Tag Archives: Socialism

Vladimir Putin tells America that socialism doesn’t work

Found this transcript of Putin’s remarks in the Wall Street Journal. The story was linked over on John Lott’s blog.

Putin opposes protectionism:

We must not revert to isolationism and unrestrained economic egotism. The leaders of the world’s largest economies agreed during the November 2008 G20 summit not to create barriers hindering global trade and capital flows. Russia shares these principles.

Putin opposes state intervention in the economy:

Excessive intervention in economic activity and blind faith in the state’s omnipotence is another possible mistake.

True, the state’s increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent.

Putin opposes big government:

The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation.

In the 20th century, the Soviet Union made the state’s role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly.

Putin opposes wealth redistribution and welfare:

Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.

Putin opposes bailouts and deficit spending:

And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.

Putin goes on to give recommendations on how to solve the problem.

I can’t believe that America and the USSR have switched places. What is the world coming to? Obama has unilaterally plunged us into bankruptcy and angered the entire world with his naive protectionism. How could we have been so ignorant as to have elected someone with no knowledge of economics whatsoever? During an economic crisis!

Two ways to conduct a Tea Party revolution against socialism

GatewayPundit is reporting that the economic news is getting even worse.

Along with raising taxes on businesses, raising taxes on the “rich,” and allowing the Bush tax cuts to expire…
President Obama will also announce the implementation of an expensive cap and trade energy policy this week to battle pretend global warming.

He cites Human Events’ report that we will lose between between $444 billion and $1.308 trillion of GDP output, and unemployment would increase 2.7% (= 4 million jobs lost), mostly in the manufacturing sector.

Well, we’re doomed. Or are we? I’ve found a couple of clever ideas for dealing Obama’s plans to plunge the United States into socialism.

The first idea is from Biola University professor Doug Geivett, who is a first-class evangelical Christian scholar. I met Doug at a philosophy conference on Providence and Open Theism at Wheaton College, IL in 2000. I remember asking him whether investments were a form of gambling. He explained that investing was not gambling, because investments fund the creation of new products and services that grow the economy.

Doug starts by noting Rick Santelli’s rant against Obama’s socialist policies which involve wealth redistribution from those who produce to those who consume. (Note: there is now a new rant up, with supply-sider Larry Kudlow).

In his post, Geivett enumerates the points made by Santelli:

First, fiscally responsible Americans don’t want to pay the bill for borrowers who can’t keep up with their mortgages.

Second, fiscally responsible Americans shouldn’t have to pay the bill for borrowers who can’t make their payments.

Third, this plan doesn’t rob the rich to give to the poor. It takes from every tax-paying American and turns it over as free cash to people who can afford to rent but can’t afford to buy.

Fourth, there are ways to get the federal government to pay attention, ways the government is totally unprepared for.

Santelli suggests that responsible, productive Americans may want to consider a revolution – a kind of Chicago Tea Party. Right now, the banks are being more careful about who they give credit to. This is not a problem for responsible people with good credit history. The government is giving out bailouts to banks in order to ease credit for irresponsible consumers – the same ones that got us into this mess in the first place.

Geivett describes what he thinks this Chicago Tea Party might look like:

For example, what do you think would happen if 30% of all Americans with an income of $50,000 or more organized to do the following two things:

  1. Convert all of their assets held in the stock market and at banks and credit unions into cold, hard cash (or gold bars holed up in their bank’s safe deposit boxes)?
  2. Refused to pay income tax for 18 months (or indefinitely)?

This would remove the money that banks use for consumer loans. If no one can get credit, then no one can default, and there is no need for bailouts to these delinquents. By refusing to pay income taxes for a period of time, the government would have no funds available for bailing out their favorite special interest groups. People might finally have to stop spending and start working and saving again.

Geivett goes on to describe how this plan should incorporate reduced consumer spending, which I agree with. Somehow, America has gone terribly wrong. We use to be a nation of workers and savers. But the progress of left-wing socialism, with all the redistributing of wealth from producers to free-riders, has caused us to drift into an irresponsible, immature, hedonistic culture.

Geivett’s plan made me think of a post I read before on “Going Galt”. What if all the people who produced wealth just stopped producing?

Do you ever wonder after dealing with all that is going on with the economy and the upcoming election if it’s getting to be time to “go John Galt”? For those of you who have never read Ayn Rand’s Atlas Shrugged, the basic theme is that John Galt and his allies take actions that include withdrawing their talents, “stopping the motor of the world,” and leading the “strikers” (those who refuse to be exploited) against the “looters” (the exploiters, backed by the government).

Obama talks about taking from those who are productive and redistributing to those who are not — or who are not as successful. If success and productivity is to be punished, why bother? Perhaps it is time for those of us who make the money and pay the taxes to take it easy, live on less, and let the looters of the world find their own way.

The National Taxpayers Union explains who pays the taxes that Democrats are redistributing to their freeloading constituents. The top 50% pays 97% of all income taxes collected! The lazy half the country is freeloading off of the productive half.

The second idea that I found for responding to Obama’s socialist bailouts is to move to Canada. Captain Capitalism had this post in which he compares the two economies and concludes that Canada has a better future than the United States. Canada has a smaller deficit, a smaller debt, and is not facing a meltdown from entitlement programs like Medicare and Social Security, like we are.

Investor’s Business Daily reports that:

By 2041, Social Security will be essentially broke, having exhausted its trust fund, those dollars amassed through decades of surplus payroll tax revenues that Congress will have already squandered on general budget expenditures. Medicare’s future is just as bleak. It is already spending more than it is receiving in payroll taxes.

The prime minister of Canada right now is economist Stephen Harper, a strong fiscal conservative in the mold of F.A. Hayek.

UPDATE 1: Michelle Malkin has even more ideas on what to do here.


Democrats caused the recession and Republicans tried to stop it

Who caused this economic downturn and what should we do about it?

Almost no one realizes that this entire subprime lending mess was created by the Community Reinvestment Act, which was passed by President Carter, a Democrat, in 1977. Later on in the 1990s, Bill Clinton, another Democrat, passed laws to enforce the original bill. The purpose of the CRA is to force banks to make risky loans to people who can’t afford to repay those loans.

The extremely left-wing Los Angeles Times explains in 1999 that the CRA was passed to force banks to make risky loans.

Under Clinton, bank regulators have breathed the first real life into enforcement of the Community Reinvestment Act, a 20-year-old statute meant to combat “redlining” by requiring banks to serve their low-income communities. The administration also has sent a clear message by stiffening enforcement of the fair housing and fair lending laws.

In 1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains… Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income. That’s made banks willing to lend to lower-income families they once might have rejected.

The extremely left-wing New York Times noted in 1999 that the GSEs gave out the risky loans under duress from Democrat Bill Clinton.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

According to the New York Times in 2003, George W. Bush tried to stop the Democrats from ruining the economy with these forced loans. He was blocked by Democrats like Barney Frank.

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Here are some video clips to prove that the Democrats opposed regulating  the GSEs. They are responsible for this mess, along with the irresponsible people who signed up for these loans that they could not repay.

Timeline of the events in the crisis: Bush was the first to recommend regulating the GSEs in April, 2001. In 2003, Bush tried to create a new federal agency to regulate the GSEs. He was blocked from doing so by the Democrats in the Senate. In 2005, Alan Greenspan warned that failing to regulate the GSEs could be a catastrophe. Again, Democrats blocked the effort to regulate Fannie Mae and Freddie Mac. The video shows Democrat Chuck Schumer protesting that regulation is not needed. In 2006, McCain and other Republicans introduced a bill to regulate the GSEs. Again, the Democrats voted against it and nothing happened.

Republicans and Democrats in their own words on the GSE accounting practices: Here we have Republican Rep. Richard Baker, Democrat, Democrat Rep. Maxine Waters, Democrat Rep. Gregory Meeks, Republican Rep. Ed Royce, Democrat Rep. Lacy Clay, Republican Rep. Christopher Shays, Democrat Rep. Arthur Davis, Democrat Rep. Barney Frank, Republican Rep. Don Manzullo. Shays notes that the GSEs make many contributions to Democrats who are blocking their regulation.

Fannie Mae CEO addresses Democrats: Fannie Mae CEO calling Obama and the Dems the “Family” and “Conscience” of Fannie Mae. The Democrats obstructed the regulation of the GSEs while taking political contributions from them, especially Obama. Franklin Raines, Jamie Gorelick and Jim Johnson were all executives at the GSEs and are all Democrats. Other Democrats like Penny Pritzker ran other mortgage banks into the ground, and now work for Obama.

According to Human Events, Obama himself sued banks on behalf of ACORN, to force the banks to make these risky loans.

Obama sued Citibank under the Community Reinvestment Act in a typical ACORN-style lawsuit to force the bank to make these risky loans.  ACORN filed many of this type of lawsuit alleging racism in all of them.

According to opensecrets.org, Obama was also the second-highest recipient of political contributions from the GSEs. The American Spectator notes that he included 5.2 billion dollars of taxpayer money for ACORN in the porkulus bill.

UPDATE 1: The Achoress just posted even more of the history of this mess here. She has a link to Nice Deb’s post which contains about 2 dozen warnings issued by the Bush administration about the looming crisis, including 17 warnings in 2008 alone.

UPDATE 2:  Here’s an even better timeline than mine, by Roger Kimball.

Canadian-raised comedian explains what’s wrong with socialized medicine

I don’t know what it is about Canadians, but they sure have talented comedians. I loved my recent post on health care, in which I cite research and podcasts from practically every think tank out there. So many wonderful facts, figures and evidences! But I know that some of my readers want to learn about health care by laughing and having “fun”. Ick!

But, guess what? I’ve found the perfect video clip for you. By a guy who grew up with in the most progressive city in Canada – Montreal. If this doesn’t cure you of supporting socialized medicine, nothing will! If you want more of his videos, his web site is here. He has videos on global warming, abortion, terrorism, the auto bailout and other interesting topics.

By the way, have you guys heard of this guy Zo? He is awesome! This particular video clip has over 800,000 views. He covers health care, economics, energy and foreign policy. Can this guy talk! He needs to have his own radio show. Zo has a ton of videos. His web site is here.

Michele Bachmann explains why we need to cut corporate tax rates

Representative Michele Bachmann
Representative Michele Bachmann

Michele Bachmann is by far my favorite House Representative. In a post dated 2/17/2009, she draws attention to the little-known fact that the combined corporate tax rate of the United States is the fourth highest in the world. This is important because the higher to corporate tax rate, the more likely it is that a corporation will move overseas and lay off all of its American workers. Also, a lower corporate tax rate attracts the best and brightest from abroad to move here to start their businesses, powered by American workers.

This might come as a surprise to you, but the United States is near the top of the list of industrialized countries with the highest corporate tax rates.

You may be asking yourself “so what,” or “who cares,” but it’s important to recognize that lower corporate tax rates result in attracting more investment capital. A reduction of the federal corporate tax rate would increase firms’ productivity and investment incentives, and ultimately stimulate our nation’s long-term competitiveness by enhancing economic freedom.  The end result would be a boon to your family budget.

The problem gets even worse when you realize that many eastern European nations are slashing their corporate tax rates and even imposing flat taxes, leading to astonishing economic growth. This growth attracts foreign investments away from the USA, because investors can get a better return wherever there are lower corporate tax rates.

Bachmann post cites a study from KPMG showing just how bad the USA is compared to other nations.

“U.S. corporate income tax rate is higher than all other global regions—14 percentage points higher than the global average and nearly 17 percentage points higher than the average among European Union nations. Of the 106 countries surveyed, only the United Arab Emirates, Kuwait, and Japan impose a higher corporate tax rate than the combined rate of 40 percent. The United Arab Emirates and Kuwait each have a staggering tax rate of 55 percent; Japan’s rate is 40.69 percent.”

She also cites alarming figures from Heritage Foundation.

“Even Europe’s old welfare states have joined the aggressive tax cut parade: Sweden has cut its corporate tax rate to 28 percent from 60 percent; Norway’s rate has dropped over 50 percent to 28 percent; and Denmark’s corporate tax rate is now 25 percent.”

Is it any wonder that American firms are laying off workers and shipping jobs overseas? Cutting corporate tax rates creates jobs, increases economic growth and, eventually, increases consumer spending. If you don’t believe me, believe the 69-page research paper published by the Congressional Budget Office. The Tax Foundation summarizes their findings here.

A new study from three prominent economists finds that employees suffer most when their corporate employers must pay high corporate taxes. That contradicts the theory that has prevailed for decades — that corporate taxes mainly hurt investors — but it supports a recent CBO study by Randolph that found workers bearing 70 percent of the burden of corporate income taxes.

They find that the workers’ share of the corporate tax burden ranges from 45 to 75 percent.

The Tax Foundation has a complete study of corporate tax rates across the world. We are not winning. We are losing. Badly.

On a positive note, I find it charming and delightful when women speak passionately about how fiscal conservatism supports marriage, family and charity. Bachmann and her husband Markus run their own business. She’s worked as a tax lawyer and an elected legislator, but she still found time for a period of home-schooling. And not only did she raise her own 5 children, but also 23 foster children.

In her speech at the Republican National Convention in 2008, (video, transcript), Bachmann makes the connection between fiscal conservatism, small government, a strong family and private charity.

As Republicans, we recognize that service is an innately personal characteristic. It is best achieved by individuals and community groups, faith-based organizations and charities. And, service thrives best in an environment of freedom. Government fosters service best when government binds it least.

As Republicans, we recognize that when you keep more of your hard-earned dollars, you are free to spend it as you choose on the charities that touch your heart and make a difference in your community.

Bachmann believes in marriage, family and charity. My favorite quote from her is from her profile in World Magazine.

Bachmann says for her one thread ties all the day’s obligations together: “radical abandonment to God’s call.”

For more on big-government socialism and its conflict with marriage, family and charity, see this video lecture, by the eminent economist Jennifer Roback Morse.