All About Money

One of the things that I try to understand is the Great Divide between today’s Liberals and conservatives that has left us talking past one another on policy issues. Frankly, I have concluded that discussion with Liberals is often futile because we attribute different meanings to words and concepts.

One of those concepts, I suspect, has to do with “money”.  Let me throw the following proposition on the table for discussion:

Liberal /Lefties view “money” as a fixed, tangible quantity with intrinsic value, like gold coins, for example. Thus, the value of money is intrinsic to the lucre itself, be it coins or dollar notes. Conservatives, on the other hand, see “money” more abstractly as representing “created value”…as scrip or IOU on value created or received. As economists put it, money is a “medium of exchange” for value. So, for liberals, “money” is something tangible to that must be amassed by taking from someone else’s stash. For conservatives, “money” is something more abstract that must to be created (i.e. goods or services) directly (e.g., wages) or indirectly (e.g., inheritance) through the creation of “value”.

How might this color our perceptions of one another?

1) When people like Bill Gates amass a large quantity of money by creating products that many people wish to purchase, conservatives view Gates’ money as a reflection of the value that he created and contributed others. No hard feelings there – it’s a fair exchange. A Liberal/Lefty, however, sees only Gate’s amassed pot of lucre that appears disproportionately high compared to the lucre stored in other peoples’ pots. They see this imbalance as patently unfair, especially since this lucre was transferred from other peoples’ modest stashes into Bill Gates’ already whopping big stash: Bill has more, all of his customers have less.

2) When money is needed to achieve a desirable social or governmental goal, a conservative recognizes that such money needs to be generated somewhere to pay for this goal. This can only be done by either drawing down existing value (confiscating peoples’ lucre) or by creating new  ‘value” that can be taxed (i.e., growing the economy). A Liberal/Lefty doesn’t make this connection – they see the process simply as one of either redistributing the existing lucre from other peoples’ pots or creating new lucre by printing more money. The problem of printing new lucre, of course, is that it is still underwritten by a fixed quantity of value – expanding money supply representing a fixed value means that each dollar is worth less. We call that inflation.

I can’t tell you how many times Liberals have looked at me with puzzlement when I have asked where they expect to get the money for their favored social programs.

3) De-linking “money” from the process of wealth creation makes it easy for Liberal/Lefties to confuse using tax money to pay for unemployment checks, dance troupes or road repair as “economic stimulus”. You are, after all, taking lucre sitting idle in some peoples’ pots and putting that lucre into other peoples’ pockets to spend on purchases. Unfortunately, the fact is that such activities do not in themselves create new value. This cannot therefore “grow” the economy.

What do you think? Am I onto something? And, if so, what other aspects of the Great Divide does this help to explain? Does this help or hinder us in discussing our differences with the Liberal /Left?

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  • Indigo Red

    Absolutely, you’re on to something here. There’s a point you made that’s only half connected with Liberal/Lefty thought. Money, for Libs, is both a fixed value and created goods. A dollar is always worth a dollar; when you need more money, just produce (print) more.

    My older brother has been a Liberal for a very long time with the Liberal view of money. About a decade ago, I told him money, or any exchange medium, had only the value two or more people agree upon. Essentially, value and money are only ideas. His head nearly exploded trying to grasp the thought. Last winter, when I moved back to our hometown after 30 yrs away, he was excited to advise me that money is only an idea. DOH!

  • Charles Martel

    Book, your insight makes sense, but good luck with being able to apply it usefully.

    I remember reading a Far Side cartoon in the 1980s that had me in stitches. I showed it to everybody at work and they got hysterical, too. The last person I showed it to simply didn’t get it. No matter how hard we tried to explain the humor to her, she couldn’t grasp why it was funny. (Yes, yes, I know we violated the cardinal rule that Thou Canst Never Explain Why Something Is Funny.)

    Liberals are like that woman. They are not quipped intellectually or constitutionally to grasp humor, abstractions or money.  

  • SADIE

    Indigo Red
     
    ….money is only an idea.
     
    I’s love to hit your brother up for a large sum of money. If he balks at the idea, I’d just tell him to get another [one].
     
    Danny, you hit one of the nails on the head. There is most definitely a language problem, which is exacerbated by the left/liberals – they speak and hear only one language while the rest of us are bilingual and able to discern the differences. Liberals in many ways are still children, looking for their  allowance, never realizing that the money they receive is coming from somewhere and someone. Big government is their tooth fairy -omnipotent and benevolent resource for all things that insure a childhood from birth to old age.
     
    I guess for a starter conversation with libs, we could tell them that the piggy bank broke, the hand that was feeding it was eaten off by a wild bore [no, I did not misspell that] and if they can glue the piggy bank back together again without any cracks showing, we may be able to fill it again.
     
     
     
     

  • JKB

    Oh, it’s worse than you think.  The liberals I’ve run into don’t understand bank accounts as explained by George Bailey in It’s a Wonderful Life.  I remember a small news item about a Clinton appointed Treasury Undersecretary back in ’93 or so.  She gave a speech where she suggested we look at taxing savings, not interest but principal.  I’ve heard a few more bring that up recently.  Fortunately, the Clinton appointee was disappeared rather quickly.  I sometimes wonder if they remembered to let her out of where they dumped here in the bowels of the Treasury.  If you want to evaporate lending, start eating into people’s principal in ways other than the death tax.
    YouTube – It’s A Wonderful Life bank run
     
    If you really want to give them that confused dog look, try to explain how credit is just printing money and causes inflation.  Or when contracted, can cause deflation.

  • SADIE
  • SADIE

    Danny
     
    The snip and linked article pairs nicely with your thoughts.
     
     
    There is a growing divide between ordinary Americans and the country’s political and cultural elites, who not only have different priorities, but an entirely different sense of identity. Communicating with them would be much like the Saxons trying to explain to the Normans why their way of life matters. The Normans might pretend to listen, if it saves them the trouble of dismembering the malcontents, but they don’t particularly care. If aping the customs and manners of the locals is temporarily in their interest, they might do it. But they prefer to impose their own customs and manners on the barbarous natives. Because that is where the gap lies, in a political and cultural elite that fancies itself superior to the people it rules over.
     
    http://sultanknish.blogspot.com/2010/08/electing-another-people.html

  • Mike Devx

    I think Danny is right.  He’s highlighted the important points, and he began with the idea that we are not speaking the same language.
     
    When Obama says, “At some point, you have enough money,” he’s not saying what you think he’s saying.
     
    I certainly agree with Obama’s words THEMSELVES, but not at all with his intent.
     
    When ***I*** say, “At some point, I have enough money”, I mean something very specific by that.  I mean that I would then have total freedom to live my life in exactly the way, at every single second, I want to live it.  That the ability to purchase whatever I want at any point in time is guaranteed.  That I will never be even worried, not even mildly, when contemplating any financial concern.  That’s what ***I*** mean, if I said, “At some point, I have enough money.”
     
    For me, that would be about three million dollars.  And no, I am nowhere close to that, I’m actually not even close to 500,000.  But I live very modestly and my lifestyle is such that needs are small.  I’d be assured of living comfortably in retirement until my 100’s if I even got to 1.2 million, is my estimate.  But to be totally free, completely free, of any form of worry at all… to “have enough money”, well, that would take a lot.
     
    When Obama says, “At some point, you have enough money”, he’s talking about something completely different. First of all, HE is going to be the judge of whether you have “enough money” or not.  I would need three million.  Someone with a high-maintenance lifestyle and who is used to luxuries and 10,000 sq ft mansions, and trips to Europe and the Orient throughout the year, shopping in Paris today and jet-skiing in Tunisia two days from now, they’re going to need 50 million and even then they’ll probably say it’s still not enough.  For me, it is THEIR call.  For Obama, it is HIS call.
     
    Second, Obama means that after he decides that you have “enough money”, HE WILL TAKE CONTROL of whatever excess you have beyond his chosen dollar value.  Everything beyond that point BELONGS TO HIM, to distrubute freely to “the others” as he sees fit.  It is to be redistributed because, after all, you have “enough”, and there are others who do not have “enough”, and therefore they deserve your excess.  But it’s not YOUR excess, is it? It’s Obama’s excess, for he’s the one who gets to decide; who gets to run your life, and to control it.
     
    And that’s the difference.
     
     
     

  • suek

    >> Everything beyond that point BELONGS TO HIM>>
     
    I was reading MM today, about the demonstrations by the fishermen in the Cape Cod area.  She has also had articles recently on the expansion of control by the Feds over western lands “to preserve them”.  First the fishermen – as I read it, my thoughts was “you may not poach on the King’s water”.  Then my mind went back to the articles about the ‘preserves” being set aside, and it became “you may not poach on the King’s land”.
     
    How long is it going to take before the King is deposed?

  • BrianE

    I have read liberal economic blogs that advance the concept of just increasing the money supply to solve our economic problems. They assume that someone will take on that debt, and that someone will always be willing to extend the credit.
     
    Money can only enter the economy in the form of debt (it’s usually referred to as credit, but at the end of the day, it’s debt). As I understand what’s been happening, the fed is buying overinflated assets from banks in exchange for shiny new dollar bills. This frees the bank up to increase it’s credit.
     
    The fed is also buying those US treasuries that China is no longer buying. But I think there is a limit to how much debt they can take on without destroying their own balance sheet.
     
    But for the money to actually get into circulation, someone has to borrow it. And the banks have been, in some cases, unwilling to lend it– partly because they’ve been repairing their balance sheets and partly because there aren’t enough credit worthy people to lend it to.
     
    The government has an interest in inflating the economy to solve it’s solvency issues, and the fed doesn’t want to see it’s balance sheet disappear as their inflated assets deflate, but I’m not sure the interests of the fed and the government are always aligned. The fed is charged with promoting growth and controlling inflation. I don’t think rampant inflation is in the interest of the fed.
     
     

  • http://ritestuff.blogspot.com/ Karl

    In a conversation with a Lib-Leftist decades ago, I came to realize that the Left considered money to be a form of “stuff stamps” handed out by various powerful interests.  When corporations handed out the “stuff stamps”, they did so unfairly, and corporate fat-cats got the lion’s share while oppressed workers got a relative pittance.  Government, on the other hand, was more likely to “redistribute” these “stuff stamps” fairly.
     
    When called on the notion, in such direct terms, he denied it, but never offered a clarification of what he actually did believe, if it was in fact other.