Tag Archives: Socialism

Commentary

How Obama’s opposition to free trade raises unemployment

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From Investors Business Daily.

Excerpt:

…the president said all the right things Wednesday about boosting exports, opening markets and getting Congress to approve free-trade deals with Colombia, South Korea and Panama.

[…]But as good as the speech sounded, it was no more than a reiteration of statements Obama has already made, always promising to get on it, soon. If he wants these treaties passed, he should submit the deals already negotiated and let Congress vote, up or down.

[…]Thirty-nine House Democrats and virtually all the Republicans have indicated their support, and a host of others intend to vote “yes,” though they won’t say so.

That’s why House Speaker Nancy Pelosi refuses to permit any vote on the Colombian pact, which was submitted to Congress two years ago. She doesn’t fear it’ll fail; she fears it’ll pass.

[…]Overall joblessness of 9.4% is bad enough. But among blacks, male unemployment is averaging 19.5%, and the 13.2% rate for Latinos is double what it had been most of the decade. Then there’s the 52% of young people who can’t find work.The U.S. Chamber of Commerce warns that if Congress fails to act on the three pending trade pacts, 585,000 U.S. jobs will be snatched away by rivals such as Canada. That would be a big chunk of the 3.5 million jobs Obama promised to create by year-end.

American businesses do better when they can pay less to buy the things they need to make their products from trading partners who have signed free trade deals signed with us. More efficiency means they can sell the products and services for less. That means that people buy more of those products. And then they hire more people.The number of jobs gained by improving the efficiency of businesses is higher than the union jobs saved by not signing the free trade deals. And who cares about unions anyway – unions make consumers and businesses pay too much! And they’re Democrats! So they’re crap on social issues and foreign policy anyway.

Among economists, being opposed to free trade is the equivalent of being opposed to a round Earth. But Democrats have to believe in protectionist nonsense – they are beholden to the unions that elected them who oppose choice and competition. Unions don’t want consumers to have a choice, and they don’t want to have to compete with anyone. They want to screw consumers into paying higher prices – and Obama has to cater to their delusions.

News

Obama appoints a socialist to run Medicare and Medicaid

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Obama has bypassed the Congressional confirmation process for Dr. Donald Berwick, a socialist, and instead given him an immediate recess appointment. What this means is that there will be no debating Dr. Berwick’s socialist views in public.

From the New York Times. (H/T Verum Serum)

Excerpt:

Dan Pfeiffer, the White House communications director, said the “recess appointment” was needed to carry out the new health care law. The law calls for huge changes in the two programs, which together insure nearly one-third of all Americans.

Mr. Pfeiffer said the president would appoint Dr. Berwick on Wednesday. Mr. Obama decided to act because “many Republicans in Congress have made it clear in recent weeks that they were going to stall the nomination as long as they could, solely to score political points,” Mr. Pfeiffer said.

This 2008 NHS paper by Dr. Berwick explains what he thinks about government-run health care in the UK. (H/T Verum Serum)

Excerpt:

The National Health Service [Britain’s single payer health care] is one of the truly astounding human endeavors of modern times.  Just look at what you are trying to be: comprehensive, equitable, available to all, free at the point of care, and – more and more – aiming for excellence by world-class standards.  And, because you have chosen to use a nation as the scale and taxation as the funding, the NHS isn’t just technical – it’s political…The NHS is a bridge – a towering bridge – between the rhetoric of justice and the fact of justice.

[…]You plan the supply; you aim a bit low; historically, you prefer slightly too little of a technology or service to much too much; and then you search for care bottlenecks, and try to relieve them.

[…]You could have obscured – obliterated – accountability, or left it to the invisible hand of the market, instead of holding your politicians ultimately accountable for getting the NHS sorted.  You could have let an unaccountable system play out in the darkness of private enterprise instead of accepting that a politically accountable system must act in the harsh and, admittedly, sometimes unfair, daylight of the press, public debate, and political campaigning.  You could have a monstrous insurance industry of claims, rules, and paper-pushing, instead of using your tax base to provide a single route of finance.  You could have protected the wealthy and the well, instead of recognizing that sick people tend to be poorer and that poor people tend to be sicker, and that any health care funding plan that is just, equitable, civilized, and humane must – must – redistribute wealth from the richer among us to the poorer and less fortunate.

[…]please don’t put your faith in market forces. It’s a popular idea: that Adam Smith’s invisible hand would do a better job of designing care than leaders with plans can.  I do not agree.  I find little evidence anywhere that market forces, bluntly used, that is, consumer choice among an array of products with competitors’ fighting it out, leads to the health care system you want and need.

[…]I cannot believe that the individual health care consumer can enforce through choice the proper configurations of a system as massive and complex as health care. That is for leaders to do.

[…]Unfettered growth and pursuit of institutional self-interest has been the engine of low value for the US health care system.  It has made it unaffordable, and hasn’t helped patients at all.

That’s who is going to administer government-run single-payer health care programs in the United States. He opposes consumer choice. He opposes competition. He wants to have a monopoly on health care, and make your decisions for you. You pay him your money based on what you earn, and he’ll decide which of your neighbors will get health care. You’re smart enough to earn the money, but not smart enough to spend it on your own family. And that’s probably what Obama believes, too, otherwise he would have picked someone else.

Thanks to Verum Serum for finding all of this. They do amazing work breaking these stories. You really need to bookmark Verum Serum and read it every day, if you haven’t already.

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News

Can government create jobs more efficiently than private businesses?

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Consider this story from CNS News.

Excerpt:

According to the Government Accountability Office (GAO), the federal government helped pay the home air conditioning bills for more than 11,000 dead people, 1,100 federal employees, and 725 convicts in fiscal year 2009.

The payments were made by a $5 billion program known as the Low-Income Home Energy Assistance Program (LIHEAP). LIHEAP is designed to provide federal assistance, administered by the states, to help people pay the energy bills to heat their homes in the winter and cool them in the summer. The funds are disbursed by the Department of Health and Human Services and are distributed based on a formula that takes into account a state’s weather and the size of its low-income population.

The GAO examined the LIHEAP programs in seven states: Virginia, Maryland, Ohio, New York, Illinois, Michigan, and New Jersey.  The agency found evidence of fraud in each state.

“Our analysis of LIHEAP data revealed that the program is at risk of fraud and providing improper benefits in all seven of our selected states,” reported the GAO.  “About 260,000 applications–9 percent of households receiving benefits in the selected states–contained invalid identity information, such as Social Security numbers, names, or dates of birth.”

Think that’s an isolated event?

Consider this list of government spending projects from Andrew Breitbart’s Big Government. (H/T The Blog Prof)

Excerpt:

  • $5 million to create a geothermal energy system for a shopping mall in Tennessee. The mall is over half empty of tenants and has had falling shopper attendance for years *
  • $1.57 million to Penn State University study fossils in Argentina *
  • $100,000 to a puppet theater in Minnesota *
  • $2 million to build a replica railroad tourist trap in Carson City, Nev. *
  • A boat cruise company in Chicago got almost $1 million to “combat terrorism” *
  • $500,000 went to Ariz. State Univ. to study ant genetics *
  • Another $450,000 went to Uinv. of Arizona to study ants *
  • Almost $400,000 went to Univ. of New York to pay students to drink beer and smoke marijuana for a study there *
  • $219,000 to the Nat’l Institute of Health to study if young people “hook-up” after getting drunk *
  • $210,000 to the Univ. of Hawaii to study bees *
  • $700,000 to crab fishermen in Oregon to pay for lost crab pots *
  • $5,000 a person tax rebate if you buy a new electric golf cart (Wall Street Journal)
  • Up to $1 million went to prisoners in $250 stimulus checks (FoxNews)
  • $54 mil to a New York Indian tribe to run its casino (New York Post)
  • $1 billion for a power plant in Mattoon, Illinois that is based on speculative science and may not even work **
  • $15 million to back-road bridges that get little traffic in Wisconsin **
  • $800,000 for a practically unused airport in Pennsylvania **
  • $3.4 million for an animal walk way under a road in Florida **
  • $1.15 million to install a guard rail for a lake that doesn’t even exist in Oklahoma **
  • $10 million to renovate a rail station that has stood unused for a decade **
  • $578,000 to battle homelessness in Union, New York even though the town says they have no homeless people there **
  • $233,000 to the Univ. of Calif. to study why Africans vote… in Africa ***
  • $2 million to build a new fire house in a Nevada town that has no firemen ***
  • North Carolina schools got $4.4 million for literacy and math coaches… to teach their teachers! ***
  • $54 million for a railroad project in Napa Valley went to a minority-owned company that then hired a local construction company for half the price, pocketing the rest ***
  • A California company was given $15 million in stimulus money to monitor water quality in a stream it was under indictment for polluting previously***

I’m sure that no small business has money to waste on boondoggles like these – but they are being taxed to pay for the government to do it! And that leaves less money for them to create jobs.

Obama’s spending spree is about one thing and one thing alone – buying votes from the constituencies that voted for him so that they’ll vote for him again. That’s why public sector employment, public sector salaries and public sector benefits are all up during this massive recession, while millions of jobs have been lost in the private sector.

Economics in One Lesson

Perhaps it is time to review Henry Hazlitt’s Economics in One Lesson, chapter 4, entitled “Public Works Mean Taxes”.

Excerpt:

Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.

Excerpt that the government, lacking a profit motive, is never as efficient as private business is in spending money – government wastes money that it never earned in the first place.

And consider Chapter 5 as well, entitled “Taxes Discourage Production”.

In our modern world there is never the same percentage of income tax levied on everybody. The great burden of income taxes is imposed on a minor percentage of the nation’s income; and these income taxes have to be supplemented by taxes of other kinds. These taxes inevitably affect the actions and incentives of those from whom they are taken. When a corporation loses a hundred cents of every dollar it loses, and is permitted to keep only fifty-two cents of every dollar it gains, and when it cannot adequately offset its years of losses against its years of gains, its policies are affected. It does not expand its operations, or it expands only those attended with a minimum of risk. People who recognize this situation are deterred from starting new enterprises. Thus old employers do not give more employment, or not as much more as they might have; and others decide not to become employers at all. Improved machinery and better-equipped factories come into existence much more slowly than they otherwise would. The result in the long run is that consumers are prevented from getting better and cheaper products to the extent that they otherwise would, and that real wages are held down, compared with what they might have been.

There is a similar effect when personal incomes are taxed 50, 60 or 70 percent. People begin to ask themselves why they should work six, eight or nine months of the entire year for the government, and only six, four or three months for themselves and their families. If they lose the whole dollar when they lose, but can keep only a fraction of it when they win, they decide that it is foolish to take risks with their capital. In addition, the capital available for risk-taking itself shrinks enormously. It is being taxed away before it can be accumulated. In brief, capital to provide new private jobs is first prevented from coming into existence, and the part that does come into existence is then discouraged from starting new enterprises. The government spenders create the very problem of unemployment that they profess to solve.

George W. Bush cut taxes in his first term and created 1 million NEW JOBS. Government spending is a job killer. In fact, you can even see it failing today in Japan: Did massive government spending succeed or fail in Japan?