May 29, 2016

Thought for the day March 30, 2016 Free Trade, the New Deal and the Federal Reserve

NewDealThought for the day: Free trade agreements haven’t hurt Americans; they’ve helped. They just aren’t enough to overcome the combined economic destruction wrought by the Federal Reserve System and the New Deal, both of which must be abolished root and branch before there is anything resembling a free market in the USA.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Trump Isn’t Hitler; He’s Hamilton

trump hamiltonAs Donald Trump closes in on the Republican nomination for President, comparisons to Hitler continue. And while references to the dictator are never absent from political hyperbole, one can’t help but wonder if there isn’t a bit more legitimacy to them when it comes to the Donald. Even the creator of Godwin’s law won’t dismiss the comparison out of hand.

Superficially, there is something there. Trump appeals to the same kind of nationalist worldview that inspired Hitler’s supporters. Trump’s campaign slogan, “Make America Great Again,” isn’t substantively different than Hitler’s. Neither are his arguments for what has caused the decline: corrupt politicians who have sold out the nation, the presence of subversive or merely unwanted elements (Jews and communists for Hitler; illegal immigrants and Muslim refugees for Trump), and inept economic policy, meaning not enough of or the wrong kind of state intervention.

Like Hitler, Trump touts himself as the only hope to save his country, a strongman-type leader who will run a command economy, rid the country of subversive elements, and restore lost international respect. His disdain for civil liberties like free speech and open support of torture are an even more chilling similarity. For Trump, government isn’t the problem, it’s the solution, as long as the right leader is running it.

But for all the similarities, there are important differences. He certainly can’t be accused of sharing Hitler’s racial beliefs. Trump’s wall to keep out illegal immigrants from Mexico will have a yuuuuge door in the middle to admit legal immigrants of the same ethnicity. He has repeatedly voiced his admiration and respect for the Chinese, because “you can still respect someone who’s knocking the hell out of you.”

Most striking is Trump’s foreign policy differences with the Fuhrer. While Trump does advocate some sort of military action against ISIS, he’s strikingly noninterventionist in general. His willingness to come out and admit the Iraq War was a mistake – in South Carolina no less – and his general view that America should start questioning its ongoing military posture everywhere, including NATO, are the opposite of the aggressive military component integral to Hitler’s plan from the beginning.

So what do you call Trump’s brand of nationalism, if not outright fascism? If you take away the boorishness of Trump’s personality and insert more thoughtful, elegant rhetoric, you’d call it traditional American conservatism, before it was infiltrated by more libertarian ideas. American conservatism was always about creating an American version of the mercantilist British Empire and it really never changed.

Since the founding of the republic, American conservatives have argued for a strong central government that subsidized domestic corporations to build roads and infrastructure, levied high protectionist tariffs and ran a central bank. This was Alexander Hamilton’s domestic platform, championed by his Federalist Party. Henry Clay and the Whigs adopted it after the Federalist Party died. From the ashes of the Whigs emerged Lincoln and the Republicans, who were finally able to install Clay’s “American System” after decades of electoral failure.

The Republican Party has remained startlingly consistent in its economic principles, despite incorporating free market rhetoric in the 20th century. Republicans from Lincoln to McKinley to Coolidge to George W. Bush have been protectionists. Hoover reacted to the Depression by signing the Smoot-Hawley tariff, for all the same reasons Trump threatens tariffs now. And what was the first thing Republicans did in the 1950s, after two decades of Democratic Party domination? A huge government roads project that had Hamilton smiling in his grave.

Trump promises more of the same, justifying his stance against nation-building by saying, “I just think we have to rebuild our country.” Make no mistake, Trump isn’t suggesting cutting military spending and allowing the private sector to build what it chooses to build. “We” is the government, with Trump as its intellectually superior leader.

Trump isn’t Hitler; he’s Hamilton, advocating the kind of centralist government Hamilton spoke about in secret at the Constitutional Convention and attempted to achieve surreptitiously throughout the rest of his political life by eroding the same limits on federal government power he had trumpeted to sell the Constitution in the Federalist Papers. Trump wants to be Hamilton’s elected king, running a crony-capitalist, mercantilist economy just as Hamilton envisioned. Even Trump’s campaign slogan is Hamiltonian. Hamilton’s stated goal was “national greatness,” something he referred to again and again in his writing.

And while Hamilton was certainly a more eloquent and well-mannered spokesman for conservatism, Trump is actually superior to him in at least one way: Hamilton was a military interventionist, whose ambition to conquer the colonial possessions of Spain was much more like Hitler’s desire to seize the Ukraine for Germany than anything Trump wants to do internationally.

One has to wonder: Is that the real reason neoconservatives like Bill Kristol, John McCain and Lindsey Graham are so anti-Trump?

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Another Voice: We don’t need a federal law limiting ticket ‘bots’

schumerPaul McCartney scheduled a visit to Buffalo for the first time in his legendary career. I am a lifelong fan who had mouse poised at the precise moment tickets went on sale. I did not get a ticket. “Scalper bots” had apparently bought them faster than virtually anyone else could click on a seat. I was disappointed.

But I’m even more disappointed to hear there is support for a federal law prohibiting these kinds of programs. Under the guise of protecting the environment (but really just more crony capitalist scams), we already have the federal government telling us what light bulbs we may use and how much water our toilets are allowed to flush. We don’t need a law telling us how to buy and sell tickets to a rock concert.

The first and foremost reason is principle. Concert tickets are private property. They belong to the promoters of the concert, who have a right to sell 100 percent of them to customers using purchasing software. They also have a right to develop software to prevent bots from buying their tickets. The government’s role in exchanges of property is to ensure these property rights are secure, not to violate them as this bill proposes to do for the convenience of those who seem to believe someone owes them a concert ticket.

Read the rest at The Buffalo News…

 

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Thought for the day: Why can’t the U.S. imitate Switzerland?

shutterstock_181475261-643x419Thought for the day: Here’s a compromise I’d be willing to make with the left on the USA imitating a European welfare state: We’d imitate Switzerland. That means:

  1. An extremely limited central government with very low central government taxation (about 11% of GDP)
  2. Each canton/state decides how generous its welfare benefits will be and taxes its citizens accordingly. There is no national health care or centrally-mandated benefits.
  3. Firearms are not only considered a right, but a responsibility (although we wouldn’t mandate militia service – we have plenty who would volunteer)
  4. Nonintervention in foreign affairs in the proud Swiss tradition that even WWII was unnecessary (which it was)

I think that’s fair. How about it, lefties?

*Photo by Orbex

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

It’s not labor unions that destroy the economy; it’s the New Deal and its awful progeny

First_United_States_Labor_Day_Parade,_September_5,_1882_in_New_York_CityTwo small minorities on either end of the political spectrum have strong feelings about Labor Day. One side sees the holiday as a celebration of all the victories hard working folks have won in securing their rights against greedy capitalists who would otherwise have them working twenty-three hours a day in sweat shops. The other side sees it as overt Marxism, so dangerous to all that’s good and holy the holiday should be renamed.

The other 95% are just damned glad to have the day off.

That the right wingers are paranoid doesn’t mean no one is out to get them. There is a very real connection between the holiday, the unions that proposed it and Marxism. American Marxists are firm supporters of unions, as were Marx and Engels themselves.

Neither is there any denying the damage unions appear to have done. Wherever labor unions are firmly entrenched, economic hardship proliferates. Outside the politically correct zone, everyone knows unions destroyed Detroit. If you have any doubt, just look at General Motors’ 2006 balance sheet. Either capitalists mysteriously ceased being greedy for the preceding fifty years or something forced them to be overly generous with pay and benefits, resulting in the bizarre preponderance of legacy benefit costs reflected there.

This would seem to be something of a paradox. How can this free association, an expression of the free market itself, be so harmful to our economic well-being?

The answer is labor unions themselves are not the problem. It’s labor union legislation, starting with the infamous “Wagner Act” (National Labor Relations Act of 1935) and continuing with subsequent legislation in the decades thereafter. These laws transformed the employment contract from a voluntary buyer-seller agreement to an involuntary one for one side.

The Wagner Act didn’t protect the right of sellers (employees) to freely associate and agree upon a minimum level of pay and benefits they would accept. They already had that right. The Wagner Act legalized violation of the buyers’ (employers) right to refuse to purchase their services. Just as sellers have a right to make collective bargaining a condition of the sale, buyers have a right to make individual bargaining a condition of their purchase.

In a free market, exchanges are supposed to happen only when both sides voluntarily agree to the price and the terms. If they can’t agree, they just don’t do business together, with each party free to buy or sell the services in question from and to others, respectively.

The Wagner Act overrides this natural law. It says the sellers are free to bargain collectively, but the buyer is not free to refuse. It makes one side of the agreement involuntary. Apart from the moral repugnancy of the idea, it causes huge economic distortions.

For example, it completely reverses the incentives for the sellers. If the buyers were allowed to negotiate freely with union and non-union members, the union would have to find a way to makes its members more productive than non-union workers to justify the higher price they ask for the same services.

Instead, unions in the present scenario have an incentive to make its workers less productive. Since the employer can’t say no, the union benefits from less productivity per worker, which results in a need for more total workers paying union dues. Anyone who’s been a new employee in a union shop will attest to the pressure from other employees to slow down one’s work in order to strengthen the union’s position at the bargaining table.

The right of buyers to buy from someone else or not buy at all is the most fundamental discipline a free market imposes on sellers. It is the only reason sellers seek to improve the quality and lower the price of their products. When this discipline is removed, prices go up and quality goes down. It’s the same phenomenon playing out in health care.

Ultimately, one shouldn’t blame labor unions for the economic misery they seem to spread. They are merely responding to incentives, just as do crony capitalists who benefit from protectionism. Put the blame squarely where it belongs, on the source of most human misery in this advanced age: government.

Enjoy the Labor Day holiday. Cook some hot dogs, crack open some cold ones and thank the hard workers the holiday is meant to honor under its rightful name. And while you’re at it, burn FDR in effigy for screwing everything up.

 

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Trump’s Protectionist Fallacies Have Been Refuted By Free Market Economists for Hundreds of Years

n-ADAM-SMITH-largeIt’s easy to understand the visceral attraction to Donald Trump’s campaign. My own libertarian heart beats a little stiff when he waves the one finger salute at establishment institutions that crush our freedom, including the Republican Party leadership, the mainstream media and the useless D.C. politicians themselves.

It’s not what Donald Trump is against that bothers me. It’s what he’s for. So much attention has been paid to his immigration stance from a race perspective that no one seems to care how anti-free market his platform is. Trump is running on economic fallacies that have been consistently refuted by free market economists for hundreds of years.

When Adam Smith wrote Wealth of Nations, it wasn’t to refute the “godless socialists” 21st-century Republican voters believe are taking over the world. It was to refute the kinds of protectionist ideas championed by conservatives like Edmund Burke and Alexander Hamilton in Smith’s day, Abraham Lincoln eighty years later, and Trump today.

Read the rest at The Huffington Post…

 

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

 

Job growth in WNY has speed, but does it really have credibility?

Pair_of_2009_SolarCity_Dodge_SprintersA July 26 article in the Buffalo News rejoiced, “Job growth in WNY gains speed, credibility.” There is no doubt about the speed. The credibility may be another story.

Writer David Robinson gave due credit to “high-profile projects, from the Medical Campus to Solar City’s 1,500-employee solar panel factory, that are giving a jolt to the local job market, first because of all the construction associated with those projects, and eventually with the hiring that will take place as those businesses ramp up.”

What he didn’t mention was why those two sectors were enjoying such spectacular growth: tax breaks and other incentives provided by local, state and federal governments.

It has become fashionable to call tax breaks “subsidies,” based on the perverse idea the government not only has a legitimate claim to all wealth you’ve created in the past, but any you may create in the future. Tax breaks aren’t subsidies, but they are part of a larger economic system that has never worked.

Step One is to tax and regulate everyone into a state of complete economic paralysis. Buffalo’s local governments perfected that fifty years ago. They never got around to Step Two until now.

Step Two is to grant limited relief to those businesses who either represent something politicians like or who promise to deliver something politicians need. Solar City does both. They represent the green energy movement, the cause célèbre of politicians everywhere. They have also promised to create a significant number of jobs, which helps politicians get reelected.

This may seem like a win-win for everyone, until that buzzkill called “economic reality” turns on the lights and turns off the music. Growth created by government privilege almost always turns out to be temporary. Viable business plans don’t need government assistance to make a profit and create new jobs. They produce products customers are willing to pay for at a price that supports the company’s costs and profits.

Solar City may or may not have a viable business plan. We don’t know, because it is presently riding government “subsidies” in all its markets, not just in Buffalo. We do know its stock is down over 8% since it reported earnings in May. We’ll get another report later this week.

The risk is Solar City turns out to be another Chevy Volt, a product that never would have made it to market without similar assistance from the government. Despite that assistance, the product’s sales have consistently failed to materialize. The government continues to help keep the product alive, but if jobs were actually dependent upon producing it, they’d cease to exist. Chevy’s sales of viable products are what actually subsidize the Volt.

Not only does this form of central economic planning promote unviable business ventures over viable ones, it encourages businesses to do economically idiotic things, like hire more people than it needs. A June 11, 2015 article in the News lamented, “Billed by officials as creating 400 jobs, FedEx center in Hamburg will fall short of that tally.”

The article attempts to incite outrage that Fedex has reneged on its promise of 400 jobs in return for the tax incentives, although it acknowledges it may have been politicians who made that promise, not Fedex. Lost in all of this is the basic economic principle that a business venture is supposed to produce its product at the lowest cost possible. It’s economically harmful to everyone when it intentionally raises its costs for political reasons.

That the other significant contributor to WNY jobs is the medical sector is ominous for all the same reasons. Medical care was already the most subsidized economic sector in human history before Bush and Obama subsidized it even more. It receives real subsidies, meaning direct cash payments from the government that represent about half of all U.S. health care spending. What happens when those subsidies run out?

Central economic planning doesn’t work. They found that out the hard way in the Soviet Union and China, where tens of millions literally starved to death because of it. Central Economic Planning Lite as practiced in this country doesn’t work, either. If tax breaks stimulate growth, they should simply be granted to all businesses, no strings attached. Then, the market will allow viable businesses to create permanent jobs.

Buffalo should try this approach and lead the nation in demonstrating the power of the free market, instead of following Washington to another disaster.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Greek “no” vote on austerity isn’t remotely heroic or “libertarian”

greece-referendum-_3365507bThe 21st century global banking system based on fiat currencies and redistribution of wealth through inflation is immoral and destructive. That doesn’t mean stiffing your creditors is at all justified, heroic or remotely “libertarian,” as many on my newsfeeds are suggesting.

The Greeks who decided to take two month vacations, vote themselves useless government jobs and then retire at 50, all on someone else’s dime, aren’t the victims today. They are as much the perpetrators as the so-called “banksters.”

Photo: Sakis Mitrolidis/AFP

The real victims are those hardworking Greeks who have hitherto paid for all of this and the honest creditors who lent them money, although the latter have some culpability for bad judgment.

The Greek “no” vote on accepting “austerity” measures in return for additional loans from the European Central Bank (ECB) was more like a childish tantrum than a blow for freedom.

Imagine if you couldn’t pay your rent and asked a friend for a loan. If she agreed, stipulating you must cut your ice cream consumption from $100 to $50 per month, you wouldn’t be considered heroic for defiantly refusing her terms and still not being able to pay your rent or repay the other friend you borrowed from last month.

The Greek vote had nothing to do with liberty, but it was certainly democracy in action. Over two hundred years ago, John Adams wrote,

“Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.”

The Greek democracy has the revolver to its head. Time will tell if democracy or common sense will prevail.

 

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

 

Buffalo News Another Voice: Buffalo doesn’t need another interfering ‘master plan’

An editorial in The Buffalo News June 19 headlined “Welcome new master plan aims at making downtown core more people-friendly” said this:

“Yes, continued development could happen by accident, but it’s dangerous to leave growth up to chance and likely to produce less desirable results.”

Wrong. Leaving growth up to chance is Buffalo’s only hope for escaping the economic blight that has plagued it for over a half-century.

Let’s not forget what killed Buffalo in the first place: government interference in the marketplace and central planning, from destroying untold billions in waterfront property with wrongheaded expressways and disastrous public housing projects to larcenous taxes to stifling regulations.

“Leaving growth up to chance” really means leaving growth up to the market. Instead of government officials seizing money from taxpayers and deciding how it will be spent, each individual spends his or her own money as he or she sees fit.

This subjects new projects to the rigors of the market. Entrepreneurs face the prospect of losses if they build something people won’t buy voluntarily. When the government builds it, taxpayers don’t have a choice. They pay whether they want it or not. This steals capital from enterprises that can make a profit and employ people.

Read the rest at The Buffalo News…

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

 

 

Buffalo doesn’t need another “master plan”

buffaloBUFFALO June 22, 2015 A June 19 Buffalo News Opinion piece entitled, “Welcome new master plan aims at making downtown core more people-friendly” said this:

“Yes, continued development could happen by accident, but it’s dangerous to leave growth up to chance and likely to produce less desirable results.”

Wrong. Leaving growth up to the market is Buffalo’s only hope for escaping the economic blight that has plagued it for over a half century.

Let’s not forget what killed Buffalo in the first place: central planning by the government, which destroyed untold billions in waterfront property with wrongheaded expressways and disastrous public housing projects, built the Subway to Nowhere and generally taxed and regulated the economy to death.

The alternative to central planning isn’t “leaving growth up to chance.” It’s leaving growth up to the uncoerced choices of producers and consumers. Instead of government officials seizing money from taxpayers and deciding how it will be spent, consumers spend their own money as they see fit.

When consumers have choices, entrepreneurs face the prospect of losses if they produce products people won’t buy voluntarily. When the government plans and subsidizes, taxpayers don’t have a choice. They pay whether they want to or not. This steals capital from projects that can make a profit and employ people and leaves us with projects that need subsidies to survive.

Having lived away from this city for ten years, I’ve been overwhelmed since returning at the extent of government interference in every economic decision. There is literally no new building or business initiative local government officials aren’t intimately involved in planning.

This is to some extent the natural result of taxing the daylights out of everyone and then offering tax breaks, perversely called “subsidies” in modern socialist parlance, to those who start businesses the government approves of. But Buffalo takes it to a whole new level.

After living and doing business in relatively freer places, I feel like I’ve moved back to 1960s Moscow. It’s abundantly clear why people are leaving this city to find opportunities elsewhere.

Most are familiar with Einstein’s definition of insanity: repeating the same procedure and expecting a different result. We’ve let government central planners kill Buffalo for too many decades. It’s time to try something new.

Let’s let the market decide what is built or not built in Buffalo. That’s what made America the richest country in the world. It’s what is rebuilding the places our young people are fleeing to.

We have nothing to lose but our fifty-year recession.

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.