A Millennial Introduction to Socialism Part II

One of the great complaints about capitalism that all supporters of Bernie Sanders cite is the incessant greed that the pursuit of profit creates in our country.   We are told - by people who most likely majored in the humanities - that we should not put profit over people and that community well-being is a more laudable goal.

Let me ask you young folks a question...

Have you enjoyed toilet paper shopping lately?  How is that going?  Are you enjoying finding empty shelves, long lines and near panic-like conditions among shoppers desperate to find cleaning supplies, meat and bread?

Well, my friends, welcome to what the world looks like in Venezuela every day.   Take a look at this video.  It will take only 3 minutes and 43 seconds away from your Instagram posting and will help you see what the world would look like if we adopted socialism on a macroeconomic scale.

Shortages happen from time to time in a market economy.  The shortages we are seeing at this time stem from historic increases in the demand for everything we think we will need to get through this pandemic.   As demand increases, suppliers scramble to increase production in order to profit from this unique opportunity.  We have seen countless stories of companies shifting away from beer production, for example, in order to produce hand sanitizer.  Car makers are shifting into the production of medical equipment and so on.

The driving motivation behind this shift is not the common good, but rather the uncommon profit opportunity.

In socialism, businesses would be prevented from capitalizing on this shift in demand.   Prices would be controlled by government, inventories would be rationed - by the government - and the incentive to increase production would be eliminated - leading to permanent shortages.

This is what life is like every day in Venezuela.   The government there has waged war on entrepreneurship for over two decades and thus the incentives to produce toilet paper - and everything else - has been wiped out.  People in this once prosperous nation now line up every day to try to find things that will help them survive.

In America, because of capitalism, we know that eventually the flow of goods will return to its normal level.  None of us go to bed at night wondering if there will ever be meat at the store again.

If left to the devices of people like Bernie Sanders - and his young followers who have not taken an economics class, nor have ever lived in Venezuela - we would face shortages of everything, every day.

Dear Millennials, THIS is what Socialism looks like!

One of the greatest unintended consequences of the government's reaction to Covid-19 is the first-hand, once-in-a-lifetime lesson in what socialism really looks like.  So to all of you folks out there who are somewhere between 18 and 35 please read this carefully.  It could save your life.

I know many of you have been super-excited for quite some time with the Presidential candidacy of Bernie Sanders.   Some of you have acknowledged that Bernie is now finished but has laid important groundwork for youger socialists like Alexandria Ocasio-Cortez, who can pick up his mantle and carry it forward in your quest to finally have Democratic-Socialism arrive in the United States.

It is somewhat understandable - for two reasons - that you would want this.  First, if you are 35 years old it means you were in kindergarten when the Soviet Union fell apart.  It means you have never lived one day in a nation that was pitted against a nation that was threatening to export human misery on a mass scale to the rest of the world - or bomb us into oblivion as a second-best choice.

You did not get to live in a world where 40% of the population lived under communism or socialism.  You have never even lived in a world where Scandinavia, long held out as the dream of you young socialists, actually practiced socialism.  See https://www.heritage.org/index/

So, having no frame of reference other than modern-day Venezuela, for what socialism looks like, you are largely ignorant of what it would look like to live through it.  Of course my students from Venezuela do not need to read any more of this post because they have lived through socialism and are well versed in the deprivation it creates.   That is one reason why they are my favorite students.  They live for liberty and value it more than my American students do.

A second reason why young Americans want socialism is because this has been a lousy century for you.  When you were babies your government turned on its own people in the wake of September 11th on a scale that would make George Orwell shudder.   From the Patriot Act to domestic surveillance to a nation that makes us cow-tow at airports, you have lived in a nation that has largely traded in its liberty for security.

Then, when you were a little older, you got to see the second worst recession in our nation's history and the mass-hijacking of your futures when the Federal Reserve Bank and the federal government combined to bail out large banks and corporations that would make Robin Hood cheer.   It is no wonder you want Grandpa Bernie to give you free health care, free tuition and free child care.  You have grown up watching government give away your future earnings in the form of artificially pumped up money supplies and plunder in favor of the well connected.  Now you want your share.

Finally, we now see your government destroying liberty in the name of health care security by locking us down and telling us we cannot go places they do not approve of and that we have to be in our homes at 11PM.  In exchange for that, Congress is going to steal another $2 trillion from your future (did you think the stimulus was free money?) and destroy your jobs and income in the present.

Socialism is an economic system that violates the rights of the individual in order to serve the desires of the state.  Socialism means the nationalization or overt control over key industries.  Socialism means a huge expansion of the size of government on the backs of future taxpayers.  Socialism means lots of rules and regulations in order to make us all safe.

As you prepare to be locked in your homes by our new quasi police-state think about this...

Which seems better - the freedom and chance for prosperity you had a few weeks ago, or the security and reliance on the state that you are getting now?

Remember, be careful what you wish for....

A Libertarian Guide to Social Distancing

I hate to admit this but all this social distancing stuff is coming pretty easy for me.   As a Libertarian (since around 4 seconds after George H.W. Bush became president) I have long valued being, well, alone.

The Republican party has the elephant for a mascot.  The Democrats have a Jackass (insert joke here).  The Libertarians have a porcupine!  Think about it.  The porcupine is a solitary animal who just wants to be left alone to look for food and other porcupines.   Voluntary association is the hallmark of a good porcupine.   If you bother one you get a face full of quills.

For around 50 years I have been the human equivalent of a porcupine.  The one friend I have who lives near me (my Texas and Tennessee friends do visit much...) also happens to be my wife.  I do not own a cell phone because I find human contact overrated.  I therefore have no social media presence.  This blog does not count because I post what I think and do not really care what people think about what I think.  I don't ask for, or expect, "likes" because I do not care what you like.  I like what I like and then, if I feel like it, share it with other people.

I have been this way forever.   When I was in Eugene Field Elementary school in Hugo, Oklahoma, I used to run a way every year during the school picnic to play in the woods with whatever kid I could convince to break out with me.  The moment the teacher had us stand in a socialistic line to march to the park I was plotting my escape.  Right after lunch I would bolt with my willing partners and not come back until it was time for all the sheep to march back to school.

In the first grade, on my very first report card, my teacher wrote, "Jack is progressing well but refuses to comply with society's standards of behavior."  Damn right. Society is not my boss.  I, as a six-year old, felt that I was my boss until I got home and my parents let me know that I needed to comply with some rules - or get a belt across the behind for refusing.

With this Coronavirus I find that my life has not changed much.  I still have one friend who I hang out with regularly.   I am now at home, with my wife and dog Jake and I am fine.   I have been re-watching Stranger Things, working out, folding socks for the first time since Obama was president, cooking a little more often and doing projects that need to be done.  I miss talking to my students but they are fine.   I miss sports on television but not enough to stress over it.   Since I have never texted anyone, I do not miss that.  Since I am not on Instagram I do not miss that.  

I would recommend to anyone reading this to consider the possibility that most human interaction is not necessary and in fact, is actually pretty annoying.   Do you miss the way people drive on the roads?  Do you miss people blathering on their phones in restaurants and movies?  Probably not.   

I think the world would be a better place if we could just learn to enjoy our time away from each other.  Maybe we would be a little nicer, a little more tolerant and actually engage in meaningful conversation once we are allowed to hang out again.

Until then, enjoy the solitude.  After all, unless you hate yourself you will enjoy your company.

How Irrationality Might Lead to another Great Depression

As all of you can plainly see this virus is radically reshaping our economy right now.  I wanted to share with you an article I wrote (published in today's Orlando Sentinel) that will help you have better insight into what at least one economist is thinking.     If you are willing, sharing your insights into what you have experienced so far might be useful and therapeutic.

Here is the article..

_________

How Irrationality might lead to another Depression

As the United States, and the world, reacts to the spread of the Covid-19 virus I find myself wondering how many Americans are still alive who witnessed the economic calamity that began in October 1929.   They would come in handy right now as economic advisers to a nation that is about to panic its way into a possible second Great Depression.

It is staggering to fathom how economically myopic and reactionary our “leaders” are being at this critical time in our nation’s economic history.

Everywhere we look we are being told to go home, stay home, don’t go out; don’t interact with one another and more.  It is as if the politicians have been bestowed with some special powers to engage in policy making decisions that will somehow magically defy the laws of supply and demand.

Let’s look at it.

In an economy of more than 330 million consumers who purchase more than $20 trillion in goods and services annually, how do we continue to fuel the demand side of the economy if we are told we should not buy tickets to sporting events, hotel rooms, theme parks, restaurants and more?  If we only go out to buy toilet paper and medical masks, where do the millions of workers who depend on our purchases earn enough money to avoid being sent to the unemployment lines?

Our labor force and suppliers are also being bombarded by the doomsday scenarios outlined by those we put into office to make good decisions.

Sending labor suppliers home disrupts the entire supply chain of goods and services that prevent massive shortages, business closings and collapsing infrastructure.   The more people who are withdrawn from the labor force the greater the threat of stagflation – a combination of high unemployment and inflation – that last reared its head in the 1970’s and early 80’s.

Of course we are all being told that these decisions, while painful for a while, will be far better than leaving us alone to make our own choices of buying, selling and working.  The experts are saying that unless our lives are interrupted for an indeterminate period of time we will suffer even greater losses in the long run.

Exactly how do we know this?  What if this virus goes on into the fall?   How many months can our economy survive shattered by the possibility of accelerated cases around the globe?   What if in the meantime we see unemployment surge to levels higher than at any time since the 1930s?  What if the gross domestic product dives by double-digits?

Do we really believe that Americans are ready for an economic downturn that no one under 100 years old has ever endured?   Can we really expect deprivation on a scale that eliminates virtually all luxury spending and sends millions into poverty?

It is important to note that there is virtually nothing in the way of monetary and fiscal policy that our government could use to fight another Depression.

Interest rates are already historically low and, as we saw in the 1930’s, if people are scared to borrow, nothing the Federal Reserve Bank does can compel us to incur more debt.

Taxes are also low by historical standards.   Donald Trump’s recent cut in personal and corporate income taxes generated very small gains in revenue – an indication that more tax cuts would not create greater economic growth.

The federal deficit – fueled by profligate spending by both parties – is also near record levels so even more spending is not likely to create more jobs.

I am afraid that economic historians will someday look back at 2020 as the year our hyper-reactive society allowed elected officials to shut down the largest economy in the world and ended up destroying more lives from the ensuing economic meltdown than the virus would have.

Capitalism is all we need to fight Climate Change

What follows is my Op-Ed in the August 22, 2018 Orlando Sentinel

 

This week the Trump administration announced plans to roll back regulations on coal-fired power plants, effectively abandoning the Obama-era attempts to do away with coal as a primary resource for power generation.

 

Critics of Trump’s policies on energy often point out that since he took office, there has been a push to deregulate sectors of the economy that deal with the burning of fossil fuels, and thus, exacerbate the problem of climate change. If Trump’s policies are left unchallenged, we are told, we risk thrusting the United States back into the unenviable position of being the world leader in the destructive creation of pollution that will condemn posterity to deal with the ravages of permanent climate change.

The response by the vast majority of Americans to this dire prediction is a collective yawn rooted in a self-interested perspective on energy usage. That is because no matter how much moral suasion is used to get us to care about some kid who will be around 200 years from now, we really care more about our wallets and personal convenience 200 seconds from now.

Think about it. Every time we hear the phrase, “if we all work together…..” do we end up working together?

 

Not really.

 

We are told to drive cars that are low-emission and environmentally friendly. We ask, “How much will that car cost?” We are told to drive the speed limit to conserve energy, but we are late for work or enjoy speeding.

We nod in agreement that climate change is a terrible thing, then engage in classic free-riding behavior that starts with the premise that while our neighbors fight climate change, we will do what is best for our immediate economic concerns. Our neighbors think the same thing, and we all roll past each other in gas-guzzling SUVs while forgetting to turn off the air-conditioning at home.

 

The good news is that we don’t really have to work together to accomplish victory over rising global temperatures. That is because profit-driven companies are doing all the work for us.

 

Consider this.

 

Because of rapid advances in technology — driven only by the desire to make more money — we have seen drastic reductions in the price of power created by wind and solar. Natural gas is now cheaper than coal. Therefore, no matter what the president will claim on Twitter, market forces and the drive for greater market share has already led to the expansion of non-coal power and less carbon dioxide emission.

 

The same is true in innumerable industries. Household appliances use less energy than ever before. Not because Whirlpool wants to save polar bears from shrinking ice, but because Whirlpool wants to cash in on our desire to save money first and then save polar bears as a bonus.

 

Food is now produced with far less energy than decades ago. Cars continue to roll off the assembly line that generate a fraction of the toxic emissions that we saw in the 1970s.

From phosphate-free detergent to the growth in products produced with recycled materials, we have seen an explosion in environmentally friendly goods and services that all come from the fruits of capitalism, rather than some government program or legislative mandate.

 

In fact, where we see the government involved in the protection of the environment is where many disasters occur. From the Flint, Mich., water supply to poorly managed government forests that burn in California to accidents that lead to toxic spills, government’s record in protecting the planet is not impressive.

 

By comparison, the pursuit of money has led to impressive results.

 

Therefore, even though most of us only care about our immediate needs and our limited financial resources, we can go to sleep knowing that the same system that guarantees the production of food, medicine, housing and everything else we might want or need can be trusted to produce products that will slow climate change over time.

What will we do when the last WWII veteran dies?

What follows is my July 4, 2018 Op-Ed in The Orlando Sentinel

What will we do when the last World War II veteran dies? Seventy-five years ago today, the United States was less than a month into the invasion of Normandy. This invasion – the largest in our history – involved more than 160,000 allied forces and thousands of ships and aircraft. By July 4, U.S. forces were fighting in horrible weather amid the hedge rows of France in an effort to drive out the Germans.

William C. Coleman, one of the paratroopers who dropped into Normandy the night before the invasion, was a prisoner of war the day America celebrated the Fourth of July. Wounded as he dropped out of the sky, Coleman, a 19-year-old from Orlando, fought bravely before being captured and imprisoned until he escaped as World War II was ending in the European theater.

His story – and his life following the war – was incredible to hear. He was an amazingly successful state politician and businessman and was instrumental in helping with veterans’ causes for decades after he came home from war.

William Coleman died in 2012. Before his death, my children were fortunate enough to sit with their great uncle as he shared with them what the last war for American liberty was like for him and countless other soldiers.

A highway leading to the east campus of Valencia College is now named after him.

When I was a kid, I got to sit with Joe Dickson (pictured above), a gunner on a tank serving under Gen. George Patton. Dickson, from tiny Hugo, Okla., was a giant of a man with a laugh and good nature matching his size. When I would ask him about the war, he was always careful to not talk about the deaths he was part of, but did share stories that brought the sacrifice he had made to light. I thought he was bigger than life.

All over America there are other veterans of World War II with similar life stories, yet every day more than 370 WWII vets pass away. Of the 16 million Americans who served during this time, only 600,000 are still alive – with most of them well into their 90s.

It is deeply troubling to me, and undoubtedly, many more Americans, to contemplate what our country is losing every day. With the passing of every veteran, we are losing a connection with a time when an entire country rose up to fight for and defend the principles of constitutional liberty that the Founding Fathers spoke of on July 4, 1776. We are also losing historians, in effect, who lived through the horrors of war and witnessed the consequences of allowing nationalistic leaders to turn demagoguery into mass killing. With the loss of these eyewitnesses to history our nation – and others – we risk repeating the grave mistakes made in the years leading up to and including World War II.

Consider this:

Recently, a study published by U.S. News & World Report found that 45 percent of Americans could not name one World War II-era concentration camp, and 66 percent of millennials had never heard of Auschwitz. I wonder what would happen if you asked the average college student in America to identify various events like D-Day, the Battle of the Bulge, Pearl Harbor and more? Do you think the typical American would be able to write an essay about Hiroshima or identify the Axis powers?

I seriously doubt it.

Ten years from now, the average WWII veteran will be over 100 years old. Twenty years from now they will be gone, and along with them the ability of the rest of us to sit at their feet and hear about what it was like to defend a nation during war; what it was like to have millions of citizens rally to gather needed supplies and what it felt like to witness the power of American capitalism out-produce all of our enemies in stunning fashion to equip our fighting forces with unprecedented military superiority.

On our 242nd birthday, perhaps we all should try to find veterans of this war and ask them questions, listen to their stories and thank them for preserving liberty for all of us.

 

Our right to gamble on sports does not come from government

What follows is my May 24, 2018 opinion piece in The Orlando Sentinel

 

On Sept. 26, 1981, I was lying on the living room floor of my parent’s home watching the University of Southern California play Oklahoma in a much-anticipated college football game. In the week leading up to the game I made several bets with friends and school mates that USC would beat OU. As a 15-year old kid living in Oklahoma, I found it easy to find people who were willing to place a bet.

 

USC won and I spent the next few days collecting my cash.

John Locke would have been quite proud of me.

Almost 200 years earlier, in his second treatise on government, John Locke — one of the philosophical architects of American politics — wrote, “A liberty to follow my own will in all things where that rule prescribes not, not to be subject to the inconstant, uncertain, unknown, arbitrary will of another man, as freedom of nature is to be under no other restraint but the law of Nature.”

 

Locke understood what the U.S. Supreme Court has finally made official in our country.

That is the simple fact that as free human beings living in a country that long ago codified our natural right to life, liberty and property it is simply nobody’s business if a person decides to take part of (or all of for that matter) the fruits of their labor — and gamble on sporting events.

There should have never been the need for Las Vegas casinos, offshore booking or black-market gambling sites if our government had stayed out of our business to begin with.

Sports gambling in America — even with its limited options — is a nearly $5 billion industry even with the near unanimity among state legislatures in banning this market.

 

Of course, as politicians always discover, no law that man or woman writes ever triumphs over the laws of supply and demand. From the era of Prohibition to the current war on drugs, time and time again we see that as long as profits can be earned and consumers are available, someone will find a way to enter the market and supply us with what we want.

 

Now that the Supreme Court has opened the door to legal gambling, we should all celebrate what is going to unfold.

 

First, in a recent interview, NBA owner Mark Cuban commented that legalized sports gambling will double the value of professional sports franchises.

 

Cuban is a smart guy who sees the potential for a vast new market to open up.

 

Imagine the changes that could take place in the arenas and stadiums across the country. You can expect to see gambling kiosks throughout stadium concourses. It will also make sense to retrofit stadium seats to provide touch pad technology that allows people to gamble from their seats on everything from the score at halftime to whether a player will make his next free throw. Of course it also makes sense for teams to make cellphone apps available to gamble remotely on everything people want to gamble on.

 

Politicians should be celebrating as well. First, among people who are passionate about gambling on sports, the overall demand for sports-book services is somewhat to very inelastic. This gives state governments the opportunity to impose taxes on a per-wager basis or on the winnings of gamblers and sports-booking agents. The newfound tax revenue would allow state governments to shore up their budgets and spend on initiatives they deem necessary.

 

The state of Florida already does this with our version of legalized gambling known as the lottery. If gambling tax revenue would be added to lottery money, we might hear a lot less about critical shortages of revenue for everything from heightened school security to our over-burdened infrastructure.

 

Critics, of course will charge that legalized sports gambling will promote addiction, financially decimate families and ruin people’s lives.

 

What the economic moralizers always miss is the fact that there is already a thriving black market from which addiction can form. Las Vegas — and the chance to financially ruin your life — is a flight away. Moreover — and perhaps most important — it is also a fact that we have, as free citizens, the natural right to be stupid with our money.

 

If the government has the right to decide whether we should gamble on NFL games, why doesn’t it — in the name of protecting society and families — have the right to ban foods high in sugar and fat, or ban suggestive music or magazines that degrade women?

 

In 1849, French economist Frederic Bastiat summed up this whole gambling argument this way:

 

“If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?”

 

Let the gambling begin.