Saturday, April 14, 2007

Behavioral Models

Chris Dillow tends to come up with a Way-out Post on weekends, which approaches some aspect of life from a different prospective. What makes this practice uncommon lay in the accuracy brought to the practice. This Post on Managerialism highlights the erosive destruction of supplanting professional ethos with an alternate Value system. Maximization of Profit corrodes almost every great endeavor outside of distinct Business opportunity, and even Business sinks into Corruption if exterior ideals hold no sway. Chris attributes Managerialism to the practice of Micromanagement which may well be, though I think it is the simple practice of ‘Keeping up with the Jones’ among leadership cadres; they feeling compelled to express superiority over their Peers. This translates into egregious Salary and Benefit awards, which existence percolates downward as knowledge destructive of moral values. The end-result tarnishes the ideal of professionalism, and propels a dedication to crass Materialism.

R. J. Waldmann presents a perfect example of why One should not rely on Economists to write on Economics. His basic assertion states that Taxes should be confiscatory, or nonexistent. This is the policy dictated by standard economic models with impact of policy set to zero out. The trouble here is that in the real World, Governments do exist and do spend. His allegiance to a Poll tax cannot, and will never, cover all Expenses of that Government expenditure (any setting of the Poll tax above coverage of the simple Salaries of Government officialdom will again reintroduce a Capital tax with its distortion; i.e., Government Workers simply working, and thereby Spending, brings back the entirety of the distortion). It is a prime example of Economists getting wrapped up in their own models, and missing the functioning of the real World.

The basic intent of his Post does have a Point: Capital will alter the intent, purpose, and result of any Tax, if allowed the Time to affect that change. Waldmann does protest the Reagan/Bush policies have it wrong, and they do. Economic performance will be enhanced with an increase in the tax on Capital, not in an decrease in the tax on Capital; Waldmann undoubtedly would protest going this far. The fact exists, though, that the increased Capital tax is an Incentive upon Business; who are concerned with the maintenance of their personal levels of Income, and who will work harder and be more inventive to achieve that Income. Here is where the gradualism in Taxation works effectively, rather than the Waldmann confiscations. lgl

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