Fact Check: The Truth About Global Warming [UPDATED]

A Socratic Guide To The Burning Question Of Our Time

Intro I

There's an old Jewish joke that goes something like this:

No matter what Shlomo did in bed, his wife could never achieve an orgasm. 

Since by Jewish law a wife is entitled to sexual pleasure, they decide to consult their Rabbi. 

The Rabbi listens to their story, strokes his beard, and makes the following suggestion: "Hire a strapping young man. While the two of you are making love, have the young man wave a towel over you. That will get God's attention and he will provide an orgasm."

They go home and follow the Rabbi's advice. They hire a handsome young man and he waves a towel over them as they make love. It does not help and the wife is still unsatisfied. Perplexed, they go back to the Rabbi.

"Okay,' he says to the husband, "Try it reversed. Have the young man make love to your wife and you wave the towel over them."

Once again, they follow the Rabbi's advice. They go home and hire the same strapping young man.

The young man gets into bed with the wife and the husband waves the towel. The young man gets to work with great enthusiasm and soon she has an enormous, room-shaking, ear-splitting, screaming orgasm.

The husband smiles, looks at the young man and says to him triumphantly, "See that, you schmuck? THAT'S how you wave a towel!"

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Intro II

Let’s be clear: the work of science has nothing whatever to do with consensus. Consensus is the business of politics. Science, on the contrary, requires only one investigator who happens to be right, which means that he or she has results that are verifiable by reference to the real world.

In science consensus is irrelevant. What is relevant is reproducible results. The greatest scientists in history are great precisely because they broke with the consensus. There is no such thing as consensus science. If it’s consensus, it isn’t science. If it’s science, it isn’t consensus. Period.

Michael Crichton, author of "Jurassic Park", "Andromeda Strain", "Westworld", and numerous other works of fiction and non-fiction. Crichton also held a medical degree from Harvard.
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A Brief History of the Theory of Global Warming (aka Climate Change)

It all began back in the 1700s when some rock stars - no, not that kind of rock star, geologists actually - were traipsing around Europe and noticed that some of the boulders in the valleys matched the rocks on distant peaks.  The only plausible explanation for how those boulders traveled so far was that they must have been carried by ice.  This idea was fleshed-out a few decades later by a scientist studying skeletons and frozen remains of large mammals in Siberia.  Thus was born the idea of The  Great Ice Age.  But that opened up a whole new can-o-worms; if ice once covered the Earth, what melted the ice?

In 1824, around the same time these ideas were percolating, a scientist named Joseph Fourier figured out that Earth would be much colder without its atmosphere.  Air was trapping heat from the sun and keeping us warm, he said.  Fourier had discovered the greenhouse effect.

Building on Fourier's work, other scientists found that about 70% of the greenhouse effect was due to water vapor, 20% was due to carbon dioxide (CO2), and the final 10% was due to methane, ozone, and other gasses.  A theory developed that maybe changes in the atmosphere had ended The Great Ice Age.

Water vapor was dismissed as a cause because excess water condenses and falls-out as precipitation.  CO2, methane, and ozone do not cycle as quickly, so the theory of melting ice focused primarily on CO2, which while only .04% of the atmosphere, accounts for 20% of the warming effect.

Two things were going on at the same time as all this.  One was the industrial revolution and the burning of coal in newly invented steam engines.  The other was the observation that the existing glaciers were continuing to melt!   Could they be related and tied back to changes in CO2?

Along came a Swedish scientist named Svante Arrhenius, who in 1898 calculated the hypothetical climate change that would result if atmospheric CO2 was cut in half.  He calculated that the Earth would be glaciated...as it was during The Great Ice Age!  He also calculated that if CO2 doubled, we'd have melting ice and ...global warming!  So, the "modern" CO2 theory of global warming dates back to the calculations Arrhenius did 120 years ago in an attempt to explain the onset and demise of The Great Ice Age.   

Meanwhile, we've been burning progressively more carbon fuels like coal, oil, and gas in the last 120 years.  Finally, in 1960, an American scientist named David Keeling began measuring CO2 levels at an observatory in Hawaii.  What he discovered was that CO2 was trending up at an alarming rate!  

So with Keeling showing CO2 skyrocketing, Arrhenius' saying we are going to fry if CO2 rises, and glaciers continuing to melt, that eventually leads to Al Gore, Kyoto, Paris, The UN IPCC, and a scientific "consensus" saying global warming is an "existential threat". (Meaning, the end is nigh!)

In 2009, the U.S. government under Barack Obama officially declared that CO2 emissions endangered life on Earth.  Whole generations now believe we are doomed.  Some have even stopped having children thinking there is no future.   

All from a gas that humans exhale, that plants inhale, that makes up only .04% of our atmosphere, and that formed the basis of a theory developed in the 1800s to try and explain the The Great Ice Age!

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Pop Quiz:

So, what really ended The Great Ice Age?

A. CO2

B. Mr. Milankovitch

Since this whole CO2 inquiry began as an attempt to explain The Great Ice Age, one of the first questions to ask is, was the premise right?  Have we learned anything new since Fourier, Arrhenius, Keeling, et al?  Do we now know what caused and ended The Great Ice Age?

You are probably certain it was CO2.  After all, you've been told for years that CO2  drives climate.  Since the 1800s and Arrhenius we've believed that changes in CO2 can have dramatic effects.  We still believe CO2 is melting glaciers today.  It's "settled science" after all.

Except, that's not what happened.  It turns out, Mr. Milankovitch did it.  (Yup, our climate has been hacked by the Russians! Actually, he was Serbian, just sounds Russian.)  Milutin Milankovitch was a scientist who figured out in the 1920s that the Earth has a cyclical relationship to the sun.  It tilts. It wobbles. It's orbit changes.  Some cycles take 100,000 years to complete.  Some take 41,000 years.  Some take 23,000 years.  The effect of all this is rather dramatic... ta da... climate change!

MILANKOVITCH CYCLES

Of course, Milankovitch was instantly dismissed as a kook.  Even today as I'm typing this, his name is unrecognized by the spell-check gremlins in my computer.  Fourier, Arrhenius, and Keeling, however, are spell-check VIPs.

Until 1998, Milankovitch got no respect.  But then a funny thing happened down in Antarctica.  Scientists drilled an ice core at a place called Vostok (more Russians!) that gave them a 420,000 year climate history, and voila, there were major ice ages and warmings every 100,000 years.  There were also shorter cycles in between.  Milankovitch could no longer be dismissed, except of course by spell-check.

           

Then in 2000 another Antarctic ice core was obtained at Dome C that goes back 800,000 years.  Again it confirmed Milankovitch.  The Great Ice Age now had a plausible explanation.  The Earth's relationship to the sun caused major climate change - global coolings and global warmings - going back as far as we can see.

Dome C Temperature Estimates

If major climate change happens at least every 100,000 years, as Milankovitch theorized, and the Earth is 4.5 billion years old, then there have been 45,000 of those alone.  The Great Ice Age was just the latest in a countless series of coolings and warmings!

Another name that should get mentioned at this point is Eddy, as in John A. Eddy.   Eddy was one of the most recent astronomers to study the cyclical output of the sun.  He published a groundbreaking study in 1976 and named the most recent solar minimums and maximums.   While Milankovitch cycles play out over tens of thousands of years, solar cycles can be as short as 11 years.  They are also closely correlated with...ta da...climate change!

Here are some of the solar minimums and maximums from recent Earth history that resulted in major global warmings and mini-ice ages:

You can see why glaciers are melting today by looking at the right side of the solar activity graph. We are also near a peak in the Milankovitch cycle.  Something would be horribly wrong if glaciers were NOT melting today!

So between Milankovitch's orbital cycles and Eddy's solar cycles, these are the bases for ice ages and their demise.  These are the bases for perpetual climate change.  In addition, one-time events like volcanoes and asteroids can also produce dramatic and sudden climate swings.

[UPDATE 7/31/23:  In addition to volcanoes and asteroids, undersea volcanoes and exothermic releases must be considered.  We are currently experiencing a dramatic and sudden rise in ocean temps which largely occurred over a 4 week period beginning in March, 2023.  The theory is that heat from the Earth's core did this.  An ocean cannot be rapidly heated from above due to marginally hotter air. But an exothermic release from the Earth's core (as hot as the surface of the sun!) could do that.  This theory has been brilliantly fleshed-out over a few years in a post on theethicalskeptic.com website.  https://theethicalskeptic.com/2020/02/16/the-climate-change-alternative-we-ignore-to-our-peril/ 

Moreover, in January, 2022, the largest undersea volcano ever recorded erupted and sent unprecedented amounts of water vapor into the stratosphere.  As we know, 70% of the greenhouse effect is due to water vapor, and the amount from this undersea release is expected to take years if not decades to cycle through.  Unknown is the thermal footprint this had on deep Pacific Ocean temps because our measurements are largely based on surface temps.   https://www.nasa.gov/feature/jpl/tonga-eruption-blasted-unprecedented-amount-of-water-into-stratosphere ]

So, CO2 did not cause either The Great Ice Age or any of the many tens of thousands of cyclical coolings and warmings that preceded it.  It's the fluctuating sun and our wonky orbit that cause climate change.

(A newer ice core at Allan Hills, Antarctica claims to go back over 1.2 million years, and it also confirms Milankovitch.)
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Pop quiz:

Still, within the Milankovitch and Eddy cycles, we know that:

A. CO2 drives climate change 

B. Climate drives CO2 change

Just because Arrhenius et al were wrong about The Great Ice Age doesn't mean they are also wrong about what will happen if we add massive amounts of CO2 to our atmosphere.  According to the CO2 theory of global warming, as CO2 increases, so will temperatures.

That's why you are probably certain that CO2 still drives climate change.  A consensus of scientists, academics, politicians, and celebrities have been telling you for years that higher CO2 concentrations will cause the Earth to get hotter.  As we burn more and more fossil fuels, that releases more CO2 into the air.  CO2 is a greenhouse gas, ergo the Earth gets hotter.  It's simple.

Except, that's not what happens.  Along with temperature records going back 800,000 years, we also got CO2 records for the same time span.

Here's the CO2 and temperature record from the Dome C ice core: 

Dome C Temperature and CO2 for 800,000 Years (Red = CO2, Blue = Temps)

At first glance temperature and CO2 appear to be closely correlated.  One might even conclude that Arrhenius was right and that CO2 caused the ice ages.      

But when zooming in on this graph, something interesting is revealed; CO2 trails temperature by 1200 years, + or - 700 years!  

Climate Change (blue) precedes CO2 Change by 1200, + or - 700 Years

CO2 and the other atmospheric gasses behave somewhat like water vapor, except over a longer timeframe.  We know that hotter air can retain water vapor in greater concentrations than colder air.  There is also a water cycle that is constantly moving water from vapor, to precipitation, to ground, to sea, and then back to vapor.  CO2 has a similar cycle, just not as quick. (See Henry's Law)  

A number of datasets from ice and sediment cores confirm this finding.  The hotter it gets on Earth, the more CO2 can be found in the atmosphere.  Contrary to what you've been told, CO2 does not drive climate.  Climate drives CO2!  The alleged cause is actually an effect.

         

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Pop Quiz:

Still, pumping CO2 into the atmosphere is a new thing, and that's what makes this an existential threat!

A. True

B. False 

As everyone since Keeling knows, CO2 levels are in-fact rising.  And who can forget Al Gore on the scissor lift in his movie showing CO2 going literally off the chart?  And as everyone knows since Arrhenius, more CO2 makes Earth hotter, right?

Except, that's not what's happening.  Yes, we are in a warm period due to both Milankovitch and Eddy, and accordingly, CO2 is rising.  That's to be expected.  But the question remains: is this time different because we are burning fossil fuels?  Can CO2 work both ways?  Can it both be driven by temperature and also drive temperatures up?

If greenhouse gasses both increase as temperatures go up, and then cause even more warming, why is the greenhouse effect not a runaway reaction? According to Arrhenius and modern global warming theory, the greenhouse effect should create a feedback loop.  Why isn't that visible in the ice core data? 

The answer has to do with the light spectrum and each gasses' role in trapping radiation in the troposphere.  

   

At the affected upgoing wavelengths, which are the ones involved in global warming, CO2 is already absorbing 100% of the radiation it is capable of absorbing.  Adding more CO2 into the atmosphere can not trap more than 100% of the affected radiation!  This is why the greenhouse effect is not a runaway reaction or a feedback loop.  It's a self-limiting reaction.

In the 1800s, when Arrhenius was doing his calculations, the instruments for measuring the light spectrum this accurately did not exist. (Then again, neither did antibiotics, airplanes, Model T Fords, transistors...)

Additionally, as CO2 increases, the CO2 cycle speeds up.  Here's an example of how the biosphere absorbs CO2 at faster rates:

So, adding more CO2 into the atmosphere will not effect climate, and any CO2 increases will just grow the biosphere.  

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Pop Quiz:

Still, there is a scientific consensus that says CO2 is uniquely warming our planet, and no one can prove otherwise.     

A.  True

B.  False

Anyone who's taken a middle school science class knows the value of a control group.  Luckily, scientists have the ability to track temperature and CO2 on some of the other bodies around Earth.  Venus, Mars, and the Moon are particularly close to us and have yielded some interesting data.  If global warming theory is right, temperatures on those bodies should be un-correlated to Earth temps because they are free from the effects of industrialization!

Except, that's not what's happening.  In an odd coincidence both Mars and the Moon are warming!  (Of course, it's still man's fault!)  Milankovitch is particularly relevant to the Moon, because as goes the Earth, so goes the Moon.  Eddy is particularly relevant to Mars, because as goes the Sun, so goes Mars.

But there's more.

In our solar system, only Venus, Earth, and Mars have atmospheres with CO2. Of the three, Venus is closest to the sun, has a dense atmosphere, is very hot, and has about 200,000 times the CO2 concentration of Earth.  Mars is furthest from the sun, has a very light atmosphere, is quite cold, and  still has about 14 times the CO2 concentration of Earth!  It appears that distance from the sun is what primarily drives climate on these three planets, not CO2. _________________________________________________________________________________

Pop Quiz:

Still, we know that global warming is true because all the predictions have been right!

A. True

B. False

Real science can accurately predict the future.  If a cannon ball with a known mass, is fired from a cannon with a known amount of force, at a known trajectory, etc., science can predict exactly where it will land.  That's how science works.

If global warming science is real and quantifiable, scientists would be able to similarly predict the future of climate.

Except that's not what has happened.  In fact, every single dire prediction has been proven wrong.  100% wrong.  Here's a brief summary of what the experts have predicted:

• Global famine by the year 2000 - Dr. Paul Ehrlich, Nobel Prize recipient, Professor 
• Entire nations wiped out by 1999 - Noel Brown, U.N. Environmental Director
• Ice caps will melt away and oceans will rise causing massive flooding by 2014 - Al Gore, VPOTUS, global warming evangelist
• End of snow in England by 2015 - Dr. David Viner,  climate scientist at The University of East Anglia
• Increased tornadoes and hurricanes - James Hanson, professor of climate at Columbia University & the high priest of global warming, and The U.N. IPCC
• New Ice Age in Europe - Dr. Paul Ehrlich
• Sub-Saharan Africa drying up - U.N. and World Bank
• Massive flooding in China and India - Asian Development Bank and the Potsdam Institute for Climate Impact Research
• Polar Bear extinction - National Geographic, The New York Times, Guardian, among many.
• Drastic Temperature Increases - James Hanson
• The Earth will be in a “True Planetary Emergency” by 2016 unless greenhouse gasses are reduced - Al Gore

None of those predictions came true.  Not one.  And that is just a tiny sampling.   

And here are some of the bad predictions from just this past year!

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Pop Quiz:

Still, we are under an existential threat because the Earth is progressively getting:

A: Hotter 

B: Colder 

You are probably certain that the Earth is getting hotter.  The name global warming itself describes the danger.  You are probably familiar with the apocryphal "hockey stick" graph featured in "An Inconvenient Truth":

Except, that's not what's happening in the long run:
  

The Earth is actually getting cooler! 

Five million years is not much when you consider the Earth is 4.5 billion years old.  That would take 900 - five million year graphs!  So, here's another graph estimating 65 million years of global climate change, still only a fraction of Earth's life.  Again, it clearly shows Earth is cooling.  

    

The existential threat is that we will eventually freeze, not bake!

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Pop quiz:

Still, in the 200,000 year history of mankind:

A. It has never been this hot

B. It's been much hotter before 

No doubt you are sure it's never been this hot.  It says so on the "hockey stick" graph.  And just consider the melting glaciers!

Yet, we know that 1100 years ago, when the Vikings first went to Iceland, there were no glaciers there.  Today, glaciers cover much of Iceland.  Similarly, Vikings settled on Greenland around the same time and successfully farmed there for 500 years.  But they abandoned Greenland in the mid 15th century, presumably because it got too cold.  Those two events are known as the Medieval Warm Period and The Little Ice Age. Curiously, you won't find either of those events on Al Gore's graph.

Here's a graph that shows 10,000 years of climate change from ice cores on Greenland:

And here's a map of glacial retreat in Glacier Bay, Alaska going back 2 1/2 centuries.  As you can see, glaciers have been in retreat since long before your SUV!

We have enough data to know that this warm period is nothing new.   It's been hotter than this many times before, even in man's brief 200,000 year history.

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You are still free to believe in the CO2 theory of global warming.  Heck, you are free to believe in anything you want, including Santa Claus and the Tooth Fairy!  But any serious person who looks into global warming must reflect long and hard before blindly waving a towel for the consensus.

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I was the founder of Kindzone.com, one of the first companies to test market retail carbon credits.  I've been closely following the science and consensus of global warming for over 20 years.

Ron Reich   

Socialism is the Darwin Award for Economic Ignorance [UPDATED]

Pop quiz:

The United States is:
      A) a capitalist country
      B) a socialist country

No doubt, you were raised to call our economic system, "capitalism".  But did you know that the term "capitalism" is actually a derogatory one?  Do you know who made that term popular?  Did you know that that term didn't exist when the founders designed our economic system? And is it even true that we are a "capitalist" country today?     

The original design of our economic system could best be described as "free-markets and limited-government", not capitalist.  But by the numbers, we have spent the last 100 years moving, or "progressing", away from our original design.  Arguably, we can no longer be considered a free-market / limited-government country.  Here's a graph that chronicles this "progress": (click on the graph to view it in higher resolution)

In 1900, total government spending (federal, state, and local) consumed less than 10% of the private sector (private sector = GDP minus federal, state, and local government spending).  Then, in 1919, exactly 100 years ago, the Communist Party of the USA was founded on an agenda of labor unions and totalitarian socialism.  By the 1930s labor unions were in full bloom, and some of CPUSA's socialist wish-list was already law.  Under Barack Obama, the last President to have a complete record, peace-time government spending consumed about 70% of the private sector. That is the highest peace-time level in our history.  Only WWII exceeded it.  When 70% of a nation's wealth is consumed by government during peace-time, that may not be textbook socialism, but it certainly isn't the free-market / limited-government we had prior to 1929.

In nominal terms, the largest socialist programs on Earth are all U.S. programs.  They make-up about 50% of our total federal, state, and local government spending.  Social Security is the largest government retirement program in the world.  Medicare, Medicaid, SCHIP, Obamacare, etc., make up the largest government medical programs in the world.  Our government welfare programs, federal, state, and local, are the biggest on the planet.  Our food stamp program is the biggest on the planet.  And our accumulated government debt is the largest in the world. Among the most populist countries, none, including countries like China, India, Indonesia, and Russia spend anything near what we do on social programs.  Many European countries do spend more per capita, but they are small compared to the U.S., and the spending differences are, for the most part, minimal.

But spending is not the only measure of a government's size.  Regulation plays an equally important role, and the U.S. economy is highly regulated at the federal, state, and local levels.  In short, one can make the case that between government spending and our high levels of regulation, we have already turned the corner.  For socialists though, there are no limiting principles, and thus there is always more to do.

Our latest socialist push, which began with Barack Obama, is gathering steam and is represented today by Bernie Sanders, Alexandria Ocasio-Cortez, and over half the Democrat party which supports Medicare for All, The Green New Deal, Guaranteed Income, Guaranteed Jobs, 70% - 90% marginal tax rates, and the like.  Today, socialism polls higher than capitalism among Democrats and the young.  It is an inexorable political force that is clearly visible on the graph above.  And it will undoubtedly continue to overtake our once free-market / limited-government system.

Unlike free-markets and limited-government, socialism in its fully realized form requires unlimited, or "totalitarian" government.  That's because coercion is at the heart of it.  Totalitarian government is required to force citizens to do something that is entirely unnatural - work hard without the ability to realize the fruits of one's labor.  (Gee, that sounds familiar. Didn't we fight a civil war over that?).  Dissociating work from reward is the "fatal conceit" of socialism, to borrow a phrase from F.A. Hayek.

But none of that is taught in America today.  Which is why we are where we are, and are careening rapidly towards totalitarian socialism.  Why is this accelerating now?

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!

SOTU: What if we are already a SOCIALIST country?

One of the most interesting lines in last night's SOTU speech was when Donald Trump declared, "The United States will never be a socialist country!"  Would a Bush have ever said that?  How about McCain or Romney?  Certainly no Democrat would ever say that since they consider socialism the future of their party!   

As Republicans applauded the line, the network cameras couldn't find the fresh young face of socialism in America, Alexandria Ocasio-Cortez, though they did manage to find the red-faced scowl of old Bernie Sanders who looked like a stake had just been driven through his heart.  A picture is worth a thousand Marxist dialectics.

I found the line somewhat ironic though, since I've been writing for some time that WE ALREADY ARE A SOCIALIST COUNTRY!  You may not realize it yourself.  Donald Trump may not know it.  And Bernie and Alex certainly don't think the project is complete.  But it's true.  Consider these points:

• In 1900, government consumed less that 10% of the private sector in the U.S.  ("private sector" = GDP minus government spending)
• Under Barack Obama, the last administration to have a complete record, the government consumed around 70% of the private sector in the U.S.
• When a majority of the wealth production of an economy is dedicated to government during peacetime, that is by the modern definition... socialism.

• The big ticket items have all been largely socialized in the U.S. over the last century - housing, education, finance, health care, and retirement.  Only food, transportation, energy, and communication remain as somewhat private sector matters.  (Except of course for food stamps, school lunches, agricultural subsidies, public transportation, Amtrak, TSA, FAA, NTSB, EPA, DOE, etc. etc. etc.)   
• Health care is almost entirely controlled by the government, and for the poor and those over 65 on Medicare and Medicaid, where the bulk of health spending occurs, it is entirely funded by government.
• Virtually every mortgage in the U.S. is owned by a Government Sponsored Entity, like Fannie Mae and Freddie Mac.  
• Every student loan since the Obama administration now comes from the government.  
• The entire financial sector of the U.S. economy is backstopped and heavily regulated by government.  
• Education is almost entirely funded and controlled by the government.
• Social Security is the largest retirement program on earth, and even private pensions are guaranteed by the government. 
• Government is so vast and unlimited that even Donald Trump, an avowed anti-socialist, is powerless to stop these policies and programs.  
• We have about $22 trillion in debt, and the Fed borrowed/printed another $3.5 trillion under Obama.  It's a total of about $25 trillion in debt funded by a private sector that runs about $13 trillion annually.  
• If and when interest rates normalize to around 5%, which is inevitable, we will more closely resemble Venezuela than any version of the U.S. we've ever known.

Sorry, I know no one wants to hear this, but we are basically a socialist country now.  What Bernie Sanders and the Ocasio-Cortez Democrats are talking about is putting the finishing touches on it.  They need totalitarian socialism for eternal power.  Taking over the four areas not already socialized -  transportation, energy, food, and communication is the next step.  That's what the "Green New Deal", "Net Neutrality", "Guaranteed Income", "Guaranteed Jobs", 90% Taxes, and $15 Minimum wage will help accomplish.  Add in "Medicare For All" and we are cradle to grave totalitarian socialist.

Uninformed voters are always suckers for free stuff.  They never understand that the cure is always worse than the disease, when the cure is socialism.         

Sorry, We're Already a Socialist Country [UPDATED]

The Undiepundit Socialist Index:

First, let's talk about socialism.

Strictly defined, socialism refers to government owning the "means of production".  That means business assets like buildings, fixtures, tools, machines, vehicles, goodwill, etc. all become the property of the state under textbook socialism.  But that's not what we mean when we use the word today.  Socialist Bernie Sanders isn't calling for government nationalization of business assets.  He just wants medicine, education, housing, food, transportation, etc. provided for free to anyone who wants it, whether a citizen or not. How he intends to do that and how the quality of those things will be affected is never explained.

And that's the point; socialism is not a specific policy-set.  It's more a mindset.  It starts out being about economic issues, and it ends up being about power.

Here's a simple test:  if you believe that the federal government should provide basic human services to everyone for free, then you are a socialist.  If you understand that this kind of cure is always worse than the disease, then you are not.

Again, that's when the FEDERAL government does it.  State and local governments providing basic human services is another matter.  States cannot print and borrow money like the federal government can.  This imposes "limiting principles" on their largess.  States must make ends meet when they go socialist; they cannot hide insolvency for very long.  The U.S. federal government has no such limiting principles.

The U.S. government has found myriad ways to socialize whole sectors of our economy without making ends meet or doing it openly.  For example, in the 1990s the U.S. federal government wanted to massively subsidize housing, but they were unwilling to raise the revenue to pay for it.  So, they simply changed the mortgage requirements.  All of a sudden, any person regardless of credit history could obtain a mortgage.  It worked fabulously well for over a decade until the housing market stalled in 2006.  By 2008, the entire financial system of the planet was in ruins.

Very little has changed. No one would accuse Donald Trump of being a socialist, yet under him every new mortgage in the U.S. is owned by a government sponsored enterprise (GSE) like Fannie Mae or Freddie Mac.  Those same GSEs were the epicenter of the financial crisis in 2008.  The unfunded liabilities of Fannie and Freddie do not appear as "spending" until a crisis hits, as it did during the sub-prime financial mess.  You can see the effects on the graph above.

But we've been pretty socialist since about 1982.  That's when government spending first consumed over 50% of the private sector in the U.S..  50% is the tipping point.  When half the population becomes dependent on government, they tend to vote accordingly.  Before long it leads to "totalitarian" socialism. 

Why totalitarian?  Because without "limiting principles", socialism eventually requires force.  Once the predominant belief is that the federal government should provide basic needs for free, then those needs become "rights".  Once those needs become "rights", it's only a matter of time before that necessitates confiscation of wealth and power.  Your money, your power, your freedom, must all be subordinated for the "rights" of others.  Without limiting principles this has been proven throughout history.

Limiting principles are what saved the Scandinavian countries.  They reversed course from socialism because they were constrained by limiting principles.  Prior to the 1960s the Scandinavian countries were free market exemplars of health, literacy, productivity, and happiness.  Then in the 1960s they became enamored with socialism.  After about fifty years of progressive socialism they realized the cure was worse than the disease.  Wealthy citizens were fleeing, businesses were moving, economies were lagging, birthrates dropped, labor was being imported at unsustainable rates, and the fiscal trajectory was ominous.  These countries are relatively small compared to the U.S. and do not control the world's reserve currency.  Those on the Euro do not even control their own currency! They have built in limiting principles.  So they changed course.

Today, Scandinavian countries still retain some of the legacy socialist items, but the mindset has changed.  The Prime Minister of Denmark recently admonished Bernie Sanders for calling Denmark a socialist country.  In a 2015 speech at Harvard he said:

"I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy."

Sweden also backtracked, and both countries improved.

Similar results can be seen in the U.S. after the modest two year Trump reversal that is evident on the graph above.  To be clear, many manifestations of Trump's reversal cannot be seen in the numbers. Deregulation, a huge part of Trump's reversal, does not appear immediately on a spending graph.

But Trump is an anomaly.  We can see that the socialist mindset has inexorable momentum.  We were at 10% on the Undiepundit Socialist Index when WWI broke out.  One hundred years later, we averaged about 70% under Barack Obama.  Notice: the other two big spikes were for major World Wars!

So why doesn't it feel like we live in a socialist country?  If government was consuming 70% of the private sector from 2008-2016, wouldn't we sense that and change course?  No, because we were insulated due to massive borrowing, printing, and near 0% interest rates.  During that period the  federal debt doubled from $10 to $20 TRILLION and the Federal Reserve Bank added another $3.5 TRILLION to its balance sheet. You can hide a lot of economic signals when you create 13.5 TRILLION dollars from thin air.   At least temporarily.  The dollar's status as the world's reserve currency removes ALL limiting principles.

Sorry, we've been motoring towards totalitarian socialism since at least FDR.  Donald Trump is probably just a speed bump on that road.

[UPDATE]
It is also worth noting that Karl Marx's Communist Manifesto is the 3rd most assigned book at U.S. colleges today according to the Open Syllabus Project.  Of all the books ever published in history, the 3rd most assigned one is the one teaching socialism and communism to our kids.  You are what you teach. 

Marxism and Mobility

I'm not usually one to root for the Communist, but that's what I found myself doing the other day. As a student of economic history, I consider communism, and in fact all degrees of Marxism (which is always "progressive") antithetical to sustainable human well being.  Economic history bears this out. But there are some circumstances which make it excusable.    

To wit, the other day I read a Wall Street Journal book review of "Ants Among Elephants", by Sujatha Gidla. an account of life as an "Untouchable" in India.  The reviewer cited two narratives running through the book, the hardships of Ms. Gidla's Untouchable family, and their political views as communists.

Well hell, if I was born an Untouchable in India, I'd be first in line at the communist buffet!  India's caste system, despite efforts to end it, is still the mother of all mobility killers.  If your grandparents swept the floor, so did your parents, and so will you in all likelihood.  And it goes back countless generations.  Marxism is the only option when the culture won't abide.

I've never bought into the notion that income gaps breed Marxists.  That's not enough.  To me it's always been about economic mobility.  Think of any Marxist movement in history and you'll find, A) downtrodden people with, B) no hope of upward mobility.   The lack of hope is key.  We've had downtrodden socialists and communists in the U.S. since the late 1800s, but they never got much traction because we've always been the land of mobility.

All of which got me wondering:   Why in the U.S,  the world heavyweight champion of economic mobility, is Marxism ascendant today?

One popular theory is that in the information age, only tech geniuses and the hyper-educated can advance.  This leaves the less-educated feeling trapped.  Others say it's low skilled immigrants and an inner city underclass who see no way out.  All that sounds good, except most of the Marxists I know have graduate degrees!

Here's another theory:  In 1900, total government spending (federal, state,  and local) was around 7% of national income.  Today it's around 60%. *  As government and redistribution have grown, mobility has shrunk.

We keep trying to wipe out poverty and hardship by expanding government. Yet we still have poverty and hardship in about the same proportions.  What we're losing in the bargain is mobility.

This is the tragedy of Barack Obama, Bernie Sanders, and the modern Democrat party;  they see inequality and think bigger government and more redistribution are the solutions.   It's a cheap emotional appeal that voters increasingly fall for,  but it always makes things worse in the long run.  

What they miss is that we are not India. We have a long history of mobility that we've only recently lost.  For example, blacks moved into the middle class at a faster rate in the 1950s than they do now!  Astonishing when you consider the headwinds pre civil rights.

Perhaps in the back of voters minds, when they heard "Make America Great Again", they were thinking of our lost mobility.

The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.  - Alexis de Tocqueville, 1850s

*

Socialism is the Darwin Award for Economic Ignorance

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!

Socialists, Progressives, Communists, and Democrats; What are the differences?

Bernie Sanders is a socialist.  Hillary swears she's no socialist, she's a progressive democrat. Barack Obama swears he's no socialist either.  No one openly admits to being a communist.  What are the differences between these philosophies?

I maintain the above question is the wrong question.  The correct question is, "what unites these philosophies?"  The differences all relate to tactics and emphasis, not philosophy.  The underlying philosophy is the same in all cases.

Socialists, progressives, communists, and modern democrats in the U.S. are all Marxists.  They all believe as their foundational tenet in government coerced egalitarianism (equality of stuff).  The Marxist slogan, "From each according to his ability, to each according to his need.", applies in all cases.  This is not organic egalitarianism.  It is imposed by the government through force.

Democrats and progressives want to impose this Marxist utopia gradually and nominally through the political process, but they cannot reveal their intentions.  Socialists want exactly the same thing, only they are willing to reveal their intentions.  Communists are different only in that not only are they willing to reveal their intentions, they hope to achieve their utopia through revolution.

But in all cases utopia is the goal and it is the same vision despite some differences in detail.  Never is there a limiting principle.  In other words, how would a progressive know when the work is done? How would they know when the utopian dream has been achieved?  They cannot tell us.  

Progressivism and progressive democrats in the U.S. are unique.  That's because those terms relate specifically to our constitution.  The constitution is a formidable roadblock to Marxism.  Therefore, it must be relegated to the dustbin of history.  Progressivism means progressively dismantling the constitution.  Where will this progress end? Only when the constitution is completely dead.  It must be destroyed because it alone stands in the way of the Marxist utopia.

What makes America exceptional are the ideas on which it was founded.   Primary among them are the ideas that we are all equal in our rights, our relationship to the law, and the governments job is to protect the rights of the individual.  Marxism turns those ideas upside-down and puts the government over the individual in order to impose equality of outcomes.

So this is what it means when you hear a politician claim, "I'm no socialist/communist/Marxist, etc. I'm a progressive democrat!"  There is no difference.    

      

Why Socialism is Chic, and Capitalism is Not (ICYMI)

Socialism is chic in 2015.   But, just a few short years ago Obama voters would mock and charge racism when anyone likened his ideology to socialism.  Now Bernie Sanders, an openly socialist candidate, is leading in some key polls of those very same voters!

Why is this happening in a country which enjoys the highest standard of living of any large diverse country, and one which uniquely earned it's place due to its historic reliance on free markets and constitutionally limited government?  Part of this is a triumph of deliberate indoctrination which has been going on for at least half a century.  Another part, and the most recent part, is a deliberate deception regarding the financial crisis of 2008.

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.

You may not realize it, but socialists have been influencing you your whole life. Prior to the 1960's there were prohibitions on government workers joining organized labor.  That's because there was an obvious conflict of interest; organized labor and socialism have been synonymous throughout their shared history in the U.S.. 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.   Most likely every teacher who taught you in a U.S. public school was a member of organized labor.  Of course, not all teachers, nor members of organized labor, are socialists, but the politics of organized labor in the U.S. leans undeniably in that direction.  

"Hold on!", you say, "Just because public schools are unionized and organized labor leans socialist doesn't mean it has had any real impact on our country!"  Actually it has.  After half a century of this, Karl Marx is the most assigned economist at U.S. colleges today.  By far.   

So how did you answer the second question?  In one sense the answer to that one is again... Karl Marx.  Yes, Karl Marx is both the father of modern socialism AND the father of modern capitalism. Karl Marx was the person who defined capitalism for the masses in his scathing critique of 1860s capitalism called "Das Kapital".  He constructed a convenient dichotomy between socialism and capitalism based on his own definitions to support his theories .  Of course Marx's preferred ideology, socialism, was defined in the most glowing light, while his version of capitalism was defined in the most sinister.

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 didn't exist 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.  "Smithism" never became a word.  Marxism is taught everywhere all the time, and not just to economics majors.  If you want to learn about Adam Smith, you most likely have to do it on your own.  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 of our country.  If you go to Wikipedia and look up Marxism, you’ll find plenty.  If you go to Wikipedia and look up Smithism, you’ll get crickets. 

How about a more modern term, like Supply Side Economics?  You are probably familiar with that term, but can you accurately define it?  Can you define 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 at times seeks to stimulate consumption (Keynesianism), or at times to achieve egalitarianism (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 zip.  The language in this case does not favor the socialist demand side ideology.   Hence, it is not even defined.

No event has 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 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 it’s apex in 2007 under Republican George W. Bush, while Democrats, including Senator Barack Obama, ran both houses of congress.

All the risk from this socialist redistribution was supposed to be assumed by the federal government 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 subprime lending for the first time in history in such large numbers? Because they were coerced to do so by their government.

Deregulation also had nothing to do with it.  Canadian banks are lightly regulated compared to their U.S. counterparts, and none of them failed.  Are U.S. bankers so much greedier than their Canadian counterparts that they drove their banks into insolvency while their less regulated neighbors to the north did not?  No, it was U.S. government regulation in the form of a socialist housing policy that caused the financial crisis.  Unfortunately, when the scheme went bad the damage spread to the private banking and investment 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 candidate Bernie Sanders today.   They are also part of the continuing campaign that has mischaracterized the mortgage market as an example of failed capitalism.

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?  We are.  Fannie and Freddie own just about every new mortgage written since 2008, and the socialist policies promoting home ownership and borrowing have accelerated under Barack Obama.  We are in the process of building a second real estate bubble. Adding to that scenario is a socialist national debt bubble, student loan bubble, auto loan bubble, and equity bubble.

You might be saying, "OK, big deal, I'm a socialist.  Lots of countries are socialist, and some of them seem to be doing just fine.  What about the Scandinavian countries?  Why can't we have what they have?  Free healthcare, free college, and lots of benefits sounds pretty good to me!".  Scandinavian success came before their experiment with socialism.  They were happy, healthy, productive, and prosperous prior to the 1960s when they made the turn.  Fifty years of high taxes has slowed their growth and momentum and now they are "feeling the Bern".  Sweden and Denmark currently spend more than 100% of their private sector income on government services.  This is obviously unsustainable.  Socialist Europe is failing and is increasingly freeing their economies in response.

Here's the thing:  National socialism has never produced anything long term other than misery, starvation, poverty, and authoritarianism.  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 delay the inevitable monetary collapse.  That's because local governments cannot create money. State and local governments must be more disciplined or risk imminent collapse.  Therefore, they tend to be more fiscally responsible.  National governments can hide their insolvency much longer, 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 usually created and controlled.  The Euro countries are a recent exception now that money is no longer controlled by the individual countries.  The Euro is controlled by the European Central Bank, which is a consortium of 19 Eurozone countries .  It's almost like they recognized the fatal flaw and are trying to work around it.

But in the U.S. we have no such arrangement.  We borrow and print money at the federal level. Our system was never designed to be a socialist system.  The constitution implied that the states were the proper place for redistributive experimentation.  At the national level, the conflict of interest is just too great for elected officials.  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 today.  The founders knew that.  It's happening today. We have doubled our national debt in just the last seven years.  Interest rates have been 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 chic after all that, that is your right.  Just keep it local, and maybe - just maybe, it won't collapse until after your kids inherit the mess.