The Hypothesized Corrosive Influence Of Money On Politics

Saturday’s thought experiment: Thinking about the hypothesized corrosive influence of money on politics. Let’s take as a given that income inequality is high and rising. Most people have less money than some people (99/1 or 90/10 or something). Let’s also take as a given that the mechanism of money corroding politics equals campaign donations or advertising, mainly TV commercials.

The presumption is that rich people donate money to candidates who run TV commercials to persuade poor people to vote against their own interests. This despite the fact that poor people outnumber rich people and each person can only vote once. Poor people numerically dominate voting. We assume TV ads funded by campaign money from rich people actually convince poor people to vote against their own interests. But do they?

How do we tell the difference between poor people getting fooled into voting against their own interests versus poor people voting how they want? To believe money has corrosive influence on politics through this mechanism, must we believe that poor people are stupid?

Alternate explanation: Poor people vote how they want, other people don’t approve of their choices, and rich people are wasting their money? How can we tell? Short of assuming that our judgment of how poor people should vote versus how they do vote is prima facie correct?

Meanwhile, how do we feel about people who make top-down judgments about poor people in other political and economic contexts? If one believes poor people are too stupid to vote in their own best interests, in what other areas must they also be judged as stupid?

In case it’s not obvious: I think poor people (and middle-class people) are smarter than many observers and activists think. I say that having grown up in the rural lower-middle-class myself. Poor and middle-class people are frequently patronized.

I think in many areas of policy we have concluded that poor people need to be protected from themselves; I think this is dangerous.

Source Tweets: 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15

Senator Joe Manchin’s Position on Bitcoin

manchinLet’s explore the newly announced positions of American Senator Joe Manchin (D-WVa):

  • Manchin is FOR suppressing pro-consumer and pro-small business innovation in financial services to increase choices, lower fees, and sell globally.
  • Manchin is FOR continuation of 2008-era US financial services industry for the long term; entrenchment of status quo and Too Big To Fail.
  • Manchin is FOR maintaining high credit-card fees for much of American economy, reducing standard of living for many Americans including poor.
  • Manchin is FOR sustaining ~10% remittance fees for hardworking immigrants toiling 60-hour hard labor in US to send money back to families.
  • Manchin is FOR crippling high-job-growth US tech industry in important new field; forcing Bitcoin innovation and jobs to foreign countries.
  • SUMMARY: Manchin is FOR high fees for regular consumers and poor immigrants, 2008’s brittle US financial system, and kneecapping the US tech industry.

Source: Andreessen’s tweets: 1,2,3,4,5,6,7

Responses:

Government Regulation

Government regulation that purports to protect ordinary consumers generally ends up protecting large incumbents because government regulation establishes high stickiness for incumbents, vs new entrants that are unequipped to handle regulatory load. Large incumbents in any industry are well aware of this, so they play a 2-sided game: simultaneously complaining about and embracing regulation which ultimately leads to regulatory capture–intertwined regulators and incumbents. Crazy high barriers to entry.

Therefore Dodd Frank equals Big Banks Protection Act of 2010. Raised barriers to new banks. Result: Big banks more powerful than ever. Sarbanes Oxley = Big Companies Protection Act of 2002. Raised barriers to new public companies. Result: Number of public companies fell off a cliff.

Later, everyone wonders why there’s no new competition, incumbents are more powerful than ever, then calls for yet more protective regulation. Then total surprise that regulated sectors of economy languish while more competitive sectors race ahead. Regular consumers are the victims. It’s utterly predictable, yet surprise every single time. Triumph of hope over experience–brought to you by the Good Intentions Paving Co.

Conclusions:

  1. To be pro-consumer is generally to be pro-competition, pro-innovation, anti-monopoly/oligopoly, and anti-regulation.1
  2. The best answer to markets that seem to need regulation is generally to instead create more competition.2
  3. A one time government antitrust strike will generally be far more pro-consumer than an ongoing regulatory regime.3

Source:
Marc Andreessen’s tweet regarding government regulation and his 11 tweets that followed:

PM Erdogan of Turkey Calls Twitter a Menace to Society

Marc Andreessen references the New York Times’ summary of remarks from Prime Minister Recep Tayyip Erdogan of Turkey, which were passed over by the Turkish news media:

Now we have a menace that is called Twitter,” he said. “The best examples of lies can be found there. To me, social media is the worst menace to society.

He was delighted to hear PM Erdogan’s reaffirmation of Twitter as an important medium for communicating the people’s dissent:

Ukraine and Venezuela

My heart goes out to the people of Ukraine and Venezuela. Everyone in the U.S. hopes the result of your struggles is peace and freedom.

I think it’s becoming increasingly clear: citizens of every country are no longer willing to tolerate oppressive regimes, bad governments. Contrary to cynicism in some quarters: Internet + smartphone + many other info-tech innovations ramping up power of citizens versus bad governments.

Prediction: Every country with a bad government will have as many protests and revolutions as needed to get to peaceful, prosperous democracy.

The world has changed. No going back. There will be difficulties and setbacks, but the direction is crystal clear and will not reverse.

Post created via the following tweets: 1, 2, 3, 4, 5

Notes From “World Protests 2006-2013”

Notes From “World Protests 2006-2013”

“There have been periods in history when large numbers of people rebelled about the way things were, demanding change, such as in 1848, 1917 or 1968; today we are experiencing another period of rising outrage and discontent, and some of the largest protests in world history.”1,2

A quick summary:

  • A steady increase in the overall number of protests every year: from 2006 (59 protests) to mid-2013 (112 protests events in only 1/2 yr).3
  • Main causes of outrage are: Economic Justice, Failure of Political Representation and Political Systems, Global Justice, Rights of People.4
  • Most sobering finding is overwhelming demand, not for economic justice per se, but for what prevents economic issues from being addressed:5
  • Lack of ‘real democracy’, result of peoples’ growing awareness that policy-making has not prioritized them, even when it has claimed to.6
  • Not only traditional protesters (activists, unions) demonstrating; middle classes, youth, older people are protesting in most countries.7
  • # of protests + # of protestors increasing. 37 events had 1M+ protesters; some may be largest protests ever (100M India ’13, 17M ’13).8

Source: Marc Andreessen’s tweets referencing “World Protests 2006-2013”: