Friday, February 3

Talking Complexity: So What About The One Percent?

There are dozens of economic models, formulas, and ideas that people share and cite. I tend to read many of them because I have interests outside communication. At the same time, I'm also always thinking about how these non-communication subjects intersect with communication because the ability to communicate them is equally important, if not more important, than the ideas themselves.

Yesterday, Andrew Smith reminded me about one by Dani Rodrik. The non-communication idea is sharp enough, but what's especially refreshing is the way in which two students at the Unversidade Nova de Lisboa in Portugal wrote it. They used the Simpsons to convert the idea into a fun presentation. You can find a link to the presentation in Rodrik's introduction to Disruptive Politics and Economic Growth.

What the presentation reminded me is what a terrible job Republicans do in explaining their economic position to a majority of Americans. And, until they get it together, the message will never resonate.

Communicating about complex topics can derail companies and break nations. 

There is a very good reason why the current administration's message tends to perform better than their opponent's message. Income inequality has created a lower median income, and the people who fall below that median have an increased propensity to vote for higher taxes to make up their shortfalls.

The downside, however, is that the opposition is right in actuality, if not popularity. Increasing taxes on capital endowments (which the administration wants to do) has an adverse affect on growth, which increases unemployment, which in turn moves the median income even lower. Eventually, the pattern repeats with even more people who favor higher taxes. And eventually, the economy collapses.

This economic principle is one of the primary reasons Republicans want to hold the line on all taxes. But they have trouble communicating it. They struggle with it because it is generally reframed into the sound bite that "they represent and want to protect the rich."

Of course, that isn't true either. Wealthy people call the shots in both parties, and one side is not more altruistic than the other. If they were, we wouldn't need more taxes because they would donate what's needed as opposed to raising taxes.

Sure, the current administration likes to talk about how they have extended certain "tax breaks" and nothing has happened. While this is true, they omit the psychological impact of increased regulations and the constant threat of new taxes on people with capital. In other words, it would be like your power company telling you that next month your energy bill will be ten times as much for the indefinite future. You would probably hold on to any cash you had. They are holding.

Frankly, the dynamic of all this is remarkably acidic. And I'm not sure there is a good message.

What a capitalistic model might look like if all parties rethought politics. 

A better approach might to be realign the overarching goal into objectives that are obtainable and much more easily communicated. For illustrative purposes only, consider four fundamentals as examples.

• Government. There is no question the government should never directly invest in private companies. It is especially bad at it. If it is going to invest, it ought to invest in government-owned infrastructure, with most funding in research and development (and then contracting out labor).

This is one of the reasons I am a proponent of the moon colony concept. It would be the modern equivalent of Hoover Dam. (That, and I know too much about small grant awards and waste.)

• Business. As much as many people appreciate Ayn Rand, many more misunderstand her. They must, because the takeaway that some people seem to have is that she places a high value on the individual, which is somehow selfish. When I read Rand, I take away something different.

Businesses, regardless of size, ought to invest in communities, states, and countries, not because government forces them to do it but because it is in their best interest. If businesses want an educated workforce, better infrastructure, and safeguards against taxation, then a capital investment in the communities that help them succeed is commonsense. Businesses used to do it all the time before the government took over charity. As a backgrounder, see the comment in this post, written 10 years ago.

• People. A higher standard of living might be desirable, but a society built on overconsumption is equality problematic. If the early movement toward a more meaningful economy is valid, then we might nurture it along by measuring the merit of our lives not by the cars we drive but by the values we leave behind. Legacies are not built on mountains of discarded stuff.

As long as social media remains relatively free of social scoring and continues to lift people up as opposed to protecting the higher ground, its early success can be carried forward. It has proven invaluable in finding new talent and discovering otherwise hidden thoughts from great people who make the world a better place with both inspirational and tangible results.

• Nonprofits. As long as nonprofit organizations set sustainable action in motion rather than aiming to increase their own case loads to pad budgetary need, they are vital. In many cases, they can replace the need for some government funded services, assuming they stay away from the infusion of politics that usually comes with government grants.

In fact, had someone considered it 20 years ago, a nonprofit health insurance alternative might have helped this country avoid any pressure to create an intrusive national model. And that touches on one of the key areas we need to improve because overlapping nonprofits can dilute impact while leaving other needs underserved (like health care). General guidelines might not be bad either; some nonprofits love to pad executive salaries, upgrade training packages, and receive transportation perks.

While not everyone would necessarily agree with these illustrative ideas, all four represent nonpartisan objectives that can be understood. Smart government sets the stage for success and protects it. Purpose-driven businesses make profits and then invest them. Conscientious people value education and find meaning in their lives regardless of their titles. Nonprofits help organize groups to meet unmet critical needs.

If we had all that, then most people wouldn't care about the one percent or 99 percent. I think that would be a good thing too. Because at the end of the day, we still need 100 percent to work.
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