Tuesday, February 16, 2016

"Free Stuff"

Sydney M. Williams

Thought of the Day
“Free Stuff”
February 16, 2016

“Democracy and Socialism have nothing in common but one word, equality. But notice the difference:
 While democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.
                                                                                    Alexis de Tocqueville (1805-1859)

“Free stuff” is an aphrodisiac; it is like honey to a bear – who can forget the image of Pooh stuck head-first into a tree, bees swarming about him. It was why Odysseus had his men lash him to the mast as they approached the island of the Sirens. It appeals to the emotions, not the intellect. Listening to Bernie Sanders speak after trouncing Hillary Clinton in New Hampshire last week, it was easy to be swept away with his promises of free stuff – healthcare and college – all with the illusion this would solve unfairness and inequality. No discussion of the cost or how it would be financed, other than to raise taxes on Wall Street moguls. No mention of the decline in cultural and moral habits, like marriage, religion and work habits, that accompanied the rise in entitlements. It is not just the words; it is the way they are said.

Those who are duped with promises of “free stuff” ignore the simple fact that everything has a cost. Mr. Sanders’ admirers are asked to reject the critical concept underlying our history, which is the opportunity to succeed. No government can guarantee individual success, but ours does provide equality of opportunity and equality before the law, without regard to class, race or religion. Our government was created to protect us from the threat of kings and oppressors. It was based on the notion that our rights are God, not man, given. The Constitution provided us the freedom to think, speak, assemble and pray as we like. It enacted laws that protect us and our property from unlawful imprisonment and seizure. It promised that we would be judged by juries of our peers. America’s democracy recognizes inherent differences in individuals, as well as culture and heritages – that we are (and always have been and always will be) a nation of immigrants tossed in a cauldron, but maintaining our individual identities. American culture was based on pluralism, not multiculturalism. We are individuals, not cattle to be placed in pens convenient for politicians focused on group solutions to group problems. We are meant to be unified, not divided. The American meaning of liberty was never based on the promise of equality of outcomes – something that can never be delivered.

The cradle-to-grave care that Mr. Sanders feels is our due is enticing, especially to the naïve, those without aspiration and to those ignorant of our history. The fact that we cannot afford entitlements already promised, however, should give pause to those who believe that the riches of the one percent will be available for the the ninety-nine percent. The argument is made that Socialism has worked in some West European countries. But those countries are largely homogeneous, and the influx of refugees from the Middle East and North Africa is testing whether those systems will still function. The United States, in contrast, is an amalgamation of people from all over the world. It is our strength, but it is also one subject to abuse by politicians who choose to divide so as to conquer. They prefer compartmentalizing the electorate; it is easier to focus on specific promises to groups: the young or elderly, women, gays, Blacks or Hispanics than to discuss broad concepts like freedom, opportunity and individual responsibility that are pertinent to us all. We should, as well, not forget that Socialism has, at times, devolved into autocracies. Both Communism and Fascism were birthed under the promise of equality, fairness and socialistic solutions.

Populist politics, whether from the Right or Left, lead to authoritarianism. They involve finding someone to blame for society’s problems. Individuals or groups are singled out as responsible for whatever ills have befallen a nation and its people. Easily identifiable groups are vilified. For Fascists and Nazis, it was Jews and non-Aryans. For Communists, it was the aristocracy, free-holding serfs and Jews. For Donald Trump, it is foreigners; for Bernie Sanders (and others on the far Left), it is Wall Street and the “one percent.”

Extremism rises when dissatisfaction is high and expectations low. Mr. Obama takes credit for the fact that our economy is the fastest growing of the developed nations, that twelve million or so jobs have been added and that unemployment is below five percent. But he shuns the fact that developed nations have struggled in this economy and that about eight million jobs in the United States were lost between 2007 and 2009. He never mentions that this recovery has been the slowest in post-War history. He avoids mentioning the millions of people who have abandoned the workforce. The labor force participation, at 62.7%, is as low as it has been since the 1970s. The gap between unemployment for African-Americans and Whites, at the end of the third quarter 2015, was the highest in fifteen years. Wage gains have been nil. The most negatively affected sectors of the demographics are the poor and minorities, those very people Mr. Obama promised to help. While about three and a half million Americans reach retirement age each year, roughly four million turn eighteen.  An economy needs to absorb the natural growth in its population.

But this stagnation (and worse) for growing numbers of America’s middle class people pre-dates the Obama Administration. “The real family income of people in the bottom half of the income distribution,” according to Charles Murray writing in the weekend’s edition of the Wall Street Journal, “hasn’t increased since the late 1960s.” Ironically, but importantly, the slowdown in family incomes for the bottom half of Americans coincided with the increase in entitlements and the decline in family formations. Is there a correlation? I am not a social scientist, but the possibility cannot be dismissed. With Mr. Sanders, we would get are more of the same. History provides no support to suggest his solutions will work.

In fact, history suggests a different path. Democratic, free market capitalism has been the strongest force for good the world has ever known. Arthur Brooks, president of the American Enterprise Institute, recently wrote that free market capitalism has moved more people out of poverty – 700 million, according to his estimate over almost 200 years – than any other system. One has to look no further than Cuba, or as far away as China, to understand the truth of his message. In his book, The Great Surge, Steven Radelet, professor at Georgetown University, noted that the number of developing countries, over the past twenty-five years, that have seen annual economic growth exceed two percent has risen from 21 to 71. That has led to a doubling of per capita income for millions of people. What triggered the surge? Mr. Radelet writes that it was the collapse of the Soviet Union and the discrediting of Marxist-Leninism

Democracy is not perfect and neither is the United States. Nevertheless, with its laws, institutions and respect for human endeavor, our system has allowed us to become wealthy, as a nation and individually. It is a system where people are free to make choices, to succeed or to fail. The combination of free market capitalism and democracy have allowed us to be the most generous nation on earth, with beneficiaries being libraries, hospitals, universities, museums, symphonies, etc., institutions that have enhanced life for everyone. That is not to minimize the importance of safety nets; for we all know that there are are those who for reasons of age, infirmities, prejudice and misfortune cannot fend adequately for themselves.

Taxes and regulation, while necessary for government to function and to keep people safe and competition fair, act as governors on economic growth. The conundrum for government is to find the right balance. When no rules are applied anarchy and economic free-for-alls result. When they are applied too rigorously economic growth is impacted. Mr. Sanders’ socialist policies, which avoid mention of positive character traits like work, marriage or faith, risk slowing further an already anemic economic recovery.

“Stuff” is not free. If its price is not determined in dollars, its cost will be measured in freedoms lost.

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