The Progressive Obsession with Lording over Us

Below is a version of Donald J. Boudreaux's response to a NY Times book review that I modified to reflect my personal view on progressive elitism and authoritarianism. It differs slightly from the original authored by Mr. Boudreaux, but he articulates it very well.

A popular theme among progressives is that they, in contrast to their mindless Cro-Magnon opposites, overflow with ideas. Progressives see their theories and insights as highly intellectual and enlightened.

But these ideas are almost exclusively about how other people should live their lives. These are ideas about how one group of people (the politically successful) should engineer everyone else’s contracts, social relations, diets, habits, and even moral sentiments.

Put differently, modern progressive ideas are about replacing an unimaginably large multitude of diverse and competing ideas – each one individually chosen, practiced, assessed, and modified in light of what F.A. Hayek called “the particular circumstances of time and place” – with a relatively paltry set of ‘Big Ideas’ that are politically selected, centrally imposed, and enforced not by the natural give, take, and compromise of the everyday interactions of millions of people but, rather, by the simple notion that those with the power of government are anointed to lord over the rest of us.

Did FDR Save Capitalism?

Fans of Franklin D. Rooselvelt claim that big government was needed during the Great Depression to save capitalism. That's analogous to the fire department setting your house ablaze, then claiming they saved half of it.

The economy of the late 1920s had its share of speculation, market bubbles, and other problems, as economies have had since the dawn of civilization. But let's see what the Hoover and FDR governments did about it:

They started a trade war with Smoot-Hawley (Hoover), raised the lowest income tax rate from 0.5% to 4%, raised the highest income tax rate from 25% to 63% (Hoover) then 79% (FDR), raised the corporate tax from 11% to 15%, added a 27% tax on undistributed profits, raised numerous excise taxes, raised the inheritance/estate tax from 20% to 70%, instituted a new 2% employer/employee payroll tax, and much, much more. The effect of the economy was crushing.

The Fed manipulated the money, causing deflation, then later imposed increased reserve requirements on banks leading to lower lending. FDR screwed up markets through his disastrous agricultural policies and subsidies, and his government-imposed industry cartels. FDR also gave unions way too much power and forced up wages, making unemployment worse. Other policies forced up prices, which is the opposite of what's needed in a downturn.

And don't forget the mindlessly idiotic pig slaughter, which has parallels to Cash for Clunkers. Destroy things to artificially create demand. Let's pay half of Americans to dig holes with spoons, and the other half to fill in the holes with spoons. Full employment! Zero productivity! Totally progressive!

All those GOVERNMENT actions are big downers for the economy. Thus the government came in to fix a major problem resulting from their idiotic attempts to fix a much smaller problem. Then we're supposed to believe we needed them. Hah! This is a classic case of a government manufactured crisis.

The Nobel Peace Prize

This years Nobel Peace Prize was awarded to a teleprompter.

The New American Dream

Any able-bodied American can get good quality food, shelter, healthcare, and pocket money, without ever working, all at taxpayer expense. 

What a country!

The Great Depression and Now

There's a recent WSJ article, Taxes, Depression, and Our Current Troubles, which has some interesting parallels between now and the 1930s.  Excerpts and my commentary:

In 1930-31, during the Hoover administration and in the midst of an economic collapse, there was a very slight increase in tax rates on personal income at both the lowest and highest brackets. The corporate tax rate was also slightly increased to 12% from 11%. But beginning in 1932 the lowest personal income tax rate was raised to 4% from less than one-half of 1% while the highest rate was raised to 63% from 25%. (That's not a misprint!) The corporate rate was raised to 13.75% from 12%. All sorts of Federal excise taxes too numerous to list were raised as well. The highest inheritance tax rate was also raised in 1932 to 45% from 20% and the gift tax was reinstituted with the highest rate set at 33.5%.

But FDR did even worse:

But the tax hikes didn't stop there. In 1934, during the Roosevelt administration, the highest estate tax rate was raised to 60% from 45% and raised again to 70% in 1935. The highest gift tax rate was raised to 45% in 1934 from 33.5% in 1933 and raised again to 52.5% in 1935. The highest corporate tax rate was raised to 15% in 1936 with a surtax on undistributed profits up to 27%. In 1936 the highest personal income tax rate was raised yet again to 79% from 63%—a stifling 216% increase in four years. Finally, in 1937 a 1% employer and a 1% employee tax was placed on all wages up to $3,000.

States added to the huge tax increases.  The economic effects had to be crushing. 

From elsewhere, I looked at the 1929 stock market crash.  The market dropped from 381 (Sept 3) to 198 (Nov 13). It then recovered to 294 (Apr 17).  Thus, what happened in 1929 proper is comparable to what we've just been through.  It was only later that Hoover got things really rolling (down to 41 by 1932).  That was after he raised taxes, including higher taxes on goods due to Smoot-Hawley.  Taxing is economic friction, exactly what you don't want during an economic downturn.

So if Hoover did so wrong, which I believe he did, why do my "progressive" friends think FDR was right to do the same thing?

No One Should…

No one should lose their freedom because someone else cannot afford health care, and no one should go broke paying other people's bills.  If you agree, please post this as your Facebook status for the rest of the day.

The Kennedys and Egalitarian Force

A good friend of mine expressed his view that the Kennedy family are “givers, not takers.”  That’s only partly true, I responded. The elected Kennedys are takers of my wages. Big time. Teddy is essentially a Euro-style socialist opposed to my freedom.

What I bothers me about Ted Kennedy et al is the forced altruism inherent in egalitarian ideology. The Kennedy family has established numerous helpful private sector charities, and I've contributed to several of those myself. Good job!

But the progress of civilization is measured in freedom and individual rights, not entitlements and income redistribution. The ideological right tends to force morality on people, while the secular left tends to force their own "religion" of egalitarianism through government confiscation of the fruits of people's labor.

As none of that social engineering force is authorized by the US Constitution, it's a form of theft and oppression. So left wing forced egalitarianism is no better than right wing quasi-theocratic authoritarianism. In both cases, Americans lose their liberties. I just want to be free.

Obama Sets Back Race Relations

President Obama inappropriately injected himself into a Cambridge, MA, incident involving the local police and Obama’s friend, Professor Henry Louis Gates.  Due to race-related comments by Obama and Gates, the situation was transformed from a routine police response to a reported break-in into a race issue.

Most reports I've seen say Professor Gates behaved badly, and he pursued the policeman as he was leaving the scene. Sgt. Crowley did not take kindly to that.  The black officer accompanying Crowley agreed with the arrest. It could have been handled quietly until Obama and Gates imagined a racist angle, which made the whole thing spiral out of control. This was an ordinary police response to a reported break-in until Gates, then Obama, imagined a racist angle.

There are some calling President Obama and Professor Gates “racists” for jumping to conclusions against a white cop.  I think "racialist" is a better way to describe their controversial attitude.  They have a tendency to frame many issues in terms of race, but they're not necessarily racial bigots.  They just imagine racism where there is none. Racism in America won’t end until racialists of all skin tones let it end.

As we now know, Sgt. Crowley is an expert police trainer in racial profiling. This is only a case of racism in the imaginations of Gates and Obama, and their inappropriate behavior can only delay our path to a post-racial society. Fortunately, Obama now recognizes his huge blunder and is taking an apologetic approach. What beer did they choose?

President Obama seems to forget that he is now president, not a private citizen, but that's a competence issue, not a racial one. Obama wasn't ready for the presidency. He had rather meager political experience, almost no practical professional background, and zero executive experience coming into the job. Unfortunately, the media and political powers ordained him as “The One,” and so now he is.

President Obama has been stumbling since even before the inauguration. My 13 year old daughter is even in disbelief over his clumsiness and apparently inability to speak without a teleprompter.  Well, President Clinton had a rough first year, too, then eventually got his bearings.  Maybe President Obama will, too.

Misrepresenting the Green Economy

In Tilting at Green Windmills, George Will shows how the Obama administration is either irrational or dishonest in promoting a “green jobs” initiative as making the US economy stronger.

[Spanish Professor] Calzada says Spain's torrential spending -- no other nation has so aggressively supported production of electricity from renewable sources -- on wind farms and other forms of alternative energy has indeed created jobs. But Calzada's report concludes that they often are temporary and have received $752,000 to $800,000 each in subsidies -- wind industry jobs cost even more, $1.4 million each. And each new job entails the loss of 2.2 other jobs that are either lost or not created in other industries because of the political allocation -- sub-optimum in terms of economic efficiency -- of capital. …Calzada says the creation of jobs in alternative energy has subtracted about 110,000 jobs from elsewhere in Spain's economy.

It would be more accurate and honest to just admit the facts:

Indeed, environmentalists with the courage of their convictions should argue that the point of such investments is to subordinate market rationality to the higher agenda of planetary salvation.

With that, voters and policy makers could better trade off the cost-benefit parameters and determine a balanced and reasonable plan for the environment and economy to coexist.

Union Tyranny

If workers have the right to form a union, then don't corporate shareholders have the right to reject the union? It seems like a huge violation of property rights to force business owners to deal with workers collectively (i.e., with socialistic force) rather than as individuals (i.e., with individual liberty).

The US should be a meritocracy, not a land of entitlement. If unions behave and work to improve sales, then companies will want to deal with them. Otherwise, unions will make all companies end up like GM and Chrysler.

California's Progressive Tax Problem

Part of California's tax revenue problem is due to the highly progressive nature of its tax code. When the economy slows or shrinks, high-income taxpayers get little or no income from bonuses, commissions, and capital gains on stocks and real estate. Tax revenues sink accordingly. Almost no one cries for the rich, and I'm not saying we should, but a tax system based on soaking the rich leaves you high and dry during economic downturns.

It would be more equitable and stable if all California workers paid a similar percentage of income tax, with capital gains taxed at the same rate. In addition to providing a more stable tax base, it would be fairer to have voters share the burden of any tax increases or rewards of any tax cuts. You shouldn't be able to vote for a tax increase on others unless you're willing to pay a proportional share yourself.

A proportional (i.e., "flat") tax is a reasonable compromise between what is fair and what is practical. However, a person's "fair share" would ideally be based on an average individual's burden / impact to society. There would be a head tax (i.e., per person), plus some taxation based on how much impact you have on roads, schools, public safety, etc.

That's what I'd call a "fair share" of the tax burden, although I make no claim such a tax system is practical. Poor people are unable to pay their "fair share." I just don't think it's "fair" to blame middle class and rich people for that; nor is it "fair" to say middle class and rich people must subsidize the poor through highly progressive tax schemes.

The Moderate Path to Liberty

A moderate, mainstream, approach is needed to influence Republicans and transform the GOP into a party of limited government.  Below is my contribution to a co-authored article posted on the national Republican Liberty Caucus website. 

“Keeping it mainstream” by David Johnson and Bob Giramma

Our core principle is limited government, as opposed to big government social conservatism or other forms of big government Republicanism. The limited government part seems pretty mainstream, if presented properly. Not so with social conservatism, which is controversial and divisive. Big government Republicanism is pretty much mimicking Democrats with a different (e.g., “kinder, gentler”) set of moral values.

Another aspect of getting mainstream support is presenting limited government solutions to the problems of greatest interest, rather than running off into the weeds that no one cares about. While advocates of limited government might obsess on gun rights, drug decriminalization, etc, it’s better to focus on a small set of issues that are of greatest interest to mainstream voters.

Recent polls show those issues are (in order): the economy, the federal budget, health care, the wars, education, terrorism, and energy policy. Those are mainstream issues for which we have limited government solutions that should appeal to mainstream voters.

Recent polls show self-described “conservatives” are the biggest voting block, exceeding self-described “liberals” by a huge margin and self-described “moderates” by a small margin. At the same time, self-described “Democrats” and “independents” are the biggest voting blocks, exceeding self-described “Republicans” by huge margins.

Something is seriously wrong when conservatives have turned against Republicans like that.

California's Open Primaries Will Reduce Freedom

Doing some reading on primaries, I found the following in an article about the proposed open primary system for California:

The existing primary system, Nehring said, was another Progressive-era reform that shifted the power of nominating candidates from conventions and caucuses to all party members.

Then I saw this on Wikipedia:

In the 1952 presidential election, Kefauver decided to offer himself as a candidate for the Democratic Party's presidential nomination. Campaigning in his coonskin cap, often by dogsled, Kefauver made history when, in an electrifying victory in the New Hampshire primary, he defeated President Harry S. Truman, the sitting President of the United States. Although Kefauver would go on to win twelve of the fifteen primaries that were held that year, losing three to "favorite son" candidates, primaries were not, at that time, the main method of delegate selection for the national convention. Kefauver, therefore, entered the convention a few hundred votes shy of the needed majority. In the 1952 Democratic Party presidential primaries, Kefauver received 3.1 million votes, while the eventual 1952 Democratic presidential nominee, Illinois governor Adlai Stevenson, received only 78,000 votes.

A political party is a private sector entity. The party membership should be able to nominate their candidate in whatever manner they choose. It looks like that's just another freedom the "progressives" have stolen from me. Now the process is owned by the collective and manipulated by the political class. The proposed open primary system for California will make that worse. Progress!

The Idiots You Elect

How many times have I said most ordinary people are smarter than government officials?

"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself."
- Mark Twain

US officials flunk test of American history, economics, civics

Thu Nov 20, 2:24 pm ET

WASHINGTON (AFP) – US elected officials scored abysmally on a test measuring their civic knowledge, with an average grade of just 44 percent, the group that organized the exam said Thursday.

Ordinary citizens did not fare much better, scoring just 49 percent correct on the 33 exam questions compiled by the Intercollegiate Studies Institute (ISI).

<snip>

Asked about the electoral college, 20 percent of elected officials incorrectly said it was established to "supervise the first televised presidential debates."

In fact, the system of choosing the US president via an indirect electoral college vote dates back some 220 years, to the US Constitution.

The question that received the fewest correct responses, just 16 percent, tested respondents' basic understanding of economic principles, asking why "free markets typically secure more economic prosperity than government's centralized planning?"

Beware the Government Bailout

When your friends advocate a government bailout or other "help" from the federal government in response to the credit mess, refer them to the following article.  I've seen many economists say essentially the same thing on how the policies of Hoover and FDR lengthened the Great Depression and made it worse.  This is just another one, and it's from a reputable and well-known source.

FDR's Policies Prolonged Depression by 7 Years, UCLA Economists Calculate

Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.

After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.

"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."

In an article in the August issue of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933.

"President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services," said Cole, also a UCLA professor of economics. "So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies."

Above is an excerpt.  Full article here.

The Politics of Economics

I was just reading another positive spin on the economy.

http://www.signonsandiego.com/news/business/20080604-1420-economy.html

As a commenter observes: "Good News! Eh? must be Bush's fault lol."

I don't deny that everything negative the doom and gloom pundits write about the economy might come true.  But one reason I am very skeptical is the political nature of economics reporting.  Most on Wall Street are Democrats, and most reporters are Democrats.  This is an election year with an incumbent Republican they want to replace.  They are thus motivated to emphasize the bad news.

Political Party Labels

Brian Holtz wrote one of the better statements I've seen on political party differences:

I try to use only "nanny-state parties" when referring to the Ds and Rs.

I don't use "alternative party" as much as I should, perhaps because there are too many people who consider the two incumbent parties as alternatives to each other.

I also try to avoid using "Republicrats" and "Demopublicans", or "Coke and Pepsi" etc. The D's are discernibly leftist, the R's are discernibly rightist, and to pretend they're indistinguishable marks us as politically illiterate. More importantly, treating them as indistinguishable throws away our differentiation against the voter's other available choices (Green and CP). We are the only party that has evolved beyond the obsolete left-vs.-right dichotomy, and are the only party that wants to legislate neither personal morality nor economic equality. When we suggest that the primary difference between the LP and the Ds/Rs is that they're in power and we're not, we suggest that 1) we would probably be corrupted by power too and 2) any non-incumbent party is as good as any other.

I will always believe that our marketing should be built around the Nolan Chart. Does anyone know whether the Greens or CP ever try use the Nolan Chart and claim that they occupy the moral high ground on it? I'd be very surprised if they did.

No Brian, I doubt the Greens or others would like the results they'd get with the Nolan Chart. However, I doubt they'd ask the questions and label the results in the same manner as Nolan or other libertarians.