Gay Patriot introduces us to the myth often put forward by the left. This post by Gay Patriot will add to the video by Bill Whittle that follows it:
One of the myths Progressive Leftists elevate to “fact” by constantly repeating it to each other is the idea that Scandinavian countries are the closest on Earth fulfillment to their socialist dream utopia. ~ Gay patriot
Visitors say Danes are joyless to be around. Denmark suffers from high rates of alcoholism. In its use of antidepressants it ranks fourth in the world. (Its fellow Nordics the Icelanders are in front by a wide margin.) Some 5 percent of Danish men have had sex with an animal. Denmark’s productivity is in decline, its workers put in only 28 hours a week, and everybody you meet seems to have a government job. Oh, and as The Telegraph put it, it’s “the cancer capital of the world.”
So how happy can these drunk, depressed, lazy, tumor-ridden, pig-bonking bureaucrats really be?
I think my favorite paragraph is where he cites the Scandinavian Social Contract as the “Ten Commandments of Buzzkill.”
“You shall not believe that you are someone,” goes one. “You shall not believe that you are as good as we are,” is another. Others included “You shall not believe that you are going to amount to anything,” “You shall not believe that you are more important than we are” and “You shall not laugh at us.”
They read like the 10 Commandments of Progressive Leftism…
…From 1970 until 1989, taxes rose exorbitantly, killing private initiative, while entitlements became excessive. Laws were often altered and became unpredictable. As a consequence, Sweden endured two decades of low growth. In 1991-93, the country suffered a severe crash in real estate and banking that reduced GDP by 6 percent. Public spending had surged to 71.7 percent of GDP in 1993, and the budget deficit reached 11 percent of GDP.
TURNING POINT The combination of the crisis and the non-socialist government under Carl Bildt from 1991 to 1994 broke the trend and turned the country around. In 1994, the Social Democrats returned to power and stayed until 2006. Instead of revoking the changes, they completed the fiscal tightening. In 2006, a non-socialist government returned, and Finance Minister Anders Borg, with his trademark ponytail and earring, has led further reforms. Sweden successfully weathered the global financial crisis that started in 2008, and the Financial Times named Borg Europe’s best finance minister last year.
Before 2009, Sweden had a budget surplus, and it has one again. For the past two years, economic growth has been 4 percent on average, and the current-account surplus was 6.7 percent in 2011. The only concerns are the depressed demand for exports caused by the current euro crisis and an unemployment rate that is about 7.5 percent.
Sweden’s traditional scourge is taxes, which used to be the highest in the world. The current government has cut them every year and abolished wealth taxes. Inheritance and gift taxes are also gone. Until 1990, the maximum marginal income tax rate was 90 percent. Today, it is 56.5 percent. That is still one of the world’s highest, after Belgium’s 59.4 and there is strong public support for a cut to 50 percent.
The 26 percent tax on corporate profits may seem reasonable from an American perspective, but Swedish business leaders want to reduce it to 20 percent. Tax competition is fierce in some parts of Europe. Most East European countries, for example, have slashed corporate taxes to 15-19 percent….
Reason.org Weighs in on the “Swedish” experiment, how it got its wealth, noting how it squandered it, and how it is returning to the pre-70’s ideology:
Sweden is a powerful example of the importance of public policy. The Nordic nation became rich between 1870 and 1970 when government was very small, but then began to stagnate as welfare state policies were implemented in the 1970s and 1980s. The CF&P Foundation video explains that Sweden is now shifting back to economic freedom in hopes of undoing the damage caused by an excessive welfare state.
And do not think for a moment that the free-market has not allowed Sweden or other Nordic nations to get back on their feet. This is is pointed out in the following “101” presentation on economics:
For those of us who place more trust in free markets than state-directed economies, we must inevitably (and repeatedly) confront the skeptical interlocutor who details the “successes” of Swedish social democracy. “If state intervention into the economy is so bad, high taxes so destructive, then why is Sweden such a success?” It’s an irritatingly simple question with a incredibly complicated answer, though I do recommend pointing out, when the conversation turns to health care and secondary education, that nothing, in a state the confiscates a massive portion of your income, is “free.” But as many have pointed out, during its boom years, Sweden was a pretty free market place; from the 1970s through the 1990s—when taxes and regulation dramatically increased—the economy slowed until it spun out in the early 1990s…
…So here is my bottom line: When some American pundit, with expertise is everything, explains why some European welfare state “works,” or how everything you know is wrong about taxing income at 75 percent, do a little digging, make use of Google Translate, and don’t trust that, because Swedes and Danes tell researchers that they are happy, the United States should introduce “daddy leave” and provide subsidies to syndicalist newspapers.
The best English-language explication of the Swedish model comes from my pal Johan Norberg, who wrote this brilliant piece for The National Interest a few years back. And watch my interview with Norberg on Swedish welfare politics here and on Naomi Klein here.
The following interview is Johan Norberg, author of In Defense of Global Capitalism, sits down with reason.tv’s Michael C. Moynihan to sort out the myths of the Sweden’s welfare state, health services, tax rates, and its status as the “most successful society the world has ever known.”
National Review seems like a good place to continue the theme of showing how the Nordic countries have used the free-market system to recoup what it has lost with previous regulations that crippled free-enterprise. Here is a comparison between Sweden and Venzuala that was helpful in explaining how Sweden has less regulations that us in many places (a recent phenomenon BTW):
Talk to a Bernie Sanders voter about “socialism” — and they can be very insistent about using the word — and you’ll get paeans to Sweden, which is not a socialist country but a country with large, expensive welfare state. The distinction is not trivial: There is relatively little in the way of state-run enterprise in Sweden; the Swedish government is in fact only a 60 percent partner in the postal service. The Swedish government is, alas, in the casino business, albeit in a more transparent way than American government is. On the Heritage economic-freedom rankings, Sweden isn’t that far behind the United States. It has very high taxes, but taxes are not the only burden that governments put on the economy, not necessarily even the most important, and Sweden outscores the United States on a number of important metrics: free trade, property rights, freedom from corruption, investment freedom, monetary policy, etc. The United States’ small edge in the rankings comes mainly from relatively low taxes and a much less regulated labor market.
Reason.org again weighs in on whether Sweden is the right model for the U.S. to emulate:
The Above Video Description:
To the American mind there may be nothing more quintessentially Swedish than the leggy, blond supermodel.
But there’s another Swedish model that inspires almost as much admiration—the Swedish economic model. With a generous welfare state and high living standards, Sweden seems to prove that socialism works. Much of the hope that swept Barack Obama into the White House rests on the belief that America could reach new heights under a regime of enlightened progressivism, that we could be more like the Swedes.
Not so fast, warns Stockholm University sociologist Charlotta Stern: “If an American told me that the US should be more like Sweden I would say I don’t think it’s possible.” The United States can centralize its health care system and pass other laws that mimic Sweden’s welfare state polices, says Stern, but it’s impossible to replicate a culture that allows those policies to operate about as smoothly as possible. Swedish bureaucracies inspire trust, but their American counterparts (DMV, TSA, IRS) inspire punch lines, if not outrage.
But America could emulate some of the Swedish policies that don’t require extensive bureaucracies. Take school vouchers. Teachers unions in America regard the idea as free-market radicalism, but families in Sweden enjoy universal school choice. Sweden adopted its famously progressive policies during the 1970s, but after years of sluggish economic growth the land of ABBA altered its course in the 1990s, adopting a host of free-market reforms, from deregulation to tax cuts.
Although much of the disco-era welfare state remains, economist Andreas Bergh credits the free market reforms with reviving his nation’s economy. “Sweden is moving in the market economic direction,” says Bergh, “but that does not mean America should be moving in the socialist direction.”
What if the two nations continue on in different directions? Maybe some day when America is looking for a way to rejuvenate its economy, pundits will point to a different kind of Swedish model. One that increases individual choice and competition.
“Sweden—A Supermodel for America?” is produced by Daniel B. Klein, and written and produced by Ted Balaker, who also hosts. Shot by Jonathan Liberman and Henrik Devell, with additional production support by Zach Weissmueller and Sam Corcos and post production by Hawk Jensen and Austin Bragg. Special thanks to Niclas Berggren, Martin Borgs, Nils Karlson, and the Ratio Institute.
Finland is joining military exercises with other Scandinavian countries, as well as several members of NATO, in late May, Finnish media report. The maneuvers called Arctic Challenge will span 12 days, starting May 25, and include nine countries and close to 100 planes. The drills, over Sweden and northern Norway, come amid increased tensions between Russia and its Baltic and Nordic neighbors.
Sweden and Switzerland, which like Finland are not members of NATO, are expected to join the exercise, along with NATO members Norway, the Netherlands, Britain, France, Germany and the United States. Finland plans to send 16 F-18 Hornet fighter jets, while the other countries will supply Gripen “multirole” fighters, F-16s, Eurofighters and Jet Falcons, as well as transports and tankers, Russian news agency Sputnik reported. The Norwegian armed forces said the purpose of the Arctic Challenge exercise is to “learn to coordinate efforts in complicated flight operations conducted in cooperation with NATO.”
Russia has ramped up military activity along its borders with northern Europe, causing consternation in several Baltic and Nordic countries and pre-emptive actions to head off — or prepare for — a possible military crisis. Latvia, which reported a Russian submarine near its coast in mid-March, is beefing up security on its eastern border, while Finland recently began a letter campaign notifying some 900,000 reservists of their duties in a potential crisis. Sweden also intercepted four Russian planes flying over the Baltic Sea in March with their radios off. Russian jets have been intercepted in other instances while flying in European international airspace….
I also pointed out that this promise went back to the Cold War, and was not known about till a Swedish defense think-tank/security firm uncovered the agreements in 1994. The original story’s link has been lost, but it is here on FOI’s site. FOI’s “about us” page has this:
FOI is one of Europe’s leading research institutes in the areas of defence and security. We have 1,000 highly skilled employees with various backgrounds. At FOI, you will find everything from physicists, chemists, engineers, social scientists, mathematicians and philosophers to lawyers, economists and IT technicians…. The Armed Forces and the Swedish Defence Material Administration are our main customers. However, we also accept assignments from civil authorities and industry. Our clients from the defence sector place very high demands on advanced research, which also benefits other customers.
Initially after the end of World War II, Sweden quietly pursued an aggressive independent nuclear weapons program involving plutonium production and nuclear secrets acquisition from all nuclear powers, until the 1960s, when it was abandoned as cost-prohibitive. During the Cold War Sweden appeared to maintain a dual approach to thermonuclear weapons. Publicly, the strict neutrality policy was forcefully maintained, but unofficially strong ties were purportedly kept with the U.S. It was hoped that the U.S. would use conventional and nuclear weapons to strike at Soviet staging areas in the occupied Baltic states in case of a Soviet attack on Sweden. Over time and due to the official neutrality policy, fewer and fewer Swedish military officials were aware of the military cooperation with the west, making such cooperation in the event of war increasingly difficult. At the same time Swedish defensive planning was completely based on help from abroad in the event of war. Later research has shown that every publicly available war-game training, included the scenario that Sweden was under attack from the Soviets, and would rely on NATO forces for defence. The fact that it was not permissible to mention this aloud eventually led to the Swedish armed forces becoming highly misbalanced. For example, a strong ability to defend against an amphibious invasion was maintained, while an ability to strike at inland staging areas was almost completely absent.
In the early 1960s U.S. nuclear submarines armed with mid-range nuclear missiles of type Polaris A-1 were deployed outside the Swedish west coast. Range and safety considerations made this a good area from which to launch a retaliatory nuclear strike on Moscow. The submarines had to be very close to the Swedish coast to hit their intended targets though. As a consequence of this, in 1960, the same year that the submarines were first deployed, the U.S. provided Sweden with a military security guarantee. The U.S. promised to provide military force in aid of Sweden in case of Soviet aggression. This guarantee was kept from the Swedish public until 1994, when a Swedish research commission found evidence for it. As part of the military cooperation the U.S. provided much help in the development of the Saab 37 Viggen, as a strong Swedish air force was seen as necessary to keep Soviet anti-submarine aircraft from operating in the missile launch area. In return Swedish scientists at the Royal Institute of Technology made considerable contributions to enhancing the targeting performance of the Polaris missiles.
Some More Discussion
In this first back-and-forth, I noted some of the above and got this response:
Seems Sweden is searching for the viable balance of Capitalism and Socialism. Good for them. Bernie Sanders seeks the same.
To which I respond:
They want [and have] a lower tax rate than Sanders wants. They dumped their “wealth tax” and “death tax.” They lowered their corporate tax-rate and want it at 20% and below. Lessened regulations on businesses… on-and-on.
Bernie wants the 70’s through 90’s Sweden… I am down with the 2006 and beyond Sweden.
Someone else joined the discussion, and mentioned the following:
My family is Swedish and I can tell you with 100% accuracy they are way better off than we are…. Across the board pretty much.
Again, I respond:
There is a Swedish economist in the post that from first hand experience (and expertise in his field) telling you they are where they are because of the free market and a reduction [greatly] of the welfare state/socialism enterprise. [And, BTW, they use the many life saving drugs produced by the profit motivated “Big Pharma” spending on R&D to extend the lives of their fellow Swedes.]
When you get all these health care services for “free” then people start taking them for granted, calling ambulances without second thoughts, and going to the doctor for simple things that you don’t really need to see a doctor for… False alarms for ambulances and fire trucks end up costing the government and indirectly tax payers huge amounts of money every year. Which is why Sweden has as of late started to reform its health care system by privatizing parts of it. Mind you, these are somewhat limited in scope, but people are able to pay now for private care (1-in-10 now have private insurance/health-care).
…The paradox is that America has been doubling down on government authority over healthcare with the Affordable Care Act, just as more and more European governments, including Denmark, England, Finland, Ireland, Italy, the Netherlands, Norway, Spain, and Sweden, have been forced by public outcry to address the unconscionable waits for care by introducing new laws. But it is even more essential for American voters to realize, and for our government leaders to acknowledge, what other countries are beginning to recognize all over the world. These governments have started to understand that the cure for their failed nationalized health systems is a shift to privatization. And citizens under government-dominated health systems are increasingly circumventing their own systems, pursuing private healthcare to solve the uniformly poor access to care and limited choices.
Let’s consider Sweden, often heralded as the paradigm of a successful welfare state. The facts tell a very different story. Having failed its citizens in healthcare access, the Swedish government has aggressively introduced private market forces into healthcare to improve access, quality, and choices. Although once entirely public, over a quarter of Swedish primary care clinics are now run by the private sector. Sweden’s municipality governments have increased spending on private care contracts by 50% in the past decade. Private nursing facilities now receive substantial public funding to care for patients. Widespread private sector competition has also been introduced into pharmacies to tear down the pre-2009 monopoly over all prescription and non-prescription drugs. Since the Swedish government sold over half of its pharmacies to private firms in 2009, 20 private firms entered the market and over 300 new pharmacies opened, not only improving accessibility but providing the first pharmacies ever to many small towns.
Moreover, despite the fact that an average Swedish family already pays nearly $20,000 annually in taxes toward healthcare according to Swedish economist Per Bylund, about 12% of working adults bought private insurance in 2013, a number that has increased by 67% over the last five years. Half a million Swedes now use private insurance, up from 100,000 a decade ago, even though they are already “guaranteed” public healthcare….
…In the pre-Reagan Era, the media was just as left-leaning and reluctant to discuss the poverty and oppression that permeated the Soviet Union. But there were enough people willing to talk about it outside the media for the truth to get out. The pervasiveness of social media should make it easier, not harder, for conservatives to get a message out around the media gatekeepers. Millennials should be told what happened in Venezuela after his ideological brother Hugo Chavez took over; they should be told how toilet paper became a black market commodity and supermarket shelves became bare. And they should be made aware that Sweden is not quite the utopia they’ve been taught it is, either.
I am amazed at the illiterate nature of politicians who think money is a zero sum game. That wealth is not created through investment. What Ocasio-Cortez apparently doesn’t or won’t understand is that there is no $3 billion out there that New York could spend… there would have been 24-billion-to-27-billion to spend after the 3-billion in tax-breaks — on subways, infrastructure, and the like. But now there is zero. Zilch. Nada. This deal would have created roughly 25,000 well-paying jobs. The residual job creation was estimated to be an additional 67,000 jobs. Wow. See more here:
It costs a pretty penny to earn a diploma in stupid.
The annual list price to attend Boston University — including tuition, fees, room, and board — currently rounds out to $70,000. To acquire a degree in economics from this tony institution of higher learning, an undergrad must complete courses in calculus, microeconomic and macroeconomic analysis, empirical economics, statistics, and assorted electives.
Four years, 52 credits and nearly $300,000 later, the school promises that BU economics majors will depart “with a firm understanding of core microeconomic and macroeconomic theory” and the “empirical skills that are essential to applying economic reasoning in our increasingly data-driven world.”
How, then, to explain the abject economic illiteracy of meteoric media darling and democratic socialist “political rock star” Alexandria Ocasio-Cortez?
Instead of hitting the books, Ocasio-Cortez appears to have spent most of her college days pounding the social-justice pavement. The Boston Globe reports approvingly that she “was active at BU in organizations that empower minorities,” including a stint as president of Alianza Latina, BU’s largest Latin American student organization, and as a student ambassador at the Howard Thurman Center for Common Ground, “which aims to foster inclusiveness among students of all backgrounds.”
Ms. Diversity-ConArtista may be able to blow hot air about Gini coefficients while tweeting anti-capitalist platitudes. But the numbers don’t lie. She’s everything that’s wrong with overpriced liberal ivory towers, radical identity politics, and left-wing media ideologues pining for their next savior.
According to the teachings of the Bible, government should both document and protect the ownership of private property in a nation.
The Bible regularly assumes and reinforces a system in which property belongs to individuals, not to the government or to society as a whole.
We see this implied in the Ten Commandments, for example, because the eighth commandment, “You shall not steal” (Exod. 20:15), assumes that human beings will own property that belongs to them individually and not to other people. I should not steal my neighbor’s ox or donkey because it belongs to my neighbor, not to me and not to anyone else.
The tenth commandment makes this more explicit when it prohibits not just stealing but also desiring to steal what belongs to my neighbor:
“You shall not covet your neighbor’s house; you shall not covet your neighbor’s wife, or his male servant, or his female servant, or his ox, or his donkey, or anything that is your neighbor’s” (Exod. 20:17).
The reason I should not “covet” my neighbor’s house or anything else is that these things belong to my neighbor, not to me and not to the community or the nation.
This assumption of private ownership of property, found in this fundamental moral code of the Bible, puts the Bible in direct opposition to the communist system advocated by Karl Marx. Marx said:
The theory of the Communists may be summed up in the single sentence: abolition of private property.
One reason why communism is so incredibly dehumanizing is that when private property is abolished, government controls all economic activity. And when government controls all economic activity, it controls what you can buy, where you will live, and what job you will have (and therefore what job you are allowed to train for, and where you go to school), and how much you will earn. It essentially controls all of life, and human liberty is destroyed. Communism enslaves people and destroys human freedom of choice. The entire nation becomes one huge prison. For this reason, it seems to me that communism is the most dehumanizing economic system ever invented by man.
Other passages of Scripture also support the idea that property should belong to individuals, not to “society” or to the government (except for certain property required for proper government purposes, such as government offices, military bases, and streets and highways). The Bible contains many laws concerning punishments for stealing and appropriate restitution for damage of another person’s farm animals or agricultural fields (for example, see Exod. 21:28-36; 22:1-15; Deut. 22:1-4; 23:24-25). Another commandment guaranteed that property boundaries would be protected: “You shall not move your neighbor’s landmark, which the men of old have set, in the inheritance that you will hold in the land that the LORD your God is giving you to possess” (Deut. 19:14). To move the landmark was to move the boundaries of the land and thus to steal land that belonged to one’s neighbor (compare Prov. 22:28; 23:10).
Another guarantee of the ownership of private property was the fact that, even if property was sold to someone else, in the Year of Jubilee it had to return to the family that originally owned it:
It shall be a Jubilee for you, when each of you shall return to his property and each of you shall return to his clan (Lev. 25:10).
This is why the land could not be sold forever: “The land shall not be sold in perpetuity, for the land is mine. For you are strangers and sojourners with me” (Lev. 25:23).
This last verse emphasizes the fact that private property is never viewed in the Bible as an absolute right, because all that people have is ultimately given to them by God, and people are viewed as God’s “stewards” to manage what he has entrusted to their care.
Yet the fact remains that, under the overall sovereign lordship of God himself, property is regularly said to belong to individuals, not to the government and not to “society” or the nation as a whole.
When Samuel warned the people about the evils that would be imposed upon them by a king, he emphasized the fact that the monarch, with so much government power, would “take” and “take” and “take” from the people and confiscate things for his own use:
So Samuel told all the words of the LORD to the people who were asking for a king from him. He said, “These will be the ways of the king who will reign over you: he will take your sons and appoint them to his chariots and to be his horsemen and to run before his chariots. And he will appoint for himself commanders of thousands and commanders of fifties, and some to plow his ground and to reap his harvest, and to make his implements of war and the equipment of his chariots. He will take your daughters to be perfumers and cooks and bakers. He will take the best of your fields and vineyards and olive orchards and give them to his servants. He will take the tenth of your grain and of your vineyards and give it to his officers and to his servants. He will take your male servants and female servants and the best of your young men and your donkeys, and put them to his work. He will take the tenth of your flocks, and you shall be his slaves. And in that day you will cry out because of your king, whom you have chosen for yourselves, but the LORD will not answer you in that day” (1 Sam. 8:10-18).
This prediction was tragically fulfilled in the story of the theft of the vineyard of Naboth the Jezreelite by Ahab the wicked king and Jezebel, his even more wicked queen (see 1 Kings 21:1-29). The regular tendency of human governments is to seek to take control of more and more of the property of a nation that God intends to be owned and controlled by private individuals.
SOCIALISM likewise is the taking over of private property, industry, and the capital of a man’s labor. Here is a good working definition of socialism followed by Professor Richards describing it as well:
In order to have a “favorable” view of socialism one must have either forgotten what the entire world learned about socialism from the late nineteenth century on, or have never learned anything about it in the first place. The latter is obviously true of much of the younger generation.
Socialism started out being defined as “government ownership of the means of production,” which is why the government of the Soviet Union confiscated all businesses, factories, and farms, murdering millions of dissenters and resisters in the process. It is also why socialist political parties in Europe, once in power, nationalized as many of the major industries (steel, automobiles, coal mines, electricity, telephone services) as they could. The Labour Party in post-World War II Great Britain would be an example of this. All of this was done, ostensibly, in the name of pursuing material “equality.”
In the foreword to the 1976 edition of his famous book, The Road to Serfdom, Nobel laureate economist Friedrich Hayek wrote that the definition of “socialism” evolved in the twentieth century to mean income redistribution in pursuit of “equality,” not through government ownership of the means of production but through the institutions of the welfare state and the “progressive” income tax. The means may have changed, but the ostensible end—equality—remained the same.
Hayek’s mentor, fellow Austrian economist Ludwig von Mises, explained in his classic treatise Socialism: An Economic and Sociological Analysis, that the welfare state, the “progressive” income tax, and especially pervasive government regulation of business were all tools of “destructionism” in the eyes of the socialists of his day. That is, he observed that the proponents of socialism always employed a two-pronged approach: (1) the government takeover of as many industries and as much land as possible, and (2) attempts to destroy existing capitalist societies with onerous taxes, regulations, the welfare state, inflation, or whatever they thought could get the job done.
Thomas J. DiLorenzo, The Problem with Socialism (New Jersey, NJ: Regnery, 2016), 4-5.
FIRST, here is the article Larry Elder referenced in the audio above regarding the Chicago fire: “Lessons from the Chicago Fire.” WALTER WILLIAMS gives an excellent example of the benefits of price “gouging” (supply and demand) in helping families:
…Here’s a which-is-better question for you. Suppose a hotel room rented for $79 a night prior to Hurricane Katrina’s devastation. Based on that price, an evacuating family of four might rent two adjoining rooms. When they arrive at the hotel, they find the rooms rent for $200; they decide to make do with one room. In my book, that’s wonderful. The family voluntarily opted to make a room available for another family who had to evacuate or whose home was destroyed. Demagogues will call this price-gouging, but I ask you, which is preferable: a room available at $200 or a room unavailable at $79? Rising prices get people to voluntarily economize on goods and services rendered scarcer by the disaster.
After Hurricane Katrina struck, gasoline prices shot up almost a dollar nearly overnight. Some people have been quick to call this price-gouging, particularly since wholesalers and retailers were charging the higher price for gasoline already purchased and in their tanks prior to the hurricane. The fact of business is that what a seller paid for something doesn’t necessarily determine its selling price. Put in a bit more sophisticated way: Historical costs have nothing to do with selling price. For example, suppose you maintained a 10-pound inventory of coffee in your cupboard. When I ran out, you’d occasionally sell me a pound for $2. Suppose there’s a freeze in Brazil destroying much of the coffee crop, driving coffee prices to $5 a pound. Then I come around to purchase coffee. Are you going to charge me $2 a pound, what you paid for it, or $5, what it’s going to cost you to restock your coffee inventory?
Politicians of both parties have rushed in to exploit public ignorance and emotion. Last week Illinois Gov. Rod Blagojevich (Democrat) threatened to prosecute gas companies. Texas Attorney General Greg Abbott (Republican) is threatening legal action against what he called “unconscionable pricing” by hotels. Alabama Attorney General Troy King (Republican) promises to vigorously prosecute businesses that significantly increase prices during the state of emergency. The Bush administration has called for the Justice Department and the Federal Trade Commission to look for evidence of price-gouging, and Congress plans to hold hearings on oil company “price-gouging.”
There’s an important downside to these political attacks on producers. What about the next disaster? How much sense does it make for producers to make the extra effort to provide goods and services if they know they risk prosecution for charging what might be seen as “unconscionable prices”? Politicians would serve us better by focusing their energies on tax-gouging.
…In fact, The New York Times itself described Obama’s economy this way in August 2016: “For three quarters in a row, the growth rate of the economy has hovered around a mere 1%. In the last quarter of 2015 and the first quarter of 2016, the economy expanded at feeble annual rates of 0.9% and 0.8%, respectively. The initial reading for the second quarter of this year, released on Friday, was a disappointing 1.2%.”
GDP growth decelerated in each of the last three quarters of 2016.
And on January 27, 2017, after the government reported that GDP growth for all 2016 was a mere 1.6% — the weakest in five years — the Times announced that “President Trump’s target for economic growth just got a little more distant.”
That same month, the nonpartisan Congressional Budget Office forecast growth this year would be just 1.9%.
There were other signs of stagnation as well. Stocks had flatlined in 2016, with major indexes down slightly. Real median household income dropped that year, according to Sentier Research.
Growth had been so worrisomely slow throughout Obama’s two terms in office that journalists started warning about “secular stagnation.” They said the country was in a period of long, sustained, slow growth resulting from slow population and productivity growth.
In August 2016, the Times declared that “the underlying reality of low growth will haunt whoever wins the White House.”
Predictions of Slow Growth
The next month, CBS News reported that “with U.S. economic growth stuck in low gear for several years, it’s leading many economists to worry that the country has entered a prolonged period where any expansion will be weaker than it has been in the past.”
In short, there was no upward trajectory to the economy on anyone’s radar when Trump took office…..
Dennis Prager poses a 64,000-dollar question to Andy Puzder, which brings clarity to the differences in the two economies when compared so far. (Puzder is an American attorney, author, and businessman… former chief executive officer of CKE Restaurants, the parent company of Hardee’s and Carl’s Jr…. previously a commercial trial lawyer in private practice from 1978 to 1995 who handled many high-profile cases and was active in the pro-life movement…. Puzder is a frequent commentator on economic and political issues.)
Dennis Prager interviews California Senator John Moorlach (37th District) about California Assembly Bill 2943, HOWEVER, the conversation started out with budgets and economics. Sen. Moorlach is a CPA after all. This is the section I clipped for use with friends and family that state California is money rich when you speak about our states debt.
This figure should be positive for healthy organizations. It is derived by tallying the state government’s assets (monetary funds, investments, buildings, roadways, bridges, parks, etc.) and subtracting its obligations. The last positive position California had was during Governor Pete Wilson’s final term where the state had $1.5 billion in unrestricted net assets.
California is now ranked the worst state, below Illinois, whose net position is a negative $143 billion, or $11,174 per person. Illinois’ finances are so bad, they’re telling lottery winners that they may have to delay their payments.
*NOTE: For the 2015/16 fiscal year, CalPERS planned for a 7.5% rate of return, but only managed to achieve a 0.6% rate of return. Seven percent of a $400 billion liability means a shortfall of $28 billion (some 20% of Governor Brown’s general fund budget.)
3. Current Unfunded Retiree Medical Liability
California has the nation’s highest unfunded retiree medical liability at $74.1 to $80 billion.
A John and Ken reality check (posted January 2017):
John and Ken speak to Marc Joffe of the California Policy Center (http://californiapolicycenter.org/) in regard to these recent articles on the subject of California’s fiscal emergency:
There’s been yet another development in the Fight for Fifteen, this time coming to us from the Big Apple. With great fanfare, the Democrats in New York City (and in the state government as well) have been trying to outdo each other this election cycle by jacking up the minimum wage. Recent legislative moves brought the city to the point where they’ve had six minimum wage increases in two years. As you might imagine, this has been particularly tough on the restaurant and bar business. The city is quickly making some eateries essentially unprofitable unless they increase their menu prices to the point where they will likely just drive away customers anyway.
This has Heartland Brewery CEO Jon Bloostein raising the alarm to anyone who will listen. He’s describing the overall effect on his business as that of a “bomb dropping on the city.” And to say that in New York you’ve got to be pretty serious. (Fox Business News)
I’m taking it personally now,” Bloostein told FOX Business’ Stuart Varney on “Varney & Co.” on Friday.
He said restaurant owners “can’t absorb” six minimum-wage increases in a three-year period.
“A bomb fell on the city in 2015,” he said. “I think Albany thinks because it’s New York City we can just add menu prices as high as we want – doesn’t work.”
In response, New York City restaurant owners are pushing for lawmakers to allow them to add a 5% surcharge to offset the cost and help prevent rising prices on the menus, Bloostein said.
Bloostein isn’t objecting to the idea of an increased minimum wage. He just needs the increases to stay somewhere close to other costs and not completely tank his business model. At this point, he’s not even lobbying to have the increased wage scaled back. He’s asking that merchants be allowed to add a 5% city surcharge onto the bill so they can make back some of the losses without having to increase their menu prices, likely scaring more customers off.
Unfortunately, due to New York City’s oppressive nanny state rules, he can’t even do that without getting the permission of City Hall.
Allowing restaurants to put such a surcharge on their customers’ bills would be a reminder of exactly who raised the menu prices and what the money was going toward. Even as overwhelmingly liberal as the city is, sooner or later the government is going to price them out of existence and just possibly convince New Yorkers to take a look at some other candidates when they go to the polls. But de Blasio just won another term in office handily, so it’s hard to be too sympathetic to diners facing higher prices when they go out to dinner. You keep voting these people back into office and you really do get what you deserve.
(Should start at the interview if “play” is pressed.) Talking all things media malpractice on the YouTube headquarters shooter, Detroit zoo poo, Japanese pregnancy forgiveness, and more. Dr Thomas Sowell stops in to talk economics and Owen Benjamin swings by to discuss his new YouTube strike and Twitter ban!