Tuesday, November 6, 2018

VOTE! (If you can pass this quiz)


"VOTE!", we are commanded.  Every elections season we are incessantly barked-at to go to the polls and participate in our democracy.  That's not surprising.  The same people ordering us to vote are the ones who dominate dominate the narrative.  They think their message has gotten through and we'll vote according to their dictates. This is true on both sides of the aisle.  If a Leftist is ordering you to vote, chances are they think you are a Leftist too.  Ditto on the Right.

I also believe you should vote, but only if you are informed enough to make an intelligent decision.  Do you know some history, some economics, and some current events (and not the "fake news" versions)?

Voting for the sake of voting without being informed is the same as investing without having a clue; you are bound to lose your shirt.  I have no interest in morons choosing my government.  None at all.

So, here's a brief quiz to see if you should vote:

  1.   Who famously said, "I can see Russia from my house!" 
  2.   Who told Americans in the wake of 9/11 to, "Go shopping!"
  3.   What President's policies ended the Great Recession, finally found Osama bin Laden, and achieved its military goals in Afghanistan and Iraq?
  4.   Which President praised neo-Nazis in Charlottesville, VA, and mocked a reporter's handicap?


If you nailed this quiz, go vote.  If not, stay home and read a book on economics or history.   


Answers:
1. Tina Fey said that.  Sarah Palin never did.  
2.  Newsweek said that.  George W. Bush never did.
3.  George W. Bush's policies did those things, not Barack Obama's, even though he was in office at the time.
4.  No President did that, including Donald Trump, who said some of the people in Charlottesville protesting removal of a statue were "good people".  He never praised the neo-Nazis who were there.  And many media outlets falsely accused Trump of mocking a reporter's handicap by gesticulating in a spastic manner, which he DID do, but A) the handicapped reporter was not spastic, and B) Trump uses that spastic gesture ALL THE TIME, and even used it earlier in the same speech when referring to indecisive military Generals!      




    


     

Monday, November 5, 2018

Socialism is the Darwin Award for Economic Ignorance



Socialism is poised for a big victory in tomorrow's 2018 midterm elections.  The so-called "big blue wave" is, among other things, a big socialist wave.  Democrats have overnight become the 'Democrat Socialist Party" and across the board are running on massively expanding government entitlements, all paid for by redistributing wealth from everyone richer than you... to you.  What could possibly go wrong?   

Most people paying attention to economic history know full well that all forms of socialism lead to economic misery and human suffering.  It's not surprising that some would wish that fate on their fellow countrymen, after all some people are inherently cruel, nihilistic, and even suicidal.  But that doesn't account for everyone sucked into this self-destructive vortex.  Some people are true believers and think that socialism will actually help people.  Why is that?           

Pop quiz:   
  1. Who is the father of modern socialism/communism?  
  2. Who is the father of modern capitalism? 
Odds are you will be able to answer the first question correctly and can name Karl Marx as the father of modern socialism/communism.  You probably can do a decent job of explaining Marxism without even looking it up on Wikipedia.  You may even be familiar with the Marxist slogan, "From each according to his ability, to each according to his need."

Conversely, if you are asked who the father of modern capitalism is, odds are you'd either draw a blank, or be mostly wrong.

If you attended a public school in the U.S., chances are most of your teachers were union members. Unions were prohibited for most government workers prior to the 1960s because organized labor in the U.S. began as a communist/socialist movement.  Public sector unions were seen as a huge conflict of interest. But that changed in the 1960's under Democrat John F. Kennedy, and since then government workers, including school teachers, have flooded into organized labor. That's not to say all teachers and organized laborers are socialists.  Most probably don't even think in those terms, but the politics of organized labor leans undeniably in that direction. You may or may not have been taught Marxism in school, but you probably weren't taught anything positive about "capitalism"!  

If you attended a college in the U.S., particularly in recent years, you are very likely to have been taught Marxism.  Karl Marx's "Communist Manifesto" is the third most assigned book at U.S. colleges today.  That's out of all the books ever published!  The next most assigned book in economics, capitalist or otherwise, is not even close.      

So how did you answer the second question above?  In one sense the answer to that one is again... Karl Marx.  Yes, Karl Marx is both the father of modern communism/socialism AND the father of modern capitalism. Karl Marx was the person who defined that term for the masses in his risible critique of 1860s capitalism, "Das Kapital".  

Many scholars credit a Scotsman named Adam Smith as the person whose ideas most influenced our economic system.  Adam Smith’s book, “An Inquiry into the Nature and Causes of the Wealth of Nations” was actually published in 1776.  (That date rings a bell, no?)  But the word capitalism wasn't in common use in Adam Smith’s day.  He never used it.  We mistakenly call our economic system capitalism because that's what Marx and the critics called it.  The name unfortunately stuck. 

If everyone knows what "Marxism" is, why doesn't everyone know what "Smithism" is?  Because it’s not taught, except to select economics majors.  According to the Open Syllabus Project, Adam Smith is assigned at a rate about 25% compared to Karl Marx.  "Smithism" never became a word the way "Marxism" did.  You can go through K-12 and well beyond in schools in the U.S. and never hear the name Adam Smith, never learn about his ideas, and never understand the influence those ideas had on the founding and success of our country.

Pop quiz:  
  1. What is Supply Side Economics?  
  2. What is Demand Side Economics?
You are probably familiar with the first term, but can you accurately define it?  Have you ever heard of its opposite, Demand Side Economics?  

·         Supply side economics is the theory that people will SUPPLY (create) more value if they are allowed to function in a free market.
   
·         Demand side economics is the theory that people will DEMAND (consume) more value if wealth is redistributed to them.    

These are opposite approaches for achieving different economic goals.  Supply Side seeks to optimize overall economic vitality (Smithism).  Demand Side seeks to stimulate consumption (Keynesianism), or at times to redistribute wealth (Marxism).

If you look up supply side economics on Wikipedia, you’ll find a thorough entry along with plenty of criticisms.  If you look up demand side economics, you’ll get... crickets.  The language in this case does not favor the Marxist/socialist demand side ideology.   Hence, it is not even defined.  [UPDATE:  There is now a short and inaccurate entry on Wikipedia for Demand Side Economics.  When the first version of this piece was written in 2016, there was only a re-direct to "Keynesianism".] 

Pop quiz:

The financial crisis of 2008 was caused by:

      A) Greedy bankers, deregulation, George W Bush, and capitalism
      B) Socialism

Most likely, you are 100% certain the correct answer is A.  

No event had a more profound impact on this country's recent tilt towards socialism than the financial crisis of 2008.  It is said that history is written by the victors.  That has never been more true than in the wake of the financial crisis.  Democrats controlled the government commission that wrote the post-mortem.  Barack Obama won the presidency.  Democrats had both houses of congress.  And liberals made the movies and wrote the books explaining the crisis to the masses. Unfortunately, everything they told you was a deliberate deception designed to exonerate socialism, and scapegoat capitalism.   

The fact is, the financial crisis of 2008 was a perfect demonstration of the failures of socialism. Redistribution of wealth, in this case redistribution of mortgage credit, was at the heart of the financial crisis.  At times, the support for this redistribution was bi-partisan, but the ideology behind it was socialist/demand side regardless of who was advocating.

It all began with the affordable housing goals promoted by Democrats in the early 1990s, which lowered mortgage requirements.  It accelerated in the mid 1990s under Democrat Bill Clinton with further loosening of mortgage standards, pressure on banks to write loose loans, and mandates for government backed companies FNMA (Fannie Mae) and FHLMC (Freddie Mac) to buy all the new mortgages.  It finally reached its apex in 2007 under Republican George W. Bush, while Democrats including Senator Barack Obama, ran both houses of congress.

All of the risk from this socialist redistribution was supposed to be assumed by the federal government, mostly in the form of the afore mentioned government backed companies.  Fannie and Freddie were ground zero for the financial crisis.  No government official took more money from these two companies, and at a faster rate, than the junior Senator from Illinois named Barack Obama.  His closest competitors in that money grab included Barney Frank, Chris Dodd, and Hillary Clinton.  If this is news to you,  it's because they wrote the history.

What they told you was that it was a perfect storm involving greedy bankers, deregulation, and the natural flaws of capitalism.  It was a plausible argument designed to deceive.  Bankers today are no greedier than their banking forebears.  So why did they suddenly engage in such risky lending? Because they were coerced to do so.

Deregulation also had nothing to do with it.  Canadian banks are lightly regulated compared to their U.S. counterparts and none of them failed.  Why the difference?  Only in the U.S. was mortgage credit redistributed.  To make matters worse, government regulations encouraged financial institutions to load up on mortgage backed securities.   Unfortunately, when the scheme went bad the damage quickly spread to the private financial sector bringing the entire global financial system to its knees.

The deceptions about this animated the Occupy Wall Street movement, got Barack Obama elected twice, and are responsible for the acceptance of openly socialist candidates like Bernie Sanders and Ocasio-Cortez today.   They are also part of the continuing campaign that has mischaracterized the mortgage market as an example of free-market failure.

The frightening thing about this is, if history is written by the victors and they engage in deception, aren't we doomed to repeat it?  Fannie and Freddie own just about every new mortgage written since 2008, and the socialist policies promoting home ownership and borrowing accelerated under Barack Obama.  We are currently in the process of building a second real estate bubble.  Adding to that are new socialist bubbles in national debt, student loans, auto loans, and equity prices.

Pop quiz:

People love Scandinavian socialism because:

      A) Scandinavian countries are happy, healthy, productive, prosperous, AND socialist
      B) They misunderstand Scandinavian economics and history

Scandinavian success came long before their experiment with socialism.  They were happy, healthy, productive, and prosperous prior to the 1960s when they first began their turn towards socialism. Socialism had nothing to do with their success.  But sixty years of high taxes and socialism has slowed their growth and momentum.  Until recently, Sweden and Denmark spent more than 100% of their private sectors on government - an obviously unsustainable level.  In response, socialist Europe has been freeing their economies and sharply turning away from socialism.  Switzerland, Ireland, and the U.K. are economically freer than the U.S., and Sweden, yes "socialist" Sweden, is essentially tied with the U.S. in economic freedom today.  (According to the Heritage Foundation rankings.)

Here's the thing:  National socialism has never produced anything long term other than misery, poverty, totalitarianism, and death.  Think Soviet Union, Cuba, Venezuela, and North Korea.  The NAZIS, who brought about the holocaust, WWII, and directly or indirectly caused the death of 70 million people, were known by the German acronym for "National Socialists".

So, that's at the national level.  And long term.  At the local level, socialism can survive a bit longer. Local socialism does not eliminate the incentive killing aspects of socialism, but it does avoid the inevitable monetary collapse.  That's because local governments cannot create money and therefore tend to be more fiscally responsible. National governments can hide their insolvency, plunder future generations, devalue currencies, manipulate interest rates, and cause much bigger problems down the road.

This is an important point that deserves repeating;  socialism cannot work long term at the national level.  The national level is where money is created and controlled.  Our system was never designed to be a socialist system.  The Constitution implied that the states were the proper place for redistributive experimentation.  The conflict of interest at the national level is just too great.  National politicians will eventually destroy the currency, borrow too heavily, undermine the work ethic, and undermine national defense in an attempt to gain and maintain power. The founders knew that.  It is happening today.  We doubled our national debt during just Obama's eight years.  Interest rates were artificially held near zero for that entire time.  If and when rates normalize to historical levels, the debt service alone will cause the kind of pain socialist nations have felt throughout history. We are not immune.
  
In summary: You were indoctrinated to be a socialist. You were indoctrinated to call our system capitalism.  You've been deceived about the benefits of socialism.  You've been deceived about the evils of free markets.  And you've been deceived about the perils of national socialism.  If you still think socialism is great after all that, congratulations, you've earned a Darwin Award in Economics!

Thursday, November 1, 2018

The Roots of Jew Hatred [UPDATED]



The massacre of Jews at a Pittsburgh synagogue last week was the most deadly attack on Jews in our nation's history.  And while a single deranged person did this on his own, these things do not happen in a vacuum.

Being Jewish myself, I always assumed Jew hatred was based on ancient gripes that only simple minds could abide, and since simple minds would always be around, so would Jew hatred.  I still believe that, but I've also seen how contemporary words and attitudes play a role in causing men to act on those ancient gripes.

While my last name is distinctly German, my family all originated in Russia, and I can't trace a single family member back to Germany.  Jewish persecution in Germany goes back much further than the modern holocaust and Hitler's Nazis.

Jews began being murdered in Germany en masse way back in the 11th century.  Not only were Jews a religious minority, they were also accused of usury, causing plagues, and, of course, killing Jesus.  Back then, the church prevented Christians from lending money, so if you borrowed money, you were probably indebted to a Jew.  Moreover, Jews were frozen out of many professions including farming, and thus were less susceptible to plagues which tended to affect agrarian populations.  These things formed the basis of Jew hatred.  Then came the Crusades in the 11th century and Jews began their long history of being slaughtered by Germans.

Despite that, many Jews survived and remained in Germany after the Crusades.  Some even thrived.  But then came Martin Luther.           

In 1543, a German named Martin Luther wrote a 75 page screed called "The Jews and their Lies".  It instantly became a best-seller.  Luther was a key figure in the Protestant Reformation and one of the most influential Christians in history.  He was also a rabid Jew hater.   His book laid out the case that ultimately led to the bulk of the Jews being driven from Germany, and 400 years later, the Holocaust of WWII.

Luther labeled Jews as vermin, vipers, dumb, miserable, stupid, fools, blind, senseless, thieves, and usurers.  To deal with them, his recommendations included burning their synagogues, burning their houses, not allowing them safe passage on roads, forcing them into labor,  and killing them. 

Here's a sample of his conclusions:
Burn down their synagogues, forbid all that I enumerated earlier, force them to work, and deal harshly with them, as Moses did in the wilderness, slaying three thousand lest the whole people perish.

These words have reverberated throughout history.

Which brings me to my point.  In the wake of the slaughter in Pittsburgh, many are looking to point fingers and find out what led this deranged man to take action.  What ideas filled the vacuum of his twisted mind?  Who knows. The only thing we do know is that he was not a Donald Trump supporter.  He was listening to other voices.

A week before the murders, a modern American religious leader and influential Democrat named Louis Farrakhan went on a Jew hating rant in front of a large cheering crowd, and then followed up with this Tweet:



As far as I can tell, no prominent Democrat has publicly and emphatically condemned Louis Farrakhan for this latest Jew hating rant.  None.  Not one. 

Words and ideas matter.  They echo through history.  As a Jew, I must shine a light on this and point out its pedigree.



[UPDATE 11/4/18]
Louis Farrakhan is currently in Iran and chanting "Death to America" and "Death to Israel".  Democrat leaders have remained steadfast in their.....complete and absolute silence.