Tax Fury On Facebook

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On April 13, the Rasmussen polling organization released the latest poll on political opinion. Voters were asked who they would vote for President. Result: President Obama, 42%; Ron Paul, 41%. No other Republican was in double-digits.

This was a bombshell. The Republican Establishment had previously dismissed his win at C-PAC (Conservative Political Action Conference) as manipulated. This was not a scientific poll, they said. But the Rasmussen poll was scientific. Ron Paul is neck-and-neck with Obama.

How is this possible? Two words: Tea Party.

I have covered the meaning of Ron Paul’s amazing performance and the reasons for it in another report. I contend that we are seeing a true political revolution. No sitting House member in American history has ever matched a sitting President in terms of public polls.

I have a theory about what we are seeing. The Tea Party movement has become the largest and most motivated swing vote bloc over the last 14 months mainly because of Facebook. Something in the range of 25% of those polled by Rasmussen are either open members or are sympathetic. If I am correct, this is going to create a growing wall of resistance to Congress. It will change the way politicians run for office . . . and run from office.

I say this because of the connection between Facebook, embedded videos, and the desire of people to establish networks of shared opinion.

SOCIAL MEDIA AND MOBILIZATION

Social media are more social than email is. They bring people together or separate them in a way that email does not.

Email allows individuals to keep in contact with lots of people on their mailing lists. Forwarded mail lets us keep friends informed. If someone sees an item that would be amusing or in some way of interest to a friend, he forwards the link. It may be a link to a video. It may be a joke.

Email lets you send a specific friend a specific piece of information. This lets you choose which message will be shared with which people in your data base. The ability to discriminate among recipients keeps the transmission of information more diverse. It lets people stay on good terms with others of varying political or religious views. In this sense, email promotes diversity.

Facebook does not. A Facebook page shares the same information with everyone who visits the page. This forces people to decide which aspect of themselves they are willing to share with everyone who has access to their pages.

This means that Facebook pages are more revealing of a person’s interests and commitments than an email data base is. On Facebook, people "let it all hang out" as they used to say. Their pages reflect their major commitments.

This makes for far more personal communications. When something grabs a person’s interest that he wants to share with his peers, he posts it.

What we find is that people are now identifying themselves politically. They post items in terms of their major commitments. They say, in effect, "take or leave it." They are really saying "take me or leave me."

This trend is the opposite of diversity. It is the essence of special-interest politics. It is leading to the creation of new voting blocs. This is going to Balkanize American politics.

Facebook is like a phone tree. In politics twenty years ago, a phone tree let a special interest group mobilize the troops, phone call by phone call. The message had to be short. The action had to be specific: just one thing, usually a letter to Congress or a phone call to a Congressman.

The phone tree was rarely used. The willingness of people to commit to the effort of calling was limited to One Big Thing.

Today, the Facebook page is in effect a mobilization device. Within minutes, a message goes out to a large number of people. This is not planned. It is unpredictable. It is based on people’s fancy. This communications system can be used by some central agency, but it is inherently unplanned.

That is its great threat to the organized voting blocs that have controlled politics. This communications system is beyond the control of any group.

VIDEOS GO VIRAL

A video that grabs people’s attention can go viral. Millions of people can see it. There is no way to know which video will work.

Couple this with cell phone videos and Flip-type webcam videos, and politicians face a nightmare. One offhand remark, and half a million voters know. If someone sends it to Glenn Beck, three million may know.

Because conservatives dominate the digital news media, the digital communications revolution tends to benefit them. Liberals watch the pseudo-news shows on Comedy Central. But these shows must be produced, scripted, and broadcast. They are long shows by YouTube standards. A short YouTube video can go viral in an hour.

Facebook is making communication more immediate. It allows people to post embedded videos on their pages. There is no question of the greater immediacy of an embedded video over a link to a video. One click, and it’s playing.

Videos are becoming a way to communicate more than amusement. They communicate political and economic news with an immediacy that the printed word rarely does.

YouTube settled on a ten-minute maximum. This now defines the limit of effective communication. A message that can be communicated effectively in ten minutes or less has a competitive edge.

OUTRAGE IN TEN MINUTES OR LESS

Tax stories and Congressional spending stories lend themselves to a YouTube video. If a video producer can get the numbers across with a graph of an inherently outrageous boondoggle, he can get his message out there.

The pioneer here was Wisconsin’s Senator William Proxmire, 1975—1988. He used to stage a monthly media event called the Golden Fleece Award. He would find some egregious example of Federal waste and give it an award. His staff was careful to find a boondoggle that would be media-worthy. Some choice examples are here.

I copied this tactic when I wrote Ron Paul’s newsletter in 1976. I found gems in various reports from Federal agencies. The agencies were proud of these projects. The directors should have concealed them. The column was called "Where Your Tax Money Goes and Goes and Goes."

Today, a YouTube video of a Golden Fleece—type announcement would be easy to produce. It would get a lot of coverage.

There is always a market for juicy tidbits about government boondoggles and waste. People respond in derision to them. But derision is not the same as mobilization. The public shrugs and thinks, "that’s politics." Voters do not think, "I think we can change this."

In contrast, videos on stonewalling bankers do very well. Videos on all sorts of recipients of bailout money do well.

These videos get posted on Facebook pages. They spread fast, because social networks really are networks. Networks operate in terms of shared interests and commitments.

A Facebook page is also highly personal. Direct-response copywriters know the power of the testimonial. They also know the power of the endorsed mailing list: a testimonial from a trusted friend.

The Tea Party movement has spread like wildfire because of both phenomena. When one person recommends a video, his followers are more likely to watch it. This gets the message across.

RON PAUL’S BONANZA

Ron Paul is on YouTube. He is all over YouTube. No other Congressman has anything like the number of YouTube videos.

Facebook keeps his opinions in front of a growing army of Tea Party people. The mainstream media cannot control this.

The decentralized nature of Facebook is an enormous benefit. There is no single source of the information.

In 1976, I was on Ron Paul’s staff. I shared with him a technique that I had used to recruit subscribers to my "Remnant Review" newsletter. I used voice answering machines, then a novelty. People would call in response to ads I ran in local newspapers.

He liked the idea. He started a weekly 3-minute recorded report. He had the machines set up in his district. He sent the cassettes to his district office by mail.

He lost in November by 267 votes out of 180,000. He kept doing his weekly phone report for the next two years. This became a cheap way for him to communicate with his supporters. He ran again in 1978 — not a Presidential election year — and defeated the Congressman who had beaten him in 1976.

He understands the media. YouTube has expanded his audience. His Presidential run in 2008 got him national exposure. YouTube and Facebook then took over.

The typical mush-mouth politician wants to harness this power of getting votes and donations. He can’t do it. He has nothing to say that is worth posting on Facebook. He does not gain the commitment of ideologically committed voters.

This is why Facebook is a threat to the Establishment. The mush-mouths do not like single-issue voters. They are a threat to him. He does his best to waffle. Always before, he has been able to hide his views. This is getting more difficult.

If he says something controversial, it will wind up on YouTube. It will alienate some of his voters.

Ron Paul has been saying controversial things for so long that his core voters know his positions. He is not threatened by local voters. There are not enough of them to offer a challenge. For years, he raised money from readers of hard-money newsletters. Today, his constituents are national. There is no way some local Democrat can defeat him.

So, he can say whatever he pleases. The Republican hierarchy does not like this, but it can do nothing about it.

CONGRESS DOES NOT SEE WHAT IS COMING

Congress assumes that it is safe politically because Federal spending does not result in the pain of taxation. The ability of the government to sell debt at almost no interest enables the government to spend without hiking taxes. The pain of repayment or else default will come in the future.

Congress prefers the voters’ pain later to sooner. It defers the day of reckoning by running up the tab. The tab is the voters’ tab. On our behalf, the government spends now and promises to pay later.

On-budget debt is now in the range of $12.8 trillion. Of this, $8.3 trillion is owed to investors who are not part of the U.S. government, while $4.5 trillion is owed to intergovernmental agencies, mainly the trust funds of Medicare and Social Security. You can check this daily on a page run by the U.S. Treasury, "Debt to the Penny."

The ability of Congress to pursue its agenda with other people’s money, present or in the future, guarantees a runaway budget. The restraints are off. There was a time when the restraining force of interest payments served as a warning light. But with the federal funds rate at under 0.25%, there is no longer much restraint. The money is almost free money.

The ballooning deficit parallels the ballooning rate of spending. The public shrugs. Voters assume that the government can safely run up a tab on future taxpayers without inflicting pain. After all, the government has been doing this for almost a decade. The taxpayers have yet to feel the pain. Because the government has succeeded in the past in spending without inflicting pain, voters presume that this can be done infinitely.

Voters know that this is not true with respect to their personal finances. They know the warning signs of personal debt, and they cut back their spending when the monthly repayment burden gets close to 18% of disposable income. They monitor their monthly budgets. You can see how narrow a range this figure has fluctuated since 1980: for homeowners, between 15% and 18%. It is now at 17.5%.

Because they do not monitor Congress, they pay little attention to the deficit. But this is beginning to change. The magnitude of the deficit has finally caught the attention of about 25% of the electorate: the Tea Party movement and its sympathizers. This development has come out of nowhere in the past 14 months. It has caught Congress by surprise.

Old habits are hard to break. Congress is aware of the growing backlash, but incumbents do not see the magnitude of the threat to their careers. Facebook is too new.

The Tea Party movement is a threat to politics as usual. If incumbents of both parties are defeated this November, this will send a wave of fear through the Establishment. The swing voters are no longer under control.

If swing voters use social networks to monitor the votes of the newly elected Congressmen, the far older social network — the old boy network in Congress — will no longer be able to protect those who go along to get along.

CONCLUSION

A showdown is coming in November. It will be a showdown between the old boy network and the social networks. A new political force is on the move, that the Establishment has not yet learned how to manipulate.

The social networks are examples of what free market economist F. A. Hayek called the spontaneous order. It is outside the old boy network.

The fury over taxes is increasing. This is moving toward a fury over the deficits. This is new. It means that Congress can run, but it can’t hide. Congressmen can run, but they can’t hide.

This will be fun to watch.

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

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