Why are you a liberal?

[turar]

OMG, this thread has just turned golden.

[NormR]

Time for the Americans to outsource their government to

  ;)

[Guest deepValue]

Thanks for the book recs (especially the one about squirrels). Is there a socialist response to The Road to Serfdom or Human Action?

[SouthernYankee]

"SouthernYankee, is that you!?!?  We missed you!"

 

-That was funny, you just never know who your biggest fans are!! ;D

 

I'll stay out of this, other than to say I will do EVERYTHING in my power to prepare my family for the future, be it putting money aside for college, retirement, life insurance, medical bills. I do understand deepValue's question, though. How it is that so many people who DO for themselves think that a few masterminds can make ALL of the correct decisions for millions is simply ludicrous, to me anyway. Call me crazy, call me maybe, but I, thankfully, will say don't call me dependent on Chuck Schumer's next Sunday night press interview.

 

Oh, and tell President Obama, if he goes back on Letterman, the answer to one of the questions was "over $16 TRILLION"!!

 

mhdousa, How did I do!!?? ;)

 

[txitxo]

folks i don't think any disagree that we need taxes

 

the question is how much

 

  OK, so we agree that a civilized country need taxes. The question is how much.  As value investors, we should avoid the ideological crap and go straight to the numbers. These are the top 10 countries in terms of Human Development index, a measure of the "standard of living" or the "quality of life", and their tax revenue as a function of GDP

 

Country                  Tax revenue/GDP

1. Norway                          43.6%

2. Australia                        30.8%

3. Netherlands                    39.8%

4. United States                26.9%

5. New Zealand                  34.5%

6. Canada                          32.2%

7. Ireland                          30.8%

8. Liechenstain                  ? but probably very low

9. Germany                        40.6

10. Sweden                        47.9

 

  You see very little correlation between standards of living and taxes. The tax rate in the US is probably average in the world. Sweden's is one of the highest. You could increase taxes in the US by 50-80% and still live as well as people do in Germany, the Netherlands or Sweden, some of the most civilized, free, humane, economically developed and innovative societies in the world. Those are the facts. And given those facts, saying that a country like the US will be destroyed if you increase its taxes is just not true. 

 

[Eric50]

The vast majority of the people I meet in the hedge fund community are liberals (in the modern sense of the term; i.e., Democrats). Hedgies tend to be smart people who can act against the crowd if the facts warrant such a position. However, I am having a difficult time understanding why so many smart people (that no doubt understand the power of incentives) support social welfare programs and other freedom-limiting actions of the federal government. It seems like liberals (and I include establishment Republicans under this label) either have not thought through their positions or are operating on loose principles.

 

Although I wholeheartedly disagree with his politics, I try to heed Charlie Munger's warning about falling into a specific ideology without thoroughly examining the counterpoints. If you have the inclination, I would appreciate a defense of modern liberalism and the reasons why we are better off living in a collectivist society rather than one that promotes freedom of the individual. Book recommendations in lieu of an argument are also appreciated.

 

I believe you are mistaken if you believe that smart hedgies are for the most part democrats. My experience is that an overwhelming majority are republican. Many hedgies jumped on the Obama bandwagon in 2008 IE: Loeb but have since realized that was the biggest mistake. In my experience, 9 out of 10 successful people I know are conservative and/or republican/libertarian leaning.

 

I generally don't like ZH because they are too negative for me and I find influence people to be bearish on markets. But yesterday I was sent a very good piece from ZH:

 

http://www.zerohedge.com/news/what-mitt-romney-also-said-glimpse-endgame

 

This situation may have reached the tipping point where it cannot be reconciled without massive inflation. The most ironic part of all this is that in the end the nannystate will have punished the lower classes more than anything as the price of their basic goods/services/energy will rise in real terms to levels which don't correlate with their levels of productivity. The rich will have no problems buying groceries when prices double...

 

The Romney quote in the ZH article is quite interesting. It means he understands the issues the USA is facing. Sadly, I believe the odds of him being elected are pretty low now. Probably 10-20% max. There is a huge correlation between a strong stock market in Sep-Oct and the incumbent being reelected.

 

QE3 might have been the trigger in favor of Obama in this campaign. Romney has said before that he would not reappoint Bernanke. This might have been a huge mistake: Bernanke started to print a few weeks before the election date.... I'm not saying the election is rigged, I'm just wondering.... It's easier to leave a legacy if your term lasts longer.... Maybe it was not even conscious from Bernanke; he just did not have a good incentive not to print...

 

 

 

[LC]

 

 

  You see very little correlation between standards of living and taxes. The tax rate in the US is probably average in the world. Sweden's is one of the highest. You could increase taxes in the US by 50-80% and still live as well as people do in Germany, the Netherlands or Sweden, some of the most civilized, free, humane, economically developed and innovative societies in the world. Those are the facts. And given those facts, saying that a country like the US will be destroyed if you increase its taxes is just not true.

 

Additionally, let's remember that taxes in the US were much higher in the mid-1900s on high-income individuals.

[bmichaud]

Eric50,

 

To your point about Romney's chances being low, I've been thinking the same thing recently due to A) the high correlation between a rising election-year market and the incumbent winning and B) the recent large spike in Obama's Intrade chances (recently 67% ish). However, a friend of mine is a huge political junkie and digs into all of the polls, and he is convinced that the polls are heavily skewing Obama's chances due to over polling of Democrats and not taking into account the likelihood of lower overall turnout. He pointed out today that the recent Gallup poll, which apparently is only registered voters, is now 47-47 Obama/Romney versus 50-43 last week. Then lastly he sent me this article today....

 

http://www.wnd.com/2012/09/secret-retirement-plans-does-obama-expect-to-lose/

 

VERY interesting to say the least. And this would in fact jive with what these two professors are saying about Romney's chances (see here: http://www.huffingtonpost.com/2012/08/22/university-of-colorado-pr_n_1822933.html) based on their analysis of economic data.

[PlanMaestro]

 

What is the use of data when we have ideology?

 

 

OK, so we agree that a civilized country need taxes. The question is how much.  As value investors, we should avoid the ideological crap and go straight to the numbers. These are the top 10 countries in terms of Human Development index, a measure of the "standard of living" or the "quality of life", and their tax revenue as a function of GDP

 

Country                  Tax revenue/GDP

1. Norway                          43.6%

2. Australia                        30.8%

3. Netherlands                    39.8%

4. United States                26.9%

5. New Zealand                  34.5%

6. Canada                          32.2%

7. Ireland                          30.8%

8. Liechenstain                  ? but probably very low

9. Germany                        40.6

10. Sweden                        47.9

 

  You see very little correlation between standards of living and taxes. The tax rate in the US is probably average in the world. Sweden's is one of the highest. You could increase taxes in the US by 50-80% and still live as well as people do in Germany, the Netherlands or Sweden, some of the most civilized, free, humane, economically developed and innovative societies in the world. Those are the facts. And given those facts, saying that a country like the US will be destroyed if you increase its taxes is just not true.

[Eric50]

Eric50,

 

To your point about Romney's chances being low, I've been thinking the same thing recently due to A) the high correlation between a rising election-year market and the incumbent winning and B) the recent large spike in Obama's Intrade chances (recently 67% ish). However, a friend of mine is a huge political junkie and digs into all of the polls, and he is convinced that the polls are heavily skewing Obama's chances due to over polling of Democrats and not taking into account the likelihood of lower overall turnout. He pointed out today that the recent Gallup poll, which apparently is only registered voters, is now 47-47 Obama/Romney versus 50-43 last week. Then lastly he sent me this article today....

 

http://www.wnd.com/2012/09/secret-retirement-plans-does-obama-expect-to-lose/

 

VERY interesting to say the least. And this would in fact jive with what these two professors are saying about Romney's chances (see here: http://www.huffingtonpost.com/2012/08/22/university-of-colorado-pr_n_1822933.html) based on their analysis of economic data.

 

Thanks, I hope your friend is right!

[mhdousa]

Eric50,

 

To your point about Romney's chances being low, I've been thinking the same thing recently due to A) the high correlation between a rising election-year market and the incumbent winning and B) the recent large spike in Obama's Intrade chances (recently 67% ish). However, a friend of mine is a huge political junkie and digs into all of the polls, and he is convinced that the polls are heavily skewing Obama's chances due to over polling of Democrats and not taking into account the likelihood of lower overall turnout. He pointed out today that the recent Gallup poll, which apparently is only registered voters, is now 47-47 Obama/Romney versus 50-43 last week. Then lastly he sent me this article today....

 

http://www.wnd.com/2012/09/secret-retirement-plans-does-obama-expect-to-lose/

 

VERY interesting to say the least. And this would in fact jive with what these two professors are saying about Romney's chances (see here: http://www.huffingtonpost.com/2012/08/22/university-of-colorado-pr_n_1822933.html) based on their analysis of economic data.

 

Holy crap, you really are linking to an article written by the guy who LITERALLY swiftboated John Kerry.  On a site that pushed the whole birther bullshit.

http://en.wikipedia.org/wiki/Jerome_Corsi

http://en.wikipedia.org/wiki/Worldnetdaily

 

[PlanMaestro]

Since we are in the realm of literature:

 

Surely there never was such fragile china-ware as that of which the millers of Coketown were made. Handle them never so lightly, and they fell to pieces with such ease that you might suspect them of having been flawed before. They were ruined, when they were required to send labouring children to school; they were ruined when inspectors were appointed to look into their works; they were ruined, when such inspectors considered it doubtful whether they were quite justified in chopping people up with their machinery; they were utterly undone, when it was hinted that perhaps they need not always make quite so much smoke. ...

 

Whenever a Coketowner felt he was ill-used - that is to say, whenever he was not left entirely alone, and it was proposed to hold him accountable for the consequences of any of his acts - he was sure to come out with the awful menace, that he would 'sooner pitch his property into the Atlantic.' This had terrified the Home Secretary within an inch of his life, on several occasions.

 

However, the Coketowners were so patriotic after all, that they never had pitched their property into the Atlantic yet, but, on the contrary, had been kind enough to take mighty good care of it. So there it was, in the haze yonder; and it increased and multiplied.

 

Hard Times - Dickens

[Aberhound]

Since I see the cult of authority as the core problem I agree mostly with the libertarians. Where you have authority and no oversight or consequences for wrongdoing problems appear. I see little effort to correct this well known weakness in human nature. From Wall Street to police to prison guards to priests to regulatory organizations, to schools, to generals etc. the same problems appear. People granted "authority" falsely believe that the "authority" is an excuse to ignore their morals, compassion and empathy while the rest, trained from a young age at school, obey when instructed by "authority" while wrongly believing that they would never do something contrary to their own morals.

 

Humans need personal freedom and dominion to reach their potential.

 

 

[PlanMaestro]

From that core of conservative thinking ... G.K. Chesterton:

 

Now the really odd thing about England in the nineteenth century is this -- that there was one Englishman who happened to keep his head. The men who lost their heads lost highly scientific and philosophical heads; they were great cosmic systematisers like Spencer, great social philosophers like Bentham, great practical politicians like Bright, great political economists like Mill. The man who kept his head kept a head full of fantastic nonsense; he was a writer of rowdy farces, a demagogue of fiction, a man without education in any serious sense whatever, a man whose whole business was to turn ordinary cockneys into extraordinary caricatures. Yet when all these other children of the revolution went wrong he, by a mystical something in his bones, went right. He knew nothing of the Revolution; yet he struck the note of it. He returned to the original sentimental commonplace upon which it is forever founded, as the Church is founded on a rock. In an England gone mad about a minor theory he reasserted the original idea -- the idea that no one in the State must be too weak to influence the State.

This man was Dickens. He did this work much more genuinely than it was done by Carlyle or Ruskin; for they were simply Tories making out a romantic case for the return of Toryism. But Dickens was a real Liberal demanding the return of real Liberalism. Dickens was there to remind people that England had rubbed out two words of the revolutionary motto, had left only Liberty and destroyed Equality and Fraternity. In this book, Hard Times, he specially champions equality. In all his books he champions fraternity.

 

The atmosphere of this book and what it stands for can be very adequately conveyed in the note on the book by Lord Macaulay, who may stand as a very good example of the spirit of England in those years of eager emancipation and expanding wealth -- the years in which Liberalism was turned from an omnipotent truth to a weak scientific system. Macaulay's private comment on Hard Times runs, "One or two passages of exquisite pathos and the rest sullen Socialism." That is not an unfair and certainly not a specially hostile criticism, but it exactly shows how the book struck those people who were mad on political liberty and dead about everything else. Macaulay mistook for a new formula called Socialism what was, in truth, only the old formula called political democracy. He and his Whigs had so thoroughly mauled and modified the original idea of Rousseau or Jefferson that when they saw it again they positively thought that it was something quite new and eccentric. But the truth was that Dickens was not a Socialist, but an unspoilt Liberal; he was not sullen; nay, rather, he had remained strangely hopeful. They called him a sullen Socialist only to disguise their astonishment at finding still loose about the London streets a happy Republican.

 

[ERICOPOLY]

Eisenhower (Republican) raised the top income tax rate to 91% in the 1950s.

Hoover (Republican) raised the top income tax rate from 24% to 63% in 1932.

 

I wonder if the conservatives today would rather have an Eisenhower and his 91% tax, a Hoover with his 63% tax, or Obama who has never proposed any tax even remotely like that?

 

[kevin4u2]

Since I see the cult of authority as the core problem I agree mostly with the libertarians. Where you have authority and no oversight or consequences for wrongdoing problems appear. I see little effort to correct this well known weakness in human nature. From Wall Street to police to prison guards to priests to regulatory organizations, to schools, to generals etc. the same problems appear. People granted "authority" falsely believe that the "authority" is an excuse to ignore their morals, compassion and empathy while the rest, trained from a young age at school, obey when instructed by "authority" while wrongly believing that they would never do something contrary to their own morals.

 

Humans need personal freedom and dominion to reach their potential.

 

People naturally want to obey authority becuase it allows them to avoid taking responsibility for themselves and their lives.  For those who disagree haven't looked at the science, Milgram's experiment.   

 

[cmattporter]

This is all my opinion:

 

Liberals tend to have an better understanding of economics and how the system works, the easiest example is welfare/unemployment benefits. Republicans think of them as "handouts", but in reality it benefits everyone. If you have a candidate for welfare/unemployment, instead of ignoring, they provide the tools necessary to help someone grow and in return that person can now buy goods and services, pay taxes, and help the economy function.

 

I think the economy is such a large intertwined system it is hard to grasp. There are instruments(liberal) that look horrible to an ignorant person, but are large, intertwined, and take time. Idk here's my rant!

[AAOI]

From that core of conservative thinking ... G.K. Chesterton:

 

Now the really odd thing about England in the nineteenth century is this -- that there was one Englishman who happened to keep his head. The men who lost their heads lost highly scientific and philosophical heads; they were great cosmic systematisers like Spencer, great social philosophers like Bentham, great practical politicians like Bright, great political economists like Mill. The man who kept his head kept a head full of fantastic nonsense; he was a writer of rowdy farces, a demagogue of fiction, a man without education in any serious sense whatever, a man whose whole business was to turn ordinary cockneys into extraordinary caricatures. Yet when all these other children of the revolution went wrong he, by a mystical something in his bones, went right. He knew nothing of the Revolution; yet he struck the note of it. He returned to the original sentimental commonplace upon which it is forever founded, as the Church is founded on a rock. In an England gone mad about a minor theory he reasserted the original idea -- the idea that no one in the State must be too weak to influence the State.

This man was Dickens. He did this work much more genuinely than it was done by Carlyle or Ruskin; for they were simply Tories making out a romantic case for the return of Toryism. But Dickens was a real Liberal demanding the return of real Liberalism. Dickens was there to remind people that England had rubbed out two words of the revolutionary motto, had left only Liberty and destroyed Equality and Fraternity. In this book, Hard Times, he specially champions equality. In all his books he champions fraternity.

 

The atmosphere of this book and what it stands for can be very adequately conveyed in the note on the book by Lord Macaulay, who may stand as a very good example of the spirit of England in those years of eager emancipation and expanding wealth -- the years in which Liberalism was turned from an omnipotent truth to a weak scientific system. Macaulay's private comment on Hard Times runs, "One or two passages of exquisite pathos and the rest sullen Socialism." That is not an unfair and certainly not a specially hostile criticism, but it exactly shows how the book struck those people who were mad on political liberty and dead about everything else. Macaulay mistook for a new formula called Socialism what was, in truth, only the old formula called political democracy. He and his Whigs had so thoroughly mauled and modified the original idea of Rousseau or Jefferson that when they saw it again they positively thought that it was something quite new and eccentric. But the truth was that Dickens was not a Socialist, but an unspoilt Liberal; he was not sullen; nay, rather, he had remained strangely hopeful. They called him a sullen Socialist only to disguise their astonishment at finding still loose about the London streets a happy Republican.

 

Plan, you had me with Chesterton :), although (and not to get drawn into a political discussion) I think the idea that Chesterton, Dickens, Johnson, Lewis, or any of the other true intellectual giants of Britain would identify or support modern progressives is outright lunacy - and not saying your drawing that connection - just felt like it needed to be pointed out. Also, I think the idiosyncratic differences of the countries above vis a vi their tax rates (and this discussion) makes any comparison specious at best...so I would hesitate to refer to the inference as a fact to say the least.

 

Anyhow, Chesterton's book on Dicken's was an absolute masterpiece. The best ever written by far...   

[AAOI]

This is all my opinion:

 

Liberals tend to have an better understanding of economics and how the system works, the easiest example is welfare/unemployment benefits. Republicans think of them as "handouts", but in reality it benefits everyone. If you have a candidate for welfare/unemployment, instead of ignoring, they provide the tools necessary to help someone grow and in return that person can now buy goods and services, pay taxes, and help the economy function.

 

I think the economy is such a large intertwined system it is hard to grasp. There are instruments(liberal) that look horrible to an ignorant person, but are large, intertwined, and take time. Idk here's my rant!

 

You can't be serious...

[AAOI]

One more thing, for any one that's interested in digging into that specious tax table...if memory serves, all one needs to do is to take a look at how that quality of life index or whatever is actually calculated. 

[turar]

Saw this on Reddit shortly after reading this board, and thought some here might like it:

[RichardGibbons]

I found The Spirit Level a good description with evidence of why liberalism works.

 

http://www.amazon.com/Spirit-Level-Equality-Societies-Stronger/dp/1608193411

 

The interesting thing is that it has reasonable evidence and explanations for the argument.

 

That said, I generally also believe that fairness is good, social mobility is good, and that people generally grossly underestimate the effects of random chance.  Typically, liberal strategies result in increase social mobility and reduce the impact of chance on people's lifestyles.  Plus, killing people by, say, not providing them with affordable medical care, seems unethical to me. 

 

What's more, I don't think taxes and social programs are nearly the disincentive that conservatives make them out to be.  Generally, people like to be perceived as successful, and wealth generators always seem to be perceived that way, while people on social programs are never perceived that way.

 

And, from a purely practical point of view, I think that a low-regulation society leads to corruption and system gaming that leads to instability (see the 2008 crash, more the latter than the former).  Plus, I think without liberal safety nets, society is unstable, since wealth will naturally gravitate to extremes, and eventually the people without wealth will decide to kill the people with it.  So, a reasonable degree of regulation and liberal programs is a good thing.

 

That said, I can understand the conservative point of view.  It's hard to believe that a significant component of your success is luck, and it's hard supporting social systems that would cause your taxes to increase and reduce your relative social standing, even if you know that it's a good thing for society as a whole.

 

[kevin4u2]

This is all my opinion:

 

Liberals tend to have an better understanding of economics and how the system works, the easiest example is welfare/unemployment benefits. Republicans think of them as "handouts", but in reality it benefits everyone. If you have a candidate for welfare/unemployment, instead of ignoring, they provide the tools necessary to help someone grow and in return that person can now buy goods and services, pay taxes, and help the economy function.

 

I think the economy is such a large intertwined system it is hard to grasp. There are instruments(liberal) that look horrible to an ignorant person, but are large, intertwined, and take time. Idk here's my rant!

 

You can't be serious...

 

I'll second that... 

 

What are the unintended consequences of the handout policy? 

 

I would also recommend The Road to Serfdom by F A Hayek

[meiroy]

 

  Imagine that Warren, Charlie, Paulson, Simmons, Klarman and Soros had been born in a hut in the middle of the Congo rainforest ~70 years ago. The difference between the life they would have had there and the one they have had in the US is called civilization. The price of civilization is called taxes.

 

hmm than you would have a white sextuplets in the middle of a Congo rain-forest with at least one of the babies cooing in yiddish... Someone would probably raise an eyebrow.

 

 

 

[PlanMaestro]

Plan, you had me with Chesterton :), although (and not to get drawn into a political discussion) I think the idea that Chesterton, Dickens, Johnson, Lewis, or any of the other true intellectual giants of Britain would identify or support modern progressives is outright lunacy - and not saying your drawing that connection - just felt like it needed to be pointed out. Also, I think the idiosyncratic differences of the countries above vis a vi their tax rates (and this discussion) makes any comparison specious at best...so I would hesitate to refer to the inference as a fact to say the least.

 

Anyhow, Chesterton's book on Dicken's was an absolute masterpiece. The best ever written by far... 

 

You are probably correct on that point AAOI, Dickens and Chesterton probably would not even imagine the modern welfare state. They could also not imagine the level of wealth that we currently have. What was important was the system and the balance. Also, if you follow that conservative lineage to more modern times you will find people like Eisenhower, Rockefeller and George Romney that were concerned with the Goldwater revolution and Nixon's southern strategy ...  and were always "good sports".

 

Also, is not to say we have not increased the scope of Liberty over the last 150 years and the State has played a key role in it. Why we should not increase also the scope of equality, fraternity, security, and even happiness with the level of wealth that we have ?... well that is a decision that the republican framework has been answering over time. And it is a great framework.

 

There are reasons why we have these fences: like social security, the Fed, and financial regulation. And we saw what happened when we took one of those down without asking why it was there in the first place. And there other sectors where there is substantial evidence that the government does a better job than a privatized system ... like health insurance that is bound to become more important.

 

You know that I would love to throw some Keynes and data to the mix (smile) . But since were are at the level of literature and philosophy, and I have not packed for an early flight, I will leave it at that.

 

"The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of the Conservatives is to prevent the mistakes from being corrected."