Thursday, September 08, 2011

Obama’s Keynesian Superstition

Tibor R. Machan

President Obama gave a speech on Thursday afternoon announcing the American Job Creation Act. There were numerous points that were open to criticism but before dealing with a few, it is important to state what creates jobs: Jobs are created when people who have earned an honest buck go to the market and purchase goods and services that other people need to produce. If a good many go to the market to do this, there will be many jobs, if only a few, there will be few jobs. Moreover only if the people get to choose what purchases they make in the market will the resulting jobs be more than make-belief, artificial jobs, like digging holes and filling them up again.

Mr. Obama and his team appear to believe that printing money and handing it to people who may or may not take it to the market and spend it on goods and services serves to create jobs but this is sheer superstition. It is like thinking that steroids produce healthy muscles in one’s body. Such spending is more akin to fueling artificial production--like getting a bunch of extra haircuts with phony money one has obtained from a forger. Or numerous baths or car washes--as if people had no ability to allocate their limited resources prudently but will do well by spending the phony funds (or other peoples’) on duplicate goods and services. So, bottom line: jobs are created from people spending honestly earned income, not from spending phantom income.

Now back to Mr. Obama’s address. He started by telling us all that “the millions of Americans who are watching right now do not care about politics.” Oh? Who are those millions of people who take part in primary elections, in caucuses, and in all the campaigns around election times?

Obama continues: these millions of Americans “have real life concerns,” as opposed to politics. What a thing to say for a lifelong politician. It is a strange confession, to proclaim that politics is not a real life concern. How these little asides turn out to be very revealing from a Harvard educated politician!

Obama also told us that all these Americans “know that Washington hasn’t always put their interests first.” No kidding--”hasn’t always”? How about has very, very rarely. Anyone with only a cursory familiarity with public choice theory--an idea Professors James Buchanan and Gordon Tullock developed (for which Buchanan received the Nobel Prize), in their book The Calculus of Consent (1962)--can appreciate that Obama completely understated the degree to which Washington fails to put the interests of Americans first. For one, Americans are a highly varied lot and they have zillions of interests which plainly cannot be addressed by Washington. Politicians aren’t deities, Mr. President.

Then, also, politicians are mostly busy looking out for their own interests--mostly getting reelected the next time they run for office--except when looking out for the interests of special groups and major donors that happen to further their own. So this entire line of reasoning on which it seems the president is basing his American Job Creation Act is fallacious.

Here is yet another howler from Mr. Obama: “The people in this country work hard to meet their responsibilities.” Well, some do but some don’t. Many people in America believe that they are entitled to benefits from the government simply because they exist, they have been born here, kind of like the what millions of Greek citizens evidently believe. And many believe that they are credit worthy even while being anything but. Which is to say millions of Americans have expected to be provided with loans to buy homes even though they had no idea how to pay them back or had the collateral to back them. This does not testify to what the president has claimed about the people of this country.

The entire plan of the jobs bill amounts to nothing more than artificially manufacturing jobs, from phony money, phony demand. And this doesn’t even address the issue of Mr. Obama’s favorite superstition, namely, his idea that he can somehow turn America into a showcase of green life without incurring massive expenses for this, expenses the country cannot afford. (It is interesting how Obama has avoided the subject of his giving awards to certain companies that went green big time and then went belly up!)

One could go on. Sadly if an Obama enthusiast were to come across these points they would most probably be dismissed as nothing but dirty Republican or Tea Party politics. No one of Obama’s team ever confronts the arguments--they just ridicule the people who put them forth, even demonize them.

And don’t forget the persistent rich bashing that made its appearance in this lecture just as it tends to in every other given to us by Mr. Obama or members of his team. Ok, so some rich folks are doing well even these days. So why begrudge them this? It’s like wanting to injure able bodied folks because there some some who are disabled. Disgusting. Moreover, even as a public finance, the idea of targeting the wealthy is ridiculous. If all those with over $250,000 had their money confiscated by the feds, hardly any dent would be made on the national debt, especially if one subjects the idea to more public choice analysis.

Mr. Obama, you aren’t going to make jobs and you aren’t going to do any good to most Americans apart from some of your pals in the bureaucracy with what you want to do. Take an entirely different approach, namely, remove government regulations and lower taxes for everyone and that will most likely energize the country’s economy.
Liberty: Both Radical & Traditional

Tibor R. Machan

At times libertarian or classical liberal--or, in yet other words, pure laissez faire capitalist--ideas are dismissed as part of a misguided modernity that’s lacking proper pedigree. But this is all wrong. Already back in circa 600 B.C.E. the Chinese sage Lao Tzu had weighed in with libertarian ideas, writing

"Why are people starving?
Because the rulers eat up the money in taxes.
Therefore the people are starving.

"Why are the people rebellious?

"Because the rulers interfere too much.
Therefore they are rebellious...."

And in ancient Greece, Xenophon records an exchange between Pericles and Alcibiades in which the latter dismisses all government edicts that are coercive as plainly unlawful. As he put it, “It would seem to follow that if a tyrant, without persuading the citizens, drives them by enactment to do certain things--that is lawlessness.”

Of course, merely because a good idea has seen the light of day at some point in time, it doesn’t mean it actually carried the day. Ideas of individual liberty did not begin to animate actual political affairs until rather late in the day, starting around the 11th century A. D. A good example of some such ideas beginning to make an impact is the Magna Carta. And then, in time, came the American Founders, with the Declaration of Independence and the Bill of Rights. They managed, finally, to use the libertarian position, which they absorbed through their reading of history and philosophers such as John Locke, for practical, legal purposes. Why so late with the emergence of practical legal measures that support individual liberty?

One reason is that in much of human history what carried the day was unmitigated, unabashed physical coercion, the powerful and well armed running roughshod over the rest. Conquering thugs, armed to the teeth by monarchs and tribal chiefs, would not let up on their brutal subjugation of the population so they could extort from them their labor and whatever meager resources they have accumulated. There had been slave and peasant revolts but not until a substantial middle class emerged, with the capacity to create wealth, did those not in the ruling class manage to be able to mount a resistance to the rulers. And while some knew about the ideas that supported individualism and libertarianism, many were hoodwinked by stories of the divine rights of monarchs and the widely promulgated myth of class privilege.

In the modern era what stood in the way of the liberation of individuals, the overturning of class rule, is the idea that individualism had been invented to serve the economically lucky and powerful. This was a ruse, of course, perpetrated by the cheerleaders of modern rulers, the likes of Auguste Comte and Karl Marx, who had no patience for individual rights and liberation but believed in a collectivism that included the entire globe! They appealed to the myth of tribalism which they managed to sell to millions of people who, in turn, signed up for a unity of the workers but, of course, under the leadership--read: brutal rule--of the likes of Lenin and Stalin. Or they gave up their chance for freedom to national socialists or fascists like Hitler and Mussolini.

Even today the ideas and ideals of individual liberty fare badly because of the many excuses people use to keep others oppressed. The idea of class warfare that even American politicians deploy, for example, undercuts individualism. Ethnicity, racism, gender politics, and the like are all obstacles to making headway for bona fide individualism, with its politics of everyone’s equal unalienable natural rights as the foundation of the legal system, even as their proponents sometimes invoke individualist ideas to excuse the special political privileges they seek.

The Marxists dismissed individualism as an ideology that supposedly served the capitalist, thereby aiming to destroy the most efficient social engine of productivity, the one that unleashed the enormous energy of individual initiative and entrepreneurship. We are, sadly, still in the grips of the big lie that individualism is some kind of insidious ideology.

What’s the remedy? Relentless, vigilant education in the history and philosophy of individualism and libertarianism. That’s the greatest hope for human liberation.

Tuesday, September 06, 2011

Moral Responsibility and the Poor

Tibor R. Machan

Two central dogmas of contemporary liberalism are that the rich are to be blamed for all our ills and that in the end all people are the same and no one is more or less worthy than anyone else. Blaming those who are not so well off as others is unjust because they are not well enough socialized to be ambitious and diligent.

At the same time, those who are well off get a lot of moral criticism for failing to be generous, kind, charitable or giving. Indeed, they are so bad that they need to have their wealth reduced by way of heavy taxation--not just the familiar progressive kind but whatever else the politicians and bureaucrats with this line of thinking can manage to extort from them. (Remember, taxation is extortion. It is the legacy of the feudal era, the kin of serfdom.)

Not only that but even those who stand up defending the wealthy are morally guilty, deserving of scorn and contempt, not civilized discourse about the matter. I know this quite well since I have been standing up against extortion for decades now. For me it isn’t a matter of whether a wealthy deserve their wealth--I don’t know the bulk of them so I cannot tell--but whether anyone is justified it doing such extortion. (I may not deserve my good health or pretty face but this doesn’t justify anyone levying a tax on it!)

The liberal attitude about morality stems, in part, from widespread scientism, the view that science has invalidated morality, made it something bogus like astronomy has made astrology bogus. Extrapolating the empirical scientific method to everything else of interest to human beings achieves this distortion.

Everything is not subject to the experimental method--for example whether faking research is ethical isn’t. And this is the beginning of the confusion and obfuscation--those who are championing the abolition of morality are just as morally ticked off with those who distort their ideas as anyone else is with bad conduct. They become moralists, all of a sudden, never mind that no natural science can show there is anything amiss with faking research, with distorting anyone’s views, etc.

So from the git-go the effort to abolish the moral perspective fails. But what then about denying to those not so well off a moral criticism? Is it right to hold that the poor or disadvantaged cannot be held morally responsible?

That would be rank dehumanization. These folks are not invalids or infants but full human beings who for whatever reason lack substantial wealth. But that doesn’t mean they could not be guilty of acting irresponsibly. All bona fide human beings are subject to moral assessment, usually by those who know them well but when the conduct is evident to us all, to anyone aware of how they are acting. It doesn’t take intimate knowledge of a terrorist to know that what he or she is doing is contemptible. Or of a child molester or cheat.

In the realm of economics, also, that some people refuse to make the effort to lift themselves out of poverty is quite subject to criticism. Or that despite being poor, they keep producing children they cannot care for and then then dump on the rest of society as if others were the parents.

But if all this is true, then all this blaming the rich needs to be seriously reconsidered. Maybe the rich--or at least most of them--are the good guys, having worked hard or deployed their skills and talents wisely so they’d end up well enabled to carry on in their lives.

And all this also implies that the public policy debate about who is to be held responsible for housing bubbles, becoming debt ridden and unemployed and such needs some serious revision. Instead of penalizing the rich, perhaps most of them ought to be praised and held up as models for the rest of us. And the poor ought not to be let off so easy when they come under scrutiny. As Herbert Spencer observed,

“Sympathy with one in suffering suppresses, for the time being, remembrance of his transgressions….Those whose hardships are set forth in pamphlets and proclamations in sermons and speeches which echo throughout society, are assumed to be all worthy souls, grievously wronged; and none of them are thought of as bearing the penalties of their own misdeeds. “(Man versus the State, p.22)