Personality Based Politics and The Acceptance of Income Disparity

``To say that you're going to have social justice means you're going to have to concentrate power in the hands of some small group of people to override rules, and standards, and so forth. And people do not see that that's more dangerous than the injustice that they're trying to wipe out." Thomas Sowell, columnist, Townhall.com

Obviously, this is a clear case of shooting ourselves in the foot. While one may argue correctly, using present values, that economic gains have not filtered to the masses and that the financial markets may not ‘entirely’ be reflective of the overall economy, signals emitted by the marketplace are usually discerned as LEADING indicators that signify a change in social mood (Robert Prechter, Elliot Wave International) and economic cycles. In short, the improvements in the marketplace could be indicative of an impending recovery or a gradually unfolding recovery in our midst.

Yes, I know, I have argued alot about liquidity driven markets, but that is precisely the point, today’s macro framework has been particularly liquidity driven, such that because the world is swimming in too much money, this has filtered into the country’s financial markets as well as into the domestic economy. Thus, our country’s recovery has been anchored on liquidity dynamics more than a structural one much like most of its contemporaries or the emerging market economy class, albeit they could be transient and dependent on the continuity of liquidity creation and intermediation.

Let us be honest to ourselves, all forms of recoveries in any aspect of our lives; be it physical, financial, emotional or spiritual, in the norm, does not come with a wink of an eye but rather through the passage of time (Of course there are exceptions to rule like winning lotteries is one).

Only to the “personality-based” politically obsessed minds can one not or refuse to see these emerging positive developments.

Personality based politics in my definition is analogous to a game of musical chairs. Under the present system of popularity and patronage derived economic opportunities and expectations for government led stimulus or more government intervention in the provision for our social needs, no amount of leadership change would successfully reform the country’s economic and financial status (as said above present gains are a matter of global liquidity dynamics rather than a structural one) ...UNLESS the populace is given the unbridled opportunities under an environment that would allow them to take the necessary risks, to fail, learn and excel in their respective fields in the open market.

Whining about social/income inequality (as seen in growing social/income inequality in US, China or other parts of the world) or mouthing egalitarian objectives conventionally seen with our leaders, politicians and their factotums are nothing but a facetious attempt to pay lip service to the public (demagogues). In reality these represent nothing but a bunch of canards...and they know or are aware about it! Nonetheless, in assuming or maintaining political power, which incidentally emanates from the myopic, gullible and fickle voting public, the political players simply have to tell or promise on what the public simply wants to hear (perpetuating these untruths)!

Yet the quest and struggle for political power is simply so compelling because it practically is all about Spending Other People’s Money (SOPM)! Everybody seems to have their ‘rightful’ concept about governance, or bluntly said, how to spend someone else’s money...except theirs. It seems that hardly anyone realizes that more laws equates to more budget or spending, yet none of the local analysts/experts or ‘self -righteous reformers’ have ever parleyed on the correlation of the du jour word of “corruption” to the relative size of government. Everybody seems to be agog with the fallacious inferences and associations of the virtuous aspects of governance (SOPM) while IGNORING on the structural ones.

In essence, the world is simply never equal. Borrowing the sagacious words of Gavekal Research, from their book Our Brave New World (emphasis mine)...

`` The acceptance of income disparity is probably the hardest thing to achieve in the current political structure of most countries. Why? Because most countries counterpoise the ‘social’ to the ‘unequal’ and strive to avoid wide income disparities.

`` But the refusal to accept income disparities is very destructive. Inherently, it implies that capital is taken from where it is efficient and generating higher returns and distributed where it is not. Such a course of action can only lead to an improverishment of the greater society; and when the greater society gets poorer, it is the poorest members who suffer the most. Time and again, this has been the experience of socialism.

`` Trying to prevent the growth of income disparities is also denying an important economic reality: income disparities are a tremendously creative force. As Thorstein Veblen showed in the Theory of the Leisure Class, one of the main motors of capitalism is the desire for conspicuous consumption; or as popular knowledge calls it, the wish to keep up with the Jones’. If there are no Jones to keep up with, why get out of bed in the morning?”