The Myth of the Private-Sector Saviour

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A common belief among Republicans concerning qualifications of their candidates of choice is that experience in the private sector as a entrepreneur and/or executive makes one uniquely qualified to be in public office. In fact, this is axiomatic to most Republicans. While certainly a conceptually attractive perspective it is remarkably devoid of logic and hindsight.

It is true that experience in the private sector enables one to better understand the logical and actual effects of public policy. Being on the receiving end naturally gives one a greater understanding of and sensitivity to the manner in which taxes, regulation and legal frivolity negatively impacts business start-ups, development, employment and general purchasing and investment decisions. Thus, it is understandable why “conservatives” conclude that an individual with an entrepreneurial and/or executive background is better suited for public office. Yet it is highly doubtful that any Republican would consider voting for a Warren Buffett, Ted Turner or Steve Jobs, each of whom built highly successful business empires in keeping with the greatest traditions of capitalism. Nevertheless, although their professional expertise cannot be ignored, each man possesses a worldview that is an anathema to Republicans and utterly at odds with his own personal and professional experience.

But this doesn’t prove that private-sector experience is a non-factor in choosing a candidate. To most ‘conservatives” this merely evinces the fact that Leftists are hypocrites. In their opinion these men are typical limousine liberals who support Socialist/Statist policies because 1) it makes them feel better and 2) they know that they would never actually feel the burden of such policies. While each of these charges may have some merit, perhaps better examples then are individuals on the political right who achieved similar levels of success and likewise advocated and/or supported a public policy agenda not unlike that of their leftist counterparts.

One such individual is former US President Herbert Hoover, who is almost universally regarded as the man who ushered the US into the Great Depression. This assessment of Hoover is at variance with the truth but what matters here is the political temperament of the man himself. Nowhere is there a more honest and straightforward presentation of Herbert Hoover than in The Forgotten Man: A New History of the Great Depression (2007) by Amity Shlaes.

In addition to dispelling a plethora of well-crafted myths concerning Hoover’s supposed culpability in orchestrating the collapse of the US economy, Shlaes points out correctly that Hoover’s real transgression was in paving the way for the massive growth in central planning which marked the administration of his successor, Franklin D Roosevelt. Hoover was a constant tinkerer in the private economy for he believed that he knew what was best for business given his own success. In fact, prior to his ascendancy to the presidency, Hoover was one of the most successful mine-owners in the US. He can justly be regarded, the “Steve Jobs” of his day. He generally thought himself to be the smartest guy in the room, and oftentimes he was. The mistake however was the assumption that he therefore knew how to manage the many nuances of the marketplace better than the individuals therein who had, until his time, lived their lives on the basis of the concatenate order of things rather than the coordinated order which Hoover envisioned. And yet Hoover’s belief in an economy coordinated from the top was a consequence of his own private success. Since he ran his own business in such a manner, constantly micro-managing various aspects of the operation, naturally the grand economy of the US would enjoy a similar success through the application of these same methods. But Hoover cannot be described as a Socialist. A more accurate description would be “Statist,” for he brought to government the temperament of Socialism without the philosophical ideology thereof.

This intelligent man who once proudly described the American system as one of “rugged individualism,” did not possess the prescience to see that his policy agenda was an attack on that very spirit. In the history of American Socialism, Hoover tilled the soil and planted the seeds; Franklin D Roosevelt simply made it grow.

In the current Republican bid for the White House Republicans are likely to nominate former executive and governor, Mitt Romney. Mr. Romney has a proven track record of success in the private sector as CEO of Bain & Company and co-founder of Bain Capital. He also demonstrated remarkable leadership and executive acumen as head of the Salt Lake Organizing Committee for the 2002 Winter Olympics. Were that the only portion of his background available for public inspection we would be free to draw inferences as to his prospective use of the public trust therefrom. But Romney has a record in public office as Governor of the Commonwealth of Massachusetts.

Mitt Romney led Massachusetts for a single term (Jan 2003 to Jan 2007). During this time he established a record that is, like that of Herbert Hoover, a testament to the ideals of the political Left.

Romney opposed the sweeping tax-cut initiative of then-President George Bush, supported and advocated tougher gun-control laws and regulations, increased the Minimum Wage, increased the number of government employees, opposed all broad-based tax-cut initiatives for the Commonwealth, increased 57 existing Commonwealth fees and introduced 33 new fees (most of them mandatory) and introduced the nation’s first mandatory socialized health-care system. To his credit, he did belatedly stand in support of a citizen-led referendum to reduce the Commonwealth’s Personal Income Tax from 5.95% to 5%.

Those who support Mr. Romney insist that this record is not reflective of the character of the man, rather the climate in which he governed. Granted, Massachusetts, like most of New England, is decidedly left-leaning. The legislature is dominated by Democrats whose temperament evinces a penchant for radical Socialism. This is an admittedly hostile and intractable climate for anyone advocating a conservative/libertarian public policy agenda. But is it not reasonable for right-leaning voters in Massachusetts to have expected him to make the effort? The governor of a state/commonwealth has far more authority in setting policy than does the President of the United States.

Time and again we have witnessed private sector geniuses prove themselves to be big-government, crony-capitalist, radicals. Even billionaire developer, Donald Trump, who many Republicans once hoped would toss his hat into the ring as a Presidential contender, has repeatedly supported and/or advocated the kinds of policies that would make any conservative/libertarian recoil in horror. And need I mention New York Mayor, Michael Bloomberg?

Too many people blithely accept the idea that a successful business person turned-politician is more likely to deliver the kinds of policies most conducive to the advancement of individual freedom and, as a result, economic progress. History however, is replete with evidence to the contrary. When all is said and done, we can only assess the likely manner in which an individual will use the powers of office from an understanding of his/her world-view.

Perhaps it is high time we remember that the only difference between Socialism and Statism is the intentions of the proponent. The Socialist seeks central planning because he believes it to be the answer to the problems which plague society. The Statist seeks central planning out of a misguided desire to correct the supposed “errors” of free-enterprise. No matter the motives involved, the results are always the same.StreetArticles.com - Tomas B Phillips

Wolfgang Kasper, Nothing New on the Euro Front | Library of Economics and Liberty

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Wolfgang Kasper, Nothing New on the Euro Front Library of Economics and Liberty

Battlefield USA – The Outcry Against Senate Bill 1867

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Amid a din of breathless, fear-induced bloviating, the US Senate voted on 28, November 2011, to approve amendments to the National Defence Authorizations Act (SB 1867), over President Obama’s threat of a veto. The outcry of pseudo-Libertarians, Leftists and media pundits centre on the language of Sections 1031 & 1032 of the amendments, that permits suspected terrorists captured within the borders of the US to be removed from the authority of civilian law enforcement and placed immediately in the custody of the US military. Pursuant to the authority granted under Article 1, Section 9 of the US Constitution, said individuals may be denied the privilege of a Writ of Habeas Corpus until the end of military hostilities. Naturally, certain people are concerned that this language opens the door to the detention of US citizens by the military. Yet nothing could be further from the truth.

There are times when such issues come to the fore that one may shrug it off as general ignorance. In the present case however, one can only conclude that those opposing this Bill are engaged in a spirited dance of prevarication. A simple reading of Subtitle D, Section 1032 (B) tells the story quite clearly wherein it reads that the provisions of Section 1032 shall not apply to a citizen or lawful resident of the United States.

Moreover, the preceding Sections expressly note that the law applies specifically to individuals associated with al-Queda, the Taliban and affiliated groups. As for persons in the US who knowingly and wilfully assist said groups in waging war against the people of the United States, it must be noted that under the Constitution Writ of Habeas Corpus is a privilege, not a right. That privilege may be rescinded in cases of invasion (and a terrorist cell is an invading hostile force) if public safety deems it necessary. In the present case, Writ of Habeas Corpus will be denied the parties belligerent.

There is much to be criticised in the National Defence Authorizations Act. In fact, there is ample Constitutional justification for its nullification in whole. If the detractors wanted to make that case, I would be solidly in their corner. What I cannot countenance is a disingenuous attempt to foment public outcry.

John Quincy Adams once opined that “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.” Libertarians, Leftists, media pundits and President Obama would do themselves, and the rest of us, a favour by considering this little caveat instead of creating irrational public hysteria.

The Evolution of Public Policy

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The idea is simple and innocent enough on its face: (1) identify something "bad", (2) promote "change", (3) it becomes "worse" and (4) the politician charges in as saviour.

Congressman John Doe wants to unionize auto wash employees. He says publicly that it is because they are routinely subjected to harsh treatment by their employers, forced to work long hours and paid a wage too low to allow them to earn a living. Behind closed doors of course he admits that this would be a great way to get personal name recognition in his State. Moreover, as unions cast their lot with his political party, this would be a great way to increase his party’s chances of electoral success, obtain lobbying funds from said unions and local activists and solidify his support among Hispanics who make up the vast majority of auto wash employees in his state.

So he begins with a spirited PR campaign on the issue. He has many close associates and supporters in the media so getting them to run his Press Releases nearly verbatim is no problem. They even do a series of “special reports” extolling the woeful working and living conditions of the employees. Eventually it reaches the point where he and his media accomplices brand it a “crisis” and as we all know, a ‘crisis” demands the strong hand of government.

Once the public perception of the situation has been sufficiently tailored, he and his colleagues conspire with community activists to organize unions among the employees. But there’s a problem. This is such a easy job that any employer can easily locate people willing to perform the work at the rate he is willing to pay and his customers are willing to bear. The answer then is a new law that punishes any employer who seeks to avoid the added costs associated with union demands.

Within months the employer’s cost for a basic wash goes from $3 to $10. The natural economic result of course is that the employer passes the additional costs on to his customers by increasing his price from $7 to $15. While some consumers begrudgingly pay the higher fees for the service others, including those who supported the idea of unionization, choose to forgo the use of commercial services and instead wash their vehicles at home. Naturally the owner wants to attract customers back so he offers a few value-added services to entice people to use the service which is now double the price one year earlier. With dwindling customer support owners begin closing their shops. Normally they would begin by increasing prices but that’s the cause of the current problem. The other option would be cutting the workforce but the union contract makes this impossible.

When Congressman Doe and the local activists witness the negative consequences of unionization they conclude that the employers and consumers are acting on “greed.” The only way to force consumers back into the commercial auto wash services is to make it illegal to wash their vehicles at home. In come crony capitalism and the Baptist-bootleggers.

The owners have a dilemma. Many of them actually support the political party of Congressman Doe and those who do not understand that the political atmosphere is such that having the policy reversed is highly unlikely. So they form a trade union of auto wash owners Crony Capitalists United (CCU).

With the help of Congressman Doe and his colleagues CCU joins hands with environmental activists to work out the specifics of their plan. The idea is to launch a campaign using environmental groups for cover (the “Baptists”). The programme is of course largely financed by CCU (the “bootleggers”). Aided by their friends in the media, they focus on the strain home auto washing places on local water resources. Then they turn the public’s attention to the run-off which goes into local drainage systems. Surely this affects beaches and shoreline ecosystems. They even finance a few “scientific” studies on the matter, all with the same result of course. Eventually the public is convinced that this is a “crisis” and as we all know, a ‘crisis” demands the strong hand of government.

A year later we have a new law/regulation that makes it illegal to wash your vehicle at home. Now that the public is forced to use a specific commercial service, the consumer price of that service increases yet again. Not only because of the increase in government-manufactured demand, but also because members of the CCU are now comfortably protected from a decline in business. To get around the threat of increased competition, they join with government regulators to make entry into the business cost-prohibitive using a combination of license fees, permits, bonding, insurance, CCU enrolment fees and mandatory unionized labour force, to name a few. Furthermore, members of CCU adopt a price floor to prevent any one member from reducing his price so as to achieve a competitive advantage.

In the end, Congressman Doe and his colleagues get money from lobbyists on all sides each seeking to either increase their privileges or avoid harmful laws and regulations. The CCU enjoys the benefits of higher profits and legal protection. Environmental organizations enjoy yet another legislative/regulatory victory. The employees of the union enjoy higher wages, better benefits and not threat of job loss. In fact, the only group that suffers here is the consumer (aka, common man).

This is how a single well or ill-intended idea naturally evolves into a series of public policy disasters for the common man.

“Compromise” Is Not A Strategy

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In every political debate these days we are greeted to an endless cacophony of calls for “compromise.” Of course, those calls are directed towards the political Right. It would be understandable if such caterwauling were limited to the Left, but many of the most vociferous mavens of “compromise” actually pose as Republicans, “conservatives” and “independents.” They run the gamut: commentators, radio personalities, elected officials and journalists.

In the days leading up to the political showdown these people can be counted upon to criticize any conservative or Libertarian who refuses to stand on principle. They are admonished to stand firm on limited government and individual liberty. Yet the moment the issue comes to the fore, “compromise” becomes the only objective the critics seek.

They begin by accepting the premise of the Left; that the issue being addressed is a “crisis”. Next is the conclusion that the government must act now to save the people from the impending calamity. Since the Left is most often the advocate for the government solution, it is the Right that must “compromise” so that something can be done. No one bothers to question whether there really is a “crisis” and if so, why government action is the only option? They never even ask whether the proposed law or regulation will solve the problem or exacerbate it. Those who do so are summarily dismissed as being blind to the needs of the common man. They are unrealistic, idealistic obstructionists who are holding the business of the people hostage.

Fact is, “compromise” is only possible when the parties to a dispute agree on the underlying premise. In such a case each may moderate his position so as to reach a solution. But when each is of a wholly different position on the underlying premise, the very concept of “compromise” is moot. The only option available is to advocate his respective position, win or lose. Any moderation can only be accomplished if one or both abandons his principles.

But doesn’t that mean they never had principles to begin with?

How To Lose An Election

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With the Presidential election nearly one year away, it may sound a bit overly pessimistic to assert that Republicans are poised for defeat. After all Obama is one of the greatest disasters in the Oval Office in decades and were it not for the fact that journalist, educators and academics act as his personal advocates, the vast majority of Americans would be of that opinion. But Obama is not a disaster because he has not achieved his objective; he is a disaster because he has. So why do I believe Republicans will lose next Fall?

Even if Republicans prove victorious in the next Presidential election I fear they will once again sow the seeds of long-lasting defeat. In effect, Republicans will demonstrate their mastery of the art of losing by winning.

The most common lament of Republicans (Tea Party included) is the fact that it is so hard to find a Republican who is willing to stand on principle. The problem of course is that the moment someone answers the call, he/she is immediately derided as hopelessly “unrealistic” and dismissed as “unelectable.” To be appealing to Republicans one has to be principled but to actually get their vote one has to be the typical slick politician.

Republicans will therefore follow the dictates of the GOP establishment and nominate a “safe” candidate, which is to say, a candidate who either meets with the approval of or does not stir the fears of the Left. They will cast their pearls before a candidate who they believe is likely to win based on the assessments of “consultants,” rather than the candidate most likely to uphold the values cherished by people who call themselves “Republicans.” For many Republicans, the defeat of Obama represents a moral victory rather than an actual opportunity to right a great many wrongs imbedded in to the American political, social and economic system over the past 100 or more years. So they will seek only to win the next election. As for laying the groundwork for a counter-offensive against the Left, they have no such ambitions. That is the shame, because the current climate presents a perfect opportunity to accomplish both.

Yet before one can engage in battle one has to understand the lay of the land. Forget what you have been told by the hoards of politically-connected “consultants” and celebrity talking-heads. Clear your mind of the rubbish regarding the so-called “independents” and “undecided’s.” The US electorate is actually quite easy to identify and understand. So here goes:

Block Votes
Democrats generally enter an election cycle with a 10 - 12 point advantage. This point spread is made up of groups that vote Democrat irrespective of the candidate or the issues. It includes: Blacks, Hispanics, Jews, Gays and Union members. With exception of Union members each group individually accounts for relatively few votes, whereas the combined force of their numbers can be a deciding factor in local, state and national elections. These are the voters on whom Democrats do not have to expend many resources as their support is virtually assured due to the irrational fears they harbour towards Republicans. The only real issue here for the Left is voter turnout. This is most certainly a major handicap for the GOP, but it is by no means insurmountable.

As for Gays and union members, their issues of concern place them in an inimitably adversarial relationship with Conservatives/Classical Liberals. There is therefore, little that can be done to appeal to these groups that would not involve, on some level, an abandonment of the principles which Republicans purport to represent. However there is, much that Republicans can do to broaden their appeal among Blacks, Hispanics and Jews. A good starting point would be developing the courage to stand on principle in the face of the mindless calls for “compromise.” Additionally the GOP has to address them as American citizens as opposed to some special minority class thereof.

*"Gays" here does not mean those who are engaged in same-sex relationships. Rather it applies to those who seek political, social and/or economic privileges on the basis of their sexual preference.

Young People

While younger people (18-29) generate enormous public clamour they comprise a rather small percentage of actual voters. Even the famed student movements of the 1960’s which forced major changes in social and economic policy did little to effect electoral results. In fact, these students eventually forced the DNC to nominate George McGovern for President against a wildly unpopular Richard Nixon. Nixon carried 49 states in the election that followed. Young people simply do not vote in sufficient numbers to have an appreciable impact on national elections. Democrats know this as well as Republicans. So why are they an important demographic?

Democrats practice the art of preparing the field for next-year’s harvest. By appealing to younger people today when they are less likely to vote, Democrats reap the rewards of their support tomorrow when their votes do matter. In actuality, the Left’s preparation of the youth begins at the grade-school level. Democrats may follow the Keynesian method of focusing on the near-term in economic policy but their electoral strategy is centred squarely on the long run.

Senior Citizens

The elderly (65 and over) are, as a group, the most active electoral participants. This is most likely a matter of having the time available to inform themselves of issues of importance. Like the 30-64 age group, they often split somewhat equally for Democrats and Republicans in national and state elections. At the local level however, the elderly represent a more homogeneous grouping. Thus some communities can be expected to be solid blocks for either Democrats or Republicans. The issues which can swing their vote typically involve changes in the system of entitlements targeted for the elderly.

The GOP has to have the courage to make the case for common-sense reform. More importantly they need to intelligence to do so in a way that does not play into the stereotype of Republicans as heartless and insensitive.

The “Real” Swing Voters

The only category of voters whose support is up-for-grabs at the national level is heterosexual, non-union, White men and women under the age of 65. This demographic tends to vote on the basis of economics, foreign policy and national security concerns yet they have shown a small but noticeable tendency to vote on key social issues as well (i.e. illegal immigration, abortion and gay marriage). Although they vote nearly 50/50 for Democrats and Republicans, a candidate’s position on the issues can swing the demographic 7 or more points either way.

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Based upon many fruitless discussions with Republicans I am convinced that the GOP, along with the average Republican voter stakes its hopes on securing a temporary electoral victory. I truly believe that we will watch once again, as Republicans ignore the opportunity to broaden its base in hopes of gaining a few additional points among the elderly and swing voters. Why? Because it safe. And for a group of people (Conservatives/Classical Liberals) who pride themselves on the ideals of free enterprise where he who accepts the greatest risk often reaps the greatest reward, Republicans are obsessed with playing it safe in politics. They are willing to lose the American dream not only for themselves but for generations to come in exchange for the temporary euphoria of claiming victory on Election Day.

Democrats on the other hand, focus on tillage. Following basic revolutionary tactics, the Left will often engage in battles they know they have little hope of winning. The point is not to win (though they will take it if they can get it) but to sow the seeds for an offensive that is 2, 5 or perhaps 10 years down the line. It’s an investment in the future and like all investments, one willingly accepts a bit of sacrifice in the present. The Left is willing to risk defeat if it means they can use the national spotlight for effective propaganda purposes. In this way they demonstrate more courage and a greater understanding of the psyche of the people than their opponents. So while the Republicans seek only to get someone in office with an “R” behind his/her name because it makes them feel better, their opponents busy themselves winning the culture.

If Republicans want to have a lasting impact on the American culture, and not just the next election, they will have to choose between:

1) Repairing the leaks in the hull of the ship, and
2) Remaining in shallow water where sinking wont hurt as much

Stop Feeding Leviathan

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Any government that can do anything it wants for you, will not long delay doing anything it wants to you. This is something that left-wing Socialists, right-wing Statists and the voters who empower them, continue to ignore to their and our detriment.

Whenever you give the government the authority, or sheepishly accept its arrogation of authority, to do a thing simply because that thing seems necessary to redress an historic grievance, address a current crisis or avert a future disaster, you are feeding an avaricious beast and by extension, surrendering your freedom. I know that your intention is to give them the authority to act only with respect to a particular issue, but that is not the way government works. What you are actually doing is establishing a principle and that principle, once established, becomes the basis for any and all future usurpations of your rights and freedoms.

I recall an incident in 2009, when the Obama Administration wanted to deny Fox News access to the White House. The other journalists in the press pool were incensed. Several news organizations informed the White House that they would not cover its affairs if Fox News is excluded. They didn’t do this because they supported Fox News of course. No, they were responding to what they correctly saw as the establishment of a dangerous precedent (principle).