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.
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.
Problems with Disney Taking Sides Politically
Disney CEO Bob Chapek has had a tough spring.
First, he upset a vocal portion of his workforce at Disney World by not publicly opposing Florida’s newly enacted (on March 29) “Parental Rights in Education Act.” (The opponents of this law term it the “Don’t Say Gay” law, because it forbids Florida public schools from teaching about such sensitive topics as sexual orientation and gender identity in kindergarten through third grade.)
Then he caved to the outcry of those employees by not only stating that the Disney Company opposes the new law but also promising to spend millions of corporate dollars to lobby against such laws in other states. These pronouncements, in turn, drew major pushback from Florida’s Republican-controlled legislature and Gov. Ron DeSantis, including the loss of tax breaks and other special privileges that Disney founder Walt Disney had procured for the company decades ago.
Chapek’s initial instinct was correct. He should have refrained from stating an official corporate position about the Parental Rights in Education Act. The reason is simple: As the CEO of a publicly traded company, his primary responsibilities are to Disney’s customers, employees, and shareholders. If Disney were privately owned, then whoever owned it would have the prerogative to identify his or her company with whatever causes and public policies he or she wished — such is the privilege of ownership — but Chapek doesn’t own Disney (or rather, he owns only a minuscule percentage of it, however many shares of Disney stock he currently owns). As CEO of The Walt Disney Company, it’s questionable whether Chapek has the legal right to speak on behalf of the entire corporation on issues of public policy, and it’s certain that he doesn’t have the moral right to do so. Plus, it’s simply a bad business practice.
Legally, Disney has a huge number of owners. It’s safe to say that those individuals (and remember, even the funds that own Disney stock own those shares on behalf of individuals) span the political spectrum. When it comes to a controversial policy, such as that adopted by the passage of the Parental Rights in Education Act, many shareholders support the law and many are opposed. It’s presumptuous for Chapek to speak on behalf of all the owners as if they all agree with his position. They most certainly do not. (It’s his right to articulate the objectives that Disney strives to achieve and the values that the corporation seeks to embody, and that should be the limit of his pronouncements about official corporate policies.)
Similarly, what right does a CEO have to stake out a corporate position that many of the company’s employees disagree with? Doing so creates an unfriendly work environment just as surely as would be the case if a CEO of a public corporation declared, “Our company supports the Democratic (or Republican) Party,” or “We favor Protestants over Catholics, Jews, atheists, et al.” A large corporation will naturally have a politically and religiously diverse workforce, and it should not favor one segment over the others. In this case, Chapek caved to a noisy segment of the company’s workers and adopted their position as the official position of the entire corporation when, in fact, such a position disrespects Disney employees who agree with the new law. It seems to have been a case of the proverbial squeaky wheel getting the grease.
Let me be clear that on issues like what children should be taught in public schools, each employee of the corporation, from the newest park cleaner to the most senior executive, should be free to publicly advocate whatever political goals they favor. But they should do so as individuals, using their own time and financial resources. The non-CEOs of the company should not have to endure the company CEO presuming to stake out an official corporate position on controversial political issues as if they were representing the views of every employee. A CEO who takes divisive positions cannot benefit to workforce morale. It inevitably leaves one side disgruntled.
Finally, Disney’s customer base, being the largest group of people to whom Disney is accountable, is also the most diverse. Why risk antagonizing a portion of them by staking out an official corporate position on an issue that millions of customers or potential customers oppose? If Chapek and his fellow executives read the market as wanting more gay content in Disney movies, fine. Let them respond to market demands by altering their product lines. That is what successful businesses do. But CEOs shouldn’t array themselves against a portion of their customers by openly opposing them in the political realm. Many will forgive Disney and still take the kiddies on a vacation to the Magic Kingdom, but not all of them will.
Chapek’s ill-considered official adoption of a controversial political position reminds me of last spring’s jarring decision by the commissioner of Major League Baseball to remove the 2021 MLB All-Star game from Atlanta. The commissioner adopted without reservation the Democratic Party’s assertion that Georgia’s election reform law was nefarious and un-American when, in fact, millions of Georgians and Americans viewed it as simply improving the integrity of elections. By adopting the Democratic position as objective fact rather than the partisan political spin that it was, the commissioner caused consternation among millions of baseball fans who had thought that major league baseball was apolitical, that it was for the nonpartisan enjoyment of all Americans, not a political actor siding with one party against the other.
Let’s hope that Chapek and other corporate CEOs remember to whom they’re accountable. If they adopt “woke” partisan positions on political issues, they risk alienating customers, dismaying employees, and jeopardizing the profits that shareholders hope for. The bottom line: CEOs should focus on serving all their constituencies impartially, and avoid getting embroiled in political skirmishes.
Florida Enacts Law to Highlight the Evils of Communism
Florida Gov. Ron DeSantis, a Republican, is in the national limelight again. This time, he’s garnering attention for signing legislation that requires public schools to devote at least 45 minutes per year to teaching the “evils of Communism.”
The range of negative reactions to the new law is telling.
One of the more surprising objections was raised by a Chinese émigré who works as an economist at the Mercatus Center, George Mason University’s pro-free-market think tank.
Weifeng Zhong told The Washington Times:
“Immigrants and refugees from China, Cuba, North Korea, and more understand the authoritarian regimes they were once in. They didn’t learn that from mandatory courses in school.”
Quite true. Nobody who has lived under Communism needs to take a course to learn how oppressive and cruel such regimes are. Their personal experiences provide all the evidence they need to understand that basic reality. Unfortunately, however, millions of young Americans are woefully clueless about what daily life is like in a country ruled by Communists. They’re scandalously ignorant of the sheer destructiveness of an ideology that has snuffed out approximately 100 million lives in the past 105 years while enslaving hundreds of millions more. That’s exactly why a law requiring at least a cursory knowledge of the pertinent facts is now needed.
Zhong need not worry about Americans hating those who flee Communist tyranny. A small minority of Americans may resent immigrants whom they perceive to represent a threat to their jobs, but the overwhelming majority of Americans are more than happy to welcome refugees escaping from tyrannies.
The more typical objections to the new Florida law will come from the anti-American left. They’ll point out America’s faults while glossing over Communist atrocities.
A student at the college where I taught gave a lesson about the evils of Communism at the high school where she did her student teaching. After the class, her supervising teacher glared at her and huffily stated that after she was gone, he would teach the students about the good things that Communist governments had done. Huh? What good things? A “good side of Communism” lecture would have to be the shortest lecture (well, the shortest truthful lecture) in academic history. The appalling fact that some teachers teach that Communism has made some positive contributions to human society shows why the Florida law is so needed.
According to the Washington Times’s report, one of the more over-the-top reactions to the Florida law popped up on a feminist website, Jezebel.com:
“For any impressionable Florida kids that may be reading this, please note that there have never been any ‘true’ Communist countries, owing largely to violent intervention from the U.S. and other Western superpowers.”
Let’s gloss over the counterfactual reference to “other Western superpowers.” What’s most fascinating about this bizarre statement is the sudden concern on the left for the “impressionable.” Leftists were loudly opposed to Florida’s recent law banning instruction about gender identity, even though the little tykes covered by that law (those in grades kindergarten through three) are certainly more impressionable than the “kids” who are old enough to be reading about Communism. Yet, it seems that leftists would like to ban any historically factual education about Communism, a political virus that poses an existential threat to the realization of each person’s unique individuality.
The assertion that “there have never been any ‘true’ Communist countries” is a favorite leftist myth. Well, it’s technically true, I suppose, in the sense that there has never been a historical example of a Communist regime imposing a Marxist plan on society and successfully creating a just and affluent workers’ paradise followed by a withering away of the ruling Communist party, its historical mission having been accomplished. But it isn’t correct to assert that “true” Communism hasn’t been tried.
Lenin imposed complete Communism for the first few years that he was in power in Russia. The problem for him and his subject peoples was that Communism in practice was so unworkable that Lenin jettisoned “pure Communism” and replaced it with his New Economic Policy in 1921. The policy permitted limited free market activity, not because Lenin liked economic freedom, but because it was the only way to keep the Russian people from starving to death and strangling his “Communist paradise” in its cradle.
Speaking of starvation in Soviet Russia, it had gotten so bad by 1921 that the United States started sending massive food aid to lessen the death toll of the Russian famine. The aid began to arrive in the late summer of 1921. A year later, U.S. food aid was feeding approximately 11 million Russians every day. Far from “violent intervention,” as alleged in the hysterical rant quoted above, if it hadn’t been for U.S. humanitarian intervention, Soviet Communism would have expired before ever becoming a global menace.
It’s unfortunate that Florida had to enact a law directing schools to acquaint students with the evils of Communism. One would think that American teachers, having lived their whole lives free from political oppression and the impoverishment caused by central economic planning, would, as a matter of course, teach the crucial and profound differences between the American belief in individual rights and Communism. Alas, many teachers and schools have gotten off track; in fact, many of them have adopted leftist curriculums.
Since the left has weaponized education, pushback and countermeasures have become necessary. In that context, the Florida law mandating some modest observances and lessons about the evils of Communism is a welcome development.
The Consumer Fuel Price Gouging Prevention Act: Cynical and Revealing
On May 19, the U.S. House of Representatives passed the Consumer Fuel Price Gouging Prevention Act by a vote of 217 to 207. Four Democrats and every Republican voted against the bill. The purpose of the bill is to empower the federal government (specifically, the Federal Trade Commission) to fine oil companies if they increase prices in an excessive or exploitative way, with the bill, in typical Washington fashion, not bothering to define what constitutes “excessive” or “exploitative.”
This bill — which has little chance of passing the Senate — is both cynical and revealing.
It’s cynical because supporters of the bill are accusing oil companies of doing what the federal government itself is doing — namely, restricting the supply of oil. Rep. Katie Porter (D-Calif.) publicly declared, “Big Oil is threatening our entire economy by keeping supply low and jacking up prices at the pump.”
Rep. Frank Pallone (D-N.J.) who chairs the House Energy and Commerce Committee, asserted in a hearing on May 16, “The problem is Big Oil is keeping supply artificially low so prices and profits stay high.”
It takes a lot of chutzpah to blame oil companies for currently tight supplies when the administration of President Joe Biden has so aggressively pursued anti-fossil fuel policies and repeatedly declared its desire to wean U.S. consumers from fossil fuel consumption. I wrote twice last year about specific anti-oil production policies that the Biden administration has adopted.
Has the administration altered course in response to spiking gas prices higher? Not in the slightest. Just a few days before Reps. Porter and Pallone tried to blame oil companies for tight oil supplies, the administration canceled oil leases in the Gulf of Mexico and Cook Inlet. Existing leases are being held in regulatory purgatory whereby bureaucrats refuse to approve a green light for actual production. A few days ago, Sen. Joe Manchin (D-W.Va.) commented that 16 months after the Biden administration announced a pause on granting new oil exploration leases, “we still have no new leases,” and, “it has become crystal clear that the ‘pause’ is in fact a ban.”
Democrats have a long history of persecuting oil companies. In 2007, the House passed similar anti-price gouging legislation. Multiple times since then Congress has staged the political theater of show trials during which they lambaste oil company executives. This tactic is a classic political sleight of hand. Congress wants to get your attention fixed on the Big Oil bogeyman so you don’t notice how irresponsible Congress itself has been in blocking the development of domestic oil deposits. Interestingly, Rep. Stephanie Murphy (D-Fla.), one of the four Democrats who voted against the bill, referred to it as a political gimmick.”
Besides being cynical, the anti-price gouging bill is very revealing.
The demagogues who voted for it are at war with the inexorable, unrepealable law of supply and demand. The average American understands that gasoline prices are soaring and oil company profits are rising because supply isn’t keeping pace with demand. The politicians who voted for the price-gouging bill prefer to blame greedy oil executives rather than impersonal market forces for higher prices and profits. This raises an important question: If all oil companies have to do to maximize profits is restrict supply, why don’t they do that every year and avoid horrendous years like 2020, when they lost billions of dollars?
There are two realities about the oil market that elude those who voted to punish alleged price gouging: It’s highly cyclical and brutally competitive.
This year’s healthy oil company profits are the result of a still-young upturn in the cycle after the 2020 bottom. Many oil company leaders are hesitant to boost exploration spending now, partly because of how much money they have lost in recent years and partly because they perceive the Biden administration’s zealous anti-oil beliefs.
Not only has the administration been canceling pipelines and leases while rendering existing leases almost worthless by imposing a regulatory freeze on actual drilling, but Biden also keeps talking about weaning Americans from fossil fuels ASAP, praising the U.N. scheme to have financial institutions steer capital away from the oil industry. ESG ratings are branding oil companies as socially irresponsible.
Who would want to go out on a limb and commit huge sums of capital if they fear that Uncle Sam wants to curtail, if not crush, their business?
If Democratic politicians really wanted to lower gas prices for consumers and squeeze oil company profits, they would use the law of supply and demand to help them. They would remove all restrictions from drilling and selling oil. Oil companies would resume the cutthroat competition that has characterized their industry from the beginning. Supply would go up, prices and profit margins would go down, and American consumers would be thrilled.
Instead, these anti-market zealots want to suppress gas prices and squeeze oil profits thwarting oil production at the same time. These economically incompatible goals are irrational. Like socialistic central economic planners, they believe that they can alter the way the world works — reality itself — by legislative will. That’s what makes their passionate desire to control, manage, and direct the economy for the alleged good of the people so dangerous. They think prosperity is a matter of will and that their good intentions will overrule the laws of economics, physics, and so on.
Of course, progressives tend to justify their heavy-handedness on economic policies by invoking “justice.” Democrats are the party of “fairness,” right? Well, not exactly. Consider this: Just as oil company profits are at or near record highs today, so U.S. homebuyers are facing record-high house prices. The reason is exactly the same: low supply relative to high demand. To be consistent, then, shouldn’t Congress fine all those homeowners who are taking advantage of current market conditions to “gouge” buyers? Are those howls of protest I hear? I agree with you! It would be unjust for Congress to limit how much you sell your house for. That would infringe upon your property rights. But then, why should Congress intervene to limit how much a company sells its product for? Morally, there’s no difference.
Progressives reject the rule of law and viciously discriminate against Americans who produce oil. This overt assault on property rights reveals the socialistic spirit that animates today’s progressives.
Our country’s rapid economic growth over the past century and a half has been powered by the energy that oil companies have produced for us. They even produced the oil that Biden is releasing from the Strategic Petroleum Reserve to boost his popularity poll numbers. Congress, by contrast, has never produced a gallon of energy, even as it spends billions of dollars that it has taxed from those companies. How about a little gratitude for American oil companies, Congress?
The only positive comment one can make about the Consumer Fuel Price Gouging Prevention Act is that it makes plain just how allergic progressives are to economic common sense.
Mankind Versus Climate: The Humans Are Winning
The human race has made immense progress in dealing with the reality of climate change. If you wish to characterize the ongoing collisions between mankind and climate as a war, humans are winning that war. It’s time to retire the phrase “existential threat” when discussing climate change. While there’s more yet to be done, many commendations are due for successful steps already taken. Schools should stop teaching gloom and doom to our children. It’s time for all of us to be optimistic about climate change.
You wouldn’t know this if you listen to the political establishment. That cozy club continues to crank out alarming projections. For example, on Feb. 25, the Biden White House released a slew of press releases from the “White House Climate Science Roundtable warning of climate catastrophes if we don’t undertake a rapid, radical changeover from fossil fuels to intermittent (commonly called “renewable”) sources of energy. The Roundtable — a mixture of university profs funded directly or indirectly by government and political appointees — all tout the official party line. They seek “to cut U.S. emissions in half by the end of the decade, to reach 100 percent clean [sic] electricity by 2035, and to reach net-zero emissions by 2050.”
Meanwhile, many scientists outside the political establishment continue to downplay the alleged threat of catastrophic climate change. One example is research published in January in The European Physical Journal Plus. As The Heartland Institute summarizes the findings:
“To sum up on ‘disasters,’ accumulated real-world data does not show cyclones, droughts, extreme precipitation events, floods, heat waves, hurricanes, or tornadoes have become more frequent or intense.”
And as the European scientists themselves conclude, “on the basis of observational data, the climate crisis that, according to many sources, we are experiencing today, is not evident yet.”
Who are we to believe? Each person must decide for himself, but if you examine the agendas of the four key factions of the political establishment, you begin to realize that the proposed switch to intermittent (sorry, “renewable”) energy is often the means to an end having nothing to do with climate.
First, numerous political leaders have explicitly stated that the climate change issue provides them with a convenient pretext to achieve their overarching goal of imposing socialism.
Second, Wall Street, seeing that trillions of dollars are in play, is lining up with Team Biden to direct capital away from fossil fuel companies and toward producers of intermittent (sorry, “renewable”) sources of energy. Get ready to see more cronyism and corporate welfare than you’ve ever seen before.
Third, government-funded scientists have found that lending credence to climate alarmism has been highly profitable for them and their universities, bringing to mind President Dwight Eisenhower’s warning in his farewell address: “The prospect of domination of the nation’s scholars by Federal employment, project allocation, and the power of money is ever present and is gravely to be regarded” and there is a “danger that public policy could itself become captive of a scientific-technological elite.”
Fourth, journalists — many of them ideologically onboard with the socialist objectives and always conscious that scary stories are better for business than reports of benign stability — are all too happy to exploit climate alarmism for all it’s worth.
In sum, the four pillars of the climate change political establishment have found that the personal benefits of being alarmist include power, profits, prestige, and popularity. Might not those allurements influence their thoughts about climate change?
For those of you who still believe that it’s imperative that we transition to intermittent (sorry, “renewable”) energy sources, I have bad news and good news.
The bad news for you is there are two insurmountable reasons why this transition cannot be made. One is cost. According to Bjorn Lomborg, writing in The Wall Street Journal:
“The largest database on climate scenarios shows that keeping temperature rises to 2 degrees Celsius — a less stringent policy than net zero by midcentury — would likely cost $8.3 trillion … every year by 2050 [with costs continually increasing] so that by the end of the century taxpayers will have paid about $1 quadrillion.”
One quadrillion dollars? The global GDP today is barely one-tenth of that. There is no possibility that a whole decade’s worth of production will be spent in the attempt to shave a degree or less off the average global temperature. This would inflict massive and often lethal impoverishment on the human population. It would literally be a genocidal policy course.
The other reason net-zero won’t happen is because of insurmountable physical limitations. As physicist/researcher Mark Mills points out, there exists only a fraction of the capacity to produce the quantity of minerals needed to build a completely intermittent (sorry, “renewable”) energy infrastructure.
But here’s the good news, both for those who believe we must wean ourselves from fossil fuels and for everyone else: We are already winning the “battle” against climate. Even as CO2 concentrations in the atmosphere have been steadily rising over the last century or so, the death toll from climate/weather events has been steadily falling. Indeed, the global climate-related death risk has dropped by over 99 percent since 1920.
The aforementioned European Physical Journal Plus article states, “global average mortality and economic loss rates . . . have dropped by 6.5 and nearly 5 times, respectively, from 1980 - 1989 to 2007 - 2016.” The key to this great progress is growing levels of wealth. It’s encouraging to note that progress toward lower climate-related death rates is not confined to rich countries. Bangladesh, for example, since 1970 “has lowered storm fatalities by a hundredfold while the frequency of destructive cyclones has increased,” according to the Christian Science Monitor.
By all means, let us continue to study and try to learn more about our climate. We humans will never be able to regulate our climate (even if CO2 emissions are stabilized, we won’t be able to control ocean currents, cloud formation, volcanic activity both on land and undersea, variations in solar radiation, etc.). But we have proven very resourceful in finding ways to minimize the damage from climate/weather-related events. We are winning. Let us celebrate rather than cower in fear. *
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. *
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.
Specious Theories Concocted to Justify Inflation
From an economic point of view, some of the ideas being proposed by current policymakers in Washington, particularly the president’s Council of Economic Advisers and top officials at the Federal Reserve, cause this economist to scratch his head in wonderment.
Take the Fed, for example. The central bank hatches policies wielding major economic impact, and yet the explanations and rationale for its policies can seem bizarre, self-serving, or just plain glib. With inflation having become an issue this year, the powers-that-be are devising some bogus “economic theories” that portray today’s higher inflation as a supposedly good thing.
The Wall Street Journal’s Greg Ip recently reported on some of these theories. For example: “Economic theory says modestly higher, stable inflation should mean fewer and less severe recessions.”
Oh, really? In the first place, the Fed hasn’t hit its inflation target for many years, so it doesn’t have any demonstrated ability to guarantee “stable inflation” at any level. Second, both high and low inflation periods have been followed by recessions. Thus, to suggest that there is a magical inflation figure that is a recession tonic is specious. In fact, inflation destabilizes the economy by increasing the uncertainties about the prices that both consumers and producers face. Inflation-induced price dislocations complicate economic decision-making and discombobulate production and employment, and so are one of the causes of inflation.
Mr. Ip also reported that “if inflation ends up closer to 3 percent than 2 percent next year, raising the [Fed’s inflation] target would relieve the Fed of jacking up interest rates to get inflation down, destroying jobs in the process.”
In this fairy-tale view, the experts are saying to simply let inflation rise — that is, let the purchasing power of our currency erode at a faster pace — and we will avoid economic pain.
Question: If avoiding painful economic adjustments, such as shifts in employment, were simply a matter of boosting prices, why didn’t earlier generations of central bankers adopt permanently expansive monetary policies to create constant inflation and uninterrupted economic bliss for the people?
This is the silly superstition (popular today under the rubric of Modern Monetary Theory) that the way to raise standards of living is to print more money. Again, if wealth creation were that simple, the process would have been mastered centuries ago and nobody would be poor. Instead, money printing can lead to hyperinflation — the destruction of money — which it already has in over 50 countries, always resulting in extreme societal impoverishment and disruption.
Ip further writes, “In bad times though, inflation allows an employer to cut labor expenses by freezing pay so inflation gradually reduces real wages. That isn’t possible with zero inflation: The employer would have to cut jobs or pay.”
Sorry, but workers have seen through that illusion for many decades with numerous union contracts including COLAs — cost of living adjustments — that protect workers against inflation’s not-so-stealthy real pay cuts. Also, American economic history includes periods when wages fell, but standards of living rose. To say that pay cuts are “impossible” is to ignore history.
Ip cites two former “senior staffers at the Fed” who assert that if the Fed were to engineer inflation of 3 percent instead of 2 percent, then “unemployment would be 0.75 percentage points lower than otherwise.”
This is another iteration of the discredited Phillips curve theory, which states that when inflation rises, unemployment falls. Remember the 1970s? Both inflation and unemployment rose at the same time then in a grim scenario known as “stagflation.” Monetary authorities may be able to print money, but they can’t print jobs.
In delicious understatement, Ip writes, “It is unclear if 3 percent inflation meets the Federal Reserve Act’s mandate for stable prices.” Of course, it’s clear. By definition, prices aren’t stable, whether they are rising at 3 percent or 2 percent per year.
Ip also reports that several of President Biden’s economic advisers expect inflation to be 3 percent a year from now, so the Fed should raise its inflation target to 3 percent rather than try to lower inflation.
What would that actually accomplish? By moving the goal posts of the Fed’s target to fit the actual economic reality of 3 percent inflation, I suppose the Fed would proclaim, “See how successful we’ve been?” But other than massaging the Fed’s reputation, Americans would take it on the chin. At 3 percent inflation, the dollar would lose half its value in only 23 years, instead of the 34 years that it would take at 2 percent inflation. Also, savers, who currently are earning about 0.1 percent in their bank accounts, would continue to have their wealth bled away by real interest rates being even more negative than they have been for the past decade-plus.
Pardon the cynicism, but perhaps we need to consider the possibility that the elites in the Washington establishment are more interested in burnishing their own reputations than in pursuing sound economic policies.
Current Tax Proposals: Critiquing Two Promises
I have written about “Washington’s Bi-Partisan Fiscal Folly” for years, caused by chronic overspending. Regardless of which party holds the upper hand in Washington, the federal budget deficit persists. In the first two full fiscal years of the Trump presidency (when there was a GOP majority in Congress), the annual federal deficit rose from $584 billion to $668 billion in 2017 and then to $779 billion in 2018. Then, with a split Congress, it rose again to $983 billion in 2019 before exploding to a COVID-turbo-charged deficit in excess of $3 trillion in 2020.
Currently, with a Democratic president and Congress, we may ask what is the current outlook for the federal deficit. Fiscal year 2021’s federal deficit is also expected to be a COVID-inflated $3 trillion. Most experts assume (or hope) that the last two years will prove anomalous, and that with COVID relief in the rearview mirror, a baseline budget deficit of “only” around $1 trillion will remain. Against that backdrop, President Biden and congressional progressives propose to increase federal spending by several trillion dollars for infrastructure and for a variety of social and environmental programs. In addition, Democratic leaders have proposed various tax increases to fund that spending.
I will remain silent here about the relative merits of the various spending and tax proposals. I will comment only on the two major promises that the proponents of these spending and tax increases make: that the new taxes will fully cover the costs of the additional spending, and that the tax reforms will make the rich “pay their fair share.” President Biden has stated in regard to the new spending, “It is zero price tag on the debt. We are going to pay for everything we spend.”
There are two proposed spending bills. The $1.2 trillion infrastructure bill includes $550 billion for new spending. That total is spread over five years, so we’re looking at $110 billion per year in new spending. The $3.5 trillion spending plan is all new. It is spread over 10 years, and thus adds $350 billion of new spending per year. Thus, adding $110 billion and $350 billion, the spending bills would add $460 billion to the annual baseline budget deficit of $1 trillion.
Now, the revenue side of the budget: To pay for an additional $460 billion per year of new spending, Democrats have proposed several dozen changes to the tax code, both on corporate and personal income. The best summary I have read of projected revenue increases is that, “Overall, the House Democrats’ tax plan is estimated to raise $2.2 trillion over a decade, with $1 trillion coming from tax hikes on high-income individuals, $900 billion from corporate and international tax reform, and additional revenue from increased tax compliance.”
So: $2.2 trillion divided by 10 years means that Democrats expect to raise $220 billion per year with which to fund $460 billion per year of new spending. That would add another $240 billion to the annual deficit.
The actual figure would likely be far higher. On the spending side, the nonpartisan Committee for a Responsible Federal Budget has calculated that the true cost of the allegedly $3.5 trillion bill would actually be $5 to 5.5 trillion. This opinion is shared by The Wall Street Journal, which has dropped its customary decorum and branded the $3.5 trillion proposal “one of the greatest fiscal cons in history,” and accused the proponents of this spending package of “blatant fiscal dishonesty.” And on the spending side, Democrats are proposing multiple tax-break subsidies to higher-income taxpayers (“the rich”), including paid family leave, rich child-care allowances, giving households earning up to $800,000 per year, $8,000 to buy electric vehicles, and repealing the cap on the federal SALT (state and local tax) deduction. Fifty-seven percent of that last tax break would go to the top 1 percent of filers, according to the Tax Policy Center, giving them an average tax cut exceeding $35,000. Indeed, according to the Joint Committee on Taxation, “restoring the full SALT deduction would cost the U.S. Treasury $88.7 billion in lost revenue for 2021 alone.”
It should be clear from those figures that the proposed tax reforms will not come close to paying for the proposed spending increases. Furthermore, it is plain that all the talk about making the rich pay their fair share is hollow rhetoric, cynically designed to win support from advocates of social justice while doing nothing to meaningfully reduce inequality.
There is an old saying that if something sounds too good to be true, it probably is. Indeed, the Joint Committee on Taxation determined that the proposed tax reforms, in addition to their generous handouts for the rich, would not exempt taxpayers earning less than $400,000, as President Biden originally promised, but instead would raise taxes on families earning as little as $50,000 per year. Most of you won’t be surprised to know that political rhetoric often doesn’t conform to economic reality. The current spending and tax increase proposals are a vivid case in point.
Learning to Defuse Anger Through Respectful Dialogue
We all know how politically polarized American society has become. There are intensely held, differing opinions about what government should or shouldn’t do. One particularly regrettable aspect of this polarization is that families have been fractured and friendships ruptured. How sad — and perhaps unnecessary.
With millions of Americans making plans to gather this week to celebrate Thanksgiving, some tips on how to defuse potentially explosive disagreements are timely.
The ability to agree to disagree is venerable wisdom. For generations, sales managers have cautioned their sales agents never to discuss politics or religion with their prospects. Why risk provoking people by saying something that might offend their most deeply held beliefs?
From the beginning, the United States has been a pluralistic society composed of individuals holding a multiplicity of political and religious beliefs. Over the last few generations, such pluralism has affected countless families. Many Americans abandon the political and religious beliefs of their parents. Sometimes each sibling has a different set of beliefs. This can be disorienting, frightening, depressing, or threatening to other family members.
Here, let me share a bit of wisdom I picked up in my criminal law course at the University of Michigan School of Law long ago. This one gem was worth the price of admission. Professor Yale Kamisar (in his 90s today, God bless him) contrasted a clever person — one who focuses on how he’s different from other people — with a wise person — one who focuses on how he’s like others. A lot of Americans today could benefit from heeding that adage.
The reason why so many conversations, whether with total strangers, casual associates, coworkers, friends, or relatives, become explosive and divisive is that the parties to the dialogue have arrived at different conclusions on an issue. The unfortunate tendency is a feeling that we have to “prove” and convince the other of the rightness of our position. The problem with this is that the more energetically one side strives to prove his correctness, the more he causes the other to become defensive and push back. Showing another person that you intend to prove him wrong is bad psychology. It undermines comity and mutual respect. Rather than try to defeat the other, try practicing the Golden Rule. You wouldn’t want someone telling you that you’re absolutely, horribly wrong about an issue, so why would you try to convince your interlocutor that he or she is ridiculously wrong? What do you hope to accomplish by such an aggressive approach? You’re more likely to render further dialogue difficult, if not impossible, and perhaps end any possibility for a truce and peaceful coexistence.
While you may have come to opposite conclusions, you might be surprised by how much you have in common with your interlocutor, if you look for it. Think about this: Do you really think that your relatives or friends have gone over to the dark side and become evil people just because they favor a different politician or policy than you do? Try asking them what the overriding goal is of the position they’re taking. What motivated them to take the position they now hold? Most issues seem less black and white when one takes that approach. It’s not that one side wants to hurt their fellow beings and one wants to help them. Most people want to do what’s right and good. Where they differ is in their perceptions and in their understanding (or misunderstanding) of the facts or errors to which they have been exposed.
Take global warming, for example. Many Americans desperately want to phase out fossil fuels very quickly despite the hardship this will impose on many people, particularly the poor. The average person (at least, those who aren’t hardcore environmentalists) who takes this position doesn’t do so out of unkind motives, but because (like poor Greta Thunberg, Alexandria Ocasio-Cortez, and millions of others) he or she believes the steady diet of climate catastrophe hysteria that the schools and media have force-fed people. Millions of others, by contrast, believe that the appropriate human response to Earth’s ever-changing climate is continued economic development so that human beings can better cope with Mother Nature’s changing conditions and periodic ferocity. Both sides want what’s best for people — that much we have in common — and that should cause us to respect the good intentions of our opponents even though we disagree with their preferred political agenda.
Another example: The socialistic desire to have the federal government mandate and fund various forms of support for various groups of citizens is popular among some, anathema to others. The socialists will say how much they want to help those in need and how unfair our free-market system is because it leads to economic inequality. Here, a gentle explanation of the difference between justice and “social justice” might be helpful. So might sharing some of the long historical evidence that socialism has never worked and an economic explanation of why it can’t work, and why inequality is better than equality for the economic well-being of a population. Again, though, you can easily discern when the other is willing to exchange ideas and when his only interest is in proving you wrong, in which case it’s best to move on to less controversial topics.
After having the humility to try to understand the motives and goals of others, perhaps the most important rule of thumb in keeping political discussions from degenerating into anger and condemnation is to reject the temptation to believe that you have to convert the other. Have enough confidence in yourself so that you don’t feel that you have to convince others of the correctness of your position. If they’re willing to engage in give-and-take about how they arrived at their conclusions, you can have a respectful discussion. If, on the other hand, either of you wishes only to harangue, criticize, and condemn the other, it’s time to politely withdraw from the conversation or to steer it in another direction. In short, find common ground. Respect the person, even if you despise his or her opinions (another version of “hate the sin; love the sinner”).
As you gather for Thanksgiving this year, may your gathering be radiant with gratitude for the gift of life and for the privilege of living in a country where citizens have been freer than most of the human race ever has been — a blessed country that has made immense progress already and has the potential to achieve so much more. Love the good motives in your friends and loved ones, and don’t give up on them because you differ on complex issues of public policy. There’s so much more to life than politics! Happy Thanksgiving, everyone. *
Mark W. Hendrickson
The Big Green Lie
Public discourse about climate change often degenerates into personal attacks. Those of us who point out the many holes in the allegedly “scientific basis” of global warming alarmism are denounced as “deniers.” As I wrote in my article, “Who Are the Ideologues,” the heart of alarmism is a radical political agenda — namely, for a socialistic, top-down plan that would restructure our energy usage, and therefore our economy, in the name of saving the planet from a climate catastrophe.
The climate change “emperor,” of course, has no clothes. You can read some of my rebuttals to the alarmists in my article, “Who Stole Greta’s Childhood,” but the sound bite version is that, yes, the world has gotten a degree or two warmer than in “preindustrial times” (for which we should be thankful, since before the Industrial Revolution, the Earth was sunk in the Little Ice Age — the coldest period of the last 10,000 years); yes, CO2 traps heat (although on a logarithmic scale, not a linear one, which means that future increases in CO2 will trap less heat); and it is essential to realize that CO2 isn’t the most important “greenhouse gas” (that would be water vapor), and there are multiple other factors that influence the heat content of Earth’s atmosphere — everything from solar and volcanic activity, to ocean currents, tectonic movements, cloud cover, etc.
In fact, in late 2009, when President Obama and congressional progressives were trying to pass a cap-and-trade bill designed to make Americans pay extra for the privilege of burning fossil fuels, some of the scientists in the global warming alarmist camp were backing off their claims of runaway warming. Looking at the most recent data available to them, they guessed (yes, “guessed” — all that we — even the so-called “experts” — can ever do is guess the future) that the earth was likely to cool for the next few decades. Think about that for a second: After years of telling us that the more CO2 there is in the atmosphere, the hotter Earth will get, they reversed themselves, saying, “CO2 will continue to increase, but the temperature is likely to fall.” The alarmists thereby demolished their own case by conceding the main point made by so-called skeptics: that many other factors besides CO2 drive changes in global temperatures.
The big green lie — specifically, that human activity is warming the globe to a dangerous degree requiring a radical economic, social, and political transformation — has many iterations. Although my invocation of “the big lie” phraseology may be harsh, it is bluntly and plainly accurate. Just as Hitler’s propaganda team (and indeed, all left-wing-totalitarian groups, whether Communist, fascist, or socialist) employed and continue to employ “the big lie” technique of incessantly repeating a falsehood until all but the most alert citizens are mesmerized into believing it from the sheer volume of repetition, so it is with today’s greens.
I am by no means likening alarmists to the murderous and maniacal Hitler. Indeed, the average government employee repeating the mantra of “anthropogenic climate change” today is a government bureaucrat or government-funded scientist dutifully — not maliciously — reciting the official party line. By the way, if you want to understand how politicians can exploit scientists and twist scientific research into “official science” — the best “science” that money can buy — get a copy of Michael Hart’s book, Hubris: The Troubling Science, Economics, and Politics of Climate Change.
And, if I may digress for a moment, the next time you hear someone cast suspicion on the integrity of a private-sector scientist who dissents from climate change alarmism, ask yourself why nobody ever asks scientists on the alarmist side if they or their university have ever received government grants for work on climate change. The unspoken bias in the media is that someone who works for government is an incorruptible, even infallible, truth-teller, while anyone who works in the private sector — especially for an oil company — is ipso facto a venal liar. What prejudicial rubbish!
There is, it should also be mentioned, another similarity to Hitler’s regime, and that is the nature of the political agenda that the greens have, as I explained in my article about the “Green New Deal”: What the greens want is a government-imposed reorganization of economic activity under the direction of the government — similar to Hitler’s Nazi (i.e., National Socialist) top-down agenda for the German economy.
The most recent iteration I have seen of the big lie appeared on April 26 in a daily newsletter from The Wall Street Journal, derived from a longer article: “$115 trillion — The amount the world would need to invest in clean technologies through 2050 to limit global warming to 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, above preindustrial levels, according to the International Renewable Energy Agency” (IRENA).
Before I point out the untruths in this statement, let me commend it for being honest and forthright in one important respect: the candid admission that the radical transition away from fossil fuels will be immensely costly — $115 trillion — wow! That’s larger than the entire planet’s annual GDP. Beyond that, though, the statement is arrogant, pretentious, and dishonest in more ways than one.
The arrogance lies in the implied certainty that human efforts can devise a policy mix that would act like a thermostat regulating Earth’s temperature.
The pretentiousness is the glib presumption that somebody even knows what the “right” temperature is, much less how to attain it.
The first dishonesty is the misleading phrase “clean technology” — as if renewables are clean. They are anything but “clean” while being manufactured, transported, and installed, and they are disturbingly lethal to winged wildlife.
The second dishonesty is the disingenuous inclusion in the article of two photographs of horribly polluted air in Chinese cities. Those photos were designed to create the false impression that all fossil fuels cause severe air pollution. They deliberately conflated carbon dioxide with pollution when, in fact, CO2 is invisible, and so cannot be the source of the air pollution in the photos. True, one particular fossil fuel — coal — causes visible and toxic air pollution, which is why so many utilities have replaced coal with oil, and especially with natural gas. U.S. cities like Pittsburgh, once known for sooty air, have enjoyed clear, clean air for decades by having moved away from coal — not to renewables, but to cleaner forms of fossil fuels, and some nuclear power. More importantly, CO2 is the base of the human food chain: Plants live on CO2, and in turn, plants provide nourishment for animals and humans. To imply that CO2 is some sort of destructive pestilence is a scientific travesty.
The greatest dishonesty of the big green lie is the basic premise of the climate change alarmists — that our prosperity is somehow sinful; therefore, that we do not deserve to live in a world with more temperate, human-friendly temperatures and in a more CO2-enriched, greener world than humans had to endure in the harsh, wretched Little Ice Age.
The big green lie is several decades old. It has been taught for nearly 30 years in our country’s schools, thanks to federal legislation giving the EPA oversight over schools’ environmental curriculums, which explain why young people like AOC truly believe that the world is approaching a climate-caused cataclysm. But facts are stubborn things, and I’m still idealistic enough to believe that truth will prevail in the end. So, let us push back against the big green lie with all our might and resist its suffocating, misanthropic, utopian socialistic plans. It is socialism, not carbon dioxide, where the real existential danger lies.
Guilt, Condemnation, and Totalitarian Punishment
We don’t hear much today about the religious doctrine of damnation — the belief that everlasting punishment awaits sinners. How much of that is due to religionists moderating their theological views or simply the ongoing secularization of society is an interesting question. Regardless, although such harsh judgmentalism may cause uncomfortable tensions between people, it generally is harmless. We have a separation of church and state that, while protecting the free exercise of religion, does not confer the ability of any sect to impose its doctrines forcibly on others. Religionists may condemn us verbally or in their hearts, but they have no power to control or punish us. That is the Creator’s prerogative, and we’ll just have to wait until we leave this world to see how accurate those bleak pronouncements of damnation are.
There is, however, a doctrine of guilt, condemnation, and punishment that threatens every American’s earthly well-being and happiness. I am referring to the political Left’s fanatical embrace of certain quasi-religious doctrines — specifically, that Americans collectively are guilty of various sins that merit condemnation. The progressive punishment for our sins is to subject us to a stern totalitarian agenda that offers the only salvation from our alleged sins.
In this humanist “religion,” progressives, socialists, pagan environmentalists, et al., have assumed a moral superiority that they believe confers upon them the right to act as judge and jury, to pronounce America and Americans “guilty” of alleged sins, and to condemn and punish us by forcing us to submit to their elitist plans. The form of that punishment — indeed, the only way for us to expiate our “sins” in their eyes — is for us to submit to the progressives’ own radical socialistic central economic plan that offers salvation if we “transform” our society into a progressive utopia. The essence of their all-encompassing central plan is to impose government control over our thought, our speech, and our lives.
Let us briefly review a few of the guilt trips that leftists are using to justify imposing tyrannical measures on the American people to achieve their utopian vision.
1. White guilt — The Epoch Times contributor Larry Elder gave a marvelous talk last week at Principia College during which he powerfully debunked the myth of white guilt. (You can read more in Elder’s book, What’s Race Got to Do with It? and in his interviews with The Epoch Times.) Leftists seek to impose collective guilt on white Americans — many, both living and dead, who have steadfastly fought for, promoted, and defended racial justice — for the sins of certain white individuals, most of whom have long been dead. Blind to the reality that there are racists among all races, the collective condemnation of an entire race is itself racist. It also illustrates the perversity of “social justice” — collectivist remedies that unjustly trample the rights of innocent individuals.
Trying to punish so-called “white guilt” is also unwise and counterproductive. Once you start trying to indiscriminately punish a whole race of people for the past sins of others, you have opened a Pandora’s box. Think of Israelis and Arabs in the Middle East — the more they try to settle old scores, the more the present generation suffers. Do we want our children to shoulder the same burden of hatred, injustice, and violence that so devastated the lives of our ancestors, or can we love them enough to break the cycle of conflict? (Indeed, imagine what a hostile place the world would be if white Americans were to seek vengeance against the descendants of the often cruel and unjust oppressions of their own ancestors.)
2. Success guilt — Dennis Prager wrote about this just last week. Both Jews and Americans have shared a cultural history that was to a considerable degree shaped by their religious faith in the God of Abraham, Isaac, and Jacob. Both of these related cultures have achieved outstanding success relative to other societies and cultures in the world. Sadly, success has triggered the envy, resentment, and hatred of many who were born into societies where those cultural values and the success they tend to spawn have been absent. How dare those Jews and Americans accomplish so much! They must be punished for such effrontery.
3. Capitalist guilt — Prager alluded to this, too, in his column. Anti-capitalism has been around for nearly two centuries — ever since capitalist entrepreneurs found ways to lift the masses of people out of poverty. The great Austrian economist Ludwig von Mises published a book entitled The Anti-Capitalist Mentality in 1956 in which he diagnosed the feelings of inferiority that anti-capitalist intellectuals struggle with. Many of these highly educated intellectuals just can’t stand seeing the masses of people richly reward entrepreneurs who serve their needs and desires while at the same time place relatively little value on the intellectuals’ abstract philosophies and academic ideologies. Billionaires (unless they are pigging out with government subsidies) are society’s benefactors. They deserve our gratitude, not our hostility. The anti-rich-people animus stems from gross economic ignorance, such as persistent belief in the long-defunct 16th-century Montaigne dogma, which falsely asserted that one man’s gain is another’s loss. More than two centuries of capitalist history have shattered that fallacy.
4. Profit guilt — Indeed, as even Karl Marx understood, capitalism excels at producing wealth, and yet Marx and his followers today decry the profit-making process that has made possible today’s unprecedented wealth for an unprecedented number of people. It is tragic that so many Americans don’t understand two crucial aspects of profits: First, profits are new wealth; the only way for a society to get richer is through the production of additional value — value that is signaled by profits. Second, because entrepreneurs in a capitalist compete to serve the people’s wants, while businesses in socialist systems have to produce what their political rulers — a socialist society’s elite — command. Obviously, people are going to be better off when production is oriented toward their preferences than the government plan’s dictates.
5. Prosperity guilt — A core value of today’s environmentalism is the misanthropic and incredibly wrong belief that human prosperity is an evil that will render Earth uninhabitable. These ideologues are ignorant of the environmental “Kuznets curve.” It’s a total myth that the more prosperous people get, the more polluted their environment gets. The way the world really works is that after an initial increase of pollution as poor societies climb out of subsistence standards of living, the increasing wealth of those societies enables them to direct wealth and effort to the cause of environmental protection. The felicitous result is that economically advanced countries pollute less than developing countries. Alas, so fanatical are greens in their belief in the evil of humanity that they remain willfully blind to two great environmental blessings that have come to the present generation: first, that temperatures have modestly risen above the grimly cold Little Ice Age, making life safer; second, that the CO2 enrichment of Earth’s atmosphere over the past century has produced a huge greening of the planet. We should celebrate, not mourn, but the funereal guilt-mongers want us to mourn.
So, here is the upshot of all the guilt trips that leftists are foisting on us: In the grip of their beliefs — their fanatical, unquestioning faith in the guilt of the American people for the above-listed “offenses” — the Left condemns all who dare to dissent from its catechism. We dissidents are, ipso facto, bad people; thus, we deserve to suffer and be punished for our sins. There is no nuance in the leftists’ thinking, no mitigating factors, no sense of context; non-leftists are wrong — period. Consequently, the United States gets no credit for the considerable progress we have made and continue to make. Instead, we are deemed guilty because we have not yet fully realized our ideals. To leftists, the perfect has become the mortal enemy of the good.
If, by the way, you object to my characterization of leftists as “fanatical,” perhaps “messianic” would be a more appropriate adjective. Think of Senator Edward Markey (D-MA) who, when unveiling the grand socialist central economic plan known as the “Green New Deal,” described the proposal as “a mission to save all of creation.” “All of creation”??? If that isn’t messianic, then nothing is. Be aware of how often leftists use the religious language of salvation. Often when they promote their vision, they assert that their policies are necessary to “save” us — and tragically often, to save us from imaginary problems (e.g., wealth, success, a greening world, etc.).
This messianic zeal has congealed into a hatred of conservatives, libertarians, Republicans — literally any American who dissents from the leftist agenda. The Left has become a Leninist movement, embracing hatred of its political opponents with all the fervor that Lenin himself mustered.
The hatred that the Left feels toward its political opponents is manifest in its aggressive attempts to obliterate, destroy, and smash those opponents by canceling and silencing them. It is seen in its blatant effort to do an end-run around democracy by resorting to such machinations as D.C. statehood, packing the Supreme Court, dictating election rules to states, ramming through legislation with zero opposition input or support, etc. Under the intoxicating influence of what I have termed “the three meta-errors” of progressivism (faith in government competence, belief in human willpower, and the tyranny of good intentions), the Left feels perfectly justified in arrogating totalitarian powers to itself. It may call it “democratic socialism,” but it is anything but democratic.
Like Marx, Lenin and other past socialist revolutionaries, today’s Left believes that the end justifies the means. It seems to have convinced themselves that by dictating a radical top-down central plan on the American people, the result will be a bright, utopian future. Don’t hold your breath.
If you want to find the utopia that the Left desires, go to Washington, D.C., take a hard left, and look for it between the unicorn farm and Atlantis. No radical social plan animated by hatred for people and based on mutilations of truth can possibly bless the human race. If you need to see it in black and white, check out The Black Book of Communism — Communism being the end of the road that Marx said starts with democracy and passes through socialism. The human race has suffered enough from the socialist/Communist virus.
To advocate socialism today can only be explained by a rejection of reason and an adherence to a secular faith that elevates hope over experience. The fanatical adherents of this quasi-religious dogma, having judged American society guilty of cardinal sins, have condemned us to a state-imposed hell that is becoming increasingly totalitarian by the day.
The good news is: We Americans are not guilty of the sins with which the Left has charged us. There is, then, no justification for condemnation and no need for the totalitarian agenda that it is pushing. As has ever been the case, America and Americans will flourish if we remain free of dictatorial government plans and controls.
Urban Emigration: A Worrisome Outlook for American Cities
Migration seems to be a constant in history. Migratory trends fluctuate, but they inevitably surface somewhere as human beings seek greener pastures and a better life.
A new migratory trend is emerging within our country: More people are moving out of large American cities and fewer are moving in; hence, some urban populations are starting to shrink. The potential ramifications of this trend are ominous.
Before I write about what is at stake for cities and the people who reside in them, let’s look at the life cycles of cities and the reasons why an increasing number of people are either exiting cities or deciding not to move into them.
The primary factors that impel the growth and development of cities are of an economic nature. I don’t mean to discount or devalue social considerations; human beings are social creatures and we crave contact with others, but without a viable economic base, cities don’t grow. In some cases, they don’t even survive. Think of the ghost towns in the Old West: Bustling communities sprang up in areas where gold discoveries were reported, only to die out and be abandoned when neither mining nor any other industry provided an ongoing economic base to sustain a human community in those locations.
Look at where major American cities (and indeed, major cities around the world) are situated. The largest tend to be found on the shores of rivers, lakes, and oceans, or other locations that give ready access to key natural resources and the flow of commerce. That’s economic reality. In our country, the emergence of heavy industry in the 19th century led to major migrations from rural areas to urban centers, driven by individuals seeking greater economic opportunities. In today’s so-called post-industrial age, populations follow technological changes. Urban areas that attracted a critical mass of workers equipped with high-tech skills have thrived, while those less successful in keeping in step with current economic trends have languished.
So, what factors are driving the current flow of people away from American cities? The consensus opinion is: COVID-19. As a recent Wall Street Journal headline succinctly put it, “The Pandemic Changed Where Americans Live.” Indeed, many American businesses and individuals, spurred by pandemic-induced social distancing, have learned how to use newer technologies like Zoom conferences to conduct business without a need for daily trips to a downtown office. Technology has, to some extent at least, broken up long-settled patterns of conducting business while increasing options for where workers reside.
At the moment, it is too early to say if this trend is a short-term, transitory response to the pandemic (as the Brookings Institution believes), or whether the trend will continue and perhaps even gather momentum in a post-pandemic society. There is, however, another significant driver of today’s ex-urban migration. While cities require an economic base to survive and thrive, great cities offer many embellishments and people-pleasing activities that attract people to live in or visit those cities, thereby expanding and enhancing the quality of life while generating additional jobs and prosperity there.
In the last year, however, the desirability and attractiveness of city living have suffered a serious blow. Riots, violence, vandalism, the wanton destruction of businesses (many of the mom and pop variety that represent a family’s best chance at achieving its American dream) along with increased crime and shootings, have encouraged many residents to move out and discouraged other people from moving in. There’s a simple truth here: People don’t want to live near danger. And fewer people will want to visit those cities, shop in their stores, or take in their cultural attractions. Who wants to go into a city where storefronts have been disfigured or boarded up, and where police protection can’t be taken for granted? What parents would choose to raise their kids in such surroundings?
According to the Journal article cited above, “Big cities including New York, Chicago, San Francisco, and Boston saw hundreds of thousands more residents move out than in . . . causing the net loss of households from migration to widen by 71 percent in 2020 from the previous year.” This exodus, by the way, preceded COVID. Many businesses and individuals have become fed up with high-tax jurisdictions and have been fleeing in droves. Now, urban emigrations are accelerating both because of pandemic-related factors and the worrisome increase in urban violence.
Tax bases and revenues were already shrinking due to people leaving cities. As emigration increases, tax revenues will continue to shrink. This poses a major threat to affected cities. Some cities run the risk of a grim, downward-spiraling cycle taking hold.
Fewer residents will result in lower government revenues. Fewer people residing in or visiting cities means less need for restaurants, entertainment, public transportation, etc. This, in turn, causes layoffs and closures in those types of service, translating into additional tax losses and fewer people visiting cities because of fewer amenities being available there.
With fewer tax dollars to spend, the quality of civic services — including police and fire — is likely to deteriorate. That could impel an increasing number of residents to move out. To make up for these lost revenues, we can expect desperate government officials to try to raise taxes. To the extent that they do, they will drive even more taxpayers out of their cities. What is happening currently is that higher-income residents are fleeing cities at a faster rate than lower-income people. This will accelerate the shrinkage of urban tax bases, because higher-income people pay a much higher share of taxes than lower-income people. It will also cause the “social justice” crowd to howl, because it will be lower-income people who will be left to live in newly impoverished cities.
I don’t want to overstate the case and say that the current exodus from cities will be fatal to cities. They will survive, I’m sure. But don’t be surprised if cities experiencing loss of population enter a period of stagnation and end up with much smaller populations (hence, smaller tax bases). This already has happened in some cities: See Detroit, which entered a half-century of decline in the 1960s due to the toxic policy mix of not controlling crime and constantly raising taxes.
To what extent American cities can withstand population losses, nobody can say. But if urban governments don’t find a way to re-establish a sense of law, order, and safety, people will continue to abandon and avoid those cities, greatly increasing the chances that those cities’ best days are behind them.
Put another way, what some of America’s largest and most famous cities need now more than anything else is a restoration of order and safety. The big question is: Which of those cities will have leaders emerge who are capable of meeting that need?
Raise the Corporate Tax Rate? Economic Obtuseness in High Places
Having proposed trillions of dollars of additional federal spending, President Joe Biden and his allies have launched a belated and somewhat desperate search for additional tax revenues. The economic reality is that there simply isn’t enough wealth available in the private sector to fund the explosion in government spending. The danger is that changes in the tax code may do more damage than good.
One wrong-headed proposal is President Biden’s plan to raise the tax on corporate profits. Over a decade ago, I wrote in this space why corporate taxes make no economic sense. The basic problem with taxing corporate income is that corporations are merely unpaid tax collectors for the government, and the actual burden of those taxes fall on individuals — either being “shifted forward” to consumers in the form of higher prices, or “shifted backward” onto workers via lower pay or fewer jobs, or in the form of lower returns to investors. Reams of economic research show that the lion’s share of the burden falls on workers.
A great achievement of President Donald Trump was to lower the corporate profits rate from 28 to 21 percent. The results were spectacular and historic: As reported in The Washington Post, in the third year of the Trump presidency (alas, right up until the COVID-19 outbreak), the U.S. workforce was enjoying the lowest overall unemployment in half a centur, all-time highs in employment for black and Hispanic workers, and strongly rising wages.
Why would any president want to undo the gains experienced by American workers? To do so seems mean-spirited at worst and economically obtuse at best. It represents the triumph of ideology over economics: Raising taxes on corporations is sold to the public as “making the rich pay their fair share.” In reality, workers of modest incomes will pay the highest price.
The problem here is that political scheming is prevailing over economic truth. Most people look at the proposal to raise corporate taxes superficially. I doubt most of them would support that proposal if they understood the counterproductive economic consequences of such taxes. This is the old, old problem of seeing only the stated purpose of a policy and not discerning through economic understanding what the actual consequences will be. (The French economist Frederic Bastiat wrote about the problem of the seen and the unseen over 170 years ago, and Grove City College economics professor Dr. Caleb Fuller gives a great explanation in his recent lecture at the website of the Institute for Faith & Freedom.)
In the formation of public policy today, politics always trumps economics. That is because in politics, you can vote for what you want. In economics, you don’t have a choice: economic principles are inviolable and not subject to majority vote or government edict. So, politically you can get the policy that you want, but no policy can alter economic law, so you won’t get the results you hope for unless the policy is consistent with economic principles.
One sad example of economic knowledge being shunted aside for political expediency is provided by Secretary of the Treasury Janet Yellen. Although she is an economist (and married to a Nobel Prize-winning economist), Yellen is dutifully serving her boss, President Biden, by calling for higher corporate taxes instead of exposing such taxes as nonsensical and economically harmful. Incredibly, Yellen, writing in The Wall Street Journal, perversely characterized the trend for countries to strengthen their economies by reducing corporate taxes as “a race to the bottom” rather than a race to greater prosperity.
As Yellen is the previous chair of the Federal Reserve, which is charged with promoting employment, it is jarring to see her now championing a policy that will (ceteris paribus) put downward pressure on jobs and wages. This reminds me of Salmon P. Chase, who, when he was Lincoln’s Secretary of the Treasury, oversaw the introduction of a new unbacked paper money (the “greenbacks”) to help fund the North in the Civil War, and then later, as Chief Justice of the U.S. Supreme Court, ruled greenbacks were unconstitutional.
The bottom line here is that regardless of what anti-economic contortions Janet Yellen imposes on the rest of us, it will be impossible for President Biden and Congress to increase tax revenues enough to pay for even a modest portion of his astronomical spending proposals, but of all the options they are pursuing, raising the corporate tax rate would be the worst.
Washington’s Bi-Partisan Fiscal Folly
For years, I have been sounding the alarm about chronic federal deficit spending — practiced by both Republicans and Democrats — steering our country into a fiscal abyss. I feel like a broken record as I periodically chronicle the folly of it all. The process has taken on a sense of inevitability as we watch what feels to me like a slow-motion train wreck.
I have remarked on various milestones along this dangerous course:
Americans as a people and a polity are astoundingly indifferent to debt and have embraced it as the (temporarily) normal way to live.
One significant marker along the way was the grim prospect of more of our tax dollars going to service the national debt than to national defense. (I also pointed out that this has only been possible because a compliant central bank, the Federal Reserve System, has suppressed interest rates — the cost of borrowing money — for over a decade and, indeed, has painted itself into a corner that makes ultra-low interest rates the only policy option until a financial cataclysm occurs.)
I noted that populist President Donald Trump — despite adopting a number of economically intelligent policies — was completely unwilling to rein in federal spending. Unlike some Republican leaders in previous years, Trump perceived that Democrats’ big-spending agenda was unstoppable. He indicated this major concession by readily agreeing to suspend Uncle Sam’s statutory debt ceiling in the summer of 2019 and he then adopted a $1.4 trillion increase in the government’s discretionary spending in December 2019.
Since then, the deficit spending problem has accelerated at a dizzying pace. The pretext or trigger or (ir)rationale (whatever you prefer to call it) was the COVID-19 pandemic. In my article about the December 2019 spending blowout, I underscored the simple mathematic fact of life that federal deficits were growing because even though the government’s revenue was increasing by 4 percent, spending was rising by 8 percent. Fast-forward to the present: According to bipartisanpolicy.org’s Deficit Tracker, as of this April, “While revenues have grown six percent year-over-year, cumulative spending has surged 45 percent above last year’s pace.”
Again, the pretext or trigger for this was the enormously problematical federal response to the COVID-19 pandemic. Thus, in Fiscal Year 2020, the federal government spent $6.55 trillion while collecting $3.42 trillion in revenue. In other words, almost half of federal spending was covered by new debt. This happened with the full support of a Republican president.
It has worsened under President Joe Biden. Currently, more than half of federal spending is being financed by debt. Apparently determined to reestablish the Democratic brand as the party of Bigger Government, Biden already has pushed through his $1.9 trillion “American Rescue Plan.” And now he is pushing his “infrastructure” package with an initial price tag of $2.2 trillion, although The Wall Street Journal estimates that it could ultimately cost over $4 trillion.
Meanwhile, having recently completed my 2020 income tax forms, it struck me that Uncle Sam is paying me more than I am paying him. I am the definition of a middle-class taxpayer, by no means a poverty case. So, tell me: How can any government afford to pay its middle-income citizens more than they pay the government? This brings to mind President Grover Cleveland’s statement, “Though the people support the government, the government should not support the people.” The government not only “should not” support us, it literally cannot. Government has no wealth but what it first takes from real people, so if most people either pay no taxes or receive payments from the government, the inevitable result is an unviable fiscal policy.
This is folly — fiscal insanity, actually — of the first order. And yet, official Washington charges blithely on toward its eventual fiscal crack-up. *
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.
The Paradox of Prosperity
In Friedrich Hayek’s 1954 book, Capitalism and the Historians, the late French philosopher and political economist Bertrand de Jouvenel noted a baffling historical trend: “Strangely enough, the fall from favor of the money-maker coincides with an increase in his social usefulness.”
In surveying the history of capitalism from its inception in the late 18th century to the mid-20th century when he was writing, de Jouvenel was struck by an ironic and counterintuitive phenomenon. By “moneymaker,” he meant the capitalist entrepreneurs who became rich by supplying the masses with more consumer goods. Entrepreneurs generated the economic growth that uplifted standards of living; hence, their “social usefulness.”
De Jouvenel aptly wrote “strangely enough” to characterize the fact that as capitalists raised standards of living in each succeeding generation, the hatred of capitalists increased. This is paradoxical, but true. The more prosperous our society has become, the more the creators of that prosperity and the system that enables it have been vilified. How dare those wicked capitalists break the iron grip that abject poverty had held over the masses of human beings throughout the millennia of history!
This graph of world wealth per capita over the last 2000 years tells an amazing story. (A chart of U.S. per capita GDP growth shows a similar trajectory over the last 230 years.)
Mass poverty was the norm for centuries. That finally began to change in the late 1700s with the emergence of capitalism. The 19th century socialist reaction to capitalism condemned capitalism for not prospering every human being equally and simultaneously. It’s true: some prospered before others. As I have explained before, the reason that there was not faster economic progress for more people in the 1800s was not because evil capitalists exploited workers, but simply that there were not enough capitalists to “exploit” (employ) more workers and mass produce more goods.
Looking at the graph, you can see that economic growth accelerated explosively in the 20th century. (Note that growth became much more rapid after the end of slavery, which debunks the fallacious assertion that America’s great wealth depended on slavery.) In the United States, per capita income rose (in 1990 dollars) from $5,301 in 1913 to $31,178 in 2008 and life expectancy from 53 years to 78 years. In short, more Americans are living longer lives at higher standards of living than ever before due to our capitalist system. That has happened despite the considerable handicaps of bureaucratic regulation, wasteful pork-barrel politics, and government redistribution of wealth. [There is also more prosperity outside the United States than ever. See chart above and my article “Ready for Some Good News?”.]
Despite the astounding success of the free enterprise system in producing unprecedented prosperity, antagonism toward capitalism is growing, and popular politicians are adopting platforms that are essentially socialist. Indeed, the paradox of prosperity that de Jouvenel noticed almost 70 years ago remains firmly intact, for capitalism has never been more fruitful and more hated by its beneficiaries than it is today.
The present fascination with socialism and hatred of capitalism reflects a combination of willful historical blindness, lack of simple common sense, and inexcusable economic ignorance:
Anyone even casually familiar with 20th-century history should know that socialism has failed miserably, causing economic retrogression and impoverishment wherever it has been tried.
Common sense should recognize that since capitalism is a system where entrepreneurs compete with each other to produce what people want, and socialism is a system in which producers produce what the state wants, then obviously people prosper more under capitalism.
Most appalling and bitterly ironic about the many Americans who enthusiastically, even fanatically, espouse socialism in 2020 is that this year marks the centenary of the most important economic discovery of the 20th century. In 1920, the Austrian economist Ludwig von Mises explained with irrefutable logic that socialism must inevitably discombobulate and reduce economically rational production because it obliterates the market-based price system necessary to coordinate production. Shame on the economics profession for remaining silent about this fundamental truth and allowing dangerous economic ignorance to persist.
Fact: It is free-market capitalism that has made us wealthy beyond the wildest dreams of our great-great grandparents. Fact: The socialist alternative simply does not work. For anyone to favor replacing the world’s greatest wealth-creating system with a proven wealth-destroying system is to spurn prosperity, forsake rationality, and court destruction. That is the grim reality of the paradox of prosperity.
Jimmy Lai, The Billionaire Freedom Fighter
Hong Kong police arrested billionaire publisher Jimmy Lai on August 10, releasing him two days later. His “crime” was to express opposition to the mainland Chinese Communist Party’s (CCP) aggression against Hong Kong — both in person and through the newspapers and magazines that he owns.
According to the 1997 treaty returning the thriving island of Hong Kong from the United Kingdom to its historical status as part of China, the CCP promised to respect Hong Kong’s independence from mainland law and governance (“one country, two systems”) until 2047. At that time, formal reunification with the mainland would go into effect. The CCP, however, is reneging on its promises. It seeks to dictate policies to Hong Kong now, and clearly desires to crush dissent.
Because he is one of the most visible figures leading Hong Kong’s resistance, Jimmy Lai is an obvious target. But who is Jimmy Lai?
When I taught the “Entrepreneurship & Enterprise” course at Grove City College, we examined several dozen entrepreneurs, both past and present. The most touching life story was Jimmy Lai’s. His rags-to-riches journey was more amazing than any Horatio Alger story. In the Acton Institute’s superb film, “The Call of the Entrepreneur,” the modest, self-effacing Jimmy Lai shared his poignant life story.
Born in mainland China in 1948, he grew up in the wretched poverty of Mao Zedong’s Communism. His father was gone (possibly killed or imprisoned by the Communists) and his mother’s state-mandated job took her away from home except on weekends. Jimmy and two young siblings had to take care of themselves Monday through Friday, starting when they were only five or six years old.
At age ten, Jimmy worked carrying passengers’ luggage at a train station. A traveler tipped Jimmy with a chocolate bar. Before then, Jimmy hadn’t known that there was such a thing as chocolate or that any food could taste so delicious. He resolved to leave China and find a land where miracles like chocolate happened. Every weekend, Jimmy would beg his mother to help him escape China. Finally, when Jimmy was 12, his mother arranged for smugglers to transport him to Hong Kong.
Jimmy was so happy with the improvement in his life. In Hong Kong he worked 12-hour days in a sweatshop for a place to sleep, simple food, and $8 per month. But most importantly, he now had hope. Having observed that people who spoke English were more prosperous, he taught himself English. By age 20, he was managing that factory.
Over the next six years, Lai hatched plans to buy his own factory. He scrimped and saved. He also read as much as he could about stock markets. Through astute stock investments, he increased his meager capital and, at 26, bought a bankrupt factory. He made sweaters and grew his business into a successful retail chain called Giordano’s that had over 2,000 shops in 30 countries, becoming a billionaire.
Lai could have coasted through the rest of his life enjoying his vast fortune, but China’s 1989 Tiananmen Square massacre was his epiphany. He adopted a new life mission: to bring freedom to the long-oppressed Chinese people. He left the clothing business and, with no prior experience, started a pro-democracy newspaper, Apple Daily. His newspaper enjoys widespread popularity and is the heart of a popular media empire. It is also a major thorn in the side of the CCP, which has brought about a showdown with Lai.
Last week was the third time the CCP has had Lai arrested this year. He knows that at any time police could send him to the mainland, where he could face life imprisonment or worse. If that happens, it will be a clear sign that the CCP is moving into a more aggressive mode. That would be a dark day, not just for Jimmy Lai and his loved ones, but for the whole world.
Despite the threat hovering over him, Jimmy Lai remains unbowed. A devout Catholic convert, he accepts as his Savior Jesus Christ, who sacrificed himself for others. Following in the footsteps of his Savior, Jimmy Lai appears willing to lay down his life in the struggle to secure the God-given rights of his fellow man. (So much for the bogus stereotype of “greedy, self-absorbed billionaires”)! Lai understands that the priceless rights of freedom of religion, free speech and press, free enterprise, and freedom of conscience don’t belong to one country or one race but are universal, belonging to the entire human race. He is truly a global hero. Indeed, he may be this generation’s most famous practitioner of nonviolent resistance, although because he is resisting Communism and is a billionaire, certain “intellectuals” won’t acknowledge his selfless heroism.
“Greater love hath no man than this, that a man lay down his life for his friends.” (John 15:13 KJV). God bless you and preserve your soul, Jimmy Lai.
The Problem with Inheritance Taxes
A recent opinion piece in The New York Times, “Tax the Rich and Their Heirs . . . more fairly,” was both reassuring and refreshing. It was reassuring to know that policy debates about relatively prosaic public policy issues continue to be debated, even though the country is convulsed with violent unrest and pandemic-related stresses. It is refreshing that the tone of the writer, New York University law professor Lily Batchelder, was measured and civil at a time when so much writing is shrill and strident.
That being said, I disagree completely with the author’s contention that inheritance taxes should be increased. On the contrary, they should be abolished.
Calls to raise inheritance taxes stem from two common failings, one moral, one intellectual. The moral error is simple: “Thou shalt not covet.” The intellectual error (often blended with the moral flaws of arrogance and pride) is the self-delusional belief of the social engineer, the top-down planner, that he or she can competently, wisely, and fairly redistribute others’ wealth and build a better society.
The spirit of social engineering pervades Batchelder’s article. Her main rationalization for wanting to raise taxes on inheritances is the typical progressive goal of reducing economic inequality. And yet, such inequality is inevitable in a state of freedom. Economic inequality becomes evil when a corrupt political system keeps the masses poor. As many disadvantaged minority entrepreneurs have proved, there is no “Keep out!” sign preventing poor Americans from becoming rich. By all means, let’s abolish and punish political cronyism, but let’s also realize that most fortunes are built by providing large amounts of economic value for others (making them less poor), and not because the rich have somehow extracted wealth from the poor.
There is antipathy to the element of luck by which some people are born to rich parents and others are not. And yet, attempts to eliminate luck via legislation amounts to tilting at windmills. Do we need a law that children of doctors shouldn’t be richer than children of English teachers? Look, if luck is bad, then being born in the USA is like winning the lottery, which is so grossly unfair that we should give most of our wealth to people with the bad luck to be born into poor countries.
Racial disparities — Professor Batchelder wants to “fix” the current imbalance of wealth between whites and blacks. However, the cure for past racism isn’t to continue to define people according to race; rather, we owe it to all Americans to remove any artificial obstacles to any American honestly getting rich.
Progressive do-goodism — Batchelder wants to use inheritance taxes to “invest in children.” Government bureaucrats “investing” in children? Are they endowed with special wisdom and expertise? On what track record does Professor Batchelder base such lofty confidence in government bureaucracies?
Fear of power — Unfortunately, Batchelder doesn’t see where the true threat of power lies. She invokes F.D.R.’s statement that “inherited economic power” is as objectionable as “inherited political power.” Theoretically, maybe, but in reality, what private fortune wields power even a fraction of that wielded by our massive federal government? Who but Uncle Sam can spend several trillion dollars per year of money that isn’t earned, but forcibly collected? Yes, cronyism is a huge problem, but government is often its cause and facilitator. Inheritance taxes would consign to even more power in government.
Inheritance taxes are wrong in principle and in practice. Like so many of our country’s Founders, I believe that it is none of the government’s business how a person spends his wealth. It isn’t illegal for the rich to assemble the world’s most expensive art or classic automobile collection, buy up the most land, or make a Bloomberg-like run for the presidency. And the law allows the super-rich to leave fortunes tax-free to spouses, churches, museums, foundations, etc., so why not to their children (or anyone else)? You say that rich heirs don’t need all that wealth and others in society do? That is often true, but who are we to decide what someone else should have? It’s not our property, but theirs. (See Luke 12:13,14)
Article I of the U.S. Constitution enumerates the powers of the federal government. That list does not include the power to decide how wealth should be distributed among citizens. Property rights were reinforced by the Fifth Amendment, which was designed to protect personal property from being plundered by a democratic majority, and by the Tenth Amendment, which reiterated the principle that federal power (and therefore spending) should be confined to those few purposes explicitly enumerated in Article I.
Here is an old-fashioned but forward-looking idea: Instead of devising ways for the government to take more wealth from citizens, “we the people” should strive to shrink government and its expenditures. In the long run, our solvency, our prosperity, and our liberty will require this.
Self-Exposure: The Left in Their Own Words (and Deeds)
We can learn a lot if we listen to what public figures tell us. I’ve saved a few choice quotes from the Left over the past year, but lately the revealing statements have been coming in droves, so let’s review a few.
In an interview last fall, Hillary Clinton, still smarting over her loss in the 2016 election, longed for the good old days when there were only three commercial broadcast networks and a few dominant national newspapers. Back then, she said, “It was a much more controllable environment.” These days, she lamented, “. . . it’s a lot harder for Americans to know what they’re supposed to believe.” Somehow, I doubt most Americans believe that the role of the media is to tell us what we are supposed to believe.
Speaker Nancy Pelosi shares Clinton’s displeasure with the notion that Americans can make up their own minds on vital issues. In fact, she seems to distrust democratic elections. Last November, after failing to persuade Congress to remove Trump from office for his phone call to Ukraine’s president, Pelosi scolded her Democratic colleagues in the House. The Speaker said that it was a “weak response” to “let the voters decide” whether they wanted Trump as president in the 2020 election. She called that a “dangerous position.” (By the way, Politifact accused Trump of a falsity by tweeting, “. . . Pelosi just stated that ‘it is dangerous to let voters decide Trump’s fate.’” Yes, the president paraphrased, and so he shouldn’t have used quotation marks, but he restated the essence of Pelosi’s message accurately.)
In my previous article, I wrote about the seething hatred on the left and the nihilistic, destructive behavior resulting from that dark state of thought. The green movement is stewed in the rantings of misanthropic environmentalists who characterize the human race as a “disease,” “virus,” “vermin,” “cancer,” etc. Then you have a Bernie Sanders groupie getting his kicks from proclaiming, “Guillotine the rich. ” Denver City Councilwoman Candi CdeBaca, a Democrat . . . re-tweeted a California woman’s tweet that said, “For the record, if I do get the coronavirus, I’m attending every MAGA rally I can.” Also, there is this appalling two-minute video compilation showing everything from Pelosi wondering why there aren’t more riots to various celebrities and talking heads yearning to burn down the White House and assassinate President Trump.
Most recently, there was the ugly incident in Portland when a Trump supporter was shot to death and some not-so-peace-loving protesters cheered when one of their mob used a bullhorn to exult, “I am not sorry that a f—— fascist died tonight!” Wow. That clearly illustrates an important difference between left and right. Every conservative I know agrees that passing counterfeit currency (George Floyd’s deed that got him embroiled with the police) wasn’t a capital offense, that his death was a tragedy, and that his death was wrong. The heartless comment in Portland indicates that leftists believe that being a Trump supporter is a capital offense. How long can democracy survive such fascist fanaticism?
Indeed, this summer’s riots have elicited all sorts of revealing nonsense from the lips of the Left. Someone named Vicky Osterweil has gained popularity on the left for publishing In Defense of Looting. In her NPR interview promoting the book, she makes such stunning observations as, “. . . without police and without state oppression, we can have things for free” (thereby ignoring, but not repealing, the first law of economics: TANSTAAFL — “There Ain’t No Such Thing As A Free Lunch.” Ms. Oserweil also said, “It’s just property. It’s not actually hurting any people.” Uh, excuse me, try telling small business owners whose dreams and livelihood have gone up in rioters’ smoke that stealing or destroying property doesn’t hurt people. How would she like it, I wonder, if her home or business, or her parents’ home or business, were looted or torched?
Chicago Mayor Lori Lightfoot sounded like a law-and-order public official when she ordered police to arrest protesters on the block where she lives because, “We have a right in our home to live in peace.” Of course, like most leftists, she doesn’t really have a heart for the common people because she gave the Chicago police no similar orders when the protesters were active in other neighborhoods. In fact, Chicagoans, many of them Democrats, are moving out of the city because they fear for their safety and feel that Mayor Lightfoot has failed to do her job.
By the way, one Chicago citizen, wanting to show her progressive bona fides, stated:
“I think people forget that people do live here, too — it’s not just the Guccis and the Jimmy Choo stores. And I completely support it all [i.e., the rioting]. You stealing shoes means nothing to me — that doesn’t hurt me at all. It’s just the fact that that brings more crime, and that does endanger me.”
Go ahead and plunder the rich, she is saying, as long as you leave me alone.
How incredibly heartless and morally obtuse! The rich are people and often American citizens, too. If we are to be equal in the eyes of the law, those people’s lives and property must be safe too as well.
Portland Mayor Ted Wheeler showed that he’s not the sharpest tool in the shed when he said of President Trump, “. . . we know you’ve reached the conclusion that images of violence or vandalism are your only ticket to reelection.” Well, then, sir, if that is the case, why haven’t you not been doing everything in your power to reestablish calm and order so that your mortal political enemy can’t benefit from violent images emanating from your city? In fact, Mayor Wheeler has failed in his misguided attempts to appease the thugs, and now the thugs’ attacks against his condo have caused Wheeler to announce his intention to move.
And then there is presidential candidate Joe Biden. He showed his true colors during a typical “confuse-the-issues-with-lies-and-half-truths” speech in Pittsburgh on August 31. Buried within the touchy-feely baloney was this ominous nugget: “Does anyone believe there’ll be less violence in America if Donald Trump is reelected?” Tell us, Joe, was that a threat? Is that what your leftist buddies have told you? Have they promised you that they will hold the riots in check if you are elected so that you can move full-speed ahead with the socialist agenda?
Finally, I owe my readers a follow-up to my recent article on Kamala Harris and her misuse of the Good Samaritan parable. Sen. Harris showed her compassionate heart in June when she tweeted an appeal for people to give financial support to people in need in riot-torn Minneapolis. Did Ms. Harris start a GoFundMe campaign to help innocent citizens whose businesses had been vandalized, robbed, and destroyed? No. Instead, she raised bail money for those who had been arrested for vandalizing, robbing, and destroying those businesses. I think Ms. Harris needs to go back to Sunday School and get that good Samaritan story straightened out. The Samaritan gave his money to help the innocent victim of an attack, not to start a legal defense fund for the attackers.
Friends, I leave it to you to decide whether the pattern and tenor of the above sentiments accurately reflect the values of today’s progressives, or whether you believe that I have taken them out of context. Please don’t forget to vote in November. And choose wisely. *
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.
How Much Should Government “Help the Economy”?
The coronavirus is disrupting our lives at a dizzying pace.
The NBA, NHL, MLS, and fledgling football league XFL have suspended their seasons. College basketball’s “March Madness” first thought about playing the tournament in the eerie silence of empty arenas, but then just canceled it completely. Tom Hanks has the virus. Broadway is shutting down, and the stock market has been plunging at a sickening pace.
Nothing is normal right now.
Question: What should the federal government do to help us through these challenging times? The difficulty here is that two distinct problems have been conflated. Americans are understandably concerned about dual threats: one to our physical health, the other to our economic well-being.
What the government should do in response to the threat to our health is obvious: marshal and facilitate efforts to contain and treat the virus.
What the government should do in response to the economic threat is much less clear.
There are dozens of suggestions for how the government should cushion the immediate economic impact of the virus and, going forward, avert a recession. The first of those two goals — helping Americans weather the virus-related economic storm — is worthwhile. The second goal — government intervention to ward off a recession — is not.
This is going to take some explaining, so please bear with me. As an economist, I have found that government intervention in economic affairs tends to help special interests while impeding overall economic progress. Yet many people believe that governments are endowed with some sort of superior wisdom that enables them to arrange our economic affairs into a satisfactory order. This is a myth. Look, if governments were that brilliant and competent, the whole world would be socialist today.
Some forms of government aid are more effective than others. Foreign aid provides a helpful object-lesson. Let us compare emergency aid with typical foreign aid designed to boost the economic development of countries.
Emergency aid, such as when the U.S. Navy deployed personnel and medical supplies to people in Indonesia after the devastating 2004 tsunami, saves lives. Even though the constitutionally stipulated purpose of our military forces is to defend American lives, Americans have a generous, compassionate heart, and we don’t begrudge such emergency assistance.
Foreign aid, by contrast, is less effective and less justifiable. Its track record is problematic. In fact, studies by economists such as Zambia’s Dr. Damisa Moyo and Nobel Prize winner Angus Deaton have shown that foreign aid too often has retarded economic progress by bankrolling entrenched governments that are corrupt or inept. The efficacy of foreign aid also is limited by the same problem alluded to above — the superstitious belief that government planners can arrange a successful economic division of labor from the top down.
Now, let’s come back home. Today, with millions of Americans reeling from the economic blows of the virus, what should Uncle Sam do?
Although there will doubtless be opportunistic, wasteful, and cynical political add-ons attached to any relief measures, emergency aid nevertheless is a compassionate step to take. Nobody should suffer eviction or hunger because some virus has shut down their place of employment or left them confined to quarters.
One proviso: Any emergency aid measures should include a sunshine date — e.g., a stipulation that 30 days after the president declares the medical emergency over, the emergency expenditures shall cease.
By contrast, there should be no intervention by either the Federal Reserve or Uncle Sam to try to avert a recession. This sounds harsh and uncaring, but please understand that I don’t like recessions any more than you do. But underlying my position is an inescapable economic truth: A recession is a time of painful, but necessary economic adjustments.
What happens in a recession is that less-efficient businesses fold, releasing their hold on valuable economic inputs (land, labor, and capital). That clears the field for entrepreneurs with new value-creating ideas. Call it the growing pains of capitalism or the cost of creative destruction or bitter medicine, but recessions are necessary for healthy long-term economic growth.
An analogy from the physical world is a useful metaphor. What did this year’s horrific wildfires in Australia have in common with the great conflagration that consumed half of Yellowstone Park in 1988? In both cases, the fires were preceded by well-intended but unwise human intervention.
It had been official policy to diligently extinguish small fires for years and to prohibit the removal of dead plant matter (also known as “kindling”). By preventing periodic smaller fires that would periodically reduce accumulated kindling, the potential for larger fires kept increasing. Eventually, a trigger event would ignite catastrophic fires. Instead of putting up with periodic smaller adjustments that were necessary to the long-term health of forests, human interventions made large conflagrations inevitable.
And so it is in our economy. When government and central bank interventions keep weaker businesses from folding, in the short run, they lessen economic pain. In the long run, however, they trade periodic small adjustments for a much larger, much more painful economic realignment. Postponing necessary adjustments causes eventual much larger adjustments.
Another question: Is the early 2020 stock market rout the beginning of a major recession? Is this “the big one”? It could be. The artificially low interest rates engineered by the Federal Reserve over the past dozen years have provided life support to numerous corporate zombies and financial weaklings. Had interest rates been at more realistic and historic levels (i.e., higher), many of these moribund companies would have given up the ghost long ago and been replaced by vigorous new entrepreneurial ventures.
The current inventory of economic “dead wood” would be much smaller, meaning that the effects of an economic downturn in 2020 would be much less severe than they will be now.
From an economic standpoint, the best thing that government can do in convulsive times like today is to get out of the way and let the invisible coordinating hand of markets sort things out and lay the foundation for a prosperous future.
From a political standpoint, however, America’s political and monetary authorities feel compelled to intervene (especially since this is an election year). They feel this way because most Americans place entirely too much faith in government competence and expect the authorities to act.
Ironically, in carrying out the will of the people, the powers-that-be will impede some of the very adjustments needed to get our economy back on a sound, healthy footing.
After Afghanistan and Iraq, What?
At the end of last month, representatives of the Trump administration and the Taliban signed an agreement that could mark the beginning of the withdrawal of U.S. troops from Afghanistan after more than 18 years there.
The reaction here in the United States has been decidedly muted, even before everything else was eclipsed by the coronavirus. Why? I think there are several reasons.
We are depressed. Our military has been fighting to keep the Taliban from ruling Afghanistan for 18 years, yet now we are preparing to withdraw and it looks like the Taliban will prevail.
Perhaps we are pessimistic. There are several conditions that still have to be met for the peace deal to be consummated, and we’re not confident that the Taliban will comply.
Maybe we’re just numb. The conflict has been going on so long that the majority of Americans who don’t have loved ones deployed there have tuned it out.
I’ve been brooding for many months over our military involvement in Afghanistan (Iraq, too). I feel the same kind of consternation that I did during the Vietnam War. The three presidents we have had during this war have failed to communicate to us why we are there and what it would take to bring our military forces home.
Indeed, it seems like the public has been deliberately misled. Worse, we haven’t been fair to our men and women in uniform. Year after year, they have had to risk their lives in a no-win war, just like in Vietnam decades ago. Young Americans have been dying in southern Asia, and most Americans don’t even know what for. That’s pathetic and tragic — a total disgrace.
The conflicts in Afghanistan and Iraq have been taking a heavy toll on our troops. There were periods last year during which the military’s recruitment needs were not met. That meant that troops who had already been separated from spouses and children for too long had their overseas deployment extended.
We need to think of our fellow Americans in uniform more than just on Veterans Day. Many of these good people return home with scars that we can’t see — scars that are often more painful than the physical ones. Everyone should read the superbly told somber story of U.S. Marine Col. Randy Hoffman, whose dedicated and decorated service in Afghanistan has caused so much pain to the inner man.
Going forward, what lessons can we learn from our prolonged military presence in Afghanistan and Iraq?
I’m no military expert, but I humbly offer three principles that I hope are worthy of consideration: 1) Remember that the purpose, the raison d’être, of our armed forces is to protect and defend the lives of Americans; 2) Don’t initiate military action without a clearly defined and attainable objective; 3) Achieve that objective as quickly as possible, declare victory, and bring the troops home.
President George W. Bush at first upheld all three of those principles in Afghanistan. The original reason for deploying armed forces there was to eliminate terrorist training camps. Remember, this was right after 9/11. The notion of terrorist attacks on American soil was no mere theory, but a vivid reality.
Bush authorized a military operation with a clear objective: find and destroy any terrorist camps there. Our military’s execution of the plan was superb. With fewer than 300 pairs of boots on the ground, U.S. Special Forces joined with non-Taliban Afghans and achieved a quick and decisive victory. Their strategy was to engage Taliban forces in long-distance gunfights, then call in fighter jets to annihilate the enemy. Within a few months, over 30,000 to 40,000 Taliban fighters had been killed, their regime collapsed, and there were no known terrorist camps operating in Afghanistan.
However, Bush then made the fateful decision to embark on nation-building — supporting the establishment of a democratic government in Kabul. In doing so, he abandoned those three principles: 1) No longer were American troops fighting for Americans; they were building schools; 2) There was no longer a clearly defined military objective; 3) There was no route to a quick, decisive victory following which troops could be brought home. Instead, over 3,000 Americans have lost their lives there.
Frankly, it isn’t for us to decide how or by whom Afghans are to be governed. In fact, should we really be surprised that in a country of long-warring tribes, the members of non-U.S. backed tribes want to defeat those Afghanis allied with what appear to them to be infidel imperialists?
Nor, cold as it may sound, should U.S. troops be dying so that Afghan girls can go to school. (Those girls should be able to go to school. Neither should there be slavery in the world, nor the kind of oppression that the Communist parties in China, North Korea, Cuba, and Venezuela are imposing on their people, but we aren’t deploying troops to right those wrongs. The fact is, we can’t keep sacrificing American troops to solve all the world’s problems.)
Simply put, after the Taliban regime fell, Bush should have kept our military action purely defensive by rotating in a small number of Special Forces to monitor terrorist activity and identify terrorist installations, nothing more.
The younger Bush should have learned a lesson from his father. Bush the elder organized a U.S.-led multinational military coalition (Operation Desert Storm) with the specific objective of expelling Iraqi forces from Kuwait. We can debate whether that operation was, strictly speaking, to defend Americans, but the elder Bush deserves credit for setting a clearly defined objective and enabling our military to score a decisive victory that brought troops home quickly.
Had Bush done what many armchair generals wanted at the time and sent our troops on to Baghdad, U.S. military forces almost certainly would have been bogged down there for years — as indeed happened a decade later under Bush the younger. In the latter case, our forces didn’t find the weapons of mass destruction that faulty intelligence had said were there, but “W” could have cut American losses once Saddam was found by simply declaring victory and bringing the troops home.
Instead, he committed to a long-term effort to “fix” Iraq and asking our troops to support the establishment of a lasting democratic government (just like in Afghanistan). The result? A quagmire costing over 4,400 American lives and nearly 32,000 injured.
Whenever we do extricate our military people from Afghanistan and Iraq, let us resolve to never put our people in harm’s way except to protect American lives. Let us never ask more of them again. Even though we are months removed from Veterans Day, I’d like to thank all our veterans for their service to our country. You are the best and you deserve the best treatment that we can give you.
Two Cheers for Capitalism?
Last month, a friend forwarded a link to a hugely important article by David Brooks. Title: “I Was Once a Socialist. Then I Saw How It Worked.” Subtitle: “Two Cheers for Capitalism, Now and Forever.” This was a truly astounding article for two reasons.
First, I was astounded that this article was published in The New York Times. Brooks is the Times’ resident (token?) relatively conservative writer, but still, in light of how overwhelmingly the The New York Times favors the socialist Democrats, it’s stunning (and admirable) that they gave space to a dissenting opinion on the central issue of the 2020 national election: socialism versus capitalism.
The other reason I consider Brooks’s article astounding is its sheer power. He brilliantly dismantles the pretenses of socialism with devastating directness, uncommon clarity, and relentless truth. Time after time I was so impressed with Brooks’ eminently quotable, crystalline explanations that I mentally gave him the greatest compliment one writer can give another: I wish I had written that.
Brooks assembled all the main reasons why capitalism is superior to socialism. He did so not as an economic theoretician, but as a down-to-earth journalist. Brooks traced my own earlier ideological odyssey. In college, we were enthusiastic supporters of socialism. Out in the real world, observation led him to the only reasonable conclusion: Capitalism dramatically advances human prosperity; socialism retards, undermines, and ultimately obliterates prosperity.
He reels off fact after telling fact:
“Capitalism has brought about the greatest reduction of poverty in human history.”
Socialism destroys incentives to improve.
Socialism lacks the price signals needed to rationalize and coordinate economic production.
Socialist central planners “can never gather all relevant data, can never construct the right feedback loops” or possess all the specific knowledge needed to master, improve, and update modes of production.
Countries that adopt capitalism get wealthier. Countries that adopt socialism get poorer.
Environmental degradation is much worse in socialist countries than in capitalist societies.
Average human life expectancy is noticeably longer (14.2 years) in capitalist countries.
Socialist “rulers turn into gangsters. A system that begins in high idealism ends in corruption, dishonesty, oppression and distrust.” Contrary to all the socialist rhetoric about “equality,” actual socialism “produces economic and political inequality.”
As superbly as Brooks articulates why human societies need to embrace capitalism and avoid socialism, his article nevertheless ultimately takes an unfortunate turn. He prints a wish list for government intervention to address some of the economic and social problems that capitalism hasn’t solved.
He calls for “wage subsidies and mobility subsidies,” “tax subsidies for health care,” “a massive infusion of money . . . into our education systems,” and so on. (Now it becomes clear why The New York Times published this article.)
It’s unarguably true that free markets haven’t solved all economic problems. Unfortunately, here Brooks falls for the same non sequitur that animates all progressives and socialists: the notion that if one has a vision for how to help one’s fellow man, then one is justified in using government power to compel others to pay for wanted reforms.
Would-be reformers aren’t content that, under capitalism, they are perfectly free to use their own time, energy, and financial resources to work — either individually or in voluntary cooperation with others — to open businesses that pay higher wages, establish foundations dedicated to helping workers relocate, open better schools, and so on.
The presumption that one is morally qualified to enlist the power of government to force others to bear the burden of one’s own vision for a better society is the seed from which tyranny grows. It’s an assault against individual liberty. Indeed, it’s self-contradictory for Brooks to advocate capitalism and then assert that the state should have the power to redistribute wealth, thereby abridging the property rights that are the essence and basis of capitalism.
Furthermore, his vision of “capitalism with modifications” is politically naïve. Brooks isn’t a leftist revolutionary, but a moderate whose intentions are benign, but he too glibly assumes that all reasonable people will agree with him as to what particular interventions are needed. There’s no such agreement today, nor any reason to hope for such an agreement to evolve.
The problem with using government to help A and B with certain economic needs is that C and D need help, too, with other economic needs. A Pandora’s box is opened. There’s no bright line to mark where government intervention should stop. Once the progressive/socialist tenet is accepted that it’s the government’s duty to actively boost citizens’ economic wellbeing (in contrast to the more limited traditional role of American government to keep citizens safe and free — a system that led to the United States becoming the wealthiest country in the world), the role of government becomes infinitely expandable. This is the road to socialism.
The myriad forms of federal intervention already in place have saddled our youth with tens of trillions of dollars of government debt and unfunded liabilities. That Brooks apparently is willing to increase that debt burden even more is, frankly, disappointing and appalling.
It’s perplexing that Brooks (given his understanding of socialism’s deficiencies) calls for a large increase in government involvement in different areas of the economy. Can’t he see that government intervention tends to raise prices — e.g., in health care and higher education? This apparent blind spot is especially strange given that his article correctly identifies government’s inability to achieve efficiency because it operates outside of market prices. That precisely is the inescapable problem in any government bureaucracy. (See Ludwig von Mises’ 1944 book Bureaucracy.)
Think about it: What is socialism but a complete system of government bureaucracies? The lengthy track record of bureaucratic waste and inefficiency in our own country provides us with a sneak preview of what conditions would be like under the total bureaucratic mismanagement of socialism.
As noted above, Brooks subtitled his article, “Two Cheers for Capitalism.” By this he means that while capitalism has been a great boon to the human race and is worthy of our praise and gratitude, it hasn’t produced perfect results. On this point he is absolutely correct. However, like many people of good will, Brooks is at least somewhat under the beguiling but treacherous influence of utopianism. He is holding “three cheers” of approbation in reserve for perfection.
But this is the human reality, utopian dreams notwithstanding: Perfection will forever be unattainable in human societies comprising manifestly imperfect human beings. Capitalism is no panacea, because there are no economic panaceas.
Unlike Brooks, I believe strongly that capitalism deserves three cheers — not because capitalism is or ever can be perfect, but for the salient fact that it’s by far the best system for prospering humankind that the world has ever known. Brooks’s article itself makes that very point. We shouldn’t let the perfect be the enemy of the best. Three cheers for capitalism! *
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.
AOC’s Ravings Against Billionaires
“No one ever makes a billion dollars. You take a billion dollars.”
That was the punch line of democratic socialist Rep. Alexandria Ocasio-Cortez (AOC) in a Martin Luther King, Jr., Day public interview with writer Ta-Nehisi Coates. The audience erupted into enthusiastic applause. This is a sad but vivid example of the woeful economic ignorance rampant in our society today.
Mr. Coates had asked AOC why he would be a bad guy if he became a billionaire by selling widgets. She replied that he really didn’t make them (shades of Barack Obama in 2012). Instead, she asserted, the billionaire sits
“. . . on a couch while thousands of people were paid modern-day slave wages. . . . You made that money off the backs of black and brown people [and] single mothers . . . who are literally dying because they can’t afford to live. And so no one ever makes a billion dollars. You take a billion dollars.”
There are many errors in AOC’s remarks, but let’s address a few.
First, let’s debunk the myth of the exploitative business owner lazily sitting around while others do all the work. Entrepreneurs are the wealth creators of society. They figure out how to combine the economic factors of production (land, labor, and capital) in new ways to create and provide new goods and services for others. Such endeavors require vision, stamina, energy, and hard work. If it were as easy as sitting on a couch, everyone would be a rich entrepreneur. Instead, entrepreneurial excellence is somewhat analogous to playing professional baseball, football, or basketball: Only a minority of people have enough talent to play professional sports competitively, and only a few of those are superstars. Not every human has what it takes to be an entrepreneur, and a Bill Gates or Jeff Bezos will be as rare as LeBron James or James Harden. Why do we admire star athletes but scorn star entrepreneurs (some of whom, AOC should acknowledge, are “black and brown people”)?
Second, AOC does not understand wealth creation. She seems to believe that billionaires extracted their billions by some dastardly process, leaving piles of victims in their wake. This is the old zero-sum view of the world that darkened human thought in the 16th century — the notion that one person’s gain is another’s loss. That is a fallacy.
In free markets based on private property, people only buy or sell if they anticipate they will be better off by doing so. We exchange what we value less for what we value more; otherwise, the trade wouldn’t happen. Thus, both parties to any voluntary transaction gain value. The billions earned by corporations are mirror images of the billions of dollars of value they have created and supplied to others.
The profits/benefits of consumer and producer are roughly comparable. But the economic value of the producer is simply more concentrated — that is, on one side you may have a corporation of 5,000 people having created billions of dollars of value for tens of millions of consumers. The total value exchanged between the corporation and its many customers is in the same ballpark, but on a per-capita basis, those billions are concentrated among a relatively small number of people on the producer side and diffused among a much larger number of people on the consumer side. But both sides are richer, not one side at the expense of the other, as AOC mistakenly believes.
It is morally perverse and economically stupid to demonize, persecute, and seek to eliminate billionaires, as Sen. Bernie Sanders desires. (See his wealth tax, among other obnoxious proposals. By the way, you can now get your very own “Billionaires Should Not Exist” bumper stickers by donating to the Sanders campaign.)
The continual denunciation of billionaires by demagogues is dangerous. Sanders has avoided saying we should hate billionaires, but in an interview with The Nation, he approvingly cited FDR’s explicit “hatred” for “economic royalists,” calling billionaires today’s royalists.
One of the consequences of the anti-capitalist fulminations of AOC, Sanders, et al. is that there are equally ignorant and self-righteous people out there who want to put words into action in some pretty vicious and violent ways. For example, Project Veritas recently recorded Sanders campaign staffer Martin Weissgerber making such revolting statements as “Guillotine the rich”; “What will help is when we send all the Republicans to re-education camps”; and “The Soviet Union was not horrible . . . [but was] the most progressive place to date in the world.” (Yes, he actually said those things.) Maybe you want to live in a society even more “progressive” than the USSR, but for the average American, this is an existential threat to our basic rights and our way of life.
We need more economic enlightenment in this country, and we need it now — not just because there is an election this fall, but because millions of Americans are in the grip of an extreme ideology that can only be described as warped and destructive.
Budget Deficit Capitulation: Our Spending Problem
During the week before Christmas, Congress rushed a spending bill into law.
Two spending bills were introduced that Monday, a flurry of political horse-trading ensued, numerous pork barrel favors were hastily added, and — presto — by Friday Congress had approved $1.4 trillion in discretionary spending. Treasury and budget officials acknowledge that future deficits will now rise more than earlier anticipated.
The American people responded to the new spending bill with a collective yawn. A deep national apathy toward the national debt has settled in. Few people care anymore. President Trump may care on a personal level, but as a political pragmatist, deficit spending is one battle he has chosen not to fight. Even those of us ashamed of how our youth are being progressively swindled by federal deficit spending have resigned ourselves to the fact that our government has a debt addiction.
The signs that Uncle Sam would further enlarge fiscal deficits had been unmistakable. As I wrote in November, the GOP-sponsored “Prevent Government Shutdown Act of 2019” was a sign of capitulation by former deficit hawks. It was clear then, if it hadn’t been before, that an expansion of deficit spending was virtually a done deal.
Now that the spending increase has happened, I’m not here to howl or protest. I emphatically think it was wrong, but what’s done is done. However, there are a couple of very important numbers that I wish to call to your attention now. I hope that you will remember them the next time President Trump or some other non-socialist president calls for lower tax rates and the left argues against them.
I’ll give the numbers to you in two forms, only the second of which I hope you will commit to memory:
In Fiscal Year 2018, President Trump’s first full year in office, federal revenues were $3,329 billion. In Fiscal Year 2019, the first full year during which Trump’s corporate and personal income tax cuts were in effect, federal receipts totaled $3,462 billion. To be more specific, federal revenues from income taxes decreased; however, the lower tax burden on the private sector contributed to an increase in the number of Americans working. That, in turn, increased federal revenues from FICA payroll taxes. Furthermore, increased economic activity boosted federal revenue from excise taxes.
Critics were too hasty to claim that tax cuts inevitably shrink federal revenues. Receipts may decline from some taxes while still rising overall. And even if overall government revenues fall, so what? All that means is that people get to keep more of their own income.
Now here is the set of numbers I hope you can remember: Federal revenue increased four percent last year over the previous year, while federal spending rose eight percent. This points to a simple, irrefutable arithmetical truth: The reason the federal deficit is rising is not because tax revenues are falling — they are not — but because spending is rising at a faster rate.
Back in the 1980s, critics on the Left claimed that President Reagan’s supply-side tax cuts caused deficits to rise. Not so. Then, as today, federal revenues actually increased substantially after the tax cuts (rising from roughly $600 billion to $1 trillion), but federal spending increased even more. Inevitably, then, deficits rose.
The bottom line remains: The federal deficit is a spending problem, not a revenue problem. Don’t ever let anyone tell you anything different.
Cheating in Baseball: Past, Present, and Future
The world of Major League Baseball (MLB) has been rocked by a major scandal. Several teams, most prominently (so far) the 2017 Houston Astros championship team, have been implicated in schemes to steal catchers’ signs to pitchers.
The Astros combined high-tech and low-tech means — television cameras and monitors to detect the signs and then banging on trash cans to alert batters to what kind of pitch to expect. That reduces a pitcher’s greatest advantage — the batter’s uncertainty about what kind of pitch he would face — and Astros’ batters feasted as a result.
Cheating in baseball (and indeed in all sports) is as old as sport itself. The desire to compete, excel, and win is part of human nature. Alas, so are baser tendencies, such as pride, envy, and greed that motivate some participants to cheat.
The good news is that Americans overwhelmingly despise cheating (except in politics, but that’s another story). They want their champions to win fair and square, admiring them for their goodness as well as their athletic accomplishments. Knowing this, the overseers of professional sports — league commissioners, team owners, and, by extension, corporate advertisers — strive to maintain the integrity and fundamental fairness of their “product” — their sport. They know they can’t afford to let some bad apples ruin the market for the sport for everyone.
MLB’s current cheating scandal is far from its first, and certainly won’t be its last. Coincidentally, this one has come exactly one century after MLB’s biggest scandal — the infamous Black Sox scandal, in which several Chicago White Sox players accepted bribes from gamblers to throw the World Series. To rescue MLB’s reputation, Commissioner Kenesaw Mountain Landis banned eight Chicago players for life, including the great “Shoeless Joe” Jackson, even though Jackson (as we are reminded in the great movie “Field of Dreams”) played flawlessly.
MLB has strictly prohibited players from getting involved in gambling ever since. This is why the sport’s all-time hits leader, Pete Rose (who bet on games, although he was never suspected of throwing a game), hasn’t been inducted into baseball’s Hall of Fame. As one who greatly admires Rose’s skill and considers him to be one of the top two hitters I ever saw bat in person (the other was Ted Williams), I agree with Rose being banned. The sport must be bigger than any individual player, and MLB can’t afford to send out the morally dubious message that one can get away with misdeeds if one is a star.
There have been all sorts of relatively minor episodes of cheating in MLB’s history. Some players have used corked bats. Pitchers have found sneaky ways to “doctor” the ball. But the biggest scandal between the Black Sox fiasco and today’s depressing news was the steroid/performance-enhancing drugs scandal that erupted early in the previous decade.
One of the great attractions of sports is the possibility of seeing prodigious feats of athleticism that are beyond the reach of ordinary human beings. One of the most impressive things I’ve ever seen in baseball happened in 1998. I was visiting a friend in St. Louis who happened to pitch BP (batting practice) for the Cardinals. That was the year the Cards’ Mark McGwire hit the astounding total of 70 home runs. My friend and I (along with 10,000 to 15,000 other fans) went to Busch Stadium two hours before the game to watch McGwire take BP. Watching him crush ball after ball, sending them speeding to the far reaches of the park, was breathtakingly awesome.
Alas, though, the stunning feats of certain sluggers and pitchers in the ’90s and early 2000s were tainted when it came to light that players were taking drugs that bulked up their musculature and strength. Players were no longer competing on a level field, and it left a bad taste in the mouths of baseball fans. While MLB seems to have suppressed the most flagrant performance-enhancing drug abuses, from time to time, players are still caught and punished.
The last thing MLB needed today was another cheating scandal, but here we are. Baseball fans are united in agreement that such cheating is wrong and unacceptable. The only debate is whether the penalties assessed to the Astros — suspension of their manager and general manager for the 2021 season, forfeiture of the team’s top two draft picks in the next two annual drafts, and MLB’s maximum allowable fine of $5 million — were harsh enough.
Should the commissioner strip the Astros of their 2017 World Series championship? That would certainly disincentivize such cheating. But what would MLB do — award the championship to the team that lost the series? But what if they cheated, but eluded detection? Have no champion at all? These are not attractive options. Plus, the full extent of the sign-stealing cheating isn’t yet known. Multiple teams have been implicated, including the Boston Red Sox, which won the 2018 World Series.
MLB is facing the grim possibility that more than one championship season has been tainted by cheating.
By the way, let me suggest a simple solution for the sign-stealing problem. Technology made the cheating possible, and technology can end it. Just have catchers wear a small device by which they can transmit their signal (encrypted, of course!) to a similar device worn by the pitcher.
And while I’m at it, let me do something very dangerous for an economist: make a prediction. Baseball may have a problem, and probably sooner than later, caused by advances in artificial intelligence (AI).
As shown in the movie “Moneyball,” MLB general managers are making increasing use of sophisticated quantitative analyses to assemble winning rosters at affordable prices. As such analyses become increasingly advanced, inevitably, AI is going to produce a blueprint for how to squeeze out a few more wins over the course of a season — the difference between qualifying for the playoffs or not.
Just as MLB is now looking at machines to take over the calling of balls and strikes from fallible human umpires, AI conceivably could produce a scenario in which a team’s human manager ends up being little more than a messenger boy from the AI program to the players. It could be AI, not a human being, determining which players to play against given opponents and at what times to make substitutions, bunt, throw a curve, steal a base, etc.
We live in an age of computers, so MLB can’t and won’t ban the use of computers. But what will happen if the team that has the most powerful, advanced AI wins championships? Ugh.
Ultimately, cheating is a moral problem. Cheaters are tempted to believe they will gain by their cheating, but then, when they get caught and disgraced, their glory turns to ashes. They see the respect of fans slip away like quicksilver, and they realize that their phantom “achievement” was nothing more than fool’s gold. Think of the shame that Joe Jackson (guilty or not) must have felt in that famous moment when a boy who was one of his fans mournfully pleaded with his hero, “Say it ain’t so, Joe.”
Perhaps, we as a society need to revisit more often those cautionary tales of making deals with the devil, of sacrificing one’s human legacy and immortal soul for short-term material gain. Faust, Mephistopheles, Dorian Gray — even Joe Hardy in Broadway theater’s paean to baseball, “Damn Yankees” — these and other fictitious stories teach us the great truth that doing wrong never ends well.
And so it is proving in baseball as in other areas of life.
The Real Christmas
Amidst this season of gift-giving and merry-making, let’s ponder three remarkable aspects of the nativity of the baby Jesus two millennia ago.
1) Birth to a Virgin — To atheistic materialism, this seems like a fairy tale. Spiritually, though, what could make more sense? God is supreme; therefore, the divine supersedes the human and the spiritual trumps the material in every way. Jesus’ birth, resurrection, and ultimate departure via ascension illustrate that fundamental point. (See Isa. 55:9.)
Indeed, throughout his earthly sojourn, Jesus repeatedly transcended material limits and so-called laws. He walked on water; transported a ship to shore instantaneously long before anybody dreamed of “Scotty, beam me up”; he instantaneously healed leprosy, a man born blind, and a withered hand; he fed thousands of people with a few loaves and fishes, and ended up with more food than he started with; he restored life to Lazarus after four days in the grave; Those are but a few examples, of course.
Skepticism doubts the historical authenticity of these occurrences, and instead claims that humans have evolved from a primordial ball of gas — that beautiful art, loving hearts, selfless giving, and feelings ranging from grief to joy are mere chemical reactions of no permanent significance. Question: Who/What created that ball of gas? No, my atheistic friends (I used to share your beliefs), I’ll trust Jesus’ assurances of eternal life given by a loving, all-wise Creator. That doesn’t seem nearly as superstitious to me as the ball-of-gas theory.
2) Mary and Joseph — What perfect models of parenthood are Jesus’ human parents: loving, nurturing, protective. Mary’s utter purity and her humble willingness to make her will subservient to God’s remain awesomely exemplary. Joseph, too, was spiritually receptive and humbly obedient. He accepted the angelic message about Mary’s miraculous conception, and was totally supportive and protective of his wife, even though the baby she carried was not his own, even as she was betrothed to him. Later, he heeded the angel’s warning about Herod’s deadly intent, and without delay took Mary and Jesus to safety in Egypt until the danger had passed.
3) The mission of Jesus — The Jewish people had been anticipating the Messiah/Christ/Anointed One to deliver them from Roman oppression. The name “Jesus” means “Joshua” — the same as Moses’ successor, a powerful military leader who vanquished the Jews’ enemies. But the child Jesus came to Earth with a higher mission.
Jesus came first to the Jewish people, because they were the only monotheists and it was the Hebrew prophets who had foretold His coming. However, Jesus did not come to save only Jews. His mission was not tribal, but universal. As the famous scriptural verse from John states, “God so loved the world that He gave His only begotten Son, that whosoever believes in Him shall not perish, but have everlasting life” (John 3:16). “Whosoever” — not just the genealogical descendants of Abraham.
Furthermore, Jesus’ mission wasn’t the limited goal of political liberation, but the boundless goal of everlasting salvation from all the enslaving enemies of all humankind: sin, sickness, sadness, and death. He came to replace mortality with eternal life and the woes of this world with the bliss of heaven.
The magnificent core of Jesus’ teachings is sublimely simple: Love God wholeheartedly and your neighbor as yourself. We humans — even self-professed Christians — haven’t completely mastered those rules yet, but we are gradually making progress. Certainly it is encouraging that the oppressive Roman Empire is long gone while billions of people have accepted the sovereignty of the Savior, Jesus Christ. As His message of love for one another warms more hearts and animates more lives, war will diminish. Jesus is indeed “the prince of peace.” Hallelujah! And thank you, Lord. *
Mark W. Hendrickson
Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision & Values at Grove City College, Grove City, Pennsylvania. These articles are from The Epoch Times, and Visionandvalues.org, a publication of Grove City.
The Evolving Social Context of Parenting
Procreation has been one of the few constants throughout history. Indeed, it is the sine qua non of human existence — no procreation, no human race.
For centuries, it wasn’t unusual for a wife to be pregnant a dozen times or more. It involved little planning, but was more like a biological imperative, impelled by the survival instinct. It was a numbers game: A certain percentage of pregnancies did not culminate in live births, and due to malnutrition, poor sanitation, and the ravages of disease, many children didn’t survive until adulthood. The hope was that two or three children would make it to adulthood and be able to care for their parents during their senior years.
Multiple developments in the last few centuries have radically altered the parental calculus. In America, the land of opportunity and individual freedom, economic progress elevated standards of living higher and higher, resulting in declining death rates and increased longevity. Twentieth-century medical advances against disease gave longevity an additional boost, raising life expectancy from the mid-40s in 1900 to the upper-70s by 2000. With higher survival rates, the incentives to have many children were reduced.
The steadily increasing prosperity of the 19th and 20th centuries had a profound impact on family life. As the productivity of parents’ labor increased, and incomes rose, children were liberated from the necessity to work. Instead, they could go to school. Economic progress enabled “childhood” to become a period in which children were increasingly exempt from the responsibilities of adulthood. They could be “children” as we think of them today, not just little people working alongside big people (adults) in the grim struggle for survival. Eventually, the productivity of labor grew to the point where a father could earn enough to become his family’s sole breadwinner, enabling the mother to stay home as a full-time mother.
This sociological phenomenon — sometimes called the “Ozzie and Harriet ideal,” after a popular TV show — peaked in the 1950s. While still the basis of our society today, starting in the 1960s, the nuclear family consisting of a working dad, a stay-at-home mom, and kids was buffeted by several major challenges.
In the early 1960s, the birth control pill came on the scene. A wedge was driven between sex and procreation; family ties started to loosen. By the late ’60s, the emerging environmentalist movement popularized the notion that a human population explosion, resulting from plummeting death rates and too-high birth rates, would quickly engulf the world in lethal disasters. According to groups like Zero Population Growth (ZPG), human survival depended on us having fewer babies.
In the 1970s, abortion was legalized, making it even easier to separate sex from parenthood and obviously reducing the number of live births. Concurrently, the women’s liberation movement was rebelling against the Ozzie and Harriet model, arguing that women should no longer feel obligated to have babies, but instead should pursue whatever vocation they wanted to and not take a back seat to men in the economic life of our society.
(For the record, I am glad that females today feel free to pursue whatever goals they set for themselves. My own daughter, as a matter of fact, is making her way in one of the most male-dominated professions. But please remember, ladies, our society depends on enough of you having enough children to keep us going. That isn’t a matter of ideology or personal preference; it is simply a statement of a biological reality: Unless we switch over to having test-tube babies, only women can bear children.)
The Economic Factor — Impacted by these developments, the birth rate in the United States fell dramatically throughout the ’60s. The decline continued until 1975, when it more or less leveled off for a generation before starting to tail off gradually in the wake of the Great Recession of 2008. The concurrence of a falling birth rate with an economic phenomenon like the Great Recession is no irrelevant coincidence.
Yes, technological change (the pill), legal change (abortion), sociological change (feminist movement), and ideological influence (fears of population explosion) have all contributed to fewer adults choosing to have fewer children, but don’t underestimate the economic factor.
I’ve told my environmentalist friends for decades that capitalism is the cure for overpopulation. The explanation is simple: Capitalism generates prosperity, and very few people who have tasted prosperity will procreate their way out of prosperity. Given the choice between having two children and enjoying an affluent middle-class standard of living, and having six children and struggling to scrape by, rational adults will opt for fewer children. Indeed, this underlying economic reality was already in play before the convulsive changes of the ’60s and ’70s — remember: Ozzie and Harriet had only two children.
Unfortunately, I believe that America’s affluence and resulting desire for material ease has gone too far, with some ominous implications. Americans (like people in other affluent countries around the world) are opting for parenthood less and less. Couples are having children at a rate lower than the “replacement” rate needed to maintain a level population. The danger today is not from a population explosion, but a population implosion.
The State as Caretaker — In the modern welfare state, government retirement and health care programs have replaced children as the primary caretakers of senior citizens. Knowing this, many citizens were “liberated” from the traditional reliance on their children to care for them in their senior years. (The exception is seen among my Amish neighbors, who continue to have more children, on average, than non-Amish Americans, and who still faithfully care for their aged parents instead of depositing them in homes where strangers tend to them.)
The problem is, so many citizens in our country and abroad have counted on the state to be their financial support in their senior years that they did not bother to have and raise enough children to produce enough workers to supply the state with enough revenue to be able to pay for sufficient eldercare when the welfare state Ponzi schemes eventually break down.
Sadly, a “who needs kids?” mentality has taken hold. Many adults refuse to have children because they want to enjoy the good life that modern affluence provides. They don’t want what they consider the distraction or expense of raising children to get in the way of their “self-fulfillment.”
In extreme cases, the animus against having children is pathological. About a decade ago, I wrote an article titled “Sex, Life, and Death” that was prompted by hearing the statistic that the second-most common cause of death among pregnant American women was homicide. It turns out that some men murder their lovers for getting pregnant. Those stunted males so intensely want to avoid being saddled with the responsibility of parenthood that they murder their own children and the women bearing them. In their warped mentality, a woman is a sex toy with no right to get pregnant.
Fortunately for all of us, enough Americans are still opting for parenthood in spite of all the cultural and societal headwinds they face. One formidable challenge American parents face today is from those who should be most supportive of children: their teachers — or more precisely, from certain powerful elements within the public school establishment. Let me hasten to say that there are many wonderful, talented teachers in our schools who are real blessings to the children fortunate enough to be enrolled in their classes. Hats off to all of those good people.
The problem is the progressive ideological mindset that permeates public education. When I went back to college after earning my bachelor’s degree to add a teaching certificate, I can honestly state that I was never taught a single thing that would make me a better teacher.
All I ever got were steady doses of thinly disguised collectivist doctrines about how the purpose of education was to “socialize” kids, to make them malleable, compliant, and willing to accept a place in the social order that supposedly enlightened leaders would plan for society. I know of teachers active in teachers unions who believe fervently that parents should surrender their children to public education starting at two years of age, because the “experts” employed by the state know much more about proper child-rearing than parents themselves do.
And then there are the many children in poor neighborhoods, often minorities, who want desperately to escape dysfunctional schools that cripple their intellectual development, but the teachers union and their progressive political allies conspire to deny these children the freedom to attend a better school. That monstrous policy shows that the political establishment doesn’t give a hoot about children, but has become a cynical, oppressive alliance willing to ruin children’s lives for their own self-serving purposes. No wonder so many American parents opt for homeschooling.
One more peek of gloom before I close on an encouraging note: Being a parent in the future isn’t going to get any easier. I am thinking of the potential issues pertaining to genetic engineering. Think of the decisions would-be parents will have to make if the technology of genetic modification gets to the point where humans can customize designer babies. Will couples planning to have children want to equip them with genius IQs? What if you believe that nature shouldn’t be meddled with, but other parents are choosing to use genetic engineering to boost their child’s intelligence (or any other desirable characteristic)? Would you choose to leave your child relatively inferior? And what if the state starts regulating who and how many babies can be genetically enhanced? Then our society would be on the threshold of something akin to Aldous Huxley’s Brave New World with the state, not parents, making life-altering decisions about their children.
The Joys of Parenthood — OK, let’s walk back from that peek into potential darkness and close by celebrating the joy of having children. For those of you reading this who are parents or planning to become parents, God bless you. You are hugely important and much to be respected. You are the ones perpetuating our society and giving us a future, and given some of the challenges swirling around us today, you are to be commended for your courage and strength.
The rewards of parenthood are considerable and incalculable. Think of all you can accomplish as a parent — to give the gifts of life and love and then to be repaid with the priceless reward of a child’s love.
Thank you for all you are doing for society by teaching your children right from wrong. If you are religious, you have the joyous privilege of sharing with your children the good news of a loving God — a just God who will give a full reward for goodness — if not in this world, then in the next. What a sublime accomplishment it is to impart to your children the ability to feel comfortable in their own skin and to gain confidence and a sense of self-worth and security. What a rich reward you will deservedly receive for sharing a love with your children that is so special that, when they grow up, they will want to recreate that love by starting a family of their own.
The bottom line is that parenting — like everything else in this world — is confronted by challenges and pitfalls, but it can bring a joy unmatched by anything else this world has to offer. Again, God bless you parents — and your children.
Educational Malpractice on a Massive Scale: The Exploitation and Indoctrination of Children
During the World Economic Forum conclave in Davos, Switzerland, at the end of January, more than 60,000 students around the world boycotted their classes to urge world leaders to do more about climate change, according to a report from the British newspaper The Guardian.
While teenagers demonstrating peacefully may seem innocuous, if you look beneath the surface, the view is disturbing, scandalous, and ugly.
I commend kids for caring about their world. And I strongly believe there are times when children can teach their elders valuable lessons. Not only can they teach us beautiful lessons of kindness and forgiveness, they can also teach us practical knowledge that we lack. Think about how many adults turn to youngsters for help handling their digital devices.
What is so ominous about the kids’ climate protests is the cynical way in which their elders have exploited them. The kids acted in good faith on the basis of what adults — particularly their schoolteachers — have taught them about climate change. These caring young people have been taught (actually, mistaught) the simplistic and fallacious dogmas of politicized climate change “science” — that CO2 is the grand regulator of global temperatures and that, in the reckless words of Rep. Alexandria Ocasio-Cortez, “the world is going to end in twelve years if we don’t address climate change.”
I’ve repeatedly rebutted the assertions of the climate-change narrative of the global political elite, but the reality of these recent (and upcoming) student protests is how those poor kids have been duped and exploited by their schools. What business do the teachers of the world have in teaching wildly speculative theories as fact, and influencing students to become activists in a particular ideological and political movement?
Indoctrination — My colleagues and I have lamented that the students coming into our college classrooms have had increasingly poor writing skills over the past few decades. One reason for this is that students are being taught climate-change hokum instead of the basic skills that would serve them so well in their adult careers. Education should teach youngsters how to think rather than indoctrinate them into what to think.
And what are these youthful climate-change protesters really protesting? Look at what the 16-year-old Swedish girl who started the strike movement said:
“Some people — some companies and some decision-makers in particular — have known exactly what priceless values they are sacrificing to continue making unimaginable amounts of money. . . . I want to challenge them into real and bold climate action, to set their economic goals aside and to safeguard the future living conditions for humankind. I ask you to stand on the right side of history.”
The anti-capitalist bias in these words is obvious. What she is really protesting isn’t global warming, about which humans can do so little, it’s markets and profits — in short, capitalism. And this goop about “the right side of history” is pure Marxist claptrap.
The educational malpractice of indoctrinating children into being climate-change warriors (a variation of the Hitler Youth) has been deliberate. Indeed, it has been an elaborate, thoroughly thought-out strategy of the Left for decades. Progressives, socialists, and Communists, have never been shy about expressing their intention to use schools for indoctrination.
Marx’s 10th point in his 10-point platform for how to achieve socialism by the democratic route was for the state to control the schools.
The late Italian Marxist Antonio Gramsci wrote:
“Socialism will triumph by first capturing the culture via infiltration of schools, universities, churches, and the media by transforming the consciousness of society.”
UNESCO, the U.N. bureaucracy that focuses on children, wrote in its book, called “Education for Sustainable Development Toolkit,” that “Children are the key to changing society’s long-term attitudes to the environment.”
The same blatant propaganda campaign has infiltrated many of America’s public schools. In 1990, President George H. W. Bush signed the National Environmental Education Act, which put the green foxes in the Environmental Protection Agency (EPA) in charge of guarding the chicken coops of our public schools, by clearing green educational materials through an Office for Environmental Education.
A report in Education Week in 2011 noted that students in Maryland had to demonstrate that they had learned the mandatory green curriculum in order to graduate. Another 2014 report “found that global warming is being taught in almost every area of the [UK] curriculum.”
As the report’s authors write in their conclusion: “The fact that children’s ability to pass their exams — and hence, their future life prospects — appears to depend on being able to demonstrate their climate-change orthodoxy is painfully reminiscent of life in Communist-era Eastern Europe or Mao’s China.”
I mentioned Ocasio-Cortez above. She is young enough to have gone through her entire academic career subjected to green propaganda, so her alarmism shouldn’t surprise us. Even where I lived in the hinterlands, the green curriculum has been in place for several decades.
Here’s a personal story: In the late 1990s, I served for four years on a curriculum advisory committee for my local school district. I examined the environmental curriculum in detail and discovered numerous errors. When I provided corrections to the curriculum coordinator, she looked annoyed when she accepted my report, and refused to make any changes in the curriculum.
As if the hijacking of education by ideologues to indoctrinate children isn’t reprehensible enough, there are more troubling aspects to green indoctrination in schools. The first is the psychological damage inflicted on innocent children. Many have suffered from anxiety and depression due to the lurid descriptions included in many climate-change predictions. The second is the threat to families.
Part of the green message drummed into impressionable children is that it is up to them to teach their ignorant or obtuse parents the “truth” about climate change. Lenin once told the Soviet commissars of education in 1923: “We must teach our children to hate their parents if they are not Communists.”
Well, the greens aren’t using the word “hate,” but they are suggesting to kids that their parents need to be corrected.
Al Gore told children a decade ago that while their parents undoubtedly mean well, they don’t have access to the latest “scientific” information that the students will be given in school. In other words, believe schools, and not your parents, if they doubt the alarmist scenario.
How fiendish and cruel! Teachers are putting children in a position where they have to choose between respecting and trusting their parents or respecting and trusting their teachers. The teachers have the advantage, because they have been pushing the same green message for years. I wonder how many young Americans are going to be alienated to various degrees from their parents because of disagreements about climate change.
For schools to take a side on controversial issues (besides being a departure from the correct purpose of school) is unfair to families. And picture what it must be like for those youngsters who realize at some point how they have been systematically deceived by their teachers: Can you imagine how hurt and betrayed they are going to feel?
Teaching the green agenda of climate alarmism in schools is child abuse. It’s diabolical, wrong, and un-American. It must be stopped.
Was Last Weekend a Portent of Things to Come?
What a nasty weekend! There were at least four reported cases of left-wing citizens abusing political officeholders or office-seekers either physically or verbally.
It’s concerning that surly, aggressive behavior is bubbling up already — a whopping 17 months before the election — and Antifa hasn’t even gotten into the act yet.
Here, in case you missed some of the action, is what happened.
This is the only one of the four incidents in which the politician involved isn’t running for president. It was also the only one in which a Republican was targeted, and the only one in which the politician was physically struck. A woman, reported to be a “former political rival” of Rep. Matt Gaetz (R-Fla.), hurled her drink (cup and contents) at the congressman, hitting him in the torso.
Thankfully, Gaetz wasn’t hurt. Indeed, given the nature of the projectile, the intent appears to have been to disrespect him, not to injure him. Compared to the attacks on two other Republican lawmakers in 2017 — the shooting of Rep. Steve Scalise and the smashing of Sen. Rand Paul’s ribs — what happened to Gaetz was mild. This has led to some pathetic attempts on the left to defend the woman’s actions.
So, what is the left’s standard — that attacks against Republicans are justifiable as long as they don’t send the target to the hospital? That’s setting the bar of permissible conduct far too low.
No member of Congress or congressional candidate should have to wonder if they’re going to be attacked for speaking in public about what policies they favor. Such actions are brutish and fascistic. They are an assault against our democratic system whereby citizens settle disagreements at the ballot box, and candidates are as free as the rest of us to exercise their First Amendment right to free speech. In fact, I’m sure that there are already decent, qualified citizens who have decided not to run for office because of the threat of such thuggery.
Why do progressive activists act as if the normal rules, laws, and social conventions don’t apply to them? Too many of them are so drunk with their own sense of moral superiority that they feel justified in assaulting those who disagree with them.
Headline No. 2: “Protester Grabs Mic from Kamala Harris”
A young man — apparently an animal rights protester — ran onto a stage where Sen. Kamala Harris (D-Calif.) was speaking and seized her microphone. The man said he wanted more attention given to “a much bigger idea.” He didn’t get too far before he was removed from the stage — again, thankfully, without anybody sustaining an injury. From this incident, we can conclude that, as far left as the Democratic Party has turned early in this election cycle, it’s still too conservative for some people.
A message to this protester and other would-be protesters: If you want to call attention to your favorite cause, you are free to do so. Write articles and books, hand out flyers in public, rent a public hall and give a speech, run for office. But please don’t think you have a right to hijack someone else’s event. That is disrespectful, undemocratic, and a form of theft. It is also self-defeating. Many of us who sympathize with some animal rights’ groups’ less-extreme ideas will turn our backs on activists who don’t respect the rights of other human beings.
Happily, the last two incidents don’t involve any sort of physical harassment. The harassment was verbal. Democrats booed fellow Democrats running for their party’s presidential nomination for daring to compromise on the socialist agenda.
In the first of the two booing incidents, the crowd got onto former Colorado Gov. John Hickenlooper at the California Democratic Convention for saying, “Socialism is not the answer.” The democratic socialists are going to make life hard for any candidate who doesn’t hop aboard the “full speed ahead to socialism” train. The ideological zealots on the left are going to rip any candidate who offers them half or two-thirds of what they want.
They would rather risk four more years of President Donald Trump and achieve almost none of their goals, rather than unite behind a candidate who doesn’t promise them the whole loaf. Whether this gamble pays off for them may be the biggest story of Election Year 2020 and may chart the course for our country.
It will be interesting to see if any Democratic contenders who don’t unreservedly promote socialism gain any traction in the race. If so, expect a civil war in the Democratic Party; if not, it will be a standard-bearer for socialism versus Trump next year.
Hickenlooper wasn’t the only speaker at the California Democratic Convention who elicited boos. Former Maryland Rep. John Delaney was booed for a solid minute for expressing reservations about “Medicare for All.”
“We should have universal health care, but it shouldn’t be the kind of health care that kicks 150 million Americans off their health care. . . . I want everyone to have health care, but it’s got to be a plan that works for every American.”
I suspect a majority of Americans would agree with such a reasonable statement, but the pro-socialism crowd rejected it roundly. This inspired the ever-outspoken Ocasio-Cortez to write on Twitter that Delaney should “sashay away” (i.e., drop out of the race).
Delaney actually was trying to do his party a favor by urging them to craft a Medicare for All program that would actually deliver on its promises. Apparently, though, the socialists are so convinced of the rightness of their cause that they care less about passing competent, helpful legislation than about squashing all opposition to their grandiose socialistic plans. What contempt this shows for the American people!
Last weekend’s incidents portend a toxic, bruising political brawl over the next year and a half. Fasten your seatbelts, folks. This could get uglier than anything that any living American has ever seen before. *
Mark W. Hendrickson
Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision & Values at Grove City College, Grove City, Pennsylvania. These articles are from The Epoch Times, and Visionandvalues.org, a publication of Grove City College in Grove City, Pennsylvania.
Alexandria Ocasio-Cortez: A Force To Be Reckoned With
Whatever else you may think of her, first-time Congresswoman Alexandria Ocasio-Cortez (AOC) is a great American success story. Hers is a classic “triumph of the underdog” tale. Nobody expected her to upset 10-term incumbent Congressman and Chair of the House Democratic Caucus, Joe Crowley, in last June’s Democratic primary in her New York City congressional district, but she did. Using her apartment as her campaign headquarters and going door to door in her district, AOC proved once again that a motivated, hard-working American can succeed against long odds.
AOC is clever and shrewd in some ways, embarrassingly clueless in others. On the positive side, she is media savvy and shows astute political instincts. On the negative side, to put it mildly, her understanding of American government is deficient (she didn’t even know what the three branches of government are), her grasp of economic and history is minimal (she espouses the ideology of socialism despite its inherent flaws, e.g., no economic calculation or coordination is possible without private property, market-based prices, and a profit-and-loss calculus), and she seems oblivious to elementary arithmetic, as evidenced by her proposals for Uncle Sam to spend tens of trillions of dollars more than exist in spendable form.
Conservatives seem to think AOC will self-destruct by repeatedly showing her economic obtuseness, but they are wrong. They are underestimating her ability to exploit media and her political acumen. Last summer after her primary victory, AOC was a guest on “The View.” Channeling King David’s son Absalom — the prototype for using flattery and charm to further one’s political ambitions — she effusively hugged each of the five hostesses, gushing and giving them her best “Oh, I’m so privileged to meet you” greeting.
In her interview on “60 Minutes,” she alternately voiced clever, quotable sound bites at the expense of Republicans and responded to questions about her apparent factual inaccuracies by playing the role of a disarmingly innocent political neophyte who admittedly hadn’t mastered all the details, but whose heart is in the right place.
On Twitter, she drops the innocent act and reveals herself to be a rough-and-tumble street fighter. Examples: She rallied to the support of fellow freshman congresswoman Rashida Tlaib after Tlaib publicly referred to President Trump as a “motherf*****,” tweeting, “I got your back.” She also isn’t bashful about disrespecting non-Republicans. Advised by one-time Democratic vice presidential nominee Joseph Lieberman to take a more moderate approach, she caustically tweeted, “New party, who dis?”
Like it or not, AOC, by virtue of her two-million-plus Twitter followers and as the fresh new face alongside Bernie Sanders at the forefront of America’s democratic socialist movement, has established herself as a force to be reckoned with on the national stage. Her fund-raising clout is bound to be considerable. This will enable her to chart an independent course, much to the frustration of Speaker of the House Nancy Pelosi. Expect AOC to drag Democrats even further to the left whether they really want to go that way or not.
Politically, her proposals — no matter how over-the-top, ridiculous, or unviable — will actually enhance rather than hurt her popularity. As the great Austrian economist Ludwig von Mises wrote nearly six decades ago, it no longer matters, politically, “whether a measure is fit to produce the ends aimed at. What alone counts for [the politician] is whether the majority of voters favor or reject it.” Sadly, wisdom and knowledge are not nearly as important in democratic politics as impassioned promises for a Santa Claus government to give voters free goods. Voters believe in the Santa Claus fantasy, and AOC is playing Santa to the hilt, promising free health care, free college, etc.
Another factor enhancing AOC’s popularity is her public stance that she would rather lose her seat in Congress than compromise her principles. In this day and age when few politicians are known for sticking to their principles, AOC stands out from the crowd.
She may know precious little about sound economics, but she has a keen nose for power. That is why she advocates the abolition of the Electoral College — because it is an obstacle to the mighty (and mighty dangerous) power of unbridled majoritarianism that our wise Founders rightly understood to be one of the greatest threats to rights and liberty.
The important question going forward will not be the mind of AOC, but what kind of heart she has. Like most prominent leaders of socialist movements, she has a knack for taking care of Number 1. I am referring to her reported unwillingness to divide the wealth equally when her own financial interest is involved. A larger concern is her refusal, so far, to condemn the murderous regime (murder by bullets and starvation) of Venezuela’s socialist president, Nicolas Maduro. This raises the question of whether her support for socialism is that of a naive enthusiast or a convicted fanatic. Let’s hope that her mind isn’t so blinded by the imagined glory of her “grand plan” for a more humane world that she lacks the compassion to disavow socialist policies when they hurt the very people whom they were supposed to help.
“Justice” Is the Word of the Year, and “Social Justice” Is Its Orwellian Opposite
The Merriam-Webster Dictionary has declared “justice” its “Word of the Year” for 2018, owing to a 74 percent year-over-year increase in searches for its definition.
The simple, everyday meaning of justice is the best: treating others fairly. Politically, it means that laws are to be written and administered so that everyone’s legal rights are impartially upheld.
Perhaps the reason why so many people are looking up the definition of “justice” is owing to the confusion caused by political activists twisting its meaning to advance their ideological agendas. Americans have always cherished the ideal of justice, and so those who would reform America seek to legitimize their political objectives by cloaking it in the garb of justice.
Most of the confusion stems from the use of the phrase “social justice.” This is a linguistically problematic phrase — a solecism. It is a pleonasm — a redundancy. Justice, without “social” to modify it, is inherently a social ideal. It’s about how we treat each other. You may say that a person isn’t being just with himself, but that is a private matter of no concern to the government. Only in the social realm of interpersonal interactions does justice properly become a matter of public policy.
Social Virtues — The concept of justice embraced by our Founding Fathers had been clearly articulated in 1759 by the Scottish philosopher Adam Smith in The Theory of Moral Sentiments. Smith cited three cardinal social virtues: prudence, justice, and beneficence.
By prudence, Smith meant that the first social obligation of any competent person is to provide for his own needs and wants so as not to burden others.
Smith considered the second social virtue, justice, to be the most important. It is “the main pillar that upholds the whole edifice” of society. Justice, according to Smith, “does no real positive good” and is “but a negative virtue” that “only hinders us from hurting our neighbor.” Writing 90 years after Smith, Frederic Bastiat, in his essay “The Law,” echoed Smith by defining justice as the absence of injustice, i.e., a society in which nobody’s rights are violated.
Smith writes that the third social virtue, beneficence (i.e., doing good for others), merits the highest praise and is the crown jewel of a good society. Beneficence, though, is never a duty: “Beneficence is always free, it cannot be extorted by force.”
If some citizens were to take the wealth of another citizen and give it to someone in need, that is an ersatz “beneficence” and an antisocial act of aggression against the basic right of property, thereby violating justice. (I write more about the difference between genuine and counterfeit charity in my article about the Good Samaritan.)
The ideal of justice shared by Smith and the founders meant that every citizen was to stand equal before the law, each having the same rights and responsibilities. (Obviously, owing to the abomination of slavery and unenlightened 18th-century attitudes toward women’s rights, the founding generation didn’t achieve complete justice.)
Each white, male citizen, whether rich or poor, was entitled to impartial justice, i.e., the same government protection of his basic rights of life, liberty, and property, as stipulated in the Bill of Rights. And each shared the same responsibilities inherent in that rights-based system: 1) to not infringe on the rights of fellow citizens; 2) to provide for one’s self and dependents (Smith’s virtue of “prudence”) since nobody had a right to someone else’s property; 3) to produce something of value to others in the social division of labor as the means of self-support.
In such a system of ordered liberty, each person reaps what he sows. However, under the influence of egalitarian ideas — the notion that, even though people quite naturally differ by aptitude, effort, and economic productivity, there should be economic parity between citizens — “social justice” advocates reject traditional justice.
Emerging Tyranny — Progressives and socialists want to redistribute wealth by replacing equal treatment before the law (i.e., justice) with a government-engineered regime of unequal rights and unequal responsibilities — based in the Communist ideology “from each according to his ability, to each according to his need.” “Social justice” means that those who diligently fulfill their social responsibility to produce wealth for others should also bear the additional responsibility of financially supporting those who do not fulfill their own responsibility to produce wealth.
Furthermore, those who fail to discharge their social responsibility to provide for themselves are given a “right” to a share of the property of those who do provide for themselves. In other words, under “social justice” theory, the rights of the non-productive are greater than the rights of the productive.
Thus, under “social justice,” traditional justice is inverted and perverted. Furthermore, peaceful social cooperation is supplanted with a socially disruptive political skirmish, in which citizens use government to appropriate the property of other citizens. In short, “social justice” is a code word for “antisocial injustice” — a linguistic deception that is positively Orwellian.
“Social justice” is Orwellian (not to mention un-American) in another sense, too: It seeks to overturn the American concept of government expressed in the Declaration of Independence and codified in the Constitution that holds government to be the protector of the sacred rights of life, liberty, and property, instead of being the instrument for violating those rights.
As John Adams warned, “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
We see signs of anarchical social decay and emerging tyranny all around us today. Under “social justice,” those who hold the reins of political power seek to dictate how much that Citizen A must do for Citizen B. “Social justice” warriors are top-down central planners — would-be tyrants — who believe that they are entitled to reshape society according to their vision. In their plans, they look down on their fellow man.
Smith wrote that these planners (he called them “the m[e]n of system”) view their fellow citizens as men on a chessboard to be moved about and controlled by the planner. Bastiat used the metaphors of a potter and his clay and a pruner and his trees to describe the power that planners want over their fellow man. This evokes Orwell’s cynical but accurate assessment of socialism in practice: “All animals are equal, but some animals are more equal than others.”
The “social justice” crowd should remember the response of Jesus when a man asked him to tell his brother to share his inheritance with him. Jesus replied, “Man, who made me a judge or divider over you?” The “social justice” advocates believe that they are more qualified than the most-just man who ever walked the Earth to impose a certain distribution of wealth on society. No wonder even the mild-mannered Smith cited their “arrogance.”
So, what is the antidote for “social injustice” with its antisocial injustice leading toward socialistic tyranny? It is simply to reaffirm justice. Let’s hope that those currently intoxicated by the Orwellian catnip of “social justice” awake to an honest recognition of what justice truly means.
Understanding “Democratic Socialism”
The goal of democratic socialists is socialism — i.e., government control of economic production. Genuine socialism, when practiced, inevitably leads to economic stagnation and ruin for the following reasons:
1. It destroys incentives.
2. It commits the intellectual error of treating human beings as fungible (i.e., the same, and therefore interchangeable) and so, socialist planners assume that their bureaucratic minions have the same specific knowledge and special talents that enable private entrepreneurs to create wealth more productively and efficiently.
3. It discards market-based prices — i.e., those based on supply and demand, thereby losing the ability to coordinate production rationally and allocate scarce resources efficiently. The inevitable result is the overproduction of some goods — thereby wasting scarce resources — and the underproduction of others, meaning that many people are unable to procure the things they want, making them poorer.
4. Central economic planners, no matter how brilliant or well-intentioned, don’t and can’t know what you and I want as well as you and I know what we want. Capitalism is a system of consumer sovereignty under which firms profit by producing what we want instead of producing what the government commands, as is the case under socialism. (Note: Cronyism isn’t capitalistic but socialistic, because cronyism involves governments, not consumers — “we the people” — determining which businesses prosper.)
The adjective “democratic” is employed to render socialism more palatable, more American, but the label can’t prevent the inherently impoverishing consequences of socialism — of government-planned and -controlled production.
“Democratic” merely specifies the means to the end. The patron saint of socialism, Karl Marx, wrote in The Communist Manifesto that there are two paths to socialism — the quick one of a violent revolution by “exploited” workers (his preference), or the more gradual, progressive implementation of socialism via democracy (see Chapter 2 of the Manifesto). A majority of U.S. workers have been too prosperous and satisfied with life to launch bloody revolutions, leaving the democratic path to socialism as the only viable strategy for American socialists to pursue.
The label “democratic socialism,” like its kindred labels “progressive” and “liberal,” have acted as fig leaves for American socialists, hiding their ultimate goal. In recent years, American socialists have been able to strive for socialism while having plausible deniability that they are socialists. They have truthfully stated that they haven’t explicitly advocated the government takeover of all the means of economic production. Here they have been coy. Instead of calling for complete control, their perennial agenda has called for more control. How much more? They never say — it’s open-ended. You are not likely to hear a socialist politician say that there is too much government control over economic production for the simple reason that socialists believe in and want government control over economic production. But it is significant that, led by Bernie Sanders, progressives now feel safe enough to come out of the closet and admit that they are (democratic) socialists.
Don’t be fooled by the adjective “democratic.” It is not benign. Wait a minute, you say. Isn’t democracy good? Isn’t that what America is all about? Well, as the TV commercial used to say, “Not exactly.”
The word democracy is linguistically problematical, due to ambiguities and different usages. On the positive side, the United States is a democratic system, meaning that people are to be free and that our political system makes government subservient and accountable to the people. The 19th-century poet, Walt Whitman, articulated the essence of America’s democratic ideal thusly:
“… Government can do little positive good to the people, [but] it may do an immense deal of harm. And here is where the beauty of the Democratic principle comes in. Democracy would prevent all this harm. It would have no man’s benefit achieved at the expense of his neighbors. . . . This one single rule, rationally construed and applied, is enough to form the starting point of all that is necessary in government; to make no more laws than those useful for preventing a man or body of men from infringing on the rights of other men.”
The benign version of democracy is rights-based. So is our American constitution.
However, democracy is also a theory of power, and government power poses a perpetual threat to individual rights. That is why American founders James Madison and John Adams abhorred democracy while Communist/socialist icons Marx and Lenin were enthusiastic advocates of democracy.
The contrast is stark:
Adams: “Democracy never lasts long. It soon wastes, exhausts, and murders itself. There was never a democracy that did not commit suicide.”
Madison: “. . . democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or rights of property; and have in general been as short in their lives as they have been violent in their deaths.”
Marx: “The way to achieve socialism is for the masses to ‘win the battle of democracy.’ ” (Manifesto, Chapter 2).
Lenin: “A democracy is a state which recognizes the subjection of the minority to the majority.”
When democracy becomes crude majority rule, nobody’s rights are safe. Instead of peacefully trading with each other in a system where property rights are secure, society degenerates into a vicious squabble as various groups of citizens demand that government give them benefits paid for by other citizens. Many historians have observed the unstable, destructive tendencies of democracy, but the British archeologist and historian Sir Flinders Petrie best articulates the danger of democratic socialism: “When democracy has attained full power, the majority without capital necessarily eat up the capital of the minority and civilization steadily decays.”
Simply because a majority favors something doesn’t make it right or just. Remember, democratic majorities voted for the executions of Jesus and Socrates — two of the most heinous, unjust events in human history. Crude majoritarian democracy can be as violent and oppressive as any other form of tyranny.
Democracy in the eyes of democratic socialists boils down to this: There are more of us than there are of you, so we will take your property and dispose of it as we see fit. This is the primitive ethos of “might makes right.” It embodies the immorality of the thug, the robber, the thief. In the fraudulent name of “social justice,” it tramples genuine justice. It is hell-bent on replacing our rights-based constitutional order with top-down central economic planning — i.e., with a tyranny that dictates who produces what for whom.
Democratic socialists want to replace our rights-based, capitalistic system — a system which, despite its imperfections and inconsistencies, has brought more freedom and more prosperity to more people than any other system — with socialism, a system that has oppressed and impoverished people wherever it has been implemented (see Venezuela today).
Sadly, the degree of economic and historical ignorance among Americans may result in a majority voting for our own destruction. Wouldn’t future historians have a field day explaining such folly?
Bill of Rights Day 2018: A Time to Reflect
Dec. 15, 2018, was Bill of Rights Day. The Bill of Rights (the first 10 amendments) appended to our constitution took effect on Dec. 15, 1791 — 227 years ago. In viewing the status of the Bill of Rights today, it’s possible to adopt either a “the glass is half empty” or a “half full” perspective.
Certainly, relative to China, the Bill of Rights keeps Americans freer. In China, the government is oppressing the Uyghur minority in Xinjiang Province in ways specifically forbidden in the United States by the Bill of Rights. The Chinese government can order one of its agents to live in a family’s house, or send anyone without a trial to a “re-education camp” merely for having given voice to religious ideas, thereby separating parents from their children and often depriving families of their primary breadwinner.
Such tyranny is blocked in the United States by our First Amendment, which guarantees freedom of speech and religion; Third Amendment, which states that government agents cannot occupy houses without permission; Fourth Amendment, the ban on “unreasonable searches and seizures”; Fifth Amendment, prohibiting any deprivation of liberty without “due process of law” — i.e., a lawful public trial by jury and with guaranteed legal counsel as per our Sixth Amendment; and the Eighth Amendment, which bans “cruel and unusual punishments,” such as the arbitrary separation of citizens from their families even though they have done no harm.
Yet, as grateful as we should be that the Bill of Rights protects us from the same cruel oppression of the Chinese regime, the Bill of Rights’ legal protections for Americans have eroded over the past century or so. Just as the body of our Constitution has been mutilated over the years, so it is with our Bill of Rights.
State Power — As is the case in China, the aggression against individual rights come from those who believe that the state must have the power to overrule individual rights in the name of the common good. The ideology that exalts the state as above all is diametrically opposed to the Founders’ vision and values.
The purpose of the Bill of Rights was to codify into the supreme law of the land the principle of government set forth in our Declaration of Independence. The essential premise of the Declaration is that “all men are created equal [and] endowed by their Creator with certain unalienable rights” and that the purpose of government — its very raison d’être — is “to secure these rights.” Further, “that whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it.”
In other words, the government was to serve under citizens, not rule over them.
The Founders — generally wise and learned men — were students of history. They knew that the perennial threat to those sacred rights of individuals was the power exercised by governments. The entire Bill of Rights was written to circumscribe the power and ability of the federal government to infringe on individual rights. This point is unmistakable when one reads the Ninth and Tenth Amendments together. Indeed, these two are rightly understood as Siamese twins.
The Ninth deals with rights. It states, “The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people.” In other words, if a particular right is not specified in the Constitution, the default assumption is that the people have that right.
The Tenth expressly limits the federal government’s power: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people” — i.e., if the Constitution fails to explicitly authorize or stipulate a specific power, then the federal government does not have that power.
There you have it: Where the Constitution is silent, the benefit of the doubt always belongs to individuals’ rights over government power.
Despite that clear language, the federal government has arrogated to itself power to intrude into previously private economic matters. Those extra-constitutional — and therefore unconstitutional — areas of intervention include agriculture, housing, labor, energy, education, health care, retirement, and so on.
Two of the more pernicious results of the expansion of the federal government beyond its constitutional confines are: 1) an unfathomably gigantic national debt that will cruelly burden our children; and 2) a chronic toxicity in public discourse now that nearly every corner of our economic lives has become public and political instead of a private economic issue.
The Founders viewed private property as key inalienable rights that government must uphold. Said John Adams, “If ‘Thou shalt not covet’ and ‘Thou shalt not steal’ were not commandments of Heaven, they must be made inviolable precepts in every society before it can be civilized or made free.” Said James Madison, “[T]hat alone is a just government which impartially secures to every man what is his own.”
Thus, the founders adopted the Fifth Amendment stipulating that “No person . . . [should] be deprived of life, liberty, or property without due process of law.” That meant that even if 99 percent of Americans believed that a fellow citizen had accumulated too much wealth, they could not justly take it from him, even by majority vote. “Due process of law” referred to a legal trial wherein the only justification for taking property from a person was in retribution for crimes committed by that person; an innocent person’s property was off-limits.
That all changed, of course, with the adoption of the Sixteen0th Amendment authorizing a progressive (Marxian) income tax. Since then, democratic majorities have striven to plunder as much private wealth as they can to fund their grandiose government programs.
Erosion of Rights — The progressive ideology that believes that state power is the proper agent to attain a just society consistently wars against the Bill of Rights. For example, progressives — not so unlike the Communist rulers of China — have whittled away at the First Amendment rights of free speech and religion.
According to the Foundation for Individual Rights in Education, close to 90 percent of U.S. colleges “maintain policies that restrict or could restrict student and faculty expression.” And who can forget the Obama administration’s relentless insistence that religious sects that view abortion as murder be compelled to purchase insurance that would cover abortions?
The progressive left also wages perennial war against the Second Amendment right of non-criminals to own firearms. When one remembers the Founders’ vision of government — that all of its powers are derived from the people — then to say that government law enforcement officers (the deputed agents of the people) may carry guns to defend the population, but that the people themselves (the principals whose rights government agents are charged with protecting) may not themselves own, have, carry, and use those same means to defend their lives is absurd.
The true polarization of America’s body politic today is the conflict between the principle that individual rights are primary and government power secondary (the Founders’ vision) and the progressives’ belief that government power must be supreme so that allegedly wise leaders can plan and construct a great society by controlling citizens’ wealth and lives.
It all boils down to the age-old battle between freedom and tyranny.
As we reflect on our hallowed, but tattered, Bill of Rights this year, we would do well to recall an observation that U.S. Sen. Daniel Webster made in 1837: “In every generation, there are those who want to rule well — but they mean to rule. They promise to be good masters — but they mean to be masters.”
The Bill of Rights may be the best legal protection against such ambitious people ever devised in human history. But no constitution or bill of rights is ever self-enforcing. The people have to have the will and determination to uphold it.
Those of us who love liberty and understand the importance of individual rights have an uphill task ahead of us. We need to rebuild the ethical foundations of the American republic if we are to remain a free people. *
Mark W. 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 The Epoch Times, and Visionandvalues.org, a publication of Grove City College in Grove City, Pennsylvania.
Ready for Some Good News?
We are constantly bombarded with bad news. There are disasters, dangers, challenges, and woes. On the political scene, we find perpetual discord peppered with lurid denunciations and shrill condemnations. Media reports are alternately dismaying, disappointing, distressing, disgusting, or depressing. But despair not, friends: All is not lost!
Here let me serve you a heaping helping of good news: The world is more prosperous and more peaceful than it has ever been before.
To those of us who came of age in the ’60s, the two most pressing problems in the world were poverty and war. Fifty years later — Voila! — there is a lot less of those two blights on human life.
Let’s start with poverty: In the mid-1970s, there were approximately 3.5 billion people on Earth and two billion of them were poor and hungry. Forty years later, there were 7.3 billion people and 767 million in severe poverty. In less than two full generations, the proportion of severely poor humans has plummeted from five in nine to one in nine. Nothing remotely similar to this massive economic progress has ever happened before.
Look at poverty in a longer-term context: In 1820, near the dawn of the Age of Capitalism, 94 percent of people were poor. Indeed, throughout all of human history before then, only a tiny elite prospered while over 90 percent of humanity barely subsisted. At the end of World War II, there had been significant progress, but over 70 percent of the people alive were severely poor. Then look: in 1981, 44 percent of humans were severely poor; in 1990, 37 percent; 2010, 16 percent; 2013, 10.7 percent. This is an astonishing achievement.
Here let me interject a cautionary note: While we are on a trend to potentially eliminate severe poverty entirely by 2030, don’t count on that happening. Flawed humans have an amazing capacity to mess things up. Just look at Venezuela today. In 1950, Venezuela had the fourth-highest per capita GDP in the world. Today, crippled by socialist policies, Venezuela has been reduced to an economic basket case with people starving to death. (Americans enthralled by Bernie Sanders, take note.)
Now, back to the good news: More people are enjoying peace and prosperity than ever before. Poverty has receded to the degree that governments around the world abandoned socialistic policies and unleashed market forces. Billions of people gained greater freedom and opportunity to work, invest, produce, profit, and trade with each other, both domestically and internationally.
Indeed, an under-appreciated aspect of market liberalization (i.e., the freeing of economic activity from government controls) has been the increased freedom to trade across national borders. After two world wars with a trade war/depression sandwiched in between, enlightened statesmen in the 1940s (with Americans taking the lead) worked diligently to craft a more peaceful, prosperous world by lowering trade barriers and strengthening commercial ties.
The underlying economics is simple: Every time the social division of labor is expanded through the inclusion of more people in the marketplace, the greater the range of talents and products available to consumers and the more competition, specialization, efficiency, comparative advantages, and economies of scale impel producers to improve quality and lower prices. In short, more trade leads to more prosperity. And as greater international commerce demonstrates that trade increases prosperity, people realize that it is self-defeating to wage war against the very people who are supplying things we want.
The theory that trade conduces to peace has been borne out in practice. As international trade has expanded greatly since WWII, the incidence of war has plummeted. By one calculation, the number of wars was ten times greater in the century before 1950 than in the 50 years after. Harvard scholar Steven Pinker avers, “the world is less violent now than at any time in history.” Let us be grateful.
The post-WWII order — more trade, more prosperity, and more peace — is worth preserving. We should celebrate the amazing progress against the twin scourges of poverty and war, even as we continue to aim for their eventual elimination. Let us urge our leaders to remove the remaining barriers to trade. True, current trade rules are not always fair. They need to be improved, as President Trump is trying, but let’s not allow the perfect to be the enemy of the good and collapse the post-WWII order of trade and peace. Our unprecedentedly peaceful and prosperous world is a whole lot better than a world of national isolation, lower standards of living, and war.
Good News, Bad News about Divorce
First, the good news: “Millennials Are Causing the U.S. Divorce Rate to Plummet.” As reported by Ben Steverman on Bloomberg.com, Census Bureau data show that millennials’ divorce rate is so much lower than baby boomers’ divorce rate that the overall divorce rate has plunged by 18 percent from 2008 to 2016. The evidence indicates that young couples are less likely to rush into marriage and subsequently realize they had made a mistake.
Unfortunately, as encouraging as a falling divorce rate sounds on the surface, there is some bad news associated with it, too. As the Steverman report states:
“Many poor and less educated Americans are opting not to get married at all. They’re living together [and] often raising kids together [but] studies have shown these cohabiting relationships are less stable than they used to be.”
Although marriage is one of the most private institutions in a society, the state of marriage in a society has profound economic consequences. Repeated tabulations of data by social scientists shows a high correlation between being married and being prosperous. Economist Robert Whaples argues that after people get married, on average they are perceptibly more productive and earn more regardless of whether they were born prosperous or poor.
Further, Whaples shared key statistics about poverty among the married and unmarried. In 2005 (the most recent year for which he had data at the time he filmed his lecture series), the poverty rate was 7.8 percent for intact white American families and 8.2 percent for intact black American families. Combined with contemporary U.S. Census Bureau data that the poverty rate for unmarried mothers with children was 40 percent while it was only 8 percent for married couples with children, we can form two conclusions: 1) The much higher incidence of poverty or near-poverty among black Americans is not a racial gap, but a marriage gap, attributable to the much higher rate of white American families remaining intact compared to black American families. 2) In the words of policy analyst Robert Rector of the Heritage Foundation, marriage is “America’s greatest weapon against child poverty.”
Another salient point in Steverman’s report about America’s falling divorce rate was that the difference in marriage rates among the economically well-to-do and the economically marginal members of our society is “a sign of America’s widening chasm of inequality.” Yes, it is, but this trend is nothing new; on the contrary, it has been going on for decades.
The widening chasm of economic inequality to which Steverman referred is one of the central points in Charles Murray’s 2012 book Coming Apart. In it, Murray cited abundant data showing that the economic gap between affluent and economically marginal Americans has paralleled the widening gap between married and unmarried adults. Although it would be an oversimplification to assert that marital status is the single determinant of whether an American leads a prosperous life or not, it is clear that the perennial divide between the economic haves and have-nots is a divide between the married and unmarried.
The seemingly intractable persistence of a two-tier society must be frustrating the heck out of the social justice warriors and the inequality fanatics. The whole social engineering cult is besotted with the belief that it can construct a “great society” — i.e., one in which everyone shares more fully in the fruits of affluence — from the top down. The increasing incidence of unmarried Americans thwarts that egalitarian goal.
What, then, are the social planners to do? Would a federal Department of Marriage produce a larger number of happier marriages? Or should Uncle Sam ban marriage for everyone on the ground that it produces unequal economic outcomes? Even the most fervent of social planners can see what a nonstarter that is. Should married taxpayers pay a penalty to subsidize their poorer, unmarried compatriots? Would the favorite progressive prescription, “Raise taxes on rich corporations,” somehow result in more Americans marrying or help already married couples stay together? Hardly.
The marriage/wealth gap should enable everyone to see the limits of social engineering. There are certain things that the state simply cannot do. No government policy, program, or agency can mold citizens into individuals with loving hearts and the strength of character to accept responsibility and make long-term commitments.
Conservatives don’t have an easy answer for this problem either, although they reject out of hand the notion that it is up to government to “fix” the marriage problem.
That leads me to a humble suggestion for how more Americans can build a foundation for lasting marriages and the economic prosperity that generally follows. A successful marriage flourishes among individuals who are selfless enough to love others and to honor their duties. Marriage works best if the marriage partners have glimpsed the spiritual truths that it is sometimes better to give than to receive and to be of service to others instead of always prioritizing self-indulgence. Marriage is strengthened when husband and wife share the noble aspiration to live for a higher cause than just momentary whims and desires. Where are such values to be taught and inculcated? In church — maybe not in every church, but for 2,000 years, church has done much to prepare people for the demanding and fulfilling joys of marriage. Turning to the divine for guidance has blessed the lives of billions of people, including many generations of Americans. It can do the same today, if people will give it a try.
Spending More on Debt Than Defense
The financial health of the federal government has been deteriorating for decades. Unable to break free from our bipartisan addiction to deficit spending, the national debt has continued to rise relentlessly. This has brought us within sight of a grim milestone: the day when the interest that Americans have to pay on the national debt exceeds what we pay for national defense. According to The Wall Street Journal article, “U.S. on a Course to Spend More on Debt Than Defense,” we will reach that baleful milestone in only five years.
The figures are startling. In 2023, military spending is projected to be more than $700 billion. Yet in that same year the annual interest that taxpayers will pay on the national debt will be even higher.
You can argue that the federal government spends too much on defense. That is an unknowable except in retrospect, but the cost of spending too much on defense is almost certainly less than the cost of not spending enough. Whatever you think about defense spending, at least it is for present consumption. By contrast, interest on the national debt is for past consumption — over $27 trillion worth by 2023. That is how much young taxpayers will have to pay to service the debt run up by their elders.
When the enormity of this predicament dawns on stressed taxpayers, progressives assuredly will blame defense spending for our massive indebtedness. Of course, progressive opposition to defense spending has been a virtual constant for decades.
The fundamental problem with blaming Uncle Sam’s sorry fiscal state on defense is that, unlike those myriad other federal programs that have contributed to the national debt, defense spending is one of the few activities that Uncle Sam engages in that is explicitly authorized by the U.S. Constitution. For well over a century now, animated by the belief that the federal government should provide economic assistance to Americans, progressives have pushed for government to expand into areas of life never envisioned by the Founders nor authorized by amendments to the Constitution. It is no wonder that progressives attacked Justice Kavanaugh from the moment he was nominated. They fear and despise his respect for the text of the Constitution, because they want to spend more money on things not stipulated in the Constitution and less on what is stipulated in the Constitution.
Indeed, the progressive agenda of expanding government beyond its historical, constitutional confines has been hugely successful. Defense spending as a share of the federal budget has fallen from an average of 48.1 percent from 1792 to 1860 to under 25 percent today.
Defense spending no longer takes up the largest share of federal spending. In Fiscal Year 2015, Uncle Sam spent $609 billion on military programs, $1,051 billion on Medicare and health spending, and $1,275 billion on Social Security, Unemployment & Labor.
Today, military spending is only the third largest category in the federal budget. In five years, when interest payments on the national debt surpass it, military spending will be the fourth largest.
The federal government is in uncharted waters, financially speaking. Historically, the federal government incurred significant debt only in wartime and then whittled away at that debt during peacetime. In the modern era, when federal spending expanded into new areas, the national debt has swollen rather than shrunk during peacetime. The fiscal problem, then, is not due to military spending, but to other spending.
Sooner or later, something will have to give. We eventually will have to learn to live within our means. I don’t say that as a matter of opinion, but as a law of nature. It simply isn’t possible to live beyond one’s means indefinitely. The longer it takes for us to learn that lesson, the more painful the convulsions of a future debt crackup will be.
One Judge’s Role in Sabotaging the Keystone XL Pipeline Project
Last week I was chatting with a friend who asked me the current status of the Keystone XL pipeline project. This is the pipeline that would transport over 800,000 barrels per day of oil from Alberta, Canada, to Nebraska. There it would connect with existing pipelines that feed into the oil refineries in the gulf coast region.
President Barack Obama had sided with environmentalists in blocking the construction of the pipeline whereas President Donald Trump has openly supported this project, both before and after taking the oath of office. Indeed, two months into his presidency, the State Department issued the necessary permit for the pipeline to cross the U.S-Canadian border.
I don’t know if my friend and I jinxed the project, but late last week a federal judge declared that he was putting the project on hold. By taking this aggressive action, U.S. District Judge Brian M. Morris has endeared himself to “environmentalists who want to keep fossil fuels in the ground” (to use the words of The Wall Street Journal’s reporter Miguel Bustillo).
This appears to be a case of judicial usurpation of the legislative and executive branches of government. Since when are judges supposed to determine our country’s energy policies? Environmentalist activists have been blocking the Keystone XL project for a decade through a series of legal delay tactics and, for eight years, with the cooperation of the Obama administration.
Judge Morris is demanding an updated environmental review “to weigh several additional factors, including the impact of lower oil prices on the project’s viability, its related greenhouse-gas emissions, and modeling of potential oil spills it could cause.” These are three transparent pretexts that the judge has no business requiring.
The first demand the judge made is for the private business interests that want to undertake this project should consider its economic viability. Really? Does he think that the people who want to build Keystone haven’t considered its potential for profit and loss? It’s their money; if they want to risk it, who is a judge to rule that they can’t?
The very premise of this request is absurd, because it implies that human beings can somehow calculate what future market prices will be. This is the arrogance of a socialistic central planning mentality. Nobody knows the future. On the positive side, increasing the production of energy sources in politically stable North America will enhance national security. It may also help to increase the supply of oil enough to push energy prices lower to the great benefit of Americans, and particularly poorer Americans who spend a higher percentage of their income on energy than do more affluent Americans. And if the project eventually goes bankrupt, well, the taxpayer isn’t on the hook. This is a private investment with the financial risk all borne by the private sector. It isn’t the judge’s role to interfere with the private decision of how much risk people are willing to take with their own property.
As for the second reason given for blocking construction of this pipeline, why should the builders of Keystone XL have to quantify the project’s carbon dioxide emissions? Until such a requirement becomes the law of the land universally applicable to every company, this is a discriminatory action. Besides, as I’ve written elsewhere it turns out that the increased concentration of carbon dioxide in the atmosphere is significantly greening the earth while the heat-trapping capacity of this benign gas is close to maxed out.
Finally, the demand for “modeling” of potential oil spills is a red herring. Moving oil long distances through pipelines is not a new industry. Our country already is crisscrossed by thousands of miles of pipelines. Do accidents occasionally happen? Yes, but rarely. The big story is how countless barrels of fossil fuels have been transported safely day after day, year after year. It sounds like the judge suffers from a typical liberal desire, which is to live in a perfect and risk-free world. Sorry, sir, there is only perfection in heaven. To block a project because there is a small chance that something might go wrong is essentially prejudicial. It feels like the Tom Cruise movie “Minority Report,” in which the police, employing psychics, arrested people before they committed a crime. That isn’t American justice.
We have laws in place to punish malfeasance, if and when it should occur. The companies that want to build the Keystone XL pipeline face powerful economic incentives to get it right. They’ve been jumping through regulatory and legal hoops for ten years. It’s time to quit persecuting them and let them get on with it.
As President Trump stated one time when he declared his support for Keystone: America is about building. The first steps to organize the project for building the Empire State Building happened in 1929. Construction began the following March and was finished one year and 45 days later. These obstructionist delay tactics are a disgrace to our national heritage.
The Politics of E15
On October 9, President Donald Trump announced that he was lifting the EPA’s ban on summertime sales of E15 — a motor fuel blend consisting of 15 percent ethanol instead of the usual 10 percent. Trump’s announcement is telling. It teaches much about politics, trade policy, and the sorry state of the environmentalist movement.
That Trump’s announcement was politically motivated is obvious. The proposed new policy was announced during a campaign visit to Iowa. A crucial biennial election loomed, and Trump unveiled his plan there to give a boost to the electoral prospects of Republicans in the Corn Belt.
Such a move was politically necessary after Trump’s tariffs on Chinese imports triggered retaliatory tariffs that reduced American food exports to China and cut American farmers’ incomes. The president needed to demonstrate to farmers that he is looking out for their interests. The call for greater use of E15 — which would increase the demand for corn — was music to the ears of many voters in the Farm Belt.
This sequence of events — economically disruptive tariffs followed by a policy designed to mitigate or offset those disruptions — illustrates a profound truth about political economy. The great Austrian economist Ludwig von Mises elucidated this truth in his essay, “Middle-of-the-Road Policy Leads to Socialism.” [Stay calm; I am not suggesting that Trump wants socialism!]
Mises’s point was that government intervention into markets, however well intentioned, inevitably impacts prices and patterns of production. Intervention helps some and hurts others. Those who now have a government-induced problem, like American farmers after the imposition of tariffs, expect the government to solve that problem. But whatever government does in the attempt to offset the damage its policies caused will further distort markets. This will stimulate cries for further intervention. Thus, the tendency of intervention is to breed further intervention.
Trump’s trade policy is developing as a “two steps forward, one step back” process. (Let’s hope it doesn’t end up being one step forward for every two steps back!) Clearly, the proposal for increased usage of E15 is a government subsidy to corn growers and the ethanol industry. It moves us even farther away from Trump’s professed goal of dropping all tariffs, trade barriers, and subsidies. Realistically, given our current political alignment, zero subsidies for American agriculture is inconceivable for the foreseeable future.
I have written before about the negative economic effects of using corn-based ethanol as a motor fuel. The negative environmental impacts are significant, too. Although some green groups, such as the Sierra Club, have warned about the environmental consequences of corn-based ethanol in the past, they have remained strangely silent about Trump’s plan to increase its usage. Apparently, they are too busy trying to use the climate change issue to scare Americans into embracing socialism to challenge a policy that truly is environmentally harmful. This underscores my long-held belief that preserving a healthy environment is not the primary goal of environmentalists.
Forty percent of the American corn crop already gets burned up in our vehicles’ engines. That represents millions of acres of land that are converted from wildlife habitat to tillage. It causes the use of who-knows-how-many tons of fertilizers that unnecessarily contaminates water (e.g., red tide in Florida).
Worst of all, any government policy that hastens the pace of water consumption in the Midwest, where aquifers already are dangerously depleted, is environmentally shortsighted. If environmentalists really cared about the environment more than they want to increase government control of the economy, they would oppose corn-based fuel more vigorously than they oppose fracking. Fracking does not jeopardize our precious water supply; corn-based ethanol does.
Remembering Soviet Dissidents and the Weaponization of Psychiatry
The New York Times obituary opened with a simple recitation of facts: “Zhores A. Medvedev, the Soviet biologist, writer and dissident who was declared insane, confined to a mental institution and stripped of his citizenship in the 1970s after attacking a Stalinist pseudoscience, died . . . in London.”
Zhores Medvedev, his twin brother Roy (still alive at 93), the physicist Andrei Sakharov, and the Nobel Prize-winning novelist Aleksandr Solzenitsyn were leading dissidents. They courageously put their lives on the line to smuggle manuscripts out of the Soviet Union. They wanted the outer world to learn the truth about the “the workers’ paradise” that so many Western intellectuals (some deluded, others having gone over to the dark side) praised.
A generation of Americans has been born since the Soviet Union, the USSR that President Ronald Reagan boldly labeled “the evil empire,” ceased to exist. They have little to no concept of how ferociously the USSR’s Communist tyranny suppressed dissent. As the Times obit of Dr. Medvedev illustrates, one Soviet technique of oppression was to declare that political dissidents were insane. They were then incarcerated in psychiatric hospitals where they were tormented and tortured. Some were used as human guinea pigs for dangerous experiments. (Shades of Hitler’s buddy, Dr. Mengele). Some even succumbed to the not-so-tender ministrations of those “hospitals.”
I recall one particular example of the disgusting abuse of human beings in Soviet psychiatric hospitals. Vladimir Bukovsky, who will turn 76 later this month, spent a dozen years being shuffled between Soviet jails, labor camps, and psychiatric hospitals. One of the “therapies” administered in a psychiatric hospital was putting a cord into his mouth, then threading it from his throat up through his nasal passages, and then drawing it out through one of his nostrils. (Maybe the cord went in the opposite direction; I’ve never been interested in memorizing torture techniques.) Alas, this Communist “treatment” did not “cure” Bukovsky of his rational (not irrational) abhorrence of tyranny and brutality.
The warped thought process that led to the perversion and weaponization of psychiatry in the Soviet Union can be traced back to Communist icon and thought leader, Karl Marx. Marx propounded a spurious doctrine known as “polylogism” to justify stifling dissent. According to Marx, different classes of people had different structures in their minds. Thus, Marx declared the bourgeoisie to be mentally defective because they were inherently unable to comprehend Marx’s (allegedly) revelatory and progressive theories. Since they were, in a sense, insane, there was no valid reason for Communists to “waste time” arguing with them. On the contrary, Communists were justified in not only ignoring or suppressing bourgeois ideas, but in liquidating the entire bourgeois class.
The practice of categorizing one’s enemies as “insane” became a ready tool of suppression in the Soviet State founded by Lenin and developed under Stalin. The USSR’s infamous secret police energetically wielded quack psychiatry as a club with which to destroy political dissidents.
The incarceration of Zhores Medvedev in psychiatric hospitals in the 1970s was a monstrous injustice. His “crime” was having exposed the bizarre pseudoscience of Lysenkoism that Stalin had embraced in the 1950s. Lysenko’s quack theories led to deadly crop failures and widespread starvation. Nevertheless, Stalin backed him by executing scientists who dared to disagree with Lysenko. Millions of innocents lost their lives because “truth” in the Soviet Union wasn’t scientific, but political.
Another vivid example of the destructive consequences of politicizing truth is related in Solzhenitsyn’s exposé of Soviet labor camps, The Gulag Archipelago. Certain Soviet officials decided to increase the steel shipped to a certain area. When the planners issued orders for trains to carry double the steel to the designated destination, conscientious engineers informed them that it couldn’t be done. They pointed out that the existing train tracks could not support such great weights. The politicians had the engineers executed as “saboteurs” for opposing “the plan.” What followed was predictable: The loads were doubled, the tracks gave out, and the designated area ended up getting less steel, not more.
This episode shows where the true insanity was in the USSR. The central planners believed that constructing their ideal country was simply a matter of will. Alas, reality doesn’t conform to the whims or will of any human being, but the arrogance of central planners remains stubbornly impervious to that inescapable facts of life. Instead, as the havoc wrought by Soviet central economic planners repeatedly demonstrated, the Communist central planners refused to abandon their insufferable self-delusion and mystical belief in the power of their own will to alter reality. This was the true insanity, compounded by the error of persecuting competent scientists like Zhores Medvedev.
Sadly, the practice of branding political opponents as “insane” is not confined to the now-defunct Soviet state. In 1981, when I was completing my master’s thesis about Solzhenitsyn, I telephoned an American college professor of history to ask whether he recalled if Solzhenitsyn had been granted honorary U.S. citizenship. (He wasn’t. President Ford didn’t want to offend the Soviet leadership.) The reply to my question was this: “Aleksandr Solzhenitsyn belongs in an insane asylum.” The virus of Marx’s polylogism is, unfortunately, alive and well in American academia.
As for Zhores Medvedev, may he now rest in peace and receive his reward for his integrity and courage. *