Asian Immigration and Trumpeterian Fabulism

 | 

I have always viewed with disgust the pervasive anti-immigrant sentiment that has plagued this country for decades, and is now reaching a fever pitch. It is most on display in the Republican Party — as I, a long-time supporter of the party, am ashamed to say. You can see the nativist hatred in its full intensity by watching the followers of our latest populist demagogue Donald Trump — people I call “Trumpeters” — exhibit orgiastic glee when he tells them he will deport 11 million illegal aliens, together with any American-born children they may have.

Trump — a man in the populist mold of Huey Long and Father Coughlin — already promises he will set up a “deportation force” to enter the immigrants’ homes and arrest them en masse. Since the immigrants are all entitled to court hearings, a President Trump will have to set up internment camps to house the millions of arrested immigrants until they can be tried.

Trump’s immigrant-bashing is all the more outrageous when we remember that when Romney was running for president, Trump bashed him for suggesting that illegals “self-deport.” Trump has no compunction about the illegal immigrants’ children born here being included, advancing the unusual legal theory that the Constitution does not (as the 14th Amendment seems clearly to do) make the children of illegals born here legal citizens.

You can see nativist hatred in its full intensity by watching the followers of Donald Trump exhibit orgiastic glee when he tells them he will deport 11 million illegal aliens.

Trump has repeatedly promised us a “fabulous wall,” to be paid for — by the Mexicans themselves! All we will need in addition are fabulous concentration camps. This is fascism of a new kind — fabulous fascism. And we need a new word for it. Perhaps the Orwellian neologism “fabulism” best captures Trump’s political program.

Of course, as readers of this estimable journal know, I don’t think that this resurgent nativist tide is — as the mainstream media portrays it — solely a Republican phenomenon. We must remember that Obama himself, when he was a US Senator, play the key role in scuttling the Bush comprehensive reform plan; moreover, after winning the presidency and having near-dictatorial control of Congress, he refused to introduce any immigration plan, or even discuss the topic for two years. He started to feign interest in the issue only after the Republicans took back the House, and intensified his charade when they took back the Senate.

The reason is, as I have suggested, that two key components of the Democratic Party base are deeply anti-immigration: organized labor, and the African-American community. The former dislikes immigration because it fears that immigrants will lower native-born workers’ wages and compete for their jobs, and the latter fears not only competition for jobs but losing its status as the main victim group entitled to governmental support.

But the joke is on the nativists, because the most recent wave of immigration is in fact rescuing this country.

Demographers love the cliché, “demography is destiny,” no doubt in great part because it accentuates the importance of their profession. But there is a fair amount of truth to it. For this reason, the most recent Pew report on recent trends in American demographics is well worthy of comment.

This resurgent nativist tide is not solely a Republican phenomenon. We must remember that Obama himself scuttled the Bush comprehensive reform plan.

As most of the European and Asian countries face contracting populations, our population is slated to grow robustly. The Pew report projects (on the basis of the most recent US Census data) that the American population will grow by an estimated 36% over the next half-century, reaching 441 million in 2065. The main driver of this projected increase in population is immigration. The report notes that nearly nine out of ten of the additional 103 million people will be immigrants or the children of immigrants (both legal and illegal). In fact, the percentage of immigrants in America’s population will rise from the current 14% to an estimated 18%.

Being spared the baleful effects of demographic decline puts us in much better economic shape than virtually all of our trading partners — indeed, most of the world. Social scientist Joel Kotkin has recently explored the idea that most countries will be facing demographic implosion. He points out that half the world’s population is now living in countries that are at negative population growth and suggests that by 2050, 139 countries (representing three-fourths of the world’s population) will be at negative population growth. China is just the most recent country to face this problem — which is why it has now frantically reversed its “one-child” policy. (What a surprise: government planning that results in failure! Who could have imagined it?) China is facing the same problem as Japan, Korea, Singapore, and most of Europe: increasingly fewer workers to support the elderly population.

Japan in particular is the paradigm case of a country struggling with deep demographic distress. The current population of 127 million is predicted to shrink to 108 million by 2050 — at which time there would be three Japanese over 65 for every one under 15. By 2100, the U.N. projects that Japan’s population will shrivel to 84.5 million, while Japan’s National Institute of Population projects it will plummet to 60 million — less than half its present size.

Exceptional in the Asian context is India. India continues to experience population growth, and is predicted to overtake China to become the world’s most populous country in just seven years. India faces no labor shortage in the foreseeable future — its population is not expected to peak until about 2060.

Being spared the baleful effects of demographic decline puts us in much better economic shape than virtually all of our trading partners — indeed, most of the world.

Even more interesting information from the aforementioned Pew Report is that there has been an historic demographic shift in the pattern of American immigration. Up to the 1970s, most immigrants to the US came from Europe. Starting in the 1980s, and peaking in the 1990s, most immigrants hailed from Mexico (and elsewhere in Latin America). But since 2011, most immigrants have come from Asia.

Nearly two-thirds of Asian Americans today are foreign-born, compared to only 37% of Hispanic Americans. Asians are predicted to surpass Latinos as the biggest foreign-born group in four decades — at which point, if the predictions are accurate, a higher percentage of Americans will be Asian than Black.

As Asians increase their numbers in America’s population, they will increase the wealth and productivity of this nation. Why? Because more than any other ethnic group — whites included — they embrace traditional marriage and education. Consider first the rates of American children born out of wedlock. As of 2013, the statistics are stunning: 72% of Black children are born outside of marriage, 66% of American Indian children, 53% of Hispanic children, and 29% of white children. The figure for Asian children is only 17%.

Now consider educational attainment. Looking at American ethnic groups, the percentage of adults with a bachelor’s degree or higher in 2014 was: American Indian 5.6%, Hispanic 15.1%, black 22.4%, and whites 40.8%. Asians were at a whopping 60.8%.

Obviously, we should hope that the immigration of Asians only accelerates — the proliferation of scholars and entrepreneurs that would result would be of enormous economic and social benefit to all of us non-Asians.

Part of the reason for this historic shift is that the number of Asians seeking citizenship keeps rising steadily, in large part because Chinese and Indian students in American universities apply for citizenship upon graduation. Given the fact that most Asian countries — including China, but excluding India — are in demographic decline, we can expect that India will more and more be the supplier of our immigrants.

But another reason for the historic shift to Asian American immigration is the recent reversal of Mexican immigration. As a recent WSJ article reports, over the last five years, more Mexicans headed back to Mexico than moved here — 1,000,000 Mexicans decamped, compared to 870,000 coming in.

Trump’s fabulist fascism targets immigrants as a way to appeal to neurotic and psychotic voters who made bad personal life choices.

There are two major reasons why the flow of Mexican immigrants has reversed. First, over the past two decades, the Mexican birth rate has plummeted, and is now at about replacement level. But second, while the economic boom times from the 1980s until 2008 created lots of jobs for Mexican workers, the slow growth of jobs during the Obama “recovery,” along with the higher rate of growth in the Mexican economy, has drawn many Mexicans back home.

So Earth to Trump:

The Mexicans are already self-deporting, and the new wave of immigration is from Asia, not the Middle East.

And me to Trump:

I am a classical liberal, i.e., one who favors modern free market capitalism. This system, which involves the free movement of financial capital, products, and labor (human capital) across the world to find their most productive uses, isn’t just the right thing to do from the perspective of economic theory. During the modern era, and during the past half-century in particular, it has proven empirically to be the only force able to lift massive numbers of the absolute poor out of their misery — something that no other force (including religion) has ever been able to do. And this system is also morally superior because it allows the maximum amount of personal liberty: unless it threatens the security of the nation, every person should be free to invest his money where he believes it will give him the best return; unless it threatens the nation, every person should be free to buy products he finds it in his interest to buy, from anyone else on the planet; and unless it threatens the nation, every person should be free to employ anyone it is in his interest to employ.

Hence I hate interventionism (i.e., welfare statism), despise socialism, and loathe communism. But I both loathe and fear fascism. Forinterventionism, socialism, and communism are based on relatively weak psychological forces, to wit, envy of the rich and pity for the industrial working class. I say that these psychological forces are weak, first because the world is moving with increasing acceleration toward a global post-industrial (or more specifically, an epistemic) economy, with low-level factory work disappearing not just in America, but in every other industrialized economy (including China’s). So the appeal to pity for the proletariat is losing power, as the proletariat itself disappears. (Witness the precipitous decline in union membership in the private sector over the past half-century). And second, envy can always be countered by self-love: show an envious man that he, too, can become wealthy and the envy dissipates as “greed” (self-interest) grows.

But fascism — while it certainly does exploit envy of the rich and pity for the proles — appeals mainly to the love of one’s own tribe and the hatred of other tribes. Its power to pervert patriotism and intensify it by demonizing other groups is potent. Trump’s fabulism targets immigrants as a way to appeal to neurotic and psychotic voters who made bad personal life choices — failed to graduate from high school, had kids without first having jobs and husbands, got into drugs or booze too deeply, refused to work hard, whatever — and are profoundly unhappy. Trump, like all demagogues, is a master manipulator of pathological politics — the politics of projection of one’s own failures upon innocent people.

That is why Trump is to be feared, as well as despised.




Share This


Take This Climate Deal — Please!

 | 

On December 12, 2015, climateers the world over celebrated as a new climate change accord, known as "the Paris Agreement," was approved. It was the culmination of four grueling years of behind-the-scenes negotiations designed to save the planet from catastrophic anthropogenic global warming (CAGW). At the stroke of the gavel marking its acceptance, the more than 40,000 climate change diplomats from 195 countries erupted into cheers, ovations, high-fives, champagne toasts, tearful embraces, and, of course, rampant backpatting.

“This is truly a historic moment,” proclaimed United Nations Secretary General Ban Ki-moon — the first "truly universal agreement on climate change." According to the New York Times, President Obama "strode triumphantly into the Cabinet Room of the White House to declare victory in his quest" for the ambitious deal. An ebullient John Kerry tweeted: "#COP21 agreement is the strongest, most ambitious global climate agreement ever negotiated." It is "the best chance to save the one planet we got," intoned Mr. Obama, perhaps too choked up for grammar. Or perhaps he noticed the Eiffel Tower illuminating the phrase "no Plan B," and the shuddering possibility that the deal — his vaunted legacy — could fall apart.

It is a progressive's dream: a profligate, utopian scheme that will fail, even if it achieves its goal.

Scaremongering climateers tell us that, unabated (i.e., absent the Paris climate change accord), mean global temperature will rise 3.7 °C by 2100, rendering earth uninhabitable. With the accord, the nations of the world pledge to reduce their greenhouse gas (GHG) emissions to levels intended to limit the rise to no more than 2.0 °C. But the decline in GHG emissions resulting from the Paris agreement is predicted to reduce the temperature rise by a vanishingly small 0.2 °C. That is, if the pledges of all 195 participating nations are carried out to a tee, including the expenditure of trillions of dollars on green technology, the mean global temperature will rise 3.5 °C by 2100, rendering earth uninhabitable.

While cameras inside the convention hall captured the joyous tears of climate diplomats as they celebrated fabricated success, they missed the angry tears of climate activists outside, as they rebuked the Paris agreement as an irresponsible, fraudulent charade, too diluted to be of any meaningful value. The soft-spoken Dr James Hansen, father of CAGW, referred to the deal as "a fake," "a fraud," "just worthless," and "just bullshit." But it will establish a colossal, intrusive UN climate bureaucracy that will haunt the world forever. It is a progressive's dream: a profligate, utopian scheme that will fail, even if it achieves its goal. Measured on a scale of maudlin self-congratulation (the auto-aggrandizometer), this is progressivism's finest achievement in central planning.

Although the agreement is not legally binding, climate change luminaries such as Obama, Kerry, and Ban Ki-moon assure us that the emission reduction goals will be met. Signatory nations must fulfill their pledge or face international ridicule through the agreement's clever "name-and-shame" mechanism. There is nothing like peer pressure to bring totalitarian police states such as China into compliance.

Similar pressure will be applied to support the Green Climate Fund — a coffer to be filled annually with $100 billion from rich nations for the purpose of cajoling poor nations into remaining poor.

Without the fund, none of the 130 nations of the developing world would have signed the agreement. With the fund — according to the delusions of progressives from the developed world — dictators, bureaucrats, and crony industrialists from impoverished countries will purchase exorbitantly expensive solar panels and windmills instead of extremely cheap coal, oil, and gas, and they will convince their citizenry that chronic disease and poverty can wait while 0.2 °C is shaved off the 2100 global temperature. (To the 1.3 billion people who have never experienced electricity, what's the rush?)

There is nothing like peer pressure to bring totalitarian police states such as China into compliance.

To ensure compliance, the Paris accord mandates that all nations shall report on their emissions reduction progress every five years — “a serious form of enforcement and compliance,” insists Mr. Kerry. Patting himself on the back, Kerry said that the voluntary pact (a 31-page cornucopia of vague commitment, toothless aspiration, and astounding deceit) would "prevent the worst most devastating consequences of climate change from ever happening." Who knows? With CAGW thought to be so solved, progressives may use the Paris agreement as a model to tackle other vexing problems, such as social injustice or income inequality. At this very moment, liberal thinktanks could be pondering the idea of bribing African or South Asian countries into pledging lower birth rates; or shaming Islamic terrorist organizations when their beheading reduction pledges are not met.

Returning to reality, the pledges of the landmark Paris accord (an agreement that will not work even if its pledges are met) will not be met — not even close. Rich countries will try; they will achieve some token, largely symbolic, degree of success. Poor countries won't bother; they have vastly more pressing challenges. No matter the size of the Green Climate Fund, the developing world will not be persuaded to replace cheap, reliable fossil fuels with expensive, unproven solar and wind technology — technologies that, after more than 30 years of development, still rely on subsidization for survival. These are also technologies that have become staggeringly more expensive after only five years of the enormous, unsubsidized strides in US fracking technology that have produced staggering declines in oil and gas prices. Oil prices, for example, which have been above $100 per barrel since 2011, have plummeted to below $40.

Media accounts credit Obama for the agreement's acceptance. They say that in pledging the US to draconian emission cuts, he leveraged the rest of the world to follow. But the US is in no position to make such a commitment, it is not legally bound to do so, and there is neither congressional nor popular support for it. Warned Senate Majority Leader Mitch McConnell, “Before his international partners pop the champagne, they should remember that this is an unattainable deal based on a domestic energy plan that is likely illegal, that half the states have sued to halt, and that Congress has already voted to reject.”

This lack of enthusiasm is produced, in no small part, by the economic stagnation that has plagued the US economy from the day Obama took office. With unprecedented, and growing, national debt, declining net worth, and labor participation at its lowest since the Carter years, where will the money come from?

Dictators, bureaucrats, and crony industrialists from impoverished countries will convince their citizenry that chronic disease and poverty can wait while 0.2 °C is shaved off the 2100 global temperature.

Ironically, the most promising source of money is the energy bonanza that fracking has created — the very source of prosperity that progressives seek to ban, in their efforts to decarbonize the world's economies. Unleashing US energy production could swiftly stimulate the US economy, lift incomes and wages, expand the middle class, create new jobs, generate enormous tax revenues, and eradicate the debt. But with the 2016 election drawing near, Democrat candidate Hillary Clinton pledges to outdo Obama. She plans to build 500 million solar panels and promises that 33% of all US electricity will be generated from wind and solar by 2027. Not to be outpandered by Mrs. Clinton, rival candidate Bernie Sanders promises 80% by 2050; and Martin O’Malley promises 100%.

It is highly unlikely, however, that a beleaguered American public will allow a Democrat president to shutter its energy goldmine, thereby continuing economic stagnation. As to the prospect of a Republican president, McConnell says that Obama should not make "promises he can’t keep." Nor should he "take credit for an ‘agreement’ that is subject to being shredded in 13 months.”

The Paris deal has no chance of thwarting CAGW — if planet salvation was even an important consideration. For those who are astounded by Mr. Obama's claim of victory, or who are wondering how so much credit could be awarded for so little accomplished, his triumph has nothing to do with saving the planet. It is a purely political victory — one for which he does deserve credit, and the highest of praise from progressivism, considering the coming creation of the UN climate change behemoth.

It is this deceitful absurdity that has progressives doing cartwheels and patting themselves on the back. The agreement itself is irrelevant, serving only to set the stage for future global central planning. The four years taken to write it featured little more than a backroom search for language that would read like a treaty but would be watered down and rendered toothless enough to get 195 nations to sign it — of which, 130 had to be bribed with the Green Climate Fund. It is not legally binding; the emissions reduction pledges are voluntary and aspirational, enforced only by the palsied hand of a “name-and-shame” system of global peer pressure. As to contributions to the slush fund, rich countries are "strongly urged" to fulfill their commitments.

The watering down process persisted to the end, holding up the vote to adopt the agreement for two final hours. Fearing that the Obama administration might be required to seek Senate approval for a binding treaty, US diplomats insisted that the word "shall" be changed to "should" in a clause on meeting emissions targets. They might as well have found a place for "pretty please" or "just bullshit."




Share This


The Religion of the Environmentalists

 | 

The crazed environmentalism of the official class has recently been the subject of two articles in Liberty, which is highly appropriate: if those people won’t leave the subject alone, why should we? Here’s my own, smaller contribution.

I’m interested in the status of environmentalism as a religion. I agree with the libertarian and conservative consensus that it is. What makes me curious is the psychological component. What do the true believers in environmentalism get out of it, as a psychological reward?

The traditional religions offer many psychological rewards and motivations: a personal relationship with the God of the universe; the prospect of eternal life; the glory of religious art, music, and literature; pride in an ancient heritage; the calm assurance of truths understood by contemplation. These are rewards that environmentalism does not offer.

If you believe what they said, they were ready to shoot themselves over the possibility that George Bush would permit oil drilling in a tiny part of Alaska.

Environmentalism offers no hope of an eternal life; its concern is entirely with this world. It replaces God with material objects and forces that cannot speak and cannot help. While some adepts claim that nature puts them in a contemplative state in which they make actual discoveries of truth, the truths they learn are hard to identify. Their experience, as described, is indistinguishable from the one you get from eating a big dinner. As for art, music, and literature, the best that environmentalism seems to offer is the photography of pretty objects, and one can find that in any fashion magazine. There is no environmental music, and as for literature, if you think John Muir was a good writer, you might do well with any other old-fashioned sermonizer. The great literature of “nature” was the literature of the Romantic period, which was pre-environmentalist; it was a literature specifically concerned, not with the preservation of certain rocks and trees, but with the mind’s superiority over the natural world:

O Lady! we receive but what we give,
And in our life alone does Nature live:
Ours is her wedding garment, ours her shroud!
       And would we aught behold, of higher worth,
Than that inanimate cold world allowed
To the poor loveless ever-anxious crowd,
           Ah! from the soul itself must issue forth
A light, a glory, a fair luminous cloud
               Enveloping the Earth—
And from the soul itself must there be sent
        A sweet and potent voice, of its own birth,
Of all sweet sounds the life and element!

— Samuel Taylor Coleridge, the Dejection ode

When I try to find some grand tradition of environmentalist “literature,” I think of Samuel Butler’s parody in The Way of All Flesh (1903):

The first glimpse of Mont Blanc threw Mr Pontifex into a conventional ecstasy. “My feelings I cannot express. I gasped, yet hardly dared to breathe, as I viewed for the first time the monarch of the mountains. I seemed to fancy the genius seated on his stupendous throne far above his aspiring brethren and in his solitary might defying the universe. I was so overcome by my feelings that I was almost bereft of my faculties, and would not for worlds have spoken after my first exclamation till I found some relief in a gush of tears. With pain I tore myself from contemplating for the first time ‘at distance dimly seen’ (though I felt as if I had sent my soul and eyes after it), this sublime spectacle.”

Not only are many traditional rewards completely absent from the environmentalist’s psychological balance sheet, but many new debits have been added. One of them is panic fear. If you can believe the sources, environmentalists are convinced that the civilized world is about to be ended by “climate change,” that “unless all of us work together now,” a new dark age will descend upon humanity. On the local level, they are constantly being scared to death by some new “environmental threat.” What a way to live! If you believe what they said, they were ready to shoot themselves over the possibility that George Bush would permit oil drilling in a tiny part of Alaska that not one in ten thousand of them could have found on a map, that none of them would ever have visited, and that could not have affected any of their lives, even if a meteor had wiped it out. And now they’re looking, with fear and trembling, at a convocation of blowhards in Paris as the last, best chance to Save the World.

So what are the psychological rewards of the environmental religion? There must be some. I’ve thought of four.

1. An easily sustained self-righteousness. Members of traditional religions are famous for this quality. Jesus denounced the self-righteous religious teachers of his time, finding many of these “hypocrites” among people who were close to agreeing with him on doctrinal issues. But traditional religions usually make you jump through some hoops before you blossom forth as a scribe or Pharisee. To be a self-righteous Christian, you have to be baptized, make a financial pledge, show up at the charity bazaar . . . something. But an environmentalist can feel self-righteous about nothing more than voting Democrat, or intending to. The kindergarten teacher who scares the kids into thinking that if they don’t recycle all their garbage they’ll be killing the whales no doubt experiences one of the cheapest rushes of self-righteousness available on this planet.

There is no environmental music, and as for literature, if you think John Muir was a good writer, you might do well with any other old-fashioned sermonizer.

2. Freedom from moral control. Traditional religions have mechanisms to keep their members in line. That sounds pretty grim, and often it is, but imagine what would happen if they didn’t, if every believer got to express his self-righteousness in any way he wanted. But you don’t have to imagine anything; just look at the environmental movement. Is there anyone in the movement whose job is to say, “Wait a minute. You’re going too far. There’s such a thing as truth. It really isn’t true that ISIS was caused by climate change. And you know, when you remove a lane of heavily traveled road and turn it into a bike lane, you’re not doing any good for the environment. Not only are you hurting other people but you’re increasing emissions from the jammed up cars. So my advice is, stop it.” Have you ever encountered anyone like that — in the movement itself?

3. Membership in an exclusive group. When you notice that last month you depleted your bank account by $1,000, rather than the $2,000 you predicted, you naturally welcome that knowledge. “Whew!” you say. “That’s great! Next time, I’ll pay better attention to my math.” When you meet a nice elderly lady who spends one day a week working for her church’s charity mission, and she notices that the number of homeless people has greatly diminished, you’ll hear her say, “Thank you, Jesus! Something must be working!” But when you suggest to an environmentalist that the dire predictions of climate change, or whatever such people want to call it this month, may not be true, you know what the reaction will be. Your facts will be dismissed, your intelligence will be questioned, and if you persist in conveying the good news, that will be the last time you get a chance to do it.

Now, who would want to hear bad news? Only people for whom knowing the terrible truth provides membership in a group of superior minds, in a club of intrepid thinkers who know things that other people don’t, including things they don’t know because the things aren’t true. Millenarians are commonly of this type. If you try to show them that their prophecies of a dreadful end-time are not being fulfilled, they won’t feel happy and relieved; they will shun you with contempt. Membership in their exclusive group is purchased at the price of unquestioning belief, and for some people, this isn’t too high a price for the satisfaction it gives.

4. Aggression. Put satisfactions 1 through 3 together, and that’s what you get. The environmental religion is a refuge for people who enjoy feeling right in their own eyes, who value their membership in an allegedly superior group far more than the claims of truth, and who want to be free from normal ethical controls. When those conditions are satisfied, the pleasures of aggression can be indulged without limit.

Is there anyone in the environmental movement whose job is to say, “Wait a minute. You’re going too far. There’s such a thing as truth"?

The spirit of aggression is, of course, well manifested in the constant barrage of leaflets, “public service” announcements, museum displays, school curricula, political diatribes, and other means of insulting and degrading any human being who drops a Kleenex in the “non-recycle” bin. It is manifested in the gleeful fantasies of those religious visionaries who delight in imagining a not too distant future when deniers will find their cities sinking under the waves and their children screaming for relief from 130-degree temperatures.

And there are many Americans who, mild-mannered in the book club or the faculty lounge, derive great and sordid pleasure from damaging others’ lives and livelihoods. Do you think people would give their time and money agitating for laws against plastic bags or paper plates if they didn’t get a kick out of closing down some “polluter’s” business? Do you think they would fight, as California’s “environmental activists” have fought, to dump billions of gallons of water into the Pacific Ocean in order to “save” an ugly and useless fish, while demanding harsh penalties for humans who do not “save water”? Do you think the bureaucrats who take out two lanes of a busy street and turn them into bicycle paths feel anything but pleasure as they watch a thousand heathen motorists creeping through a traffic jam, while a solitary saint whizzes past them on a bike? Do you think anyone would do such things, if he weren’t enjoying his aggression against normal people?

Isabel Paterson observed that “there is a secular self-righteousness which borrows all the unbearable features of formalized piety with none of its graces.” When she made that remark, in 1932, she was thinking about some particularly unfortunate aspects of Victorian culture — about which, she noted, there were also many good things to say. But there aren’t any good things to say about environmentalism. And unlike the Victorians, it’s still around. In fact, it’s everywhere.




Share This


Ayn Rand: Champion of the Working Class?

 | 

In his libertarian manifesto For a New Liberty, Murray Rothbard accused Ayn Rand of being a pawn of corporate people profiting from the welfare state. As evidence that she was out of touch with reality, he cited her famous statement that the businessman is America’s most persecuted minority (Mises Institute edition [388], quoting Rand, “America’s Most Persecuted Minority: Big Business” [1962]; reprinted in Rand’s Capitalism: The Unknown Ideal).

Objectivism, to the extent that the general public knows anything about it, is often regarded as a rightwing position and can be seen as a boon to efforts to push libertarians into the hand of the Tea Party Right. While this belief is ignorant, the masses do not have a detailed and nuanced grasp of the details of libertarian doctrine, nor should we expect them to. Many people merely adopt a false and shallow impression that libertarians are some type of conservatives who are on the far Right, compared to moderate Republicans. Some left-libertarians, such as I, are very frustrated with the tendency of Objectivism to be classified in this way. The truth about Rand (like the truth about all things) is deeper and more surprising than a first impression would allow. Rand should not be considered a member of the Right. In several important ways, indeed, she resembled a populist leftist.

The middle-aged Rand, still fresh from her own experience of poverty, tended to respect working-class folk more than rich people.

To examine the sense in which she was, historically, a friend of the working class and an enemy of the conservative Right, several things come into focus. First, let us consider Rand herself. She was a working-class woman, and quite poor during much of her adult life. It was only with the sale of the movie rights to The Fountainhead, when she was almost 40 years old, that she achieved significant self-made wealth, which was to last and grow for the rest of her life. To say, then, that Ayn Rand hated the working class and loved the rich would be to assume that she hated herself for many years — something absurdly contrary to her fundamentally self-loving and perhaps narcissistic personality.

Second, Rand always had a particular affinity for working-class people who want to earn their wages instead of relying on the welfare state. For example, Rand pushed to have The Fountainhead movie premiere in a working-class area, saying that she knew her “real audience” was there (Barbara Branden, The Passion of Ayn Rand, Anchor Books edition, 212). When the audience in working-class Southern California applauded the movie at its premier, Rand said, “That’s why I like the common man.” The middle-aged Rand, still fresh from her own experience of poverty, tended to respect working-class folk more than rich people.

Third, and perhaps most obvious and also most extremely inconvenient for rightwing libertarians, is the conservative movement’s frequent hatred of Rand, and her counterattacks against that movement during the 1960s. Any disciple of Rand knows what the hateful, anti-Randian sentence “To a gas chamber, go!” means and embodies; for those who don’t, a more extensive knowledge of the history of the libertarian movement is required (for which I recommend Brian Doherty’s Radicals for Capitalism, one of the best works on the subject). Rand’s hatred of conservatives is undeniable. The title of her essay “Conservatism: An Obituary” (1962, reprinted in Capitalism: The Unknown Ideal) is self-explanatory. If one goes beyond the title to read the text, one sees that Rand held nothing back. She was full of anger. She once said that liberals seek to enslave the body and conservatives seek to enslave the mind, both conceding freedom to that part of human existence which they care about least. This comment is hardly flattering to the Right.

Fourth, and finally, consider Rand’s signature novels themselves. Of course, all her fans have read them, but few have read carefully. In The Fountainhead, Gale Wynand gets rich by pandering to the stupid masses in his newspapers. In Atlas Shrugged, James Taggart, the major villain, is, among many other things, a rich white male businessman who inherited vast wealth and is the CEO of a major railroad. Is this a character created to praise the rich, a character that rich people should love?

Rand would have seen the working class as a place where many potential John Galts exist.

Or did Rand seek to praise productivity and intellect, not the rich as such? Compare James Taggart to his sister Dagny, a hero of the novel. Dagny is a woman who actually runs, not simply pretends to run, a great railroad. Her role in the novel makes it years ahead of its time in terms of gender equality. Let us not forget that Rand was a woman, and, as such, a living embodiment of the freedom of women to pursue careers, a freedom by no means certain for most women in America during Rand’s lifetime. Most people would regard progressive feminism as a leftist element in Rand. The creator of Galt’s Gulch, the Utopia in Atlas Shrugged, is fairly prosperous in the Gulch itself, but in “our world” he is a mere day laborer who lives in poverty — and that’s where he lives during most of the book. It is easy to connect the dots and assume that Rand would have seen the working class as a place where many potential John Galts exist. One of the basic messages of the novel is that our world would condemn all such people to a meager existence.

Murray Rothbard despised the big business Right (at least before his “paleolibertarian” phase); I believe that Rand did as well. Contemporary conservatives may exploit Rand’s ideas, just as they exploit so many other ideas, both economic and philosophical; but that’s no reason for working-class libertarians and left-libertarians not to embrace Rand as one of their own.




Share This


Impossible Dreams

 | 

Climate change experts from more than 190 countries are said to be on the verge of forging a binding international accord that will reduce humanity's CO2 emissions to a level sufficient to stave off future global warming. The details of the agreement will be negotiated this December in Paris, France at the 2015 United Nations Framework Convention on Climate Change (UNFCCC), aka COP-21, short for"the twenty-first session of the Conference of the Parties” (COP) — to distinguish the futility of the Paris summit from thatof the previous 20 such conclaves, the first of which was held at the Rio Earth Summit, by the climate shamans of 1992. Who knows? The 21st time might be the charm.

President Obama thinks so, and is counting on it. According to Politico, Mr. Obama has been working furiously behind the scenes (and the backs of Republican climate deniers in Congress) to "seal his environmental legacy" by creating "the broadest, farthest-reaching deal in history, reworking environmental regulations for governments and corporations around the world and creating a framework for global green policy for decades."

As with the Iran nuclear weapons deal, Obama's objective is the agreement, not what the agreement will accomplish. His goal is to obtain any "broadest, farthest-reaching deal in history" that enshrines his name at the top of the signatory list. The goal of the Paris agreement, which is to reduceglobal greenhouse gas (GHG) emissions to a level that prevents the average global temperature from increasing more than 2°C by 2100, is an irrelevant, environmentalist dream, impossible to achieve — even if Obama possessed congressional endorsement or public support, both of which he does not.

China and India (who, together, are responsible for 30% of the world's CO2 emissions) only pledged to reduce their emissions. A pledge is not a commitment.

Obama's Clean Power Plan (CPP) and his cancellation of the Keystone XL pipeline were not designed to curb global temperature increase. They were merely symbolic gestures contrived to invoke similar gestures from countries such as China and India. The CPP (15 new EPA regulations, estimated to cost Americans $230 billion) will have essentially no affect on global temperature. The Iran agreement will: from four to five million barrels per day of new Iranian oil unleashed into the atmosphere — a glib concession just to secure an agreement, any agreement. Apparently, that was not "the moment" that Obama spoke of in his 2008 nomination speech, "when the rise of the oceans began to slow and our planet began to heal."

To hear Obama tell it, securing an agreement in Paris will be a simple matter of establishing an emission reduction commitment for each nation, a process that will now be less contentious because of his encouragement and leadership. Last month, after a five-day climate session was held in Bonn to draft the blueprint of the Paris negotiations, Obama took credit for persuading India and China to reduce their emissions. He hopes to use their pledges "to leverage the entire world for the conference." Once the Paris deal is reached, the nations of the world will begin the task of fulfilling their commitments by replacing fossil fuels (coal, oil, and natural gas) with renewable energy (solar and wind) — right after Obama proclaims victory for the planet, and, of course, for himself.

Of the climate negotiations, Mr. Obama might tritely say that the devil is in the details. But the real devil is in what he has not mentioned in his crusade to promote the deal. China and India (who, together, are responsible for 30% of the world's CO2 emissions) only pledged to reduce their emissions. A pledge is not a commitment, and no mention was made of the revolt at the Bonn meeting by 130 developing nations, who rejected a preliminary draft because it omitted their most important concern: climate justice — aka reparations for damages done to poor countries by rich countries, whose wealth has been obtained through the rampant injection of CO2 into the atmosphere since the beginning of the Industrial Revolution. That protest, which has now expanded the negotiations into the realm of extortion (of money and technology from rich countries), was led by China and India. Obama may simply have "leveraged the entire [third] world" to line its pockets with climate justice money from the industrialized world.

Developing countries will not install the solar and wind farms that Obama incessantly praises as earth's only salvation. They can't afford to do so — not if they want to raise their burgeoning, destitute populations from what is by Western standards abject poverty. The energy they need will be generated from cheap, abundant fossil fuels. As he blatantly flaunts a storybook promise of renewable energy, Obama is obstinately silent about its harsh reality. Despite technological strides, renewable energy remains prohibitively expensive and woefully inadequate for generating the quantity of clean energy required to stave off global warming. After decades of development and untold billions spent (more than $150 billion by the Obama administration alone), solar and wind power combined generate less than 4.5% of US electricity, and both industries would immediately collapse without taxpayer-funded subsidies.

Developing countries will not install the solar and wind farms that Obama incessantly praises as earth's only salvation. They can't afford to do so.

Nor has he mentioned the global carbon budget, which setsan upper bound on the quantity of CO2 that humanity can emit without pushing the average global temperature over the 2°C threshold before 2100. According to Oren Cass of the Manhattan Institute, under optimistic assumptions regarding energy efficiency and the adoption of renewable energy, total emissions by the end of the century are projected to be almost five times greater than the quantity budgeted to save the planet. What is the point of committing the US to costly emission reductions of 26% to 28% by 2025, when the global carbonbudget will be consumed by the early 2030s?

No matter what the US does by 2025 to reduce its emissions, by 2030 it will already be too late to “save the planet” — a tidbit of climate change knowledge that Obama is reluctant to divulge. Indeed, no matter what wealthy nations collectively do is futile. Observes Cass,

If developed-world CO2 emissions ceased tomorrow, the developing world would still need to instantly slash its emissions by more than half — and hold at that level indefinitely — to remain within the carbon budget until 2100.

Any success that Obama has in Paris, therefore, will depend on his ability to "leverage" developing nations into meaningful emissions reductions. His chances are slim, if he even cares to try. As Cass notes:

In short, no evidence — distant or more recent — indicates any willingness by developing nations to make even nonbinding pledges to slow the growth of CO2 emissions, let alone accept the dramatic reductions required to substantially alter the trajectory of atmospheric concentrations.

To climate catastrophists such as Mr. Obama, the solution to this conundrum is simple, self-evident, and not to be discussed in public: an enormous transfer of wealth from rich nations to poor nations, where the money will be used (a) to buy solar panels and windmills, (b) to create decent jobs and lives of dignity, and (c) to defray the cost of adapting to the coming storms, droughts, floods, famines, terrorism, rape, and innumerable other products of the Industrial Revolution.

The idea is not new, and has captured the effusive support of Hillary Clinton, Pope Francis, and other climate change experts. In his encyclical on climate change, the Pope asserted that wealthy nations owe an “ecological debt” to poor nations and argued for “mechanisms and subsidies which allow developing countries access to technology transfer, technical assistance and financial resources.” As Secretary of State, Hillary Clinton proposed a Green Climate Fund that would provide at least $100 billion annually to developing nations. Last year, at COP-20 in Lima, Peru, Alex Rafalowicz of Friends of the Earth (FOE) demanded that rich countries pay poor countries more than $1 trillion annually.

Obama can be expected to agree. After all, there's not much distance between social justice and climate justice. But he has not indicated what concessions he would be willing to make to the clamoring bloc of 130 developing countries (representing more than 85% of the world's population) who insist that climate reparations must be the centerpiece of the Paris negotiations.

No matter what the US does by 2025 to reduce its emissions, by 2030 it will already be too late to “save the planet.”

FOE has developed a method of allocating the global carbon budget in a manner that it believes should be adopted by climate treaty negotiators. Known as Climate Fair Shares, it calculates the emission reduction commitments and reparation amounts that must be allocated to each nation to preserve earth through 2100. Beyond the appeal to planet salvation, it no doubt has political appeal: what nation could object to paying its fair share?

To illustrate how the negotiations would work out under the FOE scheme, China would be allowed to increase its GHG emissions from its current level of 12.1 billion tons to 16.2 billion tons by 2030. It would also receive $604 billion annually in climate justice payments from rich countries. In contrast, the US would be required to reduce its emissions from its current level of 6.7 billion tons to 1.8 billion tons by 2030 — a reduction of 73%, even though Obama has thus far commited the US to only a 26% to 28% reduction by 2025.

After all, there's not much distance between social justice and climate justice.

The US cost to achieve a 73% reduction would be many trillions of dollars, and require that all coal- and gas-fired power plants be replaced with extravagant solar and wind farms. On top of this immense cost are climate justice payments, $810 billion per year by 2030. According to Climate Fair Shares, these payments, compliments of US taxpayers, will "create 24,291,600 new decent jobs" and "deliver renewable energy for lives of dignity to 810 million people" — in other countries.

The developing world expects the Paris negotiations to produce an agreement along the lines of the Climate Fair Shares scheme. Mr. Obama has not addressed that possibility, nor has he indicated where the money will come from if it materializes. The US, which is in much better shape economically than most countries, is more than $18 trillion in debt, not to mention the crushing debt of Medicare and Social Security, enormous programs that will be insolvent by the early 2030s — right around the time when humanity blows its entire carbon budget and irreversible, hellish climate catastrophe begins, 70 years ahead of schedule.

These are some of the obstacles that face Mr. Obama in his quest for prominence in the annals of climate history. He has dismissed most of them, or chosen not to bother the American public with their stark realities. Then there is the warming pause, now in its 18th year, which threatens the anthropogenic global warming hypothesis motivating the Paris charade, and which Obama denies (a clumsy irony, since “denier” is his principal argument against any and all global warming skepticism). To secure his environmental legacy and fulfill his promise to heal the planet, the desperate Obama must find common ground between rich and poor countries. But in the Venn diagram of possible treaty outcomes, the intersection of planet salvation and climate justice is the empty set. The negotiators from developed nations and the negotiators from developing nations have only one thing in common: both parties seek a goal that they know, and have known all along, is impossible to achieve.




Share This


I Hate When That Happens

 | 

American manufacturing, once the principal source of American economic power, has become a pale shadow of the world-dominant competitor it was only 30 years ago. Although the productivity of American workers still vastly exceeds the worker productivity of all major manufacturing economies, America has become a laggard in the global marketplace. For decades many have bemoaned the descent of America's industrial power. Now they say that the decline has been the result of economic misfortune: globalization, technological advance, foreign competition, unions, and so forth.

The actual misfortune is that US economic policy has been formulated by feckless politicians in Washington DC. It's as if the nebbish Willie (from the “Willie and Frankie” sketches of Saturday Night Live fame) had been behind it all. Because Willie had no grasp of causality, his life was fraught with excruciating experiences, experiences of his own making. In one skit, he came up with a scheme to test mouse traps, only to discover that "the thing came down right on my tongue!" It was an accident, even though "after 40, 50 times, I . . . I . . . I couldn't even feel the cheese." With each painful incident (which included encounters with a meat thermometer, a ball-peen hammer, and a self-threading film projector), the baffled Willie sullenly whined, "I hate when that happens."

Since the turn of this century, 5.7 million American manufacturing jobs have been lost, and the US trade deficit has soared. According to a Council on Foreign Relations study, "between 2000 and 2012, the cumulative total of U.S. spending on imports of goods and services exceeded U.S. export earnings by $7.1 trillion dollars." For manufacturing workers and, for that matter, most Americans, there has been no recovery from the recession of 2008. Two of the Willies that deserve special thanks for this misfortune are former President Bill Clinton — for his role in causing the recession — and current President Barack Obama — for his role in causing the non-recovery.

Although the productivity of American workers still vastly exceeds the worker productivity of all major manufacturing economies, America has become a laggard in the global marketplace.

It's a safe bet that in none of the 542 speeches given since he left office (for which he has reaped $104.9 million) did Mr. Clinton mention how his policies caused the housing bubble and the financial crisis. These policies (deregulation of credit-default swaps, spurious use of the Community Reinvestment Act, and shenanigans with Fannie Mae, Freddie Mac, HUD, and other organizations, to name a few) were discussed here (“Sticking It To Wall Street”), and the following week, at Reason (“Clinton’s Legacy: The Financial and Housing Meltdown”). They set the stage for the recession that occurred seven years later, no doubt to Clinton's astonishment.

The Clinton legacy also included the unfortunate accidents that followed the North American Free Trade Agreement (NAFTA), passed in 1993, and permanent normal trade relations (PNTR) for China, granted in 2000. Clinton expected NAFTA to increase US exports and therefore jobs (one million in five years, he promised). Instead, according to a recent Public Citizen report, "millions have suffered job loss, wage stagnation, and economic instability from NAFTA." The export of manufactured products from the US dwindled and the trade deficit with Mexico and Canada shot from $27 billion in 1993 to $177.2 billion today. And the economic chaos that engulfed Mexico prompted "a new wave of migration from Mexico."

Granted, Public Citizen is an anti-NAFTA advocacy group, but its claims are substantiated bytrustworthy sources — namely the US International Trade Commission (for the NAFTA trade deficit data, p. 7 of the report) and the Economic Policy Institute (for the job loss and wage decrease data, p. 8). Ironically, the immigration spike was caused by one of the few US export benefits from NAFTA. With NAFTA, Mexico eliminated its corn subsidy, but the US did not. Asa result, “seventy-five thousand Iowa farmers grew twice as much corn as three million Mexican farmers at half the cost." As subsidized U.S. corn flooded into Mexico, displaced Mexican farmers flooded into the US, greatly contributing to the surge of illegalimmigrants, from 4.8 million in 1993 to 11.7 million by 2012 (p. 22).

For manufacturing workers and, for that matter, most Americans, there has been no recovery from the recession of 2008.

NAFTA has paid off well for US corn farmers. American workers who, in the wake of the immigrant influx, lost their jobs or saw their wages shrink, have come up a little short. As have American taxpayers, who foot the bill for the subsidies awarded to corn industry cronies. This should not be confused with the bill from their cousins, the ethanol industry cronies, for subsidizing the ethanol scam — the ongoingenvironment-friendly fuel program, whose accidents include increasedair pollution, water contamination, soil erosion, andgreenhouse gas emissions, as well as increased prices for gasoline, automobiles, farmland, and food.

Clinton had loftier expectations in his efforts to help China gain World Trade Organization (WTO) membership. But instead of wielding American economic power to establish a level playing field for US industry, Clinton followed the wishes of Wall Street power, which did not extend to protecting US manufacturers from the mercantilist antics of brutal, authoritarian states such as China. As Robert Kuttner explained in “Playing Ourselves for Fools”:

In 1999, when China was negotiating its entry into the WTO, it was a lot weaker economically and financially, and the stench of the Tiananmen massacre still lingered, the U.S. had far more diplomatic leverage than the rather pitiful show of humility befitting a debtor nation displayed on President Barack Obama's recent maiden trip to Beijing. But as the memoirs of both Robert Rubin and Joseph Stiglitz confirm, that leverage was used mainly to gain access for U.S. banks and insurance companies to Chinese markets, not to require China to modify its system of predatory industrial mercantilism.

Clinton promised that China's admission to the WTO would provide the US with a vital trading partner who would change its ways and "play by the rules"; trade with China would "increase U.S. jobs and reduce our trade deficit." All the experts agreed. Then presidential candidate and fellow Willie, George W. Bush, agreed. "It is primarily U.S. exporters who will benefit," echoed the Cato Institute. It would be “a win-win result for both countries,” said Clinton, that could only "grow substantially with the new access to the Chinese market."

Alas, the tremendous US-China trade that ensued has, to date, resulted in the loss of 3.2 million American jobs, a US trade deficit with China of almost $500 billion (that grew from $100 billion in 2001), and, according to the New York Times (“Come On, China, Buy Our Stuff!”), American exporters are still waiting for the payoff. The main reason: currency manipulation by China's Central Bank makes American products more expensive to Chinese consumers. Furthermore, our trade deficit, which enables such manipulation, allows China to use its surplus of US dollars to purchase US Treasury bonds, which, in turn, enables the US government to plunge itself more deeply into debt (now at more than $18 trillion), with US taxpayers paying interest for the privilege.

Instead of wielding American economic power to establish a level playing field for US industry, President Clinton followed the wishes of Wall Street power.

American consumers have benefited, but foreign competitiveness has suffered. As a percentage of GDP, US manufacturing has shrunk from 14% in 2000 to about 11% today. According to a recent Economic Policy Institute study, of the 3.2 million jobs shed by our trade with China, 2.4 million were manufacturing jobs. Moreover, trade with low-wage countries such as China "has driven down wages for workers in U.S. manufacturing and reduced the wages and bargaining power of similar, non-college-educated workers [a pool of 100 million workers] throughout the economy."

Under Clinton's version of free trade, the outsourcing of American production, jobs, and technical expertise has flourished. To participate in such trade, observed Kuttner, many US manufacturing companies engage in

deals to shift their research, technology, and production offshore, sometimes in exchange for explicit subsidies for land, factories, research and development, and the implicit subsidy of low-wage and powerless workers and weak environmental or safety requirements. At other times, the terms of the deal are more stick than carrot: If you want to sell here, the companies are told, you must manufacture here. Or even worse, you can manufacture here but only for re-export to your own domestic market and not for local sale.

Describing Clinton’s legacy, the Huffington Post called him the "Outsourcer-in Chief," saying that

Manufacturers never emerged from the 2001 recession, which coincided with China's entry into the World Trade Organization. Between 2001 and 2009 the U.S. lost 42,400 factories and manufacturing employment dropped to 11.7 million, a loss of 32 percent of all manufacturing jobs.

But things are booming in China, which, thanks to US investment in the expansion and modernization of its manufacturing sector, has now surpassed the US as the world's leading exporter, and in our federal government, which now employs twice as many people as the entire American manufacturing industry — an industry to which Clinton could say, "The thing [WTO deal] came down right on my tongue!"

If Bill Clinton was the Outsourcer-in-Chief, then Barack Obama is the Regulator-in-Chief. With annual federal regulatory compliance costs now at an astounding $1.9 trillion, no one has done more to increase the cost, and decrease the desirability, of doing business in America than Mr. Obama. His regulatory obsession has exceeded that of George Bush, who, in eight years, increased regulatory costs by $318 billion. Obama has increased it by $708 billion, in only six years.

Unhindered by a timid Congress that has consigned its legislative powers to regulators, there's no telling how high Obama can drive regulatory costs during his final two years. But American manufacturing is doubly harassed by existing regulatory overreach, paying a staggering $20,000 per employee in annual compliance costs, compared with $10,000 for the average US firm. The cost is $35,000 per employee for small manufacturers (<50 employees), who, if they can't feel the cheese, can smell the pungent odor of our federal government.

The stagnation that began creeping into the economy under Bush is in full stride under Obama, with GDP growth averaging little more than 2% since he took office. Unconventional oil and gas production (i.e., fracking of oil and gas deposits, mostly on non-federal land) has been the only bright spot. Without fracking, even this tepid GDP growth would have been impossible. With fracking, says the Cato Institute, oil and gas prices have plummeted, increasing disposable income by $1,500 per household, 2.5 million jobs have been created, and a tax windfall of $100 billion has been garnered by government.

No one has done more to increase the cost, and decrease the desirability, of doing business in America than President Obama.

After almost seven years of stagnation, the US economy — with its shrinking middle class and its growing cohort of 55 million jobless working age adults, all desperate for a meaningful recovery from the recession of 2008 — has enthusiastically welcomed the fracking revolution. Mr. Obama's greeting has been less ardent. After almost seven years of tightening drilling regulations, his response has been to tighten fracking regulations, followed by more plans to tighten fracking regulations.

Existing regulations "are more than 30 years old, and they simply have not kept pace with the technical complexities of today’s hydraulic fracturing operations,” explained Interior Secretary Sally Jewell. Nor has the 40-year-old crude oil export ban, which is no longer needed, now that the US is flush with oil and gas. Free trade in US energy would help reduce our trade deficit, our national debt, and our dependence on foreign energy. Surging US oil production has been responsible for plummeting global oil prices, thereby improving our national security with respect to countries and terrorist organizations whose bellicosity depends exclusively on oil revenues. Additional production, therefore, would further enhance US security and would likely reduce the frequency with which thugs such as Vladimir Putin and Ayatollah Ali Khamenei embarrass our president.

Crudely Put,” an article that explains the folly of this archaic ban, alludes to Putin's crushing energy grip on Europe and the reason for America’s reluctance to export more energy. Last February, Vaclav Bartuska, the Czech Republic’s energy envoy, pleaded with "American policymakers to liberalise energy exports . . . to safeguard allies under pressure from Russia," and asked, "if freeing crude exports makes America richer, its allies stronger, its foes weaker and the world safer, what stands in the way?" Willie Obama's colossal green mousetrap, of course.

This from the man who promised shovel-ready jobs, then green jobs, and now brags about the low-income jobs created under his stifling reign.

Perhaps American manufacturers will have better luck with Mr. Obama's new free trade brainchild, the Trans-Pacific Partnership, which gives him "fast-track" authority to negotiate trade deals with Pacific Rim countries. Covering the legislation's East Room signing ceremony, Politico's Sarah Wheaton noted its bipartisan support, usually a good sign. But the more telling sign, Wheaton indicated, may have been discerned by the pianist in the Grand Foyer, who played "understated renditions of the theme to ‘Charlie and the Chocolate Factory’ and ‘Puff the Magic Dragon,’ songs depicting fantasy worlds undone by cynicism and lost innocence."

Reminiscent of Clinton's trade deal confidence, Mr. Obama stated that he was "absolutely convinced that these pieces of legislation are ultimately good for American workers." This from the man who promised shovel-ready jobs, then green jobs, and now brags about the low-income jobs created under his stifling reign — while middle-income manufacturing jobs languish.

Last November, Mr. Clinton conjectured, "NAFTA is still controversial but people will thank me for it in 20 years." He might as well have bit his lower lip and said, "after 40, 50 years, we  . . . we . . . we will feel the cheese." It will take much longer for American manufacturing to thank him for hustling China into the WTO. And who knows how long it will "ultimately" take for manufacturing workers to thank Obama for the trade deals that he hopes to negotiate — deals with trading partners who cannot be controlled by the $2 trillion regulatory mousetrap that punishes American manufacturers. It is a mousetrap with a spring force that Obama has increased by $708 billion. And, as the thing comes right down on his tongue, he orders costly new climate change regulations — to be paid for by US manufacturers, and ignored by their foreign competitors.

Federal trade and regulatory policy, not foreign competition and unions, is responsible for the decline of American manufacturing. Free trade, whose banner is routinely hoisted to adorn trade negotiations, exists only in the delusional minds of our hapless political leaders. Indeed, that American manufacturers must conform to inordinately higher standards (of trade, finance, health, safety, environment, etc.) than their foreign competitors is considered an achievement by the causality-challenged Obama. Green ideology, not economics or trade, is his forte. Officious regulation, not sound industrial policy, is his goal. As to the unfortunate accidents — chronic economic stagnation, declining household income, growing income inequality, immense pubic debt, enormous trade deficits, shrinking geopolitical power, and waning foreign competitiveness — that have befallen his presidency, he hates when that happens.




Share This


The Karma of Flaming Cronyism

 | 

In 2009, Vice President Joe Biden announced a $539 million Department of Energy (DoE) loan awarded by the federal government to Fisker Automotive. Fisker, a newly formed crony capitalist firm, would use the money (together with private funding from the venture capital firm Kleiner Perkins Caufield & Byers, whose partners include green crony capitalist and former Vice President Al Gore) to produce hybrid electric vehicles in Biden's home state of Delaware. The investment would create 2,500 American jobs, by 2014 produce an annual 75,000–100,000 "highly efficient vehicles," and by 2016 "save hundreds of millions gallons of gasoline and offset millions of tons of carbon pollution."

With gasoline prices below $2 per gallon at the time, free enterprise could not be counted on to produce planet-saving electric vehicles (EVs) and establish the US as the world leader in EV technology. Capitalism can only be counted on to produce what consumers demand. Then-DoE Secretary Steven Chu believed that the demand for EVs would not materialize until gasoline prices reached nine or ten dollars per gallon. In the interim, only crony capitalism would do.

The Fisker loan was considered a vital, timely investment for America: in 2009, thanks to years of US outsourcing of jobs and manufacturing expertise that propped up its emerging crony capitalist economy, China had become the world’s leader in green technology spending. “We are putting Americans back to work,” exclaimed Chu, “and reigniting a new Industrial Revolution that is paramount for the economic success of this country.” The loan was "seed money," heralded Biden, "that would return back to the American consumer in billions and billions and billions of dollars in good new jobs."

Fisker Automotive was founded by crony capitalist Henrik Fisker, in fall 2007, only to be sued by Tesla Motors, in spring 2008, for stealing design concepts and trade secrets that Fisker allegedly used to develop the Karma — a heavily subsidized vehicle that would compete with the heavily subsidized Tesla Roadster.

The true brilliance of Elon Musk, who is regarded by many as a genius, lies in his ability to hornswoggle governments and investors.

It was also in 2008 when fellow, and far superior, crony capitalist Elon Musk became CEO of Tesla. Barely one year later, Tesla received a $465 million DoE loan. Mr. Musk knows no other form of capitalism. According to the LA Times, he "has built a multibillion-dollar fortune running companies that make electric cars [Tesla], sell solar panels [SolarCity] and launch rockets into space [SpaceX]," with the help of a staggering $4.9 billion in taxpayer-funded government subsidies. Apparently, Musk will have nothing to do with any enterprise from which he cannot obtain "government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It [the $4.9 billion] also includes tax credits and rebates to buyers of solar panels and electric cars."

The true brilliance of Musk, who is regarded by many as a genius ("our generation's Thomas Edison"), lies in his ability to hornswoggle governments and investors. While ordinary crony capitalists are content with bellying up to the government trough for tax breaks and loans to help build their businesses, Musk has the government build businesses for him. He's "so adept at landing incentives that states now compete to give him money."

New York State, for example, is building a $750 million manufacturing plant for SolarCity. With property tax gimmicks, investment tax credits, and cash grants, the entire deal constitutes a $2.5 billion windfall for Musk — courtesy of the taxpayers. Without their coerced support, crony SolarCity, indeed, the entire solar industry, could not survive. Yet in June, New York crony capitalists prevailed over the use of drastically cheaper energy, derived from free market fracking, by officially banning the technology (and denying billions and billions and billions of dollars in lower utility costs for New York residents), ostensibly because of safety concerns: natural gas might leak from wells drilled in the Marcellus Shale bonanza that the state sits on top of, causing flames to shoot out of water faucets.

Inspired by Musk's promises to lead the world into a future without gasoline (he pledged to make millions of electric vehicles by 2025), investors have bid up Tesla stock from $16 per share, when it was first publicly offered in 2010, to $260 per share today. With this runup, Tesla was able to raise more than enough private capital to repay its DoE loan — an event that the DoE declared as "living proof" that "Tesla and other U.S. manufacturers are in a strong position to compete for this growing global market.” Only in the world of green cronyism is debt repayment celebrated as success.

At least the Model S doesn't burst into flames, as did Fisker's Karma, which had a few flaws.

Tesla, which sold 31,655 vehicles in 2014, is valued at $33.8 billion — more than half the value of Ford Motor Company, which sold 6.3 million vehicles during that year. And Ford made a profit, unlike Tesla, which has failed to do so since its inception in 2003. In 2014, Ford posted a profit of $6.3 billion; Tesla lost $294 million. Incredibly, even with its government side business of selling zero-emission-vehicle (ZEV) credits to its competitors, from which it made $217 million, Tesla still lost $294 million. But Musk promises profitability by 2020.

So confident is he of continued government largesse that he scoffs at competitors such as Toyota, which has developed a hydrogen fuel cell vehicle, the Mirai, that sells for $10,000 less than Tesla's $71,000 Model S. Musk's response: “Fuel cells should be renamed ‘fool cells’” — demonstrating a wit as sharp as his automotive genius.

Nevertheless, no one has done more than Mr. Musk to advance EV development in the United States, and, by all accounts, the Model S is a flawless vehicle that has exceeded the expectations of elite Silicon Valley and Hollywood car buyers. It doesn't burst into flames, as did Fisker's Karma, which had a few flaws.

The Karma — which was initially projected to ship in 2009 and to sell over 15,000 units built by 2500 American workers at a refurbished GM plant in Delaware — did not come to market until 2011. But, according to an ABC News investigation, by October of the year only 40 Karmas were produced, all of them assembled by 500 Finnish workers at a factory in rural Finland.

There was not a single US firm with the manufacturing expertise to produce the Karma. "We're not in the business of failing; we're in the business of winning," exclaimed Mr. Fisker. "That's why we went to Finland."

Less than a year later, Fisker Automotive failed — ceasing production in July 2012 and declaring bankruptcy in November 2013. Of the 2,450 Karmas that were eventually built, 1,600 were purchased by consumers, and 2,000 were recalled because of lithium-ion battery-related fire risks (including the possibility that, while parked and disconnected from a charging station, a Karma could mysteriously explode into flames, and burn to unrecognizable rubble).

Numerous reasons have been cited for Fisker's collapse: unrealistic sales goals, compressed launch timeline, insufficient funding, flaming rubble, etc. In the end, however, most subsidized green-technology companies simply find ways to lose money. They can't make a profit, even with government support. The most famous example is Solyndra (the recipient of a $535 million DoE loan), which went bankrupt selling solar panels for half of what it cost to make them. Then there is A123 Systems, Fisker's battery supplier and the recipient of a $249 million DoE grant. A123 sold batteries that cost the company $1.57 for each dollar of sales — leading to its bankruptcy in October 2012, and, in no small part, hastening Fisker's.

A123 might have charged Fisker twice as much, thereby returning a per unit profit of 43%. Why not? Couldn't Fisker absorb the cost increase? It was getting government money too, not to mention the $7,500 tax refund awarded to EV buyers. And, with the price of gasoline heading towards $4 a gallon, surely the demand for EVs was growing. Besides, anyone who could afford the $103,000 Karma might be willing to pay a little extra. Except that, on average, Fisker spent $660,000 for each vehicle produced. To make even a meager profit of, say 10%, Fisker would have had to charge $733,000 — a price that might have scared off early Karma buyers such as pop stars Justin Bieber and Al Gore.

Most subsidized green-technology companies simply find ways to lose money. They can't make a profit, even with government support.

The purpose of the DoE grant to A123 was to help America compete with China. "President Obama was determined not to let China run away with green energy technologies," said a Forbes article covering the bankruptcy auction, where A123 was unloaded for, one could say, a fire sale price. Guess who won the bidding (hint: it wasn't an American company). It was the Wanxiang Group, a Chinese conglomerate run by Lu Guanqiu, an auto-parts magnate with deep ties to the Chinese Communist Party.

Forbes characterized the business acumen of our green cronies as a triple irony:

The U.S. borrowed money from China to subsidize a battery company to compete with state-subsidized Chinese battery companies. The American company gets bought out by a Chinese company for about the same amount of money that the U.S. government gave it. The U.S. still has to pay the money back to China. The Chinese company buying the American company makes a lot of money by providing auto parts for the cars that Americans drive.

Perhaps of greater significance is the national security implication. The sale of A123 included US technology developed for advanced ultra-light lithium-ion phosphate batteries — technology that extends beyond powering EVs, to important applications for electricity generation and distribution, not to mention sensitive military applications. As a presidential candidate in 2008, Hillary Clinton vehemently opposed such sales, asserting the need for "ensuring that technologies . . . critical to U.S. national security are not sold off and outsourced to foreign governments." Yet Clinton, who was secretary of state at the time, did nothing to interfere with the sale.

The Fisker bankruptcy snuffed out the DoE plan of "reigniting a new Industrial Revolution," as well as Joe Biden's hopes of "billions and billions and billions of dollars" for American consumers. It was followed by a DoE announcement that, instead, American taxpayers would get a bill for $139 million, the amount that the government lost in the Fisker debacle. Fisker was sold, in another fire sale, not only to a Chinese company but to the same one that bought A123.

Today, just one year afterward, Mrs. Clinton is running for president and Mr. Biden is thinking about throwing his hat into the race. Mr. Guanqiu is planning to resurrect the Karma with his new company, formed from the old Fisker and A123, businesses he picked up for a song: a measly $406 million. The amount is much less than the manufacturing assets and intellectual property he purchased. They represent a value that the DoE must have believed was significantly greater than the $778 million it invested in these companies. But that's life in the risky world of green cronyism: sometimes seed money leads to abysmal failure, especially when it is other people's seed money.

Mr. Musk is now getting into the battery business, building the world’s largest battery factory, a gigafactory, he says. That is, he bamboozled the state of Nevada into a $1.3 billion incentive package to build it. What crony could turn down a deal projected to generate $100 billion? With capitalist fracking driving gasoline prices down to less than $2 a gal (when $9 gasoline is needed for EV's to be competitive), any capitalist sees folly. But crony capitalists see only the delusion of billions and billions and billions of dollars — that, and taxpayer-funded subsidies for fellow cronies.

That's life in the risky world of green cronyism: sometimes seed money leads to abysmal failure, especially when it is other people's seed money.

And Mr. Fisker is planning to start another automotive venture. He is "intrigued with Millennials, their craving for new kinds of transportation and their fascination with all things digital." It would behoove him to rekindle his relationship with Al Gore, this time for marketing purposes. Who is better than Mr. Climate Change at pitching flimflam to Millennials? Whatever Mr. Fisker has in mind, he remains optimistic, believing that "the timing is right for something completely new."

But none of this is new. Under our current political system, the timing is always right for crony capitalism. And, unlike taxpayers, crony capitalists will profit from another completely new green auto company, even if it goes down in flames.

#39;s Thomas Edison




Share This


Europe’s Migrant Crisis: Culture Matters

 | 

Almost a decade back, at a Liberty magazine conference in Las Vegas, a speaker asked the audience what they see from the windows of their planes slightly after takeoff. He was alluding to the vast empty spaces in the US. Why not be more inviting to outsiders?

I shuddered. It had been a painful process to leave India and the last thing I wanted was the prospect of having millions of Indians living around me, again. I was even trying to run away from one Indian I couldn’t run away from: me.

It was not turning out to be easy to wean myself from the indoctrination. I had decided not to return to India for a few years, to avoid falling back into the old patterns of thinking and living that I had earlier succumbed to. Muscles have memories. Old habits don’t go away easily, even if the bad one can be recognized — for those living the bad patterns don’t see them.

Only someone heartless would not feel empathy for the sufferings of these migrants. They have starved. They have been abused. They have lived under totalitarian systems.

Most Indians I know in the US earn top salaries. They pay massive taxes. But alas, virtually all vote for things that contribute to making the US the mirror image of India. They vote for big, nanny governments. They vote for an increase in regulations to control the lives of others.

Culture matters. Our public institutions are nothing but a reflection of the underlying culture.

Indeed there is tyranny in Syria, Afghanistan, northern parts of Africa, and many other places. Only someone heartless would not feel empathy for the sufferings of migrants from there. They know what tyranny is. They have starved. They have been abused. They have lived under totalitarian systems.

A rational mind might easily conclude that such immigrants would fight for their liberties, and ours, once they were in Europe or elsewhere in the West.

But I still recall with anger and frustration the fact that when anyone among my colleagues from my engineering college in India — people who were elite students, having gone through an extremely competitive examination to gain admission — was abused, he almost never retaliated. Instead he looked for someone weaker to abuse. That was his release. I never managed to make even those proficient in math and science see reason.

Worst of all, why should they fight among themselves — kick and beat one another — in exactly the way they seem to be forever fighting among themselves in Syria and northern Africa?

A man of faults projects his faults on others. A man of virtues projects his virtues on others. That second principle defines the erroneous zone of empathetic Europeans. The European thinks that any rational immigrant would feel grateful for new opportunities and would be a frontrunner in any effort to preserve the liberties that Europe offers. Such a European erroneously projects his rationality on others, assuming it to be a natural state of being. Alas, it is not.

A look at the videos of migrants offers a glimpse that very likely leaves a rational observer uneasy and confused. Why should these migrants, instead of feeling and showing gratitude, create an angry nuisance? Why should they destroy public property? Why should they steal from their kind hosts, and abuse them? Worst of all, why should they fight among themselves — kick and beat one another — in exactly the way they seem to be forever fighting among themselves in Syria and northern Africa? A rational observer thinks that once in Europe, these people will give up the ways they have apparently been trying to leave behind. But that isn’t happening.

It is from rationality that morality emerges. It is from rationality that a society knows what is truly right or wrong, what is a virtue and what is a vice. The irrational society is immoral and incapable of respecting virtues. Irrational people see no need of being grateful or being virtuous in a thoughtful way. Rationality must be learned. But the European, nurtured in a culture of basic reason, thinks that rationality is a natural state of being. Certainly, they don’t always live up to it — but the claims of impartial reason, reason that transcends and judges the claims of tribe and superstition, do not have to be explained to them.

Unfortunately, the concept of reason has hardly made itself popular outside the West. These, the Rest — in Africa, in the Middle East and most of Asia — still exist in superstitions and tribalism. In a nonrational operating system, a person responds very different from the way in which a rational person would respond. The nonrational behavior you see on your TV screens in foreign news reports therefore comes across as strange, unbelievable, and uncomfortable in many ways.

They fail to shake off a deeply ingrained meme that money is “created” through political connections and positioning themselves in a certain way socially, rather than through wealth-creation.

The gem of analytical and skeptical reason is mostly and predominantly a Western phenomenon. Despite almost 500 years of trade and interactions with the Rest, and over the past decade, with immediate, worldwide access to knowledge through the internet, one would have expected wisdom and rationality to have percolated through to the Rest rather quickly.

It hasn’t.

The truth is that the concept of reason needed 2,500 years and the vehicle of Christianity, and a lot more, to come to the visible changes that happened in Europe in the past 500 years: the Reformation, the age of reason, the Enlightenment, and the scientific revolution.

But shouldn’t the culture of migrants change over time? Indeed, there are people who left their homelands because they were desperately tired of their irrational societies. These people appreciate the freedoms they experience when living in the West. They feel grateful for their hosts, for they have or at least had the inkling of the concept of reason before they arrived. But these are a small minority. Most modern day immigrants stay irrational, and never gain respect for their hosts. Moreover, processing their experiences — the compassion, opportunities and liberties they face in the West — but still using the operating system of the society they left behind, many immigrants learn to disrespect their hosts. They came not for freedom but for the material prosperity they had seen on TV. They are incapable of understanding what made the West what it is. They gravitate toward areas — Germany, for example — that offer the most welfare payments, for they fail to shake off a deeply ingrained meme that money is “created” through political connections and positioning themselves in a certain way socially, rather than through wealth-creation. They fail to see that when people continue Syrian or African ways of interaction they will evolve institutions in Europe that mirror what they ran away from.

Today in Europe there are many urban areas that are barred for visitation by those from outside the ethnic or religious ghettoes. When I lived in England, I had to pass through a Muslim area and then a Hindu area. I had made up convenient names for myself, rehearsed in my mind to tell them if I were accosted. This is not life lived according to reason. A rational person — projecting his virtues on others — would be in his erroneous zone if he expected that this predicament can change with time or with increase in prosperity.

It was in my early teens that I finally realized the cultural milieu that I was growing up in was utterly corrupt and irrational. Thirty-five years later — a span that includes a couple of decades spent in the West — I still feel envy when I see Western kids not suffering from habits and patterns that I still cannot shake off, after huge amount of work. Even a passionate person who realized his problems early on has found it almost impossible to surmount the problem of releasing himself from the shackles of his culture and indoctrination. When it is so difficult for someone keenly interested in changing himself to change, how difficult it must be to change those who don’t feel the need to change themselves! How doubly difficult it must be to change those who exist in a society, or ghetto, that won’t let them change even if they want to. Moreover, my indoctrination was Indian. A Syrian or North African indoctrination is probably much worse.

But isn’t the US a good example for Europe? Isn’t the US a cultural melting pot? Can Europe not do the same?

It pays to remember that virtually all the early immigration to North America was from Europe. The migrants were people who had Europe, and reason, in their genes, memes, and cultures. It is not necessarily the same with the new immigrants, either to Europe or to North America.

As a corollary, imposing what are products of enlightenment in the West — democracy, the nation state, public education — on culturally alien countries won’t work. It is for this reason that the removal of Saddam Hussein, after a lot of pain, chaos, and crisis, will end in a situation in which Iraq, some day, has to restart with a tyrant similar to Hussein. The same is the case in Afghanistan, Libya, and elsewhere.

Syria and Iraq should be left to develop their own social capacities for change, and even before that they have to find an internal feeling of a need for change.

The US government, perhaps influenced by lobbies from the military-industrial complex, wants to be forever embroiled in conflicts abroad. In the meantime, the rational American, projecting his virtues on alien cultures, thinks that such institutional impositions can effect changes in such places as Syria and Iraq. Such a rational American very erroneously sees the individuals in Syria and Libya as isolated innocents — but they are, very unfortunately, part and parcel of the problem.

It is best not to destabilize other countries. Syria and Iraq should be left to develop their own social capacities for change, and even before that they have to find an internal feeling of a need for change. This is the only possible way for a change in their societies, and Europe’s only chance to avoid getting too many migrants. Should the migration continue, it will almost certainly make an end, in Europe at the least, to the biggest achievement of humanity: the culture of reason, and hence the future of liberty.




Share This


It’s Déjà Vu All Over Again

 | 

The latest news on the American auto industry brings back bad memories of Obama’s crooked crony nationalization of GM and Chrysler. We may well be seeing the setup of another round of bailouts in our dysfunctional domestic auto industry.

Start with a recent report on the nervousness in the industry during the run-up to the Federal Reserve decision on whether to move off the Fed’s seemingly endless zero-interest rate policy. The auto industry has been selling a lot of cars for cheap money; as the report notes, the apparent revival of the domestic auto industry has been facilitated by an explosion of auto loans. Earlier this year, the combined auto debt of US households hit an all-time high of over $1 trillion. The artificially low interest rates, along with the drop in gasoline taxes (brought about by the miracle of fracking) worked like Viagra to swell the American libido for new cars. The sales of domestic cars will likely exceed 17 million units for the year — a level not seen since 2001.

GM alone has recorded more than $25 billion in profits over the last five and a half years, and Chrysler has recorded 65 months of sales growth. All this is the aphrodisiacal effect of 0% interest rates on auto loans. One couple quoted in the report said they just bought their first car in 20 years, enticed by the 0% financing, though they chose a 1.95% rate loan because of a $3,000 rebate (which they apparently used to cover their down payment). This is a common perception now: the University of Michigan’s most recent household survey showed that 28% of the households surveyed pronounced it a great time to buy a car because of the low rates.

We may well be seeing the setup of another round of bailouts in our dysfunctional domestic auto industry.

Moreover, customers are using the low easy money to buy more expensive cars. This has all the signs of a government-induced easy credit asset bubble: buy expensive cars you otherwise can’t afford, since the government has made it clear that it prefers borrowers who recklessly spend to savers who prudently forego immediate gratification. That is about as sound an economic theory as it is a moral one! Can we spell “moral hazard,” boys and girls?

However, as the report observes, easy credit brings the risk of easy defaults. And that risk has been growing like a virus: in 2013, 10.3% of auto loan applications were declined as not being credit worthy; this year, the proportion was a risible 3.3% — a drop of two-thirds!

Easy money is translating into longer loans on more expensive vehicles. Last month, the average length of an auto loan was over 68 months — six months more than it was a decade ago — a rise of nearly 10%. The size of the average auto loan is now $29,000, an increase of 15% over five years, while the average down payment amount has only increased by 10%, meaning that the loans are backed by relatively smaller down payments.

Earlier this year, the combined auto debt of US households hit an all-time high of over $1 trillion.

More bubbly still is the fact that subprime auto loans — i.e., loans to people with poor credit histories — now constitute one-fifth of all auto loans, with the total balance outstanding on subprime loans rising over the past five years to a whopping $176 billion. Many of these loans, please note, were originated by finance companies with ties to the automakers. Subprime auto loans, like subprime mortgages before the mortgage meltdown, are being bundled as securities and sold on Wall Street to people who buy them because they have higher interest rates.

Sound familiar?

Now consider another recent report, this one about the latest capers of the UAW — the main instigators of the American auto industry’s problems, and the greatest beneficiaries of Obama’s corrupt socialization of GM and Chrysler. In that deal, the GM and Chrysler bondholders and the taxpayers were totally shafted in favor of the UAW. The only real concession was the institution of a two-tier wage scale, by which existing autoworkers kept their outrageous salaries, while new hires were to come in at a lower rate — roughly $9 an hour (or about $19,000 a year) less. This irks the new hires, who often do the same work as the “upper tier” workers.

And here it gets interesting. Recently, under Rick Snyder’s enlightened governorship, Michigan — historically a state totally dominated by the unions — chose to become a right-to-work state. Thus, many UAW members — formerly coerced into supporting a mob of rentseekers — are now free to leave the union plantation. Some of the newer members, tired of being at the low end of the scale because of the UAW contract, and tired of seeing the UAW mismanage their dues, are indicating that they intend to do just that.

Subprime auto loans, like subprime mortgages before the mortgage meltdown, are being bundled as securities and sold on Wall Street.

This has led the UAW to maneuver the weakest of the three domestic automakers, Chrysler — oops! Fiat Chrysler — into signing a new contract, a contract much more favorable to the UAW. Under this new deal, after some period of time (not yet revealed), the current cap of under $20 an hour for new hires will rise to about $25 an hour (that is, new autoworkers will start out at $52,000 a year!). The two-tier system will be phased out. In keeping with its past modus operandi, the UAW will get GM and Ford to agree to the sweetened contract.

The big picture is clear. The weakest of the domestic automakers, which has on two prior occasions had to be bailed out by the federal government, at massive costs to the taxpayer, has just agreed to go back to overpaying the unionized workforce. It can do this because of the “red hot” pace of sales.

But the hot sales are inflated by the Fed’s easy money policy, and the surge of subprime loans; and sooner or later, the Fed will have to start raising interest rates. Thus, sooner or later, the nation, which has been enduring a slow, painfully shallow recovery, will slide back into recession. Then we will see the inevitable plunge in car sales, with the domestic automakers again locked into ludicrously high wage rates.

The weakest of the domestic automakers, which has on two prior occasions had to be bailed out at massive costs to the taxpayer, has just agreed to go back to overpaying the unionized workforce.

And then it will be what that great American philosopher Yogi Berra — sadly departed, this September — called “Déjà vu all over again!” We will probably see Chrysler (and even GM) go into the red once more. We will hear, once more, about the piteous plight of the company, about how sad it would be for all those overpaid employees to be laid off, and about how “compassion” — always defined by the progressive elites as spending other people’s money to buy votes for the advocates of big government — dictates another bailout of a joke of a company.




Share This


Working-Class Libertarianism

 | 

I would like to begin with a personal story about my encounters with what I call liberaltarianism, and then use logic to analyze the experience.

A number of years ago, I had a heated debate with a libertarian in the New York State Libertarian Party discussion group on Facebook. I argued that the public education system is unfair to children from working-class families because they are trapped in failing schools, and that privatizing K-12 education would lead to the development of private schools seeking customers among working class youth, schools that would free them for better career opportunities. My argument was clearly that government is bad for the poor, especially because it destroys opportunities for poor kids. The villain here is the government, and the victims are the poor.

But the person with whom I was debating believed my argument was that public schools are unfair to poor children because the rich can afford private schools and the poor can’t. He believed I was saying that the rich should not be allowed to have private schools, and that the rich are the perpetrators of the problems of poor children; in other words, that the rich are the villains and the poor are their victims. I was never able to make this person understand what my argument actually was, and he did not choose to understand it; so we did not address each other’s arguments, never having been able to agree on what proposition was actually being debated. He came away from the debate calling me a socialist. I replied that socialists do not advocate privatization of primary education; but even in the end, he seemed not to grasp what I was saying.

The villain here is the government, and the victims are the poor.

Now I would like to analyze this anecdotal evidence. I consider myself a libertarian. I am not a socialist. I am not even a liberal, or a leftist, or left of center. Yet when I make arguments in which I argue that capitalism is good for the poor and good for the working class, or equivalent arguments that government control helps the well-connected rich exploit the political system and that libertarianism would be bad for some rich people, I somehow give the impression that I am a socialist. I believe there is a missing concept, the concept of the liberaltarian, that would clear up this confusion. And I believe that logic is the correct tool for understanding this crucial missing concept.

What is a liberaltarian? Thinking back as far as Cato Institute scholar Brink Lindsey’s original efforts to create a liberaltarian movement, I cannot recall a great answer to that question. In respect to definitions, we are in uncharted territory. A liberaltarian is a type of libertarian, so we must first ask the question, what is a libertarian? There is also no one answer to this perplexing question, but let me suggest one: a “libertarian” is “someone who advocates extremely free capitalism.” Along these lines, I would extend the definition to say that a “liberaltarian” is “someone who advocates extremely free capitalism because it will be good for the poor and the working class.”

In math and logic, one often begins with a set of definitions and then uses mathematical or logical deduction to analyze them and see where they lead. Also, in logic, when one encounters an entity that meets all the necessary and sufficient conditions in a definition, one says that the thing meets the definition as a result of logical necessity. Phrased differently, logic says “if P then Q, P, therefore Q,” with P being the necessary and sufficient conditions and Q being the entity that is identified. In other words, if it walks like a duck, and it talks like a duck, it’s a duck. Let’s use that approach here.

I am not a libertarian for the sake of the rich. Most millionaires and billionaires are neither libertarians nor Objectivists.

Logically, we can see that, if these definitions are true, then a liberaltarian is a type of libertarian. A liberaltarian does advocate extreme capitalism, which puts him or her within the area covered by the definition of libertarian. However, on the flip side, we can see that not all libertarians are liberaltarians; some, perhaps most, libertarians will be opposed to liberaltarianism. For example, we could define a “right-wing libertarian” as “a libertarian who advocates extremely free capitalism because it will be good for the rich.” A right-wing libertarian, then, would have a completely different mindset than a liberaltarian, although, according to the logic of my definitions, they are obviously both legitimate varieties of the broader category “libertarian,” since they satisfy the necessary and sufficient condition to meet the definition, namely, they both advocate extremely free capitalism. In this sense, some Tea Partiers and self-described “conservatarians” would be types of libertarians, although libertarians with restrictive views on social issues that may be opposed to the “free” part of “extremely free capitalism.”

Let me clarify that I do not intend to imply that all members of the left really care about the poor, or that no members of the right care about the poor, or that all of them love the rich; I use the terms “left” and “right” here only to define differing attitudes towards the justification for capitalism.

Note something else about the definitions and what they imply. I have not said that a liberaltarian advocates capitalism “because it will be bad for the rich.” Instead, I have only said “because it will be good for the poor and the working class.” Here, I think, is where much of the confusion about liberaltarianism comes from. Are the interests of the poor opposed to the interests of the rich? Logically, one could be a liberaltarian, or a right-wing libertarian, and come out on either side of this debate.

For example, if I said that “I am a libertarian who advocates extremely free capitalism because it will be good for the poor but won’t generally be bad for the rich and won’t hurt anyone at all, other than those few rich people who unfairly exploit government favors from their politician friends,” I would fit the definitions of both liberaltarian and libertarian. But if I said “I am a libertarian who advocates extremely free capitalism because it will be good for the poor and will actually be very bad for most rich people, who have learned to thrive in our heavily regulated world and usually exploit the state and government funding to milk the taxpaying middle class and to oppress the general public,” I would also fit the definitions of both liberaltarian and (somewhat counterintuitively, but nonetheless logically) libertarian.

Thus, within liberaltarianism, there can be two further subcategories, the liberaltarians who don’t want to hurt anyone and want to help everyone, and the liberaltarians who hate the rich and want laissez faire capitalism in order to tear down privilege and power and hurt the rich. We might call the former pure liberaltarians and call the latter left-libertarians. Similarly, a right-wing libertarian might not want to hurt the poor, or he might favor extreme capitalism because he wants to hurt the poor (and yes, there really are some psychologically crazy people who could be like this).

it is unclear why we would identify with the wealthy, other than for delusions of grandeur.

Let’s do a clearer logical demonstration. Call the advocacy of extremely free capitalism P. Now call a motivating concern for the poor and the working class Q. And then call being OK with the rich A, and a hatred of the rich B. We can say that every libertarian has P, and every liberaltarian has P and Q, by definition. But the libertarian movement in general, and the right-wing libertarians, seem confused about A and B. They believe something that is incorrect as a matter of deductive logic, that a liberaltarian is, by definition, P and Q and B, thereby ruling out A. If this is true, then anyone who cares about the working class must necessarily hate the rich. But as I have shown, there is a logical analysis according to which a liberaltarian is merely P and Q, so that you can add A.

Let me be crystal clear. I do not hate the rich, nor am I opposed to the rich as such. But I am not a libertarian for the sake of the rich. Most millionaires and billionaires are neither libertarians nor Objectivists. Still more obviously, most libertarians and Objectivists are not millionaires or billionaires, and lack the productive moneymaking ability to become such. So it is unclear why we would identify with the wealthy, other than for delusions of grandeur. On the other hand, if we stop focusing on the people who are already rich, and instead focus on the freedom of the poor and the middle class to become rich — in other words, the freedom to make money — then we see precisely what I mean by the interests of the poor being served by capitalism.

According to deductive logic, one can be a liberaltarian and not hate the rich or oppose the interests of the rich (if there is such a thing as “the rich” or “the interests of the rich” in the sense of a cohesive group), so long as one’s primary concern is that capitalism is good for humanity as a whole, and will lift all kinds of people into prosperity. This seems to me a position that is worth not only defining but also adopting.

rdquo; A right-wing libertarian, then, would have a completely different mindset than a liberaltarian, although, according to the logic of my definitions, they are obviously both legitimate varieties of the broader category For example, if I said that




Share This
Syndicate content

© Copyright 2016 Liberty Foundation. All rights reserved.



Opinions expressed in Liberty are those of the authors and not necessarily those of the Liberty Foundation.

All letters to the editor are assumed to be for publication unless otherwise indicated.