The View From 1776

Labor Day should be a reminder that labor unions are quintessentially socialist organizations, taking their origin and character from the Marxian doctrine of class struggle.  Employers are the enemy, to be hammered into submission without regard for the destructive effect on everyone else, on the theory that business profits are theft of money that really belongs to the workers.

Violence is inherent in labor unionism (see IWW - Organized Crime in the Labor Market and Labor Unions: Socialism’s Shock Troops).

Labor unions’ successful extortion requires shutting down schools and businesses for months, inconveniencing the great majority of citizens and inflating the cost of living.  Meanwhile their goons are ready to beat up dissenters on the home front.

If you want to know why manufacturing jobs are disappearing from the United States, begin your research with labor unions.  It’s obvious that our older manufacturing sectors are at a competitive disadvantage with other nations, because labor unions have driven wage rates and supplemental benefits to multiples of those elsewhere in the world.  The automobile industry, forced to the wall by union militancy, is typical.

American automobiles and trucks, as recently as the 1950s, on the whole were the best in the world.  Union militancy following the end of World War II started the destruction of the auto industry and its thousands of parts suppliers.

Because businesses can’t survive without profits, heavily unionized manufacturers are forced to squeeze lower prices from their suppliers.  Among other things, product quality suffers when manufacturers are compelled seek, not the best quality component, but the cheapest. 

Non-union workers in supplier companies get squeezed with lower pay checks in order to support the unwarranted, parasitical wages, medical benefits, and pensions extorted by predatory labor unions. 

Bear in mind that the Obama administration’s first priority is not victory in Afghanistan or forestalling Iranian nuclear bomb ambitions, but buying continued allegiance from labor unions by directing so-called stimulus money from you to them.  This is today particularly evident in public employee unions, where total compensation is 30% to 100% higher than among non-union employees in the private sector.

Michelle Malkin details the most recent example of Obama’s liberal-progressive coziness with violent labor unions, for whom he desires to eliminate worker choice via secret ballot. 

Like a broken clock that displays the correct time twice a day, David Brooks gets it right.

Mr. Brooks is a liberal-progressive columnist for the New York Times, where, in contrast to his confreres, he sometimes appears to be a counter-balancing voice of conservatism.  As he notes, German political leaders have rebuffed President Obama’s insistent demands that they too open the money spigots and, following the advice of Paul Krugman, another New York Times columnist, drown the economy in debased fiat dollars.

Ironically, Germany has long been one of the world’s most consistently socialist nations.  In the middle 1800s, Ferdinand Lassalle created and led Europe’s strongest socialist political party, the General Union of German Workers.  Hitler’s political base in the 1920s onward was the National Socialist German Workers Party.  Even Ludwig Erhard’s “social market system” that revived Germany’s economy after World War II was a far-left welfare state with elements of fiscal conservatism.

That fiscal conservatism arises from Germany’s horrific hyperinflation in the 1920s and early 1930s, when Weimar Republic socialists employed the governmental deficit, stimulus spending model that John Maynard Keynes began to articulate after the end of World War I.  It was Weimar’s fiscal profligacy and its inevitable inflation that gave Hitler a strong boost.

Jeff Lukens’s essay should have been posted before the Glenn Beck rally in D.C.  But its message is just as relevant now as before the rally.

Restoring Honor: A New American Awakening?
By Jeff Lukens

If anything good can be said about the progressive left controlling our government, it’s that their astonishingly brazen and heavy-handed tactics may have aroused the American people into a new spiritual awakening. With basic liberties under assault, we are seeing a revival of values that have been dormant for a long time.

Every great moment in this country, when real progress is made, there was a spiritual awakening. The Restoring Honor Rally in Washington D.C. on August 28 may be the one of those moments. The rally’s organizer is radio and television personality Glenn Beck. Beck says that our country’s troubles cannot be solved by the same methods that got us into this mess. Like an old time revivalist, he says “We must call upon God, and He will see us through.”

The message is resonating. As many as a million people could attend the rally. Beck and his audience generally agree that this is a country of divine providence, a country of American exceptionalism, and that God has a special purpose for this land. And like the Founders, we too can call upon divine providence to overcome our nation’s troubles.

The Founders were all people of great faith who saw America as a new promised land. The popular myth is that they were not religious is not true. They believed in divine providence, and that if they relied upon God, then God would set things right.

The Founders knew that besting the most powerful army in the world in battle did not happen by accident. Nor was it an accident that they came together with like mind to agree to a lasting foundation of governance in the U.S. Constitution.

There have been major periods of revival, or Great Awakenings, in American history. The first occurred in the quest for independence. The Declaration of Independence and other founding documents frequently refer to freedom and divine providence. The Founders saw the two concepts as interrelated. Another Great Awakening began in the early 1800s, and reached its climax with the Civil War and the abolition of slavery.

Visiting America in the 1830s, Frenchman Alexis de Tocqueville was surprised by the religious atmosphere and noted that, “Freedom sees religion as the companion of its struggles and triumphs, the cradle of its infancy, and the divine source of its rights.” Tocqueville’s observation was simply that, for America, tyranny may be able to do without faith, but liberty cannot. This point is as timely today as ever.

These days, faith in God as the Provider of all human rights is an alien concept to many of our fellow citizens. Many think their rights come from government. Our Constitution is ignored as something that is quaintly out of date and can be rhetorically contorted to fit any political purpose.

Could it be that only after a calamity of such unspeakable proportions that enough people will adjust their attitude toward faith and the founding principles that a renewal can take place? We may soon find out.

With the economy as bad as it is, imagine what happens when Baby Boomers begin retiring as the Social Security and Medicare systems simultaneously go broke. This looming financial crisis, among many others, threatens the everyday freedoms we take for granted.

Our government spends trillions it does not have. When hyperinflation turns our dollars into Monopoly money, the resulting civil disorder could be unimaginable. Savings accounts will be wiped out, commerce could break down, and within a short time there could be anarchy in the streets. In their shortsightedness, “compassionate” politicians will probably then step in with price controls to “protect the people against greedy businessmen.” The resulting shortages on the store shelves could then reduce the lives of many people into a desperate search for such basic items as food and water.

There are no easy answers to what lies ahead. Life as we know it could be dangling by a thread. People already sense trouble and are starting to pay attention. They are beginning to realize we don’t need a transformed nation, we need a restored nation. And that only happens by a transformation of individual attitudes and beliefs.

Perhaps we should heed the words of 2 Chronicles 7:14: “If my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then will I hear from heaven and will forgive their sin and will heal their land.”

Beck, who is Mormon, is calling people across all religious denominations to participate in an American revival. Like the Founders, we can differ theologically and still agree in the common cause of liberty.

Beck prompts his audience daily: “We must begin by seeking God… The Hand of God will save this country… We must choose today how we are going to live… To be a free people implies we must be a responsible people… We must be involved… We lose freedom by not valuing it as a gift from God… If America perishes, where will the world run? Who stand against tyranny when we are gone? A new dark age will come.”

If the message of American renewal speaks to you, come join us at the steps of the Lincoln Memorial on August 28, and be a part of “Restoring Honor” to our nation.

Jeff Lukens is a staff writer for the New Media Alliance, a non-profit (501c3) national coalition of writers, journalists and grass-roots media outlets. He can be contacted at http://www.jefflukens.com

Professor Thomas Emerson forwarded this Wall Street Journal opinion piece by his Carnegie-Mellon colleague.

Europe Jumps Off the Keynesian Bus
The economy is looking bright in Britain and Germany after those governments announced plans to reduce spending.
August 12, 2010
By ALLAN H. MELTZER

President Obama is the victim of bad advice and misinformation. From his advisers, the Democratic caucus and the New York Times, he hears that markets have failed and the country needs more government spending to increase consumer spending. He is told that any plan to reduce government spending and the deficit will bring on another recession and even a new Great Depression. And he repeats the foolish claim that, since the rich spend a much smaller proportion of their incomes, it is good for the country to raise their tax rates.

Nonsense. After Britain’s new government announced a multiyear program to reduce government spending, the pound rose against the dollar and the economy continues to expand across the board.

In the euro area, Germany has reduced the growth of government spending to bring down the budget deficit. Following the recent announcement of a credible, long-term German program to reduce future deficits, the euro appreciated strongly against the dollar. Forecasters expect a surge in second-quarter growth when it is reported later this month. A rebound in construction and investment in machinery and equipment shows renewed optimism.

The Obama program and its advocates reflect the views of 1950s-era Keynesians, but ignore the major development in economics of the past 40 years. Modern economics differs from the past by carefully integrating expectations about the future into dynamic economic models.

The simple-minded views used to justify more government spending fail to recognize that people are not dumb beasts. Told that the government will spend more, many will expect to pay higher taxes in the future.

Investors will ask what taxes will be when today’s investments earn returns two, three or more years in the future. If the spending is as wasteful as the failed 2009 stimulus, the economy will continue to stagnate and investment will be deferred.

The billions spent after passage of the 2009 stimulus had a modest economic result at best, because the money was mainly a redistribution of income that did not induce growth. Replacing state budget deficits with federal deficits has a “multiplier” effect of nearly zero.

The teachers whose jobs are saved recognize that the benefit lasts one year. They are unlikely to buy a new car or a new house. Temporary benefits like temporary tax cuts do not produce sustained growth.

Meanwhile, the unsustainable debt held by foreigners that has built up over past decades must be serviced. That requires increased exports. Instead of wasteful programs, the administration should offer a credible plan to reduce spending and current and future budget deficits. As in Germany and the U.K., that will reduce uncertainty about future tax rates and encourage investment.

Right now, businesses are investing to reduce costs for health care and employee benefits by increasing labor-saving capital. That maintains profits despite continued slow growth, but increases layoffs and unemployment. They see what the administration and Congress do, and they protect themselves as best they can.

Policy makers can reduce uncertainty about future costs by putting a moratorium on new regulation unless it is approved by a supermajority of Congress. Meanwhile, there has to be a recognition that bashing business and blaming the Bush administration for economic problems create less confidence about the future and are counterproductive. They do nothing to end high unemployment.

Mr. Meltzer is a professor of economics at Carnegie Mellon University, a visiting scholar at the American Enterprise Institute, and the author of “A History of the Federal Reserve” (University of Chicago Press, 2003 and 2010).

U.K. Telegraph reporter Nile Gardiner describes the European view of Obama’s high-handed governance.

Quote:

...I would wager that the author of L’Ancien Régime and Democracy in America would be less than impressed with the extravagance and arrogance on display among the White House elites that rule America as though they had been handed some divine right to govern with impunity.

It is the kind of impunity that has been highlighted on the world stage this week by Michelle Obama’s hugely costly trip to Spain, which has prompted a New York Post columnist Andrea Tantaros to dub the First Lady a contemporary Marie Antoinette. As The Telegraph reports, while the Obamas are covering their own vacation expenses such as accommodation, the trip may cost US taxpayers as much as $375,000 in terms of secret service security and flight costs on Air Force Two…

The First Lady’s ill-conceived trip to Marbella and the complete disregard for public opinion and concerns over excessive government spending is symbolic of a far wider problem with the Obama presidency – the overarching disdain for the principles of limited government, individual liberty and free enterprise that have built the United States over the course of nearly two and a half centuries into the most powerful and free nation on earth.

Faced with a major recession, Obama’s priority was not jobs.  He left it to Nancy Pelosi and Harry Reid to enlarge George W. Bush’s stimulus efforts, to concoct a program of which the main effect has been pork-barreling and spending to benefit Democrat/Socialist special interest groups.

Obama chose, instead, to focus his energies upon socializing medical care.  The president and his Democrat/Socialist colleagues struggled frantically, ahead of upcoming November elections, to enchain the nation with socialistic bureaucracies so broad and so deep that they cannot be undone by future administration, so pervasive and invasive that returning the nation to a new growth path will be impossible.  Socialized medicine, nationalization of the banking system, control of energy sources and uses, flooding the nation with millions more illegal immigrants (who will be converted to Democrat/Socialist voters), resurgence of socialistic labor unions, fortifying the tort bar, subordinating our statute law and the Constitution to the world-government socialist international, and outlawing Judaism and Christianity are more important to them than the economic revival and survival of the United States.

The convergence point of these initiatives is bringing private business under an updated Fascist state corporatism of the sort that Mussolini imposed upon Italy in the 1920s and Franklin Roosevelt instituted here under the, happily, short-lived National Recovery Administration during the 1930s.  In those days, Fascist state corporatism was exercised through government regulated industry councils in which management and labor unions created industry codes of prices, hours of work, workers’ pay rates, and production volumes.

Today’s Fascist state corporatism under Obama involves industry czars calling the shots behind the scenes at banks, automobile companies, and petroleum and coal companies.  The United States government and its labor union proxies take major ownership positions in and becomes the banker for those private enterprises swept into the socialist orbit. 

As Franklin Roosevelt demonstrated in the New Deal, Federal courts eventually will condone almost any degree of stretching the Constitution’s commerce clause. Darwinian evolution implies, as Karl Marx in the 1860s and American progressives in the early 1900s theorized, that the Constitution’s meaning changes from day to day.  Judicial activism becomes a sort of natural selection mechanism to weed out original constitutional conceptions of individual rights against arbitrary government exercise of power.

In addition, under Democrat/Socialists’ liberal-progressivism, the government tries to confiscate as much of income from high net worth, high income citizens as possible, and then to transfer that income to Democrat/Socialist voters.  Among other things, this will reduce or eliminate private savings, and leave the Federal government more firmly ensconced in the economic driver’s seat, free to pick industry winners and losers without interference from a domestic free market.  Having dispensed with the Fifth Amendment’s private property rights and old fashioned concepts such as profitability and return on investment, Democrat/Socialists will be able to promote money-losing, economy-wrecking “green” jobs.

Abetted by our secular and socialist educational system, in another generation Democrat/Socialists will have completed the transformation of the United States into a third-rate, socialist nation like France.  Unless, of course, voters finally come to understand what Franklin Roosevelt set in motion during the 1930s Depression.