Christmas Greetings

Even when Christmas is only a few days away, there usually isn’t a pause in everyday activity until the day itself, or perhaps Christmas Eve. In politics, the charges, counter-charges, and occasional dirty tricks continue. But even so, Christmas and the end of the year usually present an occasion to reflect on past and future. There often isn’t enough time or opportunity to rest and think about things in a serious way. But at Christmas, we may have a special opportunity.

Christians and others need to consider the gift God gave to us in Christ, whose birth we celebrate. He came for the express purpose of dying for our sins, and to offer eternal salvation to all who would believe in Him. His is the greatest and most beneficial message mankind has ever received. It is truly Good News.

The following video features the Christmas story read by Herman Cain with his wife Gloria and some military family members, as well as Christmas greetings and a song “It's Christmas in America.” (YouTube video I found at Daily Caller.)




I hope you enjoy it, and, especially, I hope you have a Merry Christmas and a Happy New Year.

This is (probably) my last post of 2011. We look for better things in 2012. God bless.

Some Comments on President Obama’s Economic Speech of December 6, 2011

President Theodore Roosevelt. Photo via Wikipedia

The president spoke in Osawatomie, Kansas on Tuesday, December 6, 2011, on his version of Theodore Roosevelt’s “New Nationalism,” essentially trying to make a case for a more socialistic approach to the economy, with the idea of government striving to make everything “fair” and supposedly advancing the middle class.

The comments cover a good deal less than the entire speech (video found here and here), but I believe they address the main ideas he expressed. The text is found at the Washington Post website. The president’s words are in bold, mine are not.


For many years, credit cards and home equity loans papered over the harsh realities of this new economy. But in 2008, the house of cards collapsed. We all know the story by now: Mortgages sold to people who couldn’t afford them, or sometimes even understand them. Banks and investors allowed to keep packaging the risk and selling it off. Huge bets – and huge bonuses – made with other people’s money on the line. Regulators who were supposed to warn us about the dangers of all this, but looked the other way or didn’t have the authority to look at all.

It was wrong. It combined the breathtaking greed of a few with irresponsibility across the system. And it plunged our economy and the world into a crisis from which we are still fighting to recover. It claimed the jobs, homes, and the basic security of millions – innocent, hard-working Americans who had met their responsibilities, but were still left holding the bag.

The president conveniently leaves out the fact that banks were under heavy pressure from the government to make these loans, and Fannie and Freddie purchased them. The Democrats in Congress, led by Barney Frank, would not permit the needed regulation of Fannie and Freddie, claiming that they were on sound footing. Financial companies issued extremely risky derivatives, which should have been stopped by government regulators but weren’t, and now, banks have it set up where derivatives take priority in bankruptcy, over the interests of investors. See Gary North’s informative article here.

Community agitators like ACORN (which previously employed Barack Obama)  increased pressure on banks to make the bad loans. The “breathtaking greed” was driven and incentivized by the government through purchase guarantees and “affordable housing” pressure. Banks shared blame as well, but it was primarily a government- and Federal Reserve-caused situation. The bailouts (under Bush’s administration) set the tone for further legislation handled in an “emergency” fashion, (Obamacare, cap and trade, etc.), with little to no debate and in the dark of night, with 1,000-plus-page bills which were not read and perhaps not yet entirely written when voted upon. This is the fault of government.

But this isn’t just another political debate. This is the defining issue of our time. This is a make or break moment for the middle class, and all those who are fighting to get into the middle class. At stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, and secure their retirement.

Obama is correct that the middle class is at stake. It is Obama’s policies that are destroying the middle class through ensuring massive unemployment and an economic environment that discourages business growth and hiring. His answer is higher taxes and more spending. More “stimulus,” when the stimulus to date is proven ineffective.

Now, in the midst of this debate, there are some who seem to be suffering from a kind of collective amnesia. After all that’s happened, after the worst economic crisis since the Great Depression, they want to return to the same practices that got us into this mess. In fact, they want to go back to the same policies that have stacked the deck against middle-class Americans for too many years. Their philosophy is simple: we are better off when everyone is left to fend for themselves and play by their own rules….

According to Obama, the government needs to make sure a good outcome is experienced by all who “work hard.” The task of government in the economy is punish fraud and abuse, and to provide an appropriate, rather than oppressive, tax and regulation environment. The Federal Reserve has harmed the economy through massive money printing and artificially low interest rates that discourage investment and saving. The government should not interfere with the free market, which they constantly do through corporate welfare and “crony capitalism” which is actually not capitalism but more like fascist corporatism.

They should stop all subsidies, bailouts, and special tax treatment, and trust the free market, in which companies and individuals pursue their own self interest without government interference.

Now, just as there was in Teddy Roosevelt’s time, there’s been a certain crowd in Washington for the last few decades who respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If only we cut more regulations and cut more taxes – especially for the wealthy – our economy will grow stronger. Sure, there will be winners and losers. But if the winners do really well, jobs and prosperity will eventually trickle down to everyone else. And even if prosperity doesn’t trickle down, they argue, that’s the price of liberty.

It’s a simple theory – one that speaks to our rugged individualism and healthy skepticism of too much government. It fits well on a bumper sticker. Here’s the problem: It doesn’t work. It’s never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible post-war boom of the 50s and 60s. And it didn’t work when we tried it during the last decade.

It’s called free market capitalism and it does work and will work whenever it’s allowed to operate. The reason the Great Depression got so bad and lasted so long is that government tried to fix it. There was a depression in 1920 that started out as bad as the one in the 1930’s, but lasted less than two years, because neither the government nor the Fed did anything to interfere. They didn’t enshrine the mistakes as they did in the 1930’s and in the 2008 collapse. The government should have simply let the recession run its course, and by now, bad debt would be liquidated and we’d be back to normal growth. But no, politics trumps all. See Tom Woods's eye-opening video on the 1920 depression here.

When Obama says “It’s not political,” he would be more accurate in saying, “It’s not just political, it’s very, very political.” He is the servant of the unions, the radical environmentalists, and the socialist left.

This speech, delivered in the form of populist rhetoric, is an attempt to make the case for socialism. Theodore Roosevelt was something of a “Progressive,” as some liberals like to be called today, but people don’t generally understand that Progressivism is the belief that economic, social and cultural decisions that people traditionally make for themselves, should instead be made by a group of elite “experts,” acting for all. Thus we got big government, big bureaucracy, less freedom, and even eugenics. Now we have abortion, and may soon have more government-rationed health care and government-rationed or mandated who-knows-what.

Remember that in those years, in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history, and what did they get us? The slowest job growth in half a century. Massive deficits that have made it much harder to pay for the investments that built this country and provided the basic security that helped millions of Americans reach and stay in the middle class – things like education and infrastructure; science and technology; Medicare and Social Security.

Actually, we had strong job growth, compared to today. The deficits came mainly from wars that started after 9/11/2001 and continue today. And Bush’s worst deficits pale in comparison to those racked up under the Obama Administration.

Obama wants more “investment,” i.e. government spending, in education and infrastructure. But if the economy could just be allowed to recover, these issues would be taken care of without massive borrowing and endless debt.

We simply cannot return to this brand of your-on-your-own (sic.) economics if we’re serious about rebuilding the middle class in this country. We know that it doesn’t result in a strong economy. It results in an economy that invests too little in its people and its future. It doesn’t result in a prosperity that trickles down. It results in a prosperity that’s enjoyed by fewer and fewer of our citizens....

According to Obama, we need government in control to make sure the incomes and outcomes are what they should be. But experience has shown that government is hardly qualified to run anything outside its actual constitutional responsibilities. They are poorly qualified to give guidance on running business or the economy, when their own business and their own finances are out of control. It’s the private sector that needs to be able to invest, not the government. But politicians put many roadblocks in the way: bans on energy development and oppressive EPA regulations, just to name two.

America can’t afford four more years of Obama. That should be the focus of the GOP message. A few more years down the current path and we’ll be worse off than Greece.

Wealth and income inequality is not the problem. It’s simply a convenient propaganda component to stir up class envy, which, I repeat, is the very life blood of liberalism, and class warfare is its process.

Some Thoughts on GOP Candidates after the Debate of November 22

Newt Gingrich at CPAC FL 2011. Photo: Dreamstime.com

In the Tuesday (November 22) GOP debate, we have been treated to a Thanksgiving feast of discussion of foreign policy, in which all the candidates did an acceptable job of making their points. There were no major gaffes. All the candidates seemed confident and competent. Any of these candidates would be greatly preferable to Mr. Obama.

Newt Gingrich has taken the lead in the polls for now among GOP presidential candidates. His debate performances have been impressive and, for his campaign, efficient, since it doesn’t cost anything (other than transportation and scheduling) for him to participate. With his campaign all but written off earlier, he has come back to score substantially improved poll numbers.

Gingrich looks like a candidate with the depth of knowledge and ability to articulate his positions that a president needs to have. He has years of experience in government and in study of the important issues. It appears that he can be trusted with presidential responsibility. He has avoided shouting matches with his GOP opponents and saved his strong criticism for Barack Obama and the Democrats. He correctly foresaw the failure of the super committee and early and rightly pointed out the foolishness of that process.

(It’s a campaign video, but his assessment of the super committee is quite correct.)

On immigration, he said that long-time residents who came to the U.S. illegally, but have become productive workers, taxpayers, and contributors to the community, should not have their families broken up through deportation. This would represent a minority of illegal immigrants. Gingrich’s “humane” approach sounds mainly like common sense. 

If Newt is the nominee, he will be under intense scrutiny and will be attacked for his personal moral failures. If he succeeds in getting elected, it will be because the voters see him as such a great improvement over Obama that his past sins can be overlooked, or at least left in the past. Presumably, he has overcome the personal mistakes of past years.

I’m sure I wouldn’t agree with him on every issue, but I don’t agree with anyone on all the issues. I think he would make a fine president, and that he would get America on track back to normalcy. He understands the threat of radical Islam and the threat represented by our soaring budget deficits and incessant borrowing.

Brit Hume of Fox News commented on Newt’s poll numbers improvement (Daily Caller via Yahoo! News):


Another candidate showing depth of understanding is the much-unfairly-maligned Rep. Michele Bachmann. She demonstrated an impressive knowledge of complex foreign affairs issues, such as Pakistan policy. Given this and her previous debates, she has shown a good grasp of economic and social issues. I think she is thoroughly qualified to serve as president. She is hampered mainly by liberal smears against her that too many people unthinkingly accept, as with Sarah Palin. Generally, whom liberals fear, they smear.

Speaking of smears, Herman Cain was given the treatment by the Democrats, being accused by a woman who (just coincidentally – not!) lives in the same building as David Axelrod, and another woman who happens to work for the Obama Administration. These charges didn’t stick because voters have better access these days to sources other than the toadying Mainstream Media, and could find no substance to them. Cain’s defenders appear far more reliable than his accusers.

Probably none of the candidates can really be written off now, but, in my view, the race is going to get down to Romney vs. an anti-Romney in the person of Gingrich, Bachmann, or Cain. Possibly Rick Perry, if he can continue his improved debating. Ron Paul is still a factor. As for Santorum and Huntsman, their numbers remain very low, but it’s a year until the election and a lot can happen. There’s also a vice-presidential slot to fill.

As for “electability,” if Republicans can get together on a nominee, and run a reasonably competent campaign, they should be able to defeat Obama very decisively. America’s hopes for prosperity, military strength, freedom, and constitutional government increasingly depend on that.

Related article

• Newt Gingrich Would Beat Mitt Romney in Head to Head Match Up (elections.firedoglake.com)

Cain’s Current Skirmish Shouldn’t Stop Him

Herman Cain      Photo: Dreamstime.com

A new industry has sprung up, started by Politico and their numerous articles about sexual harassment accusations against Herman Cain. Many articles appeared, articles which contained no names or specific allegations, even noting that the supposedly offending actions were “not overtly sexual.” The writers were protecting the accusers, who had signed agreements of confidentiality after agreeing to cash settlements from the National Restaurant Association.

Now, a woman has come forward to accuse Cain of something specific, which supposedly happened in 1997, but was not dealt with at that time. The allegations against Cain appear to be politically motivated attacks, likely dug up by political opponents, and eagerly pounced upon by the liberal media, anxious to destroy Cain’s candidacy even though numerous articles were printed, stating no facts, offering no evidence and no justification.

Of course, liberal Reuters was quick to find three criminal lawyers who agree that Cain could have been accused of sex abuse by his latest accuser, if she had chosen to press charges, though prosecutors likely wouldn’t have wanted to take up this type of he-said-she-said case. In any event, it would be time barred now.


Herman Cain’s campaign success is definitely not liked by liberals or by some members of the Republican establishment, not to mention his GOP rivals. But this whole scenario smacks of the “politics of personal destruction” favored by the socialist liberals. Much like the vicious and spurious attacks on Sarah Palin.

Most Americans have enough of a sense of justice to understand that an accusation is not enough. Cain confidently maintains that these allegations are baseless, and his supporters have responded with increased financial contributions to his campaign. His poll numbers are holding up well.

Whether Cain’s enemies can do him real damage through these allegations remains to be seen, but a great many people see it, correctly, I think, as a media circus designed to cut down a black conservative who is also an unconventional candidate. It’s their choice of methods to avoid dealing with the serious problems for which he is offering solutions.

For media liberals, this circus is hypocritical, since there is no actual evidence to support the allegations, while they went all out to protect Bill Clinton, who actually was guilty of sexual improprieties. As Rush Limbaugh has said, for liberals, this type of behavior is a resume enhancement.

Scott Whitlock at Media Research Center reported on Friday, November 4, that networks had aired “a staggering 63 stories in just four and a half days.”

Further,

The ABC reporter [Brian Ross] also talked to Ricki Seidman, who he simply identified as a "political operative." Ross left out the fact that Seidman has worked for Bill Clinton, Michael Dukakis and other Democrats.

Of Cain's accusers, who are anonymous, the political operative sympathized, "They've been called by all kinds of names already by people who have no idea who they are." (Ross did explain that Seidman worked with Anita Hill when she testified against Clarence Thomas.)

Of course, since there’s a woman who has come forward to accuse Cain and is represented by Gloria Allred (who else?), Cain’s enemies probably think they’ve sealed the deal. But if this doesn’t work, they’ll try something else. Cain has a thick-enough skin that he will weather this, and he knows he can expect every kind of phony charge the liberal media can blow up against him.

All this obscures Cain’s debate/discussion with Newt Gingrich, carried on C-SPAN, which was quite a refreshing change from the usual debate format. Cain demonstrated considerable knowledge of the entitlement issues, as did Gingrich. So far, Cain hasn’t missed any speeches or events. He continues to hammer away on his message. I’m listening, and I am sure a lot of others are. (See brief interview dated November 6 here).


I’m about ready to send a check to his campaign. Through his campaign, he’s earned my respect and admiration. I believe him when he says the charges are baseless, and there doesn’t seem to be anyone proving him wrong. Guilty until proven innocent? I don’t think so.

Government Policies Are Bringing About America’s National Decline

Occupy Wall Street protester.  Photo: Dreamstime.com

The New York Times reports that “a deep sense of economic anxiety and doubt about the future hangs over the nation, according to the latest New York Times/CBS News poll, with Americans’ distrust of government at its highest level ever.”

Further, “Not only do 89 percent of Americans say they distrust government to do the right thing, but 74 percent say the country is on the wrong track and 84 percent disapprove of Congress — warnings for Democrats and Republicans alike.”

The distrust of government and impatience with the status quo is reminiscent of President Jimmy Carter’s “malaise” period. The cure for the “malaise” turned out to be serious changes in economic policy, a sense of cheerful optimism, and pride in America, things championed by President Ronald Reagan.

Today, the Tea Party represents a responsible citizen movement with actual ideas for improving the nation’s economic situation, and actions taken toward accomplishing an improvement. The mob known as Occupy Wall Street (or Occupy ---) demands that the government redistribute the wealth of the rich to them in the form of free college tuition, housing, health care, etc. They are in sympathy with Europeans who have demanded to keep their government benefits uninterrupted, despite the fact that their nations' governments are on the verge of default and bankruptcy.

As Chris Adamo at Renew America points out,

Throughout Europe, the spurious and unsustainable promises of socialist utopia, Ponzi schemes all, are collapsing, leaving entire segments of the population in the throes of riots and revolt. The few remaining adults on the continent are faced with the reality that the massive funding needed to prop up the sham was bound to eventually run out, and now no longer exists. As a result the dream of socialist beneficence simply cannot keep going, no matter how hysterically the short-sighted and morally vacant masses demand it.

These OWSers seem convinced that there is plenty of money to go around, if only the wealthy would “pay their fair share.” More likely, they have no clue about it except they don’t like the idea of people having more than they have – unless they’re celebrities. Actually, America’s public debt obligations are so huge that even if the rich gave up all their annual income to be redistributed, it would not even begin to solve the problem.

The challenge the GOP candidates face is this: Somehow, face up to the fact that nothing being done by the Obama Administration, nothing being suggested by OWS, and nothing the “super committee” is likely to come up with will help in the least. In fact, any of these are making and will make the situation much worse. The results of the 2012 presidential election will in all probability mean the difference between economic and currency collapse, or a real chance at a recovery that everyone can recognize as a recovery.

How the OWS protesters could support Barack Obama in view of the economic damage his administration has done, can be explained only by the fact that the protest’s money and energy is coming largely from people who have no use for America as it has been anyway, and would like to see the whole system fall. Communists, Socialists, Nazis, and fascists are eagerly awaiting what they hope will be the collapse of capitalism and the inauguration of a socialist paradise.

Economically, what they want is not only not feasible, it is not possible, unless they want something like Soviet communism, which is bound to fail. This involves the end of individual liberty and the institution of slavery. We are on Friedrich Hayek’s “Road to Serfdom” already; we need to reverse this, not accelerate it. People who are willing to trade their liberty for government “benefits” will be disappointed if they get their request.

See short video depicting the ideas of Hayek’s classic book in cartoon form here. The presentation is a bit dated, but the ideas are not:

Class warfare, stirring up the mob against the supposedly unjust success of the wealthy is the classic appeal. Liberal agitators, and probably the mainstream media, are just waiting for more violent outbursts to occur.

People who want some corrections made, but not a violent upheaval, ought to consider the fact that it is possible to address America’s economic situation in a responsible way that would bring about substantial improvement fairly quickly. This involves electing a competent Republican president and a Congress that will get rid of the “super committee” and reverse their results, and face up to the task of cutting the size and scope of the federal government and reining in the ridiculous spending.

At the least, it should be recognized that Obama has accomplished nothing positive for the economy. Actually, he has brought about much economic, social and cultural destruction. Short of direct divine intervention, four more years of Barack Obama would bring about the tragic failure of American freedom and prosperity for many years to come. That’s how serious our plight is.

Related articles

• Government Lowers The Standard of Living (economicnoise.com)
• Why It's the Mises Institute (lewrockwell.com)
• United Socialist States of America? (fidlerten.com)

Democrats’ Last Stand? or, This Ain’t the Tea Party

Image via WikipediaThe Occupy Wall Street protest, trying to become a movement, is in essence another left-wing demand for a socialist utopia. Lacking identified leaders and lacking a focus on issues, and finding a convenient scapegoat in “Wall Street,” the protests appear to be an attempt to reawaken the 1960’s protests against things in general. It is basically “juvenile rabble,” as Rich Lowry calls it, and only in a very narrow and superficial sense is it anything like the Tea Party.

Those Democrats! They’ve got no record that they can run on, so now their tactic is to stir up some of those people who are always wanting to protest something (people whom Obama’s policies have failed) and direct them toward blaming “Wall Street” for their troubles. The entire Occupy Wall Street event has been to some extent coordinated, supported, and/or financed by the usual DNC suspects: MoveOn.org, George Soros, White House advisers, etc. In supporting this reprehensible mob action, the White House, already grasping at straws for some kind of election advantage, may be holding on to their last one, for they are truly scraping the bottom of the barrel with this. Rather than simply “embracing” the OWS thing, it’s more likely that they had a hand in drawing it up and implementing it. Hopefully, American voters will see the foolishness of this whole episode.

It’s as if the protesters like what Obama has done for them so far, so much that they’re wanting four more years of his kind of “change.”

The White House continues its much-used, but false, line, with more than a hint of “Blame Bush,”

“If you’re concerned about Wall Street and our financial system, the president is standing on the side of consumers and the middle class,” senior White House adviser David Plouffe said when asked about the demonstrations during an interview today on ABC’s “Good Morning America.” “And a lot of these Republicans are basically saying, ‘You know what? Let’s go back to the same policies that led to the Great Recession in the first place.’” [Emphasis added]

No, Republicans are saying let’s not continue with those policies. They’re saying, we should stop bailouts, profligate spending, over-regulation, and basically get the government out of the way of prosperity. At least some Republicans are saying that. And Obama isn’t “standing with the middle class,” he’s destroying the middle class through harebrained economic policies designed to increase dependence upon government.

Funny, guess who some of Obama’s biggest donors are. Right. Wall Street firms. The “proposed” lists of demands, such as, cancelling all debt, free college education for all, etc., demonstrate the protesters’ profound ignorance of anything to do with actual economics. Of course, the Marxist supporters of OWS see it as a way to help bring about the downfall of capitalism, a goal shared by top leader Ayatollah Ali Khamenei of Iran, who applauds the effort.


An OWS web site referred to how they stand in “solidarity” with the people of Greece, who are just lately starting to pay the price for receiving the goodies they wanted from the government: impending default, bankruptcy and poverty. But everyone is supposed to bail them out, for reasons that are very unclear. America is already on the route taken by Greece, and if these protesters have their way, the end result is chaos, then tyranny.

The OWS protesters are a mob and are proving Ann Coulter’s point in her recent book Demonic: How the Liberal Mob Is Endangering America. Leftists like mobs and operate through mobs, dating back at least to the French Revolution. And that was well before George Soros and Saul Alinsky.

Fox News via The Daily Caller

Eugene Robinson, token liberal columnist for Investors’ Business Daily writes,

Occupy Wall Street and its kindred protests around the country are inept, incoherent and hopelessly quixotic. God, I love 'em.

I love every little thing about these gloriously amateurish sit-ins. I love that they are spontaneous, leaderless and open-ended. I love that the protesters refuse to issue specific demands beyond a forceful call for economic justice.

Apparently he loves the fact that some of these people are defecating on police cars and the American flag, and are otherwise creating a huge mess that some other people, who actually work for a living, are going to have to clean up. And that’s even if the OWSers don’t turn violent and start burning and looting.

To compare this thing to the Tea Party is like comparing the latest Nancy Pelosi speech you’ve heard to the Gettysburg Address or Hamlet’s soliloquy. Put simply, as Ann Coulter said it: “I am not the first to note the vast differences between the Wall Street protesters and the tea partiers. To name three: The tea partiers have jobs, showers and a point.”

But OWS too shall pass, and the sooner the better.

Related articles

• Herman Cain Has Some Advice For Occupy Wall Street (timesunion.com)
• Occupy Wall Street (swcrocker.wordpress.com)
• Ann Coulter Works The Room At Yale... And A Look Back At Her Other Controversial Speeches (huffingtonpost.com)

Keynesians Keep Trying to Control the Economy

Henry Hazlitt

President Obama’s economic policies have been based largely on his administration’s interpretation of John Maynard Keynes’ General Theory of Employment, Interest, and Money (Harcourt, Brace & Co., 1936). Federal Reserve Chairman Ben Bernanke likes Keynesianism also. Keynes became popular largely by proposing massive deficit spending as a key element for getting out of the Great Depression. Politicians loved the idea, because they like to spend money, and Keynesianism gave them cover to do so without raising taxes, should they so choose.

America has been accumulating the results of Keynesianism for decades, and is now dangerously close to a real day of reckoning concerning our huge national debt. Europe is already considering seeking a bailout from China. What Americans often fail to think about is: Who’s going to bail the U.S. when we get to that point? And we surely will unless some serious changes in direction are made fairly soon. The answer: No one. There is no one to bail us out. Would we end up repudiating our debt? Would we write it off in bankruptcy, allowing treasury bills to become worthless? Who knows?

Henry Hazlitt’s 1959 book, The Failure of the New Economics: An Analysis of the Keynesian Fallacies (D. Van Nostrand Co., Inc.) refutes Keynes at numerous points, quoting extensively from his book. (Ebook version of the Hazlitt work is available for free download at Mises.org.) Hazlitt was closely associated with Austrian school economics of Ludwig von Mises, Fredrich A. Hayek and others, and was a prolific writer and champion of individual liberty. [1]

Since the days of Franklin D. Roosevelt, Keynesians have dominated government economic policy and academic instruction, countered somewhat by classical theorists and monetarists, vastly growing the government, with some relief along the way, but leading to the distress we have experienced since the 2008 financial crisis and the concurrent recession. Keynes held “full employment” as the goal, but the Keynesians have delivered now-chronic high unemployment.

When Michelle Bachmann says that it “wouldn’t take that long” to turn the economy around, and when she says that her policies would lead us back to $2.00-a-gallon gasoline, she should be taken seriously, because she has a much better grasp of our economic situation than the current powers that be. She has some understanding of market forces, and does not have the contempt for the free market that the socialist regime has.

It is an axiom of economics that for economic growth, there must be saving and investment, and profits. Saving leads to availability of credit and it leads to investment. Keynesianism has led the Federal Reserve to set interest rates at near zero, and they have announced plans to keep them there for a long time. This stifles saving and investment. The Fed has encouraged easy availability of credit by pumping money, created out of thin air, into the system. Keynes discouraged individual saving and wanted low interest rates. He also wanted government to control investment. Small excepts from Hazlitt:

“The outstanding faults of the economic society in which we live,” Keynes begins, “are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes” ([Keynes] p. 372).

There are four chief things wrong with this statement:
(1) The vagueness of Keynes's "full employment" concept …
(2) Prolonged mass unemployment is not the fault of our economic “society,” but of governmental interventions in labor-management relations, wage-rates, and money and
banking policy—the very kind of intervention that Keynes wished to increase.
(3) The distribution of wealth and incomes is in the main neither “arbitrary" nor “inequitable” in a competitive free market system. As John Bates Clark showed so brilliantly in “The Distribution of Wealth” (1899) “free competition tends to give to labor what labor creates, to capitalists what capital creates, and to entrepreneurs what the coordinating function creates.” Individual inequities are bound to occur, but they are not systematic. Capitalism itself tends constantly to reduce them by its rewards to production. If we are looking for really “arbitrary” and “inequitable” distribution, we can find it in the East, or in backward and “underdeveloped” countries, or in Communist Russia and China—in short, in either pre-capitalistic or socialist societies.
(4) It is even a misnomer in capitalist countries to call this process “distribution.” Income and wealth are not “distributed” but produced, and in general go to those who produce them. [Hazlitt, Pp. 374-375]

Keynes's arguments against “liquidity” and against “speculation” are untenable. Speculative anticipations and risks are necessarily involved in all economic activity.
Somebody must bear them. What Keynes is saying is that people cannot be trusted to invest the money they have themselves earned, and that this money should be seized from them by government officials and spent or “invested” in the directions in which those officials (seeking to hold on to political power) deem best. [Hazlitt, Page 430]
(Emphasis added)

President Obama has been accused of a “class warfare” attitude because of his insistence upon raising taxes on millionaires. His liberal base likes any policy aimed at going after the “rich,” or, redistribution of income. The president in his September 20 speech accused House Majority Leader John Boehner of having a “my way or the highway” position for not being willing to accept any tax increases, but Obama himself adopts a “my way or the highway” stance with the opposite position.

Obama wants to take more money out of the hands of job creators to “invest” in things his administration would like to “invest” in, i.e., spend for. Government, in their view, owns all the money, and they only let us keep whatever portion of it they choose.



Rep. Paul Ryan (R-WI) appeared on Fox News Sunday the day before the president’s speech and indicated that Republicans would not be able to accept much of what the president was expected to propose, and characterizing it as “class warfare” approach. Ryan explained why more new taxes are not the answer:



Socialist policies lead to authoritarian controls and less freedom. Obama’s jobs bill and tax proposal, though unlikely to become law, do illustrate the Keynesian tax and spend philosophy. Obama’s wish is to get higher taxes now, and make “cuts” some time in the future – cuts which are unlikely to happen if liberals have their way.

As I have said before, class envy is the very lifeblood of liberalism, and exploiting and promoting the class struggle is the process. It has this in common with communism. Obama, the great uniter, is now reduced to pandering to labor unions by threatening “the rich” with higher taxes and more regulations, for his own political purposes. Neither his “jobs” bill nor his proposal for “paying for it” is likely to gain any ground, nor would they help with the actual problems if they were to be passed. The proposals are certainly no better than the previous “stimulus” and would create at least one more new government agency, the “Infrastructure Bank.” As if we didn’t have enough slush funds already (see Fannie and Freddie).


[1] See Keynes vs. Hayek rap video here. Sequel here.

Photo: Ludwig von Mises Institute, via Wikipedia.