Stupid Liberals! Why Are Liberals So Stupid?

“It’s infuriating, another round of tax hikes, more government spending, what are these stupid liberals thinking?” the responsible person asked themselves.

Let the free market do it’s thing, allow businesses to keep more of their money for investments. We are taxed enough already!

Who could disagree with that? Even stupid liberals don’t like paying tax.

I know liberals are stupid, but what is a liberal again?

Do you know anyone who is really concerned about the environment and thinks companies who pollute should be heavily regulated, yet as a dedicated Christian, also strongly believes abortion should be considered murder? Is this person a “liberal” or a “conservative”?

How about someone who believes national debt is out of control and the #1 priority is to pay it down. They believe taxes should be increased significantly, spending on defence should be decimated but universal health care provided to all citizens to ensure they are healthy enough to be taxed. Is this personal liberal or conservative?

The definitions of “liberal” and “conservative” are, to a student of history, moving targets and difficult to predict.

In the mid 1990s, both conservative and liberal parties in the United States advocated being “tough on crime”. Bill Clinton — a “stupid liberal” — introduced one of the harshest crime bills in US history, which over decades made the incarceration rate of the United States the highest in the world.

Russia, who incarcerates political opposition, still doesn’t lock people up as much as The United States.

Does this make Bill Clinton a conservative?

Here’s a fun fact: Human beings are too complex a creature to fit into a neat-and-tidy category of “liberal” or “conservative”.

Don’t forget the rest of the world, Americans!

In Canada, the Conservative Party strongly supports the universally accessible and publicly funded health-care system. Socialized medicine… Stupid Liberal Canadians!

In Saudi Arabia, the Conservative Regime restricts the freedom of speech, freedom to choose one’s own faith, and is strongly in favor of the merger of Church and State. In other words, a “conservative” government that greatly intervenes (liberally) in the freedom of it’s people. Stupid Liberal Conservatives!

Even in McDonalds, a symbol of America, Saudi Arabian women aren’t free to order from the same line as a man.

I hope you get my point here. These labels “conservative and liberal” are basically meaningless, or have too many subjective meanings to accurately define the words, or try to use them in any intelligent context.

Liberal Ideas Are Still Stupid

Hopefully you agree it’s naive to label a person as “liberal”. If you think this is a semantic argument, you are mistaken. Humans have a need to simplify the world through categorization, and in most instances it’s very helpful for us. But when it comes to people, they can’t be simplified so easily.

But can we call an idea liberal? You know, raising taxes and re-distributing wealth?

Punishing the job creators.

“If I hear one more Stupid Liberal talk about raising taxes on business, I’m going to snap. Don’t they know that will cause businesses to invest elsewhere? Don’t you know that will cost us jobs?”

As an entrepreneur and “job creator”, I know this argument first hand, and have given it a lot of consideration.

First, consider the history of the United States. In 1944, any income over $200,000 ($2,400,000 in 2009 dollars) was a whopping 94%. In other words, you were not allowed to make more than $2.4 million as an individual.

For business, the effective tax rate was between 40% – 50% for the following two decades, and has been steadily declining.

US Corporate Tax Rate

US Corporate Taxes rates used to be much higher

Needless to say, American business did just fine in the long run, despite huge fluctuations in tax rates. In the long arc of time, there is no correlation between tax rates and business growth (S&P 500 earnings growth or GDP) in The United States.

“it is by no means obvious, on an ex ante basis, that tax rate cuts will ultimately lead to a larger economy in the long run.” – Brookings Institute

Second, most entrepreneurs don’t start businesses to make maximum profits and create jobs. They are in the business of trying to create the future while also being in control of their own destiny. They don’t want to rely on someone else’s hand to feed them.

If that means paying taxes, so be it.

If stupid liberals want to pay more tax, then just write a check.

Of course nobody wants to pay more taxes, but most are still willing to do it. Just don’t make them work to build someone else’s dream.

Sure, some entrepreneurs and businesses simply try to make a buck capitalizing on opportunities, and it’s not always about passion or vision. Other opportunities aren’t worth the risk at higher tax rates. Some jobs can’t be created if more share of profits has to go to tax instead of new hires.

That’s true, but so what? Will our living standards suffer as a result?

The greatest businesses and entrepreneurs were simply doing what they loved, what they were good at and trying to create the future. They satisfy their competitive spirit in the highest stakes game around, the marketplace.


Some who identify themselves as conservative, especially those who do not own businesses, falsely believe that entrepreneurs will be unwilling to create new companies and products if taxes are too high.

I think having a quick peak at the Dow Jones Industrial Average over 100 years will tell a different tale.

DJIA did very well under a range of tax codes.

Would Steve Jobs have started Apple if taxes were higher? Would people have been able to buy iPhones by the tens of millions without the contributions of government?

From 1944 – 1948, many companies that are household names today (U-Haul, Best Western, Iams, Tonka and more) started when tax rates were more than double what they are now.

The point is this: tax rates aren’t a big deal, and shouldn’t be used as a “liberal or conservative” point. If you try to use this as an argument for, or against business, you are just being stupid.

Business goes on regardless of what the next talking politician says or does.

Lazy Liberals Want Hand Outs. Not My Hard Earned Money!

Coming from a low-income family, with no formal education, working my way up from minimum wage to upper management positions, after dumping thousands of hours and dollars into businesses that have failed, I know the sting of paying out taxes when I’m finally successful, after so much hard work and sacrifice.

It’s easy to look at those who didn’t work as hard, who were foolish with their money, or didn’t invest in bettering themselves as lazy and undeserving of any help.

Certainly, I didn’t get any hand-outs when my business failed. Why should I give hand-outs when it succeeds?

It takes a lot of thought, especially as an entrepreneur, to come to terms with this fact: Hard work and good decisions are only half the battle.

It so happens that at this time, most people accept that elementary and high schools ought to be funded through taxes.

If you were born before 1852, you would not have been “entitled” to such an education in The United States.

We live in nation states, and through investment from taxes, have mechanisms in place to protect personal property, educate customers on how to read, and enforce a set of rules that allow businesses to freely compete in a fair (enough) marketplace to deliver products and services.

Would hard work pay off just as well in North Korea? (DPRK)

In other words: without police, military, courts, roads, bridges, schools and hospitals, it would be much harder (and expensive) to get customers and ship products.

Just imagine it this way: We have nothing to do with being born in a rich countries, it was pure luck.

If you look at all humans who ever lived in time, what are the odds of being born at this time, and in a rich country. (billion to one odds, even worse)

What if we were born 5,000 years ago in a small village, would we still hold the same beliefs?

What if we were born at the same time, but in the slums of India? Would we have been as successful?

You were more likely to be born as this boy than in North America.

Indeed, we already won the lottery, before we even get started.

We (western society) live in a time where people have a reasonable shot at realizing their potential, by having the freedom to pursuit their interests, in a market place that rewards deserving people who create value for society.

It’s not perfect, but it’s the best humans have come up with so far, in terms of unleashing human potential and technology.

Will this party last forever? That is a separate discussion.

What a tragedy it would have been if Henry Ford was born in China, centrally ordered to clean dishes instead of having the freedom to invent the car.

This is a shift in paradigm one needs to go through: You and society have a two way relationship. How successful would you have been in a different time or different society?

What percentage of profits does a person owe to society?

I’m sorry to burst your bubble, but that idea too, changes with the times. When it comes time to pay down government debt, there’s only one place it can come from.

We need to start with the baseline understanding that a huge contributor to anyone’s success is the society in which one finds themselves.

Does Bill Gates Deserve His Money?

Bill Gates was born in an upper-middle class family, and was one of the few university students in the world who had access to a computer. Combined with his intelligence (likely born with) and insane work ethic (100% all him), the personal computer is a staple in nearly every home in North America.

Bill Gates famously said “I didn’t take a day off in my twenties. Not even one”.

Can you imagine working that hard? I can’t.

Nobody (worth a damn) thinks Bill Gates doesn’t deserve the money and respect he has. He is a man of the highest order and a shining example of what we should all aspire to be, in nearly any facet of life.

That doesn’t mean he wasn’t lucky, too.

What if the next Bill Gates isn’t able to build the next Microsoft because society decides he’s not worth investing in? What is the lost opportunity cost on that?

What if tax rates were higher and Gates couldn’t hire as many people, would some other company be the dominant player in personal computer software?

In business, it is common sense that you should take care of your customers and they’ll take care of you. True entrepreneurs look at everyone as a potential customer. What good are people to a business if they don’t have money to buy your products?

Two Sides to a Coin

I hope my argument is starting to become clear.

Nothing is as simple as saying: Liberals are Stupid, Conservatives are Stupid, Increasing Taxes is Stupid, etc

The world is way more complex than that. Many ideas in politics have a roughly equal amount of pros and cons, and humans will assign more weight to an issue depending on the way they look at the world.

In fact, the more you learn about the pros and cons of each idea, the harder it becomes to actually form a solid opinion on these matters. I can tell you first hand after more than a decade of thoughtful study and reflection.

John Lennon said “The more I see, the less I know for sure”. Einstein said “The more I learn, the more I realize how much I don’t know”. We all know this to be true.

It’s much more difficult to look at your own psyche for misjudgments caused by cognitive biases and heuristics, your own up-bringing and your immediate social circle, and challenge your current political beliefs. That’s a major reason why many people don’t put much effort or thought into their political opinions. It’s hard.

You may not like to hear this, but I stand by this statement, and will be happy to debate it with anyone:

If you strongly believe that all aspects of being “conservative” is clearly better than “liberal”, or liberal is clearly better in all ways than “conservative”, you are the stupid one and I will make you look really dumb.

Opposing viewpoints are the core drivers of progress in any human culture. Cultures cannot strengthen without intrinsic tension within. Just as only a diamond can sharpen a diamond, a society cannot progress without equal and opposite viewpoints synthesizing forward. (Thesis -> Synthesis <- Antithesis)

This is the nature of checks and balances. The right way is usually the middle way.

So even if you don’t agree with the opposing side, you can take a step back and admire how natural human tension helps all of us move forward.

Reading about human history will give you a better perspective on this. I recommend the following books to learn more.


My favorite analogy – design your own world!

I learned about this analogy from none other than Warren Buffett. He recommends a thought experiment that goes like this:

In your mind, design your ideal framework of the world, where you can write all the rules. Governments do this, Companies do that, maybe companies and governments don’t even exist in your world. Imagine what the tax rates would be, the transfer of wealth within families, the services provided to the people, how the social safety net might look. Think about all of these things.

Most of us already have “strong opinions” on this stuff.

Now that your world and the rules are designed, here is the catch:

You don’t get to be who you are today. Everyone will be shuffled around and randomly assigned a new circumstance.

Maybe you are born to parents who are drug addicts, abusive or are extremely poor and uneducated. Maybe you are born to extremely rich parents and you’d never have to work again. You might be born with some disabilities, physical or mental. Maybe you are born less attractive than you are now, maybe more. Maybe you are a different race or gender.

The point is, would you design the world the same way if you knew you might be randomly assigned a new circumstance? Or did you simply design a world which would benefit you the most based on your current circumstances?

How to not be stupid about politics

I love Charlie Munger and his tactic of inversion. It applies to anything important in life.

Instead of telling you what you should believe, what is right and how you should vote, it’s much easier to do one simple thing:

Weed out all the things that are wrong. The more wrong you remove, the more truth is left over.

When asked about how he created sculpture of David, Michelangelo famously said “I removed the parts that were not David.”

Here are some things that are clearly wrong and not really up for debate, and should be removed from your David.

  • Don’t form an opinion until you understand both sides. You cannot have an informed opinion unless you study (honestly and thoroughly) both sides of any issue. If you are unwilling to put this effort into it, you better not have a strong opinion.
  • Don’t fall victim to your human shortfalls. It’s easy to pick a political side based on what people around you think (social proof), what you see most often on the media (media bias) and what information confirms your existing beliefs (cognitive dissonance & confirmation bias). A political opinion can only be formed based on rational and independent thought, backed by analysis, precedence and an understanding of both sides.
  • Don’t spread non-sense. If you have done your research, considered both sides and truly empathized with people of different circumstances, then it is helpful for society to hear your thoughts. As we all know, most of what we hear is from incredibly ignorant sources who are more concerned with spreading their existing opinion instead of building the most informed one.

As long as you avoid doing these 3 things, you will be much less stupid about politics.

 

Barry Deen is an online entrepreneur and investor with over 20 years experience building, acquiring and selling businesses.