There’s been much talking about how “unequal” things are for “ordinary” people. The President, and the President’s political party, started the kerfluffle during the 2012 elections. But recently, as the Affordable Care Act continues to prove it’s about anything but either affordability or health care and Mr. Obama’s foreign policy initiatives crater; as congressional democrats find themselves unable to find a positive message to coalesce around and as the economy continues it’s non-recovery recovery, the talk of “inequality” from both leftist politicians and the media has reached a new crescendo.
The left went agog with the election of Bill deBlasio in New York City, who campaigned on a theme of ending economic inequality in the nation’s largest city. Leftists, and their allies in the democrat party, believe that by highlighting the basic reality of capitalism they have a permanent winning issue. But other than Sen. Elizabeth Warren (D-MA), no democrat has attempted to lend any sort of intellectual credence to the argument that rich people want the rest of us to be poor. Not even the leading leftist economists, Paul Krugman and Robert Reich included, have been able to demonstrate how that works, exactly. As for Mrs. Warren, the reality is that once you dive into her work, you soon discover that she is perhaps the most crass political animal to come out of her party since Bill Clinton. While she mouths the platitudes, she actually doesn’t have a single policy idea to “make capitalism fairer for the typical American.”
Anyway, we already know that Mrs. Warren is more a symptom than an exemplar of her party’s cynical politics. While they’ve all seemingly abandoned the DLC positions embraced by the Clinton administration, the reality is most haven’t . That includes Mrs Warren, Mr. Krugman and Mr. Reich. But there is a very large, core group of true believers who unabashedly embrace the culture of class warfare. If you’re one of those, feel free to stop trolling now. Nothing I’m about to write will change your closed minds; feel free to re-read Das Kapital and ignore such trivial matters as world history and human nature. But if you are one of those people who gets queasy about the type of all-out class warfare that the President and his minions, in seeking electoral glory are pushing us towards, I recommend you read on.
This is not the first time in either modern or ancient history that the “ordinary” people (which is to say, those without extravagant wealth) have felt that the current political and economic system failed to adequately represent their interests. The watchword over all of these movements is typically “equality.” Translated into today’s political parlance, “equality” as applied by the left means that each of us should have no more, nor no less, than anyone else: either in terms of net financial worth, political influence or social standing. This has been the aim of those hard-core leftists for well over a century. A very succinct statement of their goal is found in John Lennon’s Imagine:
Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man
Imagine all the people sharing all the world
The simple beauty of the position is, quite frankly, you need to be a heartless bastard to be against the idea of ending hunger, homelessness, hopelessness, and all the other downsides to the human existence.
This is the trap that libertarians and conservatives alike have fallen into: by allowing liberals and progressives to dictate that they (and their discredited systems) are for ending those inequities, we’ve become the faction that cheers them. Ironic, really – we’re the group that decries repression, yet in popular mythology we’re responsible for oppression. This isn’t our generation’s fault – the shift in public attitudes began late in the 19th century – but it is up to those of us alive now to begin the return to understanding the difference between equality and inequity.
The time has never been more critical than now for those who know the difference to remind the world that there is no way to guarantee equal outcomes without destroying society. The world imagined by Orwell in 1984, Huxley in Brave New World or Rand in The Fountainhead is closer than we realize. We understand that such an outcome will mean the beginning of a new Dark Age – similar to the one that encroached the Western world after the fall of the Roman Empire and lasted for a millenium. A new Dark Age might not last for untold centuries. Although science and technology would stagnate, the weapons left behind by our civilization have nearly unimaginable destructive power. Unchecked by a societal desire to learn and advance, those weapons will be left under the control of despots – leaders who will have both the will and the means to use them.
These are serious matters and engaging the public in a way that leads them to understand that liberty does not necessarily mean personal gain is the lynchpin to preventing the general collapse of society. The modern liberal probably does not realize the grave danger they, and their political and economic philosophy, pose to civilization. Most sincerely believe that not only are all men created equal, but that must necessarily also mean all men are entitled equally. I won’t go into the reasons we know this is a fallacious argument: that while we may be born with equal rights, we aren’t all born with the same drive, determination, talents and skills. Or that success is defined in different ways by different people (which, on its very face would make defining equality impossible).
Rather, let’s focus on how we win back the conversation. To do so, we need to understand why there is a sort of magnetic pull for the liberal argument of a guaranteed outcome. Why claptrap like Piketty’s Capital in the 21st Century and former SCOTUS Justice Stevens’ Six Amendments are heralded as the intellectual tomes of our age. And why Marx’s Das Kapital is still revered on campuses.
The answer lies in the fundamental fact that libertarians were not forceful enough in the days after September 11, 2001 – and the conservatives, always the stronger political force on the right acquiesced too readily to the neo-conservative ideology. It began what has become a nearly two decade long descent into the twin hells of restricted liberty at home and hopeless intervention overseas. And still today, there is strong pull on the right that insists on doubling down on those failed policies – the entire failed concept of government it represents. It is not truly conservative in nature; it is a belief that government can hold the solutions to our problems, if only properly applied. The philosophy espoused by these devotees gave us the bloated federal government and 12+ years of continuous warfare we live with today. The drain on the treasury, the reapplication of resources away from private investment and the crush of new regulations directly led to the financial collapse of 2008 and the lessening of American influence. In the six years since, the application of liberal political theory by the current administration has had the exact effect anyone with a quarter-brain predicted: continued economic decline and lack of economic security for most of countrymen.
This is where we need to make our case to restore the American Dream. To many of our fellows, the American Dream is dead. Many of our youth do not see an America where they an achieve based on skills or merit, but only one where the determining factors to economic or professional success are cronyism and discrimination. It is in this environment that otherwise insane arguments such as punitive taxation and retributory discernment gain credence. Equally concerning is that the same social powers now see the entire notion of personal responsibility as a quaint relic of past centuries. After all, they tell us, your failures aren’t your failures – they are the result of a system that’s rigged against you.
I read and hear politicians and scribes on both sides of the political aisle lamenting the pessimistic attitude that permeates our civil life. Yet they fail to understand that the reason for that attitude lies not with the ineffectiveness of their treasured government programs, but rather with the very existence of those programs. You can’t tell a man that he’s deserving of everything that everyone else has, regardless of his means to pay for those things, maintain those things or even comprehend the value of those things without being able to deliver on the promise. That’s where every redistributive model falls flat: it is impossible to give everyone everything. That is the great inequity of the liberal equality argument – it leads people to believe in something that is non-existent. It holds the ultimate societal good, as that which is unattainable.
The results of this drivel can already be seen and felt in our political discourse, in the palpable anger being stoked by the leftists. As our President and his party continue to pit the factions (rich vs. poor, black vs. white, welfare recipient vs. working) against one another, the nation becomes further fractured.
The conservative movement forged by the likes of Buckley and Goldwater reached its zenith with the election of Ronald Reagan to the Presidency in 1980. Do not believe the liberal rewrite of history that is taking place now. Reagan did not win by dividing the nation into rival factions, by demonizing certain groups or by scaring the pajamas off the American people (that happens to be the “progressive” playbook, as written by Lenin, fine-tuned by Alinsky and run to perfection by Obama). Reagan, rather, was an affirmative candidate and President. “Morning in America” wasn’t just a campaign theme, it was the way he governed and the way he presented the idea of America, not only to Americans but to the world. He could do that, because the conservative movement he led was not led by the neo-cons who later come to dominate the right, but one founded on the idea that in order for a man to succeed (however he might define success), in order for him to have the best chance at utilizing his God-given equality of opportunity, was the same idea that founded the nation in the beginning. The idea that not only Christian Conservatives but Libertarians could unite behind.
That is the same message that conservatives and libertarians need to unite behind now, if we are to save our country and the principles it was founded upon. That a man cannot be equal to another without opportunity, and that opportunity does not come from government. Opportunity comes from freedom, from liberty and from our Creator. We need to forcefully, continuously and repeatedly deliver that message. We must remind the American people and the world that men are not slaves to their government, the government is their slave. Many of us remember the famous line from Reagan’s 1981 Inaugural Address, “government is not the solution to our problem; government is the problem.” But perhaps more important to our present circumstance is this passage from the same speech:
“America must win this war. Therefore I will work, I will save, I will sacrifice, I will endure, I will fight cheerfully and do my utmost, as if the issue of the whole struggle depended on me alone.”
Many of the same problems we faced at the dawn of the 1980’s we now face 35 years later, and for many of the same reasons. Let us dedicate ourselves now, my friends, as the conservatives a generation ago did. Let us be the shining beacon the the hill for both our Nation and the World.
Face it, you just went to fill up your tank this morning and discovered that it cost you $2 more this week than last to put 12 gallons into the tank. Last week, it was $1.80 more than the week before. And so on, all the way back to the first week in January.
You complain. You gripe. Your neighbors are equally disgusted. One of your coworkers seems to bring up the topic of exploding gas prices every day. In the meantime, you noticed that your wife spent $30 more on groceries this week but brought home less food. She’s half-heartedly joking that at this rate, it will be PB&J for dinner by summertime.
Everyone seems to be talking about the way prices are skyrocketing, but nobody seems to be doing anything about it. And I’m going to let you in on a little secret: there isn’t anything anyone can do about it.
The reason prices are taking off is the dirtiest word in economics: inflation (okay, maybe the second dirtiest word after recession). Why? People automatically assume inflation means rising prices. But rising prices are the symptom, not the problem. Inflation occurs when the money supply outgrows the demand for that money. It is classical, John Smith economics at work in its most basic form: supply and demand. When supply outstrips demand, prices fall. That’s true of any product. Build more cars than the public wants and the price of cars drops. Grow more wheat than you can sell and you slash the price to where you’re virtually giving it away. In those cases, the fix is relatively simple but usually takes time to implement. Build fewer cars. Grow less wheat. Of course, you’ll need to wait a full manufacturing cycle for production to drop to a point where the supply of cars matches the demand. You need to wait an entire year before wheat prices correct.
But what happens when you print too much money? Well, basically the same thing: you shrink the availability of money. You raise interest rates on the purchase of new capital, to make it less palatable to prospective buyers. You restrict international trade of currency. You can also do things to tinker around the edges, like demand banks hold more cash in reserve and prevent corporations from dumping cash into the market. But the reality is all of these things take time to work – a lot of time. In the meantime, the hangover effect of inflation – raising prices – hits everyone hard.
And again, the reason is simple. Wages are tied to productivity, not the price of money. In fact, inflationary periods result in reduced wage pressure because as money sloshes around in the economy, productivity declines. Not because people are working less (they’re usually working more, and harder) but because the value of work is declining along with the value of the currency. The net result is you work harder to bring home the same amount of money you were before – but that money has reduced purchasing power.
Now here’s why nothing can be done about inflation in the near term: the inflationary bubble was created between 2008 and 2010 and we’re just now beginning to feel the effects. Picture the way a tsunami moves – if you’re out on the ocean, you’ll hardly notice a ripple. As you get closer to shore, the pressure builds. Enough of a wave will swamp everything for miles inland once it reaches shore. Inflation is similar in that the pressure is created much further away than when the effects are felt – and like a tsunami, there is no way to stop the momentum once it’s put into motion. We created the current inflationary bubble when we decided to print money in order to escape the Great Recession. Most Keynesian economists (guys like Paul Krugman and Robert Reich) cheered on the printing presses and have been vocal in their calls for cranking them up even faster. They’ve pointed to the short-term pain felt throughout economies that chose to choke down on the money supply while disregarding the damage to our economy rampant inflation will cause. In short, they’ve forgotten the lessons of the 1970’s in the US and the 1990’s in Japan.
Under ordinary circumstances, their calls for greater government borrowing would make sense – given the insanely low current interest rates. But they either ignore or fail to understand how that borrowing is financed. In ordinary times, governments issue bonds which guarantee a certain return on the initial investment. Private markets purchase those bonds and new money is generated (i.e., printed) to cover the interest earned on the bonds. So long as the increase in the money supply roughly matches real growth in the economy, inflation is kept minimal. But the current spending spree ignored those basic rules of supply and demand. First, The US Treasury dumped about $3 trillion of the $5 trillion borrowed over that time directly into the finance sector. Besides the bank bailouts in 2008 and 09, there wasn’t enough demand for US Treasuries to absorb all of the new bond that were floated. So the Federal Reserve purchased them and then resold them through two round of “quantitative easing.” That direct infusion of currency outpaced real GDP growth by 5.6% alone. It doesn’t factor in the interest owed on those bonds or the effects of the nearly $2 trillion in cash the Federal Reserve created on its own. When you add all of it up, the economy now has roughly $2.5 trillion more in cash than needed to meet demand. That equates to 17% inflation – 17% more money supply than demand would allow.
This isn’t to say that we’ll actually see 17% inflation before all is said and done – there are other things that could keep the number lower. For instance, if the world’s other major currencies remain weak then the dollar will retain a semblance of strength and that would mitigate the effects of inflation. At the same time, a country with a relatively weak currency that holds large reserves of dollars (say, China) could decide they need to strengthen their currency’s relative strength against the dollar and start dumping our currency.
But until then we can conserve, or drill, or do some combination. While it will have a short-term effect of mitigating the price at the pump, the end result will be the same: gas (along with everything else) will cost more this time next year than it does today. The problem with gas prices is not supply (we have more than at any time in the past 40 years) or demand (the world is using less gasoline than at any time in the past decade). In fact, the cost per gallon of gas has actually decreased, relative to actual dollar value, over the past 5 years. But because the cost hasn’t dropped as fast as inflation has risen, the price continues to move upwards.
THAT is the dirty little secret no politician in either party wants to tell you.