The Cures For Every Human Malady Hide In Plain Sight

“Sandy Koufax teases me. He said ‘Why weren’t you smart enough to come up with that 10 years before? Then it would be the Koufax operation.’” The words in quotes come from legendary orthopedic surgeon, Frank Jobe (1925-2014).

Jobe famously created what came to be known as the “Tommy John surgery,” which repairs the ligament on the inner side of the elbow. It’s named after the pitcher whose elbow Jobe famously rebuilt. Tommy John’s long career, one that had him on the doorstep of 300 wins, would have been very short without Jobe.

Unfortunately for Koufax, Jobe’s innovation was as previously mentioned, 10 years too late. Koufax retired in 1966, and after a 27-9 season. The pain in his elbow was unendurable.

Fearing permanent arm damage, he stopped doing what elevated his genius like nothing else. Imagine the agony for Koufax.

Still, Koufax’s quip was and is telling. Through Tommy John surgery we see the genius of George Gilder’s truth that wealth is information. And we need much more of it.

While Jeff Bezos, Jensen Huang, and Mark Zuckerberg will work at all manner of tax rates, they can’t innovate without capital. The more capital chasing all sorts of obscure knowledge, the better.

That’s why tax rates and government spending matter so much, though not for the reasons supply siders say. While they view tax rates through the prism of incentives to work, the “vital few” (Reuven Brenner) don’t require incentives to be great. But they do require matching with capital to test the ideas coursing through their heads.

Think Frank Jobe again. When he conducted the surgery that saved Tommy John’s career, he no doubt did so in the face of boundless skepticism. The very idea of rebuilding a player’s elbow was surely nuts, until it wasn’t.

Which means we need more information, and we need greater freedom to try things. In the right to try category, what paralyzed person wouldn’t be willing to endure all sorts of crazy sounding surgeries merely for the slim possibility of being able to walk again?

Parallel to right to try, it’s essential that live minds have access to the capital necessary to experiment in big ways followed by failure in big ways. How else to progress unless we know things?

All of which requires a change of thinking. Tax rates are too high, and this is true regardless of whether they’re lower than in other parts of the world.

That’s because wealth creation in the U.S. is stupendous relative to other parts of the world. Since it is, even nominally low tax rates are too high such that the federal government has too much money to spend. Only for the story to get worse.

See the $40 trillion national debt. Economists and pundits focus on the number and get the vapors, but what should really have them horrified is that the rich are so excessively taxed now and in the future that the federal government can be $40 trillion in debt. Which means the crisis is the debt, not the debt? Get it? If a government can be indebted to that level, then lenders must really trust that government’s taxing power.

Talk about a crisis. And it must be considered through the prism of Frank Jobe’s Tommy John surgery. Jobe discovered that, but there’s so much he and others did not discover given the cost of experimentation. Let’s cut taxes so substantially that the innovators can experiment substantially more. Yes, let’s look at government spending as a cost endured by the vital few, but most of all by the suffering.

Originally published on Real Clear Markets.