December 20 2012
Senator Kyl's Farewell: Why Can't More Republicans Talk Like This?
I’ve complained several times on Inkwell (here, for instance) that Republicans just aren’t doing a very good job of explaining their positions right now.
Senator Jon Kyl, the Arizona Republican, who is retiring after 18 years in the Senate, didn't have that problem yesterday when he delivered his farewell address.
Senator Kyl’s valedictory remarks made the kinds of points I wish more Republicans were making publicly right now.
We keep getting lost in bitter discussions about whether taxes should be allowed to go up on those making $250,000. Or should it be a million? This is arcane to most of us.
It’s not that these things don't matter. They do. Intensely. But why? Kyl explained why.
Wth that in mind, I just want to quote a few nuggets from Kyl's speech. I urge you to read it all (the Weekly Standard has it).
Kyl on the morality of free enterprise:
“And here’s some more good news about growth-based free enterprise. It is the most moral economic system ever devised, for three reasons. First, it is premised on the truth that success only comes by supplying something to others that they really need or want. In the bargain, both sides benefit. Second, this system has produced incredible wealth around the world, lifting millions out of poverty. No economic system can come in helping people. So, it is the most moral economic system in providing material benefits.
“But, free enterprise provides more than increased income and material prosperity. Those things help, but they aren’t what make humans really thrive. The key determinant of lasting happiness and satisfaction is what American Enterprise Institute President Arthur Brooks has called ‘earned success.’ People are happiest when they do something they are good at—when they create value in the lives of others—and genuinely earn their income, regardless of how much it is.
What Republicans should be saying to the public on the matter of raising taxes on "the rich:"
“Cutting taxes at the margins—that is, reducing the rate of tax on the next dollar earned—encourages growth. Raising taxes can have the opposite effect. Nobel economist Edward Prescott of Arizona has found that higher marginal tax rates are the reason that Europeans work one-third fewer hours than Americans.
“When marginal tax rates are lower, prosperity flows to other sectors of society allowing business to create jobs and new products, compete for workers, raise wages, and invest their profits, which can then be lent to other entrepreneurs. Everyone gains in a free economy. As John Kennedy put it: A rising tide lifts all boats.
Oh, and about that stimulus spending:
“Policymakers must focus on the basic laws of economic inputs. A faulty view has gained traction in recent years: that consumption, fueled by government spending, actually creates economic growth. It doesn’t. It just moves money around, taking from people who produced it and could productively spend or reinvest it, and giving it to government to spend. Consumption is the wrong target.
“People only change their spending habits when they know that they will have greater consistent income over time—for example, when they receive a raise at work or get a permanent tax-rate cut. That’s why temporary ‘stimulus’ tax gimmicks don’t work.
“If the problem with the economy is supposedly a lack of consumption, the government can’t solve that problem by spending for us. After all, it’s our tax money that’s being taken out of the economy and spent. And when the government borrows, it will eventually have to tax the people to pay back what was borrowed. There is no free lunch. For the government to spend, taxpayers have to give up wealth that they could have spent or invested. Keynesian, demand-side economics assumes that the government is more efficient at spending our money than we are. This assumption has proved incorrect time and again.
“Wise policymakers will find the right balance between the need for more tax revenue and the need for more economic freedom. They will remember that there is no fixed economic pie legislators should try to divide. They will remember that labor, capital, and technology are the real factors that drive long-term economic growth, not government spending. They will stop shackling would-be entrepreneurs and job creators with ever more burdensome regulations.
We are losing a wise policymaker with the departure of Senator Kyl.