A few rudimentary thoughts on economic theory forthcoming. I say rudimentary because I am a little fuzzy on my econ classes from well over a decade ago and I don't feel like putting the extra time into brushing up while my brain is turning this into words. Therefore, any mistakes of fact or logic are all mine. Correct me if you care.
As the election cycle has churned on, the rhetoric and vitriol remains far more important than persuading the voters of the wisdom of the party platform. Emotion trumps reason in most of the population's mental decision tree. But isn't there a very good reason for this, at least when dealing with economic policy?
As I see it, economic analysis and projection work very well when viewed through certain, objective, criteria. For example, assuming that a given population behaves in a rational and self-interested manner, various economic projections can be accurately made. Supply vs demand, production in comparison with consumption, etc. The problem arises when we start trying to determine what those rational, self-interested people will deem is rational self-interest.
Here is what I mean: Every single one of us determines the value of every transaction we enter into (or abstain from) based on extremely personal factors. If we assume every person is alike, we can accurately gauge and predict outcomes. Once we have individuals in the mix, every rational outcome is different. Yet we try to make those predictions and policy decisions anyway. Perhaps we can accurately say, "The majority of people would choose x over y. Therefore, x policy choice is more likely to have the desired outcome." But I doubt it.
Reagan's trickle down economics makes perfect sense using certain assumptions about people and businesses. However, those assumptions turned out to not have the effects that were thought. Communist command economies work under another set of assumptions about personal and collective behavior. Those assumptions have also shown to be erroneous. In short, no economic model can actually be accurate for long, given the fluid nature of human interest and fickle thought.
That leaves me one conclusion: policy must be made based on the policy maker's own moral compass. If a person believes that an action or policy is the right one to take in order to gain a moral good (not necessarily the same as a religious goal, mind you), then take the stand. Do the right thing.
Yes, I understand that policy makers are making calls that affect a wide swath of people and they must keep that in mind. But that does not change the fact that whatever assumptions they use to model the effects of their policies will reflect their own moralities. All I'm saying is own it. Believe in it. And explain to the masses why you are right. Or, at the very least, not a raving lunatic trying to burn the world down.
In the end, even the powerful must be able to live with themselves.