American Elephants


Can Inequality Be Fixed? Can There Be Social Justice? by The Elephant's Child

The current theme of the Democrats seems to be “Inequality.” Or “Social Justice” if you prefer. They speak of a growing gap between the very rich and ordinary folk, with the insinuation that anyone who gets very rich must have been unjust in their accumulation of wealth. Certainly this has been a major theme for Barack Obama. He spoke of redistribution even farther back than his famed encounter with Joe the Plumber. Michelle Obama spoke on the campaign trail of coercive redistribution of wealth, and the basic unfairness of America.

I have trouble with the concept of ‘social justice’— for the definition seems to vary from equality of opportunity, equal ability to develop one’s human potential, to the idea that society should treat all equally well who deserve being treated equally.

The gap between our IT billionaires and the poor is measured and remeasured.  We have had successful products in the past, but never before a product that is required by every person in every business and even in the poorest homes. Of course those who came up with new products, the applications and the updates and the new improved versions were going to be rewarded with fabulous wealth. Does the life of a poor person become worse because a new product enters the world? Is it somehow unfair that someone had the ideas and skills to develop those products is rewarded for so doing? How is this in any way— unjust?

If we must redistribute wealth to be just, how much do we have to redistribute? How much do we have to take away from the rich man to give to the poor man? Barack Obama promised “change” and millions of black Americans were sure that meant that their situation in life would improve. He has vigorously promoted redistribution of wealth for 4½ years, and the welfare of poor black Americans has steadily declined. The unemployment rate for black young people is a staggering 60%. The president wants to raise the minimum wage, but statistics show that will increase the unemployment rate for beginning workers, not help them.

Creating jobs for the unemployed is not what the redistributionists have in mind, however. What they have in mind is more welfare, and making the poor more dependent on government largesse. If they depend on government and their politicians for their food and housing, their health care, welfare and social services, they are very likely to vote for those who make the largesse available. The object is not “social justice” or “equality” but power for those who distribute the welfare.



The Secret Knowledge: The Origins of “Social Justice” by The Elephant's Child

From the archives: October 28, 2012

The Left is deeply concerned about income inequality, you know that, they tell us so often enough. They have observed that some people live in poverty while others, particularly corporate CEOs, who get ridiculously enormous salaries that they certainly don’t deserve, are very rich. The Left considers this observed inequality as unnatural. In his book The Secret Knowledge, playwright David Mamet tackles the origins of the problem:

To correct this observed inequality, which the Left sees as unnatural, it invented the term “social justice.” But a system of Justice already exists, formulated by Legislature, in supposed expression of the will of the people, and administered by the Judiciary. This is called the Judicial System.  What then is this additional, amorphous “social justice”? It can only mean, as Hayek wrote, “State Justice.” Here, though the Left will not follow the reasoning out to its end, the State (operating upon what basis it alone knows, and responsible to no law enacted by the people) confiscates wealth accumulated under existing laws and redistributes it to those it deems worthy.

History proves that the worthiest in these Marxist schemes are or quickly become, those in charge of distribution, which is to say “the State,” it’s constitutional powers usurped by those we know as “dictators.”

To the Left it is the State which should distribute place, wealth, and status.  This is called “correcting structural error,” or redressing the legacy of Slavery,” or Affirmative Action, or constraining unfair Executive Compensation; but it is and can only be that spoils System which is decided at the ward level as “cronyism.” And lauded at the national level as “social justice.” It is nothing other than the distribution of goods and services by the government for ends not specified in the Constitution; and in response to pressure from or in attempts to curry favor with groups seeking preferment or goods not obtainable either under the law, or through those practices of mutual benefit called the Free Market. What obscenities are created in the name of “social justice?” What could possibly be less just than policies destructive of initiative and based upon genetics?

David Mamet was once a Democrat, and thought better of it. Actually he thought long and deeply about it, read a lot, and turned his considerable writing skills to explaining just why he changed his mind. It is a perfectly delightful book, and as a lifelong Conservative, I learned a lot.

David Mamet is an American playwright, screenwriter, author,and director renowned for Glengarry Glen Ross (Pulitzer, Tony nomination). As a screenwriter, he received Oscar nominations for The Verdict and Wag the Dog. His books include: The Old Religion, Five Cities of Refuge, The Wicked Son, and a long list of books and movies, television shows and even radio dramas.

 The Secret Knowledge: On the Dismantling of American Culture,  is Mamet’s book detailing his conversion from modern liberalism to “a reformed liberal.” It was released in June of 2011, and I recommend it heartily.



Wise Words from Thomas Sowell: by The Elephant's Child

(click to enlarge)
 


“Social Justice” and Other Silly Ideas. by The Elephant's Child
January 27, 2011, 8:52 pm
Filed under: Capitalism, Economy, Politics, Statism, Taxes | Tags: , ,

Many economic concepts are counter-intuitive.  And that becomes a political problem.  It emerges in every campaign as “class warfare.”

The goal of the far left is “social justice.” They love the phrase, but explaining it is hard.  Things, they are sure, ought to be fair, and it is not fair if some people are rich and some people are poor.  It’s not fair if some people drive Mercedes and others have trouble buying a used car.  It’s not fair if some people live in big houses and others live in slums.  So “social justice” is to be attained by redistribution of income. It means not equality of opportunity, but equality of outcome.

The thing about redistribution of income for the left, is that it is to be accomplished by taking away other people’s money.  Many of those who are most concerned about “social justice” are notorious for their stinginess with their own money. Our current deficit and debt indicate how easy it is to spend other people’s money.

Income mobility in the American economy is one of the wonders of the world. A young person in America, according to Brookings economists Ron Haskins and Isabel Sawhill, needs only to observe 3 basic rules to  have a 75% chance of being in the middle class: 1. Graduate from high school.  2.  Get a job.  3.  Get married and wait until they are 21 before having a baby.

Americans don’t envy the rich, they hope to become rich.  Here in Washington State, which Obama carried with 57% of the vote in 2008, a proposal was on the ballot to add an income tax applicable only to individuals making more than $200,000 a year or families making over $400,000.  65% of the state’s voters opposed the tax. That’s not envy of “the rich.”

In his State of the Union Speech, President Obama felt compelled to raise the class warfare theme. Although he had just agreed to extend the Bush tax-cuts, he wanted to make it clear that he didn’t like it and would be back to raise taxes on the rich. Whether this is conviction or simply a sop to the far left is unknown.But long-range planning is very difficult when the government has a constant threat of higher taxes hanging over business.

Class warfare does not create jobs.  Attacking the rich or the successful does not create jobs. Government has no clue about creating jobs, they have made that quite clear.  They need to get out-of-the-way and let creative, hard-working Americans restore the economy.



The Stories Told to Justify a Very Bad Bill. by The Elephant's Child

The real reason behind ObamaCare, said Byron York in an interesting article in the Examiner:

It wasn’t just about making insurance more affordable. It wasn’t just about bending the cost curve. It wasn’t just about cutting the federal deficit. It was about redistributing wealth.

Health reform is “an income shift,” Democratic Sen. Max Baucus said on March 25. “It is a shift, a leveling, to help lower-income, middle-income Americans.”

In his halting, jumbled style, Baucus explained that in recent years “the maldistribution of income in America has gone up way too much, the wealthy are getting way, way too wealthy, and the middle-income class is left behind.” The new health care legislation, Baucus promised, “will have the effect of addressing that maldistribution of income in America.”

Former Democratic National Committee chairman and presidential candidate Howard Dean said, around the same time, that the health care bill was needed to correct economic inequities.  Democrats rate what they call “social justice” highly, for it gives them warm fuzzy feeling to “take from the rich to give to the poor.”

This is based on the idea, deeply favored by the Left and based on one of the biggest fallacies in economics, that an economy is a ‘zero-sum’ situation.  That there is only a fixed amount of money in an economy, and for one person to get rich, others must get poorer.  Lately the cause of people getting richer has been the technological revolution that is transforming the world.

“The Industrial Revolution,” pointed out John Steele Gordon, “produced so many new rich that Benjamin Disraeli had to coin the word millionaire in 1827 to describe them. Railroads, steel, oil, automobiles, the movies, television, all produced prodigious new fortunes.”

The dynamic American economy has always produced vibrant movement over the income classes.   The poor get richer, the rich get poorer.  Even the Forbes Magazine list has new entrants every year, while other names drop from the list. The poor may always be with us, but they are not the same people over time, nor are the rich.

Senator Baucus may just have been trying to encourage his leftist constituents,  to whom everything seems more virtuous if clothed in the cloak of wealth redistribution.



Water,water everywhere, but not a drop to drink. by The Elephant's Child

Sustainability is identified as the code word for eco-friendly policies, lower industrial production, lower personal consumption, economic equality and other measures of global “social justice.” City mayors and City Councils all over the country have been recruited by ICLEI– Local Governments for Sustainability.  Originally called the International Council for Local Environmental Initiatives — hence the acronym — the group is the product of a United Nations conference:  The UN World Congress of Local Governments for a Sustainable Future.  That conference, held in New York City in 1990 brought together delegates from 200 local governments and 43 countries.  They were united by a belief that cities do not need to wait  for national governments before taking action on global climate issues. (And the chance for a free trip to a conference and a chance for some good shopping as well).

Ambitious local politicians around the world are using ICLEI as an international platform that allows them to build their careers and quickly network with one another on environmental issues.  The international organization is headquartered in Toronto, Canada, and has 150 staff located in 11 offices worldwide.  (www.iclei-usa.org)

The Capital Research Center has done marvelous work in explaining the “wonders” of ICLEI and their vision of sustainability.  Seattle’s mayor Greg Nickels is the poster child of mayors who have bought into the ICLEI vision.

A 20 cent green tax on paper and plastic shopping bags as well as a ban on foam containers goes into effect on January 1, 2009. He recently shut down a couple of streets to keep people from driving.  The Parks Commission is planning to ban beach fires to prevent their contribution to global warming.  Utility ratepayers are encouraged to pay a little more on their electric bill every month — a “green” premium — to allow the city to “invest in” solar power pilot projects (Solar?  We can go months here without ever seeing the sun!).

Forbes Magazine ranked Seattle the “Most Overpriced City” in 2004 and 2005.  In 2008 Forbes called Seattle “America’s Most Increasingly Unaffordable City.”  The inflation rate at that time was 5.8%, the highest in the U.S.

At the prompting of ICLEI, and environmental activists,  bottled water is being banned by cities all over the country.  Ann Arbor, Albuquerque, Suffolk County NY, Takoma Park MD, San Francisco and  Salt Lake City.  The City of Chicago has used the trend as an excuse to levy a new tax of five cents per bottle of water regardless of size.  Washington State is looking into a statewide anti-bottled water law.  The proposed law would ban the sale of petroleum-based water bottles as well as prohibit state agencies from buying such products.  To top off the insanity, the bill imposes fines for the sale of petroleum-based bottles at $250 per day!

The website www.enjoybottledwater.org explores the depths and complete nuttiness of environmental water nannies.   Bottled water has been essential to saving lives in disasters large and small across the world. It is essential for firemen, necessary at athletic events, and useful for people on the road.

In June, 2008, the nation’ s mayors passed a resolution on bottled water resolving that:

The Conference of Mayors encourages cities to phase out, where feasible, government use of bottled water and promote the importance of municipal water.

Last year Seattle and Seattle suburbs were arguing over new sources for municipal water because of the danger of insufficient supplies. Then there is the constant chlorine contretemps which is why many people turn to bottled water, and of course the ferocious fluoride fuss.

If you are really interested in food police, a visit to Activist Cash to investigate the Center for Science in  the Public Interest which sounds like a wholesome group, is highly worthwhile.  It’s founder, Michael Jacobson argues that people can’t be trusted to make wise and healthful decisions on their own. “People tend to eat most healthily during hard times,” Jacobson has argued.  “Heart disease plummeted in Holland and Denmark during the most severe food shortages of World War II.  Records of English manors in the 1600s reveal that the peasantry feasted on perhaps a pound of bread, a spud, and a couple of carrots per day.”  And that, to Jacobson, is “basically a wonderfully healthy diet.”

So there you go.  Environmental activists want to control the water you drink and what you drink it out of, the food you eat, what kind of Christmas tree you buy and what you do with it when you are done with it, and then they want to control the big stuff too.

They want you to drive an electric car.  They want you to use only wind and solar power which will not produce enough electricity to maintain your lifestyle or keep your house warm. They want to ban all fossil fuel use, and keep all natural resources where they ‘naturally’ belong — still in the ground.  They would prefer that you do not reproduce, for they believe the world has too many people, and they are reasonably unconcerned about other people dying.  They want to do all this in the name of saving the planet from vastly over-hyped global warming that scientific observation suggests is a natural process of warming and cooling that has been going on for centuries.

Environmental activists are not particularly interested in the environment.  They care about control.  They care about eliminating capitalism and freedom, in some vague hope of a socialist utopia to come.



Bush and McCain each tried to reform Fannie Mae. Democrats Blocked them both times. by The Elephant's Child

First from the New York Times: Note the date!

September 11, 2003– The Bush Administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry,

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies.  It would exercise authority over any new lines of business.  And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken.  A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

From the Congressional Record: Again, Note the Date!

FEDERAL HOUSING ENTERPRISE REGULATOR REFORM ACT OF 2005
The United States Senate, May 25, 2006

Sen. John McCain [R-AZ]:  Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives.  In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets.  The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac. …

For Years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac — known as Government-sponsored entities or GSEs— and the sheer magnitude of these companies and the role they play in the housing market.  OFHEO’s report this week does nothing to ease these concerns.  In fact, the report does quite the contrary.  OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

Democrats blocked both attempts to reform Fannie Mae.

Thanks to Sweetness &Light which has printed these two articles in full.

Barack Obama is out trying to blame this all on the Bush Administration, as usual, and scare people as much as he can, — so that he can promise to “rescue” them.  But his solutions are the worst possible, and his speeches are irresponsible.

First Trust economists note that:

The most important thing to remember is that the emphasis belongs on the word financial. These financial market problems are not a result of general market weakness, otherwise known as a recession.  In fact, real GDP has grown 2.2% in the past year and accelerated to a 3.3% annualized growth rate in the second quarter.

The economy is not taking down investment banks; lousy lending standards and the excessive use of leverage are taking down investment banks.

This whole thing had its’ beginnings in a well-intentioned law during the Carter Administration, The Community Redevelopment Act, which was designed to encourage minority homeownership.  President Clinton, influenced by multiculturalism, encouraged it further by dictating where mortgage lenders could lend.  Tough new regulations required that lenders increase their lending in high-risk areas where they had no choice but to lower lending standards to make loans that sound business practices had previously rejected.  Clinton cronies Franklin Raines and Jamie Gorelick became multimillionaires through their supervision of the quasi-governmental agencies that came to manage the real estate market in America.

Low interest rates in the marketplace persuaded Investment banks to purchase packages of sub-prime loans, and risky decisions and a little greed, of course, let them use too much leverage.

This is not the first time that Investment Banks have failed and disappeared. E.F. Hutton, Goodbody & Company, and Kidder Peabody are three of the vanished.  Today’s Investment Banks did not do anything against the law, they just exercised bad business judgment.

Unemployment in the economy is largely confined to the housing crisis with home builders and related trades suffering, as well as the auto industry and related trades and now there will be some investment bankers on the unemployment line.

They are in trouble because they are affected by unfortunate laws made by a Congress that does not always understand what they do. Remember that most congressmen never read the bills that they sign. Congress has long been inclined to well-intentioned regulation to help the poor and save the planet.  They fall in love with the goals, and never consider or learn about the consequences of what they do.

It seems kind to help a poor family get into a house larger than they can really afford, with less of a down payment, but it isn’t really kind.  Kindness would be helping them to learn how to work hard and save their money, and how to move up to better jobs. Government can make it easier for private industry to build smaller, more affordable houses, without telling them what kind of houses to build, where to build them and under what qualifications to sell them.

The great problem with Socialism is their pursuit of “social justice”.  They believe that they can make the poor — not poor — by taking money from the well-to-do and giving it to the poor.  Never works.  Though there is extraordinary mobility in our society, those who are induced into dependency on government are inclined to lose that mobility.

Barack Obama, in all his economic plans, is extraordinarily invested in the pursuit of “social justice”. That should be a serious warning.




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