Party Paradox

With the election drawing near we see editorials from both parties claiming that they have the economic solution to help those folks losing their homes, watching their 401K get eaten by fees and dropping asset prices, doing the same job for decades with no increase in pay. Both parties claim the same goal, creating the right balance of government and market power to satisfy both groups customers, taxpayers.

Both parties want government to pay for something, with the Republicans talking up small government, strong business performance and a powerful military. The Democrats want more government social programs, more regulations for business and less guns. There are certainly other issues but most people would be able to identify the party from those policies.

The problem for the customers (citizens) of what these parties are selling is that when we make our purchase at the polls and bring the box home it often seems as if the contents were mixed up. As an example, if Republicans are the business party why has the stock market performed almost twice as well under Democrats? According to the Stock Trader's Almanac the market's average annual gain since 1901 under Republicans (56 years) has been 6.9%, a return we all would have loved to have over the last 7 years instead of the loss we have incurred. But under the Democrats the market has grown 13.3% (48 years) on average per year over the same period.

Republicans are also small government advocates, while the Democrats are argued as being big spenders, throwing your money at every problem they see. In reality the parties only varied by .5% in the growth of government as measured by budget growth in the four budgets passed by both parties prior to 2000, with the Republican Congress's growing government by 13.9% and the Democrats growing the budget by 14.4% (source GAO).

From 2000 on government has grown at unforeseen rates but factor that out if you like to blame everything after 9/11 on that event, and use it to justify the huge growth of government.

Finally look at free markets, Republicans have fought tirelessly to convince us customers that we have the best health care system, educational system and financial system because we let free market forces do our thinking for us, leaving us to reap the benefits of Adam Smith's "Invisible Hand". The results of these experiments are now in, and we pay the most of our income of all countries for the 32nd ranked health care system, our children are 3-4 years salary (gross) in debt if they have to borrow for school, both groups raise prices at over twice the inflation rate. Competitive price pressures are no where to be found.

The banking system has been de-regulated and the results are mixed at best, it now appears that risk has been moved to the citizens, we are picking up $5.7 Trillion (that's a T) of Sallie Mae and Freddie Mac after years of quarter billion dollar a year bonuses for the fine job they were doing. It may seem strange for one small rich group to get the profit and another larger poorer group to take the risk. So Republicans like government to pay bills but like Wall Street elites to make all of the money, Democrats just don't have much to say here, they get a deer in the head lights look when you see them yelling at naughty executives on C-SPAN at hearings (no one hears anything in these get togethers so the name "hearing" should be reconsidered).

So what do you do? Ignore the facts, vote the bums out (the other bums, not your own bum), vote the other party ever other election so you can always take the high road in conversations about politics?

What you must do, what we must do, is remember Lord Acton's warning from over 100 years ago, "Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men." So the next time you see a politician shooting basketball, pretending to like people that they would never invite to dinner, changing their position on a heartfelt issue every week, disowning old friends after a negative news story, remember what these politicians are really saying, "Help Me Before I Lie Again".