Tag Archives: Road to Serfdom

Commentary

Indian economist distinguishes between rights and entitlements

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From the Times of India, a good economics article from Swaminathan S Anklesaria Aiyar. (H/T Shalini)

Excerpt:

Politicians and activists constantly propose new rights — the right to work, to education, and now to food. The word “rights” is being twisted to mean entitlements, and there is a big difference.

Rights are freedoms from oppression by the state or by society (through ethnicity, religion and gender). These rights do not entail government handouts.  Entitlements, however, are welfare measures entailing government handouts. Rights are not limited by budget constraints, but entitlements are. So, rights are universal but entitlements are not.

[…]US economists calculate that three welfare measures — social security (for the aged), Medicare (for the aged) and Medicaid (for the poor)—will triple from 7% of GDP to 20% in the next decade, swallowing up virtually all federal tax revenue. Jagadeesh Gokhale of the Cato Institute calculates that, including social security, the US is headed for a national debt that’s 500% of GDP, and Europe of 434%.

Some much for entitlement spending. He then explains the origin of human rights in Britain, America and France, and then says this:

These three countries spearheaded the concept of fundamental rights. In all three, rights were about freedoms, not entitlements

In subsequent centuries, people said this was not enough, and proposed entitlements — which some called second-generation rights. Marxists declared that rights to free speech, elections and personal freedom were bourgeois illusions that did not empower the poor. So Lenin proposed a dictatorship of the proletariat that took away all basic freedoms, and instead offered the right to food, shelter and work. Mind you, nobody could sue Lenin for poor provision. Nobody could throw out Mao for the Great Leap Forward that killed 30 million people. Nobody could topple Stalin for murdering four to six million peasants in the Ukraine.

The communist experience shows that giving welfare rights priority over basic freedoms is the road to serfdom. And the capitalist welfare state now shows that entitlements, although desirable and inevitable in democracies, must be limited and targeted at the needy, so that they do not hog all spending or bankrupt governments.

It’s amazing. He’s more American than the Democrats, because he actually understands America. Thanks so much for finding this article, Shalini!

By the way, if you want to learn what the end-game is for the Democrats, you can read “The Road to Serfdom” by the Nobel Prize-winning economist F.A. Hayek, which Swami alluded to in his article.

News

Intel CEO blames Democrats for destroying the economy

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Article from CNET News by someone who understands job creation. (H/T Neil Simpson’s latest round-up)

Excerpt:

Intel Chief Executive Officer Paul Otellini offered a depressing set of observations about the economy and the Obama administration Monday evening, coupled with a dark commentary on the future of the technology industry if nothing changes.

Otellini’s remarks during dinner at the Technology Policy Institute’s Aspen Forum here amounted to a warning to the administration officials and assorted Capitol Hill aides in the audience: unless government policies are altered, he predicted, “the next big thing will not be invented here. Jobs will not be created here.”

The U.S. legal environment has become so hostile to business, Otellini said, that there is likely to be “an inevitable erosion and shift of wealth, much like we’re seeing today in Europe–this is the bitter truth.”

[…]Otellini singled out the political state of affairs in Democrat-dominated Washington, saying: “I think this group does not understand what it takes to create jobs. And I think they’re flummoxed by their experiment in Keynesian economics not working.”

Here’s Republican Senate candidate Carly Fiorina, from the same article:

The comments from Intel’s chief executive echoed statements made a day earlier by Carly Fiorina, the former HP CEO turned Republican Senate candidate.

America’s skilled-worker visa system is so badly broken and anti-immigration that “we have to start from scratch,” Fiorina said, adding that too many government policies push jobs overseas instead of making U.S. companies competitive against international rivals.

“Our corporate tax rates are the second highest in the world,” and Congress has repeatedly failed to make an R&D tax credit permanent, Fiorina told the Aspen audience. It’s time to start “acknowledging the reality that companies go where they’re welcome,” she said. (The effective U.S. corporate income tax is 35 percent, far over the industrialized-nation average of 18.2 percent.)

Here’s a recent IBD article with more from Otellini, and other CEOs

First Otellini:

“I can tell you definitively that it costs $1 billion more per factory for me to build, equip and operate a semiconductor manufacturing facility in the U.S.,” he said. And 90% of that added cost, he said, is due to taxes and regulations that other countries don’t have.

Then other CEOs:

Earlier in the week, Illinois Tool Works CEO David Speer, whose company employs 60,000 worldwide, laid out his dilemma — and that of hundreds of other CEOs: “I could borrow $2 billion tomorrow for 3 1/2%,” Speer said. “But what am I going to do with it?”

[…]In June, Ivan Seidenberg, CEO of Verizon Communications and head of the Business Roundtable, warned of a growing anti-business slant in both Congress and the White House. Tax hikes, regulations and constant policy shifts, he said, “harm our ability … to grow private-sector jobs in the U.S.”

And don’t forget the costs that Obamacare imposed on companies, causing all medical premiums to go through the roof because of the new health care mandates and taxes on things like medical devices.

Red State explains what the Obammunists should be doing:

As our government continues to make it more difficult to do business in the US, companies must increasingly look to more favorable climates abroad. If Washington really wants to spur job creation here in the US, they should repeal the health care overhaul, reduce spending, cut the corporate tax rate, give up on cap and trade, and reform litigation. Instead we have been treated to an extended experiment in government control – one that is obviously not producing new wealth, new jobs, or any real hope for the emergence of the industries of the future.

It takes a lot of courage for a CEO like Otellini to come out against the Obama administration, and the neo-Keynesian oligarchy in Washington. Taking a billion dollars from Intel to study Chinese prostitutes and to build turtle tunnels is not a good thing to do if you want to have more jobs. But the thing is – Obama thinks it is a good thing to do, because he is totally ignorant of how the economy works. So, don’t vote for him or any of his silver-spoon limousine liberal friends who were born with rich parents. Democrats don’t know how jobs are created.

Commentary

George Will explains how Democrats favor increasing dependency on government

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Article here in the Boston Herald. (H/T Dad)

Excerpt:

For congressional Democrats, expanding dependency on government is an end in itself. They began the Obama administration by expanding the State Children’s Health Insurance Program. It was created for children of the working poor, but the expansion made millions of middle-class children eligible – some in households earning $125,000. The aim was to swell the number of people who grow up dependent on government health care.

Many Democrats favor – as Barack Obama did in 2003 – a “single-payer” health insurance system, which means universal dependency on government. The “public option” insurance proposal was to be a step toward that. So was the proposed “alternative” of making 55- to 64-year-olds eligible for Medicare. Both of these dependency multipliers will be revived.

The government used TARP funds not for their stipulated purpose of buying banks’ “toxic assets,” but to pull auto companies and other economic entities into the spreading web of dependency. Servile – because dependent – banks were pliable during the farce of Chrysler’s bankruptcy, but secured creditors resisted when settled law was disregarded. Nevertheless, those creditors received less per dollar than did an unsecured creditor, the United Auto Workers, which relishes dependency on government as an alternative to economic realism.

Democrats’ financial “reforms” may aim to reduce financial institutions to dependent appendages of the government. By reducing banks to public utilities, credit, which is the lifeblood of capitalism, could be priced and allocated by government.

Many Democrats, opposing the Supreme Court, advocate new campaign finance “reforms” that will further empower government to regulate the quantity, timing and content of speech about government. Otherwise voters will hear more such speech than government considers good for them. Such paternalism is American progressivism’s oldest tradition.

The Democrats aren’t the party of making the little guy bigger, they’re the part of making the little guy even smaller than he is right now.

Bigger government means smaller individuals

Consider this article about food stamps from the New York Times. (H/T Protein Wisdom via ECM)

Excerpt:

A decade ago, New York City officials were so reluctant to give out food stamps, they made people register one day and return the next just to get an application. The welfare commissioner said the program caused dependency and the poor were “better off” without it.

Now the city urges the needy to seek aid (in languages from Albanian to Yiddish). Neighborhood groups recruit clients at churches and grocery stores, with materials that all but proclaim a civic duty to apply — to “help New York farmers, grocers, and businesses.” [note who is missing from that list … ed.] There is even a program on Rikers Island to enroll inmates leaving the jail.

“Applying for food stamps is easier than ever,” city posters say.

[…]The drive to enroll the needy can be seen in the case of Monica Bostick-Thomas, 45, a Harlem widow who works part-time as a school crossing guard. Since her husband died three years ago, she has scraped by on an annual income of about $15,000.

But she did not seek help until she got a call from the Food Bank of New York City, one of the city’s outreach partners. Last year, she balked, doubting she qualified. This year, when the group called again, she agreed to apply. A big woman with a broad smile, Ms. Bostick-Thomas swept into the group’s office a few days later, talking up her daughters’ college degrees and bemoaning the cost of oxtail meat.

“I’m not saying I go hungry,” Ms. Bostick-Thomas said. “But I can’t always eat what I want.”

It is not good for people to depend on the government. It turns adults into children. People need to live with the results of their own decisions and not expect to be bailed out by their neighbors. For those of us who are concerned about poverty, we should solve the problem ourselves by private charity. Just taking an interest in your neighbor is a good thing.