Democrats and Socialist Fantasy

Democratic historian Arthur Schlesinger dismissed President Ronald Reagan’s belief that the Soviet Union was nearing economic collapse. On his trip to Moscow in the early 1980s, Schlesinger claimed to have “found more goods in the shops, more food in the markets, more cars on the street – more of almost everything, except, for some reason, caviar.” Continue reading


America (Especially Evangelicals) Rejects a Third Obama Term

Last night Bible-believing Christians showed up for the Republican Party. And they can be cheerful with key statements in the Republican Party Platform.

“We are the party of the Declaration of Independence and the Constitution. The Declaration sets forth the fundamental precepts of American government: That God bestows certain inalienable rights on every individual, thus producing human equality; that government exists first and foremost to protect those inalienable rights; that man-made law must be consistent with God-given, natural rights; and that if God-given, natural, inalienable rights come in conflict with government, court, or human-granted rights, God-given, natural, inalienable rights always prevail….”

“Traditional marriage and family, based on marriage between one man and one woman, is the foundation for a free society and has for millennia been entrusted with rearing children and instilling cultural values.”

“The Bill of Rights lists religious liberty, with its rights of conscience, as the first freedom to be protected.”

“Ongoing attempts to compel individuals, businesses, and institutions of faith to transgress their beliefs are part of a misguided effort to undermine religion and drive it from the public square.”

“Government officials threaten religious colleges and universities with massive fines and seek to control their personnel decisions. Places of worship for the first time in our history have reason to fear the loss of tax-exempt status merely for espousing and practicing traditional religious beliefs that have been held across the world for thousands of years, and for almost four centuries in America.”

“We value the right of America’s religious leaders to preach, and Americans to speak freely, according to their faith…. We pledge to safeguard religious institutions.”

“We endorse the First Amendment Defense Act, Republican legislation in the House and Senate which will bar government discrimination against individuals and businesses for acting on the belief that marriage is the union of one man and one woman.”

“[W]e assert the sanctity of human life and affirm that the unborn child has a fundamental right to life which cannot be infringed. We support a human life amendment to the Constitution and legislation to make clear that the Fourteenth Amendment’s protections apply to children before birth.”


“The High-Wage Fallacy”

“Well, it is not fair that we have to compete with poor countries where industry pays workers peanuts.” How many times have you heard that American goods are unable to compete with goods produced by low-wage workers in poorer nations? In his book Basic Economics (2011), Thomas Sowell presents some “stubborn facts” which clarifies the issue.

For centuries wealthier countries with high-wage workers exported to low-wage countries. In the 16th and 17th centuries, the Dutch Republic had some of the highest-paid workers in the world and it was a leader in international trade. The greatest exporter of the 19th century was Britain and its wage rates were much higher than most of the countries it traded with. There are other examples were high-wage nations had great success in international trade.

As it turns out, those who expect that America’s higher-wage workers cannot compete with low-wage countries confuse “wage rates with labor costs – and labor costs with total costs.” Sowell explains the flaw in the high-wage argument: “Wage rates are measured per hour of work. Labor costs are measured per unit of output. Total costs include not only the cost of labor but also the cost of capital, raw materials, transportation, and other things needed to produce output and bring the finished product to market.”

Let us say that American workers receive wages twice as high as workers in a poorer nation. This is only half the story if American workers produce three times the output per hour. In this scenario, the important point is that America “has the lower labor costs per unit of output.” Higher wage rates per unit of time does not necessarily mean higher costs per unit of output. Sowell cites one study where the average labor productivity of India was 15 percent of American productivity. In this case, an Indian employer paying 20 percent of what an American worker makes would incur a higher cost “to get a given amount of work done in India than in the United States.”

Of course, there are cases where a low-wage country can gain jobs at the expense of a high-wage country. However, this is a sign that an industry has a problem with inefficiency (ie. slow to modernize). Competition (whether domestic or international) rewards industry that meets the needs of consumers looking for decent and affordable goods.

There will be some American industries adversely affected by cheaper or better products from elsewhere. Yet when this happens it is often pitched politically as “our country versus theirs, when in fact it is the old story of domestic special interests versus consumers.” This is a shame. America losing some jobs to low-wage countries “does not imply a net loss of jobs in the economy as a whole.” In fact, the theory of comparative advantage and historical record tells us that international trade and prosperity go hand in hand.


No Oscar for “Trumbo”

Last September a number of entertainment writers were hopeful of the film “Trumbo” scoring an Oscar. It was wishful thinking. Bryan Cranston, Best Actor nominee for “Trumbo,” was shut out at the Oscars last night.

Dalton Trumbo (1905-1976) was a Communist Party member and a Hollywood writer who refused to testify before the House Un-American Activities Committee in 1947. This was the era of worrisome Communist espionage. The Igor Gouzenko affair in Canada the year before alerted officials of the real threat of Communist spying. Fuelling fear of Communist strength within the borders of the United States were President Harry Truman’s Executive Order 9835 that established a federal loyalty program and the actions of the House Committee on Un-American Activities against Communists or those in sympathy.

Recent scholarship using newly released archival documents confirms that mid-century Americans were correct in believing that there was significant Communist infiltration of American government. High profile figures such as Alger Hiss, Julius and Ethel Rosenberg, and others were not innocent victims of anticommunist paranoia, but guilty Communist spies.

But films such as “Trumbo” and other stories driven by the Hollywood Left suggest that the broader “red scare” of the immediate post-World War II period was a witch-hunt driven by anticommunist hysteria. The numbers vary widely with one study claiming that the red scare “ruined the lives of hundreds of thousands of Americans.” This is nonsense. Where is the evidence of the red scare having much of an effect on the employment status of Main Street Americans or causing widespread “ruined” lives? One study suggests that perhaps 2,000 government employees lost their jobs of which anticommunist Senator Joseph McCarthy was responsible for no more than 40 cases.

For many years, Hollywood leftists did quite well. As scholar Ronald Radosh writes, “Communists in the film colony were well paid and lived in a political atmosphere that was not oppressive.” Yes, a small number of real Communists who refused to break from Communism did pay the consequences. Dalton Trumbo spent 10 months in prison. When he returned to Hollywood he continued to write but his work was uncredited. He never stopped regarding America as the major villain on the world scene; for him, Communism was on the “right side of history.”

Others continue to push a perversely romanticized version of home-grown Communists and those on the Left. A recent article in my local newspaper embraces this narrative. Having watched “Trumbo,” journalist Ted Barris writes: “It reminded me of a very scary time in the world…. It made me sad to think that people lost their careers (and in some cases their lives) for their political views in a democratic country … in my lifetime. The hero of the story, Dalton Trumbo, summed it up late in the movie…. ‘The blacklist was a time of evil.’”

I am unaware of the American government killing its citizens for being Communists. Also, Barris avoids any critical assessment of Communism. What about the Stalinist-style “justice” that resulted in ruthless executions of the “Great Terror” or the long horrifying sentences to isolated labor camps of so-called enemies of the state? For balance, it might be helpful if he consulted books such as The Black Book of Communism (Harvard 1999) which argues that Communist regimes were “criminal enterprises in their very essence” carrying out the planned killing of at least 85 million people in the twentieth century.

Romantic views of Communists might make good entertainment for some, but I prefer a more honest assessment of historical facts. Yes, I am glad “Trumbo” did not win an Oscar.



The Unpopular Ontario Leader

In office since 2013, Premier Kathleen Wynne has an approval rating of 21 percent. How does one explain such remarkable unpopularity?

An economic powerhouse since its birth, the province of Ontario is now in a mess. Many critics point to the economic mismanagement of the governing Liberal Party. The past nine budgets have run a deficit and the province is carrying a $300,000,000,000 debt. Although few Ontario taxpayers are happy about paying $11.4 billion in interest on the debt this year, there is another issue that concerns a growing number of people. Wynne’s sex-education curriculum has stunned the moral sensibilities of many.

Wynne’s government spent millions of dollars to promote its new sex-ed curriculum introduced to Ontario’s publicly funded schools in September 2015. The openly gay Wynne made considerable effort to satisfy the tastes of the LGBTQ community.

Many parents are less than enthusiastic with a curriculum introducing homosexuality to grade three students and anal sex to grade six students. There has been a rise of reports of children exposed to pornography, including grade one students watching porn on school-issued tablets.

Parents have responded in a number of ways: letter writing, signing petitions, demonstrations, and pulling their children out of public schools – a significant number of students have left the school system. For example, the Toronto District School Board announced a decrease in enrollment of 2,600 students. At one Toronto public school, 100 students are still absent. There has been a rise in homeschooling and placing students in private Christian schools.

Recently, the grassroots organization Parents As First Educators wrote: “We have seen parents rally across the province, demanding that their voices be heard. These are our children, our responsibilities – not the government’s. After that sham of a consultation process, the Liberal government needs to scrap the sex-ed curriculum, and start respecting parents as the first educators.” I applaud the activism of this group, but a major obstacle is that the secular media and education elites see no problem with progressive sex education.

Wynne has caused much economic pain, but she is also causing a lot of pain with her agenda of social engineering. I expect that Wynne will continue to be an unpopular ideologue until the election of 2018.


The Nonsense of the Young Liberal Mind

Liberals see a lot of problems with society and one of their solutions is to offer more free stuff to people. And politically it appears to be working with many young people. This is troubling.

Eighteenth century Scottish historian Alexander Fraser Tyler worried about the future of democracy. As he argued:

It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.

I am a little more optimistic than Tyler, but I see his point. In recent times, young voters have cast their support and votes for liberal politicians promising free stuff.

It was a depressing day for me when Barack Obama won the 2008 election as it was four years later when he won another term. Having some knowledge of his progressive ideology (the majority of college professors are among the most ignorant when it comes to basic economics), I expected his lack of economic understanding spelled an era of economic malaise for the United States. But even I underestimated the damage, notably today’s 19,000,000,000,000 debt and a historic low labor force participation rate. I never imagined that almost 100,000,000 able-bodied adults would be either not currently in the labor force or have stopped looking for work.

However, promises of free stuff and class warfare rhetoric won the day.

Obamanomics has brought us to 2016. Apparently, the left tilt did not go far enough and there are increasing demands for more socialist ideas. Today, many young college students embrace Senator Bernie Sanders as he seeks the Democratic nomination for president. This democrat socialist is their savior. He offers free tuition and jobs.

Honestly? Who pays for the free stuff? Where do the additional jobs come from? If it is government jobs, who pays for them? Will increasing the taxes of entrepreneurs and business be anywhere near enough to pay for the free stuff? And what ultimately happens when politicians stifle economic investment and punish the creativity of job creators? With less incentives in business circles, what are the consequences for a nation’s productivity and employment numbers?

Maybe it is time for young liberals to do some thinking.

The standard of living of a society depends on a number of things. Land, labor, capital, and other resources are important. But essential are policy decisions. Today there are poor left-leaning countries that have rich natural resources and rich free-market countries with limited natural resources. The deciding factor is a sensible economic policy that encourages a high level of productivity. It is called wealth creation.

History tells us much about those nations who took a socialist path such as USSR, China, North Korea, Cuba etc., and today Venezuela. I like the historical record of successful nations that embraced economic freedom and free-market ways. Wise economic policy built on free-market thinking means greater wealth creation and genuine job creation and, thus, a higher standard of living.

Liberals can feed left-wing baby food to gullible young people, but in the end we all pay. Liberal politicians will continue to spend enthusiastically, print money, kill industry in order to make room for environmental idealism, run high deficits, and adopt many other harmful economic policies unless the people ask, “Is there not a cost?”

Recommended Reading:

Jay W. Richards, Money, Greed and God: Why Capitalism is the Solution and Not the Problem (2009).

Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy (2011)