Sunday, March 15, 2009

Why John Galt Matters

I'm referring, of course, to the protagonist of Atlas Shrugged.

You don't have to be a Reagan Republican, Randian Objectivist, or Burkean Conservative to understand one critical fact about humanity: though we are created equal, and we stand before the law as equals, and we shall be judged by deity as equals, nevertheless, we are not equally productive. I happen to be quite inept at government BS paperwork and this keeps my accountant happily employed. And I do other things better than she does.

Human inequality is a multidimensional thing. I write software for a living. I'm told that there is a factor-of-ten difference between the most productive and the least productive software engineers. Compare the output of these 10X more productive programmers working a 90-hour workweek versus the low-productivity guy who works eight-to-four then out the door.

Contrast the contribution to society of someone with a ton of education and experience versus a high school drop-out on drugs. Consider the societal impact of the former working long hours versus the latter working the minimum.

Scale this up across an entire society and compare two competing societies. The Soviet Union had the best mathematicians on the planet. And there was more oil in Siberia than in Saudi Arabia. In 1917 the Russian economy was the fastest-growing on the planet. Yet, that turned around and somehow the Soviet Empire collapsed. Jimmy Carter notwithstanding, America won the Cold War.

I think you can see where this is going. I think there's a reason why the Soviets lost and Ronald Reagan won the Cold War. We could call it his brilliant strategy, but nobody acknowledged that when he was alive. I think the reason is found in this waggish remark common in the Soviet Union: "they pretend to pay us and we pretend to work." This makes me think that a lot of Russians were doing just enough to get by. And it didn't much matter whether they were high-skilled, high-productivity, or low-skilled, low-productivity.

Jimmy Carter blamed his failures on us. On malaise. Then came Ronald Reagan who pushed through tax cuts. Unlike Mr. Bush he talked about shrinking budgets, governments, and regulation. But the big thing was that he cut the income tax rates on the highest margins.

Suppose I work 40hrs. And I pay some percentage of that in taxes. The rate at which I am taxed for the 41st hour is the maximum tax rate I'll pay. Suppose further that I'm a high-skilled and high-productivity. I'll be paid more per hour than the high-school drop-out on drugs. If you think that's unfair, remember that I'm creating more value per unit time. But if I'm giving most of it back in taxes, why should I work myself to death.

This is how Atlas shrugs. It isn't an overt, dramatic "strike" by the producers, but the accumulation of tens of millions of decisions to knock off a little early or linger a bit over lunch.

Thursday, March 12, 2009

How To Go John Galt

With the recent political events there has been renewed interest in Ayn Rand's novel, Atlas Shrugged wherein the character John Galt leads a strike of the producers against the takers.

You may be aware that the tax base has narrowed so that 60% of the American populace can vote themselves goodies from the other 40%, particularly the richest 20%. This may motivate some rich guys to "Go John Galt."

This note tells you how!

First, you have to quit engaging in productive activity.

Second, you have to stop paying taxes. If you do it right, you can pretend your tax cheating is "an honest mistake." Or you may live in a high tax state. And the way to address that is by moving from a high tax state to a lower tax state. Suppose you live in Illinois with higher taxes. Just move to Virginia or Maryland.

Third, if you've read Atlas Shrugged you know the book depicts an economic collapse instigated by John Galt and his allies. To really do the John Galt thing, you've got to substantially and materially contribute to an economic collapse.

Conversely, you might not appreciate these "wreckers." You might think think people who do such things are criminals. Perhaps we can identify those who've already gone John Galt.

First, who does less productive activity, or does more anti-productive activity than a government official? Second, when the guy running the IRS is a tax cheat as well as the chairman of the House Ways & Means committee, tax-paying is definitely optional for some people. Third, the unicorn of hope and change has pursued disastrous economic policies that have has chased capital out of the financial markets. Presumably, George Soros is done shorting the markets.

So, who is John Galt?

Saturday, March 07, 2009

Blue Man Nuke

Last night I made the mistake of rounding up the usual suspects and going to see the movie, "Watchmen." Bottom line: there is no reason for any Republican to watch this movie, and I suppose, there's no reason for any Democrat to watch this movie, either: just save your money for the next Michael Moore movie.

I suppose "Watchmen" tries to overcome some of the stereotypes and tropes of the comic book. The characters are "deeper" than comic book action heroes. Deeper characterization in the sense of having internal contradictions. Yeah right. If you look for a message in this film it may be that the immanent is corrupt and the transcendent is indifferent.

There's the latex-clad eye-candy. Her story arc goes from unhappy childhood, to stealing the blue man nuke from his first love, to dumping this god for the dork, dithering a bit between them, then settling on the dork. I figure dorkman, who inherited his fortune the old fashioned way, inheritance, was a better meal ticket than the naked blue god.

Justice is for cranks. The crank justice of the all-in-one judge, jury and executioner. Rorschach is the narrator of the film and his character has a nicely noir flair about him. He's the one who investigates the crime that serves as the inciting incident. His flawed sense of justice and morality serves as an interesting counter-point to the machinations of the oh, too, predictable villain of the piece. His reward for solving the crime is fitting of the writer's nihilism.

Then there's Dorkman. He's the guy the comic-book reader identifies with. He stumbles through this film. He's told he needs to grow up. I saw no evidence that he ever did or that don't think he even wakes up from his somnolent stumble through this narrative.

EVERY a movie that depicts the smartest man in the world is set in the same universe as Idiocracy. Let's see, smartest man in the world, accumulates the greatest fortune in the world, how does he use it? 1) surround himself with ancient Egyptian kitsch, 2) fly blimps with his name plastered on the side over Manhattan, 3) leave evidence of his crimes on a computer, 4) password-protect his secrets with a password taped to the underside of the computer keyboard, 5) reveals his plan in comic-book villain fashion then says he's not a comic-book villain.

Meanwhile a number of minor characters populate the film like the little birds and stuff in the margins of Mad Magazine: Richard Nixon, Ted Koppel, Pat Buchanan, etc. It would help if the actors they'd chosen had been made up to at least vaguely resemble these public figures. Politics casts an omnipresent, baleful stench upon this film. The ultimate political solution advanced by the film is paternalistic, which makes sense given the stupidity of everyone inhabiting this world.

Let us now turn our attention to the Blue Make Nuke. If you've seen the movie trailers, you've seen all the memorable scenes of the movie. He is endowed by a nuclear accident with godlike powers. And being a god means you can be indifferent about covering up your junk. In fact, that's one of the central themes of the book: to be transcendent is to be indifferent.

In the world of Watchmen, if there is a God, s/he/it is indifferent to the human condition. The god of Watchmen is a cerulean cgi construct. One does not love this god with all of one's heart, because he's likely to be checking email during coitus. And what, precisely, does this character do with his godhood?

C.S. Lewis wrote an essay, "Men Without Chests," and the only chest worthy of note in this film belonged to the eye-candy in latex. But in the essay, "chests" was used in a metaphorical sense of ordinate affections: loving the good and hating the evil. There is evil in this film, but only a crank would confront it and oppose it. And only a sleep-walking child would endorse the sentiment.

I walked out of the film and said, "That's two and a half hours of my life I won't get back."

Tuesday, March 03, 2009

In the wagon or pulling the wagon?

I just happened upon a graphic that divided the country into 5 quintiles. (For those of you who voted for Obama, that means the bottom 20%, next to bottom 20%, middle 20%, next to top 20%, and top 20%.) It was a bar graph that showed the difference between the money the government spends on the households in that quintile, minus the money households pay to the government in taxes. The bar graph broke it down by state and federal spending. Good news! 60% of the country is getting more government spending than they're paying in taxes.

Ronald Reagan described it like a wagon with some people riding in the wagon and some people pulling the wagon. And our current tax code is structured so that an effective ruling majority of the electorate is riding in the wagon. The next-to-top quintile is getting screwed by the government, but it's only one sixth as bad as the top 20%.

This is not sustainable. It certainly makes more sense for someone to live in the bottom three quintiles than in the top two. I suppose some altruistic souls really dig their patriotic duty to pick up the tab for the politicians who are buying votes with the tax receipts. But how long does it take before they just shrug and say "Who's John Galt?"

I have been wondering whether someone could actually pull off a producers' strike like in Atlas Shrugged and I think the answer is no. There are some true geniuses out there who cannot be replaced, but a lot of mediocre types would be the scabs to break the picket lines. Instead of a dramatic societal collapse as in "Atlas Shrugged" the 2nd stringers will plug the gaps to varying degrees of adequacy. The really great talents who are tired of pulling the wagon can just shift their energies to non-taxable pursuits.

And it isn't as if anyone will hightail it to Galt's Gulch. Just live in a place where the cost of living is cheap and make just enough to live comfortably. Stop and smell the roses. Life is short. I figure smart money will find more friendly places for capital than the USA (It won't be Europe.) or shift assets into tax shelters.

One thing I learned about Democrats in the early '80s is that they are cool with high taxes because they intend for other people to pay them: They make sure they leave loopholes in the tax code for trust-fund kids like the Kennedy family. That's what tax-free municipal bonds are for. There's a reason why the teleprompter-messiah's appointees have tax problems.

So, capital, along with the talent and sacrifice that might go into creating some serious wealth will just go into hiding. And this is a good thing, when unemployment hits 30%, all the John Galt types will be working two days a week and puttering in their back yards on do-it-yourself projects. One doesn't need a lot to live simply. and that's what these hippy-dippy types all say we gotta do. Pass the granola, man, and make room in the wagon.