The Income Gap

“The income gap is growing! Oh the horror,” says the left-wing progressive. “Hear hear!” agrees the liberal, the socialist, and the anarchocommunist. “We must take down the rich to reduce the gap!” cries the union boss, who currently resides in a tent on public land near Wall Street.

But what good does it do to reduce the relative wealth difference between people if you’re making everybody poorer? Margaret Thatcher hammers this point home extremely well.

As Thatcher explains, the Liberal opposition to free-market economics reveals a willingness to make the poor poorer so long as it hurts the rich a little more. Rather making everyone poorer through the socialist policies that destroyed Eastern Europe in the 1970′s, why not favor policies that make all levels of income wealthier, such as those that Eastern Europe applied over the last 20 years, making them more prosperous than Western Europe?

Capitalism makes the rich richer? GOOD! The poor get richer through capitalism too! History is the proof- Socialism is a failed policy, which has led to greater poverty for everyone except the political elite and their connections. Let us do away with it once and for all.

Social Darwinism in the GOP?

According to the San Francisco Chronicle, “if one of the current crop of Republican hopefuls becomes president, Social Darwinism is back.”

Okay, I think a history lesson is in order. The claim in this article is that Social Darwinism consists of the belief that “life was a competitive struggle in which only the fittest could survive – and through this struggle, societies became stronger over time.” But wait a second- that’s natural selection, not Social Darwinism. There’s a world of difference between the statistical inevitability that is natural selection and the social philosophy that is Social Darwinism.

Natural selection happens whether you like it or not, adapting populations to survive as efficiently as possible. If you create a society that lets individuals survive without doing any work, then very few individuals will do work and that society will collapse.

On the other hand, Social Darwinism is a philosophy which suggests that society should actively seek out and destroy the elements considered “weak” or “inefficient.” Who makes that judgement? Generally, the government. Social Darwinism is a philosophy of letting the government pick winners and losers, NOT the philosophy of letting societies naturally evolve towards adaptability.

For example, consider Nazi Germany. How do we envision Hitler’s version of Social Darwinism? Was Hitler a proponent of laissez-faire policies, giving people the liberty to make their own choices and live with the results? No, of course not! Hitler was a totalitarian who usurped the power for his own administration to decide who gets to succeed (or even survive) based on their own narrow judgements of who deserves it. Hitler was no free-market advocate, and free-market advocates are no Social Darwinists.

So if you want to find the Social Darwinists, look for the politicians who are trying to give government the power to arbitrarily pick winners and losers according to the judgements of appointed bureaucrats, rather than letting people make their own fortune in an unbiased market. Can you think of anyone who this description fits? I’ll give you a hint: it starts with “O” and ends with “bama.”

America’s “99%” are the World’s Top 32%

When people throughout the US protest to take more money from the richest 1% of Americans, they organize those protests using iPhones, travel to those protests using cars, and film those protests using digital cameras. Through this entire process, not a single one of them has stopped to think about how rich they really are. From a global perspective, these protesters are in the top 32% in terms of income.

That’s right. The bottom 5% in the US are wealthier than the top 5% in India. Here in the US, we don’t have the poor protesting against the rich. We have rich people protesting against slightly richer people to try to take more. How selfish is that?

So if these Occupy Wall Street folks really, truly believe in “economic justice,” “social justice,” or whatever other principle they invent to misuse the word “justice,” why don’t they voluntarily redistribute their iPhones and the rest of their wealth to Asia? Or maybe to Africa? Perhaps South America?

I’m waiting.

Social Choice Part II

There is something else I want to append to the ideas described in my previous post. I’d like to expand a little bit on the process society goes through in choosing whether the man lives or dies.

The reason Krugman was reframing the binary choice in such an unrepresentative way is because he believes people are incapable of organizing unless forced to through the violent power of the law. So, he feels that in the libertarian framework, the choice would most likely be that the man dies, whereas having a law would make it so the man would most likely live. However, in thinking about the issue in this way, Krugman is completely ignoring the process it takes to actually create a functional law with the desired result.

Sure, the process of voluntary organization to solve this particular societal problem in a liberty-based system requires the efforts of thousands of people who have no mandatory obligation to actually do their part to organize a solution. It requires the support of millions of people to give such a solution the wings it needs to get off the ground. Sounds difficult, right? And yet passage of a law has nearly identical requirements!

So if Krugman wants to examine the difficulties associated with Society voluntarily and freely developing a solution, then fine, but let’s take the honest approach and compare that to the political battles and sausage-making that it takes to generate a solution through government. If instead he wants to focus on the finished product, then fine, let’s compare the efficiency, sustainability, and effectiveness of the finished products that would come out of the two systems. I’m confident that libertarians can win on both the “generation of solutions” front and the “quality of solutions” front when fought separately.

But to take the finished product of one system and compare it to the struggle to get there of the other system is just plain dishonest. And it’s that aspect of his arguments which leads me to so vehemently despise Paul Krugman.

Krugman and Social Choice

Paul Krugman is at it again (emphasis mine):

CNN’s Wolf Blitzer asked Representative Ron Paul what we should do if a 30-year-old man who chose not to purchase health insurance suddenly found himself in need of six months of intensive care. Mr. Paul replied, “That’s what freedom is all about — taking your own risks.” Mr. Blitzer pressed him again, asking whether “society should just let him die.”

And the crowd erupted with cheers and shouts of “Yeah!”

The incident highlighted something that I don’t think most political commentators have fully absorbed: at this point, American politics is fundamentally about different moral visions.

Now, there are two things you should know about the Blitzer-Paul exchange. The first is that after the crowd weighed in, Mr. Paul basically tried to evade the question, asserting that warm-hearted doctors and charitable individuals would always make sure that people received the care they needed — or at least they would if they hadn’t been corrupted by the welfare state. Sorry, but that’s a fantasy. People who can’t afford essential medical care often fail to get it, and always have — and sometimes they die as a result.

The second is that very few of those who die from lack of medical care look like Mr. Blitzer’s hypothetical individual who could and should have bought insurance. In reality, most uninsured Americans either have low incomes and cannot afford insurance, or are rejected by insurers because they have chronic conditions.

So would people on the right be willing to let those who are uninsured through no fault of their own die from lack of care? The answer, based on recent history, is a resounding “Yeah!”

Think, in particular, of the children.

So Mr. Krugman is right about one thing: At this point, American politics is fundamentally about different moral visions. However, the question of which visions is where Krugman is being deliberately misleading. Krugman frames the issue as a binary choice between two moral visions:

Option 1: Society saves the man.

Option 2: Society lets the man die.

But that doesn’t at all represent the moral question here. Libertarians do not want “Society” to just let the man die. Krugman’s mistake (which he repeats frequently, unashamedly, and deliberately, refusing to be corrected) is his tendency to equate government with “Society.” A more honest representation of the choice would be something like this:

Option 1: Government is responsible for determining whether the man lives or dies.

Option 2: Free individuals are responsible for determining whether the man lives or dies, and may voluntarily choose according to what they believe is right and fair.

Whether “Society” is comprised of government or an association of free individuals does not determine whether or not the man lives or dies. Rather, the choices that people make within each of those moral frameworks makes that determination. So who do you want to be making those sorts of determinations? Free, voluntarily associated individuals? Or the entity that gives us so many wonderful engines of bureaucratic incompetence like the DMV?

Think, in particular, of the children!

Paul Krugman’s solution to our economic woes: SPACE ALIENS

Yes. Space Aliens.

Brilliant! Why didn’t I think of that? All we need is a space alien attack, and suddenly we’re saved! The competition for survival will give the entire human race the incentive it needs to regain productivity, spurring the economy into recovery.

Of course, we could just restore the competitive free market and achieve the same incentives with less destruction and unnecessary waste…but that’s just BORING. Why do something that makes sense when we can fight a TOTALLY AWESOME WAR AGAINST SPACE ALIENS???

And maybe those space aliens will break a few windows while they’re at it.

But seriously, how can Krugman even be considered an economist?  Any introductory course in economics will teach about the Broken Window Fallacy. Perhaps he should take such a course so he can learn about his own field.

Here’s what Obama is gonna do if he stays for 4 more years

He will continue doing much of what he’s done for the last 2.5 years. That means:

More indefensible bureaucratic expansion. [link]
More regulation of company mobility to prevent profitable enterprises from fleeing Democratic majority states to search for more freedom elsewhere. [link]
More economic failure, leading to Carter-style stagflation. [link]
More debt growth, as he resists all attempts to steer the country away from an imminent Greek-style crash. [link]
More moralistic nationalization, enforced through militarization of the US police forces, pushing us towards a Soviet-style police state. [link] [link] [link]
More corrupt abuses of executive power, bordering on illegality. [link] [link] [link]

If you want to continue these disturbing trends, to disregard liberty in favor of a Soviet-style socialist nation under a government with totalitarian control over your personal life and endeavors, then by all means, vote for Obama in 2012. But if you want change- economic recovery and the restoration of the values of liberty -then for your own sake, vote against the Democrats!

Obama is Actively Holding Back the Economy

In order to secure reelection, Obama will have to argue that the economy would’ve been worse without his policies. He will argue extensively that no matter how bad things are, they would’ve been worse without him. However, that’s not what the data shows.

As you can see, the natural growth of the economy normally results in a strong growth trajectory following a big crash. This can be attributed to the fact that no technology is lost, and the efficient market hypothesis should lead to oscillation around a constant exponential growth trajectory, as shown in the first graph. This pattern even appears throughout the Great Depression.

However, in our current economic depression, we haven’t had that bounce-back they way we naturally should. You’ll notice in the second graph that recovery began in 1st Quarter, FY2009 (which is actually Oct. 1st 2008 through Dec. 31st 2008). A strong growth curve continues through 4th Quarter FY2009 (ending in September 2009). But then it stops. What happened?

Was it because the stimulus ended? Well, no, the majority of the stimulus money was spent throughout 2010. Yet, growth was stagnant throughout 2010. So the argument that “the stimulus just wasn’t big enough” really doesn’t match the data.

With the worst economic recovery in the history of the country upon us, this data makes it very clear that Obama’s economic policies have actively hindered economic growth to an extent never seen before under any previous president. No Republican or Democrat has held back economic growth as severely as Obama. He must be removed from office and his policies must be repealed if we want to see economic growth return to this country. Think about this when it comes time to vote in the 2012 elections.

Future Leaders of America Express Reservations About Freedom of Speech

This is a little scary. My generation isn’t too fond of the right to freedom of speech. And when I say “Future Leaders of America,” I don’t mean it in the trite and meaningless way it’s normally used- I mean it literally.

Georgetown University is famous for producing many of the political leaders of this country. Notable alumni include Governor Mitch Daniels, Pat Buchanan, Secretary of Defense Robert M. Gates, George Tenet (Director of the CIA), John Podesta, M. Ashraf Haidari, Justice Antonin Scalia, Senator Dick Durbin, Senator Patrick Leahy, Senator Lisa Murkowski, Representative Steny Hoyer, Lt. General John Allen, our 42nd President, and many others. You’d have a hard time finding a committee or bureaucracy in Washington without at least one Georgetown alum.

Isn’t it a little bit disturbing that the youngest generation capable of voting has become so complacent about the concept of liberty that those of them who may one day be running this country seem to think it’s a good idea to censor those they disagree with? How do we put an end to this dangerous complacency?

The Dangers of Debt

The central theory of Keynesian economics is that markets can be stabilized by borrowing and spending heavily during recessions and paying it off during boom periods. However, one of the major problems with this idea is that it completely ignores the risk associated with credit.

According to a new analysis of the Great Recession, the countries that were hit the hardest were those with the most aggregate debt (private + public debt).

Maybe this should be obvious, considering how this economic crash was termed a “credit crisis,” but now we have a definitive picture linking the collapse of the mortgage market (which I’ve already explained in great detail, countless times) to the collapse of the rest of the economy.

Basically, the CRA created a housing and mortgage bubble, which was popped by the Federal Reserve spiking lending interest rates. Normally, such a pop would be dissipated by the strength of the rest of the economy, and this is what Alan Greenspan has admitted he was counting on when he deliberately popped that bubble. However, it turns out there was another, more pervasive weakness in the economy: excessive debt due to at least 7 years of Keynesian stimulus. During the 2001 recession, Bush started a comprehensive Keynesian stimulus plan, including tax credits, stimulus spending, and lowered Fed rates. Even though actual economic recovery didn’t begin until the 2003 tax cuts were implemented, the debt-feeding Keynesian machine continued until 2006.

This is important, because it’s an example of Keynesian policy being implemented exactly as Keynes intended: inflationary stimulus during recessions, with deflationary debt-paying during bubbles. But rather than leveling out the booms and the busts, this policy merely resulted in a new bust being primed by excessive debt, hitting us even harder and faster than the last one.

Suppose you’re trying to walk while holding a glass of water. Keynesian stimulus is like trying to run exactly as fast as the oscillation of the water, so that you can move faster while your rhythm cancels out the waves in your cup. It doesn’t work. You just end up with water all over you.

With this in mind, we should be very worried about the economy in the near future. We’ve now racked up more debt than ever before with the latest round of unprecedentedly large Keynesian stimulus. We even bailed out a lot of the companies that failed last time, so that they’ll be around to fail next time too. It is absolute insanity that we’ve set ourselves up for yet another major recession like this.

Tinkering around with the economy through debt the way Keynes suggested is never safe, and therefore not a responsible approach for a national economy. We need to undo the damage that has been done and reduce our spending and debt levels, or suffer further economic collapse in the very near future.