January 28, 2010

The Death of America's Middle Class

Socialism and Death in Haiti

By Jacob Hornberger, Future of Freedom Foundation
January 23, 2010

As President Obama and his cohorts struggle over what to do now with their socialist health-care plan in response to the Democratic defeat in Massachusetts, now would be a good time to point out one of the biggest reasons for the enormous death toll in Haiti — socialism.

Yes, I am referring to the economic philosophy of American liberals — the people who purport to love the poor but whose economic policies condemn the poor to destitution and even death.

As George Mason University economics professor Walter Williams points out in his excellent column “Haiti’s Avoidable Death Toll,” Haiti is an extremely poor country in terms of wealth. Thus, when the earthquake hit, the country’s dilapidated buildings quickly crumbled, and people lacked the necessary equipment, machinery, and medical services that could have saved many more lives.

Compare Haiti’s plight to the United States. By and large, buildings here are much more able to withstand earthquakes. Moreover, highly trained personnel with heavy equipment are able to quickly move into the affected area and save more people.

Why? Why is Haiti so poor while the United States is so rich? That’s a critically important question, one that liberals answer incorrectly. They say that people are poor because other people are wealthy. Thus, the key to ending poverty, they claim, is for the government to use its monopoly of force to take from the rich and give the money to the poor.

There is one big problem, however, with this socialist concept: It doesn’t work. Government intervention in economic affairs actually makes society poorer. In fact, it is the root cause of poverty, not the solution to poverty. It is this notion that has ensured that the masses of humanity have remained mired in poverty throughout most of history.

Consider my hometown of Laredo, Texas, compared to its sister city on the Mexican side of the Rio Grande, Nuevo Laredo.

In actuality, Laredo and Nuevo Laredo constitute one big city that has a river running through it, much like San Antonio or Austin, which have rivers running through them. Yet, the standards of living of Laredo and Nuevo Laredo are dramatically different. As poor as Laredo is, the people living there have a remarkably higher standard of living than the people living in Nuevo Laredo.

How can this be, given that it’s one big metropolitan area?

The reason is that there has always been significantly more government involvement in economic affairs in Mexico than there has been in the United States. In other words, despite the massive taxation, welfare-statism, and regulation that have afflicted the United States during the past several decades, it is nothing compared to the Mexican government’s socialist, interventionist, and mercantilist economic policies that have afflicted Mexico during its entire existence.
And that’s the problem with Haiti. Like so many other Latin American countries, the government taxes, loots, plunders, and confiscates wealth and regulates and controls economic activity. In doing so, it prevents wealth from accumulating. It keeps people poor.

What is the key to the creation of a wealthy society? Capital. Capital enables people to be more productive. More productivity means higher profits and higher wages.

How does capital come into existence? Through savings? When people save a portion of their incomes, they put the money into banks, when are then able to lend it out to businesses that are financing the purchase of equipment, which makes workers more productive. It is a process by which everyone’s interests coincide — those of the employer, the employee, and the consumer.

See “The Keys to Economic Development: A Speech to the People of Brazil” by Jacob G. Hornberger (Excerpt Below):

Why is economic liberty the key to wealth and higher standards of living? Three reasons: trade, capital, and opportunity:
... The corollary to the principle of trade: Government rules and regulations interfere with or frustrate people’s right and ability to trade, to that extent the government is reducing the standard of living of people, including the poor...

... The corollary to the principle of capital: Government is confiscating capital by taxing income and savings, to that extent government is impeding the standard of living of people from rising, especially for the poorest people in society ...

... The corollary to the principle of opportunity: The state imposes burdensome rules, regulations, permits, and licenses and confiscates capital, to that extent the poor are kept down and prevented from competing against big established businesses.

“But, Mr. Hornberger,” you might say, “there is no society in the world that embraces these principles — not even the United States. In your country, there is massive taxation and confiscation of capital, and many economic rules and regulations, and there are social welfare programs such as Social Security—old-age retirement, government-provided health care for certain sectors of society, public schooling, and assistance to the poor.”

And you would of course be right, which is why the economist Milton Friedman gave the following wise advice to an audience in Mexico City some years ago: If you are interested in achieving higher standards of living in your countries, whatever you do, do not copy the direction that the United States is taking.

In fact, for the nation that desires higher standard of living, especially for the poor, the model society to consider was the American society that existed, say, in 1890. This was the most unusual society in history, in large part because of the principles of economic liberty it embraced. Set aside the issue of whether the principles they embraced are old—many old ideas remain good ideas. Simply ask yourself: Were they right or were they wrong, and what were the consequences of their ideas? Consider:
  • No taxation on income—our Constitution prohibited it; people were free to accumulate unlimited amounts of wealth and there was nothing our government could do about it.
  • No Social Security.
  • No Medicare or Medicaid.
  • No welfare for the poor.
  • No drug war.
  • No gun control.
  • No immigration controls.
  • No central bank—they didn’t trust the state with its irredeemable paper money, which is why they established a gold standard.
  • No passports, fingerprinting, or other travel restrictions.
This is what it once meant to be an American. This is what it once meant to be free. This was a society that embraced the principles of economic liberty.

The result? The most prosperous period in history, especially for the poor, many of whom were flooding American shores from nations whose governments were charged with taking care of the poor, coming to a nation where the government did not take care of the poor. Many of them were going from poverty to riches sometimes in one generation — and also the most charitable ...

Throughout history, people have suffered the ravages of poverty, not realizing that government policies were preventing them from escaping such poverty. The idea of economic liberty, first enunciated more than 200 years ago, provides the means by which the poor can finally be lifted out of such poverty. At the risk of being nationalistic, I believe that it shall yet be the people of the United States who, discovering their heritage of liberty, will lead the world to a rebirth of freedom — lead the world to the highest reaches of freedom ever seen by man. But what could be better, especially for those on the bottom rungs of the economic ladder, than a world in which nations are competing against each other in the attainment of that goal?

Thus, the key to a wealthier society is precisely the opposite from that advocated by liberals. Socialism is not the solution to poverty, as liberals claim. Socialism destroys wealth and ensures that people will remain mired in poverty.

The creation of wealth depends on economic enterprise being freed from the dead hand of the state. People need to separate the economy and the state just as our American ancestors separated church and state. That’s what a genuine “free market” is all about. That’s the key to a wealthier — and safer — society.

Copyright © 2010 Future of Freedom Foundation

The Economic Crisis and the Resurgence of Class Conflict in the United States

By David North, World Socialist Web Site
May 19, 2009

Nearly eight months have passed since the collapse of the Wall Street investment bank Lehman Brothers began the greatest economic and financial crisis since the breakdown of 1929.

A growing number of economic analysts believe that the present crisis may eclipse that of the Great Depression. This crisis will be protracted—lasting years, not months—and its long-term consequences will be far-reaching.

History is being made, and the world that emerges from this crisis will be very different from that which existed prior to the Lehman Brothers collapse of September 15, 2008.

The scale of the economic breakdown is difficult to comprehend. No previous event in economic history has involved the sums of money, in the trillions of dollars, that have been squandered by the governments of the United States and Europe to prop up the banks and financial institutions whose reckless activities triggered the global meltdown. If a criminal mastermind had managed to steal all the gold in Fort Knox, the value of his heist would have been far less than the sum of money turned over to the banks under the Troubled Asset Relief Program (TARP) scheme.

The losses of the banks, according to the International Monetary Fund, are in the area of $4 trillion. Total losses approach $50 trillion, including the $25 trillion to $30 trillion decline in share values on global equity markets.

The rapidity of the global economic downturn is without precedent. Comparing the immediate aftermath of the Crash of 2008 to that of 1929, two well-known economists, Barry Eichengreen and Kevin O’Rourke, state that the present situation is worse.

  • Production is down 12 percent, as compared to 5 percent in the six months that followed the 1929 Crash.
  • Trade has fallen 16 percent, as compared to 5 percent in the earlier crisis.
  • And though the signal event of the 1929 Crisis was the dramatic fall on Wall Street, the market collapse was far steeper in the final months of 2008 and the opening months of 2009.

The collapse of global manufacturing is without precedent since the end of World War II. As of March, European manufacturing has fallen 12 percent from a year ago; Brazilian manufacturing is down 15 percent; Taiwan manufacturing has dropped 43 percent; and in the United States the drop, so far, is 11 percent. As for trade, German exports are down 20 percent; Japan’s exports have fallen 46 percent; and US exports are down 23 percent.

The clearest statistical indication of the scale of the economic crisis and its shattering social impact are provided by the figures related to unemployment. The International Labor Organization’s 2009 Global Trends report makes for chilling reading. In 2008 unemployment increased by 10.7 million over the previous year, the largest increase since the Asian financial crisis of 1998. The total number of global unemployed reached 190 million, of whom 109 million were men and 81 million were women. The number of unemployed youth reached 76 million.

The ILO projections for unemployment in 2009 are based on three different crisis scenarios. The scenario that the ILO itself believes to be the most probable estimates that the number of unemployed will increase between 30 and 50 million people. The actual figure will likely approach the higher number.

The ILO states that the threshold for poverty in less developed countries is an income of $2 per day. For extreme poverty it is $1.25 per day. The organization projects that a severe economic crisis will create an additional 200 million workers living in extreme poverty. Another significant category tracked by the ILO is that of the vulnerably employed—that is, workers who endure extremely low wages, abusive conditions and negligible opportunities. The number of such workers rose, according to the ILO, by 84 million in 2008, to a total of 1.6 billion people.

While the social situation in the less developed regions is already catastrophic, the economic crisis is having a devastating impact on the working class in the advanced capitalist countries. In the 30 richest countries, the economic crisis will increase unemployment by 25 million people.

The situation in the United States continues to deteriorate... [the current] levels of unemployment translate into other indices of extreme social distress: a tidal wave of foreclosures and personal bankruptcies, declining college enrollments, rising crime rates, and a general deterioration in the health and well being of the population. Wage cuts of 10 percent and higher have been imposed on workers throughout the country, eroding living standards and pushing millions of workers to the very brink of financial disaster.

What is the prognosis for the future? At what point will the “bottom” be reached and a “rebound” begin? The recent rise in global markets from their March lows is being proclaimed as the beginning of a turnaround. Aside from the direct impact of multi-billion-dollar infusions of public money into the banking system, there is little hard data that justifies various optimistic forecasts of an imminent end of the recession.

Let us keep in mind that the most recent US employment statistics showed nothing more promising than a slightly less severe rate of job losses. That is not exactly great news. Moreover, speculation about an imminent “rebound” reflects an incorrect understanding of the present crisis. Of course, it is not entirely beyond the realm of possibility that there may be, at some point, an improvement in the conjuncture. Nor is it difficult to imagine that the economic situation may continue to deteriorate.

However, whatever the short-term fluctuations in the markets and other indices of the global economy, there will not be a return to the status quo ante. The previous conditions are gone and will not return...

The Socialization of America

By Dr. David Noebel, The August Review
March 27, 2009

... Today’s financial events illustrate that America is not exempt from being led toward socialism. Predictions differ, depending on one’s perspective, as to whether this will be a socialistic paradise or a socialistic hell. Time will tell. In the meantime, we’d do well to listen to warnings from the past ...

Socialism is the economic system of both the Marxist-Leninist worldview and the Fabian Society worldview. John Maynard Keynes was a member of the British Fabian Society, whose American counterparts were the Intercollegiate Socialist Society and the League for Industrial Democracy. Their American voices were centered in the ideas of Norman Thomas and John Dewey among others. Dewey, you may remember, was an early signatory of The Humanist Manifesto (1933) and its atheistic, socialist gospel.

Socialists are united in their desire to see capitalism destroyed, either forcefully or gradually, and most would rejoice if Christianity were destroyed along with it. Socialists and liberals generally see in Christians “an infallible marker of mental retardation” (Claremont Review of Books, Winter 2008/09, p. 6).

The Christian worldview endorses sound or hard money, fiscal responsibility, saving for a rainy day, deferred gratification, paying off monthly credit card bills, living within one’s means, etc. Keynesian economics, by contrast, argues for consumption, extravagance, and not providing for the future, arguing that “the great vice is saving, thrift, and financial prudence” (Keynes At Harvard, p. 63). Keynesians love huge national spending, debt, and high inflation—anathema to Christians and conservatives.

Socialists see capitalism as an evil economic system founded on the concepts of profit, individualism, private property, private business, freedom to buy and sell products and services, etc. Indeed, a working definition of capitalism is “the peaceful and free exchange of goods and services without theft, fraud, and breech of contract.”

Capitalism is tailored to individual initiative rather than groupthink or community initiative. Nearly all inventions that have furthered the capitalistic enterprise and blessed humanity in the process have been the result of individual initiative rather than committee, group, or government activity (compare previous centuries to the accelerated rate of inventions since America gained its independence in 1776).

Marx advanced the socialist cause by calling for social or public ownership of property and the abolition of private property. He believed that people were best suited to work on state farms, public parks, nationalized banks, or the government bureaucracy rather than for private employers, who would certainly take advantage of their employees, causing them both social and economic harm. Marx was an economic leech on fellow communist Engels, who supported him with his capitalistic father’s monies.

George Bernard Shaw represented the Fabian point of view by calling for “the socialization of the means of production, distribution, and exchange” to bring about an equal distribution of goods and services to all members of society and to make the State “the ALL of social well-being.” The State “subsumes all economic life of the nation.”

In other words, socialism is an economic system that downplays the individual in favor of the group, social order, or the State. It is a system in which the State directs the economic activity of the social order through central planning and by placing economic activity under the jurisdiction of the State. Socialism is also known as collectivism or Statism and, to Marx, Communism.

Today, we call this economic system “interventionism” or Keynesism. Interventionism is a kind of socialism or communism, but without the destruction of the bourgeoisie (which were slaughtered in the millions by Soviet and Chinese communists).

Today’s Fabians/Progressives/Radicals allow their capitalist enemies to create wealth, but acquire it by taxing them instead of slaughtering them (Marx’s “reign of terrorism on the bourgeoisie”). They are then free to distribute the wealth among the economically disadvantaged, the intellectual elites, and the superior governing classes.

Such (re)distribution of wealth ensures the favorable vote of the masses being fed, entertained, housed (with sub-prime loans) and doctored. ACORN (Association of Community Organizations for Reform Now) and socialism fit hand-in-glove just as Fannie Mae and Freddie Mac fit Barney Frank, Maxine Waters, and Chris Dodd to a “T.”

Most Americans are totally unaware that the U.S. House of Representatives crawls with a large, well-organized assembly of socialist organizations. These organizations are dedicated to:
a. Bringing about the destruction of the capitalist economic system (portrayed as greedy, conservative, religious, and/or filthy rich); and

b. Slowly but surely bringing production, education, food, and health care under the complete control and regulation of the federal government [which is run by the elite ruling class; i.e., the international banking cabal - editor's note].
A prime example of this governmental takeover is the carbon tax currently under discussion. It would punish business and industry’s use of gas and oil products (which according to Al Gore will warm the planet by one degree over the next 100 years) by “allowing the federal government to ‘control every aspect of our economy,’ according to Christopher Horner of the Competitive Enterprise Institute” (The Weekly Standard, March 16, 2009, p. 17) ...

Albert Edwards Alleges Central Banks Were Complicit in Robbing the Middle Classes
Volcker Says New Taxes Not an "Unreasonable Response" to Federal Banker Bailout
Oil has Crushed the Suburban Homeowner Dream
Credit Card Companies Pulling Back Credit Offers to American Households
Average American household making $52,000 a Year is Coping while the Ultra Rich Pull Away
Prepare Now to Escape Obama’s Retirement Trap
Record number of young Americans jobless
The Disposable Worker
Corporate America in no rush to hire
Game Over for the American Middle Class
America Looking Like a Developing Nation as 30% of Americans Rapidly Approach Poverty
Largest-ever Federal Payroll to Hit 2.15 Million
In Obama's America You'll All Work for the Government
Socialism Viewed Positively by 36% of Americans
Social forum ends with vows to fight capitalism
Leftists who converged in Brazil to protest what they view as uncontrolled capitalism ended the World Social Forum on Friday with vows to take advantage of the financial crisis to promote a global socialist agenda.

No comments:

Post a Comment

Go to The Lamb Slain Home Page