Self-Evident Truths in Economics

Although I have no formal education in economics, I seem to possess uncommon sense with respect to how the world really works. When I hear comments from elitists in Washington such as food stamps grow the economy, the enormous national debt is of no consequence because we are borrowing most of it from ourselves, and an ever-expanding government is a key to prosperity and health, a need for reflection about human behavior and survival is essential.

Our experiences are so remote from human evolution that almost no one acknowledges some basic truths.  Life has a few basic requirements for survival.  The most urgent among these is air to breathe.  But most of us take clean air for granted.  True, some environmental zealots are consumed with air purity.  But the world is not yet suffocating and the urgency about air pollution is not a current priority.  The next two necessities of life are water and shelter.  These alternate for supremacy in our attention, depending upon some crucial variables of circumstance.  If one is freezing to death, thirst is not a major priority.  As it turns out, death from exposure is mainly due to freezing--in the deserts or in nearly tropical region such as South Florida.  More people in these regions die from hypothermia than from dehydration or from heat exhaustion.

The fourth most critical influence of survival is food.  It is the search for food that send our ancestors out from the rift valley to every corner of the globe.  Because starvation is such a relatively slow process, as compared to suffocation and exposure, far more ingenuity became possible in order to succeed in feeding ourselves.  The height of evolution in this regard has become food stamps! We have more people on food stamps than ever before and every Democrat insists that this is a good thing--telling us it grows the economy.  That's right!  They look you in the eye and tell you that the economy GROWS every time a food stamp is traded.  We are supposed to believe that the poor buying groceries with our money generates increased demand which will then create more productivity.  We are never allowed to ask how some welfare parasite buying the bread with money robbed from our pocket creates economic prosperity.  We are never allowed to complain that we are being deprived of our own money to spend and the demand for the goods we desire never arises.

It's difficult to believe that Democrats are actually stupid enough to believe their own propaganda, but it does seem that many "true believers" walk among us.  The real masterminds betraying our country probably know this is a canard but it does seem to convince the simple-minded masses (half of the population is below average intelligence--by definition).  But their true motive is to maintain a permanent underclass of welfare parasites who might or might not vote but who will surely require massive government bureaucracies to "look after" them.  And these bureaucracies have countless government workers paying union dues that wind up in the pockets of Democrat candidates running for election in order to protect the "poor."  Why would a Democrat want a robust economy that put people to work, created prosperity for the masses, and reduced the need for their merciful largesse?

But with a national debt of $20 trillion and unfunded liabilities of over $200 trillion, those welfare checks have a fatal disease--the money will run out--sooner than one might expect.  By 2030, some have estimated, every cent collected by our Federal Government will go to pay the interest on the accumulated debt--every cent!  The Federal Reserve can print only so much counterfeit money.  So what happens when to welfare checks can no longer be issued?  The "poor" have never shown any gratitude for our sacrifices expended on their behalf.  They are already in a state of perpetual hate and envy--Obama likes to stir that pot every chance he gets.  When the food stamps disappear the riots will be unimaginable.  There will be nothing in the Federal budget to pay our armed forces or police agencies.

How much ammunition have you stored up?

THE PROGRESSIVE LEGACY

The Progressive Legacy

Robert A. Hall

The term “progressive” is steadily replacing “liberal,” because the pernicious effects of liberal policies became associated in the public mind with the name, much as “liberal” replaced “progressive” in an earlier age for the same reason. They might better, though more awkwardly, be called “transnational progressives” because of their general commitment to one world government, the absurd principle that all cultures are equally valid, and their opposition to “outmoded” concepts such as American exceptionalism and national sovereignty in the face of UN encroachments. Their ideal is the European Union, a paradise which they think we should beg to join, never mind that it is collapsing from debt and grandiose promises that no amount of taxation can fulfill.

“Liberal” is, in any case, confusing to scholars, because the classic liberalism of an earlier period was associated with limited government controlled by the popular will, respect for individual rights and responsibilities, freedom, property rights, free markets, self-reliance, and many values disdainfully called conservative today. Thus appears the term “liberal democracy,” referring to the kind of democracy envisioned by Thomas Jefferson, whose memory progressives revere as much as they despise his principles. Classical liberalism is anathema to progressives, and always has been. It does not fit well with the collectivist mind.

Progressives are not much on limiting government. The checks and balances between the federal government and the states and between the three branches of government have been pretty much destroyed because they prevented the masterminds from forcing people to do what they knew was best for them. They aren’t much on the “popular will” either, so the public’s opposition to Obamacare, or big government, or late term abortion, or support of the Keystone pipeline, means nothing.  Opponents are scorned as naïve and moronic for doubting the genius of the elitist sages who would subjugate them.

Nor are they much on free speech, pious claims to the contrary notwithstanding. People who say things they don’t like must be stopped through hate speech codes and restrictions on criticism of Islamic terror by outlawing blasphemy. They would have you forget the Alien and Sedition type laws pushed by Progressive Saint Woodrow Wilson, as well as his support for segregation and opposition to women’s suffrage, which passed in spite of him with more GOP votes than Democrat ones.

The essence of progressivism is coercion, as people must be coerced to do things they don’t want to do or don’t think are in their interests, to serve “the greater good,” as defined by the progressive elites.

Haters on both sides of the political divide fall into the trap of believing their opponents evil, stupid or both. I have a very frustrated progressive relative who, since on the evidence he cannot easily put me in either category, apparently thinks I’m just being, in the lovely British phrase, “bloody minded.” Thus his communications even on jokes take on a vicious political tone. Conservatives calling progressives names, such as “libtard,” is, in my view, offensive, ethically wrong and counter productive, because insults are hardly the way to get either the opposition or the uncommitted to consider your viewpoint with an open mind. Thankfully, the left has at least as many unreasonably and vicious haters as the right. My bias tells me they have many more.

I believe that Dr. Jon Haidt is correct in his excellent book The Righteous Mind: Why Good People are Divided by Politics and Religion that progressives and conservatives think differently about issues because they hold different values, not because one side or the other is evil. Haidt, it should be noted, is an intellectually-honest leftwing academic who strongly supported both John Kerry and Barack Obama. But his book is based on solid research, and should be well received by anyone with an open mind. He has, by the way, ongoing research into values which you can participate in by responding to surveys on line.

I think, however, that it is even more important to look at the results of policies than the values that led to them. The ends can only justify the means if you take into account all of the ends, or results, and the balance and trade offs inherent in those outcomes. And the results of progressive policies have been brutal to societies and the majority of people—and they are shortly going to be far worse.

But this begs the question, why are progressives and their policies flourishing, indeed, seemingly in control of the destiny of a collapsing western civilization? Why do so many people go along with them as they push us towards the cliff? Why cannot they even consider, never mind take responsibility for, all the results of their policies?

I believe that progressives are so wrapped up in their good intentions, so busy trying to think well of themselves for fighting for the right things, that they cannot notice the unintended consequences. It’s like a squirrel running in front of their car causing them to jerk the wheel, swerving onto the sidewalk, and then killing a small girl. They are so busy congratulating themselves over saving the squirrel, and imaging the award they will get from PETA, that the dead child never registers. And as Dr. Thomas Sowell says in his fine book Applied Economics: Thinking Beyond State One, too many people cannot think to the next step that will result from a decision or course of action. And not just progressives. But progressive intentions are good and their policies sound good to the majority who cannot think beyond state one.

Progressives literally cannot look at the results of their policies, lest that be an act of heresy, just as the divines reportedly (but perhaps apocryphally) refused to look into Galileo’s telescope. So progressives cannot even note that the 2009 $1.2 trillion stimulus failed to fulfill Obama’s promise that it would bring unemployment under 5%, just as conservative economists had predicted that it would not. Noticing that inconvenient fact would be an act of apostasy.

But the more people who can see what progressive policies have done, not just to our country but to the world, and far worse, what they will shortly do to all of us, the better are our admittedly slim chances of turning things around, thus preserving the country we love and civilization itself.

Therefore, this detailing of the Progressive Legacy:

Progressives have virtually destroyed higher education. Our universities, once bastions of independent thought, have become centers of politically correct group think, where students are not taught how to think, but what to think. The prevailing ideology is rigidly enforced, and every diversity is celebrated except the one that really matters—diversity of thought. A conservative has little chance of being hired, and if so can only hope for tenure or promotion by hiding his or her opinions.

John Leo, in “Professors: Just As Liberal, Or More Moderate?” reports that a study “by The Chronicle of Higher Education, the voice of liberal academia, found that Liberals outnumber conservatives by 11-1 among social scientists and 13-1 among humanities professors. 25.5 percent of those who teach sociology identify themselves as Marxist. Self-identified radicals accounted for 19 percent of humanities professors and 24 percent of social scientists.”

Worse, they are educating generations of high school and elementary teachers that indoctrination of students in progressive principles is the right way to teach. You only have to read the weekly stories of outrages on common sense by public school teachers to know their efforts have born fruit.

Progressives created the drug epidemic. When I was in high school, we might (and when I could, I did) indulge in alcohol, but drugs were something only the street bums over in Philadelphia did. I couldn’t have told you the difference between a reefer and heroin. Then came the sixties and the leftwing glorifying of drugs à la Timothy Leary and “Turn on, Tune in, Drop out.” Hundreds of thousands did, tens of thousands died, thousands of families were ripped apart and lives ruined, crime soared, and prostitution to support drug habits flourished. And the spiking market for drugs created in the US and other western counties by the new, progressive culture has destroyed Mexico as well, with 80,000 drug murders and rampant corruption, while also funding global terrorism. I want my culture back.

Progressives destroyed the family. If it feels good, do it: sex without responsibility and children without marriage were the result. Thanks to this cultural change, 70% of black babies today are non-marital births, with whites and Hispanics not that far behind. This increases poverty, trapping generations, increases dysfunctional children, and sets them on the path to crime, government dependency and single parenthood for themselves. Welfare benefits are predicated upon single parenthood and forbid the presence of a father/husband in the household.

Progressives supported abortion. With the US birthrate having fallen well below the replacement rate of 2.1 live births per woman, we are likely going to miss those 50 to 100 million aborted children, especially as progressives try to redeem their entitlement promised with a shrinking younger working population supporting a growing population of us geezers. Blacks make up 13% of the population, but have 40% of the abortions, so Planned Parenthood Founder and progressive saint Margaret Sanger’s goal of preventing more of what she called “the unfit” from being born is “mission accomplished.” If conservatives had killed this many black babies, they’d be shooting us in the street for racial genocide.

Progressives are grinding the poor. In order to feel good about their good intentions for saving the environment, progressives support energy policies that are and will continue to drive energy costs much higher for the poorest segments of society. They claim to care about the poor, but when it comes to spending billions of dollars in money extracted from the poor so they can feel good about lowering the Earth’s temperature less than a degree in a hundred years, the poor will just have to suffer or starve so the progressives can enjoy feeling all green and fuzzy, like bad meat. So the war on coal, the war on fracking, the war on drilling, the war on the Keystone Pipeline goes forward, and the poor and working classes pay for them. Progressives get to feel good and the poor can, well, eat cake.

Progressives destroyed our cities. Detroit is not an accident. They have encouraged black thug culture in the cities that drove out the white and black middle class, the taxpayers and job creators. In his great essay, “Black Rednecks and White Liberals,” Dr. Thomas Sowell postulates that inner city black culture, with its touchy honor, violence, promiscuity and limited work ethic,  is an inheritance they picked up from poor southern white rednecks after the civil war and brought north. Now, ironically it’s defended as black culture, not subject to criticism.

But progressive policies have abetted the destruction. Vote buying from public employee unions has created debt and unfunded liabilities that can never be redeemed. They cannot now ask their union allies and welfare dependent voter base to taker a haircut—that would create riots. So they will continue to turn the screws on the productive, who will continue to flee the cities, feeding the death spiral. Welfare giveaway programs and political corruption have only fed the flames of what is now an unavoidable approaching fiscal disaster. And the more they disarm decent citizens, the more murder they get in their “gun free zones.” In ten years, Chicago will be Detroit. Soon whole states like Illinois and California will follow the cities into the abyss.

Progressives are destroying the country through fiscal fecklessness. Vote buying by progressives in both parties has created an unfunded liability and debt that, like the cities, though far vaster, can never be paid. As I say in The Coming Collapse of the American Republic, I do not see how we can avoid fiscal collapse, followed by economic, social and political collapse, hyper-inflation, chaos, starvation, riots, violence and widespread death. But you cannot touch one of the entitlement programs in even a minor way, (Social Security, Disability Insurance, Food Stamps, Medicare, Public Employee Pensions, Medicaid and now Obamacare) without howls of outrage. Google “The West and the Tyranny of Public Debt,” an excellent Newsweek article from 2010 that details the impact uncontrolled debt has had on other societies. With an acknowledged debt of $16T and unfunded liabilities estimated from $87T to triple that, your grandkids will not live in the United States, though perhaps in a rump dictatorship incorporating that name.

It’s not just our country. Progressives have had a worldwide pernicious impact through their policies.

Vietnam: Progressives foamed at the mouth over US support for the Republic of Vietnam, the government in the south. They worked hard, often secretly guided by the communists we now know, and finally elected a post-Watergate congress that reneged on our treaty obligations to the south. Without supplies, spare parts and ammo, the south was soon overwhelmed by a communist North that was well supplied by China and the USSR—they invaded South Vietnam with more tanks than the Germans invaded France with in 1940.

While the Republic of Vietnam was admittedly no Jeffersonian democracy, it did allow multiple political parties, some press freedom and religious freedom. None of these are available to the people of Vietnam today under the communists. Christians are suppressed. The Cambodian reds murdered a quarter of the population. Tens of thousands of Vietnamese died in re-education camps or trying to escape as “boat people.” The hill people, who supported us, are steadily being exterminated. Reports claim that twice as many people were murdered by the communists in the first two years after they won as died in the entire war. It’s hard to verify, because today’s Vietnam is a completely closed society.

And the response from the left? With the notable exception of Joan Baez, crickets. One leftist, asked about the mass murders, said he didn’t believe in criticizing socialist states. You see, to acknowledge the oppression and death brought on the Vietnamese people by the communist victory would mean they owned it. It might jeopardize their ability to feel good about themselves for opposing the evil Republic of Vietnam. Far more comfortable not to notice the suffering they created, because, after all, their intentions were good.

DDT: Progressives all read Silent Spring by Rachel Carson and sprang into action to ban DDT, to “save the birds.” They never thought about what other results might follow. The major result was that Malaria, which had been in a world wide decline, spiked back up. Millions died, many of them black, brown and yellow kids in the third world. And they go on dying today. I consider Carson the fourth most successful mass murderer of the twentieth century, behind, in order, Mao, Stalin and Hitler. But she’s gaining. (A minor result is the bedbug and West Nile Virus epidemics in the US.)

Leftists can’t bear to notice these deaths from Malaria, because to do so would hurt their entitlement to feel good about themselves for saving the birds. Ironically, they now support eagle-chopper wind farms that slaughter thousands of these same birds, so they can feel good about fighting global warming.

Iran: Progressives looked at the repressive Shah of Iran, and mounted a campaign to force him out. They take no responsibility that the success of their campaign put in place a far more repressive theocracy that hangs gays, stones women for adultery, oppresses women, started a war with Iraq in which a million died, including young boys the mullahs used as human mine-clearing devices, supports terrorism around the world, and is developing atomic weapons. If we lose New York City in an atomic blast, they will still be so busy feeling good about opposing the Shah they won’t notice. Except for those living close enough to die of radiation sickness or starvation, but not incinerated instantly in the blast.

Zimbabwe: Progressives hated the oppressive white rule in then-Rhodesia. So they launched a campaign for black rule. They are too busy celebrating to notice that Zimbabwe, which once exported food, is now starving, as the appropriation of white-owned farms for black supporters of the thugocracy failed to expropriate their work ethic or knowledge of farming. That the result of black rule was to drop black life expectancy from about 63 to about 36 didn’t bother them at all. (It has recovered a bit into the 40s, I’ve read.) Nor did the destruction of Zimbabwe’s economy by the rule of greedy and incompetent thugs, with hyper-inflation destroying everyone’s hope of prosperity—except those with the guns—bother them. You can buy billions of dollars in Zimbabwean currency on eBay for a few bucks, getting in on the progressive utopia.

South Africa: All right-thinking progressives opposed apartheid and white rule, and black rule leaves South Africa not far behind Zimbabwe. A 2009 article in Newsweek expressed surprise to find that “… 800,000 out of a total white population of 4 million have left since 1995, by one count. But they're hardly alone. Blacks, coloreds (as people of mixed race are known in South Africa) and Indians are also expressing the desire to leave. In the last 12 years, the number of blacks graduating in South Africa with advanced degrees has grown from 361,000 to 1.4 million a year. But in that time the number of those expressing high hopes to emigrate has doubled.” It’s really no surprise, as crime and corruption under black rule has soared, and regardless of color, those with the education or finances to thrive elsewhere are fleeing, leaving the country without the knowledge and skills to operate government, business or industry, creatig an eventual death spiral.

A 2010 article in the Times Live of Johannesburg, “South Africa’s Black Brain Drain” by Subashni Naidoo notes that “Almost half of South Africa’s middle-class black teenagers plan to flee the country for greener pastures. … Reflecting views similar to their white and Indian counterparts, 71% of black youth felt it was impossible to get employment in South Africa; 58% said crime made them want to live in another country, and 73% felt government was not living up to its promises.”

According to the Genocide Watch website, “… there is a coordinated campaign of genocide being conducted against white farmers, known as Boers.” I have read that many countries won’t take immigrants from South Africa because it’s better they stay there and die than flee and contribute to the destruction through the brain drain. But with this flight, South Africa cannot be far behind Zimbabwe as the next progressive paradise.

Why all this unnoticed suffering and death following progressive policies?

It is not because progressives are evil, but that they are so wrapped up in feeling good about their good intentions that they cannot allow the unintended evil results to intrude on their euphoria. They perfectly fit my favorite quote from T. S. Eliot: “Half the harm that is done in this world is due to people who want to feel important. They don't mean to do harm—but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves.”

So you would be wrong to hate progressives. But if you care about the results for real people and the lives of the non-elite struggling in this world, or about future generations whose hope of freedom and prosperity is being destroyed, you have a moral obligation to oppose progressive policies with every fiber of your being. You must notice the suffering progressives ignore—and do what you can to stop them from making it worse.

*****

Permission to forward or re-post, with credit to the author, is granted. Robert A. Hall is a Marine Vietnam Veteran who served five terms in the Massachusetts Senate. For a free pdf of his book, The Coming Collapse of the American Republic e-mail him at tartanmarine(at)gmail.com. All royalties go to help wounded vets. Books by Robert A. Hall: http://tartanmarine.blogspot.com/2010/07/new-book-published.html

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Robert A. Hall
www.tartanmarine.blogspot.com

Books by Robert A. Hall: http://tartanmarine.blogspot.com/2010/07/new-book-published.html

"I have only two men out of my company and 20 out of some other company. We need support, but it is almost suicide to try to get it here as we are swept by machine gun fire and a constant barrage is on us. I have no one on my left and only a few on my right. I will hold."  --1st. Lt. Clifton B. Cates, Navy Cross, 2 Distinguished Service Crosses, (later Commandant), USMC, July 19, 1918 commanding 96 Company, 6th Marines, near the French town of Soissons.

"Casualties: many, Percentage of dead: not known, Combat efficiency: we are winning." --Colonel David M. Shoup, USMC, MOH, (later Commandant) Tarawa, 21 November 1943.

Freedom is not free, but the U.S. Marine Corps will pay most of your share. --Captain J.E. "Ned" Dolan, USMC (Ret.) Platoon Leader E/2/7, Korean War

We fight not for glory, nor for riches, nor for honour, but only and alone for Freedom, which no good man lays down but with his life. --Declaration of Arbroath, Scotland, 1320

In the end more than they wanted freedom, they wanted security. When the Athenians finally wanted not to give to society but for society to give to them, when the freedom they wished for was freedom from responsibility, then Athens ceased to be free. —Edward Gibbon

Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. -Frederic Bastiat, French Economist (1801-1850)

"I have been made victorious through terror" (Bukhari 4.52.220) --Mohammad.

THE RECIPE FOR SOCIETAL COLLAPSE

In two recent columns, I spelled out the two primary opposing agendas prevalent in modern American politics, The American Pursuit of Democratic Socialism and To Be Conservative in America.
If I could get every American to read just three columns, it would be these two and the one you are reading now. Armed with the reality displayed in these three columns, the only people who can effect real worthwhile change in America would be more likely to do so.

Without knowledge of at least these fundamental facts, the American electorate is on a path to self-destruction via democratic process, American freedom and individual liberty is at its eleventh hour and the pace into a socialist abyss is quickening.

Why American Freedom is in its Eleventh Hour

A well-known self-destructive cycle of democratic behavior has been attributed to an eighteenth century historian by the name of Alexander Tytler. Whether Tytler is the original author or not, the concept of democratic self-destruction has been proven accurate, right here in America.

“From bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy;
From apathy to dependence;
From dependence back into bondage.”

The cycle identifies eight stages of a process which demonstrates exactly how history tends to repeat itself. America finds itself in the seventh stage as it heads into the 2008 election, where it will decide whether or not to leap headlong into stage eight. Here’s how it happened and what the 2008 election is really all about.

From bondage to spiritual faith, to great courage, to liberty

America’s founding fathers were all men of great spiritual faith who had escaped political and religious bondage in Europe. It was that faith that drove them and gave them the courage to seek a new land of freedom and individual liberty, where they could design and build a nation where all men were created equal and endowed by their Creator with certain unalienable rights, chief among them the right to Life itself, individual Liberty and the right to individually define and pursue (earn) Happiness.

The Founders designed and established a limited government which was to be of, by and for the people, the governed, and they established that “to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it…”

From liberty to abundance and abundance to complacency

It was individual freedom and liberty that gave every American the right and the motivation to create the most productive, prosperous and abundant nation ever known to man. And it is the earned abundance that would lead the wealthiest nation on earth into a state of complacency.

America is not only the most productive and abundant nation on earth. It is also the most generous nation on earth. For more than two centuries, Americans have not only been willing to share their wealth with many less fortunate societies around the globe, but also our technologies, the very philosophies that made us abundant, and even our blood, so that other peoples all over the world could share in freedom, independence and prosperity.

Extended periods of peace and prosperity have resulted in American complacency and today, generations who no longer understand the foundations of our abundance, what it took to achieve it and what it takes to conserve or preserve it for future generations, are on the verge of losing it all.

From abundance to complacency and complacency to apathy

Apathy, “an absence or suppression of passion, emotion, or excitement; - lack of interest in or concern for things that others find moving or exciting.”

American abundance and complacency led to apathy years ago, when half of all American voters stopped taking the time to engage in self-governance at all, not even finding so much as an hour of their time once every four years to go to a voting booth and play a part in deciding the direction of their free nation.

The other half of America who does still engage and vote, are caught up in an insane debate over Democrat vs. Republican, Liberal vs. Conservative, Black vs. White and Poor vs. Rich. The real issue goes largely unnoticed.

While the political discussion is misdirected and limited to a laundry list of special interest issues, the real debate over Individual Rights vs. Communal Rights is silenced as “hate speech” or “greed” in the name of “political correctness.”

And as half of the nation is complacent in their mindless debate, the other half completely apathetic to the entire process, America votes itself into Democratic Socialism and from apathy into dependence.

From apathy to dependence

A short one hundred years ago, when our nation was building the infrastructure of the greatest nation on earth, our federal government and its budget was but a mere insignificant fraction of our gross productivity and nobody was dependent upon the federal government for their personal well-being. Every man, woman and child, was free to define and pursue (earn) their own destiny and no American looked to the federal government as their personal nanny.

One hundred years later, a complacent people turned apathetic towards self-governance has forgotten to remain forever vigilant in its conservation and preservation of the fundamental belief structure that made it all possible.

Today, an increasing number of Americans are now dependent upon the federal government and the federal trough for their happiness. Every national election is about what our federal government can do for us personally, not what we are able to do for ourselves as a result of individual freedom and liberty in the land of equal promise.

Increasingly ill-suited to navigate the individual choices inherent with freedom, a growing number of Americans have come to rely (depend) upon politicians and their government to solve personal challenges they no longer feel capable of solving themselves.

Socialized medicine is being sold as “universal health care.” Government control of the people’s private natural resources is being sold as “environmentalism.” The government confiscation of private earned assets, land, money and individual rights, tyranny for benefit of a greater common good, are being sold as a forced form of “communal generosity” and “community obligation.” The constant attack on “Capitalism” is sold as reigning in “evil corporations.”

This is what Hillary Clinton means when she says, “It takes a village to raise a child.” Or “We are going to take some things away from you, for the greater good.” It is what all modern liberals mean in their quest to replace individual freedom and liberty with government controlled equality.

Of course, it’s also what Karl Marx meant when he said “From each according to his ability; To each according to his need.”

From dependence back into bondage

The final stage of the cycle is the fall back into bandage. Thomas Jefferson provided the perfect warning with this statement, “A government big enough to give you anything you want, is strong enough to take everything you have.”

According to the IRS as of 2005, 70 percent of all taxes and thereby 70 percent of the American budget, is paid for by only 10 percent of Americans, those evil bastards we call “the rich.” Likewise, the bottom 50 percent of income earners now pay little or no taxes at all. Many of them get tax refunds on taxes they never paid to begin with. “From each according to his ability; To each according to his need.” Remember?

We accept this as a “graduated tax scale” whereby the “haves” are responsible for paying the tax burden of the “have-nots.” It is nothing more than an acceptable level and method of socialism, social engineering and forceful taking of earned assets from one, for benefit of another deemed more deserving. A re-distribution of wealth; - a taking from one according to his ability; given to another on the basis of his need.

Americans are Voting for Bondage via Democratic Socialism

A small segment of the American populace is knowingly pursuing an American democratic form of socialism. But a much larger segment of American voters are unwittingly voting for democratic socialism, to forever increase the size, scope and reach of the federal government in the name of some greater common good, without realizing that what Jefferson and many other Founders warned was true. “A government big enough to give you anything you want, is strong enough to take everything you have.”

From Freedom back into Bondage

The 2008 election is all about this decision. Today’s Democrat Party calls itself “the party of the working man” (aka the working class, the proletariat). But it makes policy promises as the Party of the non-working man, forever promising equal economic status for those who refuse or fail to pursue (earn) happiness on their own. This is the promise that all of their electoral support is based upon. Every Democrat voter seeks to vote themselves (or their neighbor) favors from the federal trough.

Every modern democrat voter seeks to take the rightful earnings of others by force, to serve their idea of a greater common good.

And by this method, they are voting not only those whom they seek to rob of their earnings back into bondage, but themselves as well.

The politicians they ask to define and provide equal happiness to all do not make these campaign promises on behalf of the greater common good of their voters. They make these promises for the greater good of their own political power. This has been true of all who have ever made these promises throughout history.

Our Founders knew this reality. But too many Americans do not.

United upon founding principles, we have stood as the world’s beacon of individual freedom and liberty for more than 230 years. But divided as we are today, the nation is collapsing. Though we are at war with many international enemies who do indeed seek to bring an end to America as we know it, no threat is greater than the threat posed from within, American against American.

Americans, from the CEO to the janitor, the ditch digger to the Hollywood star, the least among us to the 10 percent who currently pick up the national tab, must unite upon fundamental American values and principles in order to conserve and preserve our greatness for future generations.

We will alter our voting habits and the government that results now, or we will soon have no option but to abolish it and start over.

It’s not just our right to alter or abolish a government which has become destructive of these principles and values, it is our obligation.

In a few months, Americans will make a decision. We will decide to either leap headlong into the socialist abyss with Hillary Clinton or Barack Obama, or stem the tide by voting against those who seek political power via Democratic Socialism.

The choice is just this simple and just this serious. Study reality and make the choice carefully. We will alter the direction of our federal government today, or abolish it tomorrow.

This is indeed, freedom’s eleventh hour…

JB WILLIAMS

March 10, 2008

THE GENIUS OF GOVERNMENT--IT ALWAYS GETS IT WRONG

OUR WONDERFUL GOVERNMENT MINDS

INTRODUCTION

Over the past century or so, academics have presented mankind with spectacular scientific advancements in just about all fields of study...except one.   Armed with a mastery of mathematics and physics, scientists sent a spacecraft hundreds of millions of miles to parachute to the surface of one of Saturn’s moons. But the practitioners of the “dismal” science of economics can’t point to a similar record of achievement.   If NASA engineers had evidenced the same level of forecasting skill as our top economists, the Galileo mission would have had a very different outcome. Not only would the satellite have missed its orbit of Saturn, but in all likelihood the rocket would have turned downward on lift-off, bored though the Earth’s crust, and exploded somewhere deep in the magma.

In 2007 when the world was staring into the teeth of the biggest economic catastrophe in three generations, very few economists had any idea that there was any trouble lurking on the horizon. Three years into the mess, economists now offer remedies that strike most people as frankly ridiculous. We are told that we must go deeper into debt to fix our debt crisis, and that we must spend in order prosper. The reason their vision was so poor then, and their solutions so counterintuitive now, is that few have any idea how their science actually works.   The disconnect results from the nearly universal acceptance of the theories of John Maynard Keynes, a very smart early-twentieth century English academic who developed some very stupid ideas about what makes economies grow. Essentially Keynes managed to pull off one the neatest tricks imaginable: he made something simple seem to be hopelessly complex.

In Keynes’s time, physicists were first grappling with the concept of quantum mechanics, which, among other things, imagined a cosmos governed by two entirely different sets of physical laws: one for very small particles, like protons and electrons, and another for everything else. Perhaps sensing that the boring study of economics needed a fresh shot in the arm, Keynes proposed a similar world view in which one set of economic laws came in to play at the micro level (concerning the realm of individuals and families) and another set at the macro level (concerning nations and governments).   Keynes’s work came at the tail end of the most expansive economic period in the history of the world. Economically speaking, the nineteenth an early-twentieth-century produced unprecedented growth of productive capacity and living standards in the Western world. The epicenter of this boom was the freewheeling capitalism of the United States, a country unique in its preference for individual rights and limited government.

But the decentralizing elements inherent in free market capitalism threatened the rigid power structures still in place throughout much of the world, horrified by the prospect of people liberated to run their own lives. In addition, capitalistic expansion did come with some visible extremes of wealth and poverty, causing some social scientists and progressives to seek what they believed was a more equitable alternative to free market capitalism. In his quest to bring the guidance of modern science to the seemingly unfair marketplace, Keynes unwittingly gave cover to central authorities and social utopian masterminds who believed that economic activity needed to be planned from above.   At the core of his view was the idea that governments could smooth out the volatility of free markets by expanding the supply of money and running large budget deficits when times were tough.   When they first burst onto the scene in the 1920s and 1930s, the disciples of Keynes (called Keynesians), came into conflict with the “Austrian School” which followed the views of economists such as Ludwig von Mises. The Austrians argued that recessions are necessary to compensate for unwise decisions made during the booms that always precede the busts. Austrians believe that the booms are created in the first place by the false signals sent to businesses when government’s “stimulate” economies with low interest rates.   So whereas the Keynesians look to mitigate the busts, Austrians look to prevent artificial booms.  

In the economic showdown that followed, the Keynesians had a key advantage. Because it offers the hope of pain-free solutions, Keynesianism was an instant hit with politicians. By promising to increase employment and boost growth without raising taxes or cutting government services, the policies advocated by Keynes were the economic equivalent of miracle weight-loss programs that required no dieting or exercise. While irrational, such hopes are nevertheless soothing, and are a definite attraction on the campaign trail.   Keynesianism permits governments to pretend that they have the power to raise living standards with the whir of a printing press.   As a consequence of their pro-government bias, Keynesians were much more likely than Austrians to receive the highest government economic appointments. Universities that produced finance ministers and Treasury secretaries obviously acquired more prestige than universities that could not. Inevitably economics departments began to favor professors who supported those ideas. Austrians were increasingly relegated to the margins.   Similarly, large financial institutions, the other major employers of economists, have an equal affinity for Keynesian dogma. Large banks and investment firms are more profitable in the Keynesian environment of easy money and loose credit.

The belief that government policy should backstop investments also helps financial firms pry open the pocketbooks of skittish investors. As a result, they are more likely to hire those economists who support such a worldview. With such glaring advantages over their stuffy rivals, a self-fulfilling mutual admiration society soon produced a corps of top economists inbred with a loyalty to Keynesian principles.   These analysts take it as gospel that Keynesian policies were responsible for ending the Great Depression. Many have argued that without the stimuli provided by government (including expenditures necessary to wage the Second World War), we would never have recovered from the economic abyss. Absent from this analysis is the fact that the Depression was the longest and most severe downturn in modern history and the first that was ever dealt with using the full range of Keynesian policy tools.

Whether these interventions were the cause or the cure of the Depression is apparently a debate that no serious “economist” ever thought was worth having.   With Keynesians in firm control of economics departments, financial ministries, and investment banks, it’s as if we have entrusted astrologers instead of astronomers to calculate orbital velocities of celestial bodies. (Yes, the satellite crashed into an asteroid, but it is an unexpected encounter that could lead to enticing possibilities!)   The tragi-comic aspect of the situation is that no matter how often these economists completely flub their missions, no matter how many rockets explode on the launchpad, no one of consequence ever questions their models.  

Most ordinary people have come to justifiably feel that economists don’t know what they are talking about. But most assume that they are clueless because the field itself is so vast, murky, and illogical that true predictive power is beyond even the best and most educated minds.   But what if I told you that the economic duality proposed by the Keynesians doesn’t exist? What if economics is much simpler than that? What if what is good for the goose is good for the gander? What if it were equally impossible for a family, or a nation, to spend its way to prosperity?   Many people who are familiar with my accurate forecasting of the economic crash of 2008 like to credit my intelligence as the source of my vision. I can assure you that I am no smarter than most of the economists who couldn’t see an asset bubble if it spent a month in their living room. What I do have is a solid and fundamental understanding of the basic principles of economics.   I have that advantage because as a child my father provided me with the basic tool kit I needed to cut through the economic clutter.

The tools came to me in the form of stories, allegories, and thought experiments. One of those stories serves as the basis for this book.   Irwin Schiff has become a figure of some renown and is most associated with the national movement to resist the federal income tax. For more than 35 years he has challenged, often obsessively, the methods of the Internal Revenue Service while maintaining that the income tax is enforced in violation of the Constitution’s three taxing clauses, the 16th Amendment, and the revenue laws themselves. He has written many books on the subject and has openly challenged the federal government in court. For these activities, he continues to pay a heavy personal price. At 82 he remains incarcerated in federal prison.   But before he turned his attention to taxes, Irwin Schiff made a name for himself as an economist.

He was born in 1928 in New Haven, Connecticut, the eighth child of a lower-middle-class immigrant family. His father was a union man, and his entire extended family enthusiastically supported Roosevelt’s New Deal. When he entered the University of Connecticut in 1946 to study economics, nothing in his background or temperament would have led anyone to believe that he would reject the dominant orthodoxy, and to instead embrace the economic views espoused by the out-of-fashion Austrians...but he did.   Irwin always had the power of original thinking, which, combined with a rather outsized belief in himself, perhaps led him to sense that the lessons he was learning did not fully mesh with reality. Digging deeper into the full spectrum of economic theory, Irwin came across books by libertarian thinkers like Henry Hazlitt and Henry Grady Weaver. Although his conversion was gradual (taking the full decade of the 1950’s to complete), he eventually emerged as a full-blooded believer in sound money, limited government, low taxes, and personal responsibility. By 1964, Irwin enthusiastically supported Barry Goldwater for president.

At the 1944 Bretton Woods (New Hampshire) Monetary Conference, the United States persuaded the 44 Allied nations of the world to back their currencies with dollars instead of with gold.  Since the United States pledged to exchange an ounce of gold for every 35 dollars, and it owned 80 percent of the world's gold, the arrangement was widely accepted.

However, 40 years of monetary inflation brought about by Keynesian money managers at the Federal Reserve caused the pegged price of gold to be severely undervalued.  This mismatch led to what became known as the "gold drain," a mass run by foreign governments, led by France in 1965, to redeem U.S. Federal Reserve Notes for gold.  Given the opportunity to buy gold at the old 1932 price, foreign governments were quickly depleting U.S. reserves.

In 1968, President Lyndon Johnson's economic advisors argued that the gold drain resulted not from the attraction of bargain basement prices, but because foreign governments feared that U.S. gold reserves were insufficient to provide backing for domestically held notes and to redeem foreign notes.  To dispel this anxiety, the president's monetary "experts" advised him to remove the required 25 percent gold backing from domestic dollars so that reserves would be available for foreign dollar holders--a license to counterfeit money.  The dollars could now be printed at will because there was no actual gold needed to back them up!  Presumably, this added "protection" would assuage concerns of foreign governments and would stop the gold hemorrhage.  These economic geniuses could not conceive that a profit motive could be a factor--that actually getting something for nothing might motivate human beings.  Irwin, then a young business owner in New Haven, Connecticut, correctly surmised our government's reasoning was absurd.

Irwin sent a letter to Texas Senator John Tower, who was then a member of the committee reviewing this gold issue, explaining that the United States faced two choices: (1) force down the general price structure to bring it in line with the 1932 price of gold, or (2) raise the price of gold to bring it in line with 1968 prices.  In other words, to adjust for 40 years of Keynesian inflation, America now had to either deflate prices or to devalue the dollar.

Although Irwin argued that while deflation (lowering prices of goods) would be the most responsible course, since it would restore lost purchasing power of the dollar, he understood that economists erroneously viewed falling prices as a catastrophe and that governments have a natural preference for inflation.  Given these biases, he argued that authorities could at least acknowledge prior debasement and officially devalue the dollar against gold.  In such a scenario, he felt that gold would have to be priced at $105 per ounce.

He also feared a much more likely, and dangerous, third option: that the government would do nothing (which was precisely what it chose to do).  Then as now, the choice was between facing the music or deferring the problem to future generations.  They deferred, and we are the future generation.

Tower was so impressed with the basic logic of Irwin's arguments that he invited him to address the entire committee.  At the hearings, all the highly placed monetary experts from the Federal Reserve, the Treasury Department, and Congress testified that removing gold backing would strengthen the dollar, cause the price of gold to fall, and usher in an age of prosperity!

In his testimony, Irwin asserted that the removal of gold backing from U.S. currency would cause gold prices to soar.  But more importantly, he warned that a currency devoid of any intrinsic value would lead to massive inflation and unsustainable government debt.  This minority opinion was completely ignored, and gold backing was removed.

Contrary to everything the economists had predicted, the availability of additional gold reserves failed to stop the outflows of gold--the world kept flocking to buy $105 worth of gold for only $35!  Finally, in 1971, President Richard Nixon closed the window, which severed the dollar's last link to gold.  At that point, the global economic system became completely based on worthless money!  Over the next decade, the United States experienced the nastiest outbreak of inflation in our history and gold headed towards $800 per ounce.

In 1972, Irwin set out to write his first major attack on how Keynesian economics was putting the United States on an unsustainable economic course.  His book The Biggest Con: How the Government Is Fleecing You, enjoyed widespread critical acclaim and decent sales.  Among the many anecdotes the book contained was a story about three men on an island who fished with their hands.

The story had its genesis as a simple time killer on family car trips.  When caught in traffic, Irwin attempted to entertain his two young sons with the basic lessons of economics (any boy's idea of a perfect afternoon).  To do this he almost always resorted to funny stories.  This one became known as "The Fish Story."

The allegory served as a centerpiece of a chapter in The Biggest Con.  About eight years later, after so many readers had commented to him about how much they loved the story, he decided to develop an entire illustrated book around it. How An Economy Grows and Why It Doesn't was first published in 1979 and went on to achieve quasi-cult status among devotees of Austrian economics.

Thirty years later, as I watched the United States' economy head off a cliff, and as I watched our government repeating and redoubling the same mistakes of the past, my brother and I thought it would be an ideal time to revise and to update "The Fish Story" for a new generation.

Certainly, there has never been a greater need for a dose of economic clarity, and the story is the best tool we know of to give people a better understanding of what makes our economy tick.

This version is in many ways more ambitious than the one Irwin drafted 30 years ago.  Our scope is wider, and our attempt to incorporate the historical sequence is deeper.  In fact, the story would best be described as a riff on the original.

We hope that this book can appeal to the kinds of people who typically go numb when they hear economists drone on about concepts that seem to have nothing to do with reality.  We intend to show that the model proposed by the Keynesians, whereby governments can spend without consequence in the belief that worthless (counterfeit) money can be an effective economic lubricant, is both false and dangerous.

The bad news is that when you take off the rose-colored glasses that all of our economists have forgotten that they are wearing, you can see clearly that our nation is confronting serious problems that we are currently making much worse, not better.  The good news is that if we allow ourselves some clarity, then we can at least make an attempt to solve the problems sensibly.

And while the subject matter is deadly serious, we approached the project with the kind of humor that is absolutely vital in times of stress--just as Irwin would have wanted it.

Schiff, Peter D.; Schiff, Andrew J. (2010-04-29). How an Economy Grows and Why It Crashes . Wiley. Kindle Edition