• For a market to be prosperous, both consumers and producers need to be free to act in their best interest. Our current market enables substantial freedom for consumers, but not for producers. Government imposed regulations, controls and mandates have substantially driven up operating costs for producers - increases which are passed directly to consumers. Most Americans sense the freedom they have as consumers, but are ignorant of how, and to what detrimental extent, government regulation and intervention stifles producers. Failure to consider the producer aspect leads them (along the encouragement of statists pining for power) to incorrectly blame the “free market” as faulty and inadequate. They are right to advise doing something, but wrong in the something they condone (increased government intervention). The solution is to free the other essential realm in the market - the producers.
  
  Consumptive Freedom + Productive Freedom = Prosperity
  Consumptive Freedom + Production Regulation = Escalating Costs/Declining Value
  Consumptive Regulation + Production Regulation = Market Stagnation

• Americans have tolerated (and confessedly bought into) the welfare state out of altruistic default. We’ve dealt with more and more wealth being confiscated in countless new ways to fund seemingly endless streams of income redistribution. We can only hope that enough people will sense that this collectivist endeavor is a different beast altogether. Socializing medicine differs in that it moves beyond simply confiscating money through taxation to buy other people’s widgets - it effectively (in time) stifles and stagnates the entire widget market for everyone.
• Until recently, I never imagined a day would come where I’m actually considering which of my physician friends would function as my “Black Market Doctor”.
• The only way a private business gains any kind of immunity to economic forces is through some form of government influence impinging upon it. Without such influence, businesses (regardless of size) are subject to consumer choice. They may have immense capital assets and infrastructure, but they still have to keep the customer happy or in time they’ll go bankrupt. This is the key difference between economic and political power - only the latter, the power of government, can be legally forceful. The only way insurance companies, the most commonly demonized player in this scenario, obtain any power to operate in a manner which may appear to be immune to market forces is as a result of some government distortion of economics. The demand for medical expertise, usually through insurance coverage, is so high that any lack of efficiency or uncompetitive offerings would present an opportunity for other players in the market to seize the chance for expanding their market share. However, if some unnatural force prevents new players from entering the market, or prevents existing competitors from acting upon the opportunity, then the market goes unchecked and prices may rise while quality of service declines. This should sound very familiar.
• Insurance companies are typically condemned for the amount of profit they earn, but this can only be an issue in a mixed-economy, i.e., an unfree market. A producer can increase profits by either raising the market price of their goods to consumers, or lowering their costs of production through efficiency - the high-price method, or the low-cost method. In a free market, competition urges producers to compete on the latter, because competing on high prices would be contrary to the law of supply and demand. This competitive dynamic leads to lower prices, because any savings from the low-cost method can be used to gain a competitive advantage and are transferred directly to consumers. But, when that competitive dynamic is retarded or eliminated by barriers to market entry, or oppressive regulations that stifle competitive pressure, prices tend to trend upwards. This escalating trend that appears immune to supply/demand is what grants certain businesses the facade of power - political power. The only way insurance providers, or any business in any market for that matter, can obtain political power on consumers is when equipped with government assistance.
• When prices in a given market escalate at a higher rate than inflation without a comparable increase in value to the consumer, some force is distorting the economics. That force could be a natural one, e.g., a shortage in some vital resource (labor, materials, etc.), or an unnatural one - which, in a mixed-economy, is most often government intervention in some form or manner.

Leftists are in denial. Sundry media chumps, politicians, even center-left leaning friends and acquaintances are adamantly opposed to tossing out the labels Fascism or Socialism. The thought of explicitly naming the deadly fact that they so earnestly long for is very unpopular and met with passionate challenges to justify such declarations.

Have we really become what they dream of, yet dread to name? I think this question by Myrhaf explicitly drives home the point:

If the state is firing CEO’s and telling businesses how much in bonuses they can get, how is this not fascism? At what point does a mixed economy that is heading toward fascism actually cross the line to fascism?

Driven by the primacy of consciousness, where reality is only a arbitrary product subject to their mental discretion, so long as they don’t call a spade a spade it can remain any object of their choosing. Such evasion enables them to still consider the irrational altruist-collectivist-keynesian nightmare that America has devolved into as a progressive society of hope, so long as they don’t label it with any unbecoming title. Conforming to their moral code, altruism, collectivists seek all the essential aspects of Socialism, but implicit, lingering filaments of reason and rationality demand that they stop short of its full embodiment. They realize that the whole charade rests on the fuel of individual freedom. They want the benefits of freedom but also to wrangle it with statist power, to enjoy the prosperity of Capitalism but under the control of tyranny, to have their cake and eat it too.

Historical fact places them within a precarious quagmire - fact vs. wish. The brutal and undeniable record of statism has ingrained negative connotations in the minds of most luke-warm leftists such that explicitly applying Fascist, Socialist and Communist labels to America would present very uncomfortable contradictions - ones that would be impossible to evade.

As a result, they must try to find a way to camouflage the attack, both to the victims and themselves. One tactic is to think up a lofty title wreaking of sincere benevolence - Universal Health Care, Smart Start, Paycheck Fairness etc. - the other is to debate inessential technicalities in order to persuade that our version of collectivism isn’t pure, or represents a unique approach to establishing stagnant misery.

Societies are in constant movement either towards or away from freedom - in almost all cases away. If we’re not moving towards freedom and the individual, i.e. prosperity, we’re heading towards statism and the collective, i.e. misery. Since this country has long abandoned the former, only the latter remains as our final destination.

Does America more closely resemble laissez faire Capitalism or Fascism? I think without any question the latter.

Unfortunately I stumbled upon this gem by Alan Blinder, which is either satirical journalism at its best or just another delusional leftist rant. His purpose is to challenge the purportedly mouth-breathing notion that Obama is socialist.

Considering an objective summary of Obama’s words, positions, history and actions, how anyone could question this fact is perplexing.

Ever since President Barack Obama released the budget last month, we have been hearing a fusillade of criticism claiming that the president, contrary to previous advertising, is not a centrist, but a “leftie” intent on leading the country down the path of socialism.

Let’s see. Socialism means public ownership and control of businesses, right? So which industries does the president propose to nationalize?

The short answer is all of them - I would venture to guess. But, he’s smart enough to know that such a transition cannot be thrown on the country in one fell swoop, so he’ll push just up to the point of chaos, back-peddle a bit, reposition, repeat. This is the standard tactic of prudency for aspiring tyrants.

Right off the bat we see Mr. Blinders obtuse definition of Socialism which he seems to be using in an extremely narrow sense. Are we to assume that by his standard a nation that is fully Socialized save one Grocery store in some American town is not Socialist?

A more accurate gauge is to evaluate the extent that a nation considers individual rights as sacred pillars of freedom.

Socialism is the sacrifice of the individual to the collective. To the extent that such notion is a nation’s guiding premise, that country is Socialized. No, America isn’t fully Socialized. And no, Obama hasn’t yet prescribed full Socialization, but the very nature of such a society is recursive and self-perpetuating. Controls breed controls - and once the the footing is compromised, the path is downhill unless the fundamental philosophical thrust of the nation is altered.

Banking? Well, no. Secretary of the Treasury Timothy Geithner has made it clear that he opposes nationalizing banks, despite much outcry from the political left — and even some from the right — to do just that.

Again, no - banks aren’t fully nationalized, but the wedge is well in place. This, and the most recent administration have redistributed looted wealth in the form of subsidies to corporations. The subsidies came with invasive stipulations. The subsidies weren’t optional, but mandatory. Even if a slave owner limits his restrictive tenets to only a few prohibitions, he’s still in control.

What about health care? Doesn’t Mr. Obama want “socialized medicine”? No. He wants to reform the current system so that it costs less and covers more people. Disgracefully, the United States is the only advanced nation in the world that fails to cover every citizen — even though we spend vastly more on health care than other nations.

Some reformers want the U.S. to adopt a single-payer system like other countries, such as “socialist” Canada and England — which run firmly capitalist economies, by the way. But regardless of whether single-payer is a good idea, it’s not Mr. Obama’s. His health-insurance reform plan emphasizes choice (keeping what you have if you like it), greater efficiency (partly by utilizing information technology), and portability (your health coverage will follow you from job to job). Which part of that is socialist?

Exactly how can he reform it without violating the rights of all parties involved? What’s disgraceful is that America has sunk into the altruist-collectivist abyss so far as to condone and prescribe threatening one man’s life to support another - by force. And exactly why do you think we spend more? Because we’re already subsidizing the parasites in this country who won’t support themselves. Doing so on a wider and more explicit scale will only drive costs up and value down, not to mention the crippling effect that nationalization will have on the competitive and creative forces of innovation. To the extent that a man is rational, he will not work under compulsion.

As far as England and Canada (or any country in the world) being Capitalist, surely you jest Mr. Blinder?

As the law now stands, when a family that does not itemize deductions on its tax return donates $100 to its favorite charity, the donation costs the family $100. But when an itemizing family in the 25% bracket donates $100, it costs them only $75 after tax. And when an itemizer in the 35% bracket donates $100, the after-tax cost is only $65. Thus the richer you are, the less it costs. Is it socialistic to say that seems a little backwards?

Not necessarily socialist, but it’s preposterous to imply that an individual who diligently complies and attempts to wrangle our nightmarish tax code shouldn’t be rewarded. This is the same line of thought that claims it’s an injustice for an individual who doesn’t pay taxes to not get a tax refund.

So where does all this leave us on the road to socialism? If Mr. Obama is able to get all of these proposals through Congress, the U.S. will have a fully private banking system, propped up with temporary government support; a uniquely American health-care system that covers virtually everyone; and a somewhat more progressive income tax.

If this is socialism, then let’s make the most of it.

Fully private eh? Except for thousands of pages of regulations, a mandatory phony currency, and that pesky Federal Reserve pulling the strings that drive the whole show. Temporary huh? Would that be “income tax” temporary, or “public education” temporary? Uniquely American? Except that it’s rooted in the same poisonous altruist-collective nonsense that leads every subscribing country to stagnant mediocrity, poverty and ultimately destruction. Our particular blend of the freedom/statism concoction may be non-essentially unique, but the course will lead to the only possible destination - misery.

Mr. Blinder, if you prefer not to call our president a Socialist, how about this? He’s a collectivist thug that stands to contradict and trample every founding principle of America. Does not using the “S” word make you feel better?

His ideals, like yours, represent the cloudy, contradictory fog of nonsense that has the greatest nation in the history of mankind circling the drain.

This read is astonishing.

This raises a truly alarming question: can capitalism and democracy survive side by side?
[edited for relevant concision]

His conclusive question is valid, but not for the misguided notions he presents.

The answer is clearly no, Democracy and Capitalism are not compatible.

Capitalism is a system based on individual rights where Government acts to protect such rights as the sole agent of retaliatory force.

Democracy is mob-rule. Whether the gangs involved are political parties, lobby groups or grassroots organizations - they are all competing to condone and prescribe illegitimate government force to achieve their ends. Such goals can only be achieved by encroaching on other individuals right to life, liberty or property and cannot be accomplished under a system where said rights are sovereign.

The author seems to resort to the tired old false dichotomy of Keynesian meddling vs. full Statism, i.e., Socialism/Fascism vs. Communism - neither is the path to Capitalism and the prosperity that results.

America is not and was not constructed as a Democracy but rather a Constitutional Republic. To borrow Ayn Rand’s words -

The American system is a constitutionally limited republic, restricted to the protection of individual rights. In such a system, majority rule is applicable only to lesser details, such as the selection of certain personnel. But the majority has no say over the basic principles governing the government. It has no power to ask for or gain the infringement of individual rights.

Also, contrary to his apparent penchant for central planning, Keynesian madness is precisely the tactic (facilitated by a phony currency) responsible for all previous, current and our impending economic turmoil because it involves wholesale trumping of individual values, choices and accountability and the attempt to evade reality in a economic context.

I’ll end with the thoughts of Myrhaf:

The only solution to the entire crisis is the one thing our statist politicians cannot tolerate: individual rights. Get the state out of the economy and let free individuals dispose of their property according to their best judgment. No, Obama and his buddies want no talk of individual rights; they want the people to think of themselves as part of a collective controlled by the state.

Mob violence is a perfect manifestation of Obama’s collectivist vision of man’s nature. His altruist-collectivist-statist premises have no room for free, rational individuals trading peacefully with one another without interference from their masters in Washington, D.C.

Add to the already impressive list of potential economic threats the total confiscation of retirement accounts.

RALEIGH — Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts — including 401(k)s and IRAs — and convert them to accounts managed by the Social Security Administration.

Triggered by the financial crisis the past two months, the hearings reportedly were meant to stem losses incurred by many workers and retirees whose 401(k) and IRA balances have been shrinking rapidly.

The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.

……

The majority of witness testimony during recent hearings before the House Committee on Education and Labor showed that congressional Democrats intend to address income and wealth inequality through redistribution.

On July 31, 2008, Robert Greenstein, executive director of the Center on Budget and Policy Priorities, testified before the subcommittee on workforce protections that “from the standpoint of equal treatment of people with different incomes, there is a fundamental flaw” in tax code incentives because they are “provided in the form of deductions, exemptions, and exclusions rather than in the form of refundable tax credits.”

Even people who don’t pay taxes should get money from the government, paid for by higher-income Americans, he said. “There is no obvious reason why lower-income taxpayers or people who do not file income taxes should get smaller incentives (or no tax incentives at all),” Greenstein said. [emphasis added]

Income redistribution has so many faces.

Stumbled across this image on wikipedia with the accompanying caption:

“Without a gold standard, governments can print as much money as they want, destroying wealth through inflation. A German woman in 1924 feeding a stove with currency notes, which burn longer than the amount of firewood they can buy.”

Is this where the US is heading? The markets aren’t safe, being subject to the immeasurable economic destruction wreaked by the planners. Savings accounts can be sucked dry by wreckless money printing.

Is there a safe investment for wealth? Land maybe?

Courtesy of Titanic Deck Chairs:

Great post by Myrhaf as a part of his series on the evasion festival in Denver:

Biden said we are losing the American dream. Right — we are. Why is that? Why was the American dream strong in the 19th century and now it is in trouble? Could it possibly be the growth of the welfare state? Could it be that replacing individualism with collectivism destroys the American dream? Could it be that everything the Democrats stand for destroys the American dream?

The dream has been hijacked by a complex rebellion against reality which aims to fulfill a desire to enjoy the benefits of an exciting and fulfilling life without the requisite costs of thought, action and justice. In the last 50 years the left discovered that, courtesy of the deadly combo of altruism and non-objective law, they could hack into the law of causality. They realized swinging the altruistic (mob-rule) club hard enough could indeed create a scenario where one can wallow in convenient passivity while the energy and productivity of others provides the means. As long as the wallowers and their henchmen didn’t push too hard the producers would retain their desire to live, and would stay in the game despite the gun in their side.

I see it daily - intelligent and creative men who are driven to think, produce and succeed who think nothing about the maze of theft they’re herded through along the way. If only they had the clarity of mind to stop supporting their own destroyers.

The Democrats are a party of ignorant altruists. At this late date, you have to be stupid to want more government control over the economy and to think it will work. There has been much stupidity on display for the last three days. I think deep down the more intelligent Democrats understand that socialism will not work, but they evade in order to keep the impracticality of socialism unclear and undefined.

I think a large percentage have an intuitive sense that full Socialism won’t work, but see “Socialism-Lite” (slightly more statist than our current system) as the answer. I think what’s unclear and undefined are the exact ingredients of the “lite” version. They know they want to control everything, but in order for their project to continue they realize they must show some restraint. They’re constantly prancing along the line that represents the breaking point. The more nihilist variants disrespect or disregard the threshold. They subscribe to the mindset in full, but don’t have the sense to realize that a shrugging by Atlas would end the game. The more “practical” segment has enough sense to keep “extremists” in line because they realize the producers must be alive and participating in order for the whole production to work.

change: verb - to further pervert the nature and purpose of government by using such power to force a collectivist vision on its citizens.