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Orwellian Doublespeak Dominates Economic Policy
Orwellian Doublespeak Dominates Economic Policy
February 13, 2012
Originally published in Real Clear Markets
While taking in my morning helping of news and commentary, I was struck by a certain similarity in every article touching on economic policy. It wasn't just the trampling of the Constitution, the abandonment of rational accounting principles, or the futility of the search for logic behind the proposals coming out of Washington that was so disturbing. There is nothing new about such sad developments. We long ago began to adapt to life without these bygone bulwarks against chaos.
It was the progressive destruction of the English language that prompted coffee to come out of my nose. Without a common understanding of precisely what words mean, rational discourse becomes futile. We might as well babble gibberish at each other as we fall back to settling our differences swinging clubs.
For example, what does "unemployment" mean? How can the official unemployment rate go down when millions of discouraged job seekers stop looking for work and the nation's labor participation rate takes the biggest plunge in history? Easy; simply stop counting people who drop out of the labor market. Numerous articles have pointed this out, but even sophisticated investors don't seem to be paying attention. When newspaper headlines proclaim, "Unemployment Down!" the stock market goes up. Smart stock buyers tell you that they know better but are betting on the trading behavior of people who don't. How's that for baking institutionalized ignorance into the market?
Can you buy "insurance" to protect yourself from predictable, repetitive events like paying your cable TV bill? No? So exactly how did we get into this big brouhaha about who has to pay for "insurance" coverage to gain "access" to birth control pills? (I looked up "access." It didn't say "free stuff.")
If compound obfuscation is your fancy, try "unemployment insurance." It's the only kind of "insurance" where your benefits can go up even when you are out of work and not paying any premiums. And if you stop looking for work as soon as you finish collecting benefits, you are no longer unemployed. Brilliant!
What does "inflation" mean? I know what I have to spend when I go to the grocery store and stop at the gas pump. Yet the official inflation rate excludes food and energy. How can the assurances of government officials be so contrary to our everyday experiences? Grouch Marx explained it. "Who are you going to believe, me or your lying eyes?"
The star word of this silly season is "fair." The top 10% of tax filers pay 70% of all income taxes while the bottom half collectively pay almost no income tax. Yet we are in a huge debate about increasing taxes on those already paying the most in order to decrease taxes on those already paying the least. And it's all in the name of "fairness." That was a pretty neat trick. Think how different the debate would sound if instead of "fair" we used the words "stick ‘em up!"
While we're at it, do you know what your "tax rate" is? The most recent IRS data show that the top 1% of taxpayers fork 24% of their adjusted gross income over to Uncle Sam in income taxes. The next 1-5% cohort pays 16.4%, the next 5-10% pays 11.4%, the next 10-25% pays 8.2%, the next 25-50% pays 5.6%, and the bottom 50% pay a barely measurable 1.85%. In a progressive tax system, when you make more money you not only pay more taxes, you pay taxes at a higher average rate. Our current tax system may be impossibly complex, corrupt, and inefficient but it delivers exactly that result. So how did we end up in a shouting match about "millionaires and billionaires," enjoying a lower "tax rate" than secretaries when it's just not true? Better ask Obama's favorite billionaire. Maybe Warren Buffett can explain how someone that makes $200,000 a year is a millionaire.
It gets better. Giving money to your friends and political donors to finance hare brained speculative schemes is called an "investment." How can that be? I don't know, ask the Energy Department. But rest assured, fair taxpayer, your money is as safe as the General Motors stock the White House bought on your behalf. Perhaps they salted away your shares in the Social Security "lockbox."
God forbid we should invest our Social Security "accounts" in the stock market, which can go down, when we can entrust our "savings" to Congress, who has stolen them altogether. And speaking of speakers, is Congress "in session?" Better not ask the Speaker of the House.
Don't you love all those "budget cut" announcements? When we cut the budget in my household, spending goes down. Only in Washington can a "budget cut" lead to higher spending. You have to look at the numbers to learn that what they are really doing is marginally decreasing the acceleration in the growth of spending. As a geek, I know a second derivative when I see one. Apparently, members of the press never took math.
Train your eye to spot these language debaucheries, and send me your favorites. They have become so widespread that it makes you nostalgic for the days when we used to argue about what "is" is, or what carnal acts count as "sex" when the Commander in Chief claims he didn't have any. At least back then it was all good fun, speculating on the latest adventures of the presidential trouser trout as we watched our 401(k)s grow as fast as Pinocchio's nose.
Today, it's not so much fun. In fact, it's getting ugly. It will get uglier still if we don't get back to speaking plain English to each other.