Reset Assumptions

Lyndon Baines Johnson has left a lasting legacy. President Johnson passed the Great Society. He and his left wing comrades passed the legislation. Subsequent Presidents funded it. His lasting legacy has nothing to do with the legislation. The laws helped create the legacy. Keep in mind that many historians rank Johnson as one of the worst American presidents of all time. In my mind he is locked in a battle with Jimmy Carter, but that is another piece.

His legacy is resetting the assumptions we have about poverty and poor people in general. Until the Great society period we believed that poor people did not want to be on public support. We believed that government assistance was intended by the giver and the receiver to be temporary and lasting no longer than absolutely necessary. I don't say this to infer that all recipients want to be there. That would be nonsense. My intention here is to point out that today in 2008 many people in government now start out with the assumption that people considered poor are there forever and by no fault of their own, and more importantly there is nothing they can do about it.

Details of the much awaited economic stimulus package are being leaked. There is an agreement in principle on the provisions between the two parties and the White House. This tells me that the majority of those people believe these are the principles that will make the economy grow. of the estimated $150 billion in costs in the plan is is believed $100 billion will be in the form of tax 'rebates'. Why do I put that in quotes? Some of the recipients paid no taxes at all. You can't rebate what you never paid. Personally I will put mine into either savings or my kids college funds. I believe this will be fairly typical. No spending will occur at all. No major investment either. The assumption is that they should not be left out just because they didn't pay taxes. They are suffering so someone must help them. Prior to the Great Society that someone was believed to be family, friends and charity organizations. Now that someone is believed to be the federal government.

Another area where assumptions are clearly changed is in education. Before that period in history we believed that education was important, but not a right. You saved your money, you went into the military (by the way I don't consider military benefits to be in any way a giveaway, these brave men and women served valiantly for these benefits), or you worked for the University, or you worked your way through college. Personally I did receive loans, not government loans, but private loans. I didn't qualify for government guaranteed loans. The assumption is that education is so important that society has a compelling interest in nearly everyone going to college. Economically this injects a huge amount of investment into a sector of the economy, which there is little downside. if someone fails to get their degree there are very little consequences. it also allows Universities to build and expand regardless of budgets. Even though mass investments of government money have come in and continue to grow, the inflation of tuition continues unchecked. This actually makes sense. There is no competitive pressure on tuition. There is competition based on quality in certain programs, but none on price. The investor should require a better use of their money. A stockholder would, but our government does not. The results? We work on the assumption that if we cut back on government supplied loans and grants than poor people will not be educated. Somehow people were educated before all of this investment, but we believe the private sector would not rise to fill that void. This is a wrong assumption.

These assumptions changed for a couple of reasons. Once politicians found out that the more money and stuff you give out, the more votes you get. People found out that it is easier, not necessarily better but easier to subsist, than to go through the effort of excelling. One more thing, the longer we go on assuming people will not strive to excel, the farther away we will get from that ideal. Elections matter!!!