12-20-2020
Ahh, I can hear the death chant. I can see the crowd tearing at their hair, fingernails screeching across the chalkboard, the three monkeys, hear no evil, speak no evil, see no evil. Capitalism is the black sheep of proper society. No one wants to touch it because no one can explain it.
Our form of capitalism – the US economy – has become so complex that I often wonder if anyone truly understands it. The Federal Reserve along with the Treasury is more like a black jack dealer in Vegas than an institution designed to maintain our currency. Check that. They operate more like a good fellow running a numbers game. Better still, the inside trader for a hot IPO. You get the picture. The Monopoly money is not real. It’s not a level playing field at this point. Was it ever?
I submit that capitalism works too well. It works so well that the leftovers have created a monster. Does that call for redistribution? Maybe, but how the hell do you do that when the overseers of the redistribution are the same crooks we are trying to deal with? Why not just open the hen house and send a Twitter to the wolves?
No, the redistribution should be monies from the public sector moved back to the private sector where they came from in the first place. The government produces nothing, zip, zilch, not a single thing of value. But they want to increase your tax and “share” it. This is a con job the scope of which has never been conceptualized. Yet so called ‘serious’ people are talking about it! Why? Because our government is so invested in controlling the wealth that they already handle over one half of the GDP. They should have never touched that money in the first place. Mortgages, college loans, social security, welfare, Obama Care, medicare and medicaid: they have been a siphon of our earned income since 1900, before, and other than a great highway system and a few dams, what do we have to show for it?
They said the internet would be private sector – free – not to be manipulated. HOGWASH. They said – a long time ago – insurance companies were free to do business but we must regulate them (1752 Benjamin Franklin joined together with the fellow firefighters of Philadelphia to form what is known as The Philadelphia Contributionship for The Insurance of Houses from Loss by Fire the first “oversight commission was established in 1851 -New Hampshire.) How many tax dollars have been spent since on regulation and how much cheaper would insurance be if it was a competitive product? All the government does is enable COLLUSION.
As usual, I could go on, but I wish to promote principles. I am not a policy maker. We vote for policy makers. They are called “representatives”.
Yes, capitalism works so well it has lifted the world many steps higher and is the only hope for our future prosperity. So why is the swamp so determined to destroy it and allow the oligarchy complete control? This globalism stuff, this whole “reset” idea, is a return to feudalism, albeit beneath a central, iron fisted authority.
Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations in 1776. What a coincidence, 1776. He was the father of capitalism and free markets. To abbreviate his economic theory we often use the phrase “self interest”. That is, if reasonable men and women operate within the guidelines of moral principles and act in their own self interest, the resulting competition will lift all people. He also developed the concept of division of labor.
All too many people equate capitalism with greed and it is an understandable assumption. Greed, coupled with unscrupulous behavior and lack of morality does indeed promote inequity. Taken too far, we end up with abusive working conditions, monopolies, and a host of issues that cannot stand.
No system is perfect when we are locked in the struggle for survival. For a society to exist in peace it must conform to the dictates of natural law while forever striving in an altruistic direction. So capitalism is only as successful as the people are “good”. Didn’t Smith know that people are not good?
I repeat, no system is perfect. When our founders were etching out “individual liberty” they were making room for a middle class. Having money is a component to being free. There is much more to freedom, but money is symbolic to its essence. Liberty creates the opportunity to make money. It does not guarantee it.
Mercantilism is another term we must explain. Circa 1750 – 1800 a type of feudalism was the dominate system within countries throughout the world. But trade between those countries should be classified as mercantilism. Thus mercantilism measures the balance of trade between nations; and this is in many ways was the reason our fore fathers saw England as an overlord – unfair trading policies. More than one war was the result of mercantilism. In 1549 the English court’s attitude was, “We must always take heed that we buy no more from strangers than we sell them, for so should we impoverish ourselves and enrich them.”
Capitalism seeks to reach a balance of trade by making markets free inside and out. It promotes peaceful competition and rewards ingenuity. Unfortunately, the government can not or will not sit by and watch the private sector become rich without tinkering with the system. This is RULE #3: The government ALWAYS makes things worse.
There is no doubt that we need our government to regulate certain aspects of the economy. Currency must be stable and consistent. Monopolies should be disciplined when they begin abusive tactics. However the genius behind regulation unfolds, it must protect the middle class because the middle class creates more jobs by far than any other sector.
Instead, our government has bled the middle class to near extinction. As they say in the halls of Congress, “That’s where the money is….”
Aside from the past year, 2017-2019 showed exactly how a stronger middle class could elevate all people. And we were just getting started. Merely slashing 2 regulations for every one new regulation has changed the environment. People were investing. Businesses were opening. For Christ sake, we were energy independent! So why tear that down?
Good numbers are hard to come by, but today, roughly 42% of private sector workers support the other 58% of public sector employees. This does not include the unemployed, children and retired. Another way to see it: nearly 50% of all people rely on government for their income. You can see this is virtually impossible to maintain unless you simply print money. We’ve all heard the word “unsustainable”. So we must choose whether to go all in with a socialistic / communistic takeover, or start shrinking the size of government and strengthen the private sector.
The Public Sector should be limited to law enforcement, fire protection, infrastructure, education and utilities. And I’m not so sure about education. In other words, just as the constitution provides the framework for government, the government should provide the framework for free markets and free people. Then butt out. Nothing else!
Smith’s theory advocates competition to create value. The more value one creates, the more successful they will be. By creating value, other people benefit . So the more people who are improved by your work, the more work you will get, the more money you will receive. We don’t need the government to tell us how to do this. We should not have to pay them for the privilege of being free to operate. Let us keep our money!
As is often the case, the principles of capitalism were not so much invented as they were discovered. They have been at work since the first fire starter taught the second fire starter how to start a fire. (100% value added) Prior to that we hung out in trees telling stories. So it was Adam Smith’s observations that fast tracked feudalism and mercantilism into capitalism. So strange that the industrial revolution came in the wake of Adam Smith and the Revolutionary War. Another coincidence.
Everything takes time. Trickle down is not a joke or an insult to the lower class. It is a fact. Things take time. But once food production reached the point where there was no scarcity – and agriculture is certainly dependent upon federal subsidies – our economy blossomed. Every successful country or empire, every civilization, has predicated their strength upon a surplus of food.
Likewise, the richer people become, the richer the almighty government becomes. (If only they could manage their money, eh?) A lower tax rate in a thriving economy yields more net revenue for Uncle Sam than a high rate which lowers the GDP. The whole society prospers. Ours has. Communist countries have not. What more do you need to know? If you allow the lower class to have jobs and show them hope of upward mobility, then we don’t need the government to take care of them. They become independent, free. The greatest gift you can give to a human being is integrity. With integrity comes honor and a respect for justice and morality. This builds up a community whereas food lines and rent subsidies only denigrate it. The middle class is the job creator.
Moreover, no one is more efficient than the person with skin in the game. Henry Ford proved that with the assembly line. If we are all working for the government, no one will bother to improve the system. No one will reach for higher heights. Creativity will be stifled.
My favorite stupid example:
The city needs a stop sign. They tax you, spend $5,000.00 and take 3 months.
I could erect that sign for less than $1,000.00 and have it up in 2 days or less.
I find my own insight insufficient to imagine just how truly inefficient the government is. I’ll keep trying though.
Sadly, throughout the years, while we were promoting free trade, many other countries were practicing mercantilism, attempting to strengthen their own treasuries by an imbalance of trade. Germany was excellent at this. Saudi Arabia and OPEC became wealthy almost overnight once the oil began to flow. More recently, China has used trade coupled with currency manipulation to effectively wage war with the whole world. In truth, America was once a net exporter also. But for more than 50 years we have been a huge net importer. So if China insists on unfair policy, what can we do except return the favor? All of this is to show just how complex economic factors are, and to suggest that the less government interference, the better.
Today, we are deep in bed with the Chinese Communist Party (CHICOMS), With their help, we are becoming more like the communists than they are becoming like us. Our government is slowly swallowing every dime we make, spending far more each year than they take in. With every new tax or tax increase, with every concession to an over sized corporation, every fee, regulation, license, or insurance premium, the middle class becomes weaker and less able to create. Meanwhile, the government highers more bureaucrats to oversee the grotesque machinery they are building, one useless piece atop the last. The strange bedfellows of CEOs, oligarchs, bankers and bureaucrats are slashing their own wrists – dreaming of tapping into the Chinese market of 1.4 billion; but before they bleed to death, we will be buried and forgotten.
Why, oh why, are we voting IN a communist regime?
I have played a major role in building a very tiny company. Very tiny. But in the course of my service, I have seen the cost of doing business skyrocket, and none of the additional costs have helped us create a better product. In 1985 I did all of the preliminary paperwork, placed all the orders for supplies, talked with customers, managed the payroll, and still had time to work in the production area. Today there are 3 bookkeepers and I contribute zero to production. I rarely speak to a customer. The complexity has become unbearable and because of crippling capital gains tax and taxes on net income, IT MAKES NO SENSE TO TURN A PROFIT.
I have watched small businesses like ours die or be swallowed by “corporate structures” whose layers of companies defy imagination. I see no similar new businesses being started. I believe it is now impossible to do so. I honestly do not know what percentage of the monies we bring in ultimately end up in the hands of government. I honestly do not want to.
The private sector is in grave danger. For several years we have been shown a path to daylight, only for the door to be slammed shut by a corrupted election and cowardly judges. Only the mega corporations will survive the coming storm, and to what extent they are absorbed by the STATE remains to be seen. We will all be serfs, beholden to the land owners (the state), with no American Dream to strive for. That is only the first step into socialism. From there it will get far worse.