The More Things Change . . .

 | 

I will confess that I found this past presidential campaign sheer hell. I detested both Clinton and Trump, and voted for neither. I hoped that both would lose, and my only consolation was that they both did lose: Trump was defeated decisively in the popular vote, while Clinton was defeated decisively in the Electoral College contest. My view was and is that Trump will transform the Republican Party into a populist one, pushing nativism, protectionism, corporatism, and isolationism. It saddened me to see writers I had previously admired — such as Larry Kudlow and Steve Moore — who have long argued against the populist siren call to the Republican Party, succumb to it at last, in the form of Trump — The Boss. They, along with a large group of other soi-disant free market commentators, have been seduced by populism. This group I call “the Herd.”

Now, when those of us who are classical liberals — i.e., believers in the free movement of products, of physical capital, and of human capital — expressed alarm at Trump’s explicitly expressed nativism, animus toward Mexicans and Chinese, sexism of the crudest sort, and obvious protectionist aversion to free trade, the Kudlow-Moore Herd mooed, “Oh, he’s just saying that to get the workers’ votes. Don’t worry — he isn’t serious — it’s just bait for the bubbas.” The Herd never asked why the rest of us would ever be attracted by the pitch “Vote for The Boss — he would never do what he says he will!”

Well, even before assuming office, The Boss has started making major decisions as if he were already in charge. It’s as if he couldn’t wait. And it seems he was serious in his campaign.

One highly touted decision The Boss made recently was to coerce Carrier, a division of United Technologies that makes HVAC units, to keep roughly half the workers who were slated to lose jobs when the plant was moved to Mexico. Under pressure, Carrier agreed to keep about 800 of the jobs here. (The Boss’ propaganda ministry said it was 1,150 jobs, but it turns out that included 350 support jobs that were slated to stay anyway.) Gregory Hayes, United Technologies’ CEO, gave in to The Boss, and The Boss and his myrmidons hailed this as a triumph. Indiana, veep-elect Mike Pence’s state, sweetened the deal by giving the company $7 million in tax incentives (read: taxpayer subsidies), but clearly Hayes was most concerned with the continuing bad publicity driven by The Boss and his Herd, and the threat of a 35% tariff on Carrier gas furnaces made in Mexico.

The Herd never asked why the rest of us would ever be attracted by the pitch “Vote for The Boss — he would never do what he says he will!”

The reactions to The Boss’ gambit have been fascinating, to put it mildly. Richly ironic was Sarah Palin’s denunciation of the deal as “crony capitalism.” She wrote ruefully, “When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent. . . . Republicans oppose this, remember? Instead, we support competition on a level playing field, remember? Because we know special interest crony capitalism is one big fail.” This is rich, considering Palin was one of the Republican Party elite who came out in support of Trump. And she may come to rue her small speck of intellectual honesty, since she has been rumored to be under consideration for government positions and The Boss has shown he tends to appoint his supporters to administrative posts.

Moving now from the ironic to the surreal, the arch-free-market opponent Bernie Sanders also criticized the deal. Yes, socialist Sanders was angry that The Boss didn’t “save” all the jobs by immediately imposing a massive import tax on the products of any company that dares to offshore its operations. Sanders thinks that “United Technologies took Trump hostage and won,” by getting tax breaks in exchange for only half the jobs. In fact, Sanders holds that The Boss has endangered the jobs of countless American workers, because “he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives. Even corporations that weren’t thinking of offshoring jobs will most probably be reevaluating their stance [now].”

Surreal indeed! The loopy old Stalinist tool can’t imagine any other reason why businesses would legitimately want to move operations abroad than to get tax breaks. Certainly not to escape our punitive corporate income taxes, currently the highest in the industrialized world, and about triple the rate of Ireland. Certainly not because of our dysfunctional common law system, the only one without the “loser-pay” (or “British”) rule that limits frivolous lawsuits. Certainly not to escape Obamacare, a law that saddles companies with the obligation to provide costly health insurance to their full-time employees whenever they have more than 49 of them. And certainly not because of the metastasizing cancer of regulation, which under Obama has simply exploded. Here the senile socialist Sanders complains that United Technologies made a profit last year of $7.6 billion, and its top execs received $50 million each. (Imagine that! Top execs being paid less than one tenth of one percent of the billions in profits they helped produce! Outrageously generous!)

The loopy old Stalinist tool can’t imagine any other reason why businesses would legitimately want to move operations abroad than to get tax breaks.

In a revealing interview with CNBC’s Jim Cramer, United Technologies’ CEO Hayes explained his thinking. Nobody listening to the interview could doubt that Hayes is a decent and patriotic man, but also a man committed to running his company profitably and for the long term. He signaled that he caved to The Boss’ demands because he feared government retaliation against the other three United Technologies divisions — Pratt Whitney engines, Otis Elevator, and the aerospace division — no less than against Carrier. As he put it, “I was born at night, but not last night. I also know that about 10% of our revenue comes from the US government.”

Hayes outlined the reasons why his company had moved Carrier’s — but no other divisions’ — operations down to Mexico. While the skills of the employees at the other divisions are extraordinarily high, the skills at the assembly line for HVAC units are much lower. Moreover, Hayes noted, not only are labor costs lower in Mexico (80% lower) but the company’s existing Mexican plants, the absentee rate was only 1% and the turnover rate only 2%. These figures are much lower than those for the American plant.

Here Hayes touched upon two points I have to work to explain to my business ethics students — who, despite their choice of major, often incline to the Clinton-Sanders-Obama view of capitalism. First, besides intellectual virtues, employers have to consider moral virtues as well. And employees are often not “perfect substitutes” here: some are more inclined to show up for work reliably and work enthusiastically and conscientiously, because for them work is a moral prerequisite for being a virtuous person. Unfortunately, this attitude is more prevalent abroad than in heavily unionized American factories. (I attribute this to the unionization, not the Americanization, of the workers.) Second, what makes employees more valuable is their productivity, not their relatively low salaries. The top paid quarterback in the NFL is a lucky fellow named Luck, who earns $26.4 million a year from the Colts organization. Suppose I called the Colts management and offered my services for a mere 1% of that cost. Would the Colts jump at the chance to “snap up” an old, out-of-shape, overweight, nearsighted, clumsy, uncoordinated philosopher who has never played football in his ludicrous life? Hardly. But if the Colts management could find a man with the skill set of Mr. Luck for significantly less, then they might consider it.

What makes employees more valuable is their productivity, not their relatively low salaries.

Hayes explored this latter point when he noted that United Technologies sent 45,000 employees through their “employee scholar” program, with 38,000 receiving degrees. United Technologies spent $1.2 billion over the last two decades on increasing the skills — the intellectual virtue — of its workforce. And Cramer — an intellectually honest progressive liberal, which is as rare as a sympathetic fascist — pointed out for his CNBC audience (to wit, progressives who make money off capitalism even as they despise it) that United Technologies had early moved a plant from Nogales, Mexico to Florence, South Carolina — at a cost of $60 million in the first year. Notice that neither The Boss’ propaganda machine nor the Herd of establishment Republican apologists even mentioned the onshoring of the bigger Otis plant at great expense, nor the huge amount of money the company has put into improving the skills of tens of thousands of American workers. They mentioned only the 800 inefficient assembly-line jobs.

Hayes noted that United Technologies will now invest $16 million in the existing Carrier plant, to automate it as much as possible, to make it “cost competitive.” So the jobs “saved” by The Boss are not destined to last long. Yeah, the Mexicans won’t “steal them,” but the robots will. In short, don’t blame Juan — blame R2D2!

Hayes made one other point that one wishes The Boss could grasp: “The genie of globalization is not going back into the bottle. . . . Free trade is still essential to the growth of this country. This country was founded on two principles: immigration and free trade.” Boss, let me introduce you to Thomas Jefferson!

But the Herd was mightily pleased with what The Boss did to United Technologies. Larry Kudlow and Neil Cavuto, who should know better than to tout protectionism and cronyism, approved on air, with Cavuto adding the deft ad misericordiam touch that these jobs were saved just in time for Christmas — which rather makes The Boss the Savior.

The jobs “saved” by Trump are not destined to last long. The Mexicans won’t “steal them,” but the robots will.

One of the founding members of the Herd — Glenn Reynolds — chimed in his support for The Boss’ crony capitalism. Reynolds wrote an amazing — really, psychedelic — piece favorably comparing The Boss and his tweets with FDR and his radio “fireside chats.” Like, far out, man, America is in the Great Depression redivivus, and the Boss is here to save us!

Of course, as Reynolds himself concedes, FDR probably extended the Depression by seven years, but he certainly made economically illiterate Americans feel like he cared. And I guess it’s better to feel the pain you cause in others than to be oblivious to it, although I am more inclined to say you shouldn’t cause the freaking pain to begin with.

But Reynolds’ point is that The Boss, in “saving” these pathetically few jobs, showed more “compassion” than Obama, because when Obama was asked about saving jobs at this Carrier plant, the Prez said that the answer was improved job (re)training. That caused Reynolds to wax sanctimonious, saying that when a factory closes (from outsourcing, free trade, automation, or just plain producing a product the public doesn’t want), the people laid off and the local economy suffer. And the existing job retraining programs — including the Trade Adjustment Assistance program (TAA) — don’t work well. Here Reynolds quotes a study done by the Heritage Foundation that says the TAA doesn’t work — though considering the infamous hit-report the Heritage Foundation did some years back on the cost of immigrants to the nation, which cemented the organization’s turn from conservativism to populism, I no longer put any credence in its reports.

Now, readers of this journal over the last eight years will, I believe, not accuse me of being a blind Obama supporter — far from it. But in this case, Obama is correct and Reynolds, the Heritage Gang, and the rest of the Herd is wrong. We all learned from Joseph Schumpeter that economic progress is driven by “gales of creative destruction,” when old, less efficient ways of doing business are eliminated by newer, more efficient ones. Cathode ray tube TVs died rapidly when flat screens came out; VHS tapes died rapidly when DVDs became available. And human-piloted cars, trucks, and buses may soon be replaced by autopiloted ones. And we all know what Schumpeter pointed out, that this process is often a hardship on some workers as they undergo retraining for more productive jobs. No doubt, if truck, delivery van, and bus drivers, as well as cab and Uber drivers are all put out of work by self-driving cars, some people will find it hard to find other, more productive jobs over a relatively short period of time. But most will find other, more productive work, easily.

FDR probably extended the Depression by seven years, but he certainly made economically illiterate Americans feel like he cared.

For those workers who can’t make the shift easily, the answer is precisely to retrain them. What other options are there? To let them languish on food stamps? Or (as the lumpenprotectionists, Luddites, and nativists would urge) simply outlaw progress? Let’s face it: progress is a bitch!

Let’s consider this for a moment. No doubt many truck and cab drivers will oppose self-piloting vehicles. But we as a country lose roughly 38,000 people a year in auto accidents, more than we lost in the Korean War. Does Mr. Reynolds — so much more compassionate than we unpatriotic, cosmopolitan, hard-hearted, elitist, and egoistic globalists — really want to see those deaths occur forever, lest some cabbie in Queens can’t find work?

As to why the TAA and the other few dozen other government retraining programs don’t work well, they don’t work well for the same reason public schools don’t work well: when the government runs a monopoly, it fails just all other monopolies do. The answer (in both cases) is to separate the government funding from the service by voucherizing it.

Specifically, we should kill all the retraining programs, along with (say) the Department of Energy, and use all that money for vouchers for long-term unemployed so that they can go to a public or private community colleges to get retrained (or get the high-school diploma they should have gotten when they were young). I would allow trade unions and private industries to use these vouchers to expand their apprenticeship and training programs they already have, and to open full-fledged trade schools as well. For example, the United Electrical, Radio and Machine Workers of America could run a chain of trade schools where people could come to learn the trades, paying the union with vouchers and perhaps by agreeing to be dues-payers for some period of time (say, ten years). Oh, and end the Obama Administration’s war on for-profit colleges, a war that killed so many hundreds of decent trade schools for no reason other than a desire to please the teacher’s unions. (The fall of the ITT college chain alone eliminated 130 campuses.)

There are several reasons why The Boss’ “victory for American jobs” is in fact disastrously bad.

First, it forces Carrier to keep paying high wages to its employees, thus ensuring that it will be unable to compete with foreign-produced products in the long term. This is the kind of “good deal” the US autoworkers received: ludicrously sweet contracts that drove two of the major American automakers into bankruptcy.

Government retraining programs don’t work well for the same reason public schools don’t: when the government runs a monopoly, it fails just all other monopolies do.

Second, it punishes American consumers, who will be forced not just to pay continuing high prices for Carrier’s products but also to pay higher taxes to provide the subsidies. The Boss’ “big-hearted” concern for the workers obviously did not extend to the consumers or taxpayers.

Third, as Bastiat would note, while the populace — with the Herd leading the cheers — hails the Boss for the 800 jobs saved, it will not see the many of thousands of jobs that will be lost. Any company, foreign or domestic, that is thinking of building new plants here knows that if any of those facilities turn out to be unprofitable — say, because the workers form a union as unreasonable as the UAW — and the company moves to close the plant, The Boss will punish it with whatever sort of sanctions he can dream up. As the French have discovered, the harder you make it to fire workers, the more reluctant companies will be to hire them in the first place, so you wind up with chronic high unemployment.

This is where the Herd may be miscalculating. Kudlow, Moore, Laffer, Cavuto, Reynolds, et.al. assume that with lower corporate taxes and fewer regulations, the economy will boom and job growth explode as companies repatriate foreign profits and open new plants here. But in the face of The Boss’ demagogic, autocratic governance, the companies may instead use the money to buy back stock in their own outfits or invest the money abroad. The good effects of The Boss’ more classically liberal policies may be trumped by the bad effects of his populist ones.

The harder you make it to fire workers, the more reluctant companies will be to hire them in the first place, so you wind up with chronic high unemployment.

In fact, the Herd’s admiring lowing in response to his bullying of Carrier may be confirming to The Boss that his protectionism is working. He moved on rapidly to attack another company — Rexnord Corporation — for daring to move a plant to Mexico and “viciously fire” 300 existing employees. So far the company hasn’t caved, leading The Boss to renew his threat to hit Mexican imports with a 35% tariff. Ford, which he threatened earlier, still appears to be moving forward with plans to build small cars in Mexico. So The Boss may well be forced to carry through with his threat.

This is all reminiscent of Obama’s first year, in which he started trade wars with Mexico and Canada, while engaging in crony capitalism with environmentalist companies. As the cynical but insightful French put it, the more things change, the more they stay the same.




Share This


Type B, Meet Type B

 | 

R.W. Bradford, the founder of this journal, was an acute political analyst, thoroughly familiar with American history and American life in all its forms. I’ve read a lot of professional commentators on American politics, but Bill Bradford’s chance observations showed more knowledge and intuition than 90% of the commentators show in a lifetime.

Every four years I recur to something Bill said to me one day, almost by chance. He said that there have been two types of presidential candidates: (A) those who had a perennial constituency — in Bill’s words, those “who always had a lot of people who wanted them to be president” — and (B) those who didn’t, those whom “nobody ever wanted to run.”

Crowds of people loved them, honored them, backed them in every attempt at the highest office.

It wasn’t a difference between people with good ideas and people with bad ones, although Bill said that he’d always had a weakness for the old maxim that “the job should seek the man,” not the other way around. The difference had to do with the psychology of the candidates and of their willing or unwilling supporters. Because of that difference, there might also be a difference in the candidates’ campaigns and their performance in office, if they managed to get into office.

I think there’s a good deal of truth in Bill’s idea. I think it provides an interesting perspective on how things work. And I think it’s sadly appropriate to what we see this year.

Think about it. Andrew Jackson, Daniel Webster, Henry Clay, Stephen Douglas, Ulysses S. Grant, William Jennings Bryan, Robert LaFollette, Robert Taft, Barry Goldwater, Hubert Humphrey, Ronald Reagan . . . Crowds of people loved them, honored them, backed them in every attempt at the highest office. These people cheered their victories, mourned their defeats, and convinced themselves that the defeats were victories. Such followers enhance their favorites’ stature. More importantly, they enhance the candidates’ experience of their country and their countrymen. They give them a connection, if they want to use it, to real knowledge of America. And most of those favorites did use that connection.

Now think of Franklin Pierce, William Howard Taft, Woodrow Wilson, Warren Harding, Lyndon Johnson, Richard Nixon, Jimmy Carter, Bill Clinton, the two George Bushes, Barack Obama . . . No constituency ever spontaneously decided that these men were inspiring figures, and therefore insisted that they run for office. When they ran, it was because of their own insensate and insatiable ambition (Wilson, Nixon, Johnson, Carter, Clinton, Obama), or because they thought it was somehow an appropriate thing to do (Taft), or because a deadlocked party invigorated a lurking idea that yes, maybe they could make it (Pierce, Harding), or because of some reason I cannot fathom (the Bushes).

Who clamored for Ted Cruz to run for president? What irresistible mob of supporters demanded that Marco Rubio take the field?

In each group, A and B, there are people whom I happen to like or admire, and there are people whom I happen to dislike or despise, usually because of their political philosophy. And there are people whose group assignment we can debate. But it would be hard to say that the Group B folk had the personal stature of the Group A folk, or their connection with the American experience. People in the second group have been candidates of themselves and some political coterie; their experience hasn’t needed to be broader, and sometimes it has been remarkably narrow. Those among them who have been motivated merely by their ambition, or the ambition of their friends and family, have tended to be either twisted souls or kids perpetually too late for the party.

The alarming thing about 2016, from this perspective, is the absence of any candidates from Group A.

Who clamored for Ted Cruz to run for president? What irresistible mob of supporters demanded that Marco Rubio take the field? John Kasich — the subject of what adoration? Jeb Bush — the cynosure of what eyes? None, of course, except those of the Chamber of Commerce and the diaspora of former Bush political employees.

I guess it goes without saying that nobody ever wanted Hillary Clinton to be president, and nobody wants it now. What her supporters desire is somebody who will favor their chosen policies, make the appointments they want to the Supreme Court, give them government grants and favors, employ them (or their relatives) and give them wealth and power. If Krazy Kat had figured out a way to collect gigantic bribes without overtly violating a law, and therefore had a ton of money to throw around, those people would be cheering for Krazy Kat. Who, come to think of it, would be a much better choice than Hillary Clinton, who is zanier than any comic strip character, though without the fun.

Ah, but Donald Trump and Bernard Sanders, what of them?

This is not a puzzling question. Think back to a year or two ago. Do you remember anybody ever saying, “There’s just one person I want to be president, and that’s the senator from Vermont”? No, you don’t. Sanders was and is a nonentity. It was the prospect of Mrs. Clinton’s coronation that made him a public hero. Any other plausible receptacle for leftist nonsense would have done as well, or better.

Of Donald Trump, we may ask a similar question, and find much the same answer. He wasn’t a nonentity, but no broad masses (to use the Marxist phrase) ever begged him to run for public office. He just got up one morning and decided to do it. So he has become the plausible receptacle for most of the justifiable or unjustifiable anti-establishment sentiment in the country. The fact that he has certain curious skills, skills that have made him more successful than Sanders in the political arena, doesn’t mean that anyone ever wanted him to be president.

I guess it goes without saying that nobody ever wanted Hillary Clinton to be president, and nobody wants it now.

I don’t know what Bill Bradford would say about this, but when I look at the major-party presidential contests of this republic, if we can keep it, I find very few examples of a year in which both candidates were in Group B. One example is the Harding-Cox election of 1920. Another is the melancholy contest of 1976 between Gerald Ford (nice guy, but an accidental president) and Jimmy Carter (distinctly not a nice guy, or a guy with any known constituency or capacity for office — a man elected to the seat of Washington by the fact that he was a Southern Democrat).

There have been other contests of B vs. B. But the current election is spectacular for the prominence of two inmates of Group B who are obnoxiously assertive personalities. To paraphrase the words of an advertising man who helped to elect Richard Nixon, “They wake up in the morning with their suits all rumpled and start running around shouting, ‘I want to be president! I want to be president!’”

One of these Type B people will win. The voter’s job is to decide which one is less weird and dangerous. This isn’t Harding vs. Cox. Both were capable men, and the victor, Harding, turned out to be a good president. (Forget the adverse propaganda; read the great book on the subject, Robert Ferrell’s The Strange Deaths of President Harding.) This time, the chances are much greater of getting a president devoted wholly to his or her self-generated ambitions.

Yes, in a republic, private ambition can sometimes benefit the public. Sometimes.




Share This


Ideas Have Consequences

 | 

It probably couldn’t be any worse. The current presidential candidates are about as bad as bad can be.

Just look at them.

  • Ted Cruz, who called a press conference to say that he would not “copulate” with a rat like Donald Trump.
  • Donald Trump, who had every opportunity to gather all anti-establishment voters into his fold but insisted, instead, on alienating as many as possible — e.g., stipulating that in some hypothetical world in which abortion was outlawed, women who had abortions should be “punished,” then putting out a press release saying that he didn’t really mean that, and then saying what he didn’t mean again.
  • Bernie Sanders, spouting non-facts 24/7.
  • Hillary Clinton — say no more.

The temptation is to attribute the horror of 2016 to the candidates’ abominable personalities, or at most to the failures of the electoral system, which is warmly responsive to televisable personalities (Trump), and to the indefatigable pressure groups that gave us Clinton and Sanders (and Jeb Bush and a few other sparklers).

I think that those factors are important, but they are as nothing when compared with the ideas that are insisted upon by the pressure groups and are projected so abominably by the personalities.

All the problems that are used to justify the literally insane campaigns now being waged were the direct results of unlimited government.

The ideas aren’t many. We’re not dealing with the intellectual intricacy of the questions that Lincoln and Douglas debated. Most of what passes for ideas in today’s campaigning results from a handful of crude, outdated assumptions, as follows:

1. The idea that work produces wealth, and therefore ought to be rewarded — an idea that had the stuffing knocked out of it by the discovery of the principle of marginal utility, a mere 14 decades ago.

2. The age-old idea that wealth should be apportioned by political means; i.e., by force.

These two ideas provide most of Bernie Sanders’ intellectual equipment, if you want to call it that.

3. The pre-1830s idea that free trade is bad for the economy.

Here you will recognize Donald Trump’s motivating idea, and one of Sanders’.

4. The 1970s idea that racial — and “racial” — sensitivities have rights that government must enforce.

This belief, which is merely the flipside of the much older belief that white racial sensitivities must be enforced by government, is the basis of the grievance industry which fuels both Sanders and Clinton, and without which their candidacies might not be able to exist.

5. The idea that, as H.L. Mencken said, “the people know what they want and deserve to get it, good and hard.”

This is populism, which fuels the preposterous windbaggery of Trump and Sanders, and to a degree that of Cruz. It was adequately discredited by the idiotic behavior of the ancient, direct democracies, if not of modern Detroit, Chicago, and New York City.

Now, you may say, and you would be right to say to it, these fallacious notions get a lot of their steam from the true, or sort of true, ideas that are associated with them. Sanders’ people and Trump’s people are right in believing that the financial system is rigged against the majority of Americans. Trump’s people and Cruz’s people are right in thinking that the country is being run into the ground by small groups of wealthy, or otherwise privileged, self-serving apostles of political correctness, seemingly bent on outraging all feelings but their own. Trump’s people are right in thinking that a welfare state cannot admit hordes of immigrants without grossly disadvantaging its own citizens. Clinton’s people are right in their visceral aversion to populism.

It’s remarkable that Clinton’s supporters, though undoubtedly the best “educated” of any of these groups, has the fewest ideas, right or wrong. It’s certainly a commentary on elite education.

But the most remarkable fact is that all the problems that are used to justify the literally insane campaigns now being waged were the direct results of unlimited government. If the American people had voted to increase income inequality, strangle the middle class, create racial tensions, ship jobs overseas, enlarge the permanent underclass, and grant a permanent veto power to an unelected class of well-paid parasites, they couldn’t have gotten better results from their decades of votes for people who wished to expand the government.

Now people of common sense and what used to be common knowledge are seeing (the cliché is unavoidable) the chickens coming home to roost. Are you happy? I’m not.




Share This


Are Mobs a Good Thing?

 | 

In recent days, the Indiana “religious objections” law has often occupied the number one spot in the news, despite competition from the Iran nuclear negotiations, the mass slaughter of Christians in Kenya, the machinations of leading candidates for the presidency, and other inarguably more important topics.

I’m no expert on the law, and I won’t pretend to be, but I suspect that neither the governor of Indiana nor the gay and liberal lobbies that are attacking him could ever be convicted of libertarianism. We knew that, coming in.

It does seem obvious, however, that both conservative and liberal lobbies have made a lot of money on this controversy, and will make plenty more on mass emails with 20-point type. Less obvious, but vaguely predictable, is that the conservatives will benefit from a sizable backlash and, even more, from the precedent set by liberal lobbyists in promoting business boycotts that crippled the governance of a state, and all because of something that is, in itself, pretty clearly a minor issue.

From this, I believe, libertarians can learn two equal but opposite lessons.

1. In America, in the digital age, boycotts can actually work; and a minor issue can be the best thing to use in promoting such boycotts. Campaigns about minor issues don’t have demonstrably worrying entailments. They can be reduced to simple messages and used to embarrass people who don’t join a boycott. “What do you mean, you don’t celebrate Cesar Chavez Day? What do you mean, you don’t start your meetings with a flag salute?” Not libertarian examples, I know . . . but given a little ingenuity, people inclined toward liberty could use this weapon to mobilize opposition to governmental entities that offend in some clear though minor way, thus encouraging them not to offend in mightier ways.

2. In America, moral mobs are easily formed. America is, for good and bad reasons, a moralistic country. It’s a country that had Prohibition, for God’s sake. It’s the kingdom of political correctness. Anyone who claims to be offended in America can elevate the “issue” to moral status and make the alleged offender wish that he or she were dead. Libertarians are just as vulnerable to this treatment as anybody else, and the precedent set by the liberal mobs zeroing in on Indiana — or Duke University, or the University of X, or Company Y . . . fill in your own favorite atrocity — is not a happy one. It appears less happy when one reflects that even after the mobs have been shown to be lynching the wrong people, their impetus doesn’t go away. They just find another victim.

Two lessons. No conclusions. Sorry.




Share This


Main St. vs. Wall St.

 | 

The defeat of Romney and the victory of Obama in a disastrous economy which should have crushed the incumbent shows that most people still associate themselves with "Main Street" and view "Wall Street" as the enemy. Only an ideological movement to shift this perception can save the GOP — and such a shift could also help to empower the Libertarian Party.

So let me debunk the myth right now. A look at the Forbes annual list of the richest American and international people shows that many billionaires are not "old money." Many of them are "new money": either self-made rich or the immediate heirs (wives, children, grandchildren) of the self-made rich. Also, many billionaires are women or members of non-white ethnic groups — e.g. the Mexican billionaire Carlos Helu and the women billionaires such as Steve Jobs' widow, Laurene Powell Jobs, and the self-made billionaire Sara Blakely. Thus it is clear that the rich are not an "aristocracy" ruling over the poor and middle class, as leftists and Marxists assert. The rich are merely those people whose merit — hard work, intelligence, and good choices — earned them vast fortunes.

Let me also explain that trickle-down economics is not voodoo; in other words, why the rich being rich helps the poor and middle class. It helps because the rich do not spend all their money on yachts and mansions and caviar (although even their expenditures on luxury create jobs for other people). They need to make their wealth keep pace with inflation, which forces them to invest most of their money. Who do we want to make business decisions about investing in small businesses and entrepreneurs, to decide who receives society's investment capital: people who know finance and economics and take personal responsibility for their decisions, or government officials lost in a mess of bureaucracy and red tape, who experience no personal accountability from gains, losses, and the profit motive?

Capitalism is merely a system in which capital is invested by private people, as opposed to the state. "Wall Street," that much-maligned entity, is the process followed by rich people — and the financial managers who invest money for them — as they make decisions that fund the talented and hard-working middle class. Small businesses are carefully chosen by Wall Street’s investors because they have the capacity to succeed and expand, thus creating more jobs for the poor.

Wall Street is Main Street's best friend, even though most people don't see the complicated economic relationships that form the substructure of a trip to buy a loaf of bread at the local grocery store. Someone made a decision about which grocery stores to invest in, and which bakers to invest in, and the success of those decisions helps determine whether you pay $1.50 for bread, as we can today, or $15.00, as we might in the socialist nightmare of tomorrow. The socialist-leftist-modern liberal dogmas that the rich are a few crusty old white men locked away in the towers of distant mansions, counting gold coins like Scrooge, and that the corporations have enslaved us and the only practical thing is for “working people” to rebel, is totally contrary to the way the world works.

Shatter the leftist myth, and the people won't view another Republican nominee with envy, hatred, and malice, as they viewed the GOP candidate in 2012. It is too late to save the Romney campaign, but the Rand Paul 2016 campaign could benefit from the argument presented above.




Share This


The Return of Coxey’s Army

 | 

In 1894, Coxey’s Army, a legion of purportedly needy people, came to Washington to demand radical reform of the capitalist system. It was supposed to be a “march,” but some of Coxey’s soldiers tried to make their trip to the capital by hijacking railroad trains. The depredations of the Army were widely feared, especially by communities that lay on its route, but by the time it reached Washington its numbers had dwindled. It ended when its leaders were arrested for walking on the capitol grass. That took care of Coxey’s Army.

During the past few weeks, downtowns across the country have been the unwilling hosts of tribes of ignorant savages shouting about the wickedness of, guess what, the capitalist system.  They maintain that they represent the 99% of Americans whose lives are controlled by the remaining 1%, who supposedly own 99% of property in this country. Ironies abound: people who have nothing better to do than hang out in a park and empty their bladders in a McDonalds restroom are lauded and supported by labor unions; people who want to abolish wealth are bankrolled by “liberal” billionaires; and people who never vote are courted by the highest official representatives of the Democratic Party. Friendly media note with relief that the Occupy mobs are (usually) “peaceful.” I suppose that if you come over to my condo complex, pitch a tent, and refuse to leave, denouncing me day and night and threatening my neighbors with the risk of epidemic disease, you are being “peaceful.”

It’s a safe bet that not one Occupier, or mainstream commentator on the Occupiers, has ever heard of Coxey’s Army. So such people haven’t fully realized what the lowest level of police power can do to wipe up a “movement.” On October 13, all around the country, local mayors and cops started moving against the demonstrators, evicting them from their zones of occupation for reasons of health. Their tent cities were fouling the environment.

Of course, that’s another irony that should be savored.  One of the Occupiers’ great complaints is that capitalism is ruining the environment. Well, just look at what the Occupiers did to New York’s Zuccotti Park (which by the way is privately owned, despite Mayor Bloomberg’s apparent assumption that he owns it and can let protestors in and out whenever he wants). It’s hard to imagine a more degraded environment.  For this reason, the protestors were nearly kicked out of the park on October 14, a mere four weeks after they started to degrade it. On that day and the day after, they were kicked out of parks and other civic spaces in many other cities. On October 16, they were prevented from starting a camp in Chicago’s Grant Park.

A few more run-ins with local government, and the movement will probably go the way of Coxey and Friends. This is yet another irony, because what the protestors, “anarchist” or not, are really screaming for is more government, government that will run everyone’s life in the minutest detail. That’s the only way in which their multitudinous demands — for equal incomes, free money, vast solar energy projects, whatever — could ever be satisfied.

But there’s one nice, nonironic touch.  For once, one of the Occupiers said something correct. According to a CNN report on October 13, Occupy Wall Street spokesman Tyler Combelic promised resistance to any attempt to move the protest out of its usurped location, observing. "It's not an occupation if you can't occupy the park."  How true, how true.




Share This


Face Time

 | 

I was not an early adopter of Facebook. And I joined for commercial reasons. For a short time a few years ago, all the smart people in book publishing were saying that social media was the future of book promotion. Of course, at that point, the smart people in every industry were saying that social media was the future of promoting any product or service. Some of those smart people may have been in the employ of Zuckerberg & Co.

That conventional wisdom, like most such, turned out to be an exaggeration of a minor observation. My firm’s efforts at promotion through Facebook have yielded modest results. (The well-worn triad of direct mail, author spots on local talk radio, and carefully-chosen display ads remains the most effective way to promote books.)

Despite this, I still use Facebook. And may use it more than ever. It’s a pleasant diversion, a low-maintenance way to stay in touch with family, friends and a group of “Facebook friends” — acquaintances from high school, college and other points in my life. It offers the interactivity of a chat room with the promise of enough vetting to keep out the most egregious cretins and child-molesters.

It’s also an interesting laboratory for measuring people’s attitudes about sports, politics, pop culture and the news.

One thing that I’ve learned is how presumptuous — and erroneously presumptuous — people are about the means and motives of online entertainment. Many of my acquaintances presume that there’s some system of consumer-protection law that applies to their dealings on Facebook. This applies especially to matters of “privacy.”

Facebook is, like Google, an advertising company at heart. The business model is to create an online space that people will visit regularly — and then to sell access to those people. Many of the activities on Facebook are designed to capture information about users likes and dislikes, so that Facebook can create detailed consumer profiles and sell precisely-calibrated access to advertisers.Yet multitudes of Facebook users rage childishly when this or that detail comes to light about how the site collects information.

Another lesson (and the real reason for this Reflection): the politics and beliefs of most Americans are so ill-formed and erratic that it’s difficult to engage them in a meaningful way.

Recently, several of my Facebook friends posted approving comments about Warren Buffett’s “integrity” and “bravery” in calling for higher taxes on the wealthy. I pointed out — as I have in this space — that there’s no integrity or bravery in Buffett. At least on this issue. He’s acting in self-interest, and being cagey about it. His company’s holdings include several life insurance companies that sell annuities and other tax-avoidance mechanisms. The higher the federal tax rates, the more his products sell. He’s like an arsonist who owns the fire-extinguisher shop across the street from a theater that he sets afire during a sold-out performance of La Boheme.

Despite the ugly truth, some of my Facebook friends insisted that Buffett looks out for the working man. So, I pointed out that he is also a large shareholder in the Washington Post Company — whose highly-profitable Kaplan Education unit destroys the lives of working-class idiots by selling them worthless degrees financed by costly student loans that aren’t dischargable in bankruptcy.

At this point, a friend of one of my Facebook friends — who could read the comment thread through his connection to my friend (such is the nature of a social network) — commented that my use of the term “working-class idiots” was offensive. And that he knew better than I how predatory Kaplan Education is because he had borrowed tens of thousands of dollars to get a useless certificate in 3D animation from that very company. And that, several years later, he remains unemployed. But he wasn’t as angry at Kaplan or Buffett as he was at me for describing his ilk unkindly.

The What’s the Matter with Kansas wing of the American Left argues that presumedly right-leaning corporate interests brainwash the middle class into voting against its own interests. But that brainwashing isn’t a Right/Left phenomenon. The same argument could be made of the presumedly left-leaning Warren Buffett and the unemployed friend of my Facebook friend.

We who value liberty have a long way to go in explaining our case to the American masses. We have to assume our fellow citizens know nothing. Or, worse, we have to assume that most of what they know is affirmatively false. And we have to do it nicely.

I use Facebook as a tool to sharpen my skills in this effort.




Share This
Syndicate content

© Copyright 2017 Liberty Foundation. All rights reserved.



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

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