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M. "Ruby" Schaeffer, a lib, stopped by the site recently and commented on a post. In the course of the comments, I mentioned the velocity of money, a concept where economy is measured by the speed with which transactions take place. This is actually the core concept of what has been called "trickle-down economics" in the past. Dumb branding in the choice of name, but the concept is, well, right on the money.

Liberals/progressives believe that it doesn't matter how the money gets passed around. If the government re-routes the money, it'll still get spent, right? The government just makes sure that the money is given to the right people - to promote economic and social justice. It's not fair that the rich get richer. That's the argument.

Unless I'm forced to buy my every purchase and my every decision is removed from me, only one thing drives my decision to buy: value. I perceive value in obtaining the item I purchase. I either want or need something, I look around for the best item at the best price, in my estimation, and if it still holds value for me after weighing my want/need against the item/price, I buy.

The more options I have from which to choose, the more I'm likely to find value in the market. For example, a lot of people, including a few of my kids, love the iPod. Me, I would never purchase one because of its proprietary song format. Songs purchased on iTunes only play on Apple products. So I find my value in another product.

Some people want to create playlists to match moods/settings. Others don't care - they just want music.

Some don't care about price. For others, affordability drives the decision. In fact, the more options available in the marketplace, the more affordable items become. Greater supply, lesser cost. That's Econ 101.

The more options available in the market, the more likely that I will find value and decide to purchase.

How do all of these options get into the marketplace? By someone investing themselves into a new venture to put a product in the market. But if the government takes money away from these people, it reduces the likelihood of investment by those who know how to bring a product to market.

Which means less supply.
Which means less choice.
Which means less likelihood of perceiving value in the market.
Which means less purchasing.
Which means less velocity of money.

When the velocity of money is reduced, so is income. Which ends up hurting the very people it supposes to help. Income goes down, and unemployment - as a direct result - goes up. "Social justice" is a farce, and the people who believe in it while claiming superior education don't have a real world answer to this. But that's how Ivory Tower theories roll.

It's one thing to say, "It's not fair that some people work hard and remain poor. Spreading wealth is compassionate because it helps the poor. And the rich wouldn't be rich if it weren't for the poor working for them, so who really deserves the money?" (The liberal view is not hard to fathom. It's a simplistic argument.)

The fact of life that no liberal wants to face is this: there are people in this world who know how to invest and work their money in a way that brings products and services to market. By doing so, they create jobs, which provides income for the poor, which helps them to afford to improve their skills and gives them the opportunity to invest their own money and time to perhaps learn how to bring their own product or service to market to become one of (horrors!) the rich.

If the rich don't perceive value in the effort of bringing a product to market, they won't do it. And then fewer people have jobs or income. Perception of Value: it's what prompts us to spend our money.

Those who lived in Soviet Russia said of their lot: "They pretend to pay us, and we pretend to work." Nobody perceived value in that "social justice" system.

But if I perceive value and want something enough, I bust ass to earn my way to it. Which creates economy through velocity of money. Which means that the most compassionate act we can do is to support capitalism. Some libs are such dyed-in-the-wool haters of capitalism that no matter how much fact is presented to them, they'll refuse to see it.

I offered to take Ruby to lunch to explain this. But the talking point vitriol directed at me would have likely derailed any hope I had of success - though Ruby wold have enjoyed what Ruby expects for everyone: a free lunch.


by Brett Rogers, 9/19/2009 9:43:11 AM


I quote, "Some don't care about price. For others, affordability drives the decision. In fact, the more options available in the marketplace, the more affordable items become. Greater supply, lesser cost. That's Econ 101."

A market-based, publicly-funded option designed to increase competition and exert downward regulatory pressure on price would seem like Economics 101. Maybe you should revist this idea.




Posted by Ruby, 10/9/2009 10:22:19 PM

Market-based, publicly-funded options reduce competition. Fannie Mae and Freddie Mac are great examples of this. What's the non-government private sector version of the secondary mortgage market? Hmm? There are none.

Further, when the government manages something, it goes broke. Social Security, MediCare, Medicaid, Fannie Mae and Freddie Mac... all of which will need a big "bailout."

Even the USPS can't sustain itself.

I know you really want a market-based, publicly-funded option to work. But the truth is that they are money pits.



Posted by Brett Rogers (, 10/10/2009 9:18:09 AM

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