The Deluded and the Delusional

There is a real divide among Americans, and it is not Republicans versus Democrats. It is a divide that runs far deeper than political affiliation. The divide is between those who believe they or others can and should control the world and those who believe that the attempts to control are counterproductive and misguided.

Senate majority leader Harry Reid from Nevada has given us great insight into the mind of the wannabe controller. Appearing on MSNBC shortly before Election Day, Reid expressed frustration that he was not doing better in the polls and exclaimed, “But for me, we’d be in a worldwide depression.” “I’ve been running the country, or at least helping to run it,” Reid told a reporter who asked why he was not campaigning more. Reid, like many politicians, is delusional. According to Merriam-Webster, to suffer from delusions is to hold false beliefs “regarding the self or persons or objects outside the self…despite indisputable evidence to the contrary.”

The idea that it is desirable to control a modern, complex economy reflects profound ignorance. Yet, Reid and others in Congress spend almost 100% of their time trying to do just that by considering and passing substantive laws.

Friedrich Hayek has explained the difference between substantive and formal law. Substantive laws are written to achieve specific outcomes. To achieve those ends, law makers pick winners and losers; people are not treated equally under substantive laws. In his seminal book The Road to Serfdom Hayek explained:

Where the precise effects of government policy in particular people are known, where the government aims directly at such particular effects, it cannot help knowing these effects, and therefore it cannot be impartial. It must, of necessity, take sides, impose its valuations upon people and, instead of assisting them in the advancement of their own ends, choose the ends for them. As soon as the particular effects are foreseen at the time the law is made, it ceases to be a mere instrument to be used by the people and becomes instead an instrument used by the lawgiver upon the people and for his ends.

In other words, Harry Reid and other politicians propose laws which benefit some individuals at the expense of other individuals; and importantly, they serve their own political ends to receive sufficient contributions from lobbyists to run their reelection campaigns.  They are redirecting the economy towards the ends they prefer and away from the ends that would otherwise have been chosen. These distortions lead to faltering economies and ultimately economic crises.

In The Road to Serfdom Hayek explained why societies regress as they focus on substantive rather than formal law. Formal laws establish the rules of the road, they do not pick winners and losers, and they do treat everyone the same. The U.S. Constitution is an example of formal law. Hayek gives the example of the rules of the road (speed limits, drive on the right, etc.) which are formal laws; substantive laws would order drivers where to go.

The delusional need the deluded in order to obtain and maintain power. The deluded are those who choose to be deceived that Harry Reid, Ben Bernanke, and others can “run the country” and save us from, rather than cause, economic disasters.

Breathless headlines declare that the Fed’s current round of quantitative easing is bold medicine to jumpstart the economy. Newspapers often act as though Ben Bernanke has a magic wand; they’d have us believe that by printing up paper money Bernanke will somehow solve our economic problems.

Of course the truth is no one controls, or can control, the United States economy. Unsustainable budget deficits, crippling substantive laws accumulated over decades, and most importantly, trillions of dollars of assets artificially inflated in price due to past Fed interventions are propelling the country into further economic hardship. Any hope of a speedy recovery is destroyed as the delusional go on believing they can control the economy and the deluded go on hoping that the delusional will save at least them. I wrote “at least them” because the deluded say, “The heck to everybody else; just save me.”

Explaining the virtues of the formal law, Hayek wrote, “In our age, with its passion for conscious control of everything, it may appear paradoxical to claim as a virtue that under one system we shall know less about the particular effect of the measures the state takes than would be true under most other systems.…”

When the deluded are ready to understand and embrace this virtue of the formal law, the Harry Reids and Ben Bernankes of the world will be reduced to giving their opinions at Starbucks and cocktail parties. When they are no longer deluded, the American people will cease to give power to the delusional.


13 Responses to The Deluded and the Delusional

  1. Dave L. says:

    “In other words, Harry Reid and other politicians propose laws which benefit some individuals at the expense of other individuals; and importantly, they serve their own political ends to receive sufficient contributions from lobbyists to run their reelection campaigns.”

    It seems even the majority of Americans agree that this is a problem. Grasping at straws, people complain about “the power of lobbyists” and special interests, talk about the need for a third political party with power, and in desperation, vote for people “who are not from Washington,” i.e., Palin, Alvin Greene, et al.

    This is all wasteful and counterproductive.

    I truly believe there is a pretty simple solution that has the potential to radically change electoral politics.

    And really, it is just for everyday people to combine voting power to vest political power in certain individuals.

    The vehicle for this would be the pledging of votes. For instance, in my local elections, say that my biggest concern is local schools. I would pledge my vote to a school leader (who is not running for election), who would then approach the two candidates, similarly to how a lobbyist would. That leader would say “I have 250 votes that I control.” It is very important to me that this redistricting happen in a certain way. The two candidates will be forced to make promises/concessions to that school leader.

    Nationally, if a guy like Ralph Nader had 5,000,000 or so votes (instead of running himself) with which to barter with the national politicians, he would actually have REAL political power.

    Because at the end of the day, politicians like political contributions, but the desired result is votes so that they stay in office. And cold hard votes are more important than $$$.

    So, Barry, I hereby give you my one vote for president. So, your opinion on who should win is now worth 2 votes, not 1. Meaningless? Absolutely. But get 100,000 more, and it is not. Also, you could find someone to give your two votes to.

    Back in the early days of our republic, the electoral college consisted of individuals from each area who traveled to Philadelphia to vote for the presidential candidates. Those individuals did not know who they were going to vote for until they got there. Their goal was to represent their various home districts. So they would wheel and deal with the candidates and ultimately would place their vote with the candidate who would do the most for their district.

    I recognize that what I am talking about is nothing new. Unions do it all the time, hence their political power. But unions almost always vote democratic, so their real power is in the primaries.

    Even more power would be derived by being willing to cast one’s “block of votes” for any party or any candidate.

    The problem of an individual voter is that they only have one vote, there is so much (mis)information out there, and you don’t really matter to the candidates. Block up votes, and that would change.


  2. Dave L. says:

    Lastly, all the representative would have to do in this day and age is send an email out to his “pledges” the day before the election.

    Those pledges would then cast their vote as they were instructed (even if the candidate is from a party they ordinarily would not support), and they would sign an affidavit possibly to say they did as they were told.

    That way, the block of votes would be a known quantity. And each individual would be comfortable in knowing that their one vote “truly made a difference.”

    The individual, who does not generally have the opportunity to vote knowledgably, will have outsourced his vote to someone he trusts, whose job it is to understand politics and have influence with the candidates.

    The persons bartering the votes would be lobbyists in a way, and could potentially have more power than the lobbyists we know of today.

  3. Dave L. says:

    The electoral college as it presently exists is an antiquated system whose supporters base their support almost solely on keeping up tradition. It provides no real tangible benefit.

    My proposal would bring back the reasoning behind why the electoral college was originally created. These “electors” would be vested with the power of their constituents. And since it is their only job, they are another check/balance on the system (there was a reason our founding fathers made the electoral college rather than the house of reps responsible for electing the president). While in the old days it was really only needed for the presidential election, with the divide between the people and the candidates ever widening, even in elections for state congressmen, today these “electors” would be helpful in almost every level of politics.

    And the most powerful of the electors would be powerful enough to singlehandedly swing elections. Because of that, they could ultimately be even more powerful than the candidates themselves. Those candidates would have to do everything they could to keep those electors on their side. They would have to cater to them even more than they presently cater to the lobbyists for special interests. Money for political campaigns roughly translates to votes – the more commercials you can run, the more votes you’re going to get – but all the money in the world doesn’t guarantee votes like these electors could.

    And if the winning candidates didn’t keep their pre-election promises (betrayed the elector who provided them with many votes)? Clearly they would lose the support of that elector the next cycle and would likely lose the next election.

    The elector might be a target of bribery or simply not do his job to the best of his ability. That said, his constituents could always change their allegiances to new electors, so trust and the integrity of the elector would be extremely important.

    That system somewhat exists right now, but the only players are lobbyists, unions, newspapers (who give endorsements), etc. If you are only an individual without an affiliation with these organizations (such as myself), you are disenfranchised. But it doesn’t HAVE to be that way!

    I would even argue that a group of people who always vote for the same party to a large degree is also disenfranchised, as the candidates need only give their issues lip service in order to gain their vote. While there will always be some “playing to one’s base,” the base never gets a great deal, as they are taken for granted.

    It is the swing voters that the candidates are going after.

    And an elector with a lot of votes behind him could be the single biggest swing voter out there.

  4. Dave L. says:

    One last thought. Sorry, Barry, to hog your blog, as it were.

    Politicians do their damnedest to never say anything controversial. They like to talk in platitudes rather than discuss specific policy and get pinned down. Why? Because talking about specific issues and where they stand on those issues is likely to piss people off who don’t agree with them on those issues.

    That is why Republican candidates talk about how they also care deeply about the environment, and Democratic candidates show concerns about the national deficit and try to act tough on crime. Every candidate has something positive to say about every issue. No one is going to do ANYTHING bad. Never!

    For that reason, the individual has a hard time knowing exactly how a candidate will act once in office, other than presuming based on party affiliation. And that is why the individual vote as a form of political power is illusory.

    There is only power in the group. And the only political power in a group that always votes the same way is derived from turnout rate.

    But a large group that has a representative who can wheel and deal with the candidates on whatever issue(s) is/are important to them? That is a different matter.

  5. Dave,

    Wow, you have really given us much to ponder. I’m letting this all sink in.

    I really appreciate the time you took to share your ideas!

  6. Chris C. says:

    Dave’s proposal is interesting, but without some way to radically reduce the power of government to meddle in our lives and the economy, it is only re-arranging the deck chairs on the Titanic. (By “meddle”, I mean pillage, loot, burn, rape, and raze to the ground.) If there were enough people who would pledge votes to sharply reduce taxes, close and padlock the doors on all the regulatory agencies, etc., Dave’s ideas would work.
    However, the majority of Americans *like* a powerful, do-something government. Despite some of the rhetoric of the Tea Parties, most of them still believe in the warfare/wellfare government. I marched with many of them on 9/12/09 in DC to observe them, and what they seemed to want (evedenced by their signs and roughly a score of conversations I had) was for the government to stop doing whatever did not directly benefit them.
    Most supported the immoral and costly wars in Iraq and Afghanistan (and didn’t care that the US military has a presence in over 150 countries). Many were fearful that they wouldn’t get “their” Social Security checks. (I’m pretty sure I won’t get anything out of that particular Ponzi scheme.) They support the War on (Some) Drugs, which is mainly a war on our remaining civil rights. And most of those I asked even support the TSA (or they did then, hopefully that may change with the current controversy), because “we need to feel safe” or words to that effect.
    The run-of-the-mill Rs and Ds are all in favor of at least as much government as we have now. So if the alleged outsiders, the Tea Party “anti-big-government” types, aren’t willing to espouse real and substantive funding cuts (not decreases in the rate of increase), we’re screwed. Altering how the theives decide how to divvy up the loot won’t slow, much less halt, our decling. As H.L. Mencken said, “Elections are sort of an advance auction of the sale of stolen goods.” Until we change *that* paradigm, we’ll continue our slide into the kind of economic purgatory that Japan has suffered through for the last twenty years.

    • Chris,

      Thanks for sharing your very interesting observations about the Tea Party.

      At this point “sliding into economic purgatory” would be a dream come true. I say that because a civil society would be left intact for future generations to make better choices. There are many other possible scenarios that are far worse and given prevailing societal attitudes is hard to think of any better ones.

    • Dave L. says:

      I agree with what you’re saying, but the whole premise of what I’m talking about is that smart people, if their numbers are organized, can have a disproportional effect on an election, and therefore can wield political power in a way that the disorganized masses can not.

      I am not recommending that this be publicized to the masses, necessarily. I think if it were used effectively, eventually there would be copycats. However, in the meantime the possibility exists for groups who are serious about one issue that they believe is more important that the rest to use this as a tool for wielding true political power. There are many, many people who believe in fiscal restraint/responsibility, but they are spread out between various parties, and are not organized. If you are unorganized, it should not be a surprise when our “representational government” does not represent those views.

      The power of the “swing voter” can be harnessed only be becoming a swing voter.

      Without political power, we’re all just pissing in the wind. No one is going to listen to us unless we wield some power. The goal in my mind is not to reduce the government’s power, it’s about the right people controlling the government and making the decisions. Right now, the wrong people are making those decisions.

      But it really doesn’t have to be that way.

      • Chris C. says:

        Just like one cannot “cure” the problems caused by too much borrowing and spending by borrowing and spending more (regardless of what Paul Krugman believes), one cannot cure the abuses of government by changing the people in power. The conceit of Plato and his philosophical progeny, that “philosopher kings” can rule wisely, is belied not only by the elegant logic of Hayek in “The Road to Serfdom”, but by centuries of empirical experience.
        The system of govermment in the US is set up to reward tax feeders, and the permanent bureaucracy works toward that end. Changing some (or even all) of the elected officials would only slow the decline slightly. And, as Dr. B notes, purgatory is one of the options to be hoped for. Far more likely is that the masses will elect a “man on horseback”, who will establish some sort of authoritarian regime. Remember, there are more tax feeders than tax payers now (if only by a small amount), and their incentives to vote themselves more from the “treasury” is more compelling than is ours to prevent it. We have the ability to earn more, the tax feeders do not conceive of this as a viable option.
        If the greater part of the population was of the opinion that big government is a bad thing, we wouldn’t need your rather complicated program. Since the “public” schools have taught their captive audience that government is the answer to all problems, what we have is a large percentage of Americans who are geared toward dependency on that government. It will take a rather large upheaval to change this situation. It will NOT be pretty.

  7. Dave L. says:


    I agree that simply “changing those in power” will do nothing.

    In fact, I don’t even think those in power need to be changed. But if you can get those in power to have to turn their ear to the correct policies and good ideas, then YOU can be in charge as much as the politician. They will be forced to work for YOU.

    When democratic politicians, especially, promote programs that expand government and entitlements, they are doing so to represent the group that votes for them, the group that gives them power. Ultimately, however, their strongest allegiance will usually to be to more powerful interests. They usually will support those more powerful interests as quietly as possible, as often it goes against their “Democratic ideals,” and could upset their constituents. They rationalize that they have to represent these more powerful interests and their lobbyists in order to stay in the game.

    All government is imperfect. However, democracy can work. It isn’t working very well right now, but it’s had 200+ years to calcify. Anarchy may be the inevitable answer, but it is not one to be desired. Why not try to tinker with what we’ve got?

  8. Chris C. says:

    The national government is long past the point where tinkering can be expected to have positive results. As I noted before, the bureaucracy is permanent, and has huge incentives to grow government. Thus, changing the elected officials can have little effect. Spending scarce time and other resources on a strategy built more on hope than experience is unlikely to have a good ROI. No matter who you elect, you still get a politician. The system corrupts those who stay with it more than a term or two. And I do not agree that “democracy can work”. For, as soon as the masses figure out that they can vote themselves largesse from the taxpayers, the system is doomed. And you cannot depend on a constitution, much less legislation, to prevent that, because officials will see the chance to buy votes on the cheap by agreeing to such proposals. This has been the experience in all democracies throughout history.

    • Dave L. says:

      You must concede that democracy worked OK in the United States for at least a while, right?

      And why does the system corrupt those who stay with it for more than a term or two? How, exactly, are they “corrupted”?

      Because they do the bidding of those who contribute big $$$ to their campaigns and the “masses” who just want a hand-out and provide them with votes?

      Like it or not, that’s democracy in action. We can only change the results by giving those politicians reasons why they must listen to a different perspective. One option would be to come up with a good idea, make a $billion, and spend that on lobbyists who would promote whatever you want. Probably not realistic for most people.

      I believe I have outlined a solution whereby organized individuals can wield a large amount of political power, similar or even greater to what unions and/or lobbyists currently have. We would be creating power from where none currently exists.

      The way the system currently works, all I can do is try to change one individual’s mind after the other. After having predicted both the tech stock market crash and the housing bust to my friends/family, I have a bit of credibility. But convincing 20 people that our huge deficits are going to end in abject disaster (which I probably haven’t even been able to do yet) is ultimately insignificant. Because even if you know that to be a fact, what do you do about it? Write your congressman? That is wasting energy, in my opinion. Other than a few fringe politicians like Rand Paul (none of which are in my district), there are no representatives out there for people like me to even vote for. And I have accepted that a majority will never understand and/or agree with the principles outlined on this blog. However, the whole point of my proposal is that you don’t NEED a majority – a relatively small number of individuals, whose voting power is vested in a lobbyist, can have a large effect on a candidate’s chances, and thus the vote-lobbyist can essentially have a pre-election auction between candidates where they are forced to compete with escalating promises in order to gain the lobbyist’s votes.

      It’s one thing to say my idea won’t work – that is certainly arguable. But I have a hard time accepting that there’s just no point in trying to change the course of history. That is a viewpoint that is guaranteed to end in failure.

      In the end, if it does work, those politicians will be “corrupted,” but only in the sense that they are doing the bidding of the group that has gained the power. They would be corrupted by us, our policies would be implemented, and someone else would be the one complaining.

  9. Chris C. says:

    Playing the game of politics to cure the ills of politics is like having sex to promote chastity. All democracies go through stages, ending in a decline as that nation’s energies are spent deciding how to divide a pie rather than how to bake more pies. You will not find enough people to agree with your premise to even approach the power bases of tax feeders, and even if you did, the permanent, entrenched bureaucracy will resist the changes you advocate. The best I can hope for is a break-up of the US, with some parts going for a more freedom-oriented, laissez-faire, much smaller government. I live in Maryland, which will not be one of those.

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