Why Election Promises Should Make Us Cringe

So, I know this is probably a deeply unpopular opinion, but I ask that you hear me out…

Recently the political scene in the US and the UK has taken something of an unexpected turn.  In the UK, Jeremy Corbyn was elected as the leader of the Labour Party.  Prior to his election he was relatively unknown to the broader public.

Jeremy Corbyn is indeed quite rare amongst those in established circles based on his track record.  For instance he was said to have submitted the lowest expenses of any member of the British Parliament during the 2009 UK Parliamentary Expenses Scandal. It appears on the face of it, that he lives quite a modest life, and he imbues the sort of qualities that I think most of us would aspire to.

In the US you have a Corbyn like figure running for election as a Democrat in the form of Bernie Sanders.  A sort of Pious and Grandfatherly Anti-Trump.

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Bernie has really taken a chunk out of Hillary Clinton’s popularity in the Democratic nominations.  He is extremely against Wall-Street.  For any establishment politicians, the writing should be on the wall now (something being discussed at the Davos Summit this week, no doubt). People are getting quite tired of being fed lies, having to fund corruption, and of being ignored, irrespective of their votes.

So why do I not like Corbyn and Sanders?

It’s not a personal issue that I have with them.  I honestly could aspire to more like Corbyn in my personal life.  The reason I find them distasteful is that they seem to make poor economic decisions for the sake of morality.  Economics is, despite often doing a great job of not knowing it, governed by the laws of the Universe. Physical laws.  Scarcity is real.

Every time I hear a campaign promise to provide something for nothing (free healthcare, assured pensions, insured bank balances, more welfare, etc. the list goes on..) it makes me cringe.

When politicians transfer taxes, they extract administrative fees (salaries, expenses, upkeep for Parliamentary buildings etc.), and the public sector is generally more inefficient based on the incentives which govern them.  I’m aware there are some things, like public pensions (as originally argued by economist Paul Samuelson) that the market just will not provide, but ironically, Samuelson’s original reasoning for pensions, is now a pretty good argument against them. Regardless, the message should be clear…

Next time a politician offers you something free which sounds great, recall who is picking up the tab (hint: it’s you), and what incentives to implement the social program exist from the perspective of the politician. They might be angels, or they might just been trying to shuffle paperwork, or come up with new ways to expand their budgets.

While the private sector is far from perfect, the profit motives it embodies are up front and honest (though the means of achieving them may be far from reasonable.)  With politics there is no way of telling who stands for what.

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