The flat world that never happened

Thomas Friedman’s 2005 “The World is Flat” postulated a world growing ever closer together, with diminishing barriers both trade and political and a gradual move towards at least elements of world government. With all due respect to Mr. Friedman, this never happened, and does not appear likely to. The questions that arise are: Why not? and Where are we going instead?

“The World is Flat” appeared plausible in the decade after 2005, which is all you can ask a successful book to do, but it was always based on an illusion. After the collapse of Communism in 1991, it had appeared that there were no major divisions between the world’s major powers, so one could envisage the world converging on a kind of lowest-common-denominator social democracy (one could envisage the world converging on truly free capitalism as well, but only if one were completely delusional!)

If the world’s major powers were indeed converging on social democracy, then there would seem little reason why their economies should not converge as well. The “Washington Consensus” a kind of social democrat version of the free market with supposedly benign governments guiding the market so that everybody got gradually richer, could in the Friedman view gradually allow the world to “globalize” with no trade barriers, benignly run large corporations with good governance managing the economy, under the overall control of benign governments, who would set the “ground rules” by international consensus. Living standards would converge worldwide, and over time more and more of the functions of government could be taken over by international bodies, theoretically selected by national governments, but staffed with all-knowing, benign bureaucrats.

For anyone who believes in individual freedom, it was a ghastly prospect. It was also completely contrary to human nature, not allowing at all for the human failings of the Platonic guardians who ran the international bureaucracies. But New York Times writers like Friedman don’t believe in freedom and have very little understanding of human nature.

Make no mistake, there are still powerful forces pushing us towards this dystopia. Google and Facebook, for example, are near-monopolies in their spheres, and their management appears infected with the Thomas Friedman way of thinking. Since their worldview offers no place for dissent from itself, those companies will continue doing everything in their power to prevent contrary voices from emerging. They are instruments of a failed globalist police state, just as the labor camps were instruments of the Soviet tyranny.

SOURCE 

************************************

Fake Bombshell: Trump Admitted Losses a Decade Ago

Trump Freely Admits in Old Video: 'I Was Billions of Dollars in Debt' About 13 Years Ago

A promotional video put out by President Trump years ago throws cold water on the New York Times' exclusive "bombshell" report about Trump's taxes showing "staggering" business losses of more than $1 billion from 1985 through 1994.

In the video, Trump freely admitted that he was "billions of dollars in debt" during that time period.

"I'm Donald Trump and I'm the largest real estate developer in New York. I own buildings all over the place, model agencies, the Miss Universe Pageant, jetliners, golf courses, casinos, and private resorts like Mar-a-Lago -- one of the most spectacular estates anywhere in the world," the bombastic billionaire boasted. "But it wasn't always so easy. About thirteen years ago, I was seriously in trouble. I was billions of dollars in debt. But I fought back and I won -- big league!" he declared.

The big story in the Times in October 1995, in fact, was that Trump was the "Comeback King":

"Though there are still four years to go in the 90's, business and government leaders in New York honored Donald J. Trump yesterday for pulling off what they called "the comeback of the decade." Mr. Trump, the developer who came to epitomize opulent wealth during the 80's before tumbling into deep financial trouble, has managed to erase much of his debt and is moving ahead with major projects at a time other developers are idling."

On Fox and Friends Wednesday morning, Newt Gingrich blasted the hypocrisy of politicians and reporters who are pushing the alleged bombshell.

"It would be fun, for example, to challenge the owner of the New York Times to release all of his tax returns and find out how many loopholes and shelters the New York Times and the family have taken over the last forty or fifty years," he said. "It would be fascinating to have Nancy Pelosi release her family tax returns, find out how many different things they've done because they're pretty rich," he added.

Gingrich pointed out that Trump was "a very serious businessman" who always had the best lawyers and accountants, suggesting that the methods he used to avoid paying taxes were above board.

SOURCE   

***********************************

Socialized medicine update

Compensation paid out for harm and deaths caused by NHS delays and blunders has doubled in five years, an investigation reveals.

Patients groups said the increase in negligence payouts was “extremely worrying” - warning that lives are being lost because of a steep rise in waits for appointments, diagnosis and treatment.

Official figures reveal that in 2017/18 the NHS paid out £655 million in compensation for such cases - an increase from £327 million in 2013/14.

In total, 1,789 patients, or their bereaved families, received payouts in 2017/18, a rise from 1,406 cases in 2013/14.

SOURCE 

***************************************

Capitalism Will Save Us -- If Only We Let It

“With all thy getting, get understanding." (Proverbs 4:7)

HARDLY A DAY goes by without some eminence from business or finance proclaiming with furrowed brow and seeming sorrow that capitalism is in crisis and must be overhauled if it is to survive and not be replaced with some variant of socialism. Inequality, climate change, obscene levels of corporate profits, stagnant wages, soaring healthcare costs, crushing levels of student debt, rampant Wall Street greed, high-tech monsters and much more are all laid at the feet of an allegedly heartless, unresponsive capitalistic system.

It ain't so. Contrary to all this highbrow hand-wringing, the problem is bad government policies and, worse, a fundamental misunderstanding of free markets. It's time for a reality check regarding this much-maligned system.

Capitalism, free enterprise, free markets--whatever you label our system--is moral because one succeeds by meeting the needs and wants of other people. An entrepreneur tries to discern needs people don't know they have until a product or service is introduced to the market. Think Steve Jobs and the iPhone and iPad. Businesspeople try to persuade you to buy what they offer. Unless the government gets involved, there is no coercion. Countless people are trying to come up with ways to make everyone's lives better. If they succeed, they might (gasp!) get rich, but we are all better off.

Ever more sophisticated supply chains rise up, which work precisely because no tsar or central planner is in charge.

Government mistakes--not inherent flaws in free markets--are at the root of every economic crisis in modern times.

The Great Depression was triggered by the draconian Smoot-Hawley Tariff Act, which imposed higher taxes on thousands of import items, triggering a global trade war that devastated economies. This felony was compounded when countries--Germany, Britain and the U.S. were the worst offenders--substantially raised taxes in the teeth of a sharp downturn.

The terrible inflation of the 1970s was the result of the Federal Reserve and other central banks repeatedly printing too much money. The crisis of 2008–09 sprang from the U.S. deliberately weakening the dollar, which set off a flight to hard assets such as housing.

High taxes are growth-killers.

 Taxes are a burden. Countries that keep the burden light do better than those that don't. After it recovered from WWII, Europe had growth rates comparable to or even better than those of the U.S. But in the 1970s the weight of taxation became heavier and heavier with the imposition of VATs and higher effective income tax rates. Result: microscopic paces of expansion.

Every time the U.S. has enacted big tax cuts, its economy has blossomed. The economy's post-Obama pickup came from the 2017 tax reduction and deregulation.

Excessive regulations hurt.

 Regulatory expert Philip Howard cites a typical example: An upstate New York apple orchard is subject to 5,000 rules from 17 different programs. Regulations cost the U.S. some $2 trillion a year. On average, a manufacturer pays $2,000 to $4,000 in annual taxes per worker; its regulatory burden is $20,000 to $35,000. Is it any wonder that manufacturing has suffered until recently?

Don't blame student debt on free enterprise.

 Government is the villain. With the best intentions Washington created programs to help people pay for college, primarily Pell Grants and student loans. Studies from the New York Fed and others confirm that the more money colleges collected via these schemes, the more students were charged.

High-priced healthcare is not a failure of capitalism.

 Free markets are the solution here, not more government control. Ours is a third-party healthcare system: government (primarily Medicare and Medicaid), insurance companies and large employers, not consumers. Hospitals' revenues depend on how well they negotiate with third parties, not on how well they please their patients. What a drug company charges for a medicine is far smaller than what you see reflected on a hospital bill. A big chunk of the price charged goes to pay pharmaceutical benefit managers. Discovering in advance what a procedure might cost is a Herculean effort.

In normal markets, if you make an advance in productivity, competitors will likely follow suit quickly. Not so in healthcare or higher ed.

The Surgery Center of Oklahoma posts all of its prices online. It has topflight surgeons; its overhead is low, by industry standards; and the cost of an operation is a fraction of that charged at traditional hospitals and clinics because patients pay the entire amount in advance. (Prices are higher if a patient wants the center to file their insurance claim.) Yet it has few imitators. Why? Because there is no consumer market. Since third parties foot most of the bill, most patients have no incentive to compare quality and prices, and would be hard put to do so even if they wanted to.

Take electronic records. Every dry cleaner and gas station has had them for 20 years. But not healthcare providers: There was no competitive advantage. Then Washington decided to mandate them but did so destructively, in a manner worthy of the defunct Soviet Union.

Purdue University president Mitch Daniels has frozen tuitions since he took office in 2013. He has enacted numerous efficiencies, so that to attend this prestigious institution a student today pays less than a student did six years ago. By the way, Daniels has boosted the number of Purdue's tenured professors.

But just as with the case of the Surgery Center of Oklahoma and other hospitals, there's no stampede of colleges and universities urgently following Purdue's example.

Free markets reduce poverty.

 Real incomes per person have risen over 50-fold since we achieved independence. Before the Industrial Revolution, which capitalism made possible, individual incomes in the world grew imperceptibly. Today, despite all the economic policy mistakes, poverty is plummeting. Over the past 20 years, 1 billion people have escaped abject poverty.

Free markets always turn scarcity into abundance, today's luxuries into tomorrow's common products.

 Among countless examples is the handheld phone. The first cellphone of the early 1980s--which could only make calls--was as large as a shoe box, weighed as much as a brick, had barely an hour of battery life and cost $3,995. Today there are billions of cellphones, and most have the capability that a supercomputer had a couple of decades ago.

The same happy phenomenon of getting more for less would happen in healthcare if certain free-market reforms were enacted, such as nationwide shopping for medical insurance and removing restrictions on medical savings accounts.

Inequality?

Wages, until recently, had stagnated since the financial crisis of 2008, and they hadn't been improving much in the decade before then. Once again, the problem was faulty government actions.

Investment is the sine qua non for progress, and more investment takes place when money has a stable value. Until the 1970s the dollar had been fixed to gold, and the U.S. economy had grown as no other nation's ever had before. But since then our average growth has declined 25% or more. And guess what: Income growth hasn't been as robust as when we were on the gold standard, either.

Another factor: relentlessly rising medical costs. Employer-provided insurance counts as part of an employee's compensation. Even though compensation has risen, the cash part has lagged. Not helping, either, has been the surge in federal payroll taxes, labeled "FICA" on your paycheck stub. With a regime of low taxes, a trustworthy dollar and a patient-oriented healthcare system, cash wages would rise very nicely.

Profits are essential.

 They are moral. Without them, the economy stagnates and regresses. The economist Joseph Schumpeter famously coined the phrase "creative destruction." Vibrant economies need enormous amounts of new capital to move forward. Change constantly destroys old capital--look at what the internet did to the value of legacy newspaper and magazine publishers--which must be replaced. Capital is needed to finance startups (most fail) and expansions as well as the productivity improvements of existing businesses. Capital comes from profits and savings. In that sense profit is a cost of doing business.

More and more young people want to work for outfits that are not "just" business.

This is one of the great virtues of capitalism: The system seamlessly adjusts to people's wants and expectations. Wise companies quickly pick up and respond to these changes. Forbes has written frequently about these companies and the individuals pioneering their efforts.

Some people in business do bad, amoral or unethical things.

 Yes, they do, but that's not something unique to capitalism. People were guilty of bad behavior long before Adam Smith penned his capitalist classic, An Inquiry into the Nature and Causes of the Wealth of Nations, in 1776. Moreover, in an open, free-market and democratic system, the bad ones are usually flushed out, unlike in authoritarian or socialist regimes.

Socialism never works.

It always leads to blood, tyranny and tears, as can be seen today in Venezuela, Cuba and North Korea and in the recent past in the Soviet Union, Maoist China and communist Cambodia (where, in less than four years, the regime slaughtered more than one fourth of the population).

What about the "socialism" of Scandinavia and Europe?

 They are not socialist in the sense that the government owns and runs the economy. Many of these countries have elaborate welfare programs, restrictive labor laws and overtaxation. But all this is beginning to change.

What self-styled American socialists overlook is that countries like Sweden have been scaling back government. Sweden has been cutting taxes. It has no inheritance tax, and it allows school choice, which is anathema to Bernie Sanders and his ilk. As for the rest of the EU, the average rate of economic growth since the crisis of 2008 has been minuscule, less than half that of the U.S.

More to the point, capitalism creates the wealth that makes welfare states possible. That's why more and more Europeans are looking at pro-capitalist reforms, such as low taxes, to gin up their economies.

SOURCE 

********************************

For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both 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 THE PSYCHOLOGIST.

Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

**************************