Archive for the ‘Rhetoric’ Category

Is the Social Security Trust Fund a Liberal Own-Goal?

November 12th, 2010 13 comments

The Social Security trust fund is one key rhetorical crux of our budget debates. (I’m punting on Medicare here for the moment; it’s obviously the elephant in the room.)

Liberals think of the trust fund as a big national savings account. They point to the trust fund’s promises to future retirees, their multi-decade contributions to the trust fund, its solvency (it’s been banking >$150 billion in surplus revenues every year [except — for obvious reasons — 2009]), and its projected longevity, to assert that Social Security is in great shape. Just some slight tweaks needed.

Conservatives say the trust fund is a sham, because it contains nothing but promises from the government. Social Security is just a(n unaffordable) transfer program — from younger working people to retirees, the disabled, and widow(er)s and orphans.

Who’s right?

Liberals are totally correct that minor tweaks in revenues and/or spending are all that’s needed. (75-year projected deficits are about 2% of future payrolls, .6% of GDP. Since our country currently taxes about 30% less than most other prosperous countries — 28% of GDP compared to 40% — filling that .6% gap would not be onerous.)

Conservatives are right that the trust fund is basically a chimera. Social Security is for all purposes (you can argue intents amongst yourselves) a pay-as-you-go transfer program.

If we eradicated the trust fund today (along with the debts that government owes to that trust fund), arithmetically it would change exactly nothing. We’d still have revenues and outlays for Social Security. Subtract outlays from revenues, and you’ve got the SS surplus or deficit. It just doesn’t matter whether those revenues and outlays pass through the trust fund, shifting its balances up and down. It’s the same thing as shifting overall government debt up or down.

All of a sudden you’d see $1xx billion dollars a year in additional government revenue (the current annual Social Security surplus). But the government would spend all that instantly, right? We’d owe it to future generations, because we have promised it to them. But that’s exactly what’s happening today. The government is spending those revenues and issuing bonds a.k.a. promises to the trust fund. That’s already a fact, as embodied in the unified budget (combining “on-budget” revenues and spending with the trust funds for Social Security, Medicare, etc.)

But here’s what really bothers me: by insisting on the reality of the trust fund, liberals are putting themselves in a rhetorical trap.

Want to make the Social Security trust fund sustainable long-term without cutting benefits? The obvious solution is to increase its funding source: payroll taxes. The only alternative is for general government to pay for future shortfalls, which would mean admitting that … it’s a transfer program.

But this is an illiberal proposal because payroll taxes are horribly regressive. 1) They only tax earned income — which people presumably actually worked to acquire, and 2) You don’t pay payroll taxes on earned income above $106,800/year (much less on income from your virtuous, meritorious ownership of things).

There is one progressive solution even within this rhetorical box: Remove the $106,800 cap. But once again the liberal rhetorical position precludes it: that cap is only justifiable if you buy into the trust-fund/savings account concept. “People shouldn’t have to put in more than they take out.” If you acknowledge that Social Security’s a transfer program — and that people’s inputs don’t necessarily match their eventual receipts (they don’t, even now, especially if you compare generations), there’s no a priori reason to retain the cap.

Simply removing the earnings cap on payroll taxes would fill the .6% Social Security gap beyond the predictable future. To 2083, to be (falsely) precise. See the CBO’s July 2010 Social Security Policy Options (PDF), pages xi and 18. (Thanks, Bruce.)

It sounds reasonable given that our tax system (state, local, federal combined) is currently not progressive at all above about $60,000 a year in income.

But still: you’re only taxing earned income. And — conservatives will be happy to point this out, correctly — taxing earned income discourages people from working and building overall prosperity. Acknowledging that Social Security is a transfer program lets us fund it with more economically efficient and more equitable taxes like carbon taxes or even — gasp — increased taxes on unearned investment income, or wealth.

Am I Channelling David Stockman, or Is He Channelling Me?

September 30th, 2010 Comments off

He could have written my last two posts, or I could have written the script for this:

Media Player | WBUR and NPR – On Point with Tom Ashbrook.

The Stockman interview starts at 12:03. It would be uncanny, if both of us weren’t simply stating the obvious.

He got two things wrong — it’s the last thirty years, not the last forty (he corrects himself later), and yes, there is a responsible party, that consistently pays its bills.

The Reaganomics Strategy: A Legacy of Debt

September 28th, 2010 Comments off

I’ve laid this out before, but I wanted to give it its own post so I could refer to it — notably in my next post.

The Reaganomics Strategy is a brilliantly effective (and profoundly irresponsible) political strategy. It goes like this:

Borrow money from our children and from abroad, and use the money to buy votes here with the world’s oldest political pander: “I’ll cut your taxes.”

Just tell the people they don’t have to pay for the government they insist on receiving. Borrow to pay for it instead. It gets you elected, right? Deficits be damned.

When Cheney said “Reagan proved that deficits don’t matter,” he was making a political, not an economic statement. People (especially Republicans) love to self-righteously complain about deficits and debt, but they vote for the person who promises to cut their taxes.

Here’s the legacy of The Reaganomics Strategy:

After declining steadily for 35 years after WWII (from 120% to 35% of GDP) — with Republicans and Democrats alike responsibly paying off the debts of that war during a multi-decade economic boom — in 1981 debt started spiking, and has been doing so ever since (except under Clinton).

The Bush II spike in particular is simply stupefying, and we know the four sources of that spike: two wars, Medicare Part D, the economic bailout, and — of course — massive tax cuts.

Is it any wonder that Democrats complain of hypocrisy, when Republicans — supposed “fiscal conservatives,” vilifiers of Keynesian stimulus — have been engaged in a nonstop thirty-year binge of deficit spending and Keyensian stimulus gone wild — in both good times and bad? (Keynes advocated deficit spending during recessions, and building surpluses during expansions — straightforward stuff that both economists and everyday people see as being sensible, prudent, and the best path to growth and prosperity. Maybe Republicans don’t really believe in sensible, prudent policies that yield growth and prosperity.)

But even with that endless flood of government stimulus, Reaganomics-driven government- and regulation-slashing — supposedly such spurs to growth — have resulted in only tepid economic growth compared to the pre-Reagan era — and little to no growth in middle-class incomes. (Trickle-down is supposed to … trickle down, right? Eventually?)

We’ve done the experiment. It failed.

Now don’t get me wrong. I don’t blame all this on what Ronald Reagan did. He was a pretty good Keynesian compared to today’s lot — he raised taxes when times got good, to the tune of about half his bad-times tax cuts. I blame it on the ideology he promulgated.

Reagan loved to spout the Government Is Bad gospel — it was good rhetoric, good politics — but he didn’t actually live by it. He spent half his life in government. But his dee-sciples, they’re another story. With the wild-eyed (glassy-eyed?) zealotry of typical disciples, they’ve translated that rhetoric into a childishly simplistic and unabrogatable gospel that is a cartoonish caricature of Reagan’s relative pragmatism.

That’s the legacy that Obama is saddled with — thirty years of profound fiscal malfeasance. He’s set to flatten out the debt curve (once again, responsible Democrats cleaning up after Republican profligacy), but he won’t be delivering robust economic growth, much less a balanced budget, any time soon. That opportunity was squandered long ago.

Reagan was able to come off looking pretty good, because Volcker was able to turn on the monetary tap in ’83. The economy — including the unemployment rate — turned around within months.

Bernanke and Obama don’t have that luxury. The Republicans have had the tap wide open for thirty years.

So while Obama’s popularity ratings seem to be tracking Reagan’s almost perfectly right now, don’t expect that to continue. He’s in the unhappy position of dealing with a fiscal time bomb that was planted starting in 1981.

Do Experts Know Better?

April 14th, 2010 9 comments

My friend Steve likes to proclaim the value of casual intuition — based on one’s day-to-day observations over the course of life — and downplay the value of expertise, analysis, and data in making good judgments. Among other things, he defends Sarah Palin and other less-thinkerly politicians on these grounds.

He also points to Robert McNamara — the king of data analysis — as having failed utterly in his judgments on Vietnam. This putting aside the facts that 1. Steve’s casual intuition would have led him to exactly the same policies (if not worse), and 2. McNamara’s data was not the driving force behind the big decisions and judgments on Vietnam. They were at best excuses, self-justifications, rationalizations, or simple thumb-twiddling. McNamara actually manufactured a system that delivered systematically false data.

Also: systematic, in-depth knowledge — rooted in research, analysis, and frequently, data — is obviously not sufficient to guarantee good judgment. But it is arguably necessary. Or at least, it (greatly?) improves the odds of making good judgments. If the Bush administration, for instance, had had some basic knowledge of the difference between a Shiite and a Sunni…

One of the key books on this field is Philip Tetlock’s Expert Political Judgment. He argues — based on analysis of 82,000 predictions by 284 experts — that political experts perform only slightly better than random dart throws. It’s a pretty damning condemnation of experts.

But as Bryan Caplan has pointed out, there are two fatal flaws in Tetlock’s argument:

1. He only examines questions that are highly controversial among experts. (If 50% believe each way, 50% will inevitably be wrong.) Tetlock explicitly ignores the “dumb” questions that seem to the experts to have obvious answers, but which everyday folks might consider controversial.

2. He doesn’t compare the the experts to the average person on the street. The only such comparison in the book is between experts and Berkeley undergrads — who are darned high on the elite/expert spectrum, in absolute terms. And even in that comparison, the experts win in a landslide. The undergrads aren’t even as good as chimps or dartboards.

This suggests that if you looked at those “obvious” questions — which are often not at all obvious to non-experts — and compared casual to expert opinion, you’d see experts being right far more of the time. As they say in the biz, “more research needed.”

Tetlock does reveal another fact, however, that serves to seriously undermine one’s confidence in the intuitionally inspired beliefs of Sarah and similar: among the experts, “foxes” — those who in Nicholas Kristof’s words are “are more cautious, more centrist, more likely to adjust their views, more pragmatic, more prone to self-doubt, more inclined to see complexity and nuance” — resoundingly beat out the “hedgehogs” — those who “have a focused worldview, an ideological leaning, strong convictions.”

Is this also true of everyday folks? Based on my many years of decidedly non-systematic observation, I would suggest that it is.

Update: Chris’ comment,

This worked well enough back when virtually all information of note was controlled by experts.  Now they’re forced to compete with everyone, which has the nasty side effect of forcing people to become steadily more extreme and loud just to be heard.

Reminds me of another takeaway from Tetlock’s research. Again quoting Kristoff because he summarizes it well:

the only consistent predictor [of accuracy] was fame — and it was an inverse relationship. The more famous experts did worse than unknown ones. That had to do with a fault in the media. Talent bookers for television shows and reporters tended to call up experts who provided strong, coherent points of view, who saw things in blacks and whites.

In other words, the loudest, most simplistic, and most dogmatic “experts” — the extreme hedgehogs — 1. are the least accurate, and 2. get the biggest megaphone.

Delight and Abject Dismay on Richard Dawkins’ Birthday

March 26th, 2010 15 comments

Another of those convergences: I just joined the Richard Dawkins group on Facebook, and discovered that today is his birthday. (Happy birthday sir!) It’s a convergence because over the last week I’ve been horribly dismayed. After decades of near hero-worship on my part, I’ve discovered that he is not acting as the man I’ve always believed him to be.

The issue is his position on group selection. (Don’t go away: it matters.) The way he has defended that position seems contrary to everything I have always so admired about him.

And I have so admired him, for so long. I have to watch myself constantly to avoid the kind of wild-eyed evangelism that serves only to give aid and comfort to the creationist enemy. The Selfish Gene and The Extended Phenotype provided (some of) the fundamental underpinnings for my understanding of (human) existence, and the belief and value system that’s built on that understanding.

I didn’t really need to read The God Delusion — preaching to the choir — but I did so and greatly enjoyed it purely for the joy of his arguments — the lucidity, the cogency, the logical and rhetorical coherence.

I can’t count the number of times I’ve recounted his anecdote about an aging professor who changes his mind. (“My dear fellow, I wish to thank you. I have been wrong these fifteen years.” . . .  “We clapped our hands red.”) It still brings tears to my eyes when I read it, and epitomizes how science, for all its real-world failings, is fundamentally different from faith. (Here. Start with “It does happen.”)

So, again, I’m nearly teary-eyed at the stance he has taken, and the rhetoric he’s deployed, in response to a body of thinking that has grown over decades and came to something of a culmination in 2007. (I’m late to the party on this one.) That body of evidence and theory contradicts one of his longest- and strongest-held beliefs: that group selection is hooey, that it could not have had any role in the evolution of human altruism.

Remember the stated goal of Dawkins’ seminal book: “My purpose is to examine the biology of selfishness and altruism.”

His basic theory: genes are the units of selection, and organisms are the vehicles of that selection. If a gene causes organisms to have more grandchildren, the gene’s frequency expands in the population.

Based on this, he rightly pooh-poohed warm, mushy, poorly-reasoned notions about genes contributing to “social cohesion” and the like. No altruistic gene could survive in a group if it didn’t provide net benefit for the individual containing that gene — either by helping the individual, helping kin who have the same gene, or through reciprocal payback from other individuals.

But what about the success of groups? Could groups with more altruistic genes have more grandchildren than groups with more purely self-serving genes? Could that group selection effect predominate over individual selection within the group?

It seems plausible, and from the first time I encountered the conundrum, it has always seemed to me to be a purely statistical question.

And that’s how (a damned impressive set of) mid-20th-century evolutionists went at it. They built models, ran the numbers, and determined that no: group selection could not overwhelm the forces of individual selection. If a gene isn’t good for an individual (and/or his kin), it will die out.

That belief achieved an orthodoxy in the political ecology of scientific academe that largely prevented later scientists from even raising the question, and successfully crushed most of the few efforts to re-examine it. It’s agonizingly similar to the despicable response that sociobiology and evolutionary psychology themselves encountered over those same decades, from the likes of Lewontin, Gould, and the “Theory” humanists.

As a result, both professionals and amateurs — including reasonably diligent amateurs like me — have been unthinkingly chanting along with that orthodoxy for years, decades. I don’t know how many times I’ve discredited thinking that seemed rooted in group-selectionist thinking.

And I was wrong. At least, I was too categorical. So I was sometimes/often wrong.

Here’s what makes me so sad: Richard Dawkins has been perhaps the most powerful voice for that orthodoxy, and he seems to be clinging to that idol even when its feet — his feet — are looking resoundingly clay-like.

Cutting to the meat, simplified:

In 2007, David Sloan Wilson and E. O. Wilson (the founder of sociobiology and one of the most brilliant, diligent, and sober evolutionary biologists to ever live, as Dawkins certainly agrees) published a paper (PDF) laying out the cogent, lucid, and compelling case that group selection can indeed predominate over individual selection in the evolution of altruistic genes — that the group can be a vehicle of selection, just as the individual can. (They talk about “multilevel selection.”)

In other words, genes that benefit the group can proliferate in the larger population, even if those genes are disadvantaged within the group. Again, it’s all a matter of models and statistics, and the Wilsons (no relation) deployed and cited damned convincing models and statistics showing that the earlier evolutionists probably got it wrong.

Now if Dawkins had cogent takedowns of those models and statistics, there is nobody I would rather hear them from. But his counterarguments have all been from principles, even when those principles are not thrown into question by Wilson and Wilson — their arguments are based on those principles.

What’s more dismaying is that Dawkins’ few dozen paragraphs in reply (remember, it’s been three years since then) bear all the hallmarks of a religionist who has not a leg to stand on, lashing out in frantic, desperate defense with red herrings, tangents, inapplicable arguments, dodges, weaves, and personal invective. (I’m not a professional in the field, but I know good and bad arguments when I hear them.)

This post is already too long, so I won’t detail everything here. You can see one of Dawkins’ replies here (PDF), and you can read the whole story from D. S. Wilson — including much of Dawkins’ response — here. Wilson’s 19-post blog thread is here in a one PDF.

I’ll just quote one passage from Dawkins to give the flavor of those replies:

…as far as I am concerned, the statement is false: not a semantic confusion; not an exaggeration of a half-truth; not a distortion of a quarter truth; but a total, unmitigated, barefaced lie.

This is not the Richard Dawkins I’ve known and (intellectually) loved for lo these many decades. It is, in fact, the exact opposite of that Richard Dawkins.

I can only quote D.S. Wilson’s words, which precisely echo my most heartfelt feelings:

In my dreams, I imagine him reading my modified haystack model and saying “Well done, David! I have been wrong all these years.”

Richard Dawkins won’t you please come home?

Just to Be Really Clear: Why I Hate Avatar

March 14th, 2010 Comments off

Jonathan Haidt asks on his blog:

“Can anyone understand Avatar who lacks all intuitions of purity/sanctity?”

He’s talking about the sanctity of nature, and of spirituality, as against corporate, consumerist, and militarist values.

My answer is “Yes.”

I (a devoted liberal with a “Liberal Purity” score of 1.0–compared to Libs’ 2.7 and Cons’ 2.1) understand it as a brilliantly Machiavellian corporate vehicle to extract cash from those souls who embrace that purist intuition — and from the other groups that are so successfully, simultaneously, pandered to:

1. America haters worldwide who love watching military/corporate America get its ass kicked;

2. Uneducated militarists (who nevertheless love their mommies), and who want to believe that only their like can save the world;

3. Those with contempt for pointy-headed academics who can’t get anything done on their own (at least they’re not depicted as bad — just ineffectual); and

4. Teenage boys who think they’re going to be the next Luke Skywalker, Neo, or Jake Sully: The One.

There’s something for everyone! (Except, yes, Mr. Burns and Colonel Killgore.)

And while extracting that cash, insidiously propagandizing all those groups for the superiority of #2.

Yes, it’s beautifully produced. But re-read The Republic (and The Prince) — that’s the whole point.

The Party of Prosperity? The Seven Reasons that Democrats’ Policies are More Economically Efficient

March 10th, 2010 Comments off

Or: The Seven Habits of Highly Efficient Economies

Republican economic policies are widely perceived (especially by Republicans) as being pro-growth and pro-prosperity, even though All. The. Evidence. Demonstrates. The. Opposite. (How dare they call themselves “conservatives”?) Even the rich get richer under Democrats — though not at the expense of the poor and the middle class.

Instead of pointing out that Democrats deliver more prosperity and less debt, Democrats’ main response is “Yeah, but…uh…Equality!” To which many Americans respond by reaching for the remote control.

If — as all the pundits proclaim — Democrats need a coherent, unifying, and compelling narrative (like the profoundly effective though sadly false narrative that is Reaganomics), how about this:

The Party of Prosperity

Democrats deliver more prosperity. They deliver it to more people. And they do it without busting the budget.

How do they achieve all that? Through the miracles of economic efficiency–policies that make the markets actually work — and work better — for the greater prosperity of all (including the rich).

Wisdom of the Crowds. Democrats’ dispersed government spending — education, health care, infrastructure, and social support — puts money (hence power) in the hands of individuals, instead of delivering concentrated streams to big entities like defense and business. Those individuals’ free choices on where to spend the money allocate resources where they’re needed — to truly productive industries that deliver goods people actually want.

Preventing Government “Capture.” Money that goes to millions of individuals is much less subject to “capture” by powerful players, so it is much less likely to be used to then “capture” government via political donations, sweetheart deals, and crony capitalism.

Labor Market Flexibility. When people feel confident that they and their families won’t end up on the streets — they know that their children will have health care, a good education, and a decent safety net if the worst happens — they feel free to move to a different job that better fits their talents — better allocating labor resources. “Labor market flexibility” often suggests the freedom (of employers) to hire and fire, but the freedom of hundreds of millions of employees is far more profound, economically.

Freedom to Innovate. Individuals who are standing on that social springboard that Democratic policies provide — who have that platform beneath them — can do more than just shift jobs. They have the freedom to strike out on their own and develop the kind of innovative, entrepreneurial ventures that are the true engine of long-term growth and prosperity (and personal freedom and satisfaction)–without worrying that their children will suffer if the risk goes wrong. Give ten, twenty, or thirty million more Americans a place to stand, and they’ll move the world.

Profitable Investments in Long-Term Growth. From education to infrastructure to scientific research, Democratic priorities deliver money to projects that the free market doesn’t support on its own, and that have been demonstrated to pay off many times over in widespread public prosperity.

Power to the Producers. The dispersal of income and wealth under Democratic policies provides the widespread demand (read: sales) that producers need to succeed, to expand, and to take risks on innovative new endeavors. Rather than assuming that government knows best and giving money directly to businesses, Democratic policies trust the markets to direct that money to the most productive producers.

Fiscal Prudence. True conservatives pay their bills. From the 35 years of declining debt after World War II (until 1982) to the years of budget surpluses and declining debt under Bill Clinton, Democratic policies demonstrate which party deserves the name “fiscal conservatives.”

Labor and Trade Efficiencies. (This is an update — I can’t resist adding a #8.) The social support programs that Democrats champion — if they truly provide an adequate level of support — give policy makers much more freedom to put in place what are otherwise draconian, but efficient, trade and labor policies. If everyone is guaranteed a decent wage by an excellent program like the Earned Income Tax Credit, we have less need for the economically constricting effects of unions and protectionism.

(These aren’t actually “The” seven reasons that Democratic policies are more efficient. There are many others. But the definite article made for a catchier post title.)

If you’re noticing that these talking points capture and co-opt the Republicans’ very own most cherished talking points…well yeah. (As my teenage daughter would say, “No duh.”) There’s a darned good dose of rhetorical jiu-jitsu at play here. It’s downright Machiavellian in its appeal to “Reagan Democrats,” Independents, and Republicans who are disaffected by their party’s thirty years of profligacy, malfeasance, and hypocricy.

But that doesn’t make it any less true. (If you don’t believe that it’s true, return to the first sentence of this post and start clicking links. Then come talk to me.)

And Democrats, in all their fecklessness — Obama in particular — could use a good helping of Machiavel.

Our president took all sorts of heat from his base during the campaign when he said that “Ronald Reagan changed the trajectory of America in a way that Richard Nixon did not and in a way that Bill Clinton did not.” But he was profoundly correct. FDR did as well. And their means were decidedly Machiavellian. (Here repeating the David Stockman link from above.)

Now Obama’s got his chance to change the trajectory. And there’s a narrative that can effect that change.

The Party of Prudence. The Party of Prosperity.

Use it.

** At risk of ending this post on a wild tangent, I can’t resist citing the passage I was thinking about in writing those last two words. In M*A*S*H (the movie) there’s a football game in which one of the M*A*SH team’s players is being harassed by an opponent. Here’s the dialog:

Bastard 88 called me a coon.
Called you a what?
OK, that’s an old pro trick to get you thrown out of the ball game. Why don’t you do the same thing to him?
What, call him a coon?
No, the boys in camp used to talk about his sister. Her name was Gladys. Use it!

Without revealing what (hilariously) ensues, I’ll just say: it worked.

My new favorite title for this post: “Gladys!”

Democrats are Profligate Spendthrifts! Oh…Wait…

February 8th, 2010 Comments off

Damn I’m busy today. I came across yet another great Wikipedia page that I really had to share: National debt by U.S. presidential terms.

I’ll just share a little top-line data. There’s much more over there.

Average Increase, 1978-2005 Spending Debt GDP
Under Democratic Presidents 9.9% 4.2% 12.6%
Under Republican Presidents 12.1% 36.4% 10.7%

Who are the true conservatives here?

Feel free to snark at this table. It’s just one slice out of millions that are possible, quite possibly cherry-picked. But make sure to also take down all the evidence you’ll find here and in the ensuing links. (There’s really no way to spin the data any other way without spectacular efforts at cherry-picking and statistical contortion.)

Then come back and talk to me.

Galbraith Translates “Trickle Down”: Eat Shit

February 8th, 2010 Comments off

In digging around for the previous post, I came across  this beaut on Wikipedia (can’t believe I’ve never seen it before), and just can’t resist sharing it:

The economist John Kenneth Galbraith noted that supply side economics was not a new theory. He wrote, “Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: If you feed the horse enough oats, some will pass through to the road for the sparrows.[45]

I’ve always said “trickle-down only works with urine and semen,” but I think Galbraith has embraced a superior excretion.

David Stockman on Starving the Beast: “It doesn’t work. Game over.”

February 8th, 2010 9 comments

You remember David Stockman, right? Reagan’s “whiz kid” budget director? He’s the man who engineered the last thirty years of Republican dominance by implementing The Reaganomics Strategy: borrow money from our children and from abroad to buy votes at home with the “I’ll cut your taxes” pander.

Stockman has never been the type to twirl his finger in his cheek and actually proclaim that Reagan’s economic vision had any roots in reality (aside from the political reality that “deficits don’t matter”). He’s repeatedly acknowledged–even as early as ’81–that the whole thing was a scam. (That’s not exactly the word he used, but…) Check out this Wikipedia page for details, and links to more.

Well now — after years as a top Wall Street private-equity and hedge-fund hotshot who’s very, very clear on how the world works — he’s demonstrating that clear-eyed side once again. Here he is on February 5, on PBS News Hour with Paul Salmon, commenting on “Starve the Beast”:

The lesson of the last twenty five years is that it doesn’t work.

Here’s the whole video. (Start about 6:30 to skip the fairly predictable indictment of the too-big-to-fail financial institutions and somewhat more surprising endorsement of Obama’s proposal to tax them.)

Stockman continues:

You can keep cutting taxes until you reach the point where this year, the year just ended, we spent 3.6 trillion and we only collected 2.2. We are now so far out of kilter that it’s irrelevant. Taxes are going to have to be raised. The beast needs to be trimmed back, but it can’t be starved enough to even begin to cope with our fiscal problem. And this is where I think all the politicians are faking, in both parties but the Republicans especially. The Republicans think their mission in life is to cut taxes. Sorry, game over. We’re now in the tax raising business, and we’re going to be in the tax-raising business for the next decade.

The bill is due. And yes, Virginia, there is a difference between the Democrats and the Republicans. The Democrats have certainly used and benefited from the pander (Clinton: “The era of big government is over”), but today’s Republicans still either believe or choose to pretend to believe in what Reagan’s own VP, the first George Bush, so aptly called “Voodoo Economics.”

Today’s Republican politicians are either 1) craven liars, or 2) intentionally self-deluded zombies, while most Democratic politicians are just limp-wristed, politically motivated collaborators. It’s pretty obvious which is worse. (I won’t get into the voters except to say that Democrats who vote against their own best interests do it because it’s the right thing to do–economically and morally–while Republicans who vote against their own–and everyone else’s–best interests do it because they’re idiots.)

It’s damned unfortunate that we have to raises taxes now, during a downturn that shows every sign of lasting for years, because raising taxes hurts economic growth over the short term. But after thirty years of magical thinking, it’s time to pay the bills.

The good news–for those of patient merit—is that in the long run, paying for the amount of government that’s necessary to maintain and promote prosperity results in (surprise) more prosperity.

Saving the best for last, there is this remarkable interchange in the Stockman interview, at about 2:00:

Salmon: Listening to you I’m struck by the fact that I can imagine critics on the left saying exactly the same thing.

Stockman: I’m mortified by that thought. But at some point you have to ask, what’s good policy?

Here’s one aggrieved citizen who wishes that point had arrived — that David had asked that question — oh, about twenty-eight years ago?