We are all Keynesians now.” — attributed to President Richard Nixon
In the depths of the Great Depression, economist John Maynard Keynes theorized that the government could control business cycles through monetary and fiscal policies.
Keynes was right to some extent. Lower taxes, higher government spending and lower interest rates stimulate the economy, at least for a while. Even Nixon came to believe in it.
The phrase “We are all Keynesians” caught on. Economics is the dismal science after all.
A Newsweek cover story in 2009 took the catchphrase a step further in proclaiming on its cover that “We are all socialists now” as they celebrated President Barack Obama’s promise to fundamentally transform America.
Maybe Newsweek didn’t really think socialism would save the world, but just hoped it would save Newsweek. Within a few years after that story, Newsweek was dead as a print magazine and was sold for one dollar. Which was worth less than seven cents in the 1930’s money used by Keynes.
Although socialism came too late for Newsweek, it came too early for Venezuela. Historically, Venezuela has always had an industrious workforce and abundant natural resources.
Which it has wasted.
To give just one example, Venezuela has the largest petroleum reserves in the world. But it currently imports oil from the United States because it now lacks the know-how and systems to run its oil fields beyond about 40 percent capacity.
How can that be?
Socialism, that’s how. The late socialist Hugo Chavez looted part of the country and ran the rest into the ground in the name of “Chavism.” The price of gasoline in Venezuela is about four cents a gallon, but you have to stand in line for hours and sometimes days.
Inflation in Venezuela in 2019 is projected to be 10 million percent per annum, says the IMF. Seriously.
That’s what happens under socialism. The dogma is “from each according to his ability and to each according to his needs.” The outcome, predictably, is a needy population with little ability.
The people running the show tend to have the highest needs and lowest ability of all. Chavez became a billionaire by destroying his country, as did all the others.
So what of America? Well, here are some sobering statistics.
Millennials favor socialism over capitalism by a margin of 51 to 45 percent according to a 2018 Gallup poll. At our universities, liberal professors outnumber conservatives by 12 to 1, a 2016 study by Econ Journal Watch found.
A full 18 percent of university professors are full-on, self-described Marxists, according to researchthat included a University of Colorado professor. These purportedly educated individuals are adherents to the philosophy that killed 100 million people in the 20th century.
Some 40 percent of Americans, according to the Cato Institute, think the government should prevent so-called hate speech with which they disagree, the First Amendment be damned.
That’s because socialists know that earners don’t surrender their earnings voluntarily. Their earnings must be taken. And dissent must be crushed — by censorship, by political correctness and by name-calling. Now that they’ve worn out the race card, their idea of persuasion is to call you a “motherf—er.”
If necessary, and sometimes just for the fun of it, they use violence. A Brookings Institution survey in 2017 found 19 percent of college students think it’s OK to use violence to stop speakers from speaking.
To disguise their thievery, socialists play word games. The newest incarnation of this ancient practice of taking from others whatever you need for yourself has been rebranded the “Green New Deal.”
“Green” refers to the money the government will confiscate under the proposed 70 percent tax rates (plus state and local taxes).
Whatever the branding, socialism does appeal to the mob. The mob would rather play than work, and would rather take than earn. They especially like to take from earners they envy and therefore hate.
Playing, taking, envying and hating are not the path to happiness that the mob assumes, but that point is for another column. Today’s point is that such shallow self-indulgence is not what saved us from the stultifying stank of socialist slums.
It’s the incentives, creativity, risk-taking and individuality of capitalism that did it. In America over the past century, shorter work hours and labor-saving machines attributable to capitalistic invention and investment produced a bounty of leisure time. Lifespans have increased by 50 percent and child mortality has dropped by over 90 percent. We don’t have just a chicken in every pot; we have two cars in every garage.
Even our poor enjoy more luxury than yesterday’s royalty, with cable television, air conditioning, pickup trucks and smartphones.
Our biggest problems are ones of abundance. No one involuntarily starves to death in America, but many people voluntarily eat themselves to death. We’ve nearly eradicated ancient bigotry based on gender, skin color and religion, but are now promoting it again in the name of identity politics.
We’ve almost earned our way to a real utopia, but we risk sacrificing it on the altar of a cult that promises counterfeit happiness and free stuff in the form of envy and stolen goods.
Give the Chavistas credit for one thing — there’s no problem with illegal immigration into Venezuela. People are instead fleeing that “workers’ paradise” just as they fled all the others.
I wonder how long before there will be nowhere to escape. Are we all Chavistas now?
(Published Jan 13, 2019 in the Aspen Times at https://www.aspentimes.com/opinion/glenn-k-beaton-are-we-all-chavistas-now/)
The U.S. is less socialistic than most other “advanced” countries, but has more programs and a higher level of income transfer than leftists are willing to acknowledge in demanding ever more. Examples include Medicaid, Medicare, Social Security, food stamps (SNAP), unemployment compensation, free public education, rent subsidies, and the earned income tax credit. Taken together, these programs — paid for mostly by higher income people — have helped to modestly increase the disposable income of lower income Americans over the decades, despite the claim of leftists that the “rich get richer” (true) and the “poor get poorer” (false).
I would personally support political candidates who advocated somewhat more progressive taxation if they did so for reasons of common good such as reducing the national debt, and knocked off the populist/Marxist rhetoric about how “unfair” the current system is to “the poor” while never acknowledging what “the poor” should do to improve their own social and economic circumstances. (One way… take better advantage of the educational opportunities that are available.)
The problem with the wealth trensfers that you mention, in the eyes of the Left, is they don’t seem tangible enough. They want freebies they can hold in their hand. Another problem in their view is that the transfers leave too much wealth in the hands of the rich. Part of their discontent, after all, is simple envy.
I make a distinction between two types of wealth owned by “the rich.”
One is ownership of the type of “capital” that produces the goods and services most demanded by consumers, and continues to invest the “profits” in more such capital, to the benefit of practically everyone. Warren Buffett (who has Democratic leanings) best exemplifies this type of socially-beneficial use of wealth.
Then, there is wealth that is devoted to personal consumption — much of which is deliberately “conspicuous” of the type that we see in places like, um, Aspen. It consists of luxury homes in multiple “upscale” locations, luxury yachts, personal aircraft, dinners including wines costing hundreds or thousands of dollars per bottle, etc. While these extravagant expenditures do “employ people,” any competent economist recognizes that the real effect is to divert limited human and physical resources from what most people would regard as “reasonable” lifestyle amenities. (That is particularly true considering that many of these “luxury” accommodations and playthings are only used for a small portion of a year.)
The debate over the “appropriate” distribution of wealth between “the rich” and everyone else would be a lot more rational if an objective distinction were made between the part of the wealth of “the rich” that is invested in capital assets providing goods, services, and productive employment, and the part that is invested in “luxury personal consumption.”
Mr Beaton, you have produced an article with brilliant points regarding the stupidity of the libs/lefties/”progressives”/moral relativists/subjectivists/Democrat fools. Thank you and keep up the great work.