It’s Déjà Vu All Over Again


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

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

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

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

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

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

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

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

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

Sound familiar?

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

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

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

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

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

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

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

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

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Working-Class Libertarianism


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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All the Wrong Moves


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


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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Turkish Savagery


For centuries, Europeans viewed the Turk as the most feared, yet least familiar enemy. Twice, the Ottoman hordes threatened Vienna, practically next door to Paris. For hundreds of years French Mediterranean towns and monasteries fortified themselves against Turkish pirates (who mostly never showed up). Algerian pirates, who were thought of generically as “Turks,” occasionally plundered the Irish coast. Once, a bunch of them even raided Iceland! Following his naval debacle at the Bay of Abukir, Napoleon brought Mamelukes, Turkish mercenary troops from Egypt, back to Europe. He used them as a weapon of terror against the insurgent Spaniards, a fact memorialized by Goya in his Tres de Mayo. In this atrocity painting, only the Spanish victims, who seem to be appealing to the viewer, have human faces. The Mameluke execution squad is shown from the rear, like a many-backed beast.

Twenty years later, the European aristocracy reveled in taking the side of Greek independence fighters against Turkish tyranny. (Lord Byron, the celebrated English poet indirectly died of it.) Ottoman power responded to the Greek insurrection with several well-publicized massacres. The most famous, the Massacre at Chios, depicted by my namesake Delacroix (Eugene), remains one of the great masterpieces of war propaganda. The painting displays in one tight space mass slaughter, including that of babies; rape; rapine; and the haughty indifference of the cruel Turk. In a perverse turn of mind, the artist made the central figure, an Ottoman horseman with saber in hand, disturbingly handsome. (I have to resist the temptation to see the painting as an early instance of soft-core porn, catering to a sadistic streak.)

Naturally, until recently, I did not know much that was favorable about Turkish society, or Turks, except that they had kept a silent, humble, and effective guard on the soft southern flank of Europe during the long years of the Cold War. Now, a disclaimer: in this story, I deliberately avoid any mention of the two massacres of Armenians, in the late 1800s, and an even worse one, in 1915–1916, because I am convinced that ordinary contemporary Turks know nothing of these events, or don’t quite grasp them. Similarly, I circumvent the on-going Kurdish rebellion in eastern Turkey and its often severe repression, because I wish to write only about the things I have seen, heard, or touched myself. My circumspection in these matters does not imply denial or affirmation.

The European aristocracy reveled in taking the side of Greek independence fighters against Turkish tyranny. Lord Byron indirectly died of it.

In the early 2000s, my wife and I took the night ferry across the Aegean from Piraeus, Greece, to Turkey. My first sighting of the blood-red Turkish national flag in the early morning somehow gave me a surge of adrenalin, a pleasant one. After the persnicketiness, the somberness, and the surliness we had experienced for two days in Athens, the Turks’ smiling warmth was more than welcome. (Why do I think Greeks hold the world’s per capita record, ahead of Argentina, for burning American flags?) But in spite of these good feelings, I was on my guard. I was born and reared in Europe. After all, I did not know how many of my great-aunts and great-grand-aunts their great-grandfathers had kidnapped to serve the obscene pleasures of the Turks’ harems.

We traveled along the Mediterranean coast in comfortable air-conditioned buses, stopping where fancy dictated, armed with our American Express card, like a new breed of aging but prosperous hippies. At every stop, as I stepped off the bus, older men, fellow-passengers, would compete for the privilege of lighting my cigarette with their invariably gold-plated lighters. Many smiles were exchanged, but conversations remained rudimentary, because the brevity of the stops made it difficult to overcome the fact that we did not have even half a language in common.

One morning stop seemed to last abnormally long, much beyond the necessities of bodily evacuation and two cups of strong muddy coffee, with cigarettes, for the driver. Previously, I had exchanged a few sentences with a 20-year-old girl who seemed eager to practice her English. She was a slight, skinny young woman with a pretty face. She wore a light cotton dress of sober color. Soon she became highly agitated, making loud and shrill pronouncements in Turkish that I did not understand, of course. I did not think she was exactly crazy, since we had had a placid and courteous conversation moments before, while the bus was still running. Nevertheless, she acted like a mad person. The other passengers were smiling patiently, while the driver seemed to be taking half a catnap.

In a perverse turn of mind, the artist made the central figure, an Ottoman horseman with saber in hand, disturbingly handsome.

Suddenly, the thin girl stepped forward and shoved the burly, middle-aged driver out of his seat. She met with no resistance and no protest. She sat in his place and pounded the loud road-horn as hard as she could. Presently we all saw, across the parking lot, a tall young man scurrying toward our bus. He was clutching a small plastic shopping bag to his chest. The girl leaped out the door like a mountain goat and ran toward the young man. She grabbed him brutally and frog-marched him to the bus on the double. When they were both inside, she managed to close the bus door by herself. I was alarmed, but the other passengers and the driver were still smiling.

The young man was athletic-looking and two heads taller than the girl. He looked to me like a deeply embarrassed 18-year-old. Shouting at the top of her lungs, the girl began to strike him across the face with all her strength. Back and forth she went, bitch-slapping him in front of everyone. Although I am a burly, strong man with a fondness for blood sports, the sound of her hand on his face made me wince. Had I been at home, I would have surely intervened to protect the boy against her fury. But the other passengers were still smiling, although by now a little fixedly.

She pummeled him for half an eternity, all the while ranting and raging as loudly as I have ever heard a woman scream. (And believe me, without boasting, I have a lot of experience with angry women.) The victim made no move to defend, or even to protect, himself. After a little while, as she was still beating him, her voice began to change; it became less loud and her tone turned softer. (Remember that I understood not a word of what she was shouting.) Soon, she was whimpering on his chest and stroking the cheeks she had been battering seconds before. She pulled him down into their seats and cradled his head in her arms while whispering what were obviously sweet nothings into his ear. The engine started, the bus rolled out of the parking lot, the passengers resumed their conversations. The two young people were soon napping cheek to cheek.

 Suddenly, the thin girl stepped forward and shoved the burly, middle-aged driver out of his seat.

Later, she apologized to us in English for her outburst, and she explained: the tall young man was her adored little brother. They were traveling together from an inland city to their uncle’s home in a pretty coastal town (where my wife and I were heading, ourselves). The brother had asked her for permission to go buy a bathing suit in a shop adjoining the bus stop. He took too long because he could not find his size, so he wandered away, with all their money. She had panicked, fearful that the bus would abandon him in the unknown town. Hence her delayed wrath when she became sure that the worst was not going to happen.

The most striking part of the episode was the seemingly perfect equanimity of the other passengers. It told me of their tolerance for lateness and of their confidence that the matter would have a happy denouement. The young woman chatted some more with my wife and me. She was trustful, insatiably curious, and charming as a songbird. We would have adopted her on the spot if it had been possible.

Soon, we reached our destination, a perfectly lovable sea town, like St. Tropez must have been 50 years ago. The blue Aegean was dotted with gaily painted little boats, as in the postcards; fresh fish were frying in all the restaurants, and not a luxury store anywhere. You could not even have bought a latte for its weight in gold, thank God!

The next day was market day. If you are a serious traveler, you never miss open-air markets. They are invariably pleasurable as well as educational. All the women there, in that Turkish market, were from the interior of the country, and all were wearing broad, long, flowing, so-called “harem pants.” An older lady crossed our path wearing such pants, silky ones, with a black on gray subtle motif my wife immediately liked. You know what to do, I told my wife. (A long time earlier, I had demonstrated to her that it was possible to buy a woman’s clothes from her ten minutes after meeting her.) But at first, she demurred.

Older Turkish men are terrific liars. Men obviously in their early sixties would announce on their fingers: I am 83. I am 86. I will be 92 next year.

I saluted the gray-haired lady and expressed to her with gestures that my wife admired her pants. She took us to a stall that sold an inferior version of the same item. No, I insisted with a smile, she wants yours. To tell all, I was a little concerned that she might misunderstand me to be proposing to her that the three of us perform exotic acts together. But what we wanted soon seemed to dawn on her. I guessed she was a bit shocked but also intrigued. Soon, several other market women joined us, and a little girl who had a bit of school English. When the female passel disappeared behind a truck, I discreetly stepped away.

I walked around; to waste time, I bought a brass pepper grinder. I guessed that my wife understood men well enough to find me, eventually. I made my way to the tea stall in the middle of the market. Soon, several wide-eyed boys surrounded me. Then, one at a time, older men joined me on the benches that were set out in the open. Each one of them offered me a cigarette, and each tried to buy me a glass of tea. Seeing no toilet anywhere, I declined the tea each time with a big smile and a hand on my heart.

Are you married? One asked. How many children? Do you have pictures? Here are mine. And, finally: how old are you? I told the truth, as usual. One by one, they felt my biceps, then my thighs. I asked each politely, one by one, how old he was. As it happens, older Turkish men are terrific liars. Men obviously in their early sixties would announce on their fingers: I am 83. I am 86. I will be 92 next year. Then they took turns blustering about how good they looked for their age. It took all my willpower to refrain from challenging each and every one of the old bastards to an arm-wrestling match, just to teach them a little humility.

Subsequently, every mature Turkish man I met who was not trying to sell me a rug displayed precisely the same kind of loud vanity. I am guessing it keeps them young. It certainly beats the despicable Western custom of old geezers casually competing with one another about who has the worse health problems. Give me a braggart every time over a whiner!

No American visitors in Turkey this summer, they said. Tell the Americans to come back. We love them. Not like the fucking Europeans.

At that point, we got into the meat of things: American, yes? Yes, I confirmed. Bush? The oldest man asked with a raised eyebrow. I lifted my conservative thumb. He replied immediately: Bush, good! Saddam . . . He drew his hand across his throat. Exactly! I confirmed eagerly. (The American intervention in Iraq was about three months old then. Hussein was hiding in a dirt hole.) There were smiles all around. The fact is that I was sitting in the middle of a cluster of Muslims while my liberal academic colleagues were prudently visiting Paris, or Florence, or London. That is, the ones who had the gonads to travel overseas at all, that warlike summer.

Then, a young man who knew some English was drafted by one of the old guys. He told me the men wanted to know my opinion of the probability that Turkey would eventually be admitted into the European Union. Turkey, I answered sincerely, might just as well apply right away to the North American Free Trade Association (NAFTA). They were interested. One thing led to another. After a while, finding me so well informed, they somehow made the assumption that I must be a man of some influence in the US. No American visitors in Turkey this summer, they said. Tell the Americans to come back. We love them. Not like the fucking Europeans: they come here with one hundred euros and they think they are kings. (Don’t ask me how I know they used the expletive. I just know. It sounds the same in every tongue, anyway.)

An hour had passed and I was vaguely and only very slightly worried about my wife. I did not think there was any danger, but it was not like her to stay away, because she is the kind of person who gets lost between our house, where we have lived for ten years, and the corner grocery store. I called over a couple of 12-year-olds (who may have been 25, according to Turkish males’ general apprehension of reality), and I borrowed a gold-plated fountain pen from one of the old men. On a paper bag, I drew a chesty female silhouette and pounded my own (flat) chest. Wife of mine, I said. My wife is from India. Hindi! I added. Everyone commented favorably on my artistic talent (I guessed).

One of many wonders of globalization is that all around the less-developed world many people know and love Bollywood movies. “Hindi” struck a chord. I gave the boys one million liras each and sent them searching, paper bag drawing in hand. (What with inflation, a million liras does not buy nearly as much as it used to!) I wished them well in my heart, hoping they would not get into trouble inspecting too closely the bosoms of all and every woman at the market.

I located my wife, eventually. She had traded the old lady’s beautiful used harem pants against two new ones, plus one for each of three other women present at the negotiation, plus a whole outfit for the little girl who had acted as an interpreter. But the pants she had acquired were truly magnificent! (My wife has many wonderful qualities and enormous talent, but a wily bargainer, she is not.)

One of many wonders of globalization is that all around the less-developed world many people know and love Bollywood movies.

The transaction completed at last, she had failed to find me, she said. This, although I was in the middle of the market, surrounded by a small but noisy crowd. Instead, guided by some obscure female atavism, against all precedents, she had decided to walk back to the hotel by herself. She was in her fifties at the time. Tall and thin, but curvy, with the gray and black, silky harem pants streaming around her long legs and her narrow hips, she must have cut a striking figure in the eyes of dozens of appreciative Turkish male spectators on the way. If this was her last huzzah, she could not have chosen a better venue; bless her heart!

Later that evening, we walked the promenade on the seafront. We bumped into the young woman from the bus and her tall little brother. She embraced my wife and kissed her on both cheeks. Then she did the same with me. She pushed her brother forward and he kissed both of us too. We invited them for ice-cream. They sat with us but would not let us pay, because the sweets kiosk belonged to their uncle who would never, not ever, forgive them if we touched the check.

I don’t mean to deny centuries of European perception, or any part of history. Yet, I have to report my own experience. This, then, was my own personal encounter with Turkish savagery.

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Manufacturing Hubbub


American manufacturing is in decline. It has been for decades, shrinking to half of what it was at its peak in 1979. During the 2000s alone, it lost one-third of its workforce — largely blue-collar workers who, without a college education, could still earn a middle-class wage — and, today, its output and employment remain below their pre-recession levels.

Who cares? We still make stuff. And we still have enough money to get the stuff we don't make — from countries such as China and Mexico, at cheaper prices. In an advanced, services-oriented economy like ours, so what if our trade balance (which was in surplus prior to the mid-1970s but has been in deficit since) has plummeted to -$508 billion (-$741 billion for manufactured goods) today? We can always borrow or print more money. Right?

By outsourcing critical engineering and manufacturing expertise, the US is frittering away its industrial leadership.

Indeed, politicians, especially liberal politicians, welcome the decline. America has the coolest companies (Facebook, Amazon, Google, Apple, etc.), run by cool, billionaire geniuses. President Obama, our coolest president, uses them to run his campaigns, promote his polices, tweet his followers (a twitterati of 63 million), and post his selfies. America's future lies with these energy-efficient, planet-friendly, high-tech giants. To the liberal elite, America can do with fewer factories, even ones making things that America invented. Besides, factories pollute and warm the planet.

Except that America is now losing its high-tech manufacturing dominance as well. By outsourcing critical engineering and manufacturing expertise, the US is frittering away its industrial leadership, eroding what once was the world's font of scientific discovery, technological advance, and product innovation, and guaranteeing future decay. In a 2009 Harvard Business Review article (“Restoring American Competitiveness”), it was noted that "Beginning in 2000, the country’s trade balance in high-technology products — historically a bastion of U.S. strength — began to decrease. By 2002, it turned negative for the first time and continued to decline through 2007," reaching -$53.6 billion. Today, it has dropped to -$81 billion.

This development has even alarmed the Center For American Progress (CAP), which attributed the deterioration to "the dramatic difference between U.S. innovation policies and those of our global competitors." The high-tech trade deficit "finds its roots in the negligence of our innovation policy," claimed CAP, which, after deep liberal think-tank thought, recommended "a strong policy response." Maybe, liberals suggested, a Department of Innovation is what this country has needed all along — one with strong policies, not those negligent ones.

In President Obama's first Hub, a handful of highly paid computer engineers diligently work to develop machines that will eliminate countless blue-collar jobs.

CAP's prescription may have been what caused President Obama to spring into action with his Manufacturing Innovation Hubs, to "create high-quality manufacturing jobs and enhance America’s global competitiveness." The idea is to bring industry, academia and, of course, government together into a joint effort to convert scientific knowledge into jobs — "a steady stream of good jobs into the 21st century," said Mr. Obama.

The first such hub, America Makes, opened for business in October 2012 in the Rust Belt city of Youngstown, Ohio. It focuses on 3D printing, and will be used as a model for subsequent hubs. As many as 45 hubs are planned, with projects that are intended to have a multiplier effect: each job created will support 1.6 other jobs, outside the factory. A Reuters article described the facility as "a sleek new laboratory" housing "a Silicon Valley-style workspace complete with open meeting areas and colorful stools." Inside, "Several 3-D printers hum in the background, while engineers type computer codes that tell the machines how to create objects by layering materials." That is, a handful of highly paid computer engineers diligently work to develop machines that will eliminate countless blue-collar jobs.

As of March 2014, when the Reuters article was published, none of the six businesses participating in America Moves had hired new workers. But the government component, the National Center for Defense Manufacturing and Machining (an organization funded by the US Army, i.e., funded by taxpayers), which manages the project, had hired ten. At this rate, 450 jobs will have been created when all 45 hubs are operational, soaring to 1170 jobs once the multiplier effect kicks in.

To be fair, it’s too early to tell how much of a dent, if any, Obama's struggling Hubs scheme will put in the 5.7 million manufacturing jobs that have been lost since 2000. For example, at a similar stage, the success of Obama's green economy scheme could not be determined. But after spending billions of dollars on green manufacturing companies such as Solyndra (solar panels), Nordic Windpower (windmills), and A123 (lithium batteries), all of the green jobs that were created ended up in China — which now manufactures all of our high-tech solar panels, windmills, and batteries. Whoops, bad example. But at least the Hub jobs have not left America, yet.

In 2011, Mr. Obama — the man who said that he wakes up every morning and goes to bed every night thinking about jobs — held a “town hall” meeting at Facebook, to discuss his economic policies. To Obama, Facebook is especially cool. Its young multi-billionaire CEO, Mark Zuckerberg, wears a hoodie to work. Its 500 million users (at the time) were available to watch Obama pal around with Zuckerberg, who "offered questions submitted online that gelled with Obama's key talking points and victories."

To Obama, factories are hulking, dilapidated buildings where glum Americans used to work, producing goods the world used to buy from us.

No one asked why — if Mr. Obama cared about creating jobs, in general, or manufacturing jobs, in particular — he didn't choose a company like Boeing, which, in 2011, was comparable in value (about $50 billion) to Facebook? Boeing — which is the only remaining American manufacturer of large jetliners in our declining Aerospace industry — employed 160,000 workers. Facebook, which apparently manufactures little more than narcissism and low self-esteem, only employed 2,000, all of whom, no doubt, gelled with Obama.

Factories, on the other hand, do not gel with Obama. To him, they are hulking, dilapidated buildings where glum Americans used to work, producing goods the world used to buy from us. That is why the regulatory policies he supports are designed to ensure fewer factories. The annual cost to comply with federal regulations for the average US manufacturing company is almost $20,000 per employee, twice that of the average US company (manufacturers included). For a small (<50 employees) manufacturing company, perhaps an innovative startup firm inspired by an Obama Hub, the cost is almost $35,000.$35,000! So much for global competitiveness.

Factories provide middle-class jobs for blue-collar workers. And, at $77,506 per year ($37.26 per hour), the average compensation for US manufacturing workers, millions of jobless Americans would like to see more of them — and may have wondered why Mr. Obama chose an Amazon fulfillment center as a venue to pitch middle-class jobs. Amazon is where middle-class jobs go to die.

Most of Amazon's 150,000 employees are seasonal workers — 80,000 of them hired just last year — who make $10 to $11.50 per hour, when there is work. Known as "pickers," they scurry about "the massive warehouses plucking item after item for shipment" and are paid no more than Walmart's "lumpers," who scurry about loading and unloading trucks all day. A smattering of Amazon employees, the ones with the good middle-class jobs ("the skilled direct-hire positions, like supervisor or forklift operator — the sort of gigs hyped during a high-profile visit by the president") shared Obama's stage. The pickers were offstage, scurrying. The slowest scurriers are discarded at season's end, or sooner; the fastest are rewarded with full-time employment, where they can earn as much as $27,000 per year, for as long as it takes Amazon to find robots that are faster.

Of Obama's visit, the White House asserted, “The Amazon facility in Chattanooga is a perfect example of the company that is investing in American workers and creating good, high-wage jobs.” No wonder he brags about the record-breaking number of fast-food and service jobs that his economic policies have created. He thinks they are high-paying, middle-class jobs.

Obama thinks that a steady stream of $27,000 service jobs is thrusting the economy in the right direction.

High-tech companies such as Amazon, Google, and Facebook, as important as they are to our economic power and prosperity, are not the places to go for middle class job creation. The American manufacturing industry is a much better bet. Existing US manufacturing companies would export more products if they were allowed to compete on a level playing field with foreign trading partners. Subsidies and tariffs are not needed. They would hire more workers, if they expected higher profits — profits now eroded by excessive taxes and regulations. A steady stream of $77,506 manufacturing jobs would stimulate the economy, increase tax revenues, reduce the trade deficit, and do many other substantial things.

Despite almost seven years of economic stagnation and the rise of a vast underclass of Americans stuck with lousy jobs, Obama thinks that a steady stream of $27,000 service jobs is thrusting the economy in the right direction. US manufacturing, hobbled by his trade, tax, and regulatory policies, needs only a nudge from his manufacturing hubs.

But it's not clear that Obama's Hub program is the place to go for good manufacturing jobs either. After all, it is a scheme whose principal objective is to invent and develop machines that will eliminate manufacturing jobs. Then there is his bizarre fascination with high-tech companies that either employ a very small number of the high-wage, high-skill elite or very large numbers of the low-wage, low-skill drudge.

His Hub scheme may indeed help US manufacturers. They would certainly welcome any technology that increases their productivity and profits — especially if it was paid for with taxpayer money instead of company R&D funds. Companies such as Amazon may already have agents salivating in the demonstration areas of the robotics hubs, looking for faster pickers. But peering inside a future factory spawned by Obama Hub technology may surprise even Mr. Obama.

These factories will not create the "steady stream of good jobs into the 21st century" that he had hoped for. Rather, they will create a flood of lousy, underclass jobs — the scurrying human labor needed to feed parts and raw materials to Obama's deft, voracious machines, and relieve them of their prodigious yield. All the jobs in such a factory will be held by these pickers and lumpers, except for one: the cool job held by a geeky-looking guy from an elite engineering school, who runs the factory computer system and earns a six-figure salary. He wears a hoodie and fastidiously controls every function performed (by both scurriers and machines) for the entire operation, from his colorful stool. He gels with Mr. Obama.

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Is Passably Principled Progressivism Possible?


Try reading the title of this essay aloud. It sounds a lot like “Peter Piper picked a peck of pickled peppers.” I like tongue twisters. But as much as I value a nimble tongue, I prize a nimble brain far more.

Libertarians are the only people with whom I can still have a satisfying conversation about politics. I no longer have much patience for talking politics with self-proclaimed progressives. Fatuously, my former faction has foregone factual fastidiousness. I know that if I ever want to change them into libertarians, I need to keep on trying; I only wish the challenge didn’t daunt me so.

Their logic does not exercise the intellect; it strangles it. I could point to a dozen examples from current events alone. A few especially make me want to run naked and screaming into the street. My natural modesty, my fear of being filled with holes by overzealous cops, and my reluctance to being laughed at, hold this impulse in check. But because most of my friends and acquaintances are progressive, I am tempted daily.

They are now in a state of high indignation because some people have replaced the slogan, “Black Lives Matter” with “ALL Lives Matter.” Now, since “all” is a more inclusive term than “black,” and progressives trumpet to the skies their commitment to inclusivity, one would imagine that replacing “black” with “all” would be more favorable to them. And if most actually believed in their own stated convictions, of course it would be. But because it is becoming increasingly obvious that for many of them, their convictions are little more than an affectation, everybody else sees their “progressivism” as a sham.

I could point to a dozen examples from current events alone. A few especially make me want to run naked and screaming into the street.

What a shame! As individuals, a good many leftists whom I know are quite sincere, but they are afraid to admit the absurdity of many of the positions their crowd expects them to take. When, in a group of them, I proclaim such things to be foolish, they look at me with something akin to envy. How dare I do anything that feels so good — without guilt or fear of disapproval?

Their enthusiasms are childishly faddish. One week, it’s operatic outrage against the Confederate battle flag. The next, their Facebook posts feature photos of yawning house cats that “roar for Cecil,” the lion killed by the dastardly, trophy-hunting dentist. I’m afraid to ask what’s next. Frighteningly soon, I’m going to find out.

Is there anything remotely progressive about the great majority of fads that tickle their fancy? I’ve come to believe that far from leading toward progress, these enthusiasms actually divert them from a quest for the genuine article. Worse, they may even lead them in the opposite direction.

As individuals, a good many leftists whom I know are quite sincere, but they are afraid to admit the absurdity of many of the positions their crowd expects them to take.

The police brutality now escalating in our society can’t be effectively dealt with if its two main causes — the irresponsibility of government and the corruption of police unions — are left unaddressed. Turning the problem into a racial shoving-match is yet another tactic designed to divide and conquer. The sooner we recognize that all lives do matter, and that police brutality threatens every one of us, the more likely we are to come together to solve the problem.

Solving the problem would, indeed, be progressive in any meaningful sense of the word. But the statist left isn’t really about solving problems to bring about progress. It’s about making those problems ever worse, so it can go on decrying them and putting itself forward as the heroic force that alone can save us from them.

As a libertarian, I very much believe in organized labor. If we’re going to let free market forces regulate commercial interactions, then we need to clear away the clutter of oppressive “workers’ rights” legislation. I believe that’s a very good plan. But it makes organized labor — at least in some industries — not less necessary, but more. Busting up all unions is not, in my view, the way to protect workers’ rights in the absence of legislation.

This means that the unions must clean house. It’s absolutely crucial to their continued survival. Statist progressives are leery of admitting that corruption exists in organized labor because they fear that anti-labor conservatives will use that corruption as an excuse to abolish unions. But if they continue to ignore corruption in those unions, this is eventually what will happen. To cite the two examples most often in the news these days, police unions must stop shielding bad cops from accountability for their actions, and teachers’ unions must insist on representing people who can actually teach.

The police brutality now escalating in our society can’t be effectively dealt with if its two main causes — the irresponsibility of government and the corruption of police unions — are left unaddressed.

When I discuss this calmly with progressive friends, away from peers whose wrath they’re afraid of incurring, I find they generally agree with me. It’s rather like reasoning with teenagers, when the rest of their crowd is not present. People can only be reasonably persuaded as individuals. Their behavior around their peers changes dishearteningly little, regardless of their age.

In their regular interactions with government at every level, my progressive friends experience little but frustration. They can point to no solid evidence, in their daily lives, that government makes their lives anything but worse. Yet they continue to believe that government action is the only means to make life better in society as a whole. To libertarians, this is as ridiculous as believing that Santa Claus comes down the chimney every Christmas Eve. But like small children who’ve been told all their lives that Santa brings their presents, statists can conceive of no other possibility.

I laugh at them a lot. I compare them to kids. Many of us think that’s funny, and recognize that it’s also true. But people can’t be persuaded of much when they’re being laughed at. Far from winning them over to our side, it only drives them farther away from it.

If we can bring them back to the principles that made them progressives in the first place, we may be able to show them that every worthy end deserves the best possible means to accomplish it. That “leaders” who keep proposing the same failing strategies do not deserve to be followed. That free people who are willing to persuade and earn trust are more trustworthy than arrogant know-it-alls who use force, fraud and intimidation to get their way. And that unless human beings can be trusted to run their own lives, they certainly can’t be trusted to run the lives of others.  

Really, I’m still a progressive. I simply persist in believing in the principles that made me a progressive in the first place. But I want to see results. I want to see actual progress. I’m kind of funny that way.

Why don’t we see any success from the things their self-proclaimed leaders keep doing? And no, “but the conservatives are worse” is not an answer, any more than “but Mary Jane’s grades were worse” was the answer when they got a bad report card. Mary Jane wasn’t the only other kid in the world, and conservatism isn’t the only other political philosophy.

People can’t be persuaded of much when they’re being laughed at. Far from winning them over to our side, it only drives them farther away from it.

Libertarianism is catching fire, as more and more people discover what it’s all about. Polls increasingly show that even people who don’t call themselves libertarians hold views consistent with our philosophy. Ours is not merely a third option — it is the best option. Now we need to talk to those on the statist left, one-to-one and one-by-one, and help them see why.

That’s a whole lot better than running naked and screaming into the street. We won’t get shot at, laughed at or arrested. And as we lose enemies, we will gain friends.

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The Rise of the Underclass


If you are a working-age adult who is stuck in a low-wage job, or have no job at all, then you belong to the largest segment of the American labor force: a vast, sprawling underclass, with little, if any, economic value to the society that it burdens. Despite the ongoing monthly celebration of job growth, the number of working-age adults without a job is increasing rapidly and the jobs being created are, for the most part, of the subsistence variety, driving tens of millions of Americans into the lower reaches of the labor force.

During the recession that began in December 2007, 8.2 million American jobs were lost, 60% of which were middle-class jobs. The rest of the decline was split evenly among high-wage and low-wage jobs. Today, more than seven years later, the number of high-wage jobs has finally returned to its pre-recession level. But most of the middle-class jobs have not returned. They are being crowded out by low-wage jobs, largely the result of a stagnant economy, automation, and an enormous labor surplus.

The overwhelming majority of jobs are found in the two lowest wage earner quintiles. The bottom quintile, Q1, is 91.2 million strong, with an average income of $14,600; Q2 is 29.8 million strong, with an average income of $45,100. The other three quintiles, which I will call middle class (Q3), upper middle class (Q4), and upper class (Q5), include 19.1 million, 11.7 million, and 4.0 million, respectively, with average incomes of $70,100, $115,000, and $335,000. These three quintiles, which total only 34.8 million, have all the good jobs. The 121 million workers in the bottom two quintiles have the lousy ones.

As these jobs vanish, our already enormous labor surplus will grow ever larger, depressing wage rates still more.

Writing in the New York Times, Annie Lowrey reports that "the poor economy has replaced good jobs with bad ones." Most of the job growth has been in retail trade, administrative and waste services, and leisure and hospitality — the lowest paying sectors of the economy. Lowrey cited a National Employment Law Project analysis, which found that "fast food is driving the bulk of the job growth at the low end." To David Stockman, former Reagan budget director, the recovery has created a "Bread and Circuses" economy; he is not alone. To experts such as author and investment banker Daniel Alpert, it is a burger-flipper economy; "we have become a nation of hamburger flippers, Wal-Mart sales associates, barmaids, checkout people and other people working at very low wages.” Or, as Pulitzer Prize winning economics journalist Mark Whitehouse ("A Nation of Temps and Burger Flippers?") found, temporary burger flippers.

At least the burger flippers have jobs. With today's labor force participation (LFP) the lowest it's been in 37 years, there are 93 million working-age (16 years of age or older) adults who don't. This isn't to say that there are 93 million American who need jobs. Most retirees don't need them, and the Bureau of Labor Statistics cites "the aging of the baby boomer cohort" as the number one cause for the LFP decline. But in the 16–65 labor force age range, which excludes retirees, there are about 55 million chronically unemployed who might want a job. It's hard to whittle this number down much further. For example, the number two cause cited for the plummeting LFP is "the decline in the participation rate of those 16–24 years old." In other words, 16–24 year old Americans can't find jobs. They, along with many millions of others in this 55 million subset, are in the same boat as the 121 million with dead-end jobs — the underclass.

And it is growing fast. A recent Federal Reserve Bank study of eight major industrialized economies found that only the US has experienced a decline in LFP. Between 1997 and 2013, US LFP has decreased 4.6%, while Canada, France, Germany, Japan, Spain, Sweden and the United Kingdom experienced increases. Then there is the so-called "Great Decoupling." Beginning around the turn of the century, employment gains, which have historically followed productivity gains, ceased. Job growth and wage increases have become decoupled from the economic progress produced by technological advance. While productivity increased linearly, employment remained flat through the Bush presidency, declining thereafter. Of today's 93 million work force nonparticipants, more than 13 million (3% of the 4.6% decline since 1997) have dropped out since President Obama took office.

Automation played a significant role in this exodus to the underclass, and will only augment its future contribution. Many companies have not rehired the people they laid off during the recession. Instead, they have adopted new technologies — hastening the return to pre-recession profits, at a lower cost — that automate tasks previously performed by humans, including high-skill, middle-class humans.

Automation is no longer confined to tedious, repetitive tasks. Jobs in services, sales, and construction, even jobs in management, science and engineering, and the arts will be vulnerable to takeover by machines. So says an Oxford University study, which concluded that 47% of US jobs are likely to be replaced by computerized machines. And a technology research firm, Gartner, forecasts that smart robots will replace one of every three jobs by 2025. As these jobs vanish, our already enormous labor surplus will grow ever larger, depressing wage rates still more.

Obama's policies have created a record-breaking number of shitty jobs, which he brags about, and now promises to make less shitty.

Yet, as if existing wages were not low enough, we add one million new legal immigrants annually. Politicians, Democrat, Republican, and libertarian alike, tell us that we need them: they start new businesses, they invent things, they help support our aging population. In 1970, with a population of about 200 million and 53% of all households in the middle class, Americans competently started new businesses, invented things (almost everything that mattered), and took care of the elderly. Economic prosperity was achieved through productivity increase, not population growth. Today, with a population of about 320 million, the middle class has shrunk to only 43% (along with its wages and net worth), and we struggle in an economic mire. It seems likely that, with more people (438 million by 2050, under our current immigration policy), the underclass will continue its relentless growth.

Meanwhile, there is no serious attempt by our political elite to help create good jobs — middle class, "breadwinner" jobs that can support a family and reanimate the American Dream. The Obama administration, apparently fooled (monthly) by the declining unemployment rate, is encouraged by an economy that systemically produces low-wage jobs, as long as the number is large enough to flaunt. Mr. Obama regularly brags about record-setting job growth, 12 million at his latest count, asserting that "the economy is headed in the right direction."

It is not. By instilling fear and confusion in American business, recent tax and regulatory policies (including immigration policies) are the chief contributors to underclass expansion. For example, there is a growing preference for companies to employ temporary workers instead of permanent ones. The use of employment services, observed Mr. Whitehouse, is "a practice that makes firing easier and reflects their caution about the economic outlook." Ironically, computer and management consultants, one of the few labor categories to have experienced job growth during the so-called recovery, consist of "people who help businesses figure out how to make do with fewer workers."

Capitalists believe that the way to reverse the trend is simply to reduce the taxes and regulations that have made businesses afraid to spend. Companies, then in possession of more capital and the freedom to invest it, would purchase new plant and equipment, create new products and services, develop new markets, etc., requiring better jobs and more workers to support the expanding operations. And with the increased demand for labor, wage rates would rise.

President Obama has different ideas. He is content with his Burger Flipper economy. Unlike his Green Economy, which briefly created a paltry number of green jobs, the Burger Flipper economy produces enough low-wage jobs each month (now 61 consecutive months) for him to gloat (now, it seems, 60 consecutive months). He apparently believes that this stream of lousy jobs will continue in sufficient quantity to accommodate the five million illegal immigrants that he wants to add to our existing labor surplus.

It is only the very wealthy who prosper, with the top 1% having reaped an astounding 95% of all of the nation's net income gains since Obama took office.

Hillary Clinton, likely our next president, is dismayed by his restraint. She "advocates expanding Obama's executive actions to allow millions or more undocumented immigrants to obtain legal protection and work permits." And if that does not expand the labor surplus enough, Clinton has said that she will "welcome back people who have already been deported."

With the labor surplus driving wage decline and "fast food" driving job growth, Obama has accordingly shifted his policies to help the burgeoning underclass. As Lowrey noted,

The swelling of the low-wage work force has led to a push for policies to raise the living standards of the poor, including through job training, expansion of health care coverage and a higher minimum wage.

Obama's new plan is to improve the quality of the lousy jobs that his old plan created.

Will it work? Those without a job will get no raise. That number, now at 93 million, will increase as businesses encounter the artificially increased labor costs. Those who have a qualifying job will be happy, at first — until they discover that (A) everything they buy will cost more, (B) they will pay more in taxes and receive less in benefits, and (C) at $10.10 an hour, they will still belong to the underclass.

To date, Obama's policies have been largely aspirational, and, for existing American citizens, lamentable. According to the BLS, only 6 million net jobs (not 12 million) have been created under his stewardship. And, according to a Center For Immigration Studies report, all of them have gone to immigrants (legal and illegal). "The number of immigrants working returned to pre-recession levels by the middle of 2012, and has continued to climb. But the number of natives working remains almost 1.5 million below the November 2007 level."

Given the immensity of the underclass, the thinking at the White House might be that Obama's plan will yield more bang for the buck than a plan, say, to help create high-paying jobs. Besides, they already think that the economy is headed in the right direction and expect that, in the burger flipper economy that their old plan created, nothing could possibly go wrong with a new plan designed to lift the wages of burger flippers.

Enter the Burger Robot, the fast food industry's answer to rising labor costs. The Burger Robot can make 360 sandwiches per hour (including gourmet sandwiches); it reduces liability, management duties, and food preparation footprint; it pays for itself in about one year (even at the existing minimum wage); and it doesn't need a hairnet. The machine is not designed to improve the efficiency of fast food workers; rather, says company cofounder, Alexandros Vardakostas, “It’s meant to completely obviate them.”

The rise of the underclass is a glowing symptom of our decline. Today's politicians are singularly incapable of fulfilling their economic promises. Their glib, clumsy, overbearing laws and regulations have forged a pathetic burger-flipper economy offering little more than peonage and destitution to the majority of its labor force. After more than six years of feckless meddling, Obama's policies have created a record-breaking number of shitty jobs, which he brags about, and now promises to make less shitty. After more than six years of Obama's promises to help the poor and the middle class, it is only the very wealthy who prosper, with the top 1% having reaped an astounding 95% of all of the nation's net income gains since he took office. For everyone else, there is stagnation and decline — unless you are an immigrant or a robot.

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The Top Films Every Libertarian Should Know


Film has the power to change minds, often by changing hearts. Libertarian films are about choice, opportunity, and knocking down obstacles — in any setting. They demonstrate the power of persuasion over the force of authority. Libertarian films often point out the unintended consequences of government intervention, but they are just as likely to present a protagonist's personal struggle for self-expression. They show us how to make the world a better place simply by making our own lives better.

At this year’s Anthem Libertarian Film Festival, at FreedomFest in Las Vegas, 18 films were screened to packed audiences. We also presented several panels on topics related to film. For one of our sessions I invited four film enthusiasts to present their recommendations of the top films that every libertarian should know. Then, as a follow-up to the panel, I asked each participant to send me his recommendations for this article. Here are their selections, from the messages they sent.


Gary Alexander, who has served as an Anthem Libertarian Film Festival judge since its first season, is a music and movie historian whose weekly radio show provides insightful background as well as provocative music choices. He offered his top libertarian films in chronological order, presenting an historical look at the way freedom and individualism have been presented in film. He began with 1939, the year often called “the golden age of movies.”


Last year I watched all the major films of 1939 because it was their 75th anniversary. My pick from that year is Mr. Smith Goes to Washington (Frank Capra, director). It was #3 in box office that year, behind only Gone with the Wind and The Wizard of Oz. It reveals political corruption in an era of idealism.

1963: America, America (Elia Kazan, director). This is the American Dream personified in a young man. The protagonist, an ethnic Greek living in 19th-century Turkey, is entrusted with the family fortune to start a carpet business in Constantinople, but he dreams of emigrating to America.

1965: Shenandoah (Andrew V. McGlaglen, director) was in the top ten for box office receipts in a year dominated by The Sound of Music, Dr. Zhivago, and James Bond. Set during the Civil War but made at the height of the Vietnam conflict, it presents draft resistance in an honorable light.

1988: Tucker: The Man and His Dream (Francis Ford Coppola, director). Tucker was a maverick car designer who faced crony capitalism as he tried to bring his revolutionary car to market.

2011: Atlas Shrugged 1 (Paul Johansson, director). This film has to be included for its pure libertarian theme. The film’s producer, John Aglialoro [who spoke at FreedomFest on “Wall Street Goes to Hollywood: The Risks and Rewards of Making Movies”], said that he wants to do a 13-week mini-series based on "episodes" within Objectivism, Ayn Rand's works, or even Atlas Shrugged, thoughnot based in a linear storytelling narrative, per se. This might provide a better way to present the overarching themes of Rand’s works. We the Living (1942, Goffredo Alessandrini, director) would be a superior Rand film, but I want to give Atlas a belated boost.

Libertarian films show us how to make the world a better place simply by making our own lives better.

As an aside to the power of libertarian movies, I was just watching a taped Stossel show when a member of the audience asked Lawrence Reed [President of the Foundation for Economic Education and another speaker at FreedomFest] how he found the courage to spread freedom literature behind the Iron Curtain. Reed said, "It may sound corny, but it came from a movie." Stossel responded, "Yes, that sounds corny. What movie?" and Reed replied, "In 1966, when I was 14, my mother dragged me and my sister to Pittsburgh to see The Sound of Music. Then, when the Soviets invaded Czechoslovakia in 1968, I saw that Austria was next door and I wanted to help undermine the communists as the von Trapps did to the Nazis.”

So . . . I don't feel so silly bringing up musicals on the panel, including Sound of Music.


Doug Casey, an entrepreneur and investment specialist known to libertarians everywhere, was one of the original judges for Anthem and always provides interesting insights for the film panels. This year he focused on genre rather than specific films.


There are two genres that are overwhelmingly libertarian: westerns and sci-fi. That's likely because they both deal in frontiers, where the individual is responsible for a situation’s outcome. They tend, therefore, to be morality plays. And libertarianism is essentially a moral philosophy. One favorite Western is High Noon. And in sci-fi it's tough to beat V for Vendetta. Characters within films are very often libertarian as well, in particular Rhett Butler from Gone with the Wind, which is kind of a western. And Han Solo from Star Wars. It's odd, and counterintuitive, to me that Hollywood is a hotbed of statism and collectivism, while so many of its best products have libertarian themes or characters.


Marc Eliot is known as “Hollywood’s biographer” because he has written biographies of many of its biggest names, including Steve McQueen, Jack Nicholson, Clint Eastwood, Cary Grant, and John Wayne. He has served as an Anthem judge for four years and is a popular speaker at FreedomFest. His choices run the gamut of Hollywood’s best films.


1. A Face in the Crowd (1957, Elia Kazan, director). A premier libertarian film about, among other things (many other things), the insidiousness of big government, how it has tentacles in every aspect of our culture. It examines the link between politics-free entertainers and how they affect the popularity of candidates. A supremely important film, and highly entertaining.

2. Invasion of the Body Snatchers (1956, Don Siegel, director). One of the strangest and most intense love stories of the ’50s, set in a world where everyone is supposed to be the same. The loss of individuality here is a bold metaphor for the infliction of political correctness via big government. Should be seen by all. Love is the film's solution, and its shocking ending underscores that real love is the antithesis of imposed sameness. The tacked-on opening and closing were mandated by the studio, Allied Artists, after the film tested too frightening. It still is, filled with all the fear and paranoia of the glorious ’50s, Hollywood style.

3. The Best Years of our Lives (1947, William Wyler, director). The first and still the best film that looks at the way the Greatest Generation was treated after it helped save America and the world from Fascism. What was it like when the soldiers came home, and how difficult it was for them to readjust? What role did the government play, if any, in making their transition back to civilian society? The harsh way the three principal characters are treated is an eye-opener, and perhaps even more relevant today. Also, Wyler's use of deep focus allows the film to remain ambiguous in its depiction. One of the great ’40s Hollywood films.

It's odd, and counterintuitive, that Hollywood is a hotbed of statism and collectivism, while so many of its best products have libertarian themes or characters.

4. The Godfather (I and II, but not III) (1972, 1974, Francis Ford Coppola, director) is the story of a mob family that is the story of Corporate America ("It's business, Sonny, business"). One might wonder where the government is in all of this, apparently invisible because the Corleones are the government. Even in the second film, when the hearings into organized crime take place, the senators are already in the family's pocket. These are cautionary films; some government is needed to prevent corporations from taking over every aspect of our lives.

5. Modern Times (1936, Charlie Chaplin, director). The final appearance of The Tramp, caught in a world so mechanized that he becomes a living machine. Chaplin's vision of oppressive authority and an ever-increasing mechanical, or technological world, is well worth watching. One of the funniest and most profound films of the ’30s.

6. The Ten Commandments (1957, Cecil B. DeMille, director) deals with a higher authority even than big government, and one of the very few films to deal with Jews as victims. The film was made in the decade following the Holocaust and serves as both a memorial and a cautionary tale. Hitler was the ultimate non-libertarian, and this film reminds us that religion, faith, and righteousness will prevail over governmental enslavement. Still holds up; actually gets better with age.

7. The Searchers (1957, John Ford, director). The individual lost in a society that services the big government of the post-Civil War. Ethan (Wayne) was on the losing side of the war and as a result has lost everything. He returns home to retrieve the last of his life. Ford lets us know that Ethan's sister-in-law is probably his former lover, and that Debbie is not just his niece but, in fact, his daughter. When the house is burned down by the Comanches and they take Debbie, what follows is the ultimate chase film. Ethan tracks down Debbie to preserve his own past, or to destroy it. We don't know until the end of the film if he will kill Debbie or save her; if he will preserve the values of the union or make it, and him, slip into spiritual anarchy. A great film.

These are cautionary films; some government is needed to prevent corporations from taking over every aspect of our lives.

8. Vertigo (1957, Alfred Hitchcock, director). Not a libertarian film, but everybody should see Vertigo at least five times in life. The only film that treats lost love as something that is never truly lost. Hitchcock may have resembled Burbage but he was the 20th-century Shakespeare.Vertigo is the kind of deep, beautiful, and profound experience the Bard would have approved of. A lesson in repressed feelings, delusional love, fetishistic fatalism, and blind worship. There is simply no other film like Vertigo. I could teach an entire semester on Hitchcock and hardly scratch the surface. A Brit, he flourished in his American period, when British filmmaking came under threat of Nazi attack and much of the best talent fled to America. See it!

9. High Noon (1952, Fred Zinnemann, director). The granddaddy of Dirty Harry, this is a film that shows how the invisible hand of big government controls our lives. When it becomes known that the bad-guy Miller gang (led by Frank Miller, who has been pardoned from life imprisonment) are returning to town to seek their vengeance on Marshal Will Kane who arrested Miller, the judge who sentenced him packs his bags and flees, warning Kane that when tyrants who have been defeated return, they are always treated like heroes. Life is always better, for a while, when tyrants rule. Sure enough, the town fails to help Kane, because "the boys up north are watching, and they won't want to invest in a town that is still having shoot-outs in the streets." So much for friendship, loyalty, and support. When Kane throws his badge on the ground (an act that got the writer of the film, Carl Foreman, blacklisted), he turns his back on the town that left him to die. The best ride off into the sunset forever. A must-see. And a very libertarian film.

10. All The President's Men (1976, Alan J. Pakula). Film follows history; it is not avant garde. Here is the ultimate story of government gone crazy, and the power of journalism to help keep democracy intact. Not really a political film, more of a spy-type thriller. Enjoyable even if you've never heard of Watergate. Perhaps too liberal for libertarians, it nevertheless says that tyranny is vulnerable to a constitutionally protected free press.


Stephen Cox is editor-in-chief of Liberty and professor of literature at the University of California, San Diego. He also is a film buff who knows the classics. He approached the panel assignment thematically.


Let’s begin with Rosalind Russell movies. If you want an uncompromising satire of (elected!) political power, His Girl Friday (1940, Howard Hawks, director) is it. "Aw, go on, you'd hang your own mother to be reelected — and you know it" is one of my favorite lines. Auntie Mame (1958, Morton DaCosta, director) is the apotheosis of a free individual. Best of all, for libertarians, is Roughly Speaking (1945, Michael Curtiz, director). Roz is an entrepreneur whose investments, but not her individualism, always fail. She keeps coming back. "This is America!" she says.

I also like movies with challenging problems for libertarians. In Citizen Kane (1941, Orson Welles, director) Kane is simultaneously a power-hungry politician, of whom one of his friends says, “It seems we weren’t enough; he wanted all the voters to love him, too,” and an individualist who says, "There's only one person in the world to decide what I’m going to do — and that's me." Red River (1948, Howard Hawks, Arthur Rosson, directors) is a story constantly concerned with problems of property rights. It’s also fraught with theological issues, although that's off topic: the Red River is the place where blood is sacrificed so that the protagonist can continue to the land of promise; the father figure resembles the judgmental Old Testament God and the son figure resembles the heroically self-sacrificing New Testament God; etc.

Movies that represent a world beyond political concerns — demonstrations that there are comedies and tragedies beyond the reach of politics — are also libertarian, in implication. I would include The Red Shoes (1948, Michael Powell, Emeric Pressburger, directors), which is the ultimate drama of ballet, and All About Eve (1950, Peter Sullivan), which is the ultimate drama of the theater.


And now for me, Jo Ann:

I was fascinated by the scope of films offered by our panelists, and I was pleased to see that they reached beyond the obvious films about opposing government. Libertarian heroes are not necessarily activists working for a cause. They are individuals who follow their own paths. They do not conform to the expectations of others. When something goes wrong, they fix it themselves. When something goes right, they give credit where it is due. Libertarian stories may occur within any family, community, or industry. They do not have to be set in a dystopian future! Here are some modern films that ought to become libertarian classics:

A perfect example from 2013 is 42 (Brian Helgeland, director), the movie about how Jackie Robinson (Chad Boseman) broke the race barrier in sports. It wasn't a government edict that integrated baseball; in fact, the cops tried to keep Jackie from taking the field in some venues. No, it was a businessman, Branch Rickey (Harrison Ford), who recognized that he could sell a lot more tickets, win a lot more games, and possibly earn the World Series title, if he hired some talented African-American ballplayers. No one forced him to do it, and no one forced the other managers in the League to follow suit when they saw that they couldn't compete successfully without black ball players. It was just plain good business.

Movies that represent a world beyond political concerns — demonstrations that there are comedies and tragedies beyond the reach of politics — are also libertarian, in implication.

Another great example appears in the Oscar-nominated movie Winter's Bone (2010, Debra Granik, director). The protagonist, Ree Dolly (Jennifer Lawrence), is a 17-year-old girl living in the backwoods of Missouri and struggling to keep her family together after her father skips out and her mother becomes incapacitated. When her little brother notices the neighbors skinning a freshly killed deer, Ree cautions him, "Don't ever ask for what ought to be given freely." That night the neighbor brings over a shoulder of meat and some potatoes and onions. On her way out, the neighbor says, "I noticed your woodbox is low. You can use our splitter if you want." As the neighbor leaves, Ree says to her little brother and sister, "Who wants stew?" When they look up eagerly she adds, "Then get over here so I can show you how to make it."

This is the story of "The Little Red Hen" in action. Ree knows the importance of teaching her siblings self-reliance. The neighbor brings meat because the Dollys don't have any. She doesn't cook it into a meal, however, because Ree is capable of doing that herself. The neighbor lends the splitter but doesn't offer to cut the wood, because Ree and her brother can do that too. The neighbor helps the Dollys of her own free will and choice, but she respects Ree's dignity and character too much to offer her more than what Ree can't do for herself. What a great example of libertarian values.

Another unlikely libertarian hero appears in the Saudi Arabian film Wadjda (2012, Haifaa Al Mansour, director, previously reviewed in Liberty. The title character (Waad Mohammed) is a 10-year-old girl living within the orthodox community of Saudi Arabia, but she has very unorthodox desires. She does not openly defy the values and practices of her community; indeed, she wears her scarves and abaya as though they were as natural as her hair, and she nods nonchalantly when her mother tells her she is old enough to start covering her face with her ayallah when she goes outside. She attends a religious girls' school and works hard to learn her lessons about the goodness of Allah.

But Wadjda has her own values as well. She wears sneakers under her abaya, and inside those shoes her toenails are painted candy-apple blue. She listens to Western music on an ancient cassette tape player in her room, and she often wears a t-shirt emblazoned with "I am a great catch" in English (although we never know for sure whether she understands what the words mean).

Most of all, Wadjda wants to own a bike. She wants to know the freedom of riding faster than she can run, and the satisfaction of racing against her best friend Abdullah (Abdullrahman Al Gohani), who happens to be a boy. All the boys have bikes. In many ways the bike represents what girls can do, given the same tools and opportunities as boys.

Wadjda is determined to buy the shiny green bike on display at the local sundries store. She becomes an entrepreneur by making bracelets to sell to her friends. She charges acquaintances for running errands and, with a determined voice and a winning smile, convinces them to pay her extra. She forgoes current gratification when she no longer buys treats and trinkets from the corner store in order to save for her big purchase.

Instinctively, without even knowing it, she is a libertarian through and through.

Eventually she realizes that she will never save enough money by doing menial tasks, especially when the local store begins selling Chinese-made bracelets at a fraction of the former price. So she does what every good entrepreneur must do: she uses her savings as seed money to capitalize a larger business venture. Lured by the prize money of 1,000 riyals, she decides to enter the school's Koran recitation contest (sort of like a spelling bee or Geography Bowl). But since she has never been a good student of the Koran, she invests all her savings to purchase "capital goods": an expensive electronic study aid. It is a big risk, but it is the only way that she can turn her 80 riyals into the 800 riyals she needs to purchase the bike.

Wadjda presents one of the spunkiest and most charming protagonists to come along in quite a while. Instinctively, without even knowing it, she is a libertarian through and through. Wadjda is a film that will warm your heart even as it breaks it.

But to return to our panel discussion — what happened then is what always happens: all too soon we were ushered from the room by the next event, just as our audience was warming up with selections and offerings of their own. So what are your favorite libertarian films? What did we leave out?

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PIGS: Only the Ruins Remain


As I write this, I am in Rome. From this city, an empire once ruled a large part of the world. During its intellectually better days, Rome, building on the achievements of Greece, provided a way of perceiving the universe that distinguished human beings from animals and raised them from barbaric life to civilization. Greece and Rome showed humanity a way to reason and to understand causality.

Greece and Rome started an approach that could release humanity from quivering before the unknown, mysterious, and unpredictable forces of nature and the priest. In the late middle ages, Italy contributed enormously to the Renaissance and thus to the succeeding eras of massive, unprecedented material progress in the history of humanity. Geniuses such as Leonardo and Michelangelo lived here.

Decades of easy life and freebies have hardwired many people in PIGS countries to expect free stuff as their right.

In today’s world, a common narrative is that Portugal, Italy, Greece, and Spain — acronymically known as the PIGS — are freewheeling societies that provide a lot of personal freedom. They may not be rolling in money, but according to the narrative, their people seem actually to enjoy their lives, as compared with the workaholic North Americans. Their fashions attract people from around the world. Their public squares attract crowds of young people early in the evenings, arriving after their siestas and still partying in the mornings. PIGS countries are known for their deep social cohesion and close-knit families. It is believed that people there are social, and care for one another.

Scratch the surface, and the reality is very different.

Greece just voted “no” to reducing its dependence on free stuff. Decades of easy life and freebies have hardwired many people in PIGS countries to expect free stuff as their right. After many talks with people over the month since my arrival in Italy, I am struggling to recall anyone who may have suggested that it was not his right to expect Germans to keep on paying his bills.

PIGS are third-world countries in many ways and would be considered so, were they not proximal to northern Europe. Graffiti is everywhere. Public spaces are extremely dirty. There are always long line-ups at train stations and banks to get service, which is usually impolite and unhelpful. If you annoy an Italian auntie — who somehow assumes a superior position — every issue will be blown out of proportion. Even non-issues will crop up and then blow up.

A situation that is created by emotions cannot be undone by reason. You must know how to de-escalate, emotionally.

When I arrived late at night to the sprawling airport of Milan, there was no one at the information counters. In fact there was no one of any kind to answer questions. With 41% unemployment among young people, something just didn’t add up. Why weren’t they manning service counters? There was no ATM machine available — all were locked behind walls for the night.

Two millennia after the construction of the Coliseum, it gets far more visitors every day than it did when it was built. Cities are packed with tourists of all kinds, from museum visitors to northern Europeans on beach vacations. Museums, heritage sites, and so forth collect huge amounts of money. But what I experienced when I arrived at Milan airport — with no one to help — stood true even during daytime visits to historical sites. I usually saw no one monitoring the safety of historically precious things at the Roman Forum, the Coliseum, and the museums I visited. People who were supposed to act as guards mostly stood outside the buildings, smoking and chatting away.

There was no one of any kind to answer questions. With 41% unemployment among young people, something just didn’t add up.

People in PIGS countries suffer from a massive victim mentality, which by itself is enough of a vice to undo any civilization. On Bloomberg they seem to blame their plight on Germany, but if you encounter them in the street, they — not unlike Shias and Sunnis — blame all their problems on their nearest neighbor; Germany is too far away. Italians express displeasure about all things Spanish and Greek, Greeks about all things Turkish, Turks about things Armenian, and vice versa. The individual here is never wrong. Even questions about who created which kind of art, who invented the alcoholic drink Anis or the Greek-Turkish desserts can lead to disturbing confrontations and embarrassed faces among people who look well educated. An outsider shudders at their small-minded nationalism.

Pickpocketing is rampant in PIGS countries. Two weeks ago, my passport, money, camera, etc. were stolen from my bag while I watched the allocation of the platform of my train, right under CCTV cameras. Within minutes I was at the police station to complain. The people there all kept their seats, made me fill out a form, and waved me off. They had no interest in wasting time by going through the CCTV recording. Of course I missed my train, and the officials to whom I showed my ticket and the police report had no interest in helping me take the next one, despite knowing full well that all my money was gone.

In my subsequent conversations with people, they always assumed that the thieves were gypsies. If you are an African, a gypsy, or a Muslim you should not expect to get a job in these places. I have absolutely no sympathy for people who, having been given a better chance, should have exploited it, but did not. Where these particular people came from was far worse than the PIGS countries are. They should have been more grateful. Still, I find it strange that these groups cannot be granted opportunities and must always be looked down upon. Most people who would have been assimilated in North America remain outsiders and get blamed by those with a victim mentality. In my case, the thieves were likely white, Italian males; I saw one of them, and that was what he was.

If you encounter them in the street, they — not unlike Shias and Sunnis — blame all their problems on their nearest neighbor.

Compared with people in the US and Canada, people in Latin countries tend to be more apathetic toward their work (and more keen on partying), to spend more of what they have (and hence be more prone to indebtedness), and to be more tribal (and hence not really to care much about others, outside the tribe). Utter lack of respect for basic rules (as in driving, for example) does not necessarily translate into more freedom in society.

I am not sure how close PIGS families are, but how they do their jobs and how they look after their public spaces demonstrates a total lack of social cohesion. Rampant smoking and dislike for work does not show much about happy lives. It must be hard to spend your waking hours doing what you hate. Often pleasure-centeredness and neverending partying are nothing but an escape from what is regarded as the drudgery of normal existence.

So I am not sure whether the people of PIGS are as happy as the common narrative indicates. On the contrary, I believe that those who think the problems of the PIGS are merely about their debt look only at the surface. The problem of PIGS is the problem of their culture. They have lost reason. Leonardo da Vinci and the great Greco-Roman philosophers would feel completely out of place in their homelands today.

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