Perhaps a fundamental difference between those who call themselves conservatives and the rest of us is this:

We like competition and want to keep a given field as open as possible. We know it is the struggle that produces achievement.

They want to see the winners of competition stay on top. They are the current winners and will work to prevent any change in the rules. That the rules were hardly fair matters not at all.

Robert, you wrote: "progressives clearly want to use the police power of the state to tear down the current winners regardless of merit."

I think that's hyperbolic and wrong.  I challenge you to peruse the sites I mentioned in the post (Agenda for Shared Prosperity, Hamilton, Edwards) and provide some evidence.

Gee, it does sound so much nicer put that way. I've seen the light, now. (I'm lying.)

In the situations where one country produces the whole product, perhaps Guatemalan jackets and purses, trade looks fair to all. But when a domestic manufacturer takes their trademark, design, and sales potential to another country and then comes back into the first country, that's just evading real costs, and shunting them elsewhere. It does not imply any real improvement in process.

Sure we like cheap jeans for a while, then we begin to see the middle class suffering, with layoffs weakening local government tax revenues. Those are the costs that have been evaded. Like many systems, the idealized version is a closed system. But outsourcing labor violates that, and it is no longer truly a free market, more like a black market. Black markets are generally considered bad because they are unregulated and unaccountable. That is, legal recourse is not available to address violations of law or fair practice.

Let's also consider the constant arguments betwen nations that participate in the World Trade Organization. What looks like tax relief from one side looks like a subsidy to the other side. It's all agreements, not an open market, exactly.

I've gone back to US-made Levis shrink-to-fit jeans, and have been buying Fords lately, Chevys before.

It always amazes me that the rich, who occupy themselves with golf and sailing, can't understand the importance of

a) the handicap, and

b) the round

when it comes to maintaining an economy.

How many golfers would enjoy the sport if they never had a chance to win a single game?

Come on conservatives, clue in--there have to be ways for people to play, and play again.

It is naïve to suggest that progressives like competition. Do a quick check of this site for those railing against free markets and the “winner take all” economy. Labor unions, the darlings of progressives, certainly oppose competition, preferring instead pay based on seniority.

If conservative want to keep winners on top regardless of their merit using the police power of the state, progressives clearly want to use the police power of the state to tear down the current winners regardless of merit.

You're committing the flaw of thinking of "labor" as a commodity. That's not the case. In fact, there's no such thing as "laobr." There's just millions of people trying to get by. The current international economy puts them at a disadvantage, despite their best efforts. I simply do not think that is a good thing.

Of course progressives don't want to "punish" the rich. Robert, stop and think about it for a second. Really. This is a ridiculous comment, it's not a valid argument.

Wealth isn't created purely by individuals, it's created by our entire society working together. Progressive taxation is the most fair mechanism raising the revenue the government needs.

It's that simple. No one wants to punish anyone for anything.

Yep. It's like it's dead, but its zombie keeps stomping around wreaking total havoc... arguably more powerful than ever.

Life will never be "fair" get used to it. That said, I fail to see the grand conspiracies by the rich to hold everyone else down that progressive obsess over.

"Conservative economic policy is dead."

More like 'Night of the Living Dead' if you ask me. It just won't die, no matter how many times you stab it in the heart.

I'm currently reading Naomi Klein's "The Shock Doctrine: Disaster Capitalism and I gotta tell ya, I hear the same mantra in every utterance from these zombies in the Republicon Party today: Privatization, De-regulation, and Deep Cuts in Spending. It's a recipe for disaster and there is a vast archive of historical evidence to prove it.

Aside from the fact that I'm CERTAIN that progressives have better economic strategies, inquiring minds would like to know: Name ONE thing about 'globalization' that has been good, Jared.

The problem is Democratic ideas work. After they do, all these poor and middle class folks are rich enough to think they should vote Republican.

another thought,

We don't want the Democrats to have power for too long, because then we all would be so rich that we all would vote Republican.

So the way to have a Republican majority is to vote Democrat.

Jack

(walking away with tongue planted firmly in cheek)

Wow!

Yesterday I got my copy of Paul Krugman's "Conscience of a Liberal" in which he specifically states that the existence of the Middle Class is a political decision, not the results of impersonal economic forces. There was a minimal middle class before the Depression. After the Depression a middle class was created by the compression of wage rates during the War, political support for the right to organize unions, by the GI Bill and by Eisenhower's agreement with the basic thrust of the New Deal. [The last thirty years has seen a consistent destruction of the political basis of the New Deal, and has brought America back towards the minimal middle class representative of the Gilded Age. This has been the real focus of the "conservative movement."]

Today you post this total rebuttal of the set of conservative economic policies.

I have been reasonably sure that both your position and that of Krugman are true, but when I started to argue it I sounded like some crazy extremist who hears voices in my head. Suddenly I have these two discussions to back me up!

Conservatism has failed (Well, Duh!) and now we Liberals have the core set of debating points that we can present to the electorate. This is the basis for a real Liberal American political movement.

The conservatives are going to really go ballistic if they haven't already. (See Digby - is this an additional reason for their extreme rhetoric? See also Me for a shorter version of what Digby said.)

The old-line Democratic politicians will change or disappear - they may escape challenge in the too-early primaries of 2008, but that's their last chance. The new Democratic politicians better read this stuff if they want to win elections.

This also ends the era of the Democratic Leadership Council. The DLC'ers will adapt to this new recognition of political reality or they will disappear. The right-wingers they want to compromise with are proven wrong, and now we have a clear political philosophy to place in opposition to them. As Jim Hightower said - the only thing in the middle of the road is a yellow stripe and dead skunks.

Thank ("Insert your appropriate local deity here.") (Intended as a poke in the eye to the heretics of true Christianity who espouse Biblical Inerrancy and push Evangelism.)

Ah the life isn't fair position. Yes, I'm familiar with it. That is however inapplicable to business and the economy is it not? There are rules and laws governing business practices and the economy are there not? If there are rules and laws then this in turn implies that there are right ways and wrong ways of doing things. And if someone is not playing by those rules yet permitted to get away with it then that is by definition not fair correct? This isn't crying over spilled milk here, this is simply demanding that there be some rules and that those rules be followed. Why have rules or regulations at all if they are going to be ignored? Wait, I suppose that is the conservative's goal ultimately is isn't it?

So you fail to see corporate lobbyists buying politicians in order to secure contracts, remove oversight & accountability, eliminate laws and loosen regulations? Our history is full of varying degrees of this very sort of corruption and Washington today is inundated with it. As a Californian let me ask you to take a look at the "power shortages" we had a few years back. Courtesy of deregulation and cronyism - yes or no? Your answer to that question might clearly indicate on what side of the "rules" line you prefer to stand and whether or not you wanted to know who Dick Cheney had his "energy policy" conversations with. This is exactly what happens when you de-regulate and allow "the market" to police itself.

There is no need to throw words like conspiracy around hoping to diminish the conversation. There are in fact readily available examples of how deregulation and cronyism have tainted this "free market" of ours. In many cases these actions have been and are illegal (at least until they get a politician elected to make them legal). And in these cases the services/products and the consumer suffered while the businesses made large profits. Is this good business? Is this good for our economy? I say no, I call it cheating and I see it as having a long-term negative impact on our nation and it's economy.

And incidentally, it doesn't need to be a grand conspiracy in order to inflict damage. Many unconnected small fiascos can handle the job just as effectively as any grand conspiracy.

**Edit** I also noticed you addressed my use of the word fair but not honest, unless you're dismissive use of grand conspiracy was intended to address that. Which if so I find curious.

An economic market consists of a buyer and a seller, each of whom is independent of the other and neither of whom can effect the market price of the product or service being exchanged.

Independent and unorganized workers who "negotiate" with a large employer are not in any such market. They are price-takers. The employer sets all the prices and the rules. That's why employers work so hard to bust unions. Real negotiations are difficult. Most large employers avoid them whatever it takes.

Non-unionized labor is a commodity. Jobs offered by a large employer are not. There must be unions to balance the power between the buyer and seller in that unequal and non-free market. Commodified labor will not be paid based on merit. It costs the fat cats who own the companies too much and they won't do it unless forced to.

Workers support families. Families are the basis of society, not a side effect of commodified labor. Size makes the future of large businesses comparatively predictable. Commodified labor cannot predict their paychecks, yet when they have families they need to predict income to some extent through the end of education of their children.

Free markets are important to set relative value for inputs and outputs for businesses. They can estimate risk and return before they enter markets. Workers have limited opportunities to prepare themselves for different jobs, and they have less ability to evaluate risk and return before the start families.

Society exists to support families and individuals. Businesses that don't want to do that should find better ways to spend their time. Society does not exist to support businesses. Anyone who thinks so has their priorities totally wrong. That makes unions more important than businesses every time.

Not that unions shouldn't be flexible and assist their businesses to succeed. They should. But government and society exist to put families and individuals as the highest priority, and that includes unions before businesses.

You want flexible companies capable of meeting competition and still dealing with unions? The Germans have the right idea. Every large company must - by law - have at least two representatives of labor on the Board of Directors. Management and Labor talk to each other and build relationships based on that old business concept - Trust. The alternative is the kind of relationship American Airlines has with its unions. AA management got the unions to make major sacrifices in pay, benefits and work rules after 2001 to keep the company flying. In recent years management has been handing management massive bonuses while stiffing labor on every front. It has reached the point where management could start handing out hundred dollar bills no questions asked and the unions would ask how they were being screwed over because that is what they expect. The unions are right. They are being screwed over in favor of management. If labor had representatives on the Board of Directors they could head off the idiocies management has inacted (either in policies or in the poor forms of communication) and they would explain to the union members why what was being done was really important to the company.

As it is, conservative consultants create labor problems, setting up win-lose situations, so that they can make money shafting labor and exalting management. Like all conservatives, they convince their clientele not listen to or communicate effectively with those who disagree - in this case, the workers. The conservative consultants make a lot of money by eliminating trust between labor and management. No one else benefits.

Without effective unions there is no economic middle class. We don't want to live in an America with no Middle Class.

Those middle class voters vote Republican because there is no effective "counter" to the ideas presented by the Republicans.

This is changing. This post and Paul Krugman's new book are examples of the change.

...and therein lies one of the fundamental differences between conservatives and liberals. Conservatives believe that the only value something has is the price it can bring in the "free" market - be it the iPhone or a human being, a healthy educated public, civil liberties or the environment.
Liberals believe that the actual value of certain sacrosanct things is incalculable and that there should be a lower bound on the kind of life people have. Conservatives confuse that with thinking there should be an upper bound but that's definitely not the case. I hope you can understand that.

And the scare quotes around "free" is not meant to deride it, rather to draw attention to the fact that even the silliest of libertarians ought to realize that the government-subsidized infrastructure that markets need to work - courts, roads, an educated work-force, etc. - makes it far from "free".

Indeed that is the difference.

I think that conservatives/libertarians believe that there needs to be consequences for not contributing to the economy in order for the economy to function long term. I think most of them would agree to an safety net provided by society for those who truly cannot contribute. I suppose we are just talking about degrees to a large extent.

I do not understand that progressives do not wish to set an upper bound on the kind of life people have. Those who obsess about income disparities are arguing for just that it seems to me. Check out the debate that was raging here this week.

The argument that markets are not free since governments set and enforce the rules of engagement is an old one and I wish you would drop it. Market forces can be allowed to operate even though we don’t have anarchy.

Henry Ford created the middle class. If you don't understand that, you understand nothing.

Adults learn to accept what they cannot change and live with a system that will always be imperfect. That does not mean they do not work to improve the system, they just don't lie on the floor kicking and screaming about the system being unfair.

Once a worker gets an education for a specific job or spend an extended period of time working in a given industry at a specific job, they are no longer "millions of workers independently seeking the highest possibly pay for their labor among competing employers". They are a few workers in a small industry, and the employer has all the power to set wages and work rules.

When there are "millions of workers independently seeking the highest possibly pay for their labor among competing employers" in all markets, the workers do not create and offer jobs. Only the employers do. Again, it is not a market between equally powerful buyers and sellers. Employers have the power, and as Malthus proved, the employers will set wage rates at a level that lets labor minimally survive. There is no economic theory that demonstrates otherwise without unions. Employers can always withdraw from the market, but workers much work to eat and cannot withdraw.

Without unions there is no middle class.

Unions do not override market forces. They only set conditions in the market for labor in which labor and management negotiate on a more equal basis.

The market for labor is different from the market for the final goods and services. Both labor and management have to work to meet the demands of the market for final goods and services. Conservatives want to hand the entire responsibility for meeting the demands for final goods and services to management, and make labor into something that is similar to indentured servants. But that is because conservatives don't want to work for a living. They want to order someone else to do the work.

Besides being inefficient and unfair, that simply doesn't work well. It eliminates the middle class and provides rewards to business owners and management out of all proportion to their contribution to the final product.

If you think that unions can eliminate market forces, then you do not understand markets, unions or effective businesses. And you really don't understand the position of the family in society, or how economics relates to either families or society.

Nope. Henry demonstrated the superiority of an economy based on a decently remunerated Middle Class (bigger markets to sell to), but it took the government support for union organizing and the rest of the New Deal to the create the Middle Class.

Before effective unionization the middle class existed, but was not a major part of the economy. That took unionization.

So society did not exist before the Industrial Revolution? Society did not exist in Western Europe after the collapse of the Western Roman Empire?

A lot of societies have existed with no business sector at all. One such is what we used to call the European Dark Ages.

What you call the business sector could not have existed before the Hellenic society invented coinage in 750 BCE, but societies have existed since at least the beginning of agriculture some 12,000 years ago. Agricultural society existed in better shape before business (and the associated wars) but sea borne societies such as the Phoenicians operated on a trading basis beginning about 2000 BCE.

I'll be polite and simply say that your statement is insufficiently nuanced to have any relationship to reality or history.

I take your point re globalization--there's been a lot more pain than most policy types will admit.  But I think prices (and interest rates) are lower here, given the increase in the supply of goods that more trade provides.

I also think trade is a critical strategy for less developed economies to raise their living standards, though as the link in my post shows, that's not happening as much as it should.  But ask yourself how poor countries would get ahead if they couldn't trade with richer ones.

When someone rails against income disparities they are only highlighting how the upper extremes of wealth make poverty that much more glaring. If a minimum standard could be set without imposing taxes, I'd be all for it. But if it comes down to taking resources from middle class or upper class folks to set that standard, then I definitely would opt for the upper class based on maximizing utility - to use the purely economic argument - since $10,000 to Bill Gates means a lot less than it does to me. Plus, a clear argument against the flat tax or consumption tax, which are the most ridiculous ideas ever, is that Bill Gates uses this tax-payer funded market infrastructure a lot more than me, so he should pay more.

Plus, there are definitely conservatives that are against publicly funded education and they generally seem to be against providing a minimum standard of health care to US citizens. If it is a matter of degree, then conservatives seem to set the bar embarrassingly low.

The point regarding the free market was not about setting the rules, but rather about the actual monetary cost, requiring significant contributions on the part of regular Joes and Janes to fund rich people playing roulette (can you say real-estate bail-outs) for example. That strikes me as far more of an injustice than the imaginary specter of "welfare queens". Why aren't conservatives railing against that use of gov't money before picking on the poor?

GWB & the Republican congress's recent behavior brings this in sharp relief. Bloated budgets full of pork for Alaskan bridges to nowhere, but when it comes to a bill funding children's health care, that's when the fine-tooth comb comes out looking for the tiniest of problems.
It is things like that that make liberals question conservatives' motives.

Ultimately, I appreciate your participation in this debate in good faith.

Once a worker gets an education for a specific job or spend an extended period of time working in a given industry at a specific job, they are no longer…

I just don’t buy the concept that there are large numbers of educated and skilled employees without options if their current employer does not pay them what they think their labor is worth. True, they may be reluctant to leave their employer because of the inconvenience, but I do think most people have options.

Employers have the power, and as Malthus proved, the employers will set wage rates at a level that lets labor minimally survive. There is no economic theory that demonstrates otherwise without unions

Employers would like to have slave labor but they cannot have that in a competitive labor market. Few employees belong to unions it the competitive private sector today, yet nearly all of them are paid well above the “minimal survival” rate.

Unions do not override market forces. They only set conditions in the market for labor in which labor and management negotiate on a more equal basis.

Like I said unions cannot and in fact do not override market forces to any large extent which is why I don’t see them as the panacea that you do.

The market for labor is different from the market for the final goods and services. Both labor and management have to work to meet the demands of the market for final goods and services.

Huh? My point was that the price setting mechanism is the same for products for sale in the market and labor skills for sale in the market. It doesn’t matter what mix of labor, management (which is labor by the way) and capital was required to produce the good for sale.

The point regarding the free market was not about setting the rules, but rather about the actual monetary cost

I thought that everyone understood that when one refers to the “free” market, one is referring to the freedom to engage in commerce with others, not inferring that cost of setting and maintaining the rules of that commerce is zero.

I am not persuaded that it is better to keep profits local.

If you don't want them where you are, you can send them to me!

Sure if you can get me a better product than my local guy can.

I agree with Tom. Republicans don't really believe in free markets -- that's just a mantra to fool the voters. As George Stigler (!) said of supply-side economics, it's just a gimmick to win an election.

Republicans believe in using the power of government and selective application of competitive principles to lock in the hegemony of the corporations that happen to be on top in the current election cycle. Nothing could be more antithetical to "free market" economics as understood by any mainstream economist, far less a member of the old Chicago School like Stigler or Milton Friedman.

About 4 years ago I made three predictions;

1- Bush Republicans would destroy the Republican party, keeping them in the minority for at least a generation.

2- The right wing Christians will go to war with the right wing capitalists.

3- The right wing will slowly wither on the vine.

All three are right on schedule.

PS

Perhaps the retirement of so many long serving Republican members of Congress may be a sign of # 1.

but I do think most people have options.

As an example, at the moment, a lot of workers cannot afford to move because they can't sell their house except at great sacrifice. Their options have sharply narrowed.

In negotiations between labor and management the current relative power position is mostly favorable to management. Both increased wage rates above minimum wage and the number of jobs in any given local market narrow as a result.

Few employees belong to unions it the competitive private sector today, yet nearly all of them are paid well above the “minimal survival” rate.

The fact that there are occasional individuals who have greater ability to negotiate favorable pay rates does not mean that everyone has those options. Most workers do not. The issue we are discussing is whether most workers will belong to the middle class or to an undifferentiated mass of labor who are just allowed to survive. The comparative statistics showing that the U.S. life expectancy is dropping in relation to that of other nations shows that the U.S. is heading in the wrong direction.

Ask any honest economist about the economic theory that establishes the optimum distribution of corporate profits between capital and labor. That honest economist will grudgingly admit that there is no economic theory at all. The profits are distributed to the most powerful of the two. In the absence of unions, general labor has no power. The discipline of economics does not concern itself with the study of power. Uncle Miltie (Milton Friedman) simply arbitrarily assigns the power in large corporations to the owners of capital and refuses to accept any modification of that severe over-simplification. It results in an injustice to the contributions of Labor which needs to be negotiated out between equal negotiators.

The model provided by American Airlines' failure to communicate and negotiate between Labor and Management demonstrates a total failure on the part of Management. Conflicts with unions are 90% caused by failures of management, usually management which has hired the wrong consultants.

unions cannot and in fact do not override market forces to any large extent which is why I don’t see them as the panacea that you do.

You are assuming that such 'market exchanges' will automatically provide just outcomes because the prevailing market negotiation rules were followed. Yet you have no problem with changing the rules so that management can prevent Labor from organizing to effectively negotiate against large corporations. That's what the practice of 'union busting' is all about.

Large organizations have more power in negotiations than do small organizations or individuals, and the price results of economic negotiations will always reflect that. The minute you recognize that there are major power advantages to the larger organization it becomes obvious that the smaller organization becomes a price taker in any economic exchange.

This is true in more than just Labor negotiations. Suppliers to WalMart and Sears have found the same problem as workers. Once the unjust effects of size differentials are recognized, the need for labor to organize to meet and negotiate with management on an equal basis becomes obvious.

WalMart's suppliers are less at less of a disadvantage than workers are, however. They can always withdraw from the market and redeploy their assets elsewhere. Since most workers have to work every day to eat and pay their mortgages and credit card bills, withdrawing from the market is much less of an option for them. Again, the millstone of supporting a family limits their options.

the price setting mechanism is the same for products for sale in the market and labor skills for sale in the market.

management (which is labor by the way)

Economists do not study management as part of Labor economics. They study management under a discipline called 'Agency theory' because managers are agents of the owners. Such agents are not themselves labor.

Large corporations have to have such agent managers in order to operate. They appeared in the U.S. economy after the Civil War, and academia recognized their existence as different from Labor when Harvard began issuing Masters degrees in Business Administration. I forget exactly when that was, but I think it was just a bit prior to 1900.

Management was recognized even then as being qualitatively different from Labor. When I write of 'management' I mean that they are the active agents of the owners and distinctly different from Labor. They are the human face - the agents - of 'Capital.'

Thank you for your intelligent discussion, Robert. It's rare to find a place on the Internet where such intelligent discussion is allowed to occur. Thoughtful people like yourself who practice the art of thinking and discussion are hard to find.

By the way, I'm sure the people in India will be happy to hear that.

"free markets"

heh heh he....where??

Econ1 may be; When you put labor in competition for jobs you put downward pressure on wages and benefiits.

Here's your "Free Market" in practice;

1- John Doe, American citizen since birth, works in Widget Factory for $15.00 per hour
plus benefits; health care, pension, vacations, etc.

2- Influx of immigrants, legal and illegal, flood the market with labor.

3- Jose enters picture. Applies for job in United States Widget Mfg. Co. Application asks for salary range being applied for. Jose enters $9.00 per hour. Employer tells Jose they have an opening for a job that pays $9.00 per hour but no benefits.

4- Jose accepts job, John Doe gets laid off.

5- 6 months pass.

6- Juan enters picture. Applies for job at U S Widget. Enters $7.00 per hour on line asking about salary required.

7- Juan gets hired for $7.00 per hour, no benefits. Jose gets laid off.

8- American citizen, John Doe, goes to Unemployment Office. Offered a job at U S Widget for $6.50 per hour, no benefits.

9- John Doe declines.

10- George Bush appears on television and says we need immigrants to do the jobs Americans won't do.

Irony = Jose takes job from John Doe, Juan takes job from Jose. Jose supports open borders as Manuel looks across border, eyeing Juan's job at U S Widget.

US Corp executives drop a few million into Congressional campaign coffers and number of H1-B visas is increased by 100%.

The Free Market at work!

Do you know the way to Bang-la-desh...... la la la la la laaaaaaaaaa?

Gee, your optimism is swell. But let's look at reality. The vast majority of Americans are working harder for longer hours and making less money while all the wealth created by increased productivity is being captured by a narrow slice at the very top. It would be great if manufactutring jobs were being replaced by better jobs, but that is not the reality. They're mostly being replaced by lower paying service jobs with less benefits. It's great that you think that "our economy can adapt," but it's obvious that it has a much better chance of adapting in a way that retains a vibrant prosperous middle class if we elect Democrats and dump Republicans and their simplistic free-market fairy tales and start getting worker input on trade deals rather than letting corporate lobbyists continue to write them.

miasmo.com

I agree that he's better than many on the Right in that he's consistent. Still I'm not sure that turning a blind eye to injustice is a consistency to be proud of.

It is difficult not to sympathies with the forty year old whose job is becoming obsolete. The question is can the economy adjust to accommodate these newly available workers, or do we build walls and try to freeze the economy as it now exists.

I happen to believe that we need to find a way to adapt to change because trying to maintain the status quo will be counter productive in the long term.

Speaking of 'feeding,' back when minimum wage was what it was and a pizza cost $2.00 would mean that today when the same pizza costs $12.00 minimum wage would have to be $15/hr to keep the same ratio.

I don't know if our society might collapse when the masses can't eat, but our consumer driven economy certainly would be in trouble if people were forced to cut back on consumption because of too low wages. (We'll see if the present price of oil has any negative affect on sales over Xmas.)

"...back when conservatism was about conserving what was best about society, and so they also used to values social stability and traditions."

The type of social stability that conservatism has always been about is the stability that they think results from a class of rulers making decisions for the rest of us. Economic security for the masses leads to the masses challenging the status quo. The two have always been at odds. When people get beyond worrying about their next meal, they start to question "traditions" such as racism, sexism, and other forms of inequality as well as the authoritarian systems that rule them. If you consider such things to be "what was best about society," I guess you can honestly call yourself a conservative.

miasmo.com

mcboo's use of 'rich' here is much what I was thinking when I used the word in the post.  The idea is not to inveigh against the rich in some abstract, global sense.  That's obviously meaningless. 

The idea relates to the point about POWER.  When too few control too many of the resources--and the share of income going to the top 1% right now is 22%, highest since the late 1920s--they control the politics in destructive ways. 

The best recent eg of this is the failure of Congress to raise the tax rate on hedge fund managers from the capital gains rate to the top income tax rate (since it's compensation, it should be taxed as such--this is widely agreed upon by pols on both sides of the aisle).  But because these wealthy investors have invested heavily in politics, they've been able to kill the change.

I disagree absolutely with your use of the phrase "productive participants in the economy".

Productivity is about building, about making, about delivering service, about actual value-add. Real productivity is generated by those who are doing the work, and improvements to productivity, improvements in economic efficiency are generated or assisted by people who are inventing new ways of achieving society's ends.

Managers of large capital flows perform a useful service in any economy, including this one. Accordingly, they should be paid in accordance with the extent to which they provide value. That service is not, by any stretch, worth the current pay rate those people are extracting from this economy.

You want big money? No problem. Invent something that changes the way we work, improving our productivity.

You mention "placing some sort of handicap on the more productive participants in the economy". I challenge you to cite how Ken Thompson, Vint Cerf, or Linus Torvalds, or sir Tim Berners-Lee (etc. etc. etc.) have been remunerated in accordance with their productivity when compared against Lee Raymond, or Jack Welch, or Al "the chainsaw" Dunlap, or the myriad capital managers in the current hedge fund marketplace.

Handicap indeed.

The problem is that people view the word "conservative" as warm and fuzzy. Conservatism as a governing philosphy sucks. "Conservative" as a label has more appeal than "liberal" simply because conservatives proudly self-identify as conservatives and relentlessly demonize the "liberal" label. There's a battle being fought, and only one side is fighting it. Conservatism sucks. Liberalism is righteous. Why are we surrendering a rhetorical fight that is easily winnable and where we're clearly on the right side?

miasmo.com