Thursday, August 28, 2008

The great poncho-pup transfer of wealth and the double-thank-you 

There were reports (Mitch has one) that a booth that has mini-donuts at the State Fair is run by a DFL party unit. Oh no! Don't buy your donuts there! I've been meaning to ask Mitch about this, since he's cool with musicians being into the DFL...
But dammit, I like to rock. And it doesn�t bother me that some of my favorite artists - Springsteen, Pete Townsend) have some of the dumbest politics - because I�ll care about what musicians think about politics about the time I care what John Kline or Michele Bachmann think about music; interesting trivia, perhaps, but not why I hired any of them.
...and I assume he buys their albums, and I assume some of that money gets contributed back to Democrats. (Hang on, Michael MacDonald is singing now for "people who want their country back" at the Barackopolis. I'm sure there's some Doobie Brothers vinyl in my closet.)

I was prodded a few minutes ago to write by an ad featuring T. Boone Pickens: In the video a graphic comes on referring to our purchase of oil "no matter how much we drill" as "the largest transfer of wealth in history". And I think to myself, what does this mean?

Begin with something small. Michael rushes onto the Minnesota State Fairgrounds to do our radio show. It's the Fair, he's hungry. The Poncho Pup is his quarry. So he buys. He takes out his $4, hands it over to the vendor, who hands him his first (of many!) meals of the day. He says "thank you", the vendor says "thank you". Think about that: It's so automatic. Seldom do you hear "you're welcome" because neither thinks they got a transfer of wealth. Each actually thinks they got the deal. Each got something they valued more than they gave up. (If you ever have seen John Stossel's Greed, you know the scene I'm referring to in this example.) Think Michael checks the vendor's party ID before he hands over his $4?

So when we send money to an international vendor for a Pronto Pup -- if you can imagine that possible -- are we "transferring our wealth overseas"? Or are we fulfilling our wants with the best of all possible options?

If it costs $200 to pull a barrel of oil out of the ground in the U.S. and $100 to pull it out of Nigeria and send it to the U.S., is it a transfer of wealth to buy from Nigeria? Or did we just buy to give ourselves a better deal?

In all cases, we don't transfer wealth -- we didn't just hand the money over and got nothing back. We got back in fact something we value very much, more than what we gave up. That's not a transfer, that's a purchase. It's a voluntary transaction. Don't want to participate? Buy a bike. And buy one for each of your kids, and bike them to school and bike them home.

Perhaps the message behind Pickens is the same one used about the mini-donuts at the Fair: we can't give money to them. They might use the money to do us harm.

But that doesn't work either, because boycotts seldom do. If the Republicans all crowd the mini-donuts sold by the non-DFL vendors, the lines at the DFL vendor are shorter. That has value; some independents will go to the DFL booth to get shorter lines. A GOP boycott of the DFL donut booth is, in short, ineffective. You just put yourself in a more crowded line.

If you don't buy the oil from overseas, it cheapens it for someone else to buy. Unless the oil you drill is cheaper -- unless its high cost is the product of bad US government regulation -- forcing people to buy high-cost energy is damaging to the US as well. The "transfer of wealth" language is that of a demagogue.

We will produce efficient energy from solar when it is lower-cost; what are the barriers to it being lower cost? Are they technological or policy-created barriers? That will determine whether we should add solar. And so it is with Pickens' wind farms, or natural gas for powering cars, or other fossil fuels, etc.

Be it music, or donuts, or oil, it's not who you pay, it's how much you pay that matters.