The New Clarion

I’ve already written my personal gratitude list elsewhere, so here I’ll outline the political and cultural trends I’m glad about:

• The defeat of the Republicans: the sound drubbing that Republicans received in the recent election has made true change more possible than ever. While many believe that the American people have moved the center to the left, it seems more likely that voters were rejecting the “compassionate conservatism” and big government policies of George W. Bush. In the analysis of their loss, several prominent Republicans got it right. The GOP must return to its Goldwater-era platforms at a minimum—I’m not sure the Republican Party itself is remotely ready to provide a moral defense of capitalism.

That’s about all I could come up with today. In every other aspect of our society I considered, the trend is moving away from reason and away from individual rights. If you’ve got some good news to share, I would really love to hear about it. To my mind, we have our work cut out for us.

To follow up my last post, here is a paragraph from Andrew Bernstein’s The Capitalist Manifesto:

The enormous general prosperity of the capitalist countries — the ability of capitalism to inherit widespread poverty and then proceed to create a vast middle class — does not and will not begin to impress egalitarians. The principle of economic equality — not universal prosperity — is their moral god. Consequently, they admire the “equal” destitution of Cuba’s citizens and repudiate the unequally-shared wealth of America. To them, it is morally superior if everybody subsists roughly equally on $1,000 annually and morally inferior if some possess millions while others live on “merely” $15,000 or $20,000 or $30,000. Rational men prefer to earn $15,000 in a country where others are millionaires to $1,000 in a country where others are equally poor. But egalitarians loathe the economic inequalities necessitated by the freedom of the capitalist system.

We have been living in what Arthur Laffer calls an Age of Prosperity for the last quarter century, an age brought on in large part by Reagan’s supply-side tax cuts and deregulation.

People think Obama wants to continue the prosperity we take for granted. In their typically American benevolence, they cannot imagine that a politicians would want to diminish prosperity in any way. They forget that the left sneered at Reagan’s policy as “trickle down economics” — precisely because it was not “fair.” I forget who it was, but I remember some Democrat in Congress snarling, “We’re sick of being trickled on!”

The old adage, “A rising tide lifts all boats,” is not fairness to egalitarians. If everyone’s income rises 10%, then a millionaire gets $100,000, but a man making $20,000 only gets $2,000. Egalitarians would rather destroy prosperity than see everyone get richer unequally.

The great irony is that in pursuit of equality socialism creates a rigid class society that is as unfair as any pre-capitalist fiefdom. In communist countries there are the nomenklatura, the ruling elite, and the proletariat who serve as slaves to the ruling class. Propaganda fools the proletariat into accepting this arrangement in the beginning, but only a repressive, totalitarian police state can keep this nightmare system going for any length of time.

In America the left tries to make society more equal within a mixed economy. Even though they don’t pursue outright nationalization of the means of production, they have learned never to define their meanings clearly. If they did, voters would reject them entirely. We are just now beginning to see what Obama means by “change.” He means a more equal society. As he said to Joe the Plumber, he believes it is good to spread the wealth around.

Egalitarianism is the great destroyer. It never creates, makes better, goes farther, thinks wiser; it only destroys in the pursuit of equality. It means more chains, not more freedom. Is this change we can believe in? You’d better believe it.

From the cutting-your-own-throat department:

In separate actions, the two trade groups, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, announced their support for guaranteed coverage for people with pre-existing medical conditions, in conjunction with an enforceable mandate for individual coverage.

In the absence of such a mandate, insurers said, many people will wait until they become sick before they buy insurance.

Pirates off the coast of Somalia have had a field day this year, successfully capturing 39 vessels including a Saudi supertanker. Navies from around the world are steaming around the Gulf of Aden trying to provide some cover in a joint task force. But so far, the most that has happened is eight pirates picked up in Somali waters were dropped off in Kenya for trial.

The most common reaction to this situation is incredulity, an amazement that this is a problem in this modern era. But should we really be surprised at these blatant attacks?

Denmark, which is leading the joint task force this year, caught ten pirates in September but released them after six days of “sweating” in a “hot container.” Why were they released? Because the Danish authorities, both military and civilian, couldn’t figure out what to do with them. If they were made to stand trial in neighboring countries, they may have faced the death penalty. And if they were brought back to Denmark, they could “seek asylum.” So the Danes dropped them on a Somali beach near where they lived, restored to them their non-weapon personal effects, and bade them good luck. In a repeat incident earlier this month, the Danish “warship” caught two pirate boats, confiscated the weapons, and let the pirates go. One of the pirate ships sank due to weather, but the Danes refused to send crews to recover that boat so that the pirates might learn a lesson.

It’s not just the pacifist Europeans either. The United States naval commander recommended that merchant vessels learn defensive maneuvers and maybe consider carrying armed guards. For Admiral Gortney, the answer is “on the beach—Somalia—assuring security and stability and making sure the conditions that breed pirates are no longer there.” The Pentagon press secretary concurs that the situation “requires a holistic approach from the international community at sea, ashore, with governance, with economic development.” I guess the administration wants to formalize the ransoms that the Somali pirates are demanding by taking the money from the shipping companies (and all of us) and then paying protection money to Somalia in the form of foreign aid. Maybe if they got handouts, the “thinking” goes, they wouldn’t need to acquire machine guns and take to the seas.

A Wall Street Journal op-ed’s title said everything I was thinking on this subject: “Why Don’t We Hang Pirates Anymore?” It turns out that Articles 100 through 111 of the United Nations Convention on the Law of the Sea are unsurprisingly milquetoast on this issue. It suggests in Article 100 that “all States shall cooperate to the fullest possible extent in the repression of piracy on the high seas or in any other place outside the jurisdiction of any State.” But then it says in Article 110 that a warship cannot even board a pirate ship except to verify its right to fly its flag. Once piracy is established, Article 105 allows for the courts to mete out punishment. But as the current chairman of the Joint Chiefs of Staff said, “one of the challenges that we have—you have in piracy clearly is, if you are intervening and you capture pirates, is there a path to prosecute them?

While a functioning state in Somalia is the best prescription for ending piracy in its waters, that is beyond a proper foreign policy. These pirates are violating individual rights wholesale; we must stop them through force. The United States military must expands its rules of engagement to lethal and decisive levels even though no pirate has yet dared to attack an American merchant ship. Safety on the high seas is always in our interest and we must muster the fortitude our forefathers did during the Barbary wars.

The spending just keeps piling up. As Gus Van Horn puts it,

The Troubled Asset Relief Program, is, at $700 billion, the largest such outlay in history by the Federal government, but it is hardly the full dollar cost of the current financial crisis. Also passed in 2008 were the $30 billion Bear Stearns, the $150 billion American International Group, and the $200 billion Fannie Mae/Freddie Mac bailouts. This is nearly $1 trillion in bailouts for 2008 alone. In addition, the Federal Reserve may have already lent (as of last Friday) another $2 trillion on an emergency basis to prop up the economy, over half of that in the seven weeks following a relaxation of collateral standards on September 14.

And, by now, we should all know that “loan” is all but a government code-word for “present-day wealth transfer to the unproductive, to be paid for by future productivity on the part of other members of society”. Via Matt Drudge, there is news this morning that the Democrats are mulling an additional $700 billion “stimulus” package and the Fed “pledges” — our words are becoming as inflated as our currency eventually will be — have topped $7.4 trillion!

Obama is also talking about a new jobs program like FDR’s WPA:

President-elect Barack Obama is developing a plan to create or preserve 2.5 million jobs over the next two years by spending billions of dollars to rebuild roads and bridges, modernize public schools, and construct wind farms and other alternative sources of energy.

…

The campaign did not release an estimate of the number of jobs that his latest proposal would create. But congressional aides who have been involved in developing stimulus proposals said that any plan to create 2.5 million jobs is likely to be significantly larger — probably well over $200 billion, or between 1 and 2 percent of the gross domestic product.

Economists have called on the federal government to spend at least $150 billion and as much as $500 billion to ease the effects of what is expected to be the most painful and prolonged recession since World War II. A stimulus package signed by President Bush in February cost $168 billion.

House Democrats have been talking about a new package worth at least $150 billion, and possibly much more. During the presidential campaign, Obama proposed a two-year, $175 billion stimulus package with money for cash-strapped state governments and infrastructure projects as well as a $1,000 tax credit for working families.

This is done to “stimulate” the economy. Keynesians believe that if the state takes money from Peter to give to Paul that this somehow improves the economy.

Obama also wants “to make health insurance affordable and accessible to all.” (This used to be called socialized medicine, but sophisticates these days consider any talk these days about socialism as unrefined. Obama might be following the ten point program laid out in the Communist Manifesto, but please — don’t call him a socialist!) From Obama’s own web site,

The Obama-Biden plan provides affordable, accessible health care for all Americans, builds on the existing healthcare system, and uses existing providers, doctors and plans to implement the plan.

How much will this cost? However much the government estimates, you can bet the house, if you still have one, that the real cost will be a lot more.

Then there are Obama’s plans for sweeping new “service” progams.

President-Elect Obama will expand national service programs like AmeriCorps and Peace Corps and will create a new Classroom Corps to help teachers in underserved schools, as well as a new Health Corps, Clean Energy Corps, and Veterans Corps.

How much will this end up costing?

Earlier this year it was estimated that Obama was proposing $1 trillion in new spending. That was before the crisis and the hundred of billions — trillions now — of money being thrown at corporations the state considers too big to fail.

In addition to spending there are threats of massive regulations such as cap and trade that could devastate the economy. To top it all, there is talk in Congress of nationalizing 401k plans. Politicians are desperate to get their hands on that pool of wealth. After all, shouldn’t everyone sacrifice for the good of the country?

Benjamin M. Anderson, who was an economist working on Wall Street back in the 1920′s, proved in Economics and the Public Welfare that the economy was recovering when Roosevelt was elected president in 1932. Then Roosevelt’s first 100 days sent the economy into the Great Depression, which lasted until 1945, when the Republican Congress repealed some of Roosevelt’s most oppressive measures, such as wage and price controls. It looks like we are on the verge of another massive wave of government intervention, all in the name of ending a crisis.

Do our present politicians think all this spending and regulating will make anything better? Do they think Americans will prosper and be happy for all of it?

Statists don’t care if Obama’s program is practical, so long as it is, by their standards, moral. Altruism demands that the state redistribute wealth and reorder society to make it more “fair.” Obama’s web site says,

“Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility.”

Obama considers taking from the rich to give to the less rich to be “restoring fairness.”

Obama’s program will not create wealth. It will only expand the power of the state in order to force the productive to serve the less productive. It will make statists happier because they are reforming American society in accordance to their morality. That is the real meaning of change. Millions of naive voters thought it meant making lives better.

Another thing people forget: environmentalists oppose prosperity. The idea of free people in a capitalist society improving their standard of living, driving bigger cars and exploiting more resources is their nightmare. In their ideal society, people would live in villages in a pre-capitalist economy, with food grown locally, and the local cobbler happily repairing Timmy’s shoes in his dusty little shop. Billions would die if we reverted back to such an economy. C’est la vie.

Obama’s spending and intervention will make America less prosperous. It will not work. A great deal of wealth that would have existed if the government did nothing will be destroyed. Maybe that’s the point.