Monday, 14 February 2022 13:42

Hendrickson's View

Written by
Rate this item
(0 votes)

Hendrickson’s View

Mark W. Hendrickson

Mark Hendrickson is an economist who recently retired from the faculty of Grove City College, where he remains a Fellow for Economic & Social Policy for the college’s Institute for Faith and Freedom. These articles are from The Epoch Times and The Institute for Faith and Freedom, an online publication of Grove City College, in Grove City, Pennsylvania.

More Fluff from the Economic Establishment

One of my pet peeves about the economics profession is how often economists decline to speak truth to power. Any economist worth his salt should have a robust understanding and healthy respect for the unique and oh-so-very important functions of free markets.

Yet in all too many cases, economists compromise sound economic principles to provide intellectual rationalizations for politicians to engage in harmful political meddling in markets.

From my perspective, the economics profession permanently got off track in the 1930s. That’s when, after more than five years of massive government intervention financed by deficit spending under Presidents Herbert Hoover and Franklin D. Roosevelt, the renowned British economist John Maynard Keynes published The General Theory of Employment, Interest, and Money. That book introduced cockamamie theories purporting to justify such interventions and deficit spending. Keynes basically said to FDR, “Keep doing what you’re doing.”

Well, Roosevelt complied, with the tragic result that the depression dragged on for another six years until World War II broke out.

Despite the incalculable damage inflicted on millions of innocent citizens, Keynes was lionized by the political class for providing intellectual cover for their economically harmful political shenanigans. Since then, ambitious economists wanting to burnish their reputations have sold out to the politicians. They help politicians sell their poison to the public rather than decry the economic errors and costs of politicians’ nominally “macroeconomic” (more accurately: “non-economic”) policies.

I’ve written in these pages before about the machinations and obfuscations of the anointed “economic establishment,” and have excoriated that establishment for refusing to teach the inherent unviability of socialism, even though that truth is now over a century old. The latest example of this sorry trend is provided by former Federal Reserve Board vice chairman and current Princeton professor Alan S. Blinder in his recurring Wall Street Journal column presenting the progressive position on economic policies. I refer specifically to his Dec. 5 posting, “Look at Build Back Better’s Benefits, Not Its Price Tag.”

The title itself (which might have been an editorial decision rather than Blinder’s choice, but it sets the stage accurately for his arguments) should raise eyebrows. If there’s anyone who should never suggest ignoring price (especially when the price tag is in the trillions!) it’s an economist. Such a suggestion is professional malpractice. Cost and price are always crucial factors and should never, ever be ignored.

Let’s briefly look at some of the ways Blinder endorses Team Biden’s Build Back Better agenda and gives it an unmerited seal of approval from the economic establishment.

The subtitle of Blinder’s article asserts that Biden’s “bill is paid for.” The extreme “fudging” of the true cost of Build Back Better has been well-documented. Only a politician or establishment economist could assert with a straight face that trillions of dollars of additional spending is “free” or already has been paid for.

After telling us not to worry about the price tag of Build Back Better, Blinder says we should focus on whether Build Back Better will “spend public funds wisely” and whether it’s “oriented toward creating a better future.” Blinder then proceeds to ask three questions that he assumes will melt all resistance and end debate.

First, he asks what he hopes is a rhetorical question: “Do you oppose universal pre-K education?” Yes, I do. The Marxian goal of centralizing control over education in Washington (see Marx’s tenth plank in The Communist Manifesto) does violence to our federalist system of government. Education policy should be set at the state and local levels. But perhaps even Blinder would oppose mandating universal preschool if he read the Harvard research showing that many children aren’t developmentally ready for today’s pre-K curricula.

The results of placing children in preschool before they’re ready include anxiety and confusion. Worse, there’s a horrible tendency to diagnose kids with attention-deficit/hyperactivity disorder (ADHD) and put them on drugs, when the only “problem” is that they’re just not ready for school yet.

Second, “Are you against more affordable child care?” Of course not, but let markets set prices. Build Back Better would raise the actual price of child care while socializing those costs. Government subsidies don’t lower prices; they raise them. (See: medical care, higher education, et al.)

Third, “Do you think we should ignore global climate change?” “Ignore” it? Of course not, but we can’t afford to accept the green myths that many do blindly accept. Instead, we need to set intelligent spending priorities to lessen pollution and find realistic strategies for coping with whatever climate changes actually happen in the future — highly uncertain and beyond the current expertise of experts to predict. Blinder appears to be on board with the globalists’ agenda to redistribute wealth and establish socialism.

As for his sweeping assertion that Build Back Better will “improve future economic and social conditions,” we should be exceedingly skeptical of grandiose government plans to design a better future. (Again, there’s the problem with establishment economists ignoring the inescapable flaws of socialist planning). Certainly, the green agenda will not improve economic and social conditions for poorer Americans this winter if the price of energy continues to rise due to the Biden administration’s anti-energy policies.

Blinder goes on to double down on the shady accounting that underlies the claim that corporate taxes and taxes on the rich will fund Build Back Better. One of his rationales for raising taxes is that inflation is currently high. And why is inflation high? Because of the multitrillion-dollar federal spending splurge in response to COVID-19. So, because government is spending more, the private sector should spend less. Withdrawing wealth from the private sector while increasing public sector spending is the road to socialism. It’s also known as Modern Monetary Theory.

Blinder is a prominent member of the economic establishment. It’s sad to see that establishment aiding and abetting the socialist agenda. They should know better.

Chile Veers Leftward

Here in the United States, our global geopolitical focus tends to be transoceanic; that is, our primary concern has long been Communist powers on the other side of the world — first the Soviet Union beyond the Atlantic and Europe, and, more recently, the People’s Republic of China across the Pacific.

We shouldn’t, however, overlook the Communist challenge in our own hemisphere. For at least six decades there has been a titanic struggle in Latin America between those who favor socialism (i.e., centrally planned economies) and those who favor market (i.e., decentralized) economies.

There was a significant development in that ongoing struggle recently: The South American country Chile elected a new president, Gabriel Boric, “a 35-year-old, left-wing former student leader” whose supporters include “a revolutionary student movement and the Communist Party,” according to The Guardian.

My interest in Boric’s election has a deeply personal dimension. After translating the Latin of Julius Caesar and Virgil during my first two years of high school, I decided to learn a language that I could speak. My choice was Spanish, which eventually led to Spanish being my undergraduate major in college.

In my junior year, my Spanish 1 teacher was Sam Salas, a Chilean. The following year, my Spanish 2 teacher was another native Spanish-speaker, a wonderful man with the most Catholic name I have ever encountered: Jesús de la Cruz (Jesus of the Cross), a Cuban. Both men were masterful teachers and wonderful human beings. I don’t know why Salas emigrated from Chile, but de la Cruz, a middle-aged man who had been a prosperous attorney in Cuba, escaped his homeland in a small boat, bringing little to the States other than his wife and children. This humble, gracious man never talked about Cuba, but there was often an air of sadness about him — although he showed great character by always being cheerful in class. What Fidel Castro and the Communists had done to Cuba grieved him.

How interesting it has been for me that my first two Spanish teachers represented the polar extremes on the Latin American political continuum: Chile has had the most market-oriented (and not coincidentally, the most prosperous) economy in Latin America, and Cuba, throughout more than 60 years of Communist rule, has been the most rigidly socialistic (and not coincidentally, the poorest) economy in the region. A Russian friend of mine, who defected from the USSR in 1989, visited Cuba about 15 years ago and stated categorically that poverty in Cuba was even more severe and ghastly than it had been in the Soviet Union. Indeed, for decades under Castro, Cuba was the unchallenged titleholder of “poorest Spanish-speaking country in the world” until Cuba Version 2.0 (otherwise known as Venezuela, whose dictator, Nicolás Maduro, has been called a Cuban puppet) began to compete with them for that “honor” in the last few years.

For those who don’t know the history, Chile almost followed Cuba down the tragic path to socialism in the early 1970s. Marxist Salvador Allende was elected president with approximately 36 percent of the vote in 1970. By 1973, inflation was raging and the economy was collapsing. Housewives protested in the streets, banging pots and pans as Allende strangled the economy with socialist policies. Finally, the country’s Chamber of Deputies passed a resolution accusing Allende of violating the constitution and calling for the restoration of constitutional order. It was in response to that resolution that Gen. Augusto Pinochet deposed Allende in September 1973 and seized the reins of power. (Allende himself died, possibly by suicide, during the chaos.)

Pinochet mercilessly hunted down leftist leaders and crushed the Marxist supporters of Allende. He assumed the presidency of Chile and ruled for 17 years. (He eventually left office peacefully in 1990 after losing Chile’s first presidential election since Allende’s election 20 years earlier.) As he consolidated his powers, more than 2,000 individuals, undoubtedly including some innocent people who simply were in the wrong place at the wrong time, “disappeared.”

Here in the United States, the mainstream media and sundry “intellectuals” showed their moral bankruptcy by condemning Pinochet for “los desaparecidos” at the same time that they lionized Cuban dictator Fidel Castro who had “disappeared” at least four times as many of his political opponents in Cuba as Pinochet had in Chile. Apparently, those American commentators believe that “disappearing people” is permissible in the service of imposing Communism, but impermissible in the cause of defeating Communism.

Just as telling, the pro-Castro forces in this country often praised him for the supposedly superior accomplishment of de-developing Cuba and turning it into an economic basket case in the name of “the people” and “social justice” (favorite Communist slogans) while denouncing Pinochet’s autocratic rule, even though his policies led to vibrant economic growth and much higher standards of living for the Chilean people.

Being economically ignorant, Pinochet, after being president for a couple of years, asked for policy recommendations from the so-called “Chicago boys” — free-market economists who had studied at the University of Chicago. Following their recommendations, Pinochet liberated markets from state control. He removed various price controls, cut bureaucratic red tape, drastically shrank government spending, and privatized as much as 90 percent of public companies. Most famously, Pinochet authorized a privatized retirement system that financed vigorous economic expansion in the ’80s and ’90s.

On the negative side, Chile’s economic turnaround was very bumpy and protracted for a variety of reasons, including the economy having been so badly wrecked by Allende, monetary policy mistakes, a worldwide recession in the early ’80s, and the perennial problem (possibly a universal tendency, but a glaring feature of Latin American society for the past half-millennium) of cronyism, by which ownership of many valuable state-owned properties was transferred on unfairly favorable terms to an already prosperous elite.

Overall, though, the reforms resulted in a fourfold increase of Chilean per capita income in only 40 years, while the poverty rate has fallen from 45 percent to 8 percent, and the middle class has expanded from 23.7 percent to 64.3 percent of the population.

Once again, though, what I call “the paradox of prosperity” has reared its head. On Dec. 19, a majority of Chileans voted against the very policies that brought them the highest standard of living in Latin America. By electing a young man to the presidency who has “pledged to bury Chile’s ‘neoliberal’ past of market-oriented policies that are widely considered to have helped drive decades of rapid economic growth but also stoked inequality,” the Chilean people may be committing economic suicide. Distracted by the inequality bugaboo, they seem blind to the reality that the standard of living of Chile’s poor has been rising under “neoliberal” policies. That stands in marked contrast to socialist economies (e.g., Cuba and Venezuela) where economic stagnation for all but the political elite is the norm.

The “great sin” of capitalism is that some individuals advance economically more rapidly than others, but the important point is that society in general advances. One can only hope that Chile will not throw out the baby with the bathwater — that is, that they will find ways to improve the economic well-being of their poorest compatriots without jettisoning the economic policies that have prospered the country so greatly. Perhaps President-elect Boric will turn out to be wiser than his leftist rhetoric would indicate, and he will turn out to be a statesman rather than a revolutionary ideologue. Good luck to the Chilean people.

The Biden Administration’s Ongoing, Ill-timed Battle Against Fossil Fuels

A few months ago, I wrote about President Biden’s anti-fossil fuel policies. Among other steps designed to restrict domestic production of oil and natural gas, the president canceled completion of the Keystone XL pipeline, banned drilling for oil in the Arctic Wildlife Refuge, and greatly curtailed the issuance of leases for companies to develop fossil-fuel resources underneath public lands and waters.

Since then, the prices of gasoline, oil, and natural gas have risen smartly. As noted by one source, the last time natural gas prices were this high, “One-third of American households already had difficulty . . . adequately heating and cooling their homes — and one-fifth of households had to reduce or forego food, medicine, and other necessities to pay energy bills.” Bank of America is predicting that the price of a barrel of oil may rise to $120 this winter, inflicting additional hardships on the poorest Americans.

Globally, many countries are already in the midst of a full-blown energy crisis. There are critical shortages of fossil fuels at a time when energy from so-called “renewable” sources (more accurately, “intermittent” energy sources) has fallen far short of expectations. In Brazil, China, India, Europe, and other countries, energy shortages have led to factories cutting production, blackouts in which traffic lights are inoperative, non-functioning elevators in high-rise apartment buildings, vital ventilation systems not working in hospitals, etc. Britain is facing the possibility of more than 10,000 deaths this winter due to cold weather in homes where families can’t pay the elevated energy prices that would provide adequate heat.

Surely, with so many people at home and around the world needing more energy so badly, the Biden administration would ease off its aggressive restrictions on fossil-fuel production here in the United States, wouldn’t it? Alas, no. Instead, Team Biden has doubled down on its anti-energy policies.

Examples: Team Biden left the recent United Nations climate gathering in Glasgow pleased that a plan has been put into place for the world’s major banks to restrict investment in companies that produce fossil fuels. The president also designated 1.7 million acres of federal land in Utah as a “national monument,” thereby putting that acreage off-limits to oil and gas exploration. The administration also is reportedly considering the possible shutdown of another major pipeline, the Enbridge 5, that moves a half million barrels of oil per day through Canada and Michigan. Biden’s recent nominee to be the country’s next Comptroller of the Currency, Saule Omarova, was on record as stating, “we want [America’s small oil and gas companies] to go bankrupt.”

Perhaps most egregious of all, when asked by a Bloomberg interviewer what her plan was “to increase oil production in America,” Biden’s Energy Secretary, Jennifer Granholm, responded with a belly laugh. She then evaded the question by saying that she didn’t have a magic wand to make OPEC increase production. (Of course, she doesn’t. She is the Secretary of Energy for the United States, not for foreign countries.) In other words, Granholm has no intention to undo the Biden-imposed impediments to domestic oil production.

Cynically, the president called for the Federal Trade Commission to investigate oil companies that have raised prices. Well, of course oil companies have raised prices. That is what happens in a market when supply doesn’t meet demand. And what is a major reason why supply isn’t meeting demand? The president’s own anti-production policies.

Even more cynically, the only action the president has taken to try to lower domestic gasoline prices has been to dip into our national Strategic Petroleum Reserve. That stockpile was created to be available in the case of a national emergency. A “national emergency” would be something like war, or weather, or terror-related ruptures of vital fuel pipelines. The “emergency” that the president has today is his own plummeting popularity polls.

President Biden’s insistence on squelching fossil-fuel production before intermittent sources are sufficient to fill the gap is unconscionable. If the coming winter is harsh, the resulting hardships suffered by Americans and others around the world will be a humanitarian crisis that could have been avoided by a rational and compassionate energy policy.

When Humans Don’t Procreate: An Update

Two years ago, I wrote about the pending global population implosion. Demographers predict that 90 countries will lose population between now and the year 2100. Shrinking populations have portentous implications, including major shifts in geopolitical power and the possible financial collapse of welfare states.

The United States’ population is part of this global trend. In a truly stunning article in The New York Post, journalist Suzy Weiss reported, “Last year, the number of deaths exceeded that of births in 25 states — up from five the year before. The marriage rate is also at an all-time low, at 6.5 marriages per 1,000 people. Millennials are the first generation where a majority are unmarried (about 56 percent).”

The story gets grimmer: An increasing number of 20-something American women are reportedly undergoing voluntary sterilization. There is a growing anti-natalist movement in America. Once again, the vital question is: Why?

I will offer three explanations that overlap somewhat with what I wrote two years ago: ideological indoctrination, stunted psychological growth, and alienation from God. (Please note: I am not stating that every person, female or male, who chooses to remain childless is doing so for these reasons. What I am saying is that there are sweeping sociological currents in play.)

Ideology — The opening paragraph of Ms. Weiss’ article told of a young woman from a conservative background who went to college and had a “political awakening . . . toward progressivism.” A key component of progressivism is environmentalism. According to one professor interviewed for the article, many 20-somethings have come to conclude that “humans are the problem” and “a mistake.” This anti-human animus is one of the major tenets of environmentalism I was subjected to myself as an undergraduate a half-century ago. Then, the “green bible” was Paul Ehrlich’s Population Bomb and its related activist group ZPG (Zero Population Growth). The message then was that there would be mass die-offs of humans as the world’s population swelled. As it turned out, a more populated world became a less-poor and less-polluted world.

Today’s youth are petrified about global warming. One poll cited by Weiss: “. . . 39 percent of Gen Zers are hesitant to procreate for fear of the climate apocalypse.” The blame for this epidemic of baseless fear lies with the media, an out-of-touch global political elite, and especially with our public-school system. The indoctrination of children into environmentalist alarmism under the cynical, self-serving supervision of the EPA is professional malpractice and inhumane. Unfortunately for the women getting sterilized today, by the time they realize today’s scary predictions are as baseless as Ehrlich’s decades ago, it will be impossible for them to have children should they so desire.

Psychology — Recently, the Foundation for Economic Education (FEE) posted an article about John B. Calhoun’s “mouse utopia” experiments in the 1960s. Briefly, mice were provided with utopian (ideal) conditions — the ultimate in cradle-to-grave security. Eventually, the pampered mice became antisocial. They shunned sex and procreation, and consequently died out. Calhoun concluded from his experiments that “When all sense of necessity is stripped from the life of an individual, life ceases to have purpose. The individual dies in spirit.”

I have commented before about the paradox of prosperity — that the wealthier capitalism has made human societies, the more individuals despise capitalism. Today, the wealthier and easier that life becomes compared to what our ancestors experienced, the more reactions there are like Isabel’s. She states, “I think it’s morally wrong to bring a child into the world. No matter how good someone has it, they will suffer.” In other words, since the perfect life is unattainable, today’s better life becomes a tragedy to be avoided.

Spiritual alienation — Pagan greens disparage human life as a “cancer,” “plague,” “vermin,” “disease,” etc., and openly long for humans to decrease. They reject the Christian belief that life is a gift from God and that we humans should “be fruitful and multiply.” “I don’t want to work my life away,” says Isabel, an avowed anti-natalist. Like the mice in Calhoun’s experiments, when creature comforts abound and life is without challenges to survival, it seems that the zest for life atrophies, and along with it, the desire to procreate and share the joys of life with children. If this attitude becomes dominant — if more and more people view children as a burden instead of a gift, and life as a dreary nuisance rather than a splendid opportunity to enjoy God’s creation — our population will indeed implode. If taken to an extreme, societal suicide becomes a possibility.

We may not be at the point of an existential crisis yet. But it is ominous that an increasing number of young people no longer include child-bearing in their concept of what constitutes a fulfilled life. God help us.

Five Favorite Christmas Movies and the Hope of Renewal and Redemption

As we approach the end of another jarring year, we come to two traditional holidays spaced just one week apart—Christmas and New Year’s. One is sacred and one is secular, but they have in common one very important theme: renewal, a fresh start, the hope that life will look brighter going forward.

One staple of the Christmas season is the wide range of movies about Christmas that are televised every year. There are movies for every taste, ranging from cartoons about Rudolph, Frosty, the Grinch, the Peanuts gang, etc. for kids (including grown-up kids) to feel-good sentimental Christmas season movies churned out by the Hallmark Channel. My personal preference is for heart-warming stories that dramatize the phenomena of renewal and redemption. The possibility of renewal can appeal to people of all faiths and no faith; the gift of redemption is explicitly part of the Judeo-Christian tradition, but it has universal potential.

Let me share with you my five favorite Christmas movies. If you haven’t seen them before, I encourage you to retreat from the hustle and bustle of your life to refresh yourself with some of these messages of hope and grace.

1. “The Bishop’s Wife” (1947) — In this enchanting fantasy, Cary Grant plays a charming and very human angel who visits Earth to help a bishop (played by the superb David Niven) and his wife (played by the beautiful Loretta Young). The bishop has allowed the responsibilities of church office to overwhelm him, and this distresses his devoted wife. The supporting characters — an old professor, a friendly taxi driver, a prickly millionairess, and the bishop’s little girl, cook, and secretary — are delightful. The movie is a reminder to keep material concerns from eclipsing our spiritual priorities. This story is engaging, sweet, and profoundly wise. The scene in which the debonair Grant recites part of the 23rd Psalm is beautifully unselfconscious. It’s hard to imagine such a scene in a contemporary movie.

2. “It’s a Wonderful Life” (1946) — I have to confess that I didn’t particularly enjoy this movie the first time I saw it, but after viewing it a second time years later, I plead “temporary insanity.” This Frank Capra classic, starring Hollywood icon Jimmy Stewart, invokes the spirit of Christmas to defeat two of the greatest enemies facing humanity — discouragement and the awful belief that an individual’s life is insignificant. As in “The Bishop’s Wife,” an angel plays a key role in the redemption of a human in need, but Clarence the klutzy angel is the antithesis of the suave angel played by Cary Grant. (Interesting trivia: the child actress who played the bishop’s daughter plays one of Jimmy Stewart’s daughters in this movie.)

3. “Home Alone” (1990) — This movie is primarily known as a comedy, and for good reason. Certainly, the slapstick battle between young Macaulay Culkin and the bumbling bad guys, hilariously played by Joe Pesci and Daniel Stern, is the heart of this movie, but it also portrays poignantly the unwelcome frictions that sometimes disrupt the harmony of family life. The theme of renewal comes through loud and clear in the touching subplot in which young Kevin teaches his formerly mysterious elderly neighbor to press the “reset” button and reconnect with his estranged son and his family.

4. “A Christmas Carol” — There are multiple renditions of Charles Dickens’s classic story of the spiritual awakening of one of the most memorable characters in fiction — the grouchy old miser, Ebenezer Scrooge. In my humble opinion, the older the version, the better the movie (at least, in the era of “talkies”). The best, then, is the 1938 version, starring Reginald Owen. The ghosts of Christmas Past, Christmas Present, and Christmas Future in this rendition are the definitive portrayals. Second place goes to the 1951 film, starring Alastair Sim, which is somewhat longer and goes into greater but nonessential detail about Scrooge’s youth. What makes “A Christmas Carol” a timeless classic is Scrooge’s glorious rebirth. After decades living a desiccated life of self-absorption, a magical Christmas Eve night liberates Scrooge’s heart from its stony prison. Transformed, he begins to pour out love for others, and as he does, he finds joy and fulfillment in his life. He learned the vital lesson that one of the most effective ways for a person to find happiness is to focus on how to bring happiness to others.

5. “Little Lord Fauntleroy” (1980) — There have been multiple cinematic adaptations of this old Frances Hodgson Burnett novel, but the one that really captures the spirit of the story is the 1980 version, starring Ricky Schroder and the incomparable Alec Guinness, known to my generation for his Oscar-winning role in “The Bridge on the River Kwai,” and to younger movie-goers for his portrayal of Obi-Wan Kenobi. The willingness of the title character — an American boy of about 9 or 10 — to always see the good in others has a transformative, healing effect. Somewhat like Scrooge, the spirit of the boy’s English grandfather, a wealthy earl, had withered. The pure, innocent love of the boy touches grandpa’s heart and redeems his life, with the climax coming most fittingly on Christmas Day. This movie evokes the Biblical prophecy “and a little child shall lead them” (Isaiah 11:6). I bet I’ve seen this movie close to 20 times, and I never tire of it.

Any of these five movies can help to kindle the Christmas spirit within you, whether you’re Christian or not. Birth, rebirth, and renewal are what Christmas is all about; more generally, they are what life is all about.

Merry Christmas, everyone. May you feel as a palpable presence the holy benediction “on earth peace, good will toward men” (Luke 2:14). I hope you will have time to warm your heart with some of these classic Christmas movies.     *

Read 643 times
Mark Hendrickson

Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision and Values at Grove City College, Grove City, Pennsylvania. These articles are from V & V, a web site of the Center for Vision & Value, and Forbes.com.

Login to post comments

Calendar of Events

Annual Dinner 2021
Thu Oct 14, 2021 @ 6:00PM - 08:00PM
Annual Seminar 2021
Thu Oct 14, 2021 @ 2:30PM - 05:00PM
Annual Dinner 2020
Thu Oct 22, 2020 @ 5:00PM - 08:00PM
St Croix Review Seminar
Thu Oct 22, 2020 @ 2:00PM - 04:30PM
Annual Dinner 2019
Tue Oct 08, 2019 @ 6:00PM - 08:00PM
Annual Dinner 2018
Mon Oct 15, 2018 @ 6:00PM - 09:00PM

Words of Wisdom