Barack Channels Princess SummerFall WinterSpring

The princess of the title is Elizabeth Warren, self-reputed to be of Cherokee descent. And, as Native Americans go, Warren is about as authentic as Princess SummerFall WinterSpring of Howdy Doody.

You may remember Warren’s bleat of last September, in support of Obama’s plan to soak “the rich.” It caused ripples in the blogosphere (here and here, for example). The bleat? It goes like this:

I hear all this, you know, Well, this is class warfare, this is whatever. No. There is nobody in this country who got rich on his own — nobody.

You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did.

Now look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.

Last week, in Virgina, The Mighty O said the same thing in slightly different words:

There are a lot of wealthy, successful Americans who agree with me — because they want to give something back.  They know they didn’t — look, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.  I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something — there are a whole bunch of hardworking people out there.

I repeat what I said in response to Warren’s bleat:

Who said anything about anyone getting rich on his own? But didn’t the factory owner — and other “malefactors of great wealth” — pay a “fair share”of the taxes that support roads, education, and police and fire forces? Yes.* Didn’t the factory owner pay his workers for their labor? Yes, and sometimes (in the case of union workers) at the expense of consumers and those workers who couldn’t find employment because unions effectively limit entry to the labor market.

If anyone owes “the rest of us” anything, it’s the workers who received subsidized educations that enabled them to earn good wages at factories that were built because factory owners, shareholders, bond holders, and (sometimes) venture capitalists put their own money at risk.

Workers and others (including Elizabeth Warren) ought to be grateful to the “malefactors of great wealth” who have — against heavy odds — enabled America’s prosperity.

Tom Smith of The Right Coast weighs in with this:

…{H]ow many more successful businesses, inventions, products, services, toys, tools, insights, and just plain fun would there be, if government did not in the first place make it so ridiculously difficult to start a business and keep it going? I don’t see our young president taking credit on behalf of the state for all the failures it help cause, all the ideas that never got off the ground because the regulatory hurdles were so high, or all the established companies that never had to face competition because they had managed to get their rents written into law. This is part of the seen and not seen insight of Bastiat. What you see is a successful business when it manages to survive, and then people run up, the same people who taxed and regulated it nearly to death, and say I helped! I helped! What you don’t see are all the businesses that perished or never got started because of the heavy hand of the state. And it’s a very heavy hand….

I started a business, commercially unsuccessful, sadly, but we created some great technology. I was a libertarian before that, but I was really a libertarian afterwards. It’s difficult to even explain how pervasive, expensive, frustrating and sometimes just plain insuperable the regulatory and taxation burden of the state is. It’s not what did our venture in, but it helped….

It’s obvious, but still worth saying — for our young President to suggest that government deserves some large part of the credit for the achievements of business founders who manage, in spite of it all, to start a business and make of a go of it, is deeply, deeply perverse. What it ought to get credit for are all the unseen businesses, no longer here or never to be, that it is responsible for.

I can tell you, from bitter experience as a business owner and corporate officer, that Smith is exactly right. The burdens that government imposes on the creation, expansion, and operation of businesses are myriad and onerous. Most Americans aren’t aware of just how much government does to discourage the creation of jobs, income, and wealth because most Americans — even those who are employed — are not exposed to the ugliness of the business-government interface. If business-government transactions were rated like movies, they would be rated XXX.

There is one more thing to be said about the Warren-Obama attack on industriousness. It’s wrong, as any economist worth his salt could tell you. (That excludes Paul Krugman and his fellow worshipers at the altar of big government.) Despite the pretensions of bleeding heart libertarians and their brethren on the left, no one on Earth is qualified to say how much a person deserves to earn. Aside from thieves and others who coerce their earnings from others (e.g., government officials, members of compulsory unions), Americans earn what they are able to command for their services, on the basis of the value of those services to others.

The factory owner who makes a lot of money does so — after having taken the considerable risk of owning a factory and putting up with a lot of crap from government — because what he produces is valuable to others. He is being rewarded more than his employees because he is taking  risks and putting up with harassment. He is, in other words, being rewarded for his contributions to the success of his enterprise. (Did Barack or Elizabeth do anything to help him create it? Did the workers do more than they were paid to do? No, to both questions.)

And if the factory owner loses a lot of money and goes out of business, is it the fault of those who failed to buy his products? Would Barack Obama and Elizabeth Warren say that everyone let him down? They should, because by their “logic” the failed factory owner was failed by everyone who didn’t buy his products, and so they owe him something.

But most American business owners are not whiny brats like Barack Obama, Elizabeth Warren, and the freeloaders whose votes they depend on to stay in power.

Related posts:
The Causes of Economic Growth
A Short Course in Economics
Addendum to a Short Course in Economics
The Price of Government
Asymmetrical (Ideological) Warfare
“Buy Local”
Giving Back, Again
Taxing the Rich
More about Taxing the Rich
Luck-Egalitarianism and Moral Luck
In Defense of Wal-Mart
Union Thuggery
Estimating the Rahn Curve: Or, How Government Inhibits Economic Growth

Fascism with a “Friendly” Face

This is the core meaning of fascism:

Fascism is a system in which the government leaves nominal ownership of the means of production in the hands of private individuals but exercises control by means of regulatory legislation and reaps most of the profit by means of heavy taxation. In effect, fascism is simply a more subtle form of government ownership than is socialism.

A fascistic government  — even a totalitarian one — will try to secure broad political support for itself. Scapegoating is a common technique for developing political support. Scapegoating, when successful, fosters the belief that the country’s economic and/or social problems — the ones that the fascistic regime promises to cure — are due to the actions of particular, identifiable groups of citizens. Another common technique is the suppression of dissent, which stifles critical commentary while imparting to the timid masses a lesson in the value of submissiveness to the regime.

Successful scapegoating serves two purposes. First, it turns public scrutiny away from the regime’s mistakes and misdeeds and toward the supposed misdeeds of the scapegoated groups. Second, scapegoating helps to build public support for the regime by identifying it as a force for good, as opposed to the scapegoated groups, which are painted as sources of evil.

Fascism, despite its prevailing image in the popular mind, need not come about through the efforts of black- or brown-shirted thugs. If you will re-read the opening definition of fascism, it should remind you of the present state of affairs in the United States, given that the federal government has assumed de facto control of two leading industries — financial services and automobile manufacturing — the first of which is central to the operations of America’s businesses.*

How did the United States get to this point? Through the “democratic” process, that’s how — without a shot, without a coup, without a foaming-at-the-mouth dictator. The citizens of the United States — enough of them, anyway — have, over the past eight decades, elected the members of Congress and the presidents (and, indirectly, their judicial appointees) who have brought us to our present state. The grinning FDR was a fascist; the smiling Obama is acting like one (see first footnote). Thus “Fascism with a ‘Friendly’ Face” (alternative title: “Bread and Circuses Redux“).

I now turn to the unfriendly face of fascism, that is, to scapegoating and the suppression of dissent. There was scapegoating a-plenty under FDR, as exemplified by his attacks on “economic royalists.” According to FDR, among many other rabble-rousers of the time, “the rich” were to blame for the Depression and were standing in the way of recovery. That FDR’s demonization of “the rich” and his schemes for centralizing power in Washington were the real obstacles to recovery is a fact that eluded his second-rate mind and which still eludes most Americans (even  a Nobel laureate). (For much more, you should buy and read FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression, which I own and have read critically. It’s repetitive and a somewhat dumbed-down, but generally on the mark.)

We are seeing, under Obama, a renewal of scapegoating. It is evident in his plans to soak “the rich,” which would (among other things) lead to income redistribution. As if the the recession could be cured by raising taxes on the very group that is most responsible for economic growth. As if very high incomes were the result of some kind of conspiracy and not symptomatic of a dynamic, growing economy. (For more about income inequality, see this, this, this, this, this, this, and this.) Scapegoating also is evident in Obama’s attack on hedge-fund managers who refused (how dare they!) to roll over and allow the holders of Chrysler bonds to suffer for the benefit of the UAW, to which Chrysler owes its (hoped for) demise. (One hedge-fund manager’s brisk and appropriate response to Obama’s attack is here.)

Then there is Obama’s decision to join the Left’s campaign to pin the “torturer” label on the Bush administration, thereby legitimating that campaign. We might yet witness the unprecedented spectacle of an incoming U.S. administration trying members of the previous administration for what amount to political “crimes” against Leftist sensibilities.

Obama’s ascendancy, though achieved by a fairly narrow popular-vote margin, has emboldened the Left (in and out of government) in other efforts to scapegoat conservatives and suppress conservative views; viz.:

  • this report from the Department of Homeland Security (especially the footnote on page 2) and related commentary (e.g., here, here, here, and here), all reminiscent of 1964, when Barry Goldwater was vilified (successfully) as an extremist because he stood against the concentration of power in Washington;
  • denunciations of the “tea party” movement (e.g. here and here);
  • efforts by universities and public officials to suppress dissent (e.g., here, here, here, and here), most notably Sen. Jay Rockefeller’s proposal to give the president authority to shut down the internet; and

Regarding the suppression of dissent, it is noteworthy that Obama’s has tagged Cass Sunstein (a Chicago crony) to head the Office of Information and Regulatory Affairs in the White House. (See this article for more about the likely direction of OIRA under Sunstein.) My biggest concern about Sunstein, who figures to be a strong influence on Obama, is his embrace of the oxymoronical thing known as “libertarian paternalism.” (For an exposition of its flaws, see this post and its predecessors, linked therein.)

“Libertarian paternalism” is nothing more than a dressed-up version of paternalism, in which the government is used to “nudge” people toward making the kinds of decisions that Sunstein and his ilk would make. That is to say, Sunstein (like too many other bright individuals) likes to believe that he knows what’s best for others. (That conceit is demolished in the posts mentioned at the end of the preceding paragraph and in these posts by an avowed utilitarian.)

“Libertarian paternalism” may seem innocuous, but there’s more to it than a bit of “nudging” (hah!) by the one-ton gorilla in the room (i.e., the federal government). Perhaps the most frightening item on Sunstein’s paternalistic agenda ties into Sen. Rockefeller’s proposal to give the president the power to shut down the internet — which amounts to the power to control the content of the internet. And make no mistake about it, Sunstein would like to control the content of the internet — for our own good, of course. I refer specifically to Sunstein’s “The Future of Free Speech,” in which he advances several policy proposals, including these:

4. . . . [T]he government might impose “must carry” rules on the most popular Websites, designed to ensure more exposure to substantive questions. Under such a program, viewers of especially popular sites would see an icon for sites that deal with substantive issues in a serious way. They would not be required to click on them. But it is reasonable to expect that many viewers would do so, if only to satisfy their curiosity. The result would be to create a kind of Internet sidewalk, promoting some of the purposes of the public forum doctrine. Ideally, those who create Websites might move in this direction on their own. If they do not, government should explore possibilities of imposing requirements of this kind, making sure that no program draws invidious lines in selecting the sites whose icons will be favoured. Perhaps a lottery system of some kind could be used to reduce this risk.

5. The government might impose “must carry” rules on highly partisan Websites, designed to ensure that viewers learn about sites containing opposing views. This policy would be designed to make it less likely for people to simply hear echoes of their own voices. Of course, many people would not click on the icons of sites whose views seem objectionable; but some people would, and in that sense the system would not operate so differently from general interest intermediaries and public forums. Here too the ideal situation would be voluntary action. But if this proves impossible, it is worth considering regulatory alternatives. [Emphasis added.]

A Left-libertarian defends Sunstein’s foray into thought control, concluding that

Sunstein once thought some profoundly dumb policies might be worth considering, but realized years ago he was wrong about that… The idea was a tentative, speculative suggestion he now condemns in pretty strong terms.

Alternatively, in the face of severe criticism of his immodest proposal, Sunstein merely went underground, to await an opportunity to revive his proposal. I somehow doubt that Sunstein, as a confirmed paternalist, truly abandoned it. The proposal certainly was not off-the-cuff, running to 11 longish web pages.  Now, judging by the bulleted list above, the time is right for a revival of Sunstein’s proposal. And there he is, heading the Office of Information and Regulatory Affairs. The powers of that office supposedly are constrained by the executive order that established it. But it is evident that the Obama adminstration isn’t bothered by legal niceties when it comes to the exercise of power. Only a few pen strokes stand between Obama and a new, sweeping executive order, the unconstitutionality of which would be of no import to our latter-day FDR.

Where will it all end? As I argue here, the United States already has descended into statism. The further descent into ingrained fascism is but a fine-tuning exercise for the vast, Left-wing alliance, which consists of public-school “educators,” liberal-arts academics, and their sycophantic students; Hollywood and New York celebrities and their hangers-on; “artists” and “intellectual workers” of most stripes; well-educated, upper-income, professionals who live in and around major metropolitan areas; and hordes of politicians (local, State, and national), who foster and benefit from the prejudices of the alliance. This broad alliance patronizes idealistic twenty-somethings, blacks, Latins, and labor-union members — the four groups from which its favored political candidates draw decisive support at the polls.

The Leftist alliance scorns America and its traditional (but largely abandoned) values of personal responsibility and respect for the persons and property of others. The alliance exalts, instead, the politics of entitlement and envy, of class, ethnic, racial, and gender conflict. As a result, the alliance has succeeded in demolishing the long-standing consensus that the main constitutional functions of the federal government are “to establish Justice, provide for the common defence,” and ensure the free movement of goods and persons among the States.**

Where will it all end? Unless we are roused from our Leftist idyll by some-one or some-thing, it will end in an Orwellian nightmare. The state will control our lives, in minute detail, from conception (and the prevention thereof) to death (and the means thereof).
* For some views about our descent into fascism (even where it isn’t called that), see these posts of mine:
Things to Come
Reclaiming Liberty Throughout the Land
Are We All Fascists Now?

See  also these posts and articles by other writers:
Fundamentally Different
Obama the Planner
Obama: The Grand Strategy
The Death of Democratic Capitalism?
Tarred by TARP
Elizabeth Warren’s Holy Crusade
Pay Limits May Apply to Toxic-Asset Relief Program, Report Says
Environmentalists Are Funny. Right?
EPA’s Endangerment Finding
EPA Says Greenhouse Gases are Threat to Public

** The preamble to the Constitution also mentions “insur[ing] domestic Tranquillity,” “provid[ing] for the general Welfare,” and “secur[ing] the Blessings of Liberty to ourselves and our Posterity.” These injunctions — aside from a few specific, textual grants of power for dealing with insurrections — merely reflect the Framers’ hopes for the nation’s future under the auspices of the new Constitution.