Category Archive 'Socialism'
12 Nov 2017

California: Doing Less Well Than Mexico

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Fifth Generation Californian Steve Baldwin says good-bye to the Golden State, refuting in the process all the liberal boasting about California’s prosperity under Leftism.

[L]iberals like to claim California socialism is working by pointing to the much heralded statistic that “California’s economy is the 6th largest in the world” as calculated by the state’s Department of Finance. Indeed, California’s $2.62 trillion economy is larger than that of France, Canada, Brazil, Russia, and Italy. However, that GDP stat does not factor in California’s cost of living, which is 36.2% higher than the national cost of living. As Carson Bruno writes in Real Clear Markets, “using the cost of living adjusted data from the International Monetary Fund and adjusting California’s GDP data provides a better snapshot of California’s economic standing in the world. Doing so shows that California is actually the 12th largest economy — a drop of 6 spots — and actually puts the state below Mexico.”

Moreover, as Bruno points out, Silicon Valley “accounted for 50% of California’s private industry real GDP growth.” In other words, without a few dozen mega profitable high-tech Silicon Valley firms such as Apple, Google, and Facebook, California’s GDP would be significantly smaller.

However, as economic blogger Richard Rider points out, the aggregate GDP statistic is really not a good indicator of a state’s economic health, especially since one industry appears to be propping up the “6th largest economy” myth. California has over 39 million people, more than any other state, so a far more accurate assessment of its economy, Rider writes, would be per capita GDP as compared to the rest of the country. After adjusting the GDP figures to account for the cost of living (COL), the Golden State ends up with a paltry 37th place ranking within the U.S.A., with a $45,696 per capital GDP. Even rustbelt states, such as Michigan and Ohio, have a higher adjusted per capita GDP. Despite Silicon Valley’s high-tech giants, California barely squeezes past impoverished New Mexico. Rider also reports that when one looks at per capita GDP stats for the rest of the world, California ranks 19th, but those stats don’t factor in the COL data; if they did, California would be even further down the rankings internationally.

One should not also assume that high-tech companies are a permanent feature of California’s economy. Already, the extremely high cost of living in Silicon Valley has, since 2016, caused more Silicon Valley employees to leave the state than it has attracted. With a few high-tech companies having left California for other states such as Virginia, Texas and North Carolina, it’s only a matter of time before this turns into a flood.

But it’s not just Silicon Valley employees fleeing California; it’s productive — and job-creating — citizens from all over the state. As Joel Kotkin and Wendell Cox wrote in the Mercury News last April, “the largest group of outmigrants tends to be middle-aged people making between $100,000 and $200,000 annually.”

Indeed, California has done everything possible to make it difficult for businesses and employers to produce goods and services. California now has the highest state income tax rate and the highest state sales tax rate in the country. Our gas tax rate is fourth-highest, but if you add in the 10-12 cent “cap and trade” cost per gallon, we have the highest gas tax in the country. Based on 2014 numbers, California’s single-family residence property tax is the eighth highest in the country with the median homeowner property tax bill 93% higher than the average property tax bill for the other 49 states. As for the state’s corporate income tax rate, it is also eighth in the country. And let’s not forget our small business tax, a minimum of $800, even if no profit is earned.

Overall, the Tax Foundation ranks California as fifth worse in overall tax burden, but the state is especially hostile to its high earners who start businesses and create most of the jobs. Indeed, the top 1% pays 50% of all state income taxes. Moreover, the Small Business and Entrepreneurship Council ranked California as having the worst anti-business climate in the country; the American Tort Reform Foundation ranks the state as the “worst state judicial hellhole” in the U.S. and the national Chamber of Commerce rates California as having the fourth-worst business climate.

If California is such a prosperous state as liberals claim, why does it have the highest poverty rate in the nation? According to the Census Bureau, the poverty rate is 23.4%, which is 17% higher than second place Nevada. Indeed, while California has 12% of the nation’s population, it is home to 33% of the nation’s TANF (Temporary Assistance for Needy Families) welfare recipients, more than the next seven states combined.

What’s clear is that the producers are leaving the state and the takers are coming in. Many of the takers are illegal aliens, now estimated to number over 2.6 million. The Federation for American Immigration Reform estimates that California spends $22 billion on government services for illegal aliens, including welfare, education, Medicaid, and criminal justice system costs. Liberals claim they more than make that up with taxes paid, but that’s simply not true. It’s not even close. FAIR estimates illegal aliens in California contribute only $1.21 billion in tax revenue, which means they cost California $20.6 billion, or at least $1,800 per household.


19 Jun 2017

Recurring Cycle

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12 Jun 2017

Kotkin on California’s Feudal Socialism

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San Francisco Bay area from Grizzly Peak

Joel Kotkin admires the contradictions inherent in California’s Socialism.

The oligarchs of the Bay Area have a problem: They must square their progressive worldview with their enormous wealth. They certainly are not socialists in the traditional sense. They see their riches not as a result of class advantages, but rather as reflective of their meritocratic superiority. As former TechCrunch reporter Gregory Ferenstein has observed, they embrace massive inequality as both a given and a logical outcome of the new economy.

The nerd estate is definitely not stupid, and like rulers everywhere, they worry about a revolt of the masses, and even the unionization of their companies. Their gambit is to expand the welfare state to keep the hoi polloi in line. Many, including Mark Zuckerberg, now favor an income stipend that could prevent mass homelessness and malnutrition.

Unlike its failed predecessor, this new, greener socialism seeks not to weaken, but rather to preserve, the emerging class structure. Brown and his acolytes have slowed upward mobility by environment restrictions that have cramped home production of all kinds, particularly the building of moderate-cost single-family homes on the periphery. All of this, at a time when millennials nationwide, contrary to the assertion of Brown’s “smart growth” allies, are beginning to buy cars, homes and move to the suburbs.

In contrast, many in Sacramento appear to have disdain for expanding the “California dream” of property ownership. The state’s planners are creating policies that will ultimately lead to the effective socialization of the regulated housing market, as more people are unable to afford housing without subsidies. Increasingly, these efforts are being imposed with little or no public input by increasingly opaque regional agencies.

To these burdens, there are now growing calls for a single-payer health care system — which, in principle, is not a terrible idea, but it will include the undocumented, essentially inviting the poor to bring their sick relatives here. The state Senate passed the bill without identifying a funding source to pay the estimated $400 billion annual cost, leading even former Los Angeles Mayor Antonio Villaraigosa to describe it as “snake oil.” It may be more like hemlock for California’s middle-income earners, who, even with the cost of private health care removed, would have to fork over an estimated $50 billion to $100 billion a year in new taxes to pay for it.

In the end, we are witnessing the continuation of an evolving class war, pitting the oligarchs and their political allies against the state’s diminished middle and working classes. It might work politically, as the California electorate itself becomes more dependent on government largesse, but it’s hard to see how the state makes ends meet in the longer run without confiscating the billions now held by the ruling tech oligarchs.


18 Mar 2017

How the Medical Profession Was Hijacked By Leftism

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Sir Samuel Luke Fildes KCVO RA, The Doctor, 1891, Tate Gallery.
In 1949, Fildes’ painting “The Doctor” (1891) was used by the American Medical Association in a campaign against a proposal for nationalized medical care put forth by President Harry S. Truman. The image was used in posters and brochures along with the slogan, “Keep Politics Out of this Picture.” 65,000 posters of The Doctor were distributed, which helped to raise public skepticism of the nationalized health care campaign. In 2008, the AMA was no longer defending the sanctity of the doctor-patient relationship and the independence of the Medical Profession, but was instead supporting Obamacare and the nationalization of health care.

Dr. Publius, at Ricochet, explains how all this happened.

For the medical profession, there is one ethical obligation that surpasses all others. It is the very obligation that defines a classic profession, and once it is abandoned, members of that so-called profession no longer have any claim whatsoever to any of the special regard, respect, perquisites, or considerations that commonly accrue to true professionals in our society.

Physicians have referred to this obligation as the doctor-patient relationship. Like the lawyer-client relationship and the clergy-parishioner relationship, the doctor-patient relationship is supposed to be a sacred, protected, fiduciary one, in which the patient can feel safe in disclosing private information they may not even willingly tell their spouses, and in return the doctor agrees not only to keep that information private, but also to act on that information in such a way that furthers and optimizes the individual patient’s own best medical interests, without regard to which actions or recommendations might be to the doctor’s interests — or to society’s.

The abandonment of this sacred, fiduciary obligation (honored by physicians for over 2000 years) cannot be blamed on Obamacare. It was formally abandoned years before most of us had ever heard of Mr. Obama. The doctor-patient relationship, never as pure in practice as it was in concept, began to significantly erode in the 1990s. This, of course, was the heyday of for-profit HMOs, when the insurers used extreme coercion to make certain that doctors learned who their real customers were. Doctors who did not place the payers first had their reimbursements slashed, and often found themselves excluded from panels, and therefore from access to patients. In a surprisingly short time doctors by the thousands were signing “gag clauses,” in which they agreed to withhold from patients certain information that might be adverse to the interests of the HMOs.

It would be wrong to say that doctors did not mind these things. It troubled many of them deeply. Indeed, by the turn of the millennium many members of the profession were feeling, and occasionally publicly expressing, tremendous guilt for having had to abandon their chief ethical obligation to their patients, in order to continue practicing medicine.

Faced with an ethical dilemma which was increasingly difficult for them to tolerate, an outcry arose from within the medical profession demanding that their leadership take up the problem, and do something about it. Most doctors had in mind some sort of organized action by which the profession would attempt to reclaim its ethical grounding. And so, conferences were convened, debates (of a sort) engaged in, and at last, action taken.

What doctors in the trenches failed to realize was that the physicians who dedicate their careers to leading professional organizations are almost always Progressives, because this is what Progressives do. So the action that was finally taken was the official adoption of a new set of medical ethics, which was published in 2002: “Medical Professionalism in the New Millennium: A Physician Charter. “(Annals of Internal Medicine, February 5, 2002). This document described a new ethical precept which was to be formally adopted by the medical profession. That new precept was, of course, “Social Justice.” Under the precept of social justice, doctors, in making medical decisions at the bedside, suddenly became obligated to take the equitable distribution of healthcare resources into account. Covert rationing at the bedside at the behest of payers (who presumably knew more about equitable distribution of resources than individual physicians did), was not only acceptable, and not only a positive good, but an ethical requirement.

During the intervening years this new charter of medical ethics was indeed formally adopted by virtually every medical professional organization in the world.

Adding social justice to the ethical obligations of physicians or course did nothing to ease the discrepancy between the needs the patient and the needs of the payer. But its addition at least assuaged some of the guilt of some of the doctors who chose not to think too deeply about it.

This modernized, progressive version of medical ethics was not the result of Obamacare, but it has served Obamacare well. It was a matter of mere moments before doctors noticed that it would behoove them to shift their efforts from making the insurers happy to making the government happy.

Today, when a doctor makes a medical recommendation to a patient, that patient can no longer be confident that the recommendation is truly the one the doctor believes is best for him or her. For it may instead simply represent what the doctor has decided the patient deserves, given his/her needs in relation to the needs of all the other patients in the Accountable Care Organization, the state, the country, or the world.

18 Jul 2016

Trump’s Economic Nationalism is Socialism

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Jeffrey Tucker explains that the Trump Nationalist agenda is just another version of Socialism, and that the world has seen the rise of precisely this kind of nationalist socialism before.

The rise of Fascism and Nazism was not a reaction against the socialist trends of the preceding period,” wrote Hayek, “but a necessary outcome of those tendencies.” In Hayek’s reading, the dynamic works like this. The socialists build the state machinery, but their plans fail. A crisis arrives. The population seeks answers. Politicians claiming to be anti-socialist step up with new authoritarian plans that purport to reverse the problem. Their populist appeal taps into the lowest political instincts (nativism, racism, religious bigotry, and so on) and promises a new order of things under better, more efficient rule.

Hayek’s thesis is very similar to Mises’: that the greatest threat in the world today comes from a version of socialism — a rightist socialism — cobbled together in the name of fighting authoritarianism abroad and countering leftism at home. The road to serfdom, in Hayek’s view, is paved by a blind pursuit of unified nationhood and central planning in the name of national greatness. Or, to use today’s language, “making America great again.”

Donald Trump, Bernie Sanders and Hillary Clinton agree on a lot, especially on the need to protect and enlarge state power. None of them accepts any principled limits on what the state may rightfully do to the individual. Even on big issues where one might think they disagree — healthcare, immigration, and control of lands by the federal government — their positions are more alike than different. …

Most of these candidates’ supporters don’t see it that way, of course. They imagine themselves to be rebels fighting power itself, however they want to define it: Wall Street, the party establishment, the paid-off politicians, the bureaucracy, the billionaires, the foreigners, the special interests, and so on.

But notice that neither Trump, Sanders, nor Clinton attacks government authority as such. Instead they aspire to use it and grow it for their purposes. “The conflict between the Fascist or National-Socialist and the older socialist parties must indeed very largely be regarded as the kind of conflict which is bound to arise between rival socialist factions,” Hayek wrote. “There was no difference between them about the question of it being the will of the state which should assign to each person his proper place in society.”

As the campaign progress over 2015, the close relationship between right and left socialisms became more obvious. On the surface, Bernie Sanders and Donald Trump represent opposite extremes. But in their celebration of the nation state as the people’s salvation — their burning calls to overthrow the existing elites and replace them with a more intense form of top-down rule — they are morally indistinguishable, and equally un-American.

Read the whole thing.

08 May 2016

“One More Time”

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25 Apr 2016

Venezuela’s Suicide

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Joel Hirst looks on as the lights begin to go off in Venezuela. That country has arrived recently at a point resembling the closing chapters of Ayn Rand’s Atlas Shrugged.

Tonight there are no lights. Like the New York City of Ayn Rand’s “Atlas Shrugged”, the eyes of the country were plucked out to feed the starving beggars in abandoned occupied buildings which were once luxury apartments. They blame the weather – the government does – like the tribal shamans of old who made sacrifices to the gods in the hopes of an intervention. There is no food either; they tell the people to hold on, to raise chickens on the terraces of their once-glamorous apartments. There is no water – and they give lessons on state TV of how to wash with a cup of water. The money is worthless; people now pay with potatoes, if they can find them. Doctors operate using the light of their smart phones; when there is power enough to charge them. Without anesthesia, of course – or antibiotics, like the days before the advent of modern medicine. The phone service has been cut – soon the internet will go and an all-pervading darkness will fall over a feral land.

All it would take is the election of one more radical Progressive democrat like Bernie Sanders and the USA could share in the full Venezuela experience.

16 Feb 2016

Laissez-Faire, Not Socialism, Made Sweden Prosperous

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Johan Norberg notes that the Left loves to point out Sweden as a model of Socialism with Economic Prosperity. The problem is that all the prosperity is a legacy from an economic system which Socialism is determined to change.

Once upon a time I got interested in theories of economic development because I had studied a low-income country, poorer than Congo, with life expectancy half as long and infant mortality three times as high as the average developing country.

That country is my own country, Sweden—less than 150 years ago.

At that time Sweden was incredibly poor—and hungry. When there was a crop failure, my ancestors in northern Sweden, in Ångermanland, had to mix bark into the bread because they were short of flour. Life in towns and cities was no easier. Overcrowding and a lack of health services, sanitation, and refuse disposal claimed lives every day. Well into the twentieth century, an ordinary Swedish working-class family with five children might have to live in one room and a kitchen, which doubled as a dining room and bedroom. Many people lodged with other families. Housing statistics from Stockholm show that in 1900, as many as 1,400 people could live in a building consisting of 200 one-room flats. In conditions like these it is little wonder that disease was rife. People had large numbers of children not only for lack of contraception, but also because of the risk that not many would survive for long.

As Vilhelm Moberg, our greatest author, observed when he wrote a history of the Swedish people: “Of all the wondrous adventures of the Swedish people, none is more remarkable and wonderful than this: that it survived all of them.”1

But in one century, everything was changed. Sweden had the fastest economic and social development that its people had ever experienced, and one of the fastest the world had ever seen. Between 1850 and 1950 the average Swedish income multiplied eightfold, while population doubled. Infant mortality fell from 15 to 2 per cent, and average life expectancy rose an incredible 28 years. A poor peasant nation had become one of the world’s richest countries.

Many people abroad think that this was the triumph of the Swedish Social Democratic Party, which somehow found the perfect middle way, managing to tax, spend, and regulate Sweden into a more equitable distribution of wealth—without hurting its productive capacity. And so Sweden—a small country of nine million inhabitants in the north of Europe—became a source of inspiration for people around the world who believe in government-led development and distribution.

But there is something wrong with this interpretation. In 1950, when Sweden was known worldwide as the great success story, taxes in Sweden were lower and the public sector smaller than in the rest of Europe and the United States. It was not until then that Swedish politicians started levying taxes and disbursing handouts on a large scale, that is, redistributing the wealth that businesses and workers had already created. Sweden’s biggest social and economic successes took place when Sweden had a laissez-faire economy, and widely distributed wealth preceded the welfare state.

Hat tip to Karen L. Myers.

11 Feb 2016

New Hampshire Delegates

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10 Jan 2016

From a Memorial in Argentina

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Juan Bautista Alberdi 1810-1853

“Juan Bautista Alberdi sostenía que la Libertad produce en el hombre de a pie la angustia de la responsabilidad y por eso añora la monarquía absoluta, donde no debía decidir. Y al morir el Antiguo Régimen, se volcaba hacia el socialismo. Lo vio con 100 años de antelación.”

[Juan Bautista Alberdi argued that Liberty produces in the common man the anguish of responsibility and he therefore yearns for an absolute monarchy and no obligation to decide. Thus the death of the Ancien Regime spills over into Socialism. He saw a hundred years ahead.]

16 Oct 2015

The Debates So Far

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14 Oct 2015

The Democrat Party is Now the Socialist Party

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Jim Geraghty watched last night’s democrat debate, and observes that it proved one important thing: the democrats have become an openly socialist party. The democrat road to office is based entirely on social division and class warfare.

Sure, this batch of candidates sounded like a bunch of loons. They contended socialism is mostly about standing up to the richest one percent and promoting entrepreneurs and small business; climate change is the biggest national security threat facing the nation; college educations should be free for everyone; all lives don’t matter, black lives do; Obama is simultaneously an enormously successful president in managing the economy and the middle class is collapsing and there’s a need for a “New New Deal” which is in fact an Old Old Idea, considering how FDR called for a Second New Deal in 1935. The audience in Nevada applauded higher taxes, believes that Hillary Clinton doesn’t need to answer any more questions, supports the complete shutdown of the NSA domestic surveillance program, and that Obamacare benefits should be extended to illegal immigrants. There are kindergarten classes with more realistic assessments of cost-benefit tradeoffs than the crowd watching this debate at the Wynn Las Vegas.

So yes, the candidates sounded like hard-Left, pie-in-the-sky, free-ice-cream-for-everyone, Socialist pander bears. But they do so because that is what the Democratic Party’s primary voters demand. Don’t blame them; blame the party rank-and-file that craves these promises, rhetoric, and worldview.

27 Jul 2015

Progressives’ Progress

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04 Jul 2015

Greece and the EU

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