The Envy and Covetousness of Progressives
Get a load of this op-ed in yesterday’s New York Times: “Give Up on the Estate Tax” by Ray D. Madoff, a professor at Boston College Law School.
Referring to the estate tax, Madoff writes: “This tax, first enacted in 1916, was never intended to be simply a device for raising revenue. Rather, it was meant to address the phenomenon of a small number of Americans controlling large amounts of the country’s wealth — which was considered a national problem.”
Considered a national problem? By whom? Why, by progressives, of course — certain Americans in the early part of the 20th century who hated the fact that some people have more when others had less. What guided the progressives was envy and covetousness, which led inevitably to their ideology of using state power to take away money from the rich, with the purported aim of “equalizing wealth” within society by giving it away to the poor.
Of course, the amount to be redistributed was always less than the amount taxed because the selfless federal politicians and bureaucrats performing this important service expected to be paid handsome salaries for doing so.
Madoff quotes Supreme Court Justice Louis Brandeis (one of the early progressives): “We can have concentrated wealth in the hands of a few or we can have democracy, but we can’t have both.”
That has got to be one of the most ludicrous statements ever uttered. Democracy is a political process by which people cast their votes in elections. Even if most of the wealth is concentrated in a small group of people in a society, how does that prevent everyone else from going to the ballot box and casting their ballots?
When the socialists — oh, excuse me, the progressives — imported their statism to the United States, their justification was based on the notion that there is an inherent conflict between rich and poor in a totally free market. The rich not only keep getting richer, said the statists, but their wealth actually ensures that the poor stay poor.
That is one ludicrous notion. Actually, in a genuinely free market system, everyone’s interests harmonize. The rich provide the businesses and industries that hire the poor. The profits they make go into capital. The savings of the workers also go into capital. That capital enables businesses and industries to purchase the tools and equipment that make the workers more productive. More production means higher revenues and profits. That means higher wages for the workers.
That’s the system that once characterized the United States. No income tax. No estate tax. No Social Security tax. No Medicare tax. No welfare programs, including Social Security, Medicare, Medicaid, education grants, community grants, bailouts, foreign aid, public housing, food stamps, farm subsidies, etcetera. That was the key to wealth, especially for those at the bottom of the economic ladder. It’s not a coincidence that the poor were flooding American shores every day, leaving the lands of statism to come to the land of free markets and unlimited accumulation of wealth.
Does everyone get wealthy in a genuinely free market? Of course not. Some businesses go out of business. Some people make bad investments. That’s the nature of life. What matters, as far as individual liberty is concerned, is: (1) that everyone have the right to become wealthy by engaging in free enterprise (that is, free of government control) and accumulating unlimited amounts of wealth in the process; and (2) a free market raises the overall standard of living for people living in that society.
The problem is that once the progressives realized that there were people getting rich, including people who had been poor before they became rich, that drove the progressives batty. The great sins of envy and covetousness took control over their minds. Their obsession became to convert America’s system to a welfare state, one by which they could use the state to “equalize” wealth.
Why is the United States besieged by economic crises today? The same reason it’s besieged by foreign-policy crises: Because Americans, following the siren song of the progressives and, for that matter, the interventionists, abandoned the principles of liberty, free markets, and a constitutional republic with their embrace of socialism, interventionism, and military empire. What better time to reverse the statist victory than now?
The corrupt "earmark" process still thriving
Some lawmakers were fired by voters this year while others gave notice, but that hasn't stopped the departing public servants from charging up a storm on the nation's credit card.
With Congress angling to finish the lame-duck session this week, a major piece of unfinished business is a $1.27 trillion omnibus appropriations bill. Without the bill or a stopgap measure, the government will shut down after Dec. 18.
That "must-pass" quality has turned the bill into a magnet for earmarks for lawmakers from both parties, including several senators who lost their bids for re-election or are otherwise leaving office. They're seizing their last chance to send money back home, stuffing the bill with 543 earmarks worth about $882 million.
They're hardly alone. Their colleagues who are returning next year have larded up the bill as well. But these senators are almost out the door already. Their efforts to spend more while they still can point to the ingrained nature of Washington's spending culture.
The budget bill is a "continuing resolution," meaning it's intended to freeze government spending at the prior year's levels. Nevertheless, the total cost is $16 billion above last year's budget.
Earmarks are special requests by lawmakers that federal funds be spent on specific projects, almost invariably in their state or district. Though they're a small part of the overall budget, critics say the practice encourages an atmosphere of reckless spending in Washington.
Blanche Lincoln, D-Ark., lost her re-election fight but is leaving with 99 earmarks; Kit Bond, R-Mo., is retiring but taking home 76; Byron Dorgan, D-N.D., also retiring, is taking 57 home; Arlen Specter, D-Pa., lost his primary but is taking 96 earmarks as a consolation prize; George Voinovich, R-Ohio, also retiring, is bringing 68 home; Jim Bunning, R-Ky., forced into retirement by his colleagues, is getting 21 as his going-away gift; Robert Bennett, R-Utah, another primary loser, is taking home 73; Sam Brownback, R-Kan., who is becoming governor of his state, is bringing 39; Judd Gregg, R-N.H., another retiree, is taking a relatively modest 13; and retiring Evan Bayh, D-Ind., is taking just one.
Only one exiting senator, Russ Feingold, D-Wis., is leaving Capitol Hill without an earmark to his name. None of the other senators' offices could be reached by IBD.
Some notable earmarks include Lincoln's $1.8 million for the Dale Bumpers Small Farms Research Center in Arkansas; Lincoln's $1 million for "endophyte research" (it's a type of harmless plant fungi); Bond's $556,000 to study the soybean cyst nematode, a roundworm that eats soybean roots; Dorgan's $7 million for the Center for Nano-scale Energy in North Dakota; Bennett's $16 million for the Kennedy Center for the Performing Arts; and Voinovich's $700,000 for the Ohio-Israel Agriculture Initiative.
The rush has disgusted some GOP budget hawks such as Arizona's John McCain, Oklahoma's Tom Coburn and South Carolina's Jim DeMint. They have vowed a fight to strip earmarks from the bill. Senate Majority Leader Harry Reid, D-Nev., is resisting, accusing Republicans of trying to shut down the government.
"It's going to be a procedural game of chicken," said a Senate GOP staffer. "Reid is clearly operating under the assumption that he can dare us to do a government shutdown. We'll frame it as: 'Will they risk a shutdown to protect their earmarks?' We think we win that battle." The staffer noted that there is no GOP opposition to passing the underlying budget bill, just the earmarks.
FCC's 'net neutrality' puts new Congress to the test
The Federal Communications Commission (FCC) apparently is headed for a 3-2 party-line vote to regulate the Internet on Dec. 21, which Commissioner Robert M. McDowell (a stalwart free-market champion who opposes the regulations) points out is the darkest day of the year. In doing so, the FCC is putting the new Congress to a key first test of whether it can muster the will to overturn the Obama administration's backdoor efforts to push a far-left agenda through regulation.
Regulating the Internet under the banner of so-called network neutrality has been a far-left cause celebre for about eight years. The scare story has always been that if government doesn't step in immediately, the phone and cable companies will block access to websites, interfere with traffic and otherwise ruin the Internet. It hasn't happened, and it won't happen, because of competition. It works. A company that messed with its customers would lose them to a competitor. And competition is only increasing as next-generation wireless becomes an increasingly viable option for home broadband Internet.
But the "problem" the left has been trying to solve is something much bigger than the network-management practices of the phone and cable companies. The left is trying to strike a blow against the free-market system itself, as the leading proponent of these regulations, Robert W. McChesney, founder of the lobbying group Free Press, made clear when he said:
"You will never, ever, in any circumstance, win any struggle at any time. That being said, we have a long way to go. At the moment, the battle over network neutrality is not to completely eliminate the telephone and cable companies. We are not at that point yet. But the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control."
FCC Chairman Julius Genachowski's press secretary, Jen Howard, came to the FCC from Mr. McChesney's Free Press, where she served in the same capacity. The FCC's chief diversity officer, Mark Lloyd, co-authored a Free Press report calling for severe regulation of political talk radio. Mr. McChesney's big-picture strategy looms large at the commission, and the new network-neutrality regulations will move us toward his goal by chilling innovation in network practices and business arrangements by adding unnecessary regulatory interference.
While the FCC is legally an independent agency, under Mr. Genachowski it is a clear extension of the White House. President Obama himself said: "I will take a back seat to no one in my commitment to network neutrality," and the White House has endorsed the FCC's latest power grab. Mr. Genachowski, a Harvard Law School friend of Mr. Obama's and one of his top fundraisers, is one of the most frequent visitors to the White House. Official visitor logs show 78 visits, including at least 11 personal meetings with the president.
These Obama-FCC regulations have been rejected already by Congress and the American people. More than 300 members of Congress signed letters of opposition to FCC Internet regulation, and just 27 have sponsored Rep. Edward J. Markey's bill to impose network-neutrality rules. The bill has not even been introduced in the Senate this Congress. Last Congress, there were just 11 Senate co-sponsors. (Mr. Obama was one of them.) During the recent election, the issue proved an embarrassment for Democrats. A group called the Progressive Change Campaign Committee touted a net-neutrality pledge signed by 95 candidates. All 95 lost.
This sets up a crystal-clear test case of whether the Obama administration can get away with ignoring the election, Congress, the legitimate legislative process and the American people to force a big-government power grab through a regulatory back door.
To pass the test, the House should pass a joint resolution of disapproval under the Congressional Review Act, overturning the network-neutrality order. Senate Republicans then can force a Senate vote with a petition of just 30 senators and force a floor vote that would require just 51 votes to pass. The Congressional Review Act would protect the privileged resolution from filibuster. The Senate has 60 legislative days from when the order is issued on Dec. 21 before the privileged status is lost.
The "Wage and Hour Division": We Can Help Prolong the Recession
Since approximately day two of his administration, President Obama has boasted about what he has done since "day one." Actually, day one was relatively harmless. It was only a half day, and Obama spent it delivering another vapid speech, having a long lunch, and reviewing a boring parade. But on day ten, January 29th, 2009, he began his project of giving employers additional reasons not to hire American workers. On that day he proudly signed the Lilly Ledbetter Fair Pay Act, which allows employees more time to sue employers for alleged pay discrimination.
And from that beginning, the project of exacerbating unemployment and prolonging the recession has been carried out on a broad front of initiatives. The government has borrowed capital and diverted it to less productive uses under the guise of stimuli. Complex new mandates and penalties regarding employee health insurance have been imposed on employers. Further uncertainty has been created by thousands of pages of impending financial legislation and rules and by the possibilities that new energy taxes will be imposed and that President Bush's tax cuts will soon expire.
The Department of Labor's Wage and Hour Division (WHD) has pitched in and done its part. Under the direction of Deputy Administrator Nancy J. Leppink, a stereotypically narrow and humorless bureaucrat, the WHD has taken an adversarial approach to employers. The WHD has hired 250 field investigators to police employers and expects to hire 90 more with funds allocated in the Department of Labor's fiscal year 2011 budget. At a "stakeholder forum" in May, Leppink said she couldn't understand why the WHD should, as it had in the past, give a break to employers who come forward and acknowledge past violations.
In March the WHD announced that it was ending its longstanding practice of issuing opinion letters responding to questions from employers about how labor laws apply to their situations. The questions frequently concerned whether a type of job would be classified as exempt from the overtime requirements of the Fair Labor Standards Act (FLSA). Rather than responding in opinion letters to employers' questions about their specific situations, the WHD now issues "administrator interpretations" setting forth general interpretations of laws and regulations. The WHD claims that issuing administrator interpretations instead of opinion letters "will be a much more efficient and productive use of resources," but so far it has only issued three of them.
While the WHD has ended its service of providing employers with opinions on the classification of their employees, it is preparing to issue regulations requiring employers to render opinions on that subject to the WHD. Next month a notice of proposed rulemaking is expected to be issued on rules under which"[a]ny employers that seek to exclude workers from the FLSA's coverage will be required to perform a classification analysis, disclose that analysis to the worker, and retain that analysis to give to WHD enforcement personnel who might request it." This shift is consistent with the adversarial objective the WHD acknowledged in its Congressional Budget Justification: "WHD's regulatory initiatives will be undertaken with an objective of determining where there are opportunities to shift the burden of compliance to the employer. . . ."
And so the businesses that the administration would like to induce into hiring people become the enemy if they do. On the bright side, however, the WHD has adopted a cheerful new slogan, "We Can Help." They surely can, but if only they wouldn't.
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