Thursday, October 01, 2015

Capitalism, Socialism and the Pope

Pope Francis’s visit to Cuba and the United States and his previous efforts to bring about a rapprochement between the two countries brings the world’s attention to three facts.

First, Cuba is one of two remaining communist countries in the world — countries dedicated to the belief that individuals have a duty to live for the state. Second, although the United States does not have the freest economy in the world (Hong Kong and Singapore get that honor and we now rank number 16!), it is the symbolic fountainhead of capitalism — a country whose founding document proclaims the right of everyone to pursue their own happiness. Three, there are still people in the world who contend that communism is better.

One way to see the 20th century is to view it as one long debate over economic systems. What was the best way to lift people out of poverty and put them on the road to economic prosperity? Was it capitalism? Or was it some variant of statism — communism, socialism, fascism or the welfare state?

At the beginning of the century you could at least understand why there was a debate. Intelligent people believed that enlightened government could outperform the marketplace. All over the world they tried to put that belief into practice. The result was carnage on a scale never seen before. An estimated 170 million people were killed by their own governments in the last century! That is six times the number who died in combat, fighting wars.

Here is another stunning fact. The great majority of those deaths were at the hands of true believers – people who were ideologically driven and were at least nominally committed to making the world a better place.

By the time the century ended the debate was over. Clearly, people continued to live in poverty not because of the free market, but because of bad government. And this realization led country after country to turn to privatization, deregulation, liberalized international trade and freer markets. The results have been stunning. As this chart shows, 80 percent of the world’s worst poverty (people living on the income equivalent of less than a dollar a day) was eradicated in the past 40 years. Nothing like that has ever happened before. American Enterprise Institute President Arthur Brooks asks:

    "So what did that? What accounts for that? United Nations? US foreign aid? The International Monetary Fund? Central planning? No.

    It was globalization, free trade, the boom in international entrepreneurship. In short, it was the free enterprise system, American style, which is our gift to the world.

    I will state, assert and defend the statement that if you love the poor, if you are a good Samaritan, you must stand for the free enterprise system, and you must defend it, not just for ourselves but for people around the world.It is the best anti-poverty measure ever invented."

As I wrote previously, the Pope’s published views of all this are disappointing and in stark contrast to the views of John Paul II. In Evangelii Gaudium, Pope Francis states:

    "Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.

    …[S]ome people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system"

More than 200 years ago, Adam Smith made a remarkable discovery: you can’t succeed in the marketplace without meeting the needs of others. Competition in the market is competition in meeting other people’s needs. The most successful competitors are the ones who do the very best at meeting other people’s needs. All the charitable institutions in the world over the course of the last decade have not met as many needs as the market meets in a single hour.

The marketplace uniquely melds altruism and self-interest. Take Bill Gates, the man who pioneered the personal computer revolution. By empowering computer users everywhere, he became the world’s richest man; and now he is giving all his wealth away. Was he motivated by selfishness? Or was he altruistically trying to create the greatest good for the greatest number? The beauty of the marketplace is that Gates' motivation doesn’t matter. You get pretty much the same result either way.

In a voluntary exchange, both parties are made better off. Moreover, new entrants into a real market are opportunities for more mutually beneficial exchanges. But under zero sum rationing, other people are a threat. One person’s gain is invariably another person’s loss. One person’s place in the bread line is a place another cannot have. One person’s state-owned housing unit is an apartment another cannot have.

It is under statism, not capitalism, that the powerful exploit the powerless. And unlike Bill Gates, socialist rulers derive their income by theft, not by trade.

Fidel Castro’s former bodyguard Juan Reinaldo Sánchez says that the communist leader “lived like a king” and “ran country like a cross between medieval overlord and Louis XV.” While ordinary Cubans stood in breadlines and suffered the effects of a declining economy, Castro had his own private yacht and his own private island — a luxury Caribbean getaway, complete with dolphins and a turtle farm. In Havana, he lived in an immense estate with a rooftop bowling alley, a basketball court and fully equipped medical center.

I’m aware that on the Pontiff’s way to Washington, the Vatican let it be known that “the Pope is not a liberal.” I am also aware that the wording in encyclicals is often produced by the jockeying and maneuvering of insiders who want to see their favorite idea or phrase blessed by the holy father in print.

Still, the world would be so much better off if Rome would pay better attention to science — both the science of economics and the science of climate.

Everything that is now being done by governments around the world to affect climate change is creating the biggest burdens for those at the bottom of the income ladder. Encouraging the wrong behavior in this regard will only hurt those the pontiff says we should be helping.

And, as the 20th century so clearly shows, bad ideas about economics not only cause harm. Bad political economy kills.



Healthcare premiums up $4865 since Obama promised to cut them $2500

Remember "if you like your healthcare plan you can keep it?" Yeah, that was a pretty good Obama lie. In fact it was PolitiFact's 2013 "Lie of the Year" and also topped the Washington Post's "Biggest Pinocchios of 2013" - "Pinocchio" being a nice of way of saying "pile of bovine excrement."

Of course, we're quite used to wading through great piles of organic fecal material with regards to this administration (red lines in Syria, degrade and destroy ISIS, al-Qaida is decimated), but it does seem the greatest falsehood perpetrated on the American populace was his signature achievement called Obamacare.

Now, before we get to the statistics, take a little stroll down memory lane with me and listen to Obama promise YOU, the American sucker taxpayer that with the passage of Obamacare, health premiums for a family of four will go down $2500 a year.

Gosh it sure sounded good. But. All. Lies.

According to Investors Business Daily, "since 2008, average family premiums have climbed a total of $4,865."

For those of you mathematically challenged, the difference between going down $2,500 and going up is $4,865 is $7,365. Not what I'd call a "rounding error."

However, you really have to give credit to the White House. They've discovered more ways to spin than carnival ride designers. After this fact was revealed, (according to the annual Kaiser Family Foundation report), the White House said it was actually great news because it meant premium costs were rising more slowly than before.

Ohhhh, riiiight.

Now to be fair (and balanced), at least that part is true. Investors Business Daily says "since 2006, the average annual increase for family plans at work has been 4.9%, down from around 10% a year from 1999-2005."

But President Obama did NOT say, hey guys this is a great plan because your premiums will go up not quite as fast. That's not a particularly compelling promise.

"If what he meant was "we're going to keep the rate of increase in premiums about where it's been for several years now," he was being purposefully misleading." [GASP! Our PRESIDENT being purposefully misleading??]

"Of course, even if he did mean what he didn't say, Obama can't claim credit for the slowdown.
The truth is that the current trend started in 2006, long before Obama took office, and longer still before ObamaCare took effect.

And the continued trend of modest premium increases has been due largely to the shift in the employer market toward health savings account-type plans, which just happened to hit the market in 2005."

Oh - health savings account-type plans. Isn't that what conservatives have been recommending for like...forever?



Putin goes where Obama fears to go

Will it take Russian troops to destroy ISIS? Unlike U.S. troops, they would not be hampered by idiotic "Rules of Engagement".  Russian toughness squashed the Muslim Chechens

In dueling speeches at Monday’s UN General Assembly meeting, Barack Obama and Russian President Vladimir Putin sounded off in the latest round of tense relations between the U.S. and Russia. Unfortunately, because of Obama’s thoughtless foreign policy America is looking weak and clueless on the world stage.

Obama continued to rail against Moscow for its actions in Ukraine. “We cannot stand by when the sovereignty and territorial integrity of a nation is flagrantly violated,” he declared. “If that happens without consequence in Ukraine, it could happen to any nation gathered here today.” Of course, “stand by” is precisely what Obama has done with regard to Ukraine and Crimea.

“Stand by” has also been Obama’s “plan” with regard to Syria. And Putin has used the opportunity to bolster Russia’s presence in the Middle East. In a one-two punch this month, the Kremlin provided military support to bolster longtime Syrian ally Bashar al-Assad, and then — just in time for the UN confab — announced an intelligence sharing agreement with Syria, Iraq and Iran to combat the Islamic State.

The Wall Street Journal explains the significance of that move for Iraq: “It’s hard to fault Prime Minister Haider al-Abadi for the decision. He’s watched for a year while the U.S. coalition has made little progress against Islamic State. His decision risks putting Baghdad further under Tehran’s sway, and pushing more Iraqi Sunnis into Islamic State’s arms. But desperate leaders will act in desperate ways.”

One Iraqi militia leader put it this way: “We believe that Russia and Iran are serious about defeating ISIS while the U.S. doesn’t want to defeat ISIS. We wish that the Iraqi government wouldn’t trust or depend heavily on the U.S. because we’ve had a bad experience with the U.S. in this regard.”

So Obama has not only abandoned Iraq to the Islamic State, but to Iran and Russia.

Russia’s pledge to help Assad catches the U.S. flatfooted after Obama’s own pathetic attempts to combat ISIL in Syria have come to nothing. The haphazard air campaign against the Islamic State in Syria or in Iraq has had little impact on stopping the terror group’s territorial gains. And the embarrassing $500 million training program that led to a half-dozen pro-Western boots on the ground in Syria didn’t do much more to instill confidence in America’s abilities. In fact, the program has been suspended.

On the positive side, Obama in his remarks promoted the Islamic State from “JV team” to “apocalyptic cult.” Baby steps.

Fox News' Brit Hume surmised, “Obama’s speech at the UN [Monday] encapsulated perfectly notions that have long driven his foreign policy. He looks upon the behavior of America’s adversaries as not simply self-interested or even evil but mainly outdated, old-fashioned. … Obama warns America against ‘a notion of strength that is defined by opposition to old enemies, perceived adversaries, a rising China or a resurgent Russia, a revolutionary Iran or Islam that is not compatible with peace.’ While those may sound like the very threats we face, Obama further warns against ‘the idea that the only strength that matters for the United States is bellicose words and shows of military force.’ … Does it even occur to him that the problem is not ‘bellicose words’ but following them up by backing down?”

Putin clearly holds the upper hand right now. He has been resolute, bold and committed — all the qualities that Obama has lacked from the beginning. In the name of political expediency, Obama created a power vacuum in Iraq and Syria, allowing the Islamic State to grow and prosper. Now, Russia, which has alternated between being America’s strategic competitor to outright opponent, is stepping in to fill the void.

This is a dangerous situation that will only give Russia (and Iran) a stronger foothold in a region where Obama has steadily ceded U.S. influence and leadership. Regaining the respect of our allies and enemies alike will only get tougher as time goes by. The fact that Putin felt confident enough to call out America at the UN is a prime example of what lies ahead of the U.S. does not regain the mantle of leadership in world affairs.



For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated) and Coral reef compendium. (Updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on A WESTERN HEART.

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