Category Archives: Economics

Rule Five Socialist Sweden Friday

OK, so the title is a bit misleading, as national treasure John Stossel explains to us that Sweden is not a socialist country, and that proponents of socialism should stop pointing it out as an example.  Excerpt:

For years, I’ve heard American leftists say Sweden is proof that socialism works, that it doesn’t have to turn out as badly as the Soviet Union or Cuba or Venezuela did.

But that’s not what Swedish historian Johan Norberg says in a new documentary and Stossel TV video.

“Sweden is not socialist — because the government doesn’t own the means of production. To see that, you have to go to Venezuela or Cuba or North Korea,” says Norberg.

“We did have a period in the 1970s and 1980s when we had something that resembled socialism: a big government that taxed and spent heavily. And that’s the period in Swedish history when our economy was going south.”

Per capita GDP fell. Sweden’s growth fell behind other countries. Inflation increased.

Even socialistic Swedes complained about the high taxes.

Astrid Lindgren, author of the popular Pippi Longstocking children’s books, discovered that she was losing money by being popular. She had to pay a tax of 102 percent on any new book she sold.

“She wrote this angry essay about a witch who was mean and vicious — but not as vicious as the Swedish tax authorities,” says Norberg.

Sweden’s regulations on business are much less onerous than those in the United States, even after a round or two of Trump-era deregulating.  Their schools, pension programs and mass-transit systems have been privatized.  They do run a substantial welfare state, but they are able to do so because of their free market policies, not because of socialist ones.

Words mean things.  Here’s what “Socialist” means:

1 : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

2a : a system of society or group living in which there is no private property

b : a system or condition of society in which the means of production are owned and controlled by the state

3 : a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done.

None of those apply to Sweden; they do apply to Venezuela, Cuba and North Korea.  They applied to the old Soviet Union and to East Germany.  Now take a look at the standard of living in those places.

People who want to apply socialist policies to the United States are advocating for economic ruin, whether they realize it or not.

Here’s an extended lesson on why socialism always fails:

At the moment aspects of the U.S. economy are being dragged in the direction of socialism; you have, even in the halls of Congress, nitwits like the soon-to-be-seated Ocasio-Cortez advocating for “democratic socialism,” which is a contradiction in terms; you can’t have government control of an economy and any level of citizen control over government at the same time.

It would be damned nice if our elected leaders employees had the same level of economic understanding as Mr. Stossel.

 

Animal’s Hump Day News

Happy Boxing Day!

Will California be the next Detroit?  Sure seems possible.  Excerpt:

California has a $16 billion deficit that no one seems to notice. Brown’s budget “assumes” that California voters will pass massive tax increases on themselves. If they do not, the 2013 deficit becomes a mind-numbing $20 billion. The budget, mandated to balance by the Calfornia Constitution, has been billions in the red for 10 straight years. How could Californians re-elect the same politicians year after year that produce budgets with multi-billion dollar deficits?

To protect the endangered Delta Smelt, a fish known better as bait, water has been diverted from the Central Valley to the Pacific Ocean. Orchards in the Central Valley have been allowed to wither and die, resulting in unemployment in the Central Valley as high as 40 percent. Imagine Californians living in what was the breadbasket of American now living on food stamps. California voters rejected Republican Carly Fiorina for U.S. Senator in 2010. She ran Hewlett Packard. Instead, they re-elected Democratic Sen. Barbara Boxer ,who vowed to protect the Delta Smelt at the expense of the Central Valley.

California has 519 state agencies, like the state Blueberry Commission, that pay each of their commissioners more than $100,000 per year. State politicians, when asked to make cuts, fire teachers and fire fighters to inflict maximum pain on its citizens, while leaving these patronage commissions intact. State politicians have elevator operators in the state capital to push the buttons for them. Their solution for the overcrowding of the state’s prisons is to release inmates or transfer them to local facilities in already bankrupt cities. Yet, they are re-elected by California voters in numbers consistently higher than the old Soviet Politburo.

California’s public education system, once the envy of the world, now ranks 49th in the nation. Its business climate, according to 650 CEOs measured by Chief Executive Magazine, ranked dead last. Apple will take 3,600 new jobs to Austin, Tex. at its $280,000,000 new facility. Texas ranked first in the same survey.

Californey seems to be prone to a unique lunacy.  the once-and-former Golden State has plenty to offer; beautiful scenery, gorgeous weather, generally just a salubrious place to live.  But the tendency of California voters to keep putting the same lunatics back in charge of the asylum is troubling.

And the residents of that asylum will be calling on the Imperial government for help when the inevitable crash occurs.

The correct response from the Imperial City, of course, would be “you assholes made your bed – now go lie in it.”  But that probably won’t happen; whoever sits in the Imperial Mansion when that day comes will probably continue to enable the asylum’s behavior by making some nebulous claim as to how the entire nation’s economy depends on propping California up, and funnel billions of taxpayer dollars to the Left Coast.

And things will just keep going on the same old way.  California’s not too big to fail.  The rest of the country should let it.  There’s an object lesson in there for the other forty-nine states.

Rule Five Mexican Standoff Friday

It’s not enough that we serve as a relief valve for Mexico and Central America; we also apparently have to pay them for the privilege.  Excerpt, with my comments:

The United States pledged $5.8 billion in aid and investment Tuesday for strengthening government and economic development in Central America, and another $4.8 billion in development aid for southern Mexico.

But we’ve been throwing billions in U.S. taxpayer dollars down this particular rathole for generations now, to no tangible result.  Remember the old line about the definition of insanity?

The U.S aid aims to promote better security conditions and job opportunities as part of a regional plan to allow Central Americans and Mexicans to remain in their countries and not have to emigrate.

That’s our fervent wish as well.  Of course, it would help if they came legally.

The plan was announced in a joint U.S.-Mexican statement released by the State Department and read aloud by Mexican Foreign Relations Secretary Marcelo Ebrard in the Mexican capital.

“In sum I think this is good news, very good news for Mexico,” Ebrard said.

Of course it’s good news for Mexico!  Billions in free money!  Most of this, mind you, will wind up in the pockets of the many levels of Mexico’s deeply and fundamentally corrupt government, just like in generations past.

Newly inaugurated President Andres Manuel Lopez Obrador waxed poetic about the plan to provide jobs so people won’t have to emigrate.

“I have a dream that I want to see become a reality … that nobody will want to go work in the United States anymore,” Lopez Obrador said at a morning news conference before the announcement.

Yes, plenty of Americans have that dream as well, although, again, our issue with your folks would be less adversarial if they came legally.

But here’s the real kicker, at the end of the story:

Ebrard had previously suggested that about $25 billion in U.S. investment would be an appropriate figure for what Mexicans and Central Americans have dubbed “The Alliance for Prosperity” in the region.

Because you can never pour too much of the U.S. Treasury – that is to say, yours and my money – into corrupt Third World shitholes.

I seem to remember at one point President Trump talked about re-examining this practice of pouring U.S. tax dollars into unproductive countries.  He hasn’t said anything about that for some time, unless I’ve missed something.  It would be nice if someone in the Imperial City would at least talk about this waste of our money.

Animal’s Daily Venezuela News

Former Venezuelan Andres Malave has a message for those who advocate socialism:  Let them come to Venezuela.  Excerpt:

Venezuela was once the most prosperous country in Latin America, but today almost 90% of its population lives in poverty. Venezuela’s economy is in shambles. Recently, Venezuela’s own government released a report showing that its annual inflation rate accelerated to a whopping 833,000% in October alone.

In practical terms, Venezuela’s misery means that it is not uncommon to see children rummaging through the garbage for food. And as basic medical supplies and medicine run dangerously low, newborns and the elderly die unattended in Venezuelan hospitals.

These heartbreaking scenes are difficult for anyone to bear, but for me, it’s personal.  I know many Venezuelans who held out hope that this “21st Century” form of socialism would turn out better than the 20th century version, but their dreams were quickly dashed.

Chavez may have died in 2013, but his ideas live on through his hand-picked successor, Nicolas Maduro. Today, Maduro rules Venezuela with an iron grip, fighting the growing opposition as more and more Venezuelans are realizing that Prime Minister Margaret Thatcher was right when she said the trouble with socialist governments is that they eventually “run out of other people’s money.”

Scores of people who dared to speak up against the government have been killed or imprisoned. Political dissidents have been subjected to brutality, torture, and constant persecution.

Feature, not bug.

Plenty of those on the political Left here will claim that this isn’t “real” socialism, that socialism will work if we only put the right Top Men in charge.  You need only look to the daffy old Socialist from Vermont, with his seven-figure net worth and three spacious estates, to see what political leaders look like under the supposed egalitarian vision of socialism.

Out on a limb.

Because socialism always ends up this way.  Every.  Single.  Time.  Folks like to point to the heavily-socialized Scandinavian nations as an example of “…see, socialism can work,” without mentioning that those nations’ economies are propped up by extraction revenues and, further, that their corporate taxation and regulation policies don’t much resemble socialism in the least.  And, yet, even with those things in place, their native populations are cratering, with only massive Third World immigration keeping them active.

But the argument that gets left on the table is this:  Socialism is incompatible with liberty.  That alone is reason enough to oppose it.

Animal’s Daily Taxifornia News

The cabal of nitwits that passes for Californey’s government is at it again, this time proposing to tax text messages.  Yes, really.  Excerpt:

Why do people call California “Taxifornia”? Here’s one reason: California regulators wanted to tax cellphone text messages. They were even considering making the tax retroactive. It just shows there’s nothing in California that can’t be taxed.

As always, the state government had what it believed is a good reason for imposing the tax: It would subsidize phone service for low-income Californians. And it suggested that the tax is so small — “just” $44.5 million a year — that cellphone users wouldn’t even notice it.

California has turned the richest state in the union, and once a middle-class haven, into a state with the most poor people and fully a third of all the nation’s welfare recipients. Now middle-class Californians are fleeing. Pretty soon no one will be left to pay for “low-income Californians.”

The California Public Utilities Commission’s (PUC) dropped its plan to vote on the measure in January, but only after the Federal Communications Commission ruled that text messages can’t be taxed as a telecom service. Nevertheless, the PUC will soon need money. Why? Its spending on the so-called Public Purpose Program budget has soared from $670 million in 2011 to $998 million in 2017, a 49% increase.

California is certainly following the Reagan comment about government:  “If it moves, tax it.  If it keeps moving, regulate it.  If it stops moving, subsidize it.”  But the real idiocy of this is that, as the article notes, folks will just switch to other methods.  Facebook apparently has a messenger app, and if this were to pass you’d see a wealth of messaging apps pop up like clover blossoms after a spring rain.

And, clear as day, when this happens I can see the taxers wanting to either ban those apps or tax them as well.  There’s just no end to the stupidity.

Sometimes I think that the entire California legislature has not one brain among them.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks as always to Pirate’s Cove and The Other McCain for the Rule Five links, and to my good friends over at Glibertarians for publishing my latest outdoor article, this one on cutlery.

Meanwhile, the French are growing some balls over Macron’s gasoline tax hikes.  Excerpt:

Macron has so far held strong and insisted the fuel tax rises are a necessary pain to reduce France’s dependence on fossil fuels and fund renewable energy investments — a cornerstone of his reforms of the nation. He will defend fresh plans to make the “energy transition” easier next week.

Paris deployed some 3,000 security forces on Saturday, notably around tourist-frequented areas, after an unauthorized attempt last week to march on the presidential Elysee Palace.

Police officials said that a no-go zone, set up around key areas including the presidential palace and the National Assembly on the Left Bank of the Seine River, has not been breached.

But authorities are struggling because the movement has no clear leader and has attracted a motley group of people with broadly varying demands.

The anger is mainly over a hike in the diesel fuel tax, which has gone up seven euro cents per liter (nearly 30 U.S. cents per gallon) and will keep climbing in coming years, according to Transport Minister Elisabeth Borne. The tax on gasoline is also to increase four euro cents. Gasoline currently costs about 1.64 euros a liter in Paris ($7.06 a gallon), slightly more than diesel.

Far left leader Jean-Luc Melenchon explained to BFMTV the historical importance of this issue in the Gallic mindset: “When tax is no longer agreed to, it’s the start of revolutions in France.”

An honest-to-gosh tax revolt, in France, of all places.  Who woulda thunk it?

There’s a lesson in this for the would-be tax hikers here in the States.  People will only put up with so much in the name of increasing revenue, and that’s precisely what the Imperial City wants.  Nobody much in either party gives a shit about lowering deficits or reducing Imperial debt; that’s just a talking point for when the other party holds the checkbook.  They want revenue and they want to sell envy and buy votes, so they talk taxes; never mind that no tax scheme in history has ever managed to snag more than about 22-23% of GDP, never mind that taxation affects behavior, never mind that the Laffer Curve is a real thing, never mind that taxation is theft.

It seems Macron and Co. are getting a hard lesson in that right now.  Don’t think it can’t happen here.

Animal’s Daily Single-Payer News

Hello, Nurse!

National treasure John Stossel has weighed in on the single-payer health care issue, and as always, it’s worth the read.  Excerpt:

America needs single-payer health care, say progressives. That’s a system where government pays doctors and hospitals, and no sick person has to worry about having enough money to pay for care. After all, they say, “Health care is a “right!”

“Who pays for it?” asks Chris Pope, “And that’s really not a rights question.”

Pope studies health care systems for the Manhattan Institute. In my newest video, Pope explains that although many Americans think that Canada and most of Europe have single-payer systems, that’s not really true.

“In Germany, employers provide most of the health care … just as they do in the United States,” he says. France and Switzerland also offer multiple options, public and private, and most people buy private health insurance. Some of the Swiss government subsidies are similar to those of Obamacare.

But Canada, England, Norway, Cuba and a few other countries do have genuine single-payer. I’m constantly told that it works well — people get good care and never have to worry about a bill. They spend less on health care and live longer.

Pope says that claim is naive.

Yes, the claim is naive, yes, Pope and Stossel debunk it; but what isn’t mentioned here is the moral issue.  Namely – how is another person’s health care my responsibility?  Stossel discusses a few ways to improve the funding of health care, and let’s be clear about one thing, the issue with health care in the United States today isn’t how we deliver care, it’s how we pay for care.

But what he doesn’t discuss is why the government should pay for health care.  Something can’t be a “right” if your exercising of that “right” requires that the government, through the use of force, to confiscate a portion of your wealth/property to pay for it.  (And yes, the use of force; try not paying your taxes and see how long it takes them to send men with guns out looking for you.)

In other words, your exercising of a “right” that you can’t afford on your own requires me to labor on your behalf.  I have no choice in this equation; for that portion of the year I am simply required to labor on your behalf, with no recompense for me.

There’s a word for that.

Rule Five All Politics is Local Friday

This bright morning finds Mrs. Animal and yr. obdt. back in sunny Colorado, where moments from now loyal sidekick Rat and I will climb into the inestimable Rojito and go afield to do battle with antlered ungulates.  As mentioned earlier, watch for some more Teutonic totty as placeholders whilst we are afield; normal news posts should resume a week from today.

But for now, here’s some Colorado news.  We have a gubernatorial election this year, and as is often the case, the Democrat candidate, one Jared Polis, is having trouble explaining how he would pay for his ambitious agenda for our fair state.  Excerpt:

Republican state Treasurer Walker Stapleton’s clear goal was to call U.S. Rep. Jared Polis “radical and extreme” as many times as possible in their hour-long gubernatorial debate Monday night at Colorado State University-Pueblo.

Polis, the Boulder Democrat, didn’t bristle at the steady barrage from Stapleton, but neither did he answer it with what the GOP candidate demanded— details on how Polis intends to pay for an ambitious agenda that includes affordable health care, free pre-school and kindergarten classes.

Polis, who is a multi-millionaire from starting and selling companies, said he would work as governor to lower prescription drug prices, find other solutions in providing better care and could even work with President Trump.

“The time for name-calling is passed,” he told Stapleton, who clearly didn’t think so.

“If you will tell these people how you will pay for it, I’ll stop calling you a radical,” Stapleton shot back.

Polis denied he was either radical or extreme, saying Oklahoma provides free pre-school to students “And if Oklahoma can do it, we can do it.”

Now, to be fair, Colorado has changed politically in the thirty years I’ve lived here, but it hasn’t been Californicated to the point (yet) where a Ocasio-Cortez or Pelosi could be elected to statewide office.  Our current governor, John Hickenlooper, is as close to a moderate Democrat as you’ll find these days.  And, while I’d prefer to see Walker Stapleton win this fall, smart money in our increasingly-purple state tells me we’ll probably be dealing with Jared Polis for the next four to eight years.

But moderate (hopefully) though he may be, Jared Polis still has one failing common to Democrats and, to be fair, to plenty of Republican as well – he has a lot of big ideas, but honestly very little idea how much they will cost or how he plans to pay for them.

But here’s the catch:  Colorado’s Constitution demands the state’s budget be balanced.

Wouldn’t it be nice to have something like that at the Imperial level?  Don’t  hold your breath, though, until Congress votes to tighten up those vote-buying purse strings.

Animal’s Daily Crushing Debt News

Thanks to our friends at Pirate’s Cove for the linkback!

The more things (like Presidents) change, the more things stay the same.  Like, say, the Imperial debt.  That does change, because it always increases.  Excerpt:

The federal debt increased by $1,271,158,167,126.72 in fiscal 2018, according to data released today by the Treasury.

The total federal debt started the fiscal year at $20,244,900,016,053.51 according to the Treasury, and finished the fiscal year at $21,516,058,183,180.23.

The federal fiscal year runs from October 1 through September 30.

The $1,271,158,167,126.72 in debt accumulated in fiscal 2018 made fiscal 2018 the eighth fiscal year in the last eleven in which the debt increased by at least one trillion dollars.

The $1,271,158,167,126.72 increase in the federal debt was also the sixth largest fiscal-year debt increase in the history of the United States.

Holy crap.

One of my recurring fantasies about being President (not one of the ones that results in my waking up screaming) is submitting to Congress a budget that involves reducing the Imperial government to pre-Civil War levels, and happily vetoing any budget that spends a penny more than I proposed.

But I’m not President and I’m not likely to be.

Congressional varmints of both parties pay lip service to fiscal sanity, but do little about it.  The Republicans preach spending restraint but are content to tiny decreases in the rate of growth; the Democrats ignore the Laffer curve and shout for tax increases.  Meanwhile we continue to mortgage our grandchildren’s futures.

Again, were I President, my retort with every aforementioned veto would be:  “Fuck you.  Cut spending.”  It would be nice if President Trump showed some such inclinations.

Rule Five Why Socialism Fails Friday

Every time.  Every time socialism is tried, it fails.  You regularly here cries of “that wasn’t real socialism” or “we just need the right Top Men!” but that doesn’t change the fact that socialism fails every fucking time it’s tried.  And here’s why.  Excerpt:

The new “democratic socialists” want to make their followers believe that one could redistribute wealth and income and socialize a large part of the economy without harming production and productivity. They claim that a comprehensive control of the economy by the government would bring more justice and more prosperity. The democratic socialists want more planning and less market. Yet this postulate ignores that socialism does not fail by accident or circumstance. Socialism fails because it suffers from four fundamental design defects.

  • First, socialism eradicates private property and markets and thus eliminates rational calculation.
  • Second, socialism allows soft budgets, so there is no mechanism in place to discard inefficient production methods.
  • Third, abolishing private property and replacing it by the state distorts the incentives.
  • Four, the socialist system with its absence of private property and of free markets inhibits the economic coordination of the system of division of labor and capital.

The Importance of Market Prices

Socialism cannot bring prosperity because it destroys the market functions of private property. Under socialism, private ownership of the means of production no longer exists, and thus there are no market prices for capital goods available. Institutionally, socialism consists in abolishing the market economy and replacing it with a planned economy. By doing away with private property of the means of production, one wipes-out market information and valuation. Even if the socialist administration puts price tags on the consumer goods, and the people may own consumer goods, there is no economic orientation about the relative scarcity of capital goods.

I have one word for you:  Venezuela.

Some folks like to point out the various Scandanavian nations as evidence that the right Top Men can run a socialist nation and not crash into grinding poverty.  They don’t point out that:

  1. Personal taxes are generally sky-high, sometimes approaching 50% of income earned, while…
  2. Business taxes are generally on the low side, encouraging business growth and investment, because…
  3. Much of those state’s revenues come from extraction, mostly from North Sea oil and gas.

What works in Norway won’t work in the United States, in any case.  While there is an extraction boom in the U.S. right now, the fees and taxes from that won’t begin to cover our massive Imperial budget – and wouldn’t, even if that budget were trimmed to a more appropriate less batshit-insane level.

But in fact, we need look no further than the first bullet in the excerpt above for a reason to reject socialism.  Prosperous societies can only exist when private property rights are rigorously protected, and indeed, government really only has two legitimate reasons to exist:  To keep other people from hurting us or taking our stuff.

Socialist governments invariably do both of these things; they invariably hurt people and take their stuff.  And that’s why proponents of socialism need to be hounded to the ends of the earth.