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Sunday, July 04, 2004

Hillary’s Village

Liberals figure that jobs and production of goods and services are created by government regulations, so they are entitled to decide who gets what.

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In a speech to liberal stalwarts in San Francisco recently, Sen. Hillary Rodham Clinton told them, “Many of you are well enough off that ... the tax cuts may have helped you. We’re saying that for America to get back on track, we’re probably going to cut that short and not give it to you. We’re going to take things away from you on behalf of the common good.”

This is a basic aspect of the Senator’s concept of a just society, described in her book, “It Takes a Village.”  It reflects two aspects of liberal-socialist theory that fail to connect either with economic reality, or with the traditions upon which the United States was founded.  First is the nanny-state mind-set that says WE will tell you how best to live your lives, the very thing that the colonists fought against in 1776.  Second is the black-box approach to economic policies.

With regard to the first aspect, the nanny-state repudiates the concept of individual liberty and individual responsibility, guided by God-given natural law that sets moral conduct as the highest goal of individuals and of society.  What matters in the liberal-socialist world-view is the structure of the state.  Social justice comes, not from individual morality, but from centralized government control that forces equal distribution of income and property. 

Thus, says Senator Clinton, WE are going to take from you for the common good.  In time of war or other emergency, most people pitch in willingly for the purpose of common survival.  But Senator Clinton’s policy applies at all times and in all conditions under liberal-socialism.  According to socialist doctrine, if the government takes enough from “the wealthy” and distributes it equally to others, there will be no more wars or other emergencies.  Earthly perfection will have arrived, and peace and harmony will reign forever and ever.

Professor Michael Walzer, one of the United States’s foremost socialist spokesmen, declares flatly that the existence of unequal distribution of income and property is tyranny.  Freedom, in liberal-socialist theory, is the economic and political state in which every individual has equal access to any and all of society’s goods and services, based only on personal need.  Neither a person’s individual talents not his actual contribution to the production of society’s goods and services is to play a role in the just society of liberal-socialism.  Having more money than others is tyranny because it permits the wealthier person to have more than the share allotted to him by state-planners and social engineers.  Money in an individualistic society is power, therefore it’s bad. 

In the liberal political state, only bureaucratic planners and regulators are permitted to have power, because only liberal-socialist intellectuals like Senator Clinton understand what is best for collectivized society.  That’s why President Clinton rejected the idea of a tax cut.  As he said to reporters, his administration could give back some of the taxpayers’ money, but feared to do so, because people would spend it on the wrong things.

One of the choral lines in Handel’s “Messiah” begins, “All we like sheep….”  Atheistic liberals, however, have no use for God or the Messiah to bring back those of us who have gone astray.  They perceive themselves to be social gods empowered to shepherd us from field to pen.

Few liberals, either Republicans or Democrats, state their aims so blatantly.  But there is no end point for liberalism short of tyranny.  A cursory look back at our history during the 20th century reveals a continual and massive removal of power from the individual and his local and state governments, and a collectivization of that power at the Federal level.  The process continues unabated every year.

European history demonstrates the inevitability of collectivization under socialism, which began earlier there than here: Revolutionary France, of which Alexis de Tocqueville said that its citizens cared only for their own selfish interests and repeatedly accepted any degree of despotism, so long as they got their claimed entitlements to state largesse; Soviet Russia, in which an estimated twenty million people were slaughtered by the collective state in the name of humanity; National Socialist Germany, in which Hitler conquered Western Europe and liquidated six million Jews to create the well-ordered socialist society he promised to the electorate when they elevated him to power in entirely democratic elections. 

France and Germany today can’t comply with the economic standards they themselves set for EU membership, because their ever-expanding regulation of business makes German and French companies less able to compete in world markets.  Those companies reduce production in France and Germany, young people entering the work force can’t find jobs, and more people demand higher welfare payments at the very time that government tax revenues are falling.  Instead of reducing regulations and enabling business to raise profits and expand production and employment, socialist governments respond with yet more taxes and more regulations.

That is essentially the program espoused by liberal-socialists in the Kerry camp.  What they say to prospective voters is elect me and I will create jobs and pay for your medical costs just by passing new laws; “they” will pay for it.

This leads us to the second aspect of liberal-socialism revealed by Senator Clinton’s statement: the black-box nature of liberals’ understanding of economics.  A black-box is something with mysterious workings inside and out of sight; push a button, things go into one side, and something different comes out the other side.

The implicit expectation in Senator Clinton’s pronouncement is that the economy is a static game board controlled by social engineers via joy sticks on their black box.  Social engineers presumably can simply rearrange pieces to form a perfect social and economic pattern.  A has more than B, so take a bit from A and move it to B’s square on the board. 

For this to work, however, A, B, and all other pieces on the board must be entirely passive and have no built-in capacity to react to moves by social engineers.  Life in a real political economy, of course, is not like this.  That’s why liberal-socialism cannot fulfill its promises.

Liberal “reasoning” does not follow a scientific pattern of (a) identifying a problem, (b) seeking to understand the source of the problem, (c) suggesting possible solutions, (d) investigating whether the proposed solutions will have the desired effects, and (e) testing to determine whether these solutions will cause adverse side-effects. 

Liberal “reasoning” instead simply says it seems unjust that the normal course of nature produces unequal distributions of income and property and we intend to suspend the laws of nature by moving something from A to B.  Liberal politicians and liberal economists then chant the ritual dogma of the socialist religion: more taxes, more welfare benefits, more special-interest dispensations.

Legitimacy of this approach depends upon the presumption that there is no inherent nature to the universe, human beings, and human society imposed by the Will of God, or,  if you prefer, by the laws of physics and biochemistry.  Liberals like to say that everything in life is the product of the human mind, therefore intellectuals can make up a new, ideal society in their heads and turn it into reality just by issuing a government regulation.

Most people, to the contrary, don’t remain passively in their assigned board squares.  As soon as a social engineer makes a move, individuals began assessing its impact and looking for dangers or opportunities opened up by the move.  Indeed, a huge part of Wall Street - investment bankers, lawyers, and accountants - make their living by creating counter-moves as swiftly as possible to neutralize and offset new government regulations. 

Were it not for liberal-socialist efforts to move income from A to B, there would be no such thing as tax-shelters, and few companies would feel a need to establish legal domiciles in tax-havens like the Bahamas.  And hard-working families that save for their children’s futures would not have to fear that their life-long sacrifices would come to naught at the hands of a tax-happy, liberal-socialist Congress bowing to socialist orthodoxy that declares inherited wealth a sin against society.

Why then do so many people in our democratic society believe that Senator Clinton’s black-box really works?  Why do so many people believe Senator John Kerry (or any candidate) when he declares that he will “create” millions of new jobs and make people’s lives better with new government regulations?

The answer is two-fold.  First, some people do benefit from socialism.  Second, the economy is so vast and the ripple effects of policy moves is spread over so many people and so many parts of the economy that even economists have difficulty in compiling reliable statistics that can measure what is going on.  Moreover, the full effects of today’s policy change may not be fully felt for a year or more.

Labor unions stay ahead of the inflation curve by exerting the threat of strikes.  But, to the extent that they collect higher wages, their employers have lower profits and may defer expanding production and hiring additional workers.  In any case, higher union wages pressure companies to raise their selling prices, which contributes to inflation and reduces the buying power of non-union labor.  So, what is hailed as a great victory for the working man by liberal politicians and the AFL-CIO or the Teamsters is actually a tax on non-union labor, the much larger portion of the work force, who have no increase in income but must pay higher prices for union-labor production.

Similarly, special-interest groups, ranging from big business to environmental causes, may be pleased to receive special dispensations or special funding from Federal sources.  But some other taxpayers are footing the bill by paying higher taxes and having lower purchasing power, or else the whole population pays via inflation in the form of higher prices for goods and services.

Underlying all the liberal-socialist dogma is the misapprehension that governments can and do control economies and that Presidents or Congress can create prosperity by spending more on benefits programs.  Even a moment’s reflection reveals this as arrant nonsense.

At any given time, a fixed number of able-bodied and skilled workers are available to the work force.  Only a given capacity is available to produce goods and services.  If government spends more money, which is almost always the liberal prescription, the only certain effect is to raise prices (i.e., to boost inflation). 

Even if new government spending leads some businesses to hire workers, the increase in the money supply from government spending precedes additional production of goods and services, so that businesses will take advantage by raising prices in the short run.  The only question is how much inflation follows and how fast. 

It’s no accident that prices in the United States, except during war times, were remarkably steady from 1790 until Franklin Roosevelt formally introduced socialist state-planning with his New Deal in 1933.  Since then, prices have risen every year and are now more than 500 percent higher than when liberals promised to cure all our ills with state-planning.