When discussing Conservatism, I think that it is best to put the philosophy of the right into simple language and simple principles. If there is a major problem with Conservatism, it is that the language coming from the right, is not always clear. It is becoming more and more obvious that straight forward and simple points win. The left, or for our purposes today we will call them “the truly wise” feel justified in their plans to intervene in countless free market entities. Rather than surrendering to the attacks on the left, that would attempt to sell the right as “do nothing, or the party of no,” it is essential to put out easy to understand statements, to explain why the solutions of the right are superior to those on the left. Before that can happen it is important to describe what the most basic principles of Conservatism are.
- When you tax something, you get less of it.
This is a simple principle. If taxes are increased on employers, fewer jobs are created. Increase taxes on creativity, the result is fewer creative products. If an economy as a whole is taxed at a higher rate, all who rely on that economy will see negative results from it. Taxes should be seen as a necessary evil. The Federal Government does have basic responsibilities that require taxation; but, beyond that, taxation is a stumbling block to the free market and to more people having abundance.
How does abundance work with lower taxes? Let’s look at places that are run by high taxes and how that effects peoples lives. The “truly wise” love to preach the wisdom of public transit and higher fuel prices. They will then talk about how European Metro areas have higher public transit use and how these wise European Countries consume less gasoline. They are absolutely right, Europe is as they describe, but why? CNN.Money reported that in 2005, the average gas price was about $6.00/gallon for most Western and Northern European countries, while the average gas price was $2.27/gallon (according to the Energy Information Administration) in the U.S. No wonder public transit is so popular in European countries. If you can afford to buy a car, you would have to be rich to drive it. However, many cities in the U.S. are doing there best to follow Europe’s model as federal taxes increase. The point is, if you want less money to flow in the private sector tax at a higher rate.
What happens to a city when the city's taxes are too high? Beautiful cities in the U.S, Canada and Europe were once places of exciting new architecture and private sector growth. Today, if new architecture rises in these cities, it comes through public spending. Taxes have in many ways stunted the growth of these cities if not putting private ventures in full retreat. Once San Francisco, Manhattan, London, Munich, Vancouver, Chicago and Seattle were the images of exciting capitalism. Now, these cities have been replaced by names like Haifa, Tel Aviv, Kuwait City, Doha, Abu Dhabi and Dubai. Many of these new names were small desert villages just twenty years ago. These are now places that encourage new development by low taxes and by encouraging wealth, not demonizing it. These cities capitalize off the west’s anti-business taxes and policies. Despite the recent slowing in the Emirate, Dubai is the fastest growing city in the world, has the tallest building (by at least double it’s closest competitor) and is quickly becoming the financial, shipping, and real estate capital of the world.
- Regulation makes the production and distribution of products more difficult.
In the current Health Care debate, this is one principle that few of the left understand. The constant mantra that the growing expense of health care victimizes “the middle class,” ignores the fact that regulation, generally written by those who cry victim, is a large culprit to the rising cost of health care. The smoke screen of the health care bills coming from the left is that they will increase competition. If any business had to compete against an entity that didn’t have to worry about balancing a bottom line, such as a public run health plan, the free market competition would be in big trouble. This is the competition that would result in the answer coming out of Congress. Wouldn't it make more sense to make it easier for more free market entities to compete? On my show I have discussed a plan where certain groups of investors could pool their money together to buy cheaper insurance. These entities could choose what would be covered under their plans, such as, a pool of Catholic participants would have no need for abortion coverage or birth control coverage. These boutique investors could increase their pool by enrolling people all over the country and drive prices down. So why can’t we do these groups now? Because the regulations on insurance companies prevent the sort of competition that gives individuals that much choice.
Another form of regulation that hurts everyone is lawyer friendly law. There is a lot a talk about tort reform, which needs to be addressed; but, what about the laws that make it easy for predatory lawyers to assist in the growing cost of nearly everything, especially health care. I recently heard an ad on the radio that said ‘if you smoked, worked in a certain field and now have cancer, then you may be eligible for financial retribution. Your employer had you work in such an environment knowing that you were at risk.’ Hasn’t anyone asked how these lame law suits even make it past the first hearing? The answer is victim rights laws, written by lawyers turned law makers, who make the law easy for large vague lawsuits. If the left were truly serious about making health care cheaper, they would look at lessening the ease of which trial lawyers run up prices.
Outside health care, tariffs are a form of regulation that is often a reaction to other bad regulation. How? Lets look at the lumber industry. Environmental regulation makes lumber more expensive to buy domestically. The truly wise then slap a tariff on foreign lumber. This becomes a moral imperative to “save” the domestic industry. So what happens? The price of lumber increases to the point that any industry, that uses lumber, now has higher overhead. These industries could be: construction, furniture manufacturing, paper manufacturers, box makers, the electricity industry, telephone companies, (remember the put up utility polls), printers, pencil makers and the list goes on and on. Add the regulation that unionizes these industries and it is a miracle that any of these manufacturers survive at all. Tariffs are a way of attempting to save industries that have a difficult time competing, because of regulation or because they are producing an antiquated product.
- Subsidies support inefficiency and create artificial economic bubbles.
One principle that seems to have been largely forgotten, is that if an industry or service can’t compete, then it should go away. Unlike tariffs, subsidies are a form of supporting industries, which never had or have lost their economic legs. Corn Ethanol is presented as a way to lessen domestic fossil fuel consumption. Despite the fact that it requires more fossil fuel to manufacture and transport than gasoline. The corn alternative is economically uncompetitive. So, in come the “truly wise” to the rescue with subsidies. The subsidies make the price of corn increase at a rapid rate. So anything made from corn becomes markedly more expensive and the third world sees food riots due to the rising price of corn.
Subsidies don’t just make food or fuel less efficient, Amtrak is an another example of silly subsidy. When airline travel made it difficult for passenger trains to compete, the trains were subsidized. Then Amtrak was subsidized again and again, because they couldn’t show a profit. So what has this done to make passenger train travel more competitive? It’s still cheaper to fly, even when high fuel surcharges were placed on airline tickets. Some states have cheaper Amtrak tickets, like California, but these states use their own funding to further subsidize the service. Many subsidized industries should simply go away or be down-sized.
Let’s look at it this way. Suppose the “truly wise,” existed at the time of the Pony Express. The telegraph and railroad make it hard for the Pony Express to compete in letter delivery and so, the wise decide that the horse delivery service is “too big to fail.” The wise begin a series of subsidies to save the Pony Express. Then the telegraph and railroad have to increase their prices to stay in business and they end up having less money to invest in infrastructure. So fewer places in the country now have access to the cheaper alternatives. Letters become more expensive, fewer people can afford to travel by rail, cities that would have been reliant on rail never exist, and again the list goes on and on. The moral is that the truly wise should stop trying to “fix” things. The Pony Express was replaced by more efficient industries and was able to die healthy death, like many industries today should be able to do.
These first three principle are what I call the Reagan Principles of the anti-business stances of the “truly wise:”
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Presiden Reagan said this understanding that more often than not, the proposals and actions of the “truly wise” do more harm than good. Conservatives would do a great service to the nation to see the wisdom of getting out of the way of the free market.
To sum up the Reagan Principle a friend of mine contributed the following;
“Taxes should be very low, applied broadly, changed rarely and with great difficulty. The majority of problems, or supposed problems, that government seeks to solve would in large part be solved by increasing abundance and the creative enterprises and free associations of a free people over time.
Government, whatever methods it attempts to apply, by force, taxation and regulation, always reduces abundance. What you tax, you get less of: employment, enterprise, creativity, savings, investment, income. What you regulate you also get less of: employment, enterprise, creativity, savings, investment, income.”
Two more principles that Conservatives should embrace and understand are;
- Once a new Entitlement is created it is very difficult to make it go away.
In a recent on-line debate discussing the infamous House Health Care Bill, one of the bill's supporters made the point that there has been opposition to many new entitlements over the years. He then noted that now Medicare, Social Security and several other large entitlements are now part of the American fiber. He is correct on both points but not in the way that he would have hoped. His statement is evidence of the principle written above.
In a “town hall meeting” with Senator Bennett of Utah, I heard people ask questions on the proposed health care bills including Bennett’s bill. As people would ask their various questions, the majority of inquiries had to do with how their particular entitlements would be affected. “How will this affect me?“ Once these sweeping new programs are sold as essential, they become essential. Then those who depend on them, can’t live without them. Rarely do you hear people ask “what would have happened had an entitlement not been created.” The question that is more likely is “what will I do if my benefits are decreased.”
Entitlements become sacred cows. It is appropriate to call these big government programs entitlements because people feel entitled to receive these benefits. When a perspective congressman dares to bring up entitlement reform, generally voters run from him as if their ’fight or flight” instinct has just kicked in. When George W. Bush dared to attempt Social Security Reform, all the opposition had to do was raise a few uncertainties and the reform push died.
I hope that someday a greater part of the population will understand that they could have lived just fine without Uncle Sam cushioning them from any risk or pain, but until that happens, Conservatives need to do their best to see that new entitlements aren’t created. Especially when it comes to deficit spending. Beyond that, entitlements take away an individual’s ability to fend for themselves and others.
- Citizens should never vote to increase their own taxes.
This one would seem like common sense but it a much more abstract principle then one might think. How many times have you heard municipalities and states tell their voters that a tax increase is necessary to keep services going, or to build a new something. Often voters buy the new necessary initiative. How often have you heard people ask “why increase my taxes? Why not tighten your belt?” This should be a more frequent question.
If you live in a city with a zoo, a or a large library, light rail, a children’s museum, an aquarium, or any sort of municipal public service, they always need more money. Amazingly when these places need money the city, county or state, never have the money to keep them going. The responsibility to keep them going then falls in the citizens by way of a bond issue or higher taxes. This is despite how expensive these places often are to visit. Amazingly, even with the high prices to enter these public places, they can’t break even. This is in part to the subsidy principle mentioned above. There is always a public tax increase or bond to save the day; so, they never have to innovate or find ways to be economically self sufficient.
Bond issues are a tax hike because they have to be paid for. Even though the proponents of bonds will never say that. The truth of the matter is that in some ways they're worse, because the interest has to be paid by tax payers. In general, wouldn’t it be refreshing to have an elected official say “we will find the funding for something by being efficient or tightening our budgetary belts." Until this miracle happens more often, it is essential for more voters to understand that voting to increase taxes is never a good idea.
Here is a quick example of what can happen when tax increases are sold to the public. In a city in Northern Utah named Ogden, I saw a great example of why one should never vote to increase taxes. Salt Lake County has a very popular, and expensive, light rail system. The Citizens of Ogden were sold the idea that if they increased their property taxes, they would soon enjoy a light rail system in their area as well. The issue passed with a large majority. That was ten years ago. Today Ogden still does not have light rail, in fact it is not coming any time soon. Do you think that the property taxes have been lowered? No, they haven't been.
To summarize:
- When you tax something, you get less of it.
- Regulation makes the production and distribution of products more difficult.
- Subsidies support inefficiency and create artificial economic bubbles.
- Once a new entitlement is created it is very difficult to make it go away.
- Citizens should never vote to increase their own taxes
These principles of conservatism should be understood by all who would call themselves conservative, captilists or lovers of the free market. There may well be a resurgence of the right in our republic; but, if we elect a majority who don't see these five principles as integral, then we will be in the current malaise for a longer period of time.
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