“Socialism is for the Uninformed”

Sanders.PNGThomas Sowell makes a compelling case for going beyond surface level platitudes and shibboleths being all that it takes to realize that socialism can’t possibly work and that all evidence of countries that have tried a planned and wealth confiscatory approach have all failed. After making the case through some examples and counterpoints to the Sanders’ socialist agenda, Sowell delivers my favorite quote from the article, “None of this is rocket science. But you do have to stop and think — and that is what too many of our schools and colleges are failing to teach their students to do.”

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“America’s Drift Toward ‘Socialism’ Is Generational, But Also Educational”

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Young supporters cheer on Bernie Sanders, an avowed democratic socialist, in Iowa (Andrew Harrier/Bloomberg)

There is a great article in Forbes that essentially shows a tremendously concerning growth in support of Socialism, particularly within the 18-24 age group. The great challenge is that most of them can’t even define what socialism actually is. Thus, we have a gap in both understanding of the evils of state owned means of production (in other words, what socialism actually is) and a lack of understanding of what socialism actually means for society.  So we either have people opposed to capitalism on its own merits or people that are fooled into supporting something that they don’t understand. I am not sure which is a bigger problem – hatred of what has made America great and freed millions from penury and big government control or outright ignorance of the term and underlying political philosophy.

A key statement by the author, David Davenport is below:

A November NYT/CBS poll found that only 16% of those under 30 could accurately define socialism, compared with 30% for respondents over 30. Even more to the point, when a Reason-Rupe survey in 2014, which again confirmed young people’s support for socialism at 58% for those ages 18-24, turned around and asked whether they favored government running businesses, the clear answer was “no.” When asked whether they want government or private markets leading the economy, they chose markets 2 to 1 (64% versus 32%).

I don’t know which is more discouraging: that young people are becoming comfortable with socialism, or that they have no idea what it is. Any definition of socialism involves government ownership of the means of production and distribution. It’s most assuredly not private ownership of business or a market economy. So for starters, young people have embraced some kind soft collectivism and mislabeled it as socialism. That’s bad enough.

Quote of the week – Friedman on Freedom

“So long as freedom is maintained, it prevents positions of privilege from becoming institutionalized. Freedom means diversity, but also mobility. It preserves the opportunity for today’s disadvantaged to become tomorrow’s privileged and, in the process enables almost everyone, from top to bottom, to enjoy a fuller and richer life.” – Milton Friedman.

A socialist society advocated by Sanders becomes an ossified one. The free market is not perfect and not advertised to be, but is still the only way known to man to provide equality of opportunity and the most effective way to ensure that people can escape poverty.

Do the Chinese have an unfair advantage?

According to Donald Trump, the United States loses to China, Mexico, Japan, and just about everyone else in the world. The redress he proposes is a 45% tariff on Chinese goods that he would likely expand to others he lumps in as having unfair advantages over us and a border wall. Has any nation ever made itself great (or great again) through isolation from immigrants and trade wars? Before we jump off into the chasm of a 45% tariff on the Chinese (and others) perhaps we should think about the actual impact of an increase on our goods, particularly the low-cost goods that benefit the poor. As Daniel Henninger lays out in a recent Wall Street Journal Editorial, the tariff is one of Trump’s few actual policy proposals. Henninger elaborates powerfully on the perils of Trump’s proposal in what I have copied below:

At the core of the Trump campaign is one policy idea: imposing a 45% tariff on goods imported from China. In his shouted, red-faced victory speech Tuesday, he extended the trade offensive to Japan and Mexico.

Some detail: Combining the value of goods we sell to them and they to us, China, Mexico and Japan are the U.S’s Nos. 1, 3 and 4 trading partners (Canada is No. 2). They are 35% of the U.S.’s trade activity with the world. The total annual value of what U.S. producers—and of course the workers they employ—sell to those three countries is $415 billion.

Wal-Mart has 1.4 million U.S. employees in stores filled with foreign-made consumer goods. With a 45% price increase, many won’t be working for long.

Mr. Trump says the threat alone of a tariff will cause China to cave. Someone should ask: What happens if they don’t cave? Incidentally, unlike Mexico, China has between 200 and 300 nuclear warheads and 2.4 million active-duty forces. Irrelevant?

As with anything Trump does, the tariff proposal is a naked calculation to rile up the easy to excite masses that are befuddled by economics. His supporters may not recognize this, but all of this is really in the same vein of support as those that support Sanders.  People with pitchforks want to believe that all of their wage stagnation must be the result of some faceless enemy in a foreign land or a Mister Burns character at J.P. Morgan. They will inevitably fall into the trap of rallying behind either Sander’s envy and class warfare or Trump’s foreigner warfare. On the latter, these same individuals will grab their pitchforks once again and demand price controls once their prices down at Wal-Mart also increase 45%. They will fail to see the increase as the predictable result of their own actions. It is a vicious cycle to find succor and assistance from government men with no scruples and who possess the knowledge that true arbitrary power is created on the backs of those ignorant souls willing to make deals with dark power for fleeting and ephemeral gains. This information and knowledge asymmetry is how individual liberties are willingly ceded by voters to those who make pandering promises who know what power they can gain.

I want to turn to the canard that the Chinese have an unfair advantage in trade with Americans. I have always been puzzled by a complaint that if the Chinese manipulate their currency to an unnatural low point that we should in turn punish them. If the Chinese do manipulate their currency (and it is highly debatable whether they do), then the logical conclusion is that in doing so what the Chinese government is actually doing is using Chinese taxpayers to subsidize American consumption. In other words, currency manipulation would necessarily mean Chinese citizen oppression by the Chinese government to support our low prices and consumption habits here. One might disdain this from a sense of humanitarianism and fellow feeling for the Chinese, but what it shouldn’t be is a cry of unfair advantage for the Chinese. We should be thankful for the good fortune that Chinese government ineptitude provides us with cheaper goods! Cafe Hayek states this much more effectively than I just did, so I copy the comments from a recent blog post in the form of a letter to a former student:

Dear Mr. Hester:

Thanks for your reply.

You say that I am “naïve to forget about” the “unfairly low prices which the Chinese ruling elite impose on us.”

Please.  Low prices in America – especially if they are made artificially low at the expense of non-Americans – are no imposition on Americans; they are a blessing to Americans.  (Do you think that we earthlings would be made richer if our rulers adopt policies that require us to start paying more for the light and heat that we have until now imported from the sun at the low price of $0?  If not, why do you think that we Americans would be made richer if our rulers adopt policies that require us to start paying more for the goods that we have until now imported from China at low prices?)

Also, Chinese low wages are largely the consequence of the Chinese people being enslaved, tyrannized, and impoverished for decades by an unspeakably cruel Maoist regime.  Do you honestly believe that this terrible history gives the Chinese people today an unfair economic advantage over Americans?  If so, you must regret that we Americans were denied the advantage-rich experience of being forced to live in a collectivized, starvation-ridden society ruled by murderous despots.  My gosh!  If we, too, could today boast the horrifying recent history of China, then we, too, might be as poor as the Chinese and, hence, we, too, would enjoy – as do today’s Chinese – all the splendid “advantages” bestowed by such an impoverishing history!

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

 

The substantial middle class taxes coming with #feelthebern

The Sanders path to unicorns and rainbows can’t possibly be financed through taxes on Wall Street. In fact, that will barely make a dent in the trillions of dollars needed for single payer healthcare alone. The only way to get all of this “free” stuff is to heavily tax the middle class. So the question is, are you ready for this political revolution of 50% personal income taxes?

Economist Dan Mitchell has more details…

Source: Accelerating on the Path to Greece with Bernie Sanders

Out of the mouths of babies can come great wisdom

Bernie Sanders
Democratic presidential candidate Sen. Bernie Sanders, I-Vt., speaks during a rally at the Greensboro Coliseum Special Events Center in Greensboro, N.C., Sunday, Sept. 13, 2015. (AP Photo/Rob Brown)

With a degree of comic disappointment weighing on my mind, I took a break from my attention to the New Hampshire primary last night to put my three year old and youngest daughter to bed and to read her a bedtime story. Moments later, my eight year old daughter delicately tiptoed into the room and interrupted our lamplight reading peace to inform me that someone foolish was on the television talking about taking and having things and that perhaps it was inappropriate and needed to be turned off. I paused from my reading to see if I could hear what exactly she was referring to. No less than the bombastic and avuncular tirades of Bernie Sanders came into my ears.

I wrapped up my own powerful oratory to my youngest daughter about ladybugs being blown one by one by the wind off of leaves and migrated downstairs to catch what was left of the speech. Since Sander’s speech clocked in at minutes that must have tallied up to roughly his age, he was still going. Indeed, Sanders was on a roll racking up his familiar story of class enemies that he would pillage from in order to redistribute income. The non-economist can be mistaken for lapping up his litany of unicorns and rainbows that will be “free” but simple math indicates that it all can’t be paid for purely on the backs of taxes on “Wall Street speculation.” Really, that would not even make a drop in the bucket of a push to fund single payer health, college tuition for all, and subsidizing the many people that will be thrown into unemployment when they lack the skills to justify a $15 an hour minimum wage. Perhaps math is not important at this point for Sanders followers, perhaps it is more of the principle and the anger that he has deftly channeled. Consider it the right time at the right place in this age of populism. Still, one wonders how many people, particularly those with something to lose, are adding up the math and recognizing that taxes on the mundane middle class would have to rise precipitously to fund this political revolution. One wonders if all of the supporters lose any sleep at night over the amount of government power and agency apparatus that would necessarily have to be created in order to confiscate and shift this amount of wealth, and just how exactly is it justice that a government official gets to decide who is deserving of the wealth that they created and just who is worthy of receiving that in an arbitrary confiscation and transfer of wealth. Recognizing that many of the Sander’s crowd are ruddy faced college kids, I am reminded of the Athenian leader Pericles in the 400s B.C. telling a crowd at a war funeral oration that, “For it is impossible for a man to put forward fair and honest views about our affairs if he has not, like everyone else, children whose lives may be at stake.” The thoughts of leaving a legacy for my children makes me far more cautious before willingly turning over precious liberty and freedom to arbitrary government rule that will no doubt be abused. Even if Sanders is sincere and honest, what happens when this new government entrenched power is handed to someone with lesser scruples? Such is the importance of leaving a legacy of individual liberties and individual responsibility to our children. Let their creative and innovative minds not be circumscribed and hindered by a heavy and confiscatory hand of government.

The innocent wisdom of my daughter was to be unnerved by the shrillness of the old man on the TV rampaging on about what he was going to take. Something fundamentally within her told her this wasn’t justice. It is here that I must inform the reader, as much as one might not believe it, that leaving the primary coverage on is something I regard as a lapse in my modus operandi. I have shielded my children from the political race as I have felt they are too young to get involved and burdened with the mess of politics until they have their own firm foundations and respect for knowledge, seeking of truth, and America’s Civic foundations. Thus, her observations were completely her own and from the wisdom and honesty of a child’s perspective. It is something I am still marveling at. And yes, I will admit to a beaming moment of pride in my daughter’s natural skepticism. She is a child that I continue to see as remarkably similar to her father.  Luckily, I had her in bed too by the time Trump gave his victory speech, which I can only really compare to a revised form of the Jerry Springer show, complete with meatheads on stage and meatheads fist pumping and crying out, “build the wall, build the wall!”

I went to bed hoping to wake up having enjoyed the greatest of Mel Brooks parodies. Pinching myself, I went about my day pondering the realities of our populist age and hoping we somehow find enough veneration for our ideals of democracy and individual liberties to make them last.

What would I look like in an orange jumpsuit?

The title is a question that I ask myself when I think about what life would look like if a young 2LT Obenhaus had treated his Secret clearance knowledge of U.S. Military and Patriot Missile system secrets with the same cavalier reckless abandon that Hillary Clinton showed with classified information while head of the state department.

I think former ambassador to the U.N. John Bolton is on to something here in this article when he indicates the contrasting reactions between those that have served in government positions handling classified information and those that have not:

For alumni of U.S. national-security departments and agencies, Hillary Clinton’s email saga is mind-numbing. The publicly available information makes clear she and her aides violated so many elementary security prohibitions that alumni are speechless. They wonder, had they done what she did, how quickly they would have lost their clearances and jobs and how extensive the criminal indictments against them would be.

By contrast, many who have never served in government or dealt with classified information see the affair as opaque, even overblown. Certainly Clinton has worked hard to foster that impression. Leaving political spin aside, and without delving into arcane legal analysis, which is it? What did Clinton and her entourage actually do day-to-day, and what does it mean? In hopes of making things a little clearer, herewith the observations of one State Department alumnus, who has pondered how he would look in an orange jumpsuit were he in Clinton’s shoes.

Bolton goes on to indicate that Clinton made two fundamental errors. One is that she just plain violated common sense. The second is that it is irrefutable that she deliberately used non-classified systems to send classified information, and her arguments for why she did that and her daft pleas of ignorance are near impossible to believe. Even if she is ultimately exonerated and cleared by the FBI, which I would argue that us more lowly types would never get away with what she is getting away with, her lapses in judgment and blatant disrespect for the office are indeed troublesome.

The ultimate question is, do we want someone of equal parts lack of common sense and judgment as well as someone who is so above the law that they have little regard for classified American information to serve at our helm? I dare say that the Americans that are rushing to Bernie Sanders are as much evidence of Clinton’s weakness and a resounding vote with footsteps that the haze of perfidy that always seems to trail the Clintons is a clear indication that this won’t just go away, despite the Clinton tried and true methods of obfuscation and self-pitying cries of vast right wing conspiracies.

The drift towards socialism

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Given all of the momentum behind Bernie Sanders, fueled by what I heard one pundit call, “the children’s brigade of people supporting Sanders that have never had to watch thousands of dollars go out of their paychecks for taxes,” I created this post, in which I essentially copy and paste from one of my hidden away comments from within the About Me section.

My guiding principles on the appropriate order of society is that man should be free to do as much as they possibly can on their own without coercion of their fellow man. Freedom from coercion will inherently mean a small and limited government, which is the antithesis of what an avowed socialist such as Sanders advocates. It is not that I don’t like the idealism of a utopian state of all of us cooperating to build a just society, it is that I believe that empirical evidence of countries that have tried socialism have failed to deliver the utopia and have instead descended into quite the dystopia. The problem is that to have such a system, the ruling elites of a society change from one in which the invisible hand of the pricing system and the free market determine who is elite based upon individual skills and effort to one in which favors and status are doled out arbitrarily by a government elite. We can’t pretend that those entrenched with government power will suddenly become benevolent and all-wise benefactors. As William McGurn indicated in an op-ed in the Wall Street Journal, the unfortunate reality is that the end result of a socialist society is not idealistic cooperation, it is in fact collusion of a small governing elite and their attachments and hangers on. It is no accident that the richest woman in Venezuela is Hugo Chavez’s daughter. It is no accident that Brazil is dealing with corruption charges at all levels of government due to government officials abusing their power to milk bribes and embezzle money from the state-owned oil and gas company Petrobas.

It seems unquestionable at this point that in the last 8 years, the Democratic party has made a tremendous shift to the left, which is pulling Hillary Clinton leftward as well. Granted, much of Bernie’s recent success is in converse relation to Clinton’s inherent weaknesses in campaigning, trustworthiness, and likability, but it is still clear that voters are driving the party in a leftward lurch. This is perhaps a natural outcome of 8 years of anemic economic growth and a drumbeat of income inequality. I would submit that the income inequality seems to have been greatly aided and driven by conscious decisions by the federal reserve (by extension, government) to fuel asset prices through quantitative easing that props up asset prices owned mostly by the ultra wealthy and pins down meager saving rates largely owned by the middle class on down. We have thus ignored and swept away the hard fiscal and government reform that would actually unshackle the economy and tried to take the easy but much less effective path of monetary policy manipulation that also is much more prone to fueling asset price increases to the benefit of the rich and inflates the probabilities of a bust cycle requiring more bailouts that benefit the wealthy in the future. The clarion call warning is that if you haven’t been able to trust the angels that run government before to structure your life and make it all better before, why would you hand them the keys to even more power and control over your lives? Take some time to view the outcomes of socialist governments in the past and whether they delivered the utopia that is being proclaimed today. You will find that 100% of the time, they failed to live up to their ideals and instead descended into a different and less accountable elite-controlled society with sclerotic growth and a much more income stratified society that becomes much less fluid and changeable.

Feeling the Bern

Hidden amidst all of the focus and media hyping up the divisions within the Republican party, is the conveniently forgotten fact that Bernie Sanders in many recent polls is either within a margin of error or outright leading Clinton in the important early primaries of New Hampshire and Iowa. That an avowed socialist that admits to wanting a single-payer tax system and much heftier taxes on the middle class has made it this far says something remarkable about both the general leftward tilt of the Democratic Party and the weaknesses of Hillary Clinton as a candidate. I will say that if there is anything that Sanders has going for him and that I can’t help but find a bit endearing, it is his sincerity and candidness of his beliefs, which is in marked contrast to the constantly calculating, scheming, and ultimately polarizing Clinton, who seems to have missed the moral lessons that many parents constantly teach our kids that if one lies too much, often times one can’t even remember which lies they have told and have a very difficult time keeping the mounting lies going in a straight direction. Should not love of truth and some relation to honesty be a virtue that we at least have the veneer of holding our leaders accountable to?

We don’t get a sense of the Clinton challenges, perhaps due to the general air that Trump continues to suck out of media attention, but more sinisterly, the fact that the Democratic National Committee is doing whatever it can to keep the coronation process moving along according to the schedule. This means lack of competition and coverage, as made evidenced by the Democratic debates that are scheduled alongside NFL playoff games and Downton Abbey – out of sight and out of mind. There will be limits to this approach as it relates to a general election, since the issues will be brought up more forcefully by the Republican nominee and party and will reignite old debates about whether we all want to relive the scandal of the Clinton years and whether Hillary is trustworthy enough to hold such a high job. I can imagine that even if Trump does not win the primary, that he will serve as a useful attack dog going after Clinton from everything to her cattle futures, whitewater, her husband’s sex scandals and rape allegations that she lent a hand to silencing, Benghazi (where she is on record as having told media and family members a different story about the attacks being induced by a YouTube anti-Muslim video while she was busy telling foreign diplomats and her own daughter that it was a plotted act of terrorism), and her deliberate mishandling of classified information over a private server.

Two Wall Street Journal articles, The Democratic Crack-Up and The High Cost of a Bad Reputation published over the weekend by two of my favorite columnists, Kimberly Strassel and Peggy Noonan, respectively, provide a nice summary of the issues surrounding Clinton and the Democratic Party. They lay this issue out far more eloquently, and in Strassel’s case with far more effective biting wit, than I ever could. I should indicate that Noonan also takes aim at the deserved un-likability of Cruz, so those looking for an bipartisan approach to bad reputations will appreciate the Noonan article. What I appreciate about her article is its equal aim at tremendously flawed candidates that ought to make us stop and think before we vote. Strassel, as ever, provides a memorable synopsis in just a few words:

Some of Mrs. Clinton’s struggles are self-imposed. She’s a real-world, political version of Pig-Pen, trailing along her own cloud of scandal dust. Even Democrats who like her don’t trust her. And a lot of voters are weary or unimpressed by the Clinton name. For all the Democratic establishment’s attempts to anoint Mrs. Clinton—to shield her from debates and ignore her liabilities—the rank and file aren’t content to have their nominee dictated.