Views on the News
January 3, 2009
Views on the News:
The standard liberal-progressive-socialist litany is that socialism, in the New Deal and subsequent years would have succeeded, if only the government had spent more money for a longer time. Many liberals lament that the New Deal didn't go far enough in socializing the economy. In addition to blind religious faith in the secular religion of socialism, liberal-progressives are beset by ignorance. For three generations, students have been taught a completely false version of the Depression's causes and of the actual results attained by President Roosevelt's New Deal. Despite President Franklin Roosevelt's devaluation of the dollar, deliberate inflation of prices, nationalization of agriculture and industry and massive deficit spending, unemployment remained in double digits. Those levels, from 1933 until our entry into World War II in 1941, were more than twice as high as our present unemployment rate. Not until the 1950s did industrial production regain the levels of 1928. The initiating cause of the Depression was over-expansion of the money supply by the Federal Reserve during the 1920s, which led to excessive investments in farm and machinery production for export to post-World War I Europe. Similar over-expansion of the money supply led to over-allocation of resources in fledgeling tech companies in the 1990s dot-com boom-and-bust, as well as in the housing mania and speculative lending and investing practices in the present situation. Blaming a lack of regulation for the financial meltdown is a non-starter since the banking industry is among the most highly regulated institutions with a small army of people overseeing their every move. Censuring the free market is a way of deflecting blame from the true source, which is bad government policy supported by a Congress addicted to their industry campaign contributions. Presidents Hoover and Roosevelt accomplished that feat by pursuing the same economic policies now urgently sought by liberal supporters of president-elect Obama.
· Raising income taxes on individuals and businesses; taxing "the rich" and distributing receipts to favored economic and social classes.
· Condemning businessmen as social criminals (note current rhetoric by Senator Charles Schumer and Congressmen Henry Waxman and Barney Frank).
· Promoting inflation and devaluation of the dollar (Fed Chairman Bernanke and Treasury Secretary designate Timothy Geithner are neo-Keynesian, flood-the-market-with-artificial-money advocates).
· Clamping many rounds of new regulations upon business.
· Supporting socialist labor unions.
- Punishing businesses that sought to reduce costs enough to enable resuming production at a profit.
- Pursuing beggar-thy-neighbor protectionist policies (raising tariffs, or today rescinding and curbing free-trade agreements with foreign nations in order to please labor unions).
- Centralizing business management decisions in Washington bureaus
- Making it impossible for banks to float bonds for long-term credit to support business expansion; uncertainty about what the Federal government would do next was the enemy of credit expansion (witness today, when credit markets remain frozen, because of massive flip-flops in bailout programs by the Treasury and the Fed; Bear Stearns is merged into Chase, but Lehman is allowed to go belly up; the Treasury is to buy bad assets from lenders; then, instead, it injects capital into selected banks).
- Making daily business decisions a matter of speculative chance; FDR's New Deal came out with so many new plans, new agencies, and new regulations, month after month, that it became impossible for businessmen to make rational decisions for long-term investments that were needed to create new jobs and to ramp up the economy.
Presidents Hoover and Roosevelt turned an ordinary business recession (which should have lasted only about two years) into the worst economic downturn in our history.
Government central planning has failed every time it has been attempted, since it replaces free market planning with inferior plans made by inferior people in a government monopoly. The purpose of government planning is not to maximize the creation of wealth, but rather to maximize the satisfaction of political pressure groups. Given a century of factual and theoretical refutation, continued advocacy of government planning is a transparent fraud. It is an attempt to cover up the fact that what the planners really have to offer us is not planning but chaos--an economy held hostage to the contradictory, ever-shifting whims of government officials and political pressure groups. Isn't that the predominant character of the current bailout frenzy, as the Treasury, the Fed, the president, Congress, and the president-elect careen from one stimulus plan to another? Haven't the past three months given the impression, not of planning, but of spur-of-the-moment improvisation? Governments cannot create but merely redirect. When the government spends, the money has to come from somewhere. If the government doesn't have a surplus, then it must come from taxes. If taxes don't go up, then it must come from increased borrowing. If lenders won't lend, then it must come from the printing press, which is where all these bailouts are headed. But each additional dollar printed diminishes the value those already in circulation. Something cannot be effortlessly created from nothing. Similarly, any jobs or other economic activity created by public-sector expansion merely comes at the expense of jobs lost in the private sector. And if the government chooses to save inefficient jobs in select private industries, more efficient jobs will be lost in others. As more factors of production come under government control, the more inefficient our entire economy becomes. Based on the U.S. Conference of Mayors list to Congress of 11,391 infrastructure projects that are "ready to go," this list is full of pork with little long term economic benefit. Unless some cost benefit analysis is used, Obama’s stimulus package will do nothing to move us away from the over-priced, low social benefit projects of the past. Inefficiency lowers productivity, stifles competitiveness and lowers living standards. If we look at government market interventions through this pragmatic lens, what can we expect from the coming avalanche of federal activism? By borrowing more than it can ever pay back, the government will guarantee higher inflation for years to come, thereby diminishing the value of all that Americans have saved and acquired. The biggest problem is that Congress will never acknowledge their responsibility for this financial crisis and they will try to shift blame to the White House, while they wallow in the glory of anything that goes right. Congress is ready to ram through a half-baked stimulus package costing as much as $1 trillion, but if it's stimulus we need, why not make it effective stimulus - tax cuts instead of wasteful spending?
Obama’s experiment with socialism will be painful, but not irreversible. First, we've been here before. The New Deal was socialism, and it harmed this country by prolonging the Great Depression, according to economists. LBJ's War on Poverty was socialism, doing enormous harm to black families by supporting social pathology. Our third wave of socialism was affirmative action- race-and-gender socialism. Academic values in education have decayed as a result of affirmative action. Gender-and-race paranoia has risen, with many good and decent people being falsely accused because of their race and gender. Affirmative action has led to more racism, just as gender-based affirmative action has undermined trust between men and women. So we already have seen a great deal of socialism in the United States. There is nothing irreversible about Obamanism. Positive things always happen even while we worry about the damage inflicted by foolish and politically corrupt government. Around the world, freedom prevails in spite of coercion. Every regulatory regime creates its own black market. Yes, Obama will introduce all kinds of internationalist and socialist vote-buying practices through his environmental activism, universal health care and international treaty commitments. Americans will go from enthusiasm and media-fed hype to disillusionment, as the reality strikes home. Conservatism will grow stronger as Leftism reaches its limits. We've seen it happen before, and if the Carter-equivalent of "America held hostage" happens, and the Obama administration fails to act, as Carter did, the voters will throw the bums out. Over the long term, the world is an inconceivably better place because of free markets, free politics, free thought and innovation. Socialism is in its "Third Way" phase, after the failure of the Soviet Union. According to Tony Blair the Third Way” is the exploitation of free markets for socialist goals. Conservatism is a way to ward off the worst results of untrammeled power and mob demagogues. Nations can tolerate a great deal of decadence, misgovernment, and corrupt public display. In this time of racial, gender and ethnic socialism, the role of a loyal opposition is to oppose destructive and foolish ideas and policies. The New Media are smarter, better-informed, better-educated, funnier and faster than the declining Old Media. The Left will do its best to undermine freedom, the way they already have in our universities and news media. They will try to turn us into an engine of internationalist Eurosocialism. They will use Green politics to impose a heavy regulatory state, and drive wedges by gender, class and race to split our people. Our job is to be ourselves, and not be intimidated and don't be apologetic for opposing the hype of the moment. American people need the truth, need to uncover the media myths and lies, and then the people need to decide and live with the results.
For decades, the old media, consisting of the big three networks and the newspapers of most major cities have had a stranglehold on what information gets disseminated to the public at large. Newspapers have been trying valiantly to adapt to hardships imposed by declining readership and depressed ad sales, with today only four in 10 households subscribing to a daily newspaper, compared to a more than 100% household penetration in 1950. The media elite have decided which issues qualify as news. Not surprisingly, the majority of the information that makes it to the airwaves or in print is overwhelmingly one-sided, reflecting a world-view steeped in progressive values and blatantly hostile to traditional values. The old media elite, comprised of less than 1% of our population, has set the agenda and defined the issues in America for decades. More importantly, the old media has had the ability to relegate any facts that didn't conform to their version of reality to the ash heap. By any measure, America and our allies have won the war in Iraq. Our mission has been accomplished. This is news, even though the media has failed to report it. Iraq's economy is on track, thanks to much improved security and increased production of oil. Iraq's fledgling parliament is operating. In other words, we won and the Iraqi people have won, against tremendous odds. Because American victory and military success don't fit the media's liberal version of America, most Americans remain unaware of the tremendous accomplishments that have been brought about, thanks to President Bush and our brave fighting forces. Instead, their focus encompasses only the price we paid, not the victory achieved. Ignoring inconvenient news and embarrassing facts is a tried and true tactic of the liberal media. A majority of Americans are now somewhat aware of media bias. Increasingly, when reading a news story, Americans have the ability to recognize the obvious slant. This is all well and good. What is not well and good, is the fact that many of us are not made aware of all the news out there that is ignored - credible, relevant facts that are simply not reported. Credible challenges to a core tenet of progressivism are ignored rather than rebutted. This is media malfeasance because every American is entitled to enough information to make informed decisions. Instead, our media gives us only the information that fits the liberal template. The lack of reporting both sides of a story is having a pernicious effect on America, breeding anti-Americanism, victimology, feelings over facts and form over substance. The traditional values which made our country great, including those derived from Christianity, capitalism, the importance of families are being cast aside. Just because the media says something is so, doesn't make it so and ignoring relevant facts doesn't make them less relevant, but sadly, millions of Americans are still willing to let someone else do their thinking for them.
With a Democrat President and a Democrat House and Senate, Republicans will have nothing to lose by actively and openly fighting Democrat initiatives opposing fundamental conservative principles. First thing conservatives must do is to build up mighty, grassroots networks across the country to resurrect a powerful political movement on core conservative principles. Conservative think tanks should look to communicate in part through rejuvenated grassroots networks with conservative intellectuals touring the country speaking to such groups. Every tax increase must be pounced on as a broken Obama promise, whether it is an individual mandate requiring workers to buy health insurance, a carbon tax or cap and trade global warming regulation that would directly raise the price of energy and its use, including electricity, gas, and maybe cars, it is an increase in middle class costs. So far Congress has heeded America's protestations against legalizing what is now, at least according to the unenforced laws, illegal immigration. Education is primarily a local issue so conservatives must conduct a campaign of guerrilla warfare to rescue our schools from the liberal indoctrination factories they have become. The battle for the freedom of religious expression must be fought in the courthouse, the schoolhouse, and the church house. In the name of Global Warming carbon, a naturally occurring element, will be declared a “dangerous pollutant" by the EPA, with the sole stated purpose of "saving the planet." Senate Minority Leader Mitch McConnell criticized the massive economic-stimulus package Democrats are drafting as a potential boondoggle that could leave the country strapped with unsustainable debt. McConnell and congressional Republicans want at least a week to scrutinize the bill after its finished, that it be posted online so that taxpayers can see it, and it not include any special interest earmarks! For long-term political success, the emphasis needs to be on economic growth, because that is what moves conservative political support from the mid-40s toward 60%, enough for a governing majority. We should counter the Obama tax plan based on redistributive tax credits with a middle class tax cut based on reducing tax rates, which is what creates real incentives for economic growth. The outdated and uncompetitive federal corporate rate of 35% should be reduced at least to 25%, if not the 19% recently adopted by Germany and Canada, or the highly successful 12.5% rate adopted by Ireland. The top individual income tax rate should be reduced to 25% as well. Capital gains tax rates should be half these individual rates, if not reduced all the way to zero, as capital gains involves double taxation. Even better would be an innovative flat tax reform designed for maximum political appeal, not revenue neutral but a net tax cut. The long-term agenda also includes eventually phasing out the payroll tax with the benefits now financed instead through personal investment and insurance accounts. The fundamental theme for conservatives is freedom and prosperity, including the freedom for those who believe in traditional religious and moral values to live their lives in accordance with those values.
If you are sick and tired of government and politics as usual, read my web site with its individual issue analysis and recommendations at: http://www.returntocommonsensesite.com Remember this site is updated every Saturday. Individual issue updates this week include:
- Feminism at http://www.returntocommonsensesite.com/dp/feminism.html
- Middle East at http://www.returntocommonsensesite.com/fp/middleeast.html
This Week’s Best Articles:
- “The New Deal Would Have Worked, If… ” dated December 27, 2007 published by Intellectual Conservative at http://www.intellectualconservative.com/2008/12/27/the-new-deal-would-have-worked-if/ .
- “There’s No Pain-Free Cure for Recession” dated December 27, 2008 published by The Wall Street Journal at http://online.wsj.com/article/SB123033898448336541.html .
- “’Stimulus’ Doesn’t Have to Mean Pork” by Clifford Winston dated December 28, 2008 published by The Wall Street Journal at http://online.wsj.com/article/SB123051204977838501.html .
- “Life at New Animal Farm Won’t Be All That Bad” by Victor David Hanson dated December 29, 2008 published by Real Clear Politics at http://www.realclearpolitics.com/articles/2008/12/life_at_new_animal_farm_wont_b.html .
- “America’s Amazing Resilience” by James Lewis dated December 29, 2008 published by American Thinker at http://www.americanthinker.com/2008/12/americas_amazing_resilience_1.html .
- “Where Should Conservatives Draw the Line” by Larrey Anderson dated December 29, 2008 published by American Thinker at http://www.americanthinker.com/2008/12/where_should_conservatives_dra.html .
- “McConnell Attacks Democrats’ Stimulus Plans” dated December 29, 2008 published by News Max at http://www.newsmax.com/insidecover/mcconnell_stimulus/2008/12/29/166095.html .
- “Capitalism Is Worst System Except for the Rest” by Caroline Baum dated December 30, 2008 published by Bloomberg at http://bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=aR6Eq.uqJAyA .
- “What Conservatives Must Do” by Peter Ferrara dated December 31, 2008 published by The American Spectator at http://spectator.org/archives/2008/12/31/what-conservatives-must-now-do .
- “The Fraud of Government Intervention” by Robert Tracinski dated December 31, 2008 published by Real Clear Politics at http://www.realclearpolitics.com/articles/2008/12/the_fraud_of_government_interv.html .
- “2008: The year the U.S. media lost relevance” by Nancy Morgan dated December 31, 2008 published by World Tribune at http://www.worldtribune.com/worldtribune/WTARC/2008/ss_media0827_12_31.asp .
- “Don’t Read ‘Em… and Weep” by Kathleen Parker dated January 2, 2009 published by Town Hall at http://townhall.com/columnists/KathleenParker/2009/01/02/dont_read_em_and_weep .
- “Are You Mindless Enough to Be a Liberal?” by John W. Lollipop dated January 2, 2009 published by American Daily at http://americandaily.com/index.php/article/29 .
- “For Real Stimulus” dated January 2, 2009 published by Investor’s Business Daily at http://www.ibdeditorials.com/IBDArticles.aspx?id=315792191143684 .