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Sunday, July 25, 2004

The Economics of Liberal Values - Part Two

Liberal politicians are again playing the “caring” card.  They casually announce that a liberal-socialist President will create millions of new jobs, compel American corporations to cease employing people overseas, and make the nation energy-independent, all while sharply reducing corporations’ profitability with tax increases and costly environmental regulations.

On the one hand, liberals declare that people who believe in the values prevailing in 1776 are heartless and mean-spirited, whenever they question the effectiveness and the advisability of continually adding very large welfare entitlements programs to the Federal budget.  In effect, liberals’ prescription for treating a drug addict would be to give the addict ever-increasing doses of narcotics, because they “care” about his suffering.

On the other hand, liberals speak of these new socialist, welfare-state entitlements as if there were no real, even insurmountable, problems in implementing them.  As noted in previous postings, liberal-socialists view the economy as a sort of board game in which they can arrange passive pieces in any way they choose in order to create social justice, the equal distribution of wealth and income.  The real world is not so simple.

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The Great Economic Pipe Dream

The dictionary defines pipe dream as the hallucinations induced by smoking opium. Americans? belief that a President can and should prevent or end a recession, that a President can create jobs, is a pipe dream.  Nonetheless, most people assume that Presidents can manage the economy as if it were a large corporation.  Why is this so?

The answer lies, first, in the 180-degree distortion of public understanding wrought by the Depression and Franklin Roosevelt’s hundreds of state-planning programs.  Americans, indeed all Western nations, were enthralled with the socialistic state-planning in Fascist Italy and Communist Russia in the 1920s and 1930s.  As one journalist put it after a trip to the Soviet Union, “I have seen the future and it works.” 

President Roosevelt pledged to cure the Depression with state-planning.  The actuality was that he failed to do so (the Depression was ended only by mobilization in 1940 for a probable war against Germany and Japan).  But generations of school kids since the 1930s have been taught that Federal fiscal and monetary policies infallibly do their theoretical job (even Roosevelt said that fiscal policy,in theory, was the simplest thing in the world, but in practice it had been a disaster).

Second, the public are confused about the true nature of a society?s economic wealth and its source.  Money in a paycheck or a welfare envelope is not the same thing as real wealth.  The nation’s wealth is exactly the amount of useful goods and services it produces, and nothing more.  Increasing people’s money income, with deficit financing and welfare programs, when there is no increase in production, is simply inflationary.  Your bigger pay check is eaten up by higher prices for the same goods.

And, third, the answer lies in human tendencies to assume a cause-and-effect relationship between two events when one follows the other.  Presidents and members of Congress are happy to accept citizens? applause when the economy is booming.  The opposition party is quick to blame the administration in power when the economy turns down. 

The Depression, World War II, and Cold War defense spending have been the principal sources of confusion about cause-and-effect.  Before then, massive Federal spending programs were unknown except for the five years of the Civil War and the couple of years of our involvement in World War I.  In each of those cases, the Federal government quickly and sharply cut back spending and the size of military forces immediately after the end of hostilities.  Businessmen and political leaders then still clearly understood that economic activity and prosperity were entirely an individual matter in which the government should have no direct participation.

The fact is that the best that a political administration can do to help the economy is to step aside and give as free rein as possible to individuals and private businesses.  Fortunately for President Clinton, he followed Treasury Secretary Rubin’s advice to keep a light hand on economic controls, after the collapse of his disastrous essay at creating a Canadian-style, socialized medical care system.

Federal spending programs to boost the economy are almost inevitably too late and simply add inflationary pressures to the economy.  The only Federal policies that actually have increased real wealth via increased production, without inflation, have been significant reductions in marginal income tax rates, which is a form of stepping aside to permit individuals to do their thing.  Ironically, the first administration to take this route was that of Democrat John F. Kennedy.

Reductions in tax rates are not inflationary, because the greater amount of your money that the Feds permit you to keep came from already-existing production of goods and services.  Liberal panaceas, such as higher minimum wages and higher welfare payments, put more money into consumers hands before production can be increased, thus adding to inflationary demand.  Prices, in that case, rise before production increases.

Social Costs of Inflation

Liberals aiming to accelerate the rate of growth in Medicare, Medicaid, prescription drug benefits, and other welfare programs argue that it is unfair to people who can least protect themselves not to do so. 

Most people will agree that ours should be a benevolent society that helps victims of misfortune.  Before the New Deal’s 1935 Social Security program, widows, orphans, the sick, and otherwise unfortunate people had been very effectively cared for by churches, synagogues, immigrant societies, and the tens of thousands of local branches of self-help organizations like the Elks, Loyal Order of the Moose, Woodmen of the World, and several hundred other organizations of similar nature.  One purpose of Social Security expressed by New Deal planners was to kill off these independent self-help societies and to force everyone into the arms of Big Brother.  This was done by making Social Security taxes mandatory and sucking the economic life blood from independent and private groups.

The question is whether out-of-control entitlements programs like Social Security really work effectively and ??promote the general Welfare, and secure the Blessings of Liberty to ourselves and our posterity?? in accord with the Constitution?s preamble.  After all, the world’s first welfare-state was introduced by the German Empire’s Otto von Bismarck.  He wanted, Bismarck told the Reichstag, to be able to herd the German people like cattle.  People who are dependent on the National State for their financial security, he said, are in no position to resist its despotisms.

Our War of Independence in 1776 was fought for precisely that reason, to oppose Parliament’s imposing heavy taxes and thereby infringing our property rights.  English and American individualism was the product of private property rights available only in England and North America.  Of Magna Carta’s sixty-three articles, forty-seven enunciate private property rights and limitations upon the king’s prerogative to impose taxes arbitrarily. 

Americans understood in 1776, as Samuel Adams wrote to the Committees of Correspondence in the other colonies, that private property rights were the only bulwark against despotism.  If the people can deny money to the sovereign, they can stop his usurpations. 

The New Deal reversed 325 years of American tradition by socializing wealth and reducing the American people to dependence on the Federal government.  It was the opposite of what was intended by the delegates who crafted the Constitution during the hot summer of 1787 in Philadelphia.  The New Deal’s liberal-socialism, as well as today’s, does not support the Constitution’s intention to ??promote the general Welfare, and secure the Blessings of Liberty to ourselves and our posterity??

Let’s suppose, however, that we have decided to be happy in the clutches of Big Brother.  History proves incontrovertibly that his socialistic programs cannot succeed over the long run.

Unfortunately, entitlement spending grows much faster than the Gross Domestic Product and government tax revenues.  Medicare and Medicaid have been rising as much as 10% a year, four times as fast as President Clinton?s most optimistic projections for economic growth, when the illusory dot.com boom was in full eruption.  At that time, Democratic Senators Bob Kerrey and Patrick Moynihan estimated that, within seventeen years, growth of entitlements spending and interest on the debt would consume the entire Federal budget, leaving nothing even for national defense.

Only three avenues are open to finance that excess growth ? cutting other expenses, raising taxes directly, or allowing inflation to raise nominal incomes and tax revenues.  Cutting expenses an offsetting amount is not feasible, because entitlements spending is such a large and growing part of the Federal budget that almost every other Federal activity would eventually have to be terminated.  Tax rate increases raise production costs, make business less competitive internationally, and force additional losses of domestic jobs, which then further reduces tax revenues.  It was the inflationary route that Congress chose from the late 1960s until 1980.

When he introduced entitlements programs, President Johnson opted for ?guns and butter,? to fight both the Vietnam War and the War on Poverty without raising taxes.  Ballooning increases in Treasury debt to fund entitlements pushed up the inflation rate; that is, total money in the economy rose faster than the supply of goods and services that were being produced.  President Nixon briefly tried price controls, but neither he nor President Carter did anything to rein in the politically-untouchable and accelerating growth of entitlements spending.  Between 1960 and 1980 the Consumer Price Index jumped 184%, at an accelerating annual rate that had hit 13.5% by 1980. 

Many of us lived through OPEC oil price increases month after month, interest rates over 20%, food costs jumping every week, long gasoline lines, and the real likelihood that institutions with our life?s savings would be forced into bankruptcy because of spiraling inflation that made it impossible for them to retain low-interest-rate deposit accounts or to fund withdrawals by selling mortgage assets at prices hammered down by high interest rates.  Despite much-publicized criminal activity by a small number of loan executives, it was 1965-1980 inflation that destroyed savings-and-loans?s traditional business and produced the staggeringly costly, down-the-drain bailout.

Terrifying as those experiences were, far worse was inflation?s corrosive effect on society that left us vulnerable to today?s racial and economic bitterness.  In the 1970s, preoccupied with the struggle to keep our kids in college and pay our sky-rocketing bills, we didn?t notice at first that the Great Society was being paid for by the loss in value of our savings and our wages.  The phenomenon of ?bracket creep? pushed us into higher tax brackets as our nominal incomes increased.  Congress, of course, was gratified by this automatic, inflation-driven tax increase mechanism that allowed them to avoid facing the necessity to pass new tax legislation or to cut entitlements spending.

In effect, inflation took something out of everybody?s savings or pension account each month to pay for the shortfall between what the economy produced and what the government was spending.  Retirement savings that had been worth $50,000 in 1960 were by 1980 worth only $27,174 in real purchasing power. 

This colossal loss in real national wealth was paid for largely by women leaving their homes to become second wage-earners.  Between 1960 and 1980, the number of women in the labor force increased 96%, compared to only a 33% increase in the number of men.  By 1980, women accounted for 43% of the entire full-time working population.  Clearly the forced separation of so many mothers from their children is related to the explosion of drug addiction and crime among today?s children and young adults. 

Today we face a reprise of President Johnson’s Vietnam War and Great Society inflation blow-out.  Liberals think that the UN and the World Criminal Court will suffice to stop terrorism, so that they can afford to impose a whole new round of Great Society handouts.  Somehow the costs of the war on terror and a Canadian-style National Health Care bureaucracy are to be financed by tax increases only on “the wealthy.”  Liberals ignore the fact that the top 10% of tax-payers already pay more than 60% of all taxes.  They ignore the demographic fact that, as President Clinton’s Baby Boomer generation retires over the next few years, there will soon be only about two people working to pay the welfare-state entitlements of each Boomer.  Nor do they allow for the much greater life expectancy of these Boomers.

The tax burden on our children will, in the next decades, become total confiscation of all their income.  They will have become Lenin’s New Soviet Man, working selflessly for the collectivized National State.

Liberals, of course, will be happy.  We will at last have a fully socialized political state in which everyone and everything is under the planning and regulatory control of liberal intellectuals.

Posted by Thomas E. Brewton on 07/25 at 05:24 PM
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Friday, July 23, 2004

Latest Report: Tune in for Socialism in Action on Home Court

Socialism is doing poorly in its birthplace.  Even with the home-court advantage of cheering, believing fans in the stands, the European Union’s vaunted intellectual planners are losing the game.

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The July 22nd edition of the Wall Street Journal carries an article by G. Thomas Sims entitled “Europe Sees Limits on Growth: Structural Problems Pose a Risk Of Inflationary Pressures.”

The European Central Bank estimates that the EU can sustain non-inflationary growth of 2.0% to 2.5% per annum.  That growth rate is 38% to 50% below the U.S. growth rate.

Even that low EU growth rate is disputed by international bankers, who doubt that the EU can grow much faster than 1.4% to 2.0% per annum without igniting dangerous inflation.

So, what’s the big deal?  Why is this noteworthy?

The answer is that the EU’s two biggest economies, France and Germany, can’t meet their own self-imposed budgetary standards of inflation and deficit ratios at such low growth rates.  At a time when outlays for welfare-state benefits are surging, business is sagging and tax revenues are lagging.  But, if these economies can’t grow fast enough to cover the welfare-benefit shortfalls without serious inflation, France and Germany would seem to have painted themselves into a corner.

Europeans attribute this dilemma to “structural problems.”  But, as we have seen in examining liberal-socialism’s economic “values” in recent postings, structural problems are supposed to be the strong point of socialism.  It’s the ignorant and superstitious Christian capitalists who “don’t get it.”  Liberals are the ones who know how to create social justice and a heaven-on-earth plenty for everyone; Big Daddy will give each and every one of you whatever you need, whether you work or not.

And how is Big Daddy to do this?  Precisely because, in liberal-socialist theory, only liberals “care” about the people.  Christian capitalists are heartless, selfish, power-hungry oppressors.  Put matters under the control of intellectual planners and social-engineering bureaucrats, and economic activity will then be run efficiently and effectively.

Why then is there a Grand-Canyon-size gap between promises and performance of the EU’s socialist economies?

EU Central bankers and international bankers finger the productivity growth rate, that is, the rate of increase in output of goods and services per labor hour.  The growth rate in labor productivity dropped from 1.9% in the 1980s to 0.9% last year.  Both rates are well below the productivity growth rate in the United States.

The thing to be noted is that productivity doesn’t increase because workers work harder or become more skilled.  Productivity increases because businesses experiment with new technologies and invest very large sums in new types of production equipment and new factory designs.

BUT, businesses have the incentive, and the necessary investment funds, to do this sort of thing only when they operate profitably.  The simple fact is that European businesses can’t make enough profit operating in the EU to invest in new technologies to raise productivity.

Regulatory socialism in the EU, dominated by giant labor unions, is a stifling cocoon of restrictions and requirements.  Poor workers can’t be fired.  Unprofitable plants can’t be closed.  New investments must be vetted at multiple regulatory levels.  Every expansion move is subject to challenge by the EU’s anti-trust regulators.  Large “national champion” companies, no longer able to compete in international markets, are kept afloat with government subsidies and anti-trust regulations to keep competitors out of their markets.

The bottom line is that, if new plants are to be built to reduce the EU’s high unemployment rates, they generally must rely, not on internally generated corporate profits, but on socialist government funding.  Without the tax revenues that should come from growth of economic activity, socialist governments have to resort to deficit financing, which by definition is inflation.

If you want to foresee the economic future of the United States, just watch the EU.  Year by year, American liberals’ social-justice campaigns for welfare-state encrustations on the economy gain more adherents, as our educational system turns out inexperienced young students who firmly believe in the religion of socialism.  Those students have been taught that every citizen and every illegal immigrant has a Constitutional right to free education, health care, housing, and a Federally-provided job.

Thursday, July 22, 2004

The Economics of Liberal Values

Belief in the possibility and effectiveness of a planned economy is the central economic doctrine of liberal-socialism.  Apart from the fact that history demonstrates this to be nonsense, it puts liberals into a theoretical contradiction.

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The claimed theoretical foundation of a planned economy is that socialist intellectuals have discovered unchanging and inevitable laws of history that govern evolution in political and economic affairs.  Because socialistic intellectuals have this knowledge, they regard themselves as legitimately empowered and entitled to control all of society?s economic affairs in order to assure proper social and economic evolution.  This is what liberals call Progress.

The starting point is Jean-Jacques Rousseau?s theory that mankind?s original sin was invention of private property.  This is coupled with his fellow Revolutionary philosophers? materialism.  If humans have no nature other than their reactions to external, material working and living conditions, then it is theoretically possible for intellectual planners to structure a political society in which private property is eliminated and humans can be conditioned into perfect behavior.

At the same time, however, worshippers at the altar of socialism stoutly maintain that Christian morality is ignorant superstition, because Darwinian evolutionary doctrine proves all life forms to be the result of evolution by random chance, without pattern or design.  There is no right or wrong, just the struggle for survival of the fittest.  This obviously is the opposite of maintaining that there are unchanging laws governing political and social evolution.

At the beginning of the 20th century, the doctrine called Social Darwinism held that welfare state programs were thwarting the random processes of nature that were intended to assure survival of the fittest.  It was said that welfare programs, by preventing nature from weeding out the less fit, reduced the quality of the human race.  This view came from the eugenics movement, started by Charles Darwin?s cousin and fellow liberal-socialist, Sir Francis Galton, and used by fervent socialist Adolph Hitler in his German Master Race theories.

The more typical liberal-socialist position advocates an ever-expanding concept of the welfare state, motivated in some quarters by genuine concern for the well being of the less fortunate, and among politicians, by the desire to purchase more votes. 

This view, in any case, puts liberals into the position of playing God.  So far they haven?t played the role very well.

Massive evidence to the contrary is evident in the experiences of France, Germany, Sweden, Soviet Russia, China, Cuba, and all other countries that have adopted socialism as their national religion.  Our own disastrous results in the 1960s and 1970s from President Johnson?s Great Society have to be swept under the rug to preserve the fiction.

A Short Explanation: Capitalism vs Socialism

Since the 1930s Depression, when the New Deal of President Franklin Roosevelt imposed the religion of socialism on the United States, liberal educators have labored to obscure the real nature of socialism.  They have misinformed students that the United States doesn?t have a socialistic government.  Socialism, they say, is an economic structure under which the government owns all means of production and distribution, which obviously is not the case in our economy. 

First, government ownership of all means of production and distribution is not necessary; it?s simply one way to regulate economic activity.  Government assumption of the right to regulate and plan is the critical element.  Second, socialism is far more than an economic theory.

In support of the second point, take look at a quote from the late Bertrand Russell, one of the world?s most prominent spokesmen for socialism.  He said of the World War I German socialist party:

?For Social Democracy is not a mere political party, nor even a mere economic theory; it is a complete self-contained philosophy of the world and of human development; it is, in a word, a religion and an ethic. To judge the work of Marx, or the aims and beliefs of his followers, from a narrow economic standpoint, is to overlook the whole body and spirit of their greatness.? (from Lecture One, “German Social Democracy”).

Socialism is a systematic religion with all the trappings of prophets (the French Revolutionary philosophers, Saint-Simon, Comte, Marx, and Darwin) sacred books (from Rousseau’s “Social Contract” to “The Communist Manifesto” and “On the Origin of Species”), saints (such as Franklin Roosevelt, Lyndon Johnson, and Teddy Kennedy), and a credo (social justice is equal distribution of wealth). 

Capitalism is merely the economic aspect of government based on individualism, spiritual religion, and personal morality.  It is one product of maximizing individual freedom and individual choice.  To speak only of capitalism is to focus exclusively on the materialistic side-effects and to ignore the broader concept, which is the spiritually-oriented essence of individualism. 

Speaking only about capitalism moves the battlefield onto terrain of the liberals’ choosing.  Liberals then talk about socialism?s high moral purpose of ?caring? for the poor and denounce capitalism as a cold and heartless doctrine concerned only with greed and power.  In the real world, this amounts to condemning a society based on individualism because it is more productive and provides a higher standard of living for all members of society than socialism can muster for even its highest ranks.

In any case, the easiest way to understand the economic theory of capitalism is to say that, under a constitutional government of laws (not regulations by bureaucrats) individuals are permitted to keep as much as they can save from the fruits of their labors and to invest their savings in any way they choose.  Karl Marx called those savings Kapital, thus the term capitalism.  Most people, having worked hard to save some money, are careful about where they invest it.  The intermediaries in which they invest their savings ? banks, mutual funds, life insurance companies, and pension funds ? have a fiduciary duty to invest their depositors? funds in prudent business ventures that can be reasonably expected to grow and prosper. 

The critical point is that the capital necessary to start and to run a business is separated from the business people.  Businesses want money to expand.  Lenders and investors want to lend money to businesses only when they can be reasonably sure of getting it repaid, plus a profit reflecting the risk incurred in lending and investing.  Capitalism thus has a built-in regulator, a system of internal checks and balances.

To get money, businesses must first convince hard-eyed lenders and investors that a market exists for their products and that they can satisfy that market?s demands.  Lenders and investors have strong incentives to avoid bad loans and investments: they lose their jobs and their own money if they don?t. 

This is a central point of constitutional individualism that liberals apparently are unable to grasp.  In liberal mythology, as expounded by Michael Moore and Al Franken, capital and business are lumped into one evil mass that is dominated by a single-minded lust to plunder society.  They picture a massive power bloc called Big Business and The Rich who can do anything they want and can force you to buy their products, most of which liberals think are bad for you. 

In reality, you as a consumer are the final boss of every business.  If you and enough of your fellow consumers don?t like the company and don?t buy its products, the financial intermediaries stop funding it, and it goes out of business.  Even under our partially socialized welfare state, this system has vastly out-performed more fully socialized economies.  France and Germany, for example, are steadily falling behind the United States in productivity and standard of living.

Contrast this with full-fledged socialism.  Businesses approved by the state-planners don?t have to compete with rival businesses to get funds.  They get funding directly from the National State, in accordance with a master plan for the economy.  Individuals play no role at all in the process, since their product preferences have no effect.  Planners make all the decision about what is produced, how much of it, and where it is to be delivered.  Grossly inefficient and outmoded business enterprises, for that reason, survive decade after decade in a socialist economy.

Remember that, at the outset of the Clinton administration, the announced intention of the Federal government was to establish national regulatory controls similar to those in Japan and Germany in order to channel corporate investments into areas that Federal planners believed to be appropriate for the future.  Clinton’s advisors stated that American businessmen could not be relied upon to make socially desirable investments, because they were focused only on short term profits.  The Japanese were lauded for having close coordination by government ministry regulators, the giant Japanese banks, and the huge Japanese trading and manufacturing corporations.

Shortly into the Clinton administration, the Japanese economy fell off the cliff and is only now, a decade later, slowly climbing back up.  What became apparent was that “long-term social” planning was just a cover for disastrous investment policies dictated by government ministries and the colossally bad investment made by Japanese banks and businesses in response to ministry regulation.

From 1917 until 1987, liberals praised the Soviet Union as a society in which every aspect of life was better for all citizens than in capitalist countries.  When the Soviet Union collapsed, all the world finally were compelled to swallow the plain facts: apart from military armaments, Soviet businesses were operating at below third-world levels of productivity and their depredations of the environment had been wrought on a colossal scale.  The average Soviet citizen had a lower standard of living than the poorest of American welfare dependants in the inner cities.  France and Germany, the other two large socialist states in Europe, today are sliding ever farther behind, as their welfare-state, union-controlled economies wither under the crushing burden of costs and regulations.  Sweden, always held up as the perfect model of a non-despotic socialistic state, has fallen far behind the United States.  According to its own government statistical studies, the average Swedish citizen in 1999 had a comparative income 40 percent lower than his American counterpart.  Worse, productivity is so much lower in Sweden that the gap is increasing each year.

Under socialism, the product of your work effort is considered to be the collective property of society.  You have no right as an individual to what you produce; everything goes into the common pot.  That is what is meant by ?socialization? and by the slogan, ?From each according to ability, to each according to need.?  Individuals are, in effect, no more than soldiers in an industrial army (that, by the way, is exactly the terminology that Franklin Roosevelt used in his first inaugural address announcing the imposition of socialistic state-planning in 1933).  The State will decide what sorts of jobs, housing, clothing, food, education, and medical services are appropriate for you. 

We in the United States are not yet quite at that point in “progress” toward socialism.  But, if you listen to the “values” enunciated by liberal politicians, this is what you hear as their goals for society.  This is the meaning of “give our country back to us.”  This is what Social Security and Medicare are all about.  This is the substance of government subsidies and welfare measures, as well as of Federal funding of education.

All the wealth and income that you produce is “socialized,” that is, it’s the common property of society, presumably for the greater good.  As Senator Hillary Clinton recently told a gathering of the socialistic faithful, “We’re going to take things away from you on behalf of the common good.”

Your work product belongs to “the people,” whose voice is state-planners and social-engineers.  You, presumably, are happy to work harder than your neighbor and to watch contentedly as he gets more of your work product than you do; that?s how we get equality in a socialist state.  Planners? orientation is to restrict available choices of products and services, on the theory that a vast array of new products and choices wastes social resources.  The nanny-state of liberalism reserves the prerogative of deciding what is good for you and what you will be permitted to do and to have.  Anyway, they say, you would not want to buy any of that multitude of capitalist products if it weren?t for advertising by Big Businesses to manipulate and control your desires.  The bureaucrats will protect you from them.  No more advertising.  No sugar-frosted flakes for you, just granola, whether you like it or not.  No SUVs, only electric cars.  At the same time, liberal environmentalists will make sure that there won?t be enough electric power production and transmission lines to keep your electric car?s battery charged.  Power plants are bad for the environment, but the currently available alternative of cutting down all the trees to burn as fire wood isn’t? 

The good part is that whatever the planners and social-engineers decide to make available will be available to anyone who claims that he needs it.  Unfortunately, there will be far less of it available than in a capitalist society.  The equality of liberal-socialism means that we must all be equally poor.  You will always have to stand in line for groceries and wait months for medical care, as Canadians now do under their vaunted National Health Service.  The only people not equally deprived are the intellectual planners, who form an elite corps at the top of the power heap. 

This according to socialist theory, is the definition of happiness.  This what they called freedom from oppression.  Power is no longer in the hands of the wealthy, it’s in the hands of Big Brother, who truly loves you.

The socialist vision is of a static world in which it is their right to rearrange income, wealth, and goods and services to make everybody as equal as possible.  Because socialistic planning theory relies on centralized regulatory control of everything, it makes no allowance for the dynamism of economic and scientific progress in the real world.  Because it ignores the inborn human urge to innovate and to pursue personal goals, impulses that upset efforts to maintain equal distribution of income and wealth, liberal-socialism shuts off society?s source of social and economic progress.  Though socialists call themselves progressives, in reality they are regressives, as the third-rate performance of socialist economies everywhere has demonstrated.

You may object that we in the United States are not living in a socialist economy.  We have relative freedom of choice.  It’s true that, compared to more thoroughly socialist economies, such as France, Germany, China, Russia, and Cuba, we are relatively free.  But it’s also true that, compared to the individual freedoms that existed in 1776, and even as late as the 1920s, we have travelled a long way down what Friedrich Hayek called “The Road to Serfdom.”

Liberal proposals, for instance, to force American business to use only employees in the continental United States and to prevent outsourcing jobs is the epitome of socialistic, nationalistic self-sufficiency, the hallmark of Hitler’s Nazi socialism.

If liberal economic values are good, then bobbing for maggots in a cesspool is a medically-recommendable health practice.

Posted by Thomas E. Brewton on 07/22 at 02:04 PM
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Tuesday, July 20, 2004

More on Liberal Values: Is Liberalism as American as Apple Pie?

Constitutional liberties can’t survive liberal “values.”

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Freedom is defined by liberals as the absence of spiritual religion and moral codes, along with equal availability of society’s goods and services to everyone, without regard to whether the taker has contributed to their production.  If there is a disparity in income among the people, if some people don’t have jobs, and if some people don’t have cars, nice homes, TV, etc., in the liberal system of values, it can only be because of social injustice.

To get a full perspective on the negative implications of this conception of social justice, which is the basis of American liberalism, it is necessary to examine both the historical background and the philosophical theory.

Philosophical Overview:

This liberal theory of values is nothing new.  It has been around since Plato described it in his dialogues roughly 2,400 years ago, when he focused much of his arguments against the liberals of his day, who were then known as sophists and Epicureans.  Our educational system has left the last several generations of students ignorant about history and political philosophy, but some people today must, even so, be aware that liberal-socialist ideas about social justice were the core of political theory in the Soviet Union, Hitler’s National Socialist Germany, Mao’s Red China, Castro’s Cuba, and every other socialist society of the 20th century.

In the face of uniform failure, and usually savage brutality of a degree previously unknown in human history, why are Americans giving rapt attention to the same old liberal theories when politicians orate about them in the current Presidential campaign?  The answer, as noted frequently in other posting on this website, is that liberal-socialism is a secular religion, not a set of simply political or economic views (see Socialism: Our Unconstitutionally Established National Religion).

Liberalism, the American sect of the international religion of socialism, promises earthly salvation and the perfection of human relations here on earth, possibly even in the lifetime of its believers.  There are no rules of morality to govern individual conduct.  Individuals need not make personal sacrifices or change their way of life.  Hedonistic pursuit of sensual pleasures is acceptable.  People can say or do anything that strikes their fancy.  They do not have to take responsibility for their own well-being.  They don’t necessarily have to work for a living.  All that is required is submerging individuality in the comforting collectivity of social classes and believing firmly that collectivized government is the savior of mankind, from which all blessings flow. 

People who have lost their faith in Christianity, or more likely never had any such faith, hunger for some theory to provide meaning to an otherwise chaotic and violent world.  Baby-boomers are the largest contingent of those seekers.  Hillary Clinton, at the outset of Bill Clinton’s first term as President, was featured on the cover of the New York Times Sunday Magazine, and called, at the time, “Saint Hillary.”  She described the spiritual emptiness of her generation and speculated about alternative remedial paths, from Judaism to Zen.

The present-day version of the gnostic religious faith in socialism is rooted in the theory of pre-Revolutionary French philosophers that evil can be defined as oppressive political and economic power, which results in unequal ownership of income and wealth.  Social justice therefore is elimination of oppression, which in this theory implies redistribution of wealth.

That concept has enormous ramifications.  Not all of them are bad, but, without most of them,  the totalitarian regimes of the 20th century could not have existed. 

Most dangerous, and therefore most important, is the disarmingly simple thesis that the problems of humanity can easily be solved by intellectual planning to restructure society.  Everywhere this has been attempted, governments have moved in the direction of totalitarianism.  The reason is not hard to understand: people who have worked hard and saved their money resist the political state’s demands that they share it with others who have not worked hard and are, by traditional terms, undeserving.

The Historical Background:

French philosophers’ starting point was the idea that poor peasants and city laborers were denied social justice by the structure of French society that bestowed great wealth and privilege upon the aristocracy, purely via the accident of birth.  Few of the aristocracy were of demonstrably great intelligence or ability, and many of them failed their traditional duty to look out for the welfare of the poor on their ancestral lands, compounding the injustice.

These observations were not inaccurate.  But, while they applied to France and some other European principalities, they did not apply to England and North America. 

In France, powerful kings had for centuries been consolidating economic and political regulatory control under a central bureaucracy in Paris.  French kings encouraged the aristocracy to leave their estates and assume permanent residence in Paris, where they spent their time in idle chatter and court gossip.  French kings co-opted the aristocracy and the French Catholic Church by exempting them from most taxes, while taxing the peasants and laborers heavily to fill the shortfall.

In England, from the time of Magna Carta in 1215 the landed aristocracy and property-owning yeoman farmers had continuously battled the crown to prevent arbitrary taxation and seizure of property.  They insisted that only Parliament, as the representative of the whole country, had the right to impose taxes under the ancient, unwritten constitution of England.  And the English aristocracy made it their business to look out for the interests of farmers and property-owning yeomen on their estates, the people who would become their soldiers in armed conflicts with the king.

The cultural effect was an England and her North American colonies populated by the most individualistic and venturesome people on earth.  And a France acculturated to thinking in terms of feudal classes and inviolable privileges, in which the masses routinely endured any degree of despotism, looking only to grub for their share of whatever the king chose to dispense.  England gloried in the exploits of private explorers and merchants, sailing on trading and exploration ventures to all corners of the world.  France sought national glory via military conquest of Europe and thwarting British commerce wherever possible.

American liberals in academia have proclaimed that the French Revolution is the truest expression of Americans’ essential values.  They push the myth that France is our old and faithful ally (see the article below entitled “Misunderstanding Alliances”).  Students are taught that American colonists revolted against a tyrannical British king in order to establish full and complete equality among all citizens.  This is nonsense.

The true genesis of the 1776 War of Independence was the English Glorious Revolution of 1689.  James II, the last of the autocratic Stuart kings, was a stubborn advocate of the Divine right of kings.  A king, in this theory, was created by God and empowered to act in God’s behalf with regard to political matters.  The true benefactor of humanity was the powerful sovereign who imposed order upon unruly humanity at sword’s point.  The law was simply whatever the king decreed (note that our Federal judiciary now says that the law is whatever a judge says it is).

James II alienated huge sections of English society by seeking to overthrow the Church of England and re-impose Roman Catholicism as the established church, while at the same time confiscating property and imposing taxes without consent of Parliament.  Members of Parliament and the aristocracy forced him to abdicate. 

The English constitutional justification for the 1689 Glorious Revolution was written by John Locke.  His “Second Treatise of Government,” more than any other non-American study, expresses the true nature of our own actions in 1776.  Locke based the constitutional legitimacy of the English revolt on God-given natural law and the Christian religion.  People, he said, had voluntarily associated to form governments for their mutual protection and benefit.  But, in forming governments, they had never surrendered their God-given individual rights to life, liberty, and property.  Without these, no family could survive, and natural law and Christianity decreed that the family was the basic unit of political society.  When a ruler arbitrarily confiscated private property and imprisoned or executed resisters, he had violated the natural law rights of individuals and thereby forfeited his right to rule.

This is precisely the argument penned by Thomas Jefferson in the Declaration of Independence, and everyone in England and the colonies was fully aware of it.  The socialistic spirit that produced the French Revolution thirteen years later was on the far side of the moon from American colonists.

Problems in Applying Liberal Values, aka Social Justice:

A hedonistic population, focused on immediate gratification, is less productive of the material outputs essential to the welfare-state than a motivated and disciplined workforce animated by individualism and self-governed by morality. 

If the welfare-state is to deliver on its promises of free goodies, the anti-religious hedonism and selfishness advocated by liberal organizations like the ACLU and by TV, Hollywood, and much of the print media, can’t continue indefinitely.  Sooner or later, Big Brother has to crack down on the sensualists if political and economic order are to survive.  Indulging in drugs and sexual promiscuity don’t produce much of economic value to the general public.

Low productivity in the Soviet Union, for example, was at least partly attributable to one of the highest rates of alcoholism in the world.  When people are focused on immediate gratification via consuming to the max on credit card debt, the savings rate is very low or even negative.  Without savings, there is no source of funds to invest in new equipment to increase production of the welfare-state’s goodies, or even to replace old equipment as it wears out.  When the welfare-state substitutes printing money via deficit spending, rather than encouraging savings out of actual production, the result is simply inflation. 

This is the dilemma confronting socialist France and Germany today.  Far too many people are working far too little and being paid far too much for it.  They have come to expect the good life without the necessary hard work.  And the impulses of liberal-socialism inevitably drive society in that direction.  People who are taught by liberals that society owes them a certain standard of living are more likely to indulge their sensual appetites and selfishness.

Germany’s socialistic Weimar Republic after World War I followed this course and created one of the most devastating rampages of inflation in history.  What took place was disquietingly similar to what has been going on in the United States, particularly in cities like New York, LA, and San Francisco.  There was a flowering of art, music, and architecture.  The lewdness of Berlin cabaret society in the 1920s shocked even the Parisians.  But middle class savings were destroyed.  Factories had to shut down every hour to pay workers with carts full of million-Reichmark notes.  Reichsbank printing presses couldn’t print enough money fast enough.  Restaurants and merchants refused to take money as payment.  Transactions were reduced to primitive barter.  Diners haggled with waiters about how many yards of string a meal was worth.  The German people greeted with tears of happiness and relief the news of Hitler’s appointment as Chancellor and his promise to restore traditional German discipline.

The United States embarked upon the same course in the 1960s.  Liberal economists proclaimed that they had mastered the techniques of fine-tuning the economy.  Major media proclaimed that perfection was just around the corner, now that politicians had returned to New Deal state-planing with a massive expansion of the Federal bureaucracy.  President Johnson’s Great Society created thousands of new welfare entitlements, while the money supply ballooned.  Severe inflation got underway as the welfare rolls increased.  Stagflation came into being: an economy dead in the water, yet with soaring prices.  President Nixon accelerated the process and attempted to quell inflation with price controls.  OPEC came into existence to demand higher prices for oil to compensate for the dollar’s declining value.  The death spiral was temporarily halted when Ronald Reagan became President in 1980 and removed price controls, cut taxes, and gave the green light to Federal Reserve Chairman Paul Volcker to squeeze inflation out of the economy.

The Great Society’s experiment with expanded welfare payments to single mothers, for example, caused an explosion of illegitimate births and biological fathers who walked away from their responsibilities.  The rationalization was that unwed mother were not eligible for maximum welfare payments if there was a live-in husband or mate, so males were “doing the right thing” by not living with the women they had impregnated. 

Going on welfare, in effect, became a career choice.  Welfare ?clients? were entitled to welfare benefits and they owed nothing to society.  Since, in the catechism of liberal social justice,  it was society?s fault that they were needy, they had no obligation to seek work or to limit the number of their illegitimate children.  Nor was there any reason, moral or legal, that they and their progeny should not collect these benefits forever.  Liberals, harking back to Franklin Roosevelt’s Second Bill of Rights declaration in 1944, called this a Constitutional right.

Liberal Great Society programs under the Johnson, Nixon, and Carter administrations, from the mid-1960s until 1980, not only failed to meet their objectives; they made conditions decisively worse, measured by the Federal government?s own statistics (see Charles Murray?s “Losing Ground: American Social Policy 1950 - 1980”).  Ironically, the Great Society was designed to bring the blacks and other ethnic and social groups up to a parity with whites.  Instead, it under-cut almost all the progress they had made since the Civil War, leaving them far worse off than before.

The numbers of people with cash incomes (including welfare benefits) under the poverty line had been dropping every year after World War II.  Then startlingly, the pattern reversed.  While poverty spending increased in the Johnson administration, a period of burgeoning prosperity, the numbers of people below the poverty line increased from 23 million to 29 million. 

Liberals argued fallaciously that the increase reflected bad economic conditions.  In fact, poverty dropped more than 12% during the Eisenhower Presidency, when economic growth average only 2.7% per year, while poverty rose 26% during the 1970s, when the economic growth rate was 18.5% higher.

The real answer was simple.  It was a matter of changing public attitudes.  Social justice actually promoted the growth of poverty.  As Charles Murray noted, the poor are poor, not stupid.  For lots of ill-educated, low-income people, living fairly comfortably on welfare, without having to work at all, was a better deal than working for a living at only a slightly higher level of income. 

Similar counter-productive patterns were evidenced in employment, wages, education, crime, and family stability.

The Office of Economic Opportunity spent billions of dollars on job training programs and other efforts to move people off welfare and into the active work force.  Black male unemployment declined 38% in the 55-to-64 age group.  But the percentage improvement was progressively less as one went further down the age scale, with unemployment dropping only 1.6% among those in the 25-to-34 age bracket. 

Among black men who were too young to have been participants in the work force before the start of the Great Society entitlements programs, results were dramatically worse.  Unemployment in the 20-to-24 age group increased 18.6%.  At the youngest age bracket measured by the Bureau of Labor Statistics, those 16-to-17 years old, unemployment jumped 72.4%. 

What was going on?  Older black men, who had always worked, improved as a group.  But black teenagers had all their young lives heard politicians telling them that they had been robbed of their entitlements by the white establishment.  Starting at the low end of the economic ladder and working their way up over a period of years was considered beneath their dignity.  With welfare case workers actively soliciting them to sign up for benefits, the career of welfare dependency seemed more attractive.

Federal statistics for labor force participation ? defined as people with jobs or seeking jobs ? display a pattern never before seen in this country.  Historically, black men had always had the same percentage labor force participation rates as whites, and that pattern continued under the Great Society among older blacks.  But the percentage of young black men working or looking for jobs dropped sharply the farther down the age scale one went.  Two out of every three black youths aged 16-to-17 had never even looked for work.

This is what results when liberal politicians demand tax increases for “the wealthy” and campaign to “give our country back to us.”

Saturday, July 17, 2004

Kerry Bases his Campaign Strategy on Liberal “Values”

The liberal-socialist conception of values espoused by Senator Kerry is unrelated to the understanding of values that animated American colonists in 1776.  The differences take society in opposite directions.

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A July 14, 2004, Associated Press article states that John Kerry is aiming to co-opt “the traditional Republican values of patriotism and faith.”  The article goes on to say that Kerry wants to expand the definition of values to include health care, education, optimism, feel-your-pain sensitivity, and honesty.

This involves more than a bit of hypocrisy.  How can a liberal like Senator Kerry speak the word “values,” when our liberal-socialist school system teaches students that value judgments are unscientific?  How can Senator Kerry caustically denounce President Bush’s public professions of Christian faith when our multi-cultural educators preach that tolerance, meaning the absence of all standards, is the only socially acceptable stance?

Inclusion of “honesty” in the liberal values list can’t be taken seriously.  Senator Kerry established his political career by lying before a Congressional committee about the conduct of American servicemen in Vietnam.  His puppet-master, Senator Ted Kennedy, was thrown out of Harvard for cheating on exams, and he allowed a young woman to drown in an effort to shield his political reputation.  Lest we forget, President Clinton lost his license to practice law and paid fines of more than $75,000 for having perjured himself before both a Federal grand jury and a Federal District Court.

More serious than this hypocrisy is what Senator Kerry and his liberal sympathizers mean when they speak about values and talk about “giving our country back to us.”  Senator Kerry’s “values” are what the New York Times editorial board calls the mainstream.  Speaking about liberal-socialist “values” in this vein implies that they are the original Constitutional principles of our nation and that a Christian President like George Bush has usurped those principles with his pronouncements about morality and evil forces in the world.  One implication is that this Christian view of the world is responsible for what Al Gore called “dragging our good name through the mud” by annoying secular and socialistic France.

Even a limited inquiry will reveal that the liberal-socialist philosophical conception of values that underlies Senator Kerry’s campaign position is profoundly different from the understanding of American colonists in 1776.    So-called mainstream-values were well entrenched in academia by the late 1800s, but they acquired a public following only during the Depression when the New Deal imposed wide-ranging socialist state-planning.  “Giving our country back to us” means abandoning the moral values of Protestant Christianity that were the unwritten constitution for 325 years and cleaving to the socialistic theories of the last 71 years.

At the risk of being as boring as Senator Kerry is said to be, let’s explore the essence of that difference and how it came to be.

First, liberals’ ideas about “values” have to do with the absence of personal restraints and with material goods and services, which is what the welfare state is all about.  Values for the colonists were the elements of spiritual morality, the intangible qualities that differentiated humans from other animals. 

The values of 1776 preached individual self-restraint, self-reliance, and hard work for the future of one’s family.  Liberal values give us what has been called a juvenocracy, a society dominated by the heedless pursuit of instant gratification that is characteristic of inexperienced youth: devil take the hindmost; eat, drink, and be merry.

Values for liberals are the monetary benefits and privileges awarded to preferred groups.  Values for our nation’s founders were principles that were to guide each individual toward doing the right thing in a religious and moral sense.

The Massachusetts Bay colonists, coming to the New World for religious reasons, envisioned themselves as a light upon a hill, a beacon of righteous conduct for the rest of the world.  Liberals are anxious to cede more power to Big Brother, who will structure society in accordance with social justice by redistributing income and property from the haves to the have-nots.

Second, as with most of the evil of the modern Western world, liberals’ ideas of social justice originated in the ill-named Enlightenment of the 18th century.  A confluence of events led French pre-Revolutionary philosophers around 1750 and onwards to junk the thousands of years of civilization represented by Greek philosophy and Christendom.  The 1517 Reformation had splintered the Catholic Church; repeated wars between Catholic and Protestant political states devastated Western Europe between 1517 and 1648; and mathematics and physics made giant strides that led to the conviction that human reason could now understand, and therefore control and perfect, much of nature, including human conduct and political societies.

The group known as the French Encyclopedists became an effective spin-machine for the new views.  Their aim was to convert morality into a physics equation:  simply isolate the input variables that influenced human attitudes, desires, and conduct, then derive a formula that would permit intellectuals to regulate the proper mix of inputs to achieve the desired pattern of conduct and the proper structure of society.

Their first principle was that human conduct is nothing more than responses to external stimulae: people seek pleasure and avoid pain.  Thus pleasure is good, therefore virtuous, and pain is bad.  This formulation flatly rejects Western civilization’s concept of human beings intuiting, via religious revelation, a sense of Divine order in the universe, from which the human soul and intellect derive ideals of morality and civic virtue.

There was to be no more spiritual religion or belief in timeless moral principles.  Humans now were revealed to be essentially no different from earth worms reacting to heat, light, dryness, and dampness as they crawl along.

Virtue, in the Encyclopedists’ conception, becomes maximizing pleasure.  Evil is whatever oppresses humans seeking pleasure.  Thus Christianity is bad, because it counsels self-restraint and deferral of pleasure on behalf of one’s children.  A contemporary variation on that idea is the view expressed by some feminists that spiritual religion is just a device concocted by men to subjugate women.

In the Christian tradition that constituted Western civilization, all individuals, rich or poor, weak or powerful, had equal access to Divine Grace and eternal salvation.  They were counseled to see themselves as equally children of God, united by God’s love.  They were therefore to deal honestly and in good faith with others, even at personal cost to themselves, because they would one day die and face everlasting judgment.

Removing Western civilization at one shot, as the French philosophers did with the 1789 French Revolution, exposed a fundamental flaw in their mechanistic conception of virtue as the product of physical pleasure or pain.  How could one counsel a poor man not to steal bread for his family?  After all, that would maximize his pleasure, provided he could escape detection and apprehension by the police.

They proposed two solutions.  First, the poor man’s plight could be eliminated by taking property from the rich and redistributing it.  Second, as experience in the 19th and 20th centuries proved, government would be compelled to issue formal regulatory controls for an ever widening sphere of human activities.  The end point was the totalitarianism of Soviet Russia, Fascist Italy, and National Socialist German,

In a “value” system based on maximizing sensual pleasure, there must be no restraints on what people do or say in public.  This is especially true of Hollywood entertainers, whom Senators Kerry and Edwards describe as expressing “the soul of America” when they raise campaign funds by vulgarizing the names of political opponents and describing people who profess Christianity as Nazis.

It now becomes clear that this simplistic conception of sensual pleasure and pain as the basis of “values” is the force behind liberals’ preoccupation with battering down every remaining trace of restraint on public conduct.  Mainstream “values” thus coincide with ever increasing lewdness and vulgarity in print media, TV,  movies, and radio.  It is on this basis that liberal organizations like the ACLU decry Clear Channel Radio’s banning Howard Stern or Slim-Fast’s dropping Whoopie Goldberg as its advertising spokesman.  It is this calculus that rationalizes abortion to facilitate sexual promiscuity.

And it is this simple-minded liberal theory of “values” that is being taught to our school children as psychology and situation ethics.

Thursday, July 15, 2004

Bill Cosby Collides With the Liberal Establishment

Bill Cosby’s altogether laudable remonstrance to individuals in the black community to put their own houses in order is a direct challenge to the liberal dogma that social problems can be corrected only by government’s changing the structure of society.

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Bill Cosby recently focused attention on the fact that most of the black community’s problems can be cured by individual efforts to change cultural attitudes.  In public meetings he denounced black men who beat up their wives and parents who are indifferent to their children’s inability to speak English and oblivious to behavior that stamps their children as social renegades.  Black cultural mores, not white society, he says, are responsible for staggeringly high teen-age pregnancies, illegitimate children, and single-parent families.  The high percentage of blacks who fail to complete their schooling and do poorly academically reflects the black community’s cultural preference for sports and entertainment, rather than for the long, hard grind of acquiring knowledge as the road to success.

Cosby’s calls for personal re-examination have generally been greeted with approval by black church leaders.  But many black politicians and leaders of civil-rights groups like the NAACP, as well as white liberals, have attacked Cosby for “blaming the victim.”  In a New York Times op-ed article, white liberal Barbara Ehrenreich dismissed Cosby’s plea as “Billionaire bashes poor blacks.”

Orthodox dogma of the liberal-socialist religion posits that people are not to be considered as individuals, but collectively as groups.  And group benefits and behavior are controlled by government regulations promulgated by intellectual planners.  Thus, for liberals, Cosby is entirely off-base.  The reason that blacks do poorly in school and in the job market is, according to liberals, racial prejudice expressed by whites rigging the social structure deliberately to prevent blacks from getting ahead. What’s the point, they ask, in studying and making good grades in school if whitey will keep you from getting a good job?

Liberal theory pouring forth from Ivy League socialist trade schools, laughably still called universities, justifies all this as the ineradicable product of slavery.  It is regrettably true that slave-owners did not recognize the legal or moral sanctity of families, and that they sometimes broke up families by selling husbands, wives, and children to separate owners.  But it is not demonstrable that the effects of such inhumanity are ineradicable, however painful and enraging knowledge of it surely is to most blacks. 

Liberal theorists are compelled to ignore inconvenient historical facts.  It is easily verifiable that blacks, in New York City in the early decades of the 20th century, had created a vibrant, upwardly mobile community that valued education, hard work, thriftiness, and self-denial for their children’s futures.  When overbuilding of apartments in then fashionable Harlem led to bankruptcy of real estate developers, excellent new housing was on the market for anyone prepared to pay the rent.  Black church leaders in Hells Kitchen seized the opportunity and moved their churches and entire communities to Harlem.  Black church communities organized book clubs that promoted reading and education in general.  Black social organizations for mutual aid gave help to the elderly, poor, and unfortunate, provided that the recipients were considered to be deserving people of good moral character.

Ironically, this impressive achievement was killed off by the liberal-intellectual cohort itself.  During the Depression, Big Brother, in the guise of New Deal social planning, raised a whole new generation of blacks to the belief that their only source of worldly salvation was the welfare state.  Liberal sociologists preached that blacks’ problems were not their fault, but exclusively the result of racial prejudice.  Society had to be restructured, not to help blacks to help themselves, but to eradicate prejudice.

The last vestige of the original ethos that produced Strivers Row in Harlem was swamped after World War II, when illiterate black field hands in the South became aware that they could receive more income under New York City’s socialistic welfare system, without working, than by working all day in southern cotton fields.  Harlem was overrun with what amounted to wartime displaced persons having no means of support and lacking the education necessary to compete in northern labor markets.  The welfare-state path for blacks has been downward ever since.

Tuesday, July 13, 2004

How Multiculturalism Took Over America

Larry Auster’s article is a must-read.

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Larry Auster’s devastating analysis, How Multiculturalism Took Over America, reduces liberal arguments to a shambles.  Students are taught, and even well-intentioned conservatives are susceptible to the argument, that the intent of multi-culturalism is just to give a fair hearing to all the different cultures of the world.  Far from enriching our own culture, multi-culturalism inevitably works to destroy the founding traditions and moral fibre of the United States and to replace them with the amoral and materialistic religion of socialism.

Posted by Thomas E. Brewton on 07/13 at 12:21 PM
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Sunday, July 11, 2004

Tocqueville Revisited - Part Two

My latest monthly column in “Christian Times Today” deals with the ACLU’s demand that Los Angeles County spend millions of dollars to remove a tiny Christian cross from the county seal that appears on county buildings, vehicles, and stationery.

Public understanding has changed greatly since 1831 when Alexis de Tocqueville visited the United States and wrote his celebrated ?Democracy in America.?

The Minimum Wage, Outsourcing, and Nazism

Creating an economic and social world minutely regulated by social-engineers and invulnerable to economic and political events in the rest of the world was the primary goal of Nazism.  It is also the goal of American liberal-socialists.

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This article is in two main parts:  first, what is really going on, and, second, how it came about.

First Part:

Our nation was built by people who had to be self-reliant to survive and to prosper, people whose only expectation was that the government would protect them from outlaws and foreign enemies.  They knew that their well-being would come from their own hard work, ingenuity, prudence, thriftiness, and saving for the future of their families.  Their incentive was the knowledge that they would be able to keep the fruits of their own hard work.

In contrast, liberal-socialism’s built-in bias is to impose a new regulation for every inconvenience that our welfare-state citizens complain about.  Liberals believe that the goods and services available to citizens result from the structure of government, not from individual efforts responding to free-market prices.  In that view, society’s well-being is a function of social justice, aimed at redistributing income and property as equally as possible.  In the religious catechism of liberal-socialism there can be no social justice and no well-being without centralized governmental power to regulate economic activity in accord with state planning.

Since 1933 when Franklin Roosevelt’s New Deal, emulating Soviet Communism and Italian Fascism, replaced our original Constitution with socialism, four generations have grown to maturity with the assumption that the role of government is to protect them from their own folly and profligacy.  If heedless pursuit of sensual gratification results in venereal diseases, HIV, drug addiction, or depression, it’s not their personal responsibility.  If they spend beyond their means on credit-card debt, the government must pay their bills and take care of them in retirement and ill health.  Big business oppression is the cause of their sorry state, and government exists to make big business pay.

Liberals always have a John Edwards ready to file a class-action suit and extort vast sums from any corporation foolish enough to make products that people want to buy.  This is known euphemistically as “consumer rights.”  What can’t be extracted with multi-billion dollar damage suits must be paid for by the government welfare system.  But in no case must individuals be held accountable for their own actions.  That would be mean-spirited and uncaring; it would not be liberal social justice. 

“Caring,” however, entails consequences.

Socialism requires open-ended growth of government regulation, because it substitutes government fiat for individual freedom of choice.  Each new regulation creates its own unanticipated dislocations and problems in other sectors of the economy. Regulation must be piled atop regulation.  There is no convenient stopping point, because every regulation creates new problems and because every favor to a special-interest group produces demands from other special-interest groups for their share of the Federal goodies.  More and more sectors of political and economic life must be subjected to new regulations each year.

This internal necessity to add endless reams of regulations means that socialism tends inevitably toward totalitarianism. When peoples’ lives are not regulated by the free market, only intellectual planners in government or public education can call the shots.  We should recognize that socialistic planning is what produced the Soviet Union, Fascist Italy, and Nazi Germany.

Unfortunately, regulatory provisions to impose social justice within a nation can’t stop there.  Socialism pushes nations toward self-sufficiency, because economic and political competition from other nations interferes with internal regulation of economic conditions.  Price controls and unemployment regulations, for example, won’t work if there are no trade barriers against import competition.  A socialistic economy must be walled-off from the rest of the world to avoid import competition and to prevent export of capital to more attractive investments in other countries.

What quickly becomes apparent is that, even with tightly sealed borders, no nation can become self-sufficient without conquering other nations to gain control of supplies of vital raw materials and markets for its products.

Thus we had Nazi Germany and Soviet Russia determined to become world empires.

These tendencies are inevitably asserting themselves in the United States.  Both Democrats and Republicans once favored free trade and open world markets.  Today liberals are supporting organized, big labor in opposing free-trade agreements and in imposing ever more extensive regulatory control of American economic activity.  That regulatory urge now extends to telling other nations what kinds of working conditions they must impose on their citizens if they want to sell their goods in the United States.  The aim is to insulate American business and employment from worldwide economic competition so that they can be tightly controlled by Federal planners and bureaucratic social-engineers.

For example, Senator Ted Kennedy and his puppet John Kerry perennially call for increases in the minimum wage.  And Senator Kerry declares that he will impose regulations to stop “Benedict Arnold” corporations from outsourcing jobs overseas.  They are following in the footsteps of the Nazis, who imposed such measures to revive the German Reich in the 1930s and to make it into a self-sufficient imperial power.

History repeatedly shows, however, that other nations seldom are interested in promoting what regulators think is good for our economy.  The problem is that regulatory measures to control our economy almost always affect the economies of other nations, and those nations take counter-measures.  Thus are born trade wars, and sometimes military wars. 

Whether justified or not, war reparations and severe restrictions on German industry and employment imposed by the victors after World War I were cited by Hitler as justifications for annexing Austria, parts of Czechoslovakia, Poland, and eventually for attacking Soviet Russia.

Liberals like Senator Kerry unctuously proclaim their fidelity to “the community of nations” and to restoring our reputation around the world.  Yet halting outsourcing of jobs to India, for instance, will kick the legs from under a rapidly rising Indian middle class and impact India’s balance of payments. 

Outlawing outsourcing will raise production costs for American companies and make them less competitive with foreign companies, both in the United States market and in other countries.  Higher tariffs and import quotas against foreign competitors will be necessary to prevent loss of jobs here, as American companies’ sales decline under import competition.  India and other nations losing revenues from American outsourcing will have less purchasing power for American exports, causing further loss of jobs in America. 

The only “benefit” is that organized labor can keep its high-cost jobs.  The bill for this sort of economic planing is paid by consumers via higher prices and a reduced array of product choices.  And it’s paid by the vast majority of workers who are not part of the liberal-favored, socialistic union structure.  They will have fewer jobs and lower wages to make up for organized labor’s grabbing a bigger part of total wages.  It is, in other words, merely liberal favoritism, a method for redistributing income and property in accord with socialistic dogma.  But to the average, simplistic liberal, uneducated in economics and unaware of the collateral costs, prohibiting outsourcing is social justice; it’s merely taking ill-got gains from rich corporations and giving them to the workers who deserve them.

The minimum wage and its relative, the living wage, are “me too” efforts by liberals to make Congress into a sort of Federal Reserve for regulating wages.  If Alan Greenspan can regulate the volume of credit via manipulating basic interest rates (a questionable assumption), then why can’t Congress regulate wages by manipulating entry-level wages?

Liberals argue that a higher minimum wage benefits “American workers.”  But does it?

No one has ever demonstrated that higher minimum wages lead to higher employment and increased prosperity.  Liberals can only argue that a higher minimum wage doesn’t reduce employment.  But even that case rests upon widely questioned conclusions in a single study of fast food restaurants in one small area of New Jersey in the short time span of a few months.

It defies logic and human experience to imagine that businesses employing fewer than 150 people, the largest number of enterprises in the country, will not be unfavorably impacted by having to pay higher wages, taxes, and social Security benefits for the same amount of work from their existing employees.  To deny this, you have to believe that the average small business is enormously profitable and that a conspiracy among these millions of businesses deliberately holds wages below what they can really afford to pay.  Or else you have to assume that such businesses can easily raise their selling prices and let consumers pay for increases in the minimum wage.

In any case, the minimum wage is simply an instance of state planners ignoring market realities and imposing price controls.  The end result of the higher minimum wage is to lever up wages and prices at all levels.  Who benefits the most?  Naturally, union labor, the darlings of liberal-socialists.

Theoretically, higher wages put more purchasing power into the economy, but not if small businesses can’t afford to hire more workers or have to lay off some existing employees to avoid going broke.  True increases in economic well-being are nothing more nor less than increased production of useful goods and services. 

If you gain higher nominal wages, but must pay higher prices, you have made no real gains.  In cases where businesses can offset the higher minimum wage with higher selling prices, people just pay higher prices for the same volume of goods and services, rendering the whole exercise an illusion created by socialistic politicians to bedazzle an uneducated public. 

Increasing businesses’ production costs with higher wages is a deterrent to additional production.  Businesses invest in higher production capacity in response to the incentive of potentially higher profits and an acceptable risk/reward ratio.  Raising risks by increasing costs is a disincentive to investing in increased production.

In the real world, wages increase without government intervention as production increases and the level of unemployment drops.  Businesses are compelled to pay higher wages to attract workers in order to increase production.  Higher wages in that case are not inflationary, unless the government has artificially created excessive credit that over-stimulates capital investment, because the balance of available goods and purchasing power is maintained. 

It was, by the way, artificial expansion of credit by the Treasury and the Federal Reserve that led to the Great Depression of the 1930s and to the dot.com bubble under the Clinton administration in the 1990s.  Excessive credit not supported by real savings misled businesses to assume that potential demand for increased output was greater than it proved to be.  Thus, for example, wild expectations of exponential growth in internet traffic led to investment in fiber optical cables and switching capacities vastly greater then really needed.  The financial markets were awash with so much artificial credit that companies that never had produced a product could go public, raising a couple of billion dollars based on nothing more than a speculative expectation.

When it became apparent in the final years of Clinton’s administration that the real savings rate was negative and that further sales increases required unlimited expansion of consumer debt, Clinton’s “prosperity” and “balanced budget” collapsed.

On the other hand, while the artificial boom lasted, higher prices and higher wages produced nominally higher taxable incomes and poured more money into Federal coffers for new welfare-state programs.  Coupled with a roughly 30 percent reduction in defense spending, this created the illusion of balancing the Federal budget. 

While Treasury Secretary Robert Rubin solemnly told the public that the government was paying off public debt, in reality the Federal debt continued to rise unabated.  The slight of hand was accomplished by using temporary surpluses in Social Security revenues to purchase Federal debt in public hands and replace the purloined Social Security funds with non-marketable Treasury debt.  This was the equivalent of telling everyone that you were now debt free, because you had paid off your credit card debt with the proceeds of a second mortgage on your house. 

If you want to verify this, just go to the United States Treasury’s own website at http://www.publicdebt.treas.gov/opd/opd.htm.

Second Part:

How did we get into this downward spiral?

Anyone who looks at what was actually said and done under the banner of socialism and state planning in the 1920s and 1930s is struck by the public’s loss of faith in the political liberty and individualism that had brought England to domination of world trade in the 19th century and had laid the foundation for the United States’s becoming the industrial colossus of the world.

World War I and the economic Depression of the 1930s shattered traditional faiths.

State planning was advertised as scientific in an age that had benefited enormously from advances in the physical sciences.  Not to advocate socialism was viewed as willful ignorance.

In that climate of opinion, Hitler’s National Socialist German Workers Party (the Nazis) came to power by democratic means, electing enough members to the Reichstag to gain legitimate control of the government.  Nazis appealed to the German middle class and workers by promising to exclude the landed aristocracy from political power and bring big business to heel. 

On January 30, 1933, President von Hindenberg appointed Hitler Chancellor of the German Reich.  Two days later Hitler delivered his official address to the German people, in which he declared:

“The National Government will regard it as its first and foremost duty to revive in the nation the spirit of unity and co-operation. It will preserve and defend those basic principles on which our nation has been built. ....

Turbulent instincts must be replaced by a national discipline as the guiding principle of our national life. All those institutions which are the strongholds of the energy and vitality of our nation will be taken under the special care of the Government.

The National Government intends to solve the problem of the reorganization of trade and commerce with two four-year plans:

The German farmer must be rescued in order that the nation may be supplied with the necessities of life….

A concerted and all-embracing attack must be made on unemployment in order that the German working class may be saved from ruin….

The National Government will, with iron determination and unshakable steadfastness of purpose, put through the following plan:

Within four years the German peasant must be rescued from the quagmire into which he has fallen.

Within four years unemployment must be finally overcome. At the same time the conditions necessary for a revival in trade and commerce are provided.

The National Government will couple with this tremendous task of reorganizing business life a reorganization of the administrative and fiscal systems of the Reich, of the Federal States, and the Communes.”

Three months after Hitler became German Chancellor, Franklin Roosevelt took the oath of office as President and delivered his first inaugural address. Most people know only the famous phrase, “We have nothing to fear but fear itself.”  But the main part of the speech was devoted to language almost identical to what Adolph Hitler had been saying for more than ten years.

President Roosevelt’s version of Hitler’s speech included the following:

“?Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply.  Primarily, this is because the rulers of the exchange of mankind?s goods have failed through their own stubbornness and their own incompetence??True they have tried, but their efforts have been cast in the pattern of an outworn tradition.?The means of restoration lies in the extent to which we apply social values more noble than mere monetary profit.?

Restoration calls, however, not for changes in ethics alone.  The nation asks for action, and action now.  Our greatest primary task is to put people to work?It can be accomplished in part by direct recruiting by the government itself, treating the task as we would treat the emergency of war??Hand in hand with this, we must frankly recognize the overbalance of population in our industrial centers and, by engaging on a national scale in the redistribution, endeavor to provide a better use of the land for those best fitted for the land.?It can be helped by the unifying of relief activities which today are often scattered, uneconomical and unequal.

It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definite public character.

?if we are to go forward we must move as a trained and loyal army willing to sacrifice for the good of the common discipline, because, without such discipline, no progress is made?We are, I know, ready and willing to submit our lives and property to such discipline because it makes possible a leadership which aims at a larger good.?

With this pledge taken, I assume unhesitatingly the leadership of this great army of our people, dedicated to a disciplined attack upon our common problems.?Our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangements without loss of essential form [in other words, New Deal lawyers can interpret it to mean anything that fits their purposes]?

It is hoped that the normal balance of executive and legislative authority may be wholly adequate to meet the unprecedented task before us.  But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure.?But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me.??

One newspaper, reporting on the inaugural, summed it up with the headline, ?Roosevelt Declares for Dictatorship if Necessary.?

Before 1933, no President would have viewed the economy of the nation as a single unit which he could manage, almost as if it were it were a private corporation and he were its CEO.  This enormous presumption, tested in Germany, France, the USSR, and England after World War II, as well as here, has failed to meet the promises of social scientists.  Yet it remains an alluring prospect for an American electorate left ignorant of history and economics by our socialized public education system.

Present-day anti-Americanism in our colleges and universities is the mirror image of pronouncements by faculties in German universities in the late 19th century, when they became the self-styled defenders of the political policies of Prussian statism that were to lead directly to World War I and Hitler’s National Socialism.

Tuesday, July 06, 2004

Freudian Education

Sigmund Freud’s hedonistic theories permeate and taint the public education system.

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The Supreme Court recently remanded to a lower court for further review a 1998 internet anti-porn law known as the Child Online Protection Act.  The act, astonishingly signed into law by President Clinton, would have authorized fines up to $50,000 for website operators who put images or text “harmful to minors” on the internet without appropriate safeguards to prevent access by minors.

As argued before the Court, the issue was First Amendment free speech.  The ACLU and others asserted, and five of nine Justices agreed, that freedom of expression is so important that essentially no restraints may constitutionally be placed on it.  As reported in the newspapers, little consideration was given to whether some kinds of speech and imagery are in fact harmful to young people.

Lurking in the background of the debate is the Freudian influence on Western civilization.  Sigmund Freud was hardly alone, but his was one of the most prominent voice espousing the ACLU’s position that any policy, law, or action that serves to destroy tradition and conventions of morality is scientific progress. 

Freudian psychology, coupled with John Dewey’s philosophical pragmatism and his progressive education theories, massively reshaped American education.  While the term is not ordinarily used, Freudian education is a useful label to provide perspective on one of the most destructive developments in modern education.

Because Freud captured the imagination of America’s literary lions, Freudian theories became widely known and highly fashionable in the early decades of the 20th century.  Alfred Hitchcock and other movie directors in the 1930s, 40s, and 50s gave the public numerous screen stories that presented Freudian terminology as unquestioned scientific fact.

The essential aspect of Freudian education is the belief that the ills of society are produced by the conflict between society’s ignorant and superstitious moral conventions and the true, sexual nature of humans.  The result is unresolved guilt that impairs human relations. 

Freud detested the Victorian moral standards of late-19th century Europe and aggressively shaped his theories to ridicule and discredit them.  As expressed in frequent letters to personal friends, Freud took delight in shocking prim Victorians by telling them that their dignified behavior was nothing more than repressed sexual urges, that under the surface all the men were secretly lusting to bed their mothers and sisters, while the women were driven by penis-envy of the men.  Christian civilization was all a sham, Freud said.  There was no such thing as morality, merely the sex drive.  We should not be looking upward for Divine guidance, but reaching for our crotches to unzip our trousers.

More recent scholarship has shown that most of what Freud reported as case studies and miraculous cures were pure fabrications.  This explains why Freud refused to permit his medical peers to review his case materials or to subject his methods to normal scientific standards of replication and testing.  The odds of being cured by Freudian analysis are about the same as the odds of winning the lottery.  In fact, so few people ever have been cured by Freudian analytical methods that most medical professionals today admit that the only real beneficiaries were the highly-paid psychiatrists.

Nonetheless, Freud’s influence continues undiluted, though few people today recognize the source of their misconceptions.  The result is a complex of contradictory positions with regard to education and what harms children.

On the one hand, we are told that children pay little attention to the rampant sex and violence they witness on all sides.  On the other hand, the ACLU is sensitively concerned and alarmed that some children are deeply wounded by being forced to hear “under God” in the Pledge of Allegiance.  Christians and religious Jews have no grounds for complaint, according to the ACLU, if omnipresent depiction of sex and violence offends them.  But under no circumstances must atheistic liberal-socialists be forced to endure the sight of menorahs, Stars of David, Christian crosses, or creches.

Movie and TV producers, video-game developers, and internet websites stoutly maintain that the gluttonous servings of raw sex and violence larding most of their fare have no ill effects on the young.  In any case, they say, they are merely providing the public want it wants.  Translated, this means that however many parents oppose this, there are enough people viewing it to bring in huge box office and advertising revenues.  Since no boycotts have succeeded in deterring those who do like this sort of thing, producers see no reason to heed parents who object.  Their rejoinder is, it’s your kids and your business to keep them from watching.

But that doesn’t work when Freudian attitudes invade the public schools.  So-called sex-education teaches pubescent children how to engage in pre-marital sex.  No-questions-asked dispensation of condoms delivers the unmistakable message that sexual promiscuity is OK, in fact expected by the authorities.  Children are taught that it is unscientific to declare actions good or bad, right or wrong.

Put all this together, and we have a Freudian educational system engineered to implement the dictates of the ACLU.  The result has been illegitimate birth rates higher than ever before experienced in the history of the world.  Males feel free to impregnate immature young women and walk away, patting themselves on the back for being “real men.”  According to some sources, roughly half of all children in the United States now grow up without fathers living at home with them. 

None of this should surprise us.  What else could we expect from a society and an educational system permeated with the belief that hedonism is simply fidelity to the essence and truth of human nature?  The ACLU and the teachers’ unions stand up and cheer for this; politicians who want to stay in office follow suit; and Federal judges trained in the Ivy League’s trade schools of socialism strike down any legal attempts to restrain it.  Anyone questioning it is denounced as repressive or ignorant, or labeled a Nazi.

Posted by Thomas E. Brewton on 07/06 at 09:04 PM
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