Monday, September 3, 2012

Prosperity: A View from the Left, the Right and the Austrian Liberty Movement

With the economy in shambles and the middle class rapidly vanishing, there are 3 views on how to solved the America's increasingly critical economic problems: 1. the progressive left or Democrat view 2. the right wing or the Republican view and 3. the Austrian free market view.

While every sane American and even the political class will acknowledge that traditional American prosperity is in dire jeopardy, the views on precisely what constitutes prosperity and where prosperity comes from vary radically in the ideological camps.

The View From the Democrat/Progressive/Liberal Camp

The leftist Democrat/progressive views have been well summarized in a category captioned Austerity Hawks Want a Return to 1920's Capitalism on a progressive website that includes a series of articles on the issue.

Austerity Road to 19th Century

Deficit Hawks Continue Post-WWII Attack on Labor

Who Benefits From Austerity

High Deficits were the Objective of Right Economics

Austerity Hawks Want a Return to 1920's Capitalism

Is Obama Still on the Austerity Train?

Austerity and the GOP in Power

According to the Democrat/liberal/progressive view, there can be no prosperity for the masses without a government mandate.  Moreover, they demand absolute totalitarian powers to 1. unionize labor and give them enough power to force businesses to meet their every demand and 2. the power to tax for redistribution purposes just in case somebody has incurred their wrath and scorn by working hard and being successful in entrepreneurship.

The left automatically rejects the premise that free markets can deliver prosperity by giving the people the power to decide want they want in the way of goods and services.  Hence, the left strongly favors a top down command and control economy wherein government bureaucrats alone have the exclusive power to decide what people will get and at what price they will get it.

The progressive model is certainly nothing new and has been around since the days of Marx, Stalin and Mao.  Furthermore, the left totally ignores the fact that communism and socialism killed over 100 million folks during the 20th century alone and mostly by starvation.

Despite the incessant whining of American progressives that folks are poor because government and bureaucrats don't have enough power, there exist many nations on the planet where the progressive had all the power - Greece, Spain and Portugal to name a few - and all are suffering from profound economic decline, mountains of debt and bankruptcy.

Progressives have an intense aversion to the word austerity, although austerity is nothing more than living within your financial means and not spending yourself into personal and national bankruptcy. While progressives absolutely believe that promising and delivering the cornucopia of plenty  to humanity is their defining goal, they fall way short.  Europe's most debt ridden nations and America's most debt ridden cities are run by progressives who do nothing but lie and borrow to keep the great progressive lie alive.

Nobody summed up progressive thinking better than Michael Lewis in his book Boomerang.  What Lewis says about Greece easily applies to any progressive nation or entity dedicated to achieving the paranoid delusion of utopia through tyranny (the Marxist socialist recipe for miraculous abundance that murdered 100,000,000 folks).
As it turns out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a piƱata stuffed with fantastic sums and give as many citizens as possible a whack at it. In just the past twelve years the wage bill of the Greek public sector has doubled, in real terms – and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a years. Twenty years ago a successful businessman turned minister of finance….pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension…..and there isn't a single private company in Greece with that kind of average pay.”
Progressives are facing the stone cold reality that reality really does bite so they are in an absolute panic.  Their solution?  Raise taxes and plunder everybody.  The recently elected French president Francois Hollande campaigned on a 75% tax rate on the rich.  He won an election and delivered on his promise.  What France will learn is that capital always seeks and finds the friendliest of abodes.  Accordingly, there will be a mass exodus of money and folks with money from France.  Nobody with resources is going to hang around and wait for the ax of the financial guillotine to fall.  As capital flees, as it always does when facing the threat of outright expropriation, the French economy that is already reeling from economic misery will only get a whole lot worse.

The View From the Conservative Republican Camp

Unlike progressives that are ideologically secure and comfortable in their statist economic and command and control government views, Republicans tend to be absolute frauds who wallow in the delusion that America already has a free market economy.  At Republican gathering, one will frequently see folks holding signs defending for capitalism.  Weirdly, Republicans and conservatives truly believe that the Republican Party is the party of free markets and capitalism.  Yet the truth tells a completely different story.  The so-called capitalism and free markets that Republicans claim to worship are really nothing but statist engineered oligarchy, plutocracy, corporatism and fascism.  It's the tyranny of the marriage of Big Government and Big Business.

Republicans are notorious for voting for corporate welfare and subsidies.  The Democrats also support corporate welfare and subsidies but generally only for their pet issues like green energy scams that are personified in scandals like Solyndra.  The Democrats love corporate welfare because state run and funded business enterprises is their goal; the Democrats don't want capitalism or free markets and would gladly outlaw all forms of private business initiatives.  The Republicans love corporate welfare because they are whores and crooks who seek to fill their campaign coffers with any special interest money.  Republicans love taking care of their rich oligarch friends and showering them with taxpayer dough, protectionism and monopoly.

Ironically, Republicans frequently accuse the Democrats of being socialists and Marxists but what the Republicans do isn't a whole lot different than what the Democrats do.  They just do it for different reasons.  Republicans consistently invoke capitalism and free markets as justification for their anti-liberty and anti-free market actions while the Democrats merely invoke "we're doing it for the people" as they sing their collectivist lyrics.

In reality, getting caught up in a game of semantics is an exercise in futility.  Is it even appropriate and relevant to debate the finer semantical points when both the Republican and Democrat solutions translate to the precise same end game, namely, the control of all resources and production by a handful of elites who have absolute power and dominion over everything?

Who benefits from such a system?  Nobody, except political party elites drunk on power and filthy rich oligarchs who buy political power to guarantee their monopolies while avoiding honest competition.

Even on the fiscal and spending side of the equation, Republicans are  notorious big spenders who are addicted to spending other peoples money just as much as the Democrats are.  Under Bush 43, the national debt increased a whopping $5 trillion but there was no backlash by Republicans.  Yet, the same Republicans who had no moral qualms whatsoever with Republican spending went into full attack mode over Democrat spending.  Even the Tea Party movement is a total fraud.

The Tea Party Republicans Spent More Than the Dems They Replaced.

If there are any differences between the Republican Party and the Democratic Party, it's the contentious social issues that weigh heavily on each election. On the BIG issues like fiscal, monetary, economic and foreign policies, the tyrannical Republicans and Democrats are pretty much in complete agreement.

The View from the Austrians and Liberty Activists

While it can be conclusively proven that Republicans and Democrats are really two statist peas from the same tyrannical pod, the only political movements in America today that truly represents a change toward liberty is the Ron Paul liberty movement and the Libertarian Party. These folks advocate for -  gasp - peace, liberty and prosperity, three things that make Republicans and Democrats absolutely cringe. In fact, it makes them downright apoplectic. The establishment is stroking out because Americans are rising up to think the unthinkable and speak the unthinkable in a nation where thinking is verboten.

These liberty activists imagine a world without wars (murdering for defense contractor profits), a world without thieving central banksters that steal from the poor and middle class by devaluing currency (the Federal Reserve) and they also have the blazing audacity to imagine a world of free peoples voluntarily making and trading their widgets/services in peace. GASP again!

As odd as this may sound for the 132 million Americans who voted for Obama or McCain in 2008 and who will probably vote again for Obama or Romney in 2012, the views of the liberty activists are pretty much the exact same views of America's founders who envisioned a weak federal government, the wide dispersion of power, the freedom to produce and keep what you produce, and a federation of sovereign free states.

Liberty activists are ideologically anchored in the belief that government is a pox upon humanity because it murders, wages endless genocidal wars, steals from those who produce and uses the police powers of the state (the point of a gun) to impose its tyranny.  Liberty activists may be divided between the 100% Rothbardian purist anarcho-capitalists (no government) and the minarchist movement (bare minimal government to secure rights) but at this juncture the debate is hardly worth waging because America is so far removed from her founding principles that our founding documents, the Declaration of Independence and the Constitution, are nothing more than artifacts permanently consigned to the dust heap of history.  George Bush supposedly called the Constitution nothing but a "G-d damn piece of paper" that had no authority to limit his absolute power in any way.

Unlike Republicans and Democrats, the Austrians and liberty activists understand that government cannot create wealth and prosperity.  In fact, the only thing a government can really do economically is outlaw the ability of its citizens to become prosperous while stealing what they have already produced.  In government think, a free and prosperous citizen is not only a sovereign citizen endowed with protected natural rights, but is considered a threat to government power.  Free and sovereign citizens tend not to empower governments with anything except bare minimal powers because they know full well that such a government will come after them and their wealth.

The Keynesian economic model is based on 2 defining characteristics 1. government can remain powerful by plundering its citizens and redistributing income,  and 2. when a people and nation are fully plundered, there's always the back-up game of printing money out of thin air to create the illusion of prosperity derived from government largess and its counterfeit money printing machine.

America has been in the "print fiat money out of thin air" phase ever since Republican Nixon de-tethered the dollar from gold in 1971 (via an executive order and without congressional approval) and rendered the dollar a paper fiat currency.

Paper currency always reverts to its intrinsic value of zero.

A real and enduring wealth is produced by producing something of value.  Governments cannot create wealth with gobs of paper fiat money. If they could, there would be no human misery or poverty on the planet and everybody would be oozing prosperity from every earthly crevice.

What is Wealth?
What is wealth and prosperity? We all want it because nobody wants to be poor, suffering and impoverished.

It sounds like a simple question. It is and the answer is astonishingly simple. However, it’s our deviation from the principles that accrue wealth and prosperity to the greatest majority of people that got us into deep dodo. Wealth is simply excess production. A corn farmer sows his seeds, lovingly tends to his crops and harvests the product of his labor. What he doesn’t need to feed and sustain his own life is wealth or savings. What does the corn farmer do with his wealth? He could trade his corn for meat or eggs or shoes or clothes and other things he might want. But - no matter what the corn farmer does, he absolutely must produce and must save enough seed to plant again or he will starve and suffer. That’s a law of economics that cannot be altered, modified or otherwise tampered with without negating the entire wealth building mechanism of human survival.

Human survival has always been based on the principle of working in some capacity to produce something of value to sustain life and create excess production for the purpose of exchanging it for other goods and/or to save for the future....

When property rights were secure before the age of government confiscation, crony capitalism, cartel capitalism, protectionism and fascism, capitalism was the most prosperity inducing of all human activities simply because the motivation to work and produce was extraordinarily high. Capitalism motivated sane values like self-sufficiency, thrift, savings, a strong work ethic and building communities that respected the property of others.

But what happens to the farmer when the government invades a “man’s castle” and violates his ability to produce and save by seizing his production, his property and/or limiting his capacity to produce and save?

This has been the trajectory of America for nearly 50 years. As government power grew, it stole the production of producers, it stole their wealth, it stole their seeds for future growth and it stole their savings that are plowed back into a productive economy.
And so we remain at political loggerheads as power made control freaks lock horns with the liberty loving activists who absolutely comprehend that government can not only destroy real and endurable wealth but also outlaw the wealth building mechanism itself.  It's a recipe for perpetual poverty.  The real tragedy, however, is that the American people still have a high level of trust in the ability of the government to deliver on its promises, promises of plunder at the point of a gun.

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