Infinite Wampum Theory

One of the benefits of writing a blog is interactions with readers, and I have many of them. Some lean right – even far right – and others veer off in the opposite direction, sometimes quite far. The best ones are characterized by open-mindedness and willingness to learn something from others.

In a recent exchange, a reader observed that much political difference could be explained by the belief that there is always money. The article that had caught his eye related to an alleged “c’mon there’s always money” quote by presidential candidate Elizabeth Warren. (“The way I see it, there’s always, c’mon, there’s always money.  It’s there.”)

My friend, who lives in a place where that is emphatically not the case, referred to it as the “infinite wampum theory.”

In many conversations, one of which I am engaged in right now, the reference to wampum would be viewed as an unkind reference to what seems to be a notable political gaffe.

My friend also noted a long-ago LibertyPell story that invoked Scrooge McDuck and he observed that even Uncle Scrooge did not have infinite wampum.

Leaving aside polarization (at least until the end) and unkindness to disfavored political figures, I replied as follows.

The infinite wampum point is interesting. We have been treating wampum as infinite first by borrowing it and then by printing it.

Those with eyes of flint believe this to be wrong headed.

Yet we understand the campaign manager creed that the future does not matter; only the next four to eight years.

The quest to debunk the idea of a favored president (of either party) causing a flourishing economy and a rising stock market has failed. Though investment professionals would tell you that — no matter who is president — there is little presidential-political-party causality to a rising stock market or a flourishing economy, that battle for public opinion has been lost.

I tried to write that paragraph so it could apply to either a Republican or a Democrat who sought such credit. No doubt I will fail and be reprimanded, likely by a supporter of the President, given today’s political state of play.

Curiously, no president is ever responsible for a falling market or a sputtering economy. I say “curiously” because, if a president is wholly responsible for prosperity, how can he bear no responsibility whatever for its absence?

Equally curiously, no Democrat believes a Republican assertion of his side causing prosperity and no Republican believes the same assertion made by a Democrat. There does seem to be a correlation between the correct answer to this question and being out of power.

Fortunately for campaign strategists, it does not appear that we have reached “peak voter stupidity.” Deception techniques are improving faster than common sense, though there is some polling suggesting that people are tiring of the current levels of spinning and feuding.

Since there is money to be made by encouraging it, however, I would not bet against polarization.

And, since James Carville (it’s the economy, stupid) is viewed as an oracle, I would not bet against both parties taking credit for the economy and stock market when they are good and blaming their opponents when they are bad. Nor would I bet against continuing espousal of the “infinite wampum theory” though it is now called Modern Monetary Theory.

 

 

19 Responses to “Infinite Wampum Theory”

Jim Schutze, December 13, 2019 at 9:19 pm said:

I attended a city council meeting a few years ago in which a councilperson said, with finger raised, “I’m not going to be nickel and dimed over one or two million dollars.” I resolved while sitting there (and then forgot as soon as I stood up) that I would write the councilperson, not to argue, but to ask a question: “What is the dollar amount over which you will be nickel and dimed? Please provide number.”

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John Austin Murphy, December 13, 2019 at 9:53 pm said:

Audible chuckles elicited, Jim S.

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Haven Pell, December 14, 2019 at 6:04 pm said:

John, I have fun friends. Clever ones too.

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Haven Pell, December 14, 2019 at 6:03 pm said:

Excellent question. Can you ask him or anyone else now?

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Jim Schutze, December 13, 2019 at 9:20 pm said:

Second comment. Secret to infinite wampum: not counting wampum.

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Haven Pell, December 14, 2019 at 6:05 pm said:

Politicians are the only ones who follow the etiquette rule of not discussing money. It is someone else’s and it is limitless.

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Sellers, December 14, 2019 at 7:42 pm said:

I know where infinite wampum resides! In YOUR pocket.

OPM is indeed infinite, until it is not.

Brazil was fun in 1987-1989: almost three years of inflation running out at 3% a day. Then the politicians amassed all the cash they could, froze bank accounts for about a month (leaving themselves as the only ones with actual spending power), and bought up whatever they could. At least Fernando Color de Mello was impeached for something he actually did. He didn’t care: by that time he had a penthouse in Paris, a Miami compound and about US$6 Billion that had belonged to the sucker taxpayers. After 10 years political exile, he can back to win the governorship of the State of São Paulo, Brazil’s most prosperous state. Gotta love politicians… Gadzooks.

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Haven Pell, December 15, 2019 at 7:58 am said:

In the eight years since I began blogging, few writers have made more of an impression than Sarah Chayes, who argues for greater attention to corruption as a source of political discord. It is easy to dismiss corruption as something that happens somewhere else, but we are far from immune in this country.

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Ashley Higgins, December 15, 2019 at 9:47 am said:

Infinite wampum theory holds that it is the lust for power to dominate and control others, not the love of money, that is the root of all evil. Although wealthy, Scrooge McDuck is not my enemy. Compare and contrast, e.g., Elizabeth Warren, George Soros, and little Greta.

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Haven Pell, December 15, 2019 at 10:47 am said:

I often confuse “what I hope” with “what I think.” Many do but few admit it. I would like to have the word “devolution” be the dominant political thought of the next decade. Every task to be undertaken by a government should be done at the lowest possible level so that whatever “dominating” and “controlling” is done to the fewest people and by those closest to them. In many cases, it makes no difference if the rules differ from place to place.

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Ashley Higgins, December 15, 2019 at 11:46 am said:

I think it would be nice if federalism was in effect; I have no hope, however.

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Haven Pell, December 15, 2019 at 6:29 pm said:

On present form, I agree. The system designed in the Constitution will continue to be overwhelmed by power grabbing. Eventually, one hopes that excess interference with people’s lives will be seen to have consequences as it has for the EU with Brexit. The EU is losing one of its biggest contributors and the loss was avoidable.

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Sellers, December 15, 2019 at 10:59 am said:

I agree 100% that the primary impulse is to control: they are all megalomaniacs. That money tends to flow to power is just a welcome side effect. Michael Bloomberg’s TV ads are particularly nauseating, but he is absolutely no different from the rest of them. All the best, Ashley.

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Peter W Bragdon, December 15, 2019 at 10:14 am said:

It is predictable that Trump ignores President Obama’s daring loan to GM — all paid back ahead of schedule!

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Haven Pell, December 15, 2019 at 10:41 am said:

The mortgage meltdown happened just at the transition from the George W. Bush administration to the Barack Obama administration. Nobody “knew” how to handle the potential cataclysm. They had to do the best they could. one of the best things that happened was the continuation of the ideas begun in one administration by its successor. At least so far it has paid off.

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Ashley Higgins, December 15, 2019 at 11:43 am said:

During the period of time GM was Government Motors, it exercised its power by close a thousand dealerships, including the one here. Every closed dealership would have had at least 10 employees. Too bad for them. But Mack McClarty, friend of Bill, was a big wampum winner as one of the surviving dealerships. That corruption encouraged me toward political discord because my nature is to be a resentful SOB.

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Haven Pell, December 15, 2019 at 6:31 pm said:

however you might describe yourself, you are also a thoughtful observer

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Mac Norton, December 17, 2019 at 4:44 pm said:

The comments prompted me to take a look at the costs of the GM bailout to taxpayers, and I have to say, I am still confused, as there is considerable variation in the numbers. A New York Times story of December 19, 2014, at the conclusion of the bailout, states: “Although the overall bailout efforts turned a profit, the auto rescue did not. With Friday’s announcement, taxpayers were left with a $9.5 billion loss. Most of that came from General Motors, which paid back about $39 billion of the $49.5 billion invested.” It’s not clear from the article if this loss includes some future tax consequences (there is no specific mention of them in the article). Normally, when a company is taken over, going forward it loses the tax benefit of its accumulated losses. However, under the bailout GM was allowed to carry forward its net operating losses. Since the bailout, GM has barely paid any Federal income tax, despite years of profitability. Back at the end of 2011, GM estimated it would end up saving $11.2 billion from the tax break for its past losses.

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Haven Pell, December 17, 2019 at 5:10 pm said:

I have no idea what the answer is to the GM bailout. The reporting that led to the original comment might have been deficient. The reporting relating to yours might have been deficient. Or the question might simply be too complicated. I just listened to a podcast in which Elizabeth Warren was challenged by the NYT on her desire to punish the banks following the mortgage meltdown when the Obama administration needed them to help right the economic ship. Years later, of course, all of the motivations are being spun. It has long seemed to me that job 1 post 2008 was economic recovery as opposed to political revenge, however tempting that might have been. The end of the Bush administration and the beginning of the Obama administration seemed united in that view. To their credit.

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