American Elephants

How Does Innovation Happen? And Why? by The Elephant's Child

Have you noticed the extent to which Democrats operate on buying votes? They will give you this benefit, or this program, or this increase if you will just vote for them? The benefits, programs or increases  are all to be paid for by the taxpayers, supposedly by a law indicating that the government is supposed to give… — but the government has no money of its own so, when Bernie wants everyone to get at least $15 an hour, either the government will order all businesses to pay $15 to all their workers, or if the government is paying government workers, they will raise everybody’s taxes enough to cover the increase. (Those who are currently working in the Bernie for President campaign are complaining bitterly because they are not getting $15 for their labor) Which demonstrates what that is really all about.

Such a “benefit” is terrible for the economy, because many small restaurants don’t pay high wages, but workers make it up in tips, and go out of business when forced to comply. And beginning workers often aren’t worth much of anything as they learn slowly how to work. And some work just isn’t worth that much anyway.

Democrats simply cannot understand how cutting taxes and allowing people to keep a little more of their own money allows them to experiment, hire, invent, expand, and how that makes an economy grow. That idea is simply beyond their understanding. They never understood the Reagan revolution that produced a long economic boom, and they do not understand why cities and states run by Democrats somehow do not prosper to the extent expected.

Republican tax cuts, they firmly believe, only go to the rich and to corporate heads and people who own businesses, and the stupid Republicans should be giving big tax cuts to the poor instead. I guess those who grew up to become Democrats had a hard time with percentages in school.  It is hard to grasp that the only way we have to understand economics is by observing the transactions between people as relayed to us by the marketplace. The ordinary buying and selling that takes place. And the observed little miracles that happen when people are allowed to keep more of their own money to do with as they choose. To buy, sell or invent.

Freedom means more than just free speech or freedom of religion. Look at all the businesses that started just because somebody had an idea. Jeff Bezos thought he could sell books online. A couple of bicycle shop people thought they could build an airplane. Henry Ford thought there was a better way to put a car together and created the production line. And there is currently a gentleman who decided he could make better bed pillows by tearing up foam rubber into little pieces. I sleep soundly on one of them.

Tightly controlled societies don’t offer much opportunity for the ambitious. But America has garages and workshops all over the country where nascent businesses are being hatched. Where else in the world do you find “Go Fund Me” programs on the internet? Why does all that happen here, and not in the many countries that really, really need innovation and invention?

When FDR tried desperately to get us out of the Great Depression, he had no idea what to do, and settled on “pump-priming” or in the words of a more recent president, “stimulus”. Spending a lot of government money in the “right places” to get the economy moving. Two economists from UCLA, Lee Ohanian and Harold Cox, determined that FDR extended the Depression for seven years longer than if he had done nothing. The federal government has no money of its own. As far as that goes, city governments have no money of their own either.

It is interesting how many Democrats are quite sure that getting rid of Capitalism is the solution. Keep in mind that that is the goal of the climate change movement.

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