The Religion of the Environmentalists

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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.




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Ayn Rand: Champion of the Working Class?

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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.




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Impossible Dreams

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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.




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I Hate When That Happens

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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.




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The Karma of Flaming Cronyism

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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




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Europe’s Migrant Crisis: Culture Matters

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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.




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It’s Déjà Vu All Over Again

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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.




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Working-Class Libertarianism

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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




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All the Wrong Moves

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In his 2015 State of the Union address, President Obama asserted that his economic policies are working. "The economy is growing and creating jobs at the fastest pace since 1999," he declared. "The shadow of crisis has passed." Later, in March, a giddy Obama took credit for the recovery, saying that unemployment had fallen to 5.5% and that 60 consecutive months of job growth had created over 12 million jobs.

The crisis has not passed. Nor has its shadow, which, almost seven years after Mr. Obama promised jobs, GDP growth, and a middle class revival, grows darker and broader. Under his stewardship, the economy remains chronically stagnant, despite profligate stimulus spending by the federal government (that has run up the public debt from $10 trillion to more than $18 trillion) and the Federal Reserve (that has run up its balance sheet from $850 billion to more than $4.5 trillion).

The bold policies of Obama’s first term (the Wall Street bailout, the Stimulus, Obamacare, Dodd-Frank financial reform, the Green Economy initiative, etc.) — praised by many, and often considered to be urgently needed — failed to revive the economy, even though the recession was already winding down, officially ending in June 2009. Ironically, all these efforts have stifled the recovery, except for the so-called 1% — the wealthiest Americans, whom Obama frequently excoriates; their share of the national income increased from 18%, when he took office, to 22% today. For everyone else, income share has fallen. They are not part of the Obama Recovery; for them, the recession has not passed.

The crisis has not passed. Nor has its shadow, which, almost seven years after Mr. Obama promised jobs, GDP growth, and a middle class revival, grows darker and broader.

These economic castaways — who have experienced flat, if not diminishing, economic improvement for more than seven years — have not been fooled by the falling (from 7.8%) unemployment rate, so often celebrated as success by the Obama administration. This rate, which measures only unemployed workers who have sought employment in the previous month, provides an incomplete and misleading picture of the US labor force. While it has dropped, so too has the labor participation rate. Today, 93 million working age adults do not participate in the labor force (have no job or have given up looking). Thirteen million of them have dropped out during Obama's tenure. Some of these are retirees, but not as many as one might think. More and more, the elderly have been forced to postpone retirement or return to the labor force. Since January 2000, the participation rate for the elderly has soared by 50%; for elderly women, by 69%.

And the equally celebrated jobs numbers are no less incomplete and misleading. The net jobs gained since Obama took office are barely six million, not 12 million, and most of them are low wage, low skill jobs. The only contribution to middle-class employment under the Obama administration has been the addition of about two million jobs in healthcare, education, and social services (aka the HES Complex). But these HES jobs were not generated by the natural forces of capitalism. According to former Reagan budget director David Stockman, they are a result of "the $1.5 trillion being spent on medical entitlements and another $1 trillion each on tax-subsidized employer health plans and tax-supported education at all levels, including the massive student grant and loan programs."

The April 2015 Bureau of Labor Statistics (BLS) “Employment Situation Summary” posted 109.2 million jobs, excluding HES Complex jobs. The corresponding number for December 2007 was 109.1 million, an increase of 0.1 million jobs. That is, not counting the taxpayer subsidized HES jobs, 7.5 years of economic recovery has produced a net gain of 0.1 million jobs.

All these efforts have stifled the recovery, except for the so-called 1%; their share of the national income increased from 18%, when Obama took office, to 22% today.

Stanford economist John B. Taylor, attributes the slowness of the recovery to policies (monetary, fiscal, and regulatory) that, over the past 10 years, have become significantly "more discretionary, more interventionist, and less predictable." This policy shift no doubt contributed to the financial meltdown that caused the recession of 2008, but Obama's overbearing, anti-growth intrusion has stifled economic activity and made true recovery impossible. Normally, economic recovery proceeds rapidly, even from recessions associated with financial crises. As Taylor notes, the average annual growth rate from such recessions (we have had a total of eight in US recorded business cycle history) is 6%; for the Obama Recovery, it is barely 2%.

An annual capital injection of, say, a trillion dollars (for plant and equipment, research, new hires, etc.) should be more than enough to extricate a $17 trillion economy from its doldrums (indeed, doing so at a GDP growth rate of almost 6%). But American businessmen are paralyzed with fear about Obama's boneheaded, clumsy meddling. Although their profits have risen 35% during Obama's reign, investment in new plant and equipment has risen by a meager 2.6%, as corporations keep to themselves a $1.8 trillion cash hoard. Banks are sitting on $2 trillion, afraid to lend at artificially low interest rates. Another $2.1 trillion in the profits of multinational companies is stashed overseas to avoid taxes. It's not the economy, stupid. It's federal government policy.

Our own government, not unions and cheap foreign labor, is ruining the US manufacturing sector.

In addition to the confusing burden of fiscal and monetary policy, American business must contend with the crippling effects of regulatory policy. There is no greater middle class job killer than the stultifying morass of federal regulations that in recent years has grown with explosive speed. In his annual review of federal regulation (“Ten Thousand Commandments”), Wayne Crews of the Competitive Enterprise Institute calculates the annual regulatory compliance cost as $1.88 trillion, an amount that exceeds the combined total of corporate and individual income tax revenues. Such an astounding cost significantly reduces American competitiveness, innovation, and job creation, and punishes US households, who, in Crews’ estimation, are assessed "$14,976 annually on average in regulatory hidden tax."

Incapable of grasping the connection between excessive regulation and chronic stagnation, no one has done more with regulatory authority to destroy middle class jobs than Obama (“Regulator without Peer”). During its eight-year reign, the Bush administration increased the annual regulatory compliance cost by $318 billion. In only six years, the Obama administration has increased it by $708 billion. According to a recent study by the National Association of Manufacturers, the annual cost for the average US firm to comply with federal regulations is $9,991 per employee; for small companies, the engine of job growth during economic recovery periods, it is $11,724. Railing against the loss of middle class manufacturing jobs, Democrats blame companies that have outsourced to countries with cheap labor. Republicans blame labor unions. Yet the average US manufacturing firm must pay $19,564 per employee to comply with regulations; small manufacturing firms pay $34,671. Our own government, not unions and cheap foreign labor, is ruining the US manufacturing sector, and its unbridled fiscal, monetary, and regulatory "discretion" is destroying the middle class.

Unfortunately for the middle class, Mr. Obama's next move is to revive the middle class. According to the Washington Post, after six years of failure, "he's giving it one more try." His new plan is designed to reverse the decline of a beleaguered middle class that has been shrinking (in income, wages, savings, home ownership, stock ownership, pension ownership, and business ownership) since the day he took office. Its implementation once posed a "conundrum" for Obama, thinks the Post: "How to pitch policies aimed at a middle-class turnaround that his policies thus far have failed to deliver."

Such riddles are child's play for the clever Obama, who nimbly dubbed his new policies "Middle Class Economics" and, without taking the trouble even to define the concept, declared that "Middle-class economics works." He did, however, say what it is about: "lowering the taxes for working families by thousands of dollars, putting money back into their pockets so that they can have a little bit of cushion in their lives." Finally, the turnaround would be underway.

The 8.3 million jobs lost during the recession were mostly middle-class jobs. They have yet to return.

But a February Tax Policy Center report indicated otherwise. According to the New York Times, the Center’s analysis "found the president’s plan produced an average tax cut of just $12 for families in the middle quintile." The Obama Treasury Department shot back, insisting that "the average middle-income family would get a tax cut of about $150 under the president’s plan." No doubt this is intended to dispel any fear that the forgotten, shrinking middle class, which has lost thousands in annual income and tens of thousands in net worth over the last six years, will think it won’t get a big enough cushion.

American businessmen and entrepreneurs, intimidated and confused by fiscal and monetary policy, hoard trillions that could be injected into the American economy to create millions of good jobs. Oppressive regulations with dubious benefits continue piling up, diverting capital from, and stifling, industries such as manufacturing and energy — stalwarts of solid middle class occupations. Jobless working age adults also pile up, as fast as the federal government can borrow more money, or have it printed, creating a labor surplus that depresses the wages of those lucky enough to have a job. The 8.3 million jobs lost during the recession were mostly middle-class jobs. They have yet to return.

This is the Obama Recovery: a timid, sputtering burger-flipper economy, incapable of generating meaningful growth and high-paying jobs. The jobs that are being created are low-wage, low-skill jobs, appearing in monthly quantities large enough to fool Obama into thinking the crisis has passed. He flaunts this “growth” as evidence of a recovery, for which he then takes credit. To the low-wage cohort that is experiencing unprecedented growth under his policies, he offers an increase in the minimum wage. To the middle class, whose jobs are being replaced by the low wage jobs his policies generate, he offers a $150 tax break, calls it Middle Class economics, and pats himself on the back. He couldn’t even get the PR move right.




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India: Great Expectations

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In 1991, under pressure from the IMF, India opened some industrial sectors to private companies and removed several licensing requirements. Private cellphone operators, banks, and airline companies started to appear. Soon, private banks were so customer-friendly that they would send someone to your home to help open an account. If you wanted more than $400 in cash, they delivered it free of cost. If you had a complaint, an employee would come to meet you in person within hours — wearing a tie, even in sweltering heat. Mobile phone companies provided outstanding service and, within years, at an enviable price. They delivered my SIM card to my home. If you wanted a new car, you did not have to worry about going to their showrooms. They came to you. Local airlines served great food and drinks, and were manned by bubbling youths full of passion for success. Foreign companies looking for competitive, English-speaking young people set up their operations in India.

Today, much of this lies in ruins. You have to keep chasing these private banks. Their websites are unfriendly, and they deduct money from your account without first informing you what they are about. An account holder stays away from credit cards, unless he really needs them or must show off; yet he still gets credit cards sent to him with yearly fees charged to his bank account, all without his approval.

The Indian government is a vicious, insensitive, passionless, totally corrupt, utterly stupid, and spineless organization, made up partly of psychopaths and partly of crooks, from top to bottom.

Airlines are marginally fine — with sulky services — as long as your baggage doesn’t go missing or a delay doesn’t make you miss your connecting flight. When my baggage went missing, so did the sleek-looking customer agents, for no one wanted to take responsibility. I recently discovered that the biggest mobile company now has no customer service number where you can talk to a live person. You must visit their office. If you deposit cash after your SIM was slated for disconnection (which of course you would not have been informed about), it will have disappeared into a black hole, from which a refund is virtually impossible unless you waste a horrendous amount of time. If the front-line agent has some figment of humanity (which is quite a rarity), he will tell you not to try getting your money back, for he might see the pain you would suffer trying.

Meanwhile, foreign companies started to realize that the costs of doing business were much higher than they had anticipated. They found that looks were deceptive. The English-speaking employees lacked skills, productivity, work ethic, and curiosity. Call-centers started to move to the Philippines. India stayed at best a back-office hub.

On earlier occasions, when I faced problems with Indian companies, I would report them to consumer forums, or write in to the complaint sections of the media. But I soon realized that despite any compensation I received, I spent so much time fighting the insensitive ears of these private companies that the project was cost-prohibitive. These days, if the money involved isn’t much, I forgive and forget, a sign of greying hair and loss of idealism. If what is involved is substantial, instead of fighting in consumer courts, I look for the most efficient strategy. If the Indian company is a subsidiary of a foreign company, I start by calling their CEO's office. When the Indian arm of a Korean refrigerator company refused to do anything about a problem, by calling their Korean office I got a new refrigerator. When a subsidiary of an American company gave me a faulty air conditioner and did nothing about it, I called their CEO in the US. I told his secretary that I would call twice a day to ensure that I got to speak with the CEO. Then their Indian arm worked so well that even the best anywhere in the world would have been impressed. But I have digressed.

In a mere few years, private companies became more like state-owned companies. In some cases one prefers state-owned companies, where at least a bribe does the job. Why?

In general, the "profitability" of Indian companies, particularly the big ones, is a reflection not so much of wealth-creation but of political backing, of their ability to find loopholes in regulations, and of outright theft, often from the poor section of society.

How things go wrong

The Indian government is a vicious, insensitive, passionless, totally corrupt, utterly stupid, and spineless organization, made up partly of psychopaths and partly of crooks, from top to bottom. Most have very numb or dead brains. They exist in dirty, unhygienic, and terrible environmental conditions, for it is they who do the cleaning. I can recall very few encounters with bureaucrats or politicians in which a bribe was not demanded. Moreover, you must grovel and beg in front of these (figuratively and literally) diseased people. Even then there is no guarantee that they will do the job.

I remember that on many occasions the bribes were not about approving something, but just to release my files so that I could take them myself to the next diseased creature. Only a citizen whose mind has not been destroyed and numbed would not feel humiliated by what he goes through at government offices. Not only is the bureaucrat after money, but he relishes the act of demeaning citizens, in a corrupt attempt to make up for his deep-rooted inferiority complex and self-hatred.

Demeaning others leaves the Indian bureaucrat feeling good about himself, at least for the moment. The irony is that all this makes him seriously sick, physically, mentally, and spiritually. His children go astray and he never understands why. As you discover reading The Lord of the Rings, in a tyranny, there is no single tyrant. Everyone is tyrannized by everyone else; everyone's spirit is subdued by everyone else’s. A bureaucrat must sit with people of his kind, who scheme against one another, forever wallowing in the rotting sewage of envy, hatred, and a strange kind of showmanship. In reality, however, they have nothing to show but impotence, for they never create anything useful or productive. They, their wives and kids, and even name-dropping relatives, show off their status in an exaggerated way, through noise, heavy-handedness, armed goons in costumes, and big cars with sirens.

Not only is the bureaucrat after money, but he relishes the act of demeaning citizens, in a corrupt attempt to make up for his deep-rooted inferiority complex and self-hatred.

A casual observer might believe that all you have to do is get rid of such bureaucrats. All you have to do is to change the party in power and streamline regulations and remove corruption through an empowered constitutional authority that politicians cannot touch.

Why then why did private companies fail to sustain their proper character?

The problem is much deeper than an observer might imagine. It is a problem that cannot be reached by the typical libertarian prescription of reducing the size or composition of government. When the prescription is applied, things don’t not turn out much better; and the improvement certainly does not last.

What most people fail to understand is that the state is little more than the sum total of the collective mind.

In India, even a perfectly created product has a very short half-life. My new gym has grown old within months. The dust piles up; the equipment rusts, rather rapidly. My new car earned a big dent, the day I bought it. Every vehicle gets smeared with dents. I don't know anyone who hasn't had several injuries and close calls with death. Day-to-life faults happen with amazing regularity, a frequency that could never have been imagined or statistically expected. The most resilient equipment burns away if you do not think of using a surge protector, for the electricity company will increase the voltage by misconnecting the wires at the main poles. Normal cars need to be redesigned to ensure that they work because, for example, there is almost universal adulteration of petrol. Refrigerators that are designed to keep working as long as they are plugged in stop cooling when water condenses and freezes in their air-pipes as a result of frequent electricity cuts.

Every time you take anything for repair, even a minor one, you get a patch-up job. You are looked upon with amusement if you ask for a good, clean job. No self-respecting workman would want to have anything to do with you, irrespective of the money you offer. Expediency is the mantra. If ever there is a serious repairman, he needs immense cognition to isolate the problem. The others patch whatever they can get away with patching. When you tinker with a system or an individual piece of equipment, trying to correct the problem, you often create more problems, for your tinkering — however innocent it may be — undoes the other patches. This situation exists not just with equipment but with absolutely everything in life. Most Indians waste a very large part of their day putting out existential fires. My five hours of no electricity today, in what is among the best neighborhoods and those most catered to, are one of my smaller worries, for at least I know what the problem is.

So what is the deeper problem?

Unfortunately, but predictably, the bureaucrat described above is merely a reflection of the larger society. He is the tip of the iceberg. This is always the case, but what most people fail to understand is that the state is little more than the sum total of the collective mind. The visible state — the government — and its tyranny is a symptom of the underlying problem: a society that breeds and sustains the statist poison. Individual Indians will decry corruption, but virtually everyone will pay a bribe to gain an unfair advantage over others or take bribes by rationalizing it away. Even written contracts have no value. It is considered fair game if someone steals your money and gets away with it. Most people will not rent their property, for they fear it will not be returned. Most people, even the guy on the street, have a perfect prescription for how I should live my life and will offer it to me unabashedly. Respect for others as individuals and their properties is a completely alien concept. This, combined with fatalism (a product of a superstitious mind that is immune to the concept of causality), is the reason behind the chaos on the roads and every other area of life. I contend that the Indian road is a visual representation of how the Indian mind works.

You cannot have a small government in a society in which everyone wants to control everyone else's life, where no one can be trusted to do a job properly, where the concept of how to make money is not wealth-creation but manipulation and theft. You cannot avoid building a large and corrupt police force in a society where the individual cannot be trusted. You cannot stop a complicated structure of regulations and government in a society in which individuals cannot think straight, clearly, or rationally.

If someone wants a real, sustainable change he should work in the arena of critical thinking and individualism, not on imposing superficial Western ways.

A tyrannical government is a product of a tyrannical, corrupt, and statist society. Even before the society changes, it is the individual who must change. A free society is unsustainable without free-minded individuals. Those who want real change must work on the root: the individual.

The general totalitarianism, indolence, dishonesty, lack of work ethic, confused thinking, irrationality, superstition, and lack of respect for other people have too much momentum on their side to let private companies stay good. The initial euphoria, mostly of a drunken kind, a catharsis, lasted for no more than a few years. What you culturally see in India is not different from what the West was like perhaps 500 years back. India's problems cannot be dealt with unless the society has gone through the reformation, enlightenment, and scientific revolution that happened in the West.

What differentiates the West from "the Rest"

For vices to be replaced by virtues — the way in which a rational individual perceives them — the concept of reason must take precedence. For those who do not think by means of reason, for those whose culture is not based on it, the vantage point from which vice and virtue are considered is very different. For such people, touching a low-caste person to help him might be a sin, and forcefully occupying the property of a poor person to build a temple might be a virtue.

Lacking appreciation of all this, the US government — assuming it was well-intentioned — spent many years lavishing its resources in attempts to bring democracy, the rule of law, etc., to societies where such constructs have mutated back to what they originally were. Those truly interested in bringing a change must understand that outside the West, the mainstream's way of thinking and conceptualizing the world, its way of imagining and perceiving the world, and its resultant aspirations and motivations are driven by undercurrents that are essentially pre-rational. It is the undercurrents that must be changed. They must, indeed, be replaced by reason and individualism.

The problems of India are extreme, but they aren’t just India's problems.

In my travels around the world, I am reminded of this again and again: there is the Western civilization, which values the individual and the concept of reason; and there is the rest, the area of the world in which most people haven't a clue about what individualism means or, if they have a clue, abhor it, even after hundreds of years of interactions with the West and even after the advent of the internet, easy information, and cheap traveling.

Reason and individualism are a rare fruit, a very expensive one. Without it, democracy, the rule of law, and regulations against excessive state power have limited and mostly unfavorable effects. That is the problem of India today.

And not just India. Most places outside the West are in a mess, living a contradiction, having some material development but lacking the necessary basis in reason and individualism, and hence of ethics. Even the West has increasingly lost these concepts. This might be making the world an extremely unstable place. But, again, I digress.

If someone wants a real, sustainable change he should work in the arena of critical thinking and individualism, not on imposing superficial Western ways, trying merely to reduce regulations or reduce the size of the public sector.

The future of India

With China slowing down, Russia failing to impress, Brazil in stalemate, and the economies of the West in stagnation or decline, the focus of those looking for economic growth has moved to India.

Despite producing some of the largest numbers of so-called scientists, engineers, and so forth in the world, India is an extremely wretched country. Relatively speaking, a huge amount of economic growth has taken place since 1991, when it is believed that India started to open up — from GDP per capita of a few hundred dollars then to $1,625 today. In my view, the date when India started to change economically was a decade earlier. India had started opening telecommunications to impress visitors during the hosting of the Asian Games in 1982. This in turn opened channels for an easy import of information and technology through the telecommunications cable. Things developed from there. But now that the low-hanging fruits of imported technology have been extracted from the tree, India is stagnating again.

The mainstream media disagree, strongly. During the past year, the euphoria of the old days has returned to India. The stock market has recently been the highest ever. Foreign institutional investors are flocking again. They see India as the next China, ignoring the fact that India is one of the rare countries that hasn't had an event to shake off entrenched interests, social habits, and patterns of thinking during the past many centuries.

How Modi can change a country of 1.25 billion is something that no one really wants to think about, for these are times of euphoria.

Deaths of hundreds of thousands every year in avoidable calamities of course haven't triggered any shakeup, and hence cannot be called revolutionary. Also, it pays to remind ourselves that the so-called independence movement in India was a political event. As a rule of thumb, a political event is an active avoidance of introspection. India's certainly wasn't a cultural movement or even a shakeup. In a way, it was the antithesis of a shake up. Before that, entrenched interests had participated in the revolt against what came to be known as the Bengal Renaissance, which the English supported. Democracy allowed the basest of elements to rise to the top, making entrenchment worse and a possibility of a shake up more remote and entangled.

India's newly elected prime minister, Narendra Modi, is behind today's grand hopes. Everyone is looking at him. Alas, Indians are so badly trained (and unable to think straight and clearly from the perspective of reason) that supervising a mere few of them often feels impossible. How Modi can change a country of 1.25 billion is something that no one really wants to think about, for these are times of euphoria. Hence, the cycle starts again.

There are far too many hopes about this deity. Modi's deification is perhaps the most visual symptom of India's problems: the society looking up to someone or something external to bring salvation. Today's youth have far too many material expectations, taught them by the TV, but not enough productivity. This might be a very dangerous cocktail in the making. Even if it isn’t, I see no way for India to experience meaningful change unless it gives up its irrationality and superstition. I see nothing on the horizon that is capable of teaching critical thinking to the youth.

For those who care to imagine, India may be, culturally and intellectually, where China and Russia were in the late 19th century. Then, India was indeed going through its own renaissance — the Bengal Renaissance — until it was nipped in the bud by half-baked, uneducable people (Gandhi, Nehru, etc.) who went to study in England and learned nothing more than what their irrational minds could accept: intellectual rationalizations for socialism. They neither got nor were capable of getting even get an inkling that what had made England great was reason and individualism. A bottom-up renaissance was corrupted into a top-down design to change India, the so-called independence movement.

At some point, India has to pick up the threads where it left them, with the premature end of its renaissance. Would that require it to suffer what China and Russia suffered in the early 20th century? It shouldn't, and I would hate to see that happening, but is there any other possibility that human history shows?




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