What happens when politicians decide they are in a better position than business owners to know how much workers should be paid? We don’t have to guess. Cities like Seattle and New York have already done so with their $15/hour minimum wage mandates. Simone Barron, a lifelong restaurant worker, recounts how “helping” her impacted her wallet, her career, and her life.
Econ 101
The Blue State [Jobs] Crush
Rush Limbaugh on Friday’s show (May 15th) took a call that led him to an important response that places like New York that survive off of their Manhattan business district may lose [permanently] large corporations renting out the office space and paying the high cost of taxes that fund the city and are a large portion of taxes. The people that live and work in the tri-state areas that are also connected to making New York City run (BLUE COLLAR: maintenance, janitorial, tech, etc.) as well as all the business professionals (WHITE COLLAR: administrators, human resources, lawyers, etc.). Not only that, but the new laws and enforcements like these seen in this pandemic may be a cost for companies moving their offices to other states.
Here is an excellent article by the NEW YORK TIMES:
- Manhattan Faces a Reckoning if Working From Home Becomes the Norm: Even after the crisis eases, companies may let workers stay home. That would affect an entire ecosystem, from transit to restaurants to shops. Not to mention the tax base
Here are a couple other note-worthy articles:
- Manhattan New Rentals Plunge 71% as Coronavirus Freezes Market (NBC – NECN)
- Would Gov. Cuomo Rather Have No Businesses in New York Than Businesses That Employ Fewer People? His proposed law would require that corporations return bailout funds if they don’t rehire the same number of employees (REASON)
- ‘If It Saves Just One Life’: Layoffs Start to Hit Media and Suddenly They Notice the Problem (RED STATE)
- 100,000 Businesses Have Permanently Collapsed Under Pandemic Lockdowns (THE FEDERALIST)
Price Gouging During Emergencies | Are There Benefits?
Reposting for recent story.
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.
Socialism Ruined, RUINED, Venezuela! (UPDATED 3-27-2020)
UPDATED VIDEO by REASON TV:
People who fled Cuba and Venezuela warn Americans not to embrace socialism.
See more via my SOCIALISM links
Media personalities claim socialism didn’t cause Venezuela’s collapse, but it did.
POWERLINE sets the idea of “what socialism really is” when they note…
My one quibble is the assumption that Venezuela exemplifies income equality along with socialism. In fact, relatives and friends of the Chavez/Maduro regime have made off with billions while the majority went hungry. Socialism always leads to this kind of stark inequality. As I wrote at the link:
- [T]hat is what socialism is all about: great wealth and power for a handful, poverty and humiliation for the vast majority.
Venezuela is in the midst of economic and social collapse. Which country do you think liberals would love to model our country after?
Stossel has an exchange with famed M.I.T. linguist Noam Chomsky, who once praised former President Hugo Chávez socialist policies.
(H-T to PHIL FERNANDES) Rafael Acevedo is Founder Director of Econintech, and teaches at the Universidad Centroccidental Lisandro Alvarado in Barquisimeto. He is also Director of Politics of the Venezuelan Freedom Movement.
The longer speech by Rafael Acevedo of which the above is a truncation is HERE. Dinesh D’Souza’s wife ,Debbie D’Souza, a native Venezuelan, did a PRAGERU video as well:
We’ve read and watched the news of Venezuelan society collapsing under the weight of socialism. But how bad is it really? See this firsthand account from documentary filmmaker Ami Horowitz.
Dennis Prager first read from an AP story about Jamie Foxx visiting the death hole known as Venezuela (see the FREE REPUBLIC’S POST). Later in the show he actually gets a call from Caracas, Venezuela. I teared up a bit during the call, as did Prager apparently. Good stuff Maynard!
Here is Dennis’ Facebook comment:
Actor Jamie Foxx will pay no price for his visit with Venezuela President Maduro. A rare combo of doing evil — supporting a brutal dictator — and being stupid. Foxx will get picked up by a limo and go home to his mansion in California while the people of Venezuela starve and wait in line for toilet paper thanks to the socialist revolution.
Leftists don’t care about people, they care about ideas. This is Jamie Foxx. He care doesn’t care about the Venezuelan people. He cares about an idea. He loves the idea of equality. It’s painful. Just painful. Will there be a price paid for such radical stupidity? There is nothing a a left-winger could do that would elicit criticism.
Trump Stepping Into Obama’s Bailout Failure
(EPOCH TIMES article linked in pic above)
I grabbed this from my phone, because it is behind a WALL STREET JOURNAL paywall otherwise (for whatever reason my phone got the text?). Enjoy Art Laffer and Stephen Moore:
- Obama’s Bad Stimulus Example: Democrats want to repeat the 2009 strategy of paying Americans not to work.
President Trump is negotiating with Congress over a massive stimulus plan to combat the severe economic and financial fallout from the coronavirus. One idea that seems to be catching on is a check of up to $1,200 to be mailed to every American, while Democrats in Congress want paid-leave policies and expanded welfare benefits. These may provide some needed temporary relief for families but are unlikely to help lift the economy. Keynesian stimulus almost always fails, and often makes the downturn worse and the eventual recovery weaker.
Mr. Trump would be wise to learn the lessons from Barack Obama’s $830 billion American Recovery and Reinvestment Act of 2009. In the wake of the housing meltdown and financial crisis, Congress passed the largest stimulus-spending package in American history. The economic spark and job creation were supposed to appear almost immediately, as money flowed into “shovel ready” construction projects. Vice President Joe Biden barnstormed around the country in 2010 promising a “Summer of Recovery” that never came.
One problem apparent from the start was that only about 15% of the money was used for roads, bridges and other infrastructure projects. More than twice as much went to income-redistribution programs such as Medicaid, food stamps and extended unemployment insurance, or to green-energy projects. Remember the federally subsidized “cash for clunkers” auto trade-in program? That sop to the auto industry did little to shore up employment—or even the auto industry. University of Chicago economist Casey Mulligan calls the postcrisis downturn the “redistribution recession.”
The left is now trumpeting the redistributive stimulus as a wondrous success. Mr. Obama even tweeted earlier this year that his stimulus plan laid the groundwork for “more than a decade of economic growth.” But the facts point in the opposite direction. When his stimulus plan passed, Mr. Obama’s economic team predicted above 4% growth each year from 2011 through 2013.
Fortune tellers with tarot cards and Ouija boards might have gotten closer to the mark. On average, growth from 2009 to 2012 was a mere 2%. Two years after the stimulus the unemployment rate was still 9%, and it would have been much higher if not for the millions of Americans who dropped out of the labor force because jobs were so scarce. The plan was designed to help the middle class, but median household income fell through 2011.
In 2015 the Joint Economic Committee of Congress compared the Obama recovery with the previous eight recessions and found that per capita income growth after 2009 was thousands of dollars below the average. The JEC’s conclusion summarizes the legacy of the Obama stimulus: “On economic growth the Obama recovery ranks dead last.”
To paint a rosy picture, Democrats have had to argue that the economy would have been even worse, bordering on a second Great Depression, without all of the spending. Yet their outlook before passing the stimulus exposes that argument as a mere shifting of goal posts. Actual job growth after 2009 was lower than what Mr. Obama’s economic team predicted it would have been without the hundreds of billions in spending. That’s some “investment.”
Then as now, Nancy Pelosi was speaker of the House. Her strategy was, as Mr. Obama’s chief of staff put it, not to let a crisis “go to waste.” The 2009 stimulus morphed into a giant welfare bill—by design. Mrs. Pelosi said back then that spending money on food stamps and unemployment insurance was “fast acting” and “fiscally possible,” and that these programs could deliver a surplus of economic activity for every dollar spent. Magically, paying people not to work was supposed to get more people to work.
Now she is peddling the same economic non sequiturs, hoping to salvage employment while passing two weeks of paid leave for employers with fewer than 500 workers, beefed-up unemployment insurance, and other redistribution programs at a price tag of hundreds of billions of dollars. Democrats even tried to make the paid-leave provision permanent. All this spending will decrease the number of Americans who return quickly to work after the crisis.
Given the current public-health strategy of social distancing, providing cash and in-kind benefits to tens of millions of stranded workers may be a prudent and compassionate approach. But no one should pretend these programs will stimulate recovery. They are likelier to prolong a slump, as the Obama strategy did. President Trump should beware: Another redistribution recession might even ensure that Joe Biden takes his job in November.
A much simpler and more effective stimulus would be a pro-growth tax cut, such as a suspension of the payroll tax. In addition to boosting take-home pay, it would give 27 million small businesses an incentive to hire rather than fire.
Mr. Laffer is chairman of Laffer Associates. Mr. Moore is a senior fellow at the Heritage Foundation. They are authors of “Trumponomics: Inside the America First Plan to Revive Our Economy.”
The “Simpson’s” Explain Minimum Wage
Red States vs. Blue States (Supply-n-Demand)
I wanted to share two articles to exemplify and introduction to a HERITAGE FOUNDATION article about competition between states. The first is this article found over at HOT AIR, and it shows the damage that distortions to supply and demand for some sort of egalitarian or environmental concern can have on productive endeavors that increase the wealth of the common man. Wealth creation in other words:
If you know anything about New York in the modern era (both the state and the Big Apple), you’re likely aware that it’s not exactly a friendly landscape for the oil and gas industry. The “Keep it in the ground” crowd has a lot of influence with the Democrats who control the government. That[‘s] why, back in 2013, when the new Constitution Pipeline was proposed to carry natural gas from Pennsylvania’s rich shale oil fields to New York, activists were able to block the construction despite it already having been approved by federal regulators. Similarly, when National Grid (the local energy consortium) requested an extension to the Williams Co. Transco pipeline, they were also tied up because of the outcry from environmental activists.
Here comes the surprise that nobody could have possibly seen coming. The city and its surrounding downstate region are still expanding with new construction projects, but their energy suppliers have told them that they will not be able to supply natural gas to any new customers because they’re already at capacity. (NY Post)
Long Islanders were recently hit with bad news. National Grid, which provides natural gas for nearly 600,000 Long Island residents, announced it won’t be able to provide fuel for new customers if the proposed Williams Co. Transco pipeline expansion isn’t approved by May 15.
Earlier this year, energy company Con Ed imposed a similar moratorium on new natural-gas service in parts of Westchester County due to limited capacity on existing pipelines. These crises are completely avoidable…
For too long, politicians like Gov. Andrew Cuomo and their ill-considered energy policies have hampered the development of safe, efficient energy infrastructure, subjecting American consumers to unnecessarily high energy costs and unreliable service.
So you don’t want pipelines, eh? But you say you’d like to build more houses, apartments and office buildings? Well, you’d better figure out how to cook your food and heat your living spaces with solar panels pretty quickly because (to borrow a phrase from GoT) winter is coming. And so is lunchtime…..
The second article deals with on the one hand a Utopian [mis]understanding of alternative energy and it’s own “supply-and-demand” features built into the environmentalist hypothesis (that in the end do not fit reality). I have said for years that the supply of heavy metals and lithium which are the main ingredient to make power cells for cell phones and laptops (small/reasonable), to a whole swath of them in rows in electric cars (unreasonable).
Let me explain why I just said “unreasonable.” These ventures with Tesla and other manufacturers of electric vehicles are not a “supply-and-demand” by the free market. These ventures into wind, solar, and electric vehicles ONLY EXIST because our government has funded their “viability” in a world that if left to stand on their own would go out of business. The technology is old and never really worked, and the only people that buy Teslas, as an example, are the rich, and they are given a form of welfare to do so. (In other words, the rich are getting a form of bailout by environmentalists that say the rich are ruining the environment.)
Here is POWERLINE’S article in part:
“Green” advocates aspire to power the entire U.S. electrical system with wind and solar energy. How are they going to do that, given that wind turbines produce electricity only around 40% of the time, and solar panels produce electricity, in most areas, less than 25% of the time? The truthful answer is that whenever utilities build (or contract with) a wind farm or a solar installation, they also build a natural gas plant to provide electricity during the majority of the time when the “green” resources are idle. This is why wind and solar energy, unlike nuclear power, actually lock us into fossil fuel use for the indefinite future.
Of course, green power advocates don’t admit that they plan on using natural gas forever. They hold out hope that electricity produced by wind and solar facilities will be stored in batteries–giant ones, I assume–so that it can be used when the wind doesn’t blow and the sun doesn’t shine. No such batteries exist, of course, which is why they are not already in use. And any existing or foreseeable battery technology would rely on vast amounts of lithium, which must be mined.
Currently, the Chinese are “rush[ing] to dominate the global supply of lithium.” We do have lithium deposits in the United States, notably in the Panamint Valley of California. The Los Angeles Times reports: “A war is brewing over lithium mining at the edge of Death Valley.”
Recently, the Australia-based firm Battery Mineral Resources Ltd. asked the federal government for permission to drill four exploratory wells to see if the hot, salty brine beneath the valley floor contains economically viable concentrations of lithium. …
The drilling request has generated strong opposition from the Center for Biological Diversity, the Sierra Club and the Defenders of Wildlife, who say the drilling project would be an initial step toward the creation of a full-scale lithium mining operation.
That is the idea, I suppose.
[….]
Does it matter? There is great demand for lithium used in existing technologies–phones, laptops, electric vehicles, and so on. But the idea that batteries of any foreseeable design will combine with wind turbines and solar panels to satisfy America’s need for electricity is a fantasy. For one thing, batteries of the requisite capacity would be prohibitively expensive. It has been calculated that, using the most advanced battery technology on the market, Tesla’s 100 MW, 129 MWh battery in use in South Australia, it would cost $133 billion to store the electricity needs of my state, Minnesota, for 24 hours. That is more than one-third of the state’s annual GDP…..
AGAIN, the immutable law of supply-and-demand will come into play in rising prices of “alternative energy” and scarcity of availability… based on egalitarian environmental concerns.
N O W, here is the intro to the HERITAGE FOUNDATION article noting the differences between blue-state policies and red-state policies… much of which is based on supply-and-demand regarding energy needs:
The competition among the states is becoming more intense as businesses become more mobile. Toyota and Boeing are two high-profile employers in America that have crossed state borders because of the policy advantages of one state over another. Toyota moved from high-income-tax California to no-income-tax Texas, and Boeing, based in Washington, a forced-union state, opened a new plant in South Carolina, which has a right-to-work (RTW) law. Texas Governor Rick Perry and California Governor Jerry Brown have openly sparred in recent years about which state is more pro-business. Interstate competition allows governors and legislators to learn from each other about which policies create wealth and which policies diminish wealth inside their borders.
In recent years, governors have generally divided into two competing camps, which we call the “red state model” and the “blue state model,” raising the stakes in this interstate competition. The conservative red state model is predicated on low tax rates, right-to-work laws, light regulation, and pro-energy development policies. This policy strategy is now common in most of the Southern states and the more rural and mountain states. Meanwhile, the liberal blue state model is predominantly found in the Northeast, California, Illinois, Minnesota, and, until recently, Michigan and Ohio. The blue states have doubled down on policies that include high levels of government spending, high income tax rates on the rich, generous welfare benefits, forced-union requirements, super-minimum-wage laws, and restrictions on oil and gas drilling.
In no area are the effects of these competing models more evident than in tax policy changes of recent years. California, Connecticut, Hawaii, Illinois, Minnesota, New York, and Oregon have raised their income tax rates on “the rich” since 2008.[1] In four of these states, the combined state and local income tax rate exceeds 10 percent, reaching 13.3 percent in California and 12.7 percent in New York.[2] Meanwhile, the “red states” of Arizona, Arkansas,[3] Kansas,[4] Missouri,[5] North Carolina, Oklahoma, and Idaho[6] have cut their tax rates. This has widened the income tax differential between blue states and red states for businesses and upper-income families.
Similarly, red states such as Oklahoma, Texas, and North Dakota have embraced the oil and gas drilling revolution in America. Blue states such as New York, Vermont, Illinois, and California have resisted it. Blue states have raised their minimum wages; red states generally have not.
In this study, which is a summary of our recent book with Rex Sinquefield and Travis Brown, An Inquiry into the Nature and Causes of the Wealth of States: How Taxes, Energy, and Worker Freedom Will Change the Balance of Power Among States, we examine whether these policy differentials matter and, if so, by how much.
The answer is that the states’ policy choices on taxes, regulation, energy policy, labor laws, educational choice, and so forth have a large and in most cases a statistically significant impact on the prosperity of states over each 10-year time frame examined on a rolling basis from 1970 to 2012. There are always exceptions to the rule, but in most cases the red state model is substantially outperforming the blue state model.
We find in particular that two policies matter most. Right-to-work states substantially outperform non–right-to-work states, and states with no or low income taxes have a much better economic record than high-income-tax states…..
GPA Redistribution – It’s Only Fair
Would college students support a policy that would force those with high GPAs to donate part of their own GPA to help those with lower grades? With the recent rise of politicians like Bernie Sanders and Alexandria Ocasio-Cortez, more people than ever support socialist policies. But would they support socialist policies when it came to their GPA? We went to Florida International University to find out.
Here is an old one not set-up as well: Every year college YAF chapters submit a GPA Redistribution video, and this year, Davidson won (h-t, ACE OF SPADES):
Scandinavian Socialism (Stossel Update)
WATCH the documentary on Amazon Prime: “Sweden: Lessons for America?” (1-hour)
(Jump to the challenges directed at me dealing with America protecting these smaller countries)
The Myth
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
Kyle Smith, writing in the NY Post, digs a little deeper and discovers that, like almost everything Progressive leftists believe, the Myth of Scandinavian Utopia really is as much a myth as the college rape epidemic, the genius of Barack Obama, or the popularity of gun control.
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…
Economics 101
In an excellent Bloomberg article entitled, “Booming Sweden’s Free-Market Solution,” the myth is dismantled in toto by Anders Aslund. Here is a snippet:
…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:
The Above Video Description via Reason.org:
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.”
- See also the Mises article about the health care system entitled: “The Market is Taking Over Sweden’s Health Care.” See also “How Laissez-Faire Made Sweden Rich.”
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.
A Challenge Directed At Me
In conversation about an audio upload to my YouTube Channel of Dennis Prager discussing Bernie Sanders, I was challenged with this:
- Sweden is not a Nato member so how does the US pay for Sweden defense? Pointing at Whittle and saying “because he say they do” won’t cut it.
To which I responded with a quote from an International Business Times article:
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.
Here is the info from the old article via WIKI:
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….
(Hoover Insitute, “Defining Ideas: The Surprising International Consensus on Healthcare“)
Gay Patriot ends the beginning of this post well:
…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.
Rep. Ocasio-Cortez’s Abject Economic Illiteracy
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:
- Ocasio-Cortez Displays Her Economics Genius Once Again. Donald Trump Jr. Crushes Her In One Tweet
- Alexandria Ocasio-Cortez’s Cringeworthy Reaction to Amazon’s HQ2 Pullout Proves How out of Touch She Really Is
NATIONAL REVIEW’S article from July of 2018 seems fitting:
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.
The Bible Assumes Private Property and Business Ownership
(Originally posted February 2011)
Here is a great quote from Dr. Grudem:
A. PRIVATE PROPERTY
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.
The earth is the LORD’S and the fullness thereof, the world and those who dwell therein (Ps. 24:1; compare Ps. 50:10-12; Hag. 2:8).
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.
- Wayne Grudem, Politics According to the Bible [Grand Rapids, MI: Zondervan, 2010], 261-263.
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.
Economy – Trump’s vs. Obama’s Upward Trajectories
The new economic lie is with the sad growth of GDP during Obama’s tenure AS COMPARED to Trump’s “upward trajectory.” The IBD article Prager is reading from is entitled “Economic Boom: Media Rewrite History To Credit Obama Instead Of Trump“.
IBD:
…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.)