-making? Or does money play no role at all? It simply cannot be both at the same time. So which is it?
The answer should be obvious in this golden age of political corruption. As alien and bizarre as Washington, D.C.'s culture has become, money is still money—even in the nation's capital. It buys, incentivizes and persuades, no matter if the transaction is documented on a grocery-store receipt or a campaign finance report. The paradox may distract us from that axiom, but it is, indeed, an axiom—and it holds true regardless of whether a widget or a congressman is up for sale.
David Sirota is a best-selling author whose upcoming book "Back to Our Future" will be released in March of 2011. He hosts the morning show on AM760 in Colorado and blogs at OpenLeft.com. E-mail him at ds@davidsirota.com or follow him on Twitter @davidsirota.
© 2011 CREATORS.COM
Money is "Legal Tender", just a symbol for a product's / service's / instrument's value. The purpose of putting a dollar value on something is to make it easier to close the deal when the items being bartered have differing value to the two parties.
In the days of old, I could pay the doctor with a chicken, but what if Doc didn't want anymore chickens? Too much trouble for me or Doc to trade the chicken for a shoe, then trade the shoe for a bar of soap, then the soap for the thermometer that Doc does want. Legal Tender was easier.
By the way, once that dollar value is set, it is easier to calculate a tax. The IRS hated bartering, because their idea of what the barter was worth never matched what the bartering parties wanted to report. (ever sold a car for cash but told the DMV something else?)
That dollar value means the deal-makers can get increasingly abstract, get very far away from the concrete. So far that they really lose sight of what the trade value really is, and that is the working fodder of the con-man, the Circus RingMaster.
Since going away from the gold standard, the dollar has been greatly misapplied. No wonder businesses now need a 40% markup. They need to pay for advertising, taxes, executive bonuses, etc. In the end, it means the customer must take a 40% loss in order for that to work. Not so good for the working man.
Corporate-speak is forever talking about "accelerate", "drive", achieving "110% over last year" after already taking "the low hanging fruit". That's the point of all this giving tax cuts to the rich instead of giving a hand-out at the bottom and letting it work its way up the economy. Got to "accelerate" that flow up to the top, even if it means bypassing the working class economy on money's redistribution into the hands of the rich. The faster Mr. Big makes money, the quicker he can buy out the competition, until he truly is the only game in town, and now life for us is lived on his terms only. He doesn't care if nobody gets a meal as that money worms it's way to his counting house, he doesn't walk down our starving streets anyway.
On these bail-outs we had. Has anyone noticed that the sole intent was for us to use it as mere down payment, for us to buy on credit (money for Mr. Big today), leaving is to follow through with making payments, long after the thrill of the purchase is gone, long after Mr. Big has spent that money on someone else's Main Street? Mr. Big was not intending to stick around and see what happened to us.