Category Archives: Capitalism v Socialism

We coulda called it “Good Versus Evil”, but that’d be a tad cryptic, wouldn’t it?

Cop Resident

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SCENE:  Mitch BERG is buying topsoil at Kern Landscaping in Saint Paul.    Busily loading his car, he doesn’t notice Avery LIBRELLE climbing out of an oil-belching Subaru wagon to make a deposit.  

LIBRELLE:  Merg!  If we elect Hillary, we’ll get Bill Clinton for co-president!

BERG:  So?

LIBRELLE:  That means the economy will boom!

BERG:  Wait – didn’t NPR tell me the economy is already booming?

LIBRELLE:  It’ll boom even more!

BERG:  OK.  So we’ll get Bill Clinton.  Will we also get Newt Gingrich?

LIBRELLE:  No.  Why?  Hisssssssssssssss!

BERG:  Because it was the Gingrich Congress’s enforcement of fiscal discipline on the Clinton Administration after the 1994 Republican Wave that kept the Feds out of the way of the economic boom.  By the way, speaking of boom – will there be any empires falling, paving the way for a massive transfer of resources from the military?

LIBRELLE:  Huh?

BERG:  The “Peace Dividend”.  When the USSR collapsed – thanks to Ronald Reagan – the US was able to move a lot of defense spending to civilian uses.  Which dumped a ton of money, skill and technology into the civilian market.   Which led, after a brief recession, to the beginning of a boom that ran until 9/11.

So – if Hillary plans to bring back a conservative Congress and has another “peace dividend” in her purse, we might have ourselves a deal.

LIBRELLE:  (Stands, mutely flapping jaw)

BERG:  Have a nice day, Avery.

(And SCENE)

I’m No Longer From The Government, And I’m Here To Help

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There is an actual, credible move underway to privatize air-traffic control (ATC) – a long-overdue move to modernize a system where government’s hide-bound, politically-driven intellectual sclerosis isn’t merely slow, annoying and exquisitely expensive, but directly threatens lives:

Air-traffic control (ATC) is operated by the Federal Aviation Administration and funded by a combination of aviation taxes and a subsidy from general revenues. Ever since the Reagan administration, the FAA has been trying to modernize the ATC system, taking advantage of new technology to unclog the congested airways. Yet the system still relies on 1960s technology: radar instead of GPS to keep track of planes, paper flight strips with handwritten changes instead of electronic data on controllers’ screens, and unreliable voice radio instead of digital communication. Tens of billions have been spent on new computer systems and minor technology upgrades, but three decades of reports by the GAO and the Department of Transportation’s inspector general have documented repeated cost overruns and late deliveries and an ever-receding target date for true modernization.

The push isn’t new:

Dating back to Reagan’s transportation secretary, Jim Burnley, a growing consensus has emerged that air-traffic control is better viewed as a 24/7 high-tech service business than as a tax-funded, federally subsidized bureaucracy. National commissions, think-tank reports, and industry studies have all reached this conclusion, but reform efforts have gotten nowhere in Congress — until this year. In February, the House Transportation and Infrastructure Committee passed a bill that would remove the Air Traffic Organization (the operational arm of the FAA) from the FAA and reconstitute it as a self-funded, nonprofit, private company. It would be governed by a board representing all segments of aviation and regulated for safety — at arm’s length — by the remaining FAA, just as that agency regulates airports, airlines, and private pilots.

Read the entire article – which notes that many of the other nations that both the left and right admire have done the same, with great success (and arrested and diminishing cost (!) in recent years.

And then stop and think – where else would this work?

Swedish Style

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The things Bernie Sanders – and, to be fair, every single one of his American supporters – miss about Scandinavian socialism today (as opposed to the seventies-era variety that Sanders seems to think still applies), via Johan Norberg:

“Sanders is right: America would benefit hugely from modeling her economic and social policies after her Scandinavian sisters. But Sanders should be careful what he wishes for. When he asks for ‘trade policies that work for the working families of our nation and not just the CEOs of large, multi-national corporations,’ Social Democrats in Sweden would take this to mean trade liberalization — which would have the benefit of exposing monopolist fat cats to competition — not the protectionism that Sanders favors. … Being more like modern Sweden actually means deregulation, free trade, a national school voucher system, partially privatized pensions, no property tax, no inheritance tax, and much lower corporate taxes. Sorry to burst your bubble, Bernie.”

If there’s one thing the American left can build, it’s shatterproof intellectual bubbles.

It’s Always Sunny In Gøteborg

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It’s nothing new for America’s pollyannaish, historically-and-economically illiterate left to jabber “why can’t we try Scandinavian-style ‘Democratic Socialism?’  What do they have that we don’t?”

The  correct answer is “they have small countries – about the same population as Minnesota – with socially, ethnically and economically-homogenous societies (seriously – ethnic and social homogeneity is so ingrained in Scandinavian society, they have a word for it – Janteloven) with traditions of simultaneously-uplifting-and-suffocating communitarianism dating back hundreds of years”.

You could also add “…and a willingness to reassess how their sustainable their systems actually are in the real world“, which is something the American left flops at.

 

What Could Possibly Go Wrong?

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Obama apparently had so much fun during the original Housing Bubble, he’s setting up another.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.

Read:  Again, the government will socialize the risk, while privatizing the rewards.

Lather, Rinse, Repeat

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Joe Doakes from Como Park emails:

Just returned from a trip where I met a couple from Canada, dairy farmers who milk 150 head.  They couldn’t understand why Americans would support Sanders.
It seems the political party that dominated their province was conservative until a “Tax The Rich Corporations” party won and raised corporate taxes in order to lighten the load on the middle class.  Corporations are rich, they’re not stupid, so they moved out, taking their jobs with them, leaving a budget shortfall that required raising taxes on the middle class, who are now worse off because greed blinded their common sense.
Gee, where have I heard that one before?
Joe Doakes

We have a generation of voters who don’t remember the lessons of socialism in Eastern Europe.

Or Cuba.

Or Argentina.

Or Western Europe in the ’60s and ’70s (and coming back for an encore now)

Or India through the seventies, when it almost starved itself back to the 1600s.

Or Africa,’til today.

Or Venezuela in the past 20 years.

Other than that…

What Could Possibly Go Wrong?

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Joe Doakes from Como Park emails:

One of the keys to achieving a healthier citizenry is providing everyone with affordable (meaning subsidized) health insurance.  Naturally, since the government is paying for most of it, the government needs the data supporting the billings.  So all your medical records belong to the government.  But it’s okay, the data is totally secure, just like the personnel records at the Department of Homeland Security.

Joe Doakes

In all things, we must reinforce failure and reward incompentence.

With government, anyway.

The Scary Thing About Iowa

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OK, conservatism had a good night, and the Trump bubble got deflated ever so slightly, maybe.

But the scariest thing to come out of Iowa is that a whole lot of people consider socialism an acceptable alternative.

Peggy Noonan:

A conservative of a certain age might say: “No, he’s a fad. Socialism is yesterday! Marx is dead, the American economic behemoth rolled over and flattened him. Socialism is an antique idea that rocks with age. America is about the future, not the past.”

I disagree. It’s back because it’s new again.

For so many, 2008 shattered faith in the system—in its fairness, usefulness and efficacy, even in its ability to endure.

As for the young, let’s say you’re 20 or 30, meaning you’ll be voting for a long time. What in your formative years would have taught you about the excellence of free markets, low taxes, “a friendly business climate”? A teacher in public high school? Maybe one—the faculty-lounge eccentric who boycotted the union meetings. And who in our colleges teaches the virtues of capitalism?

If you are 20 or 30 you probably see capitalism in terms of two dramatic themes. The first was the crash of ’08, in which heedless, irresponsible operators in business and government kited the system and scrammed. The second is income inequality. Why are some people richer than the richest kings and so many poor as serfs? Is that what capitalism gives you? Then maybe we should rethink this!

And Mr. Sanders makes it sound so easy. We’re rich, he says; we can do this with a few taxes. It is soft Marxism. And it’s not socialism now, it’s “democratic socialism” like they have in Europe. You’ve been to Europe. Aside from its refugee crisis and some EU problems, it’s a great place—a big welfare state that’s wealthy! The French take three-hour lunches.

I was about to say that younger Americans’ illiteracy about the history of socialism was a failure of the American educational system…

…but I stopped myself.  To the teachers unions and most of academia, it’s a feature, not a bug.

Doakes Sunday: Glacial

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Joe Doakes from Como Park emails:

My grandkids got school photos [a few] weeks ago.  I received my prints a week ago and took the extra set to the UPS store to send to my parents, the Great-Grand Parents.  Cheapest to send by US mail First class in a flat mailer so that’s what I did.  No tracking, no signature, just mail them.

Spur of the moment, decided to visit my folks on Saturday: no photos.

The mailer should have gone out in the evening mail from Lexington Avenue at 5:00 on Monday.  I was at my parents’ house Saturday.  Five business days is not long enough for a First Class letter to get from St. Paul to Rochester?

[Columbus Day, when Joe mailed this], is a federal holiday.  Tomorrow delivery maybe, for a total of eight days?  Pony Express could have gotten it to California in that much time.  The quality of service has fallen off dramatically.

It’s only photos, nothing urgent; but every time I use the Post Office for anything other than a Money Order, I am reminded why I refuse to use the Post Office for anything other than a Money Order.

Joe Doakes

I actually sent a letter – not an urgent one – via USPS last weekend.  It was the first time I’ve done it in years.

Low Expectations

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Democrats are fond of trying to find statistics that try to show that the Obama Administration has not been a complete economic disaster.

One way is via a blizzard of charts that claim to show a long series of months with job growth:

Raw Numbers

“It’s Bush’s fault! It’s Bush’s fault!”

Of course, as Mark Twain once said – and it’s a cliche I almost regret to say – but there are three types of data; lies, damned lies, and statistics put out to defend Democrat economic policy.

A graph will look very, very different, and depict very different things, depending on the two dimensions you select, as Philip Bump points out in the Wall Street Journal.

Obama looks best when you compare his job creation record with the day he took office – a graph which, by the way, has some liberals chortling, in that it makes Jimmy Carter look like a boss job creator:

Versus First Month

Of course, Clinton is the champ – he’s the only two-term president since World War II that didn’t have a recession on his watch – thanks, of course, to Ronald Reagan and the Peace Dividend, as well as Newt Gingrich stifling the worst of Bill and especially Hillary’s agenda.  Clinton was a champ in spite of himself, and largely due to his opposition.

We also note that more jobs were created on Dubya’s watch in three years than in six and a half of Obama; remember, Dubya had the 9/11 recession and the housing bubble in his eight years.

But isn’t comparing job growth versus a president’s first day in office a little artificial?

Sure.  Let’s compare presidents with their administration’s low points:

Versus Low

 

 

So in other words, Obama’s like Nixon.  I wasn’t very old at the end of the Nixon administration, but we all know what a lousy time that was.

But of course, the population has changed; Reagan added 17 million jobs in a population that was around 260 million.  Obama has added nine million jobs in a nation of 315 million (although nobody’s really counting anymore).  So how about we measure this in terms of concrete percentages?

Versus Population
As anyone who was looking for work back then knows, life under Reagan was infinitely better; the economy added a higher percentage of jobs in the quarter after the end of the’82 recession than it has in the six years of the Obama recovery.

Print out that last graph.  Share it with your liberal friends.

Our Nation Turns Its Lonely Eyes To You

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What do we really need for President?

Jack Kemp.

The former Bills quarterback and congressman from Buffalo was perhaps the most influential American politician who never became President; he was behind much of the “get out of the way” legislation that led us to the prosperity of the ’80s and ’90s.

And he rose to prominence during an era with great similarities to today.

Morton Kondracke and Fred Barnes write in the WSJ:

The present era resembles the miserable 1970s. Growth is glacial. Incomes are stagnant. The country’s mood is sour. Divisions are widening. In 1979 only 12% of Americans thought the nation was headed in the right direction. Now it’s around 30%. And politicians are pitting class against class: the “1%” against the “47%”; white workers against Mexican immigrants. The public is furious with Washington, and no wonder. Polarized Republicans and Democrats do nothing for them.

Jack Kemp shook things up—but with dramatic ideas about policy, not by pitting outsiders against insiders. The Republican establishment resented the gall of a backbencher’s butting into tax policy. Democrats hated tax-cutting, even though Kemp kept reminding them that President John F. Kennedy first proposed lowering the top rate to 70% from 90%. Special interests were furious when Kemp proposed reducing their tax breaks. He once wrote Reagan’s deficit-hawk budget director, David Stockman,demanding to know why Mr. Stockman wanted to raise taxes on working people and cut food stamps, Medicaid and Head Start, but keep subsidies and tax breaks in place forBoeing,Exxon and Gulf Oil.

Go on and read the whole thing.

And then ask yourself – which candidate would Kemp support?

Kemp was, of course, one of the people who converted me to conservatism.  We could do much, much worse, and we usually do.

There’s Just No Way…

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…anybody could have predicted this: Seattle workers whose minimum wage has been jacked up to 15 bucks an hour…

…are now asking for fewer hours, so they don’t lose their housing subsidies.

Naturally, the artificially-high minimum wage was supposed to cut welfare dependency, blah blah blah.

So now we’ve got fewer jobs, and just watch – the program dependence is going to stay the same.

Austered The Wrong Way

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To: National Public Radio News

From: Mitch Berg, uppity peasant

Re: Terminology

Dear NPR:

Over the weekend, while listening to one of your news programs, I caught a story about skilled workers emigrating from Portugal. 

Your story announced that the Portuguese economy was “recovering from austerity”

Austerity was not the problem. Or, rather, austerity was, at most, a symptom; The disease was unsustainable government spending, that sapped the vitality of the private sector economy.  

Unrestrained spending on things like lavish pensions, cradle to grave welfare, a government workforce that displaces private enterprise, and yes, public broadcasting, committed governments to endless, crippling spending that, when the economy goes south, cannot be sustained.  

See that we don’t make this mistake again, shall we?

That is all.

It’s A Start

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Bloomington residents turn out against racketized trash hauling (emphasis added):

Some angry residents want to take decisions on trash hauling out of the City Council’s hands. Residents are circulating petitions for both an initiative and a referendum that would allow citizens — rather than their elected officials — to have the final say on the issue.

Hard to say if the bolded parts are a little bit of editorializing by the Strib writer, John Reinan – but either way, it was a great turnout:

Nearly 100 residents testified for more than three hours at a public hearing on trash hauling Monday night. The city is proposing to implement a system of “organized collection.” In essence, the seven private haulers now licensed to do business in the city would carve up the territory and charge a single negotiated rate.

In other words, the city will pick winners and losers, and give everyone – resident and hauler – an “our way or the highway” “choice”.

The part that fascinates me, whenever people get to choose between freedom and socialism, is the rationalizations people choose for socialism:

[Supporters of the racket plan] pointed to the cost savings projected by the city, which add up to more than $8 a month for the average household.

“That will save the average person $103 a year,” said resident Greg Thompson. “Given the choice between choosing the color of the [garbage] bin and the name on the side of the truck, and saving 103 bucks, I choose the 103 bucks.”

You could choose bin colors and names.

Or you could choose prices.  That’s your call, in a free market system.  I, for one, stick with prices and service.

And if you believe that the “city negotiated price” is going to stay the same, once the trash haulers have no reason to compete in Bloomington, and that service will stay the same when the trash haulers have to cut cost corners to maximize profits (which is their job), you’re clearly a Democrat voter.

And you’re in ample company, as the Bloomington City Council is controlled by the DFL.  And it shows:

City residents last week received a mailing from Garbage Haulers for Political Choice, an industry group opposed to organized collection. That didn’t sit well with Council Member Andrew Carlson.

“What concerns me is, [the haulers] are negotiating in good faith — but at the same time, actively engaged with an organization whose purpose is to oppose organized collection. That doesn’t square up well with me,” Carlson said.

Complexity is hard.  If you’re a politician.

Surplus Of Stupid

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SCENE:  Mitch BERG is ordering a Banh Mi sandwich at iPho on University.  Avery LIBRELLE enters the store.

LIBRELLE:  Hey, Merg!   After four years, Minnesota’s economy is rocking under Mark Dayton, while Wisconsin is sucking pond water!

BERG:  How do you figure?

LIBRELLE:  Minnesota has a $2 Billion surplus

BERG:  Right.  After raising taxes by…$2 Billion.  Now, if the economy is humming along, you’d think that the surplus would be bigger than the tax increase, now, wouldn’t you?

LIBRELLE:  At least Minnesota has a surplus!

BERG:  Right – apparetly, entirely due to the tax hikes.  In the meantime, Wisconsin is headed toward a surplus without the need for tax hikes – or, as we call it, a sustainable surplus.

LIBRELLE:  Yeah, but our economy is still better!

BERG:   Most of Minnesota’s growth is in metro-area medical, medical device, insurance and financial services companies – the ones that benefitted from Obamacare and “Too Big to Fail” stimuli.  Things aren’t nearly as rosy in Greater Minnesota.  In the meantime, Wisconsin’s growth is being held back by the slow manufacturing sector – which is a much bigger share of Wisconsin’s economy than Minnesota’s, and isn’t doing all that well here, either.

LIBRELLE:  If Minnesota had elected Tom Emmer governor in 2010, we’d be in the same boat!

BERG:  Right.  We’d have two economies being dragged down by Democrat policies.

LIBRELLE:  What?

BERG:  The parts of Wisconsin that are dragging the state’s economy are the ones that have been run by Democrats for generations.  The decay of Milwaukee’s manufacturing base is the state’s biggest economic problem.

LIBRELLE:  Hah!  But in Minnesota, it’s the Democrat-run cities that are winning…

BERG:  …as a result of national Democrat probrams to transfer wealth from consumers to banks and health insurance companies.

LIBRELLE:  You should issue a rape trigger warning.

BERG:  Clearly.

[And SCENE]

Chu Bad, So Sad

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Joe Doakes from Como Park emails:

In 2008, Obama’s Energy Secretary Stephen Chu famously said American gas prices should jump to European levels at $9.00 per gallon, although President Obama sought a gradual increase, instead.
Used my Cub Foods card at Holiday today.  Eat your hearts out, lads.

And it only took six years…

Smarter Than Our Leaders

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Back during the 2008 presidential campaign, John McCain was right about one thing, anyway; despite all of governments foul-ups the fundamentals of the American economy are basically strong.

We have ideas, and entrepreneurial energy, I don’t labor force that (2008 and 2012 elections not withstanding) we’re pretty smart and capable, and one of the worlds larger, wealthier consumer markets. Those, among other things, give the American economy’s a degree of resilience that is going to be hard to extinguish, even after 14 years of flagrant overspending and six years of crypto-socialism.

That’s the economy. Not the governments massive piling up of debt. That’s a whole ‘nother thing.

Why does it matter? Because the fact that the American private market is bigger, stronger, and smarter than its government – for now – may be the only thing that saved it from complete collapse six years ago.

Low Information

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Joe Doakes from Como Park emails:

I stopped for lunch at the Maid-Rite in St. Cloud. The St. Cloud Times article says Michele Bachmann is preparing to oppose Hillary’s run for president. The woman behind the counter wishes Michele Bachmann would just go away. “Obama could say snow is white and Bachmann would say it’s not.” But Obama would not say that: he’d say white snow is a micro-aggression against brown and black people; therefore Minnesotans are racist. I don’t mind having someone speak up against that attitude. Joe Doakes

The left seems to have trouble with the logical initial terms of most arguments.

Grounds For Optimism

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It’s an easy time to feel pessimistic about America. 

Forget the fact that we have the worst president in history (althought that doesn’t help much).  Part of the disaffected right would have you believe that our entire political class, GOP and Democrat, are about the same.  I see your objection – Boehner’s depressing cave on spending – and raise you Ted Cruz and Justin Amash and a few good Tea Party Republicans.

But yet I feel some optimism. 

Part of that is I’ve pretty much internalized Kevin Williamson’s The End Is Near (And It’s Going To Be Awesome), a masterpiece from last year about the inevitability of the eventual collapse of the current political system, and how, if we’re lucky and work hard, it could actually free up some space for the free market to actually solve things.

Along those same lines comes this piece from Victor Davis Hanson.  You need to read the whole thing – but this was buried near the conclusion:

America is not saved by our elected officials, bureaucrats, celebrities, and partisan activists. Instead, just a few million hardworking Americans in key areas — a natural meritocracy of all races, classes, and backgrounds — ignore the daily hype and chaos, remain innovative and productive, and dazzle the world.

The silent few of a forgotten America have given the entire country an astonishing standard of living that is quite inexplicable.

The road to that paragraph is well worth travelling.  Go there.

Mandated Equality

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Two truisms at play in this story:

  1. If someone has to mandate your equal outcome [*], then you probably really aren’t equal.
  2. Economics 101:  Forcing people to pay more or less for a good or service than they naturally would will distort the market.  Force the price up, and you’ll get a black market.  Force the price down, and you’ll get less of the good or service.

With that in mind, see if you can see both currents in this piece, about developers in NYC and their reaction to being forced (as a condition of a bailout) to include “Market-Rate rentals” which are, in fact, well below the market rate.

A Queens luxury tower that was bailed out by the city is blocking the large terraces of a few affordable units so tenants above with tiny balconies don’t get jealous, one resident claims.

Erin McFadzen chose her middle-income — and rent-stabilized — corner apartment at Long Island City’s new Q41 building because of its wrap-around terrace.

But when she moved in, half of it was fenced off by what she calls a “Jurassic Park”-style barricade.

The ugly 6-foot-high wire barrier also interferes with views from every window of her sixth-floor, $2,186-a-month pad.

“We’re caged in,” McFadzen told The Post.

“Every time someone comes over, I have to explain why the fence is there . . . and tell them we’re rent stabilized, like it’s a badge I have to wear,” she said.

And the tenants aren’t the only innumerate ones; the developers (read the story, for crying out loud) are just as bad.

The innumeracy washes over us in waves in this piece:

  1. Rent Control/Rent Subsidy (as well as the city’s systematic demonization of landlords, much as Minneapolis and Saint Paul are doing, although not nearly as effectively as NYC does – yet) is exactly why it’s impossible to find an affordable apartment in NYC.  “If you make a good or service worth less than it would naturally be, there will be less of it”.
  2. The city shouldn’t be bailing out failed developers – so the developers shouldn’t be complaining that the bailout comes with strings attached requiring them to include rentals for much lower rates than the market would ordinarily bear.
  3. Real estate in New York being as much about image as value, the “low-income” tenants shouldn’t be surprised that the developers are doing something to give the residents paying the actual market rates some sense that they’re getting something justifying the premium that they’re paying for the upscale places they’re renting.  And in that case, that means making the the full-rent balconies a better deal than the cut-rate ones.  Even just by the seemingly bitchy means they used.

If governnment has to make you equal, you’re probably not.

[*] Civil rights legislation is, of course, not an example of this; civil rights and liberties are not given to us by a landlord, but by our creator.  Nobody can justly take them away.  Housing is not a right – much less a specific class of housing for a specific price.

It Was Twenty-Five Years Ago…

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…that the Berlin Wall fell.

But make no mistake; the Soviets won.

The link is to an article about government’s role in the demise of medicine in America.  The whole piece is a pull quote, and that is not “fair use” by any stretch.  So read it.

And then look at every other area of your life where these same sorts of niggling government interventions happen “for your own good”.