Wednesday, January 22, 2014

Thomas Sowell: "Fact-Free Liberals"

I rarely repost others' work but I find this article, Fact-Free Liberals, fabulous.

In the article, its author,Thomas Sowell, cites example after example of liberals' rhetoric and public policy recommendations belying the facts and data.

23 comments:

Dave said...

Sowell left out two things in an otherwise fine article.

1. Switzerland has its own version of Obamacare, which is even more radical than the one we have here.

2. Switzerland has a very generous 'Three Pillar' government pension system that ensures comfortable living conditions in retirement.

Rex said...

Great article...

One problem I see with libertarianism is that we no longer live in a world which is primarily defined by nation-states. Many of the economic arguments set forth by Sowell are unfortunately rendered less valid by this fact. People, business and money flow rather freely from one country to the next. China has a booming economy, but in order to compete with them, bring more jobs back home, boost manufacturing, etc. we would have to eliminate the minimum wage, strip away "troublesome" environmental regulations, trample on worker rights, devalue our own currency, set up loads of tariffs and quotas, do away with quality control, etc. In other words, make America more like China. I've lived in China, and I can assure you, the air pollution alone is enough to dissuade me from living in many of their cities. Granted, I think the US could do with a big chunk of deregulation, much of which favors special interests, but when the real unemployment rate is so high in the US and the cost of living keeps going up with wages staying stagnant, without welfare, many hardworking people would be on the streets. I agree welfare should never have taken place to begin with, but now that we have it...it's not going away. The only thing that might make that possible is bringing more jobs back to the US. I don't think special interests will allow it now that they are comfortably installed in China and other countries...

Marty Nemko said...

Hi Rex,

The question is, "how can we bring jobs home" when the cost of hiring an American is so high vs offshoring and vs automation--e.g., roboticized fast food workers, drivers, retail clerks, etc? And if govt increases minimum wage to a living wage, more businesses will go out of business leaving more people without jobs.

Rex said...

You're right about the minimum wage part. What do you think would be acceptable policy-wise to lower the cost of hiring an American worker?

Dave said...

Hello Dr. Nemko and Rex,


I think China will have to deal with the same challenges in the future. The reason some multinational corporations are looking at other places is because of the rising labor costs in China. The Chinese are consuming more meat and buying more cars than ever before. I have never been to China, but I can only imagine how different Shanghai is today, compared to the Shanghai of the Maoist/Cultural Revolution era; and that era wasn't that long ago. I'm sure the standard of living has vastly improved in the major cities since then.

Multinational corporations are now looking to Vietnam and other Countries in Indochina for cheap labor.

Marty Nemko said...

Even if the minimum wage were $1.00 an hour, I'm not convinced it would convince employers to hire: the cost of benefits (Obamacare, Workers Comp, Social Security, ADA, FMLA, risk of employee lawsuit, etc) make all but star Americans unemployable, especially when ever more work can be offshored or automated.

Dave said...

But widespread unemployment and underemployment? Employers still need markets for their goods and services. I don't see how a free market system can function under those conditions. Health care, higher education, the auto industry, etc. -- these industries are pricing themselves out of the market.

You mentioned 'Simplism'. Simplism is a lifestyle, not an economic system.

Rex said...

Dave, I don't think corporations are concerned with the general welfare of society as a whole. Executives have too much to think about as is; they don't have the time/energy/incentive to consider how to improve the US economy as a whole. They react to perceived demand. If there is no demand for a certain product/service because the price is too high, they will scrap it and make something else. If there is not enough demand for anything they can make, they will find other markets ie concentrate more on emerging economies.

humanmammal said...

I read a couple of his books and found some of his arguments convincing. However when he oddly defends Sarah Palin like she's a figure head of some serious think tank that's partisan hackery.

And what's with his statistics: how is it a serious barrier to Illegally buy guns in a nearby state if one's state laws are moderately restrictive? And what about the fact that our fatal gun usage is multiple times higher than in any other industrial country?

More confounding of cause and effect: minimum wage in Switzerland and Singapore is absent because of their full employment (due to limited population and other factors ) not the other way around.

Paying people more will lead to higher consumption (since Americans save little) which would increase hiring (so at most it's a wash in regards to unemployment)

Lastly , who cares if rich loose their fortunes when 85 billionaires control half of world's wealth. As who cares an absolute monarch is deposed every year, if absolute monarchy persists. Neither absolute monarchy nor extreme oligopoly have a place in a modern democracy.

Dave said...

Good point, human animal. It seems the Gilded Age has returned. If the top 5% own 60% of the nation's wealth, then why shouldn't they pay 60% of the taxes?

Marty Nemko said...

They already pay 60% of the taxes. The left wants to soak them more.

The larger issue is that the top 5% delayed gratification, went to school longer, added enough value that people were will to pay them more, they contributed more to society. Why should they be treated the same as someone who has largely been a deadbeat?

Dave said...

95% of the population are deadbeats? I don't see anything wrong with the top 5% paying in proportion to the their wealth. Besides, the wealthy have connections and old money. That and the Ivy League diploma are the tickets to Lexington Avenue and Washington.

Dr. Nemko -- In the era of the 'Red Menace' -- the USSR -- our financial and political elites went out of their way to extol the virtues of free market capitalism, to prove that it was a fair system. They did this because they were scared. When they later realized that there was no chance that Soviet socialism would ever "bury" the West, they got complacent.

Maria Lopez said...

What if their money is inherited? What if they were capable of making great contributions but are no longer capable of this because of damage due to aging, motor vehicle accidents, or dementing illness?

Also, you should they should not be treated the same as others. This is different than saying that progressive taxation is bad. This is kind of trollish on my part but that idea suggests that they should be the only ones allowed to wear certain clothes or that they should be addressed by special titles.

While this seems odd in this day and age in England in Elizabethean times it would be odd at all.

Marty Nemko said...

I did not mean at all to imply 95% are deadbeats. What I'm saying is that your comment implied that a major societal contributor is entitled to no better treatment than a deadbeat.

Dave said...

Well, I didn't mean that. I do think extremes should be avoided.

There are too many problems with self regulation. Take the banking industry, for instance. The tax payers had to bail out those banks. The tax payers were punished for the bankers' reckless behavior.

Social/family breakdown and self-regulating industries that do not operate in the interests of the government and the governed, weaken the nation-state. I'm wondering if state capitalism will replace the free market system by mid century. It seems to work for the Chinese.

Serge said...

(Also used HumanMammal username above)

While rich do seem to pay a disproportionate amount of their income we have to remember the huge amounts of wealth super rich hold. And for sure the 85 people who own half of the worlds wealth don't pay even a fraction of world collected taxes .

Even a Forbes editorial that typically panders to the rich acknowledged that while the inequality is necessary for the economic progress and innovation. The current levels of economic inequality are undesirable. And defusing the extreme wealth would have created many new millioners and billionaires.

Indeed, while some inequality is unavoidable and even desirable, extreme inequality could lead to economic stagnation and lack of innovation. The industries that serves the rich and very rich could not drive solely the economic engine if industries that serve middle class die off due to the disappearing of the middle class.



Maria Lopez said...

I was thinking about how we judge rich people. Often it has relatively little with how they got their money and more with whether or not we agree with their politics together with whether or not they do cool stuff.

For example George Soros and Koch brothers are disliked by certain people for what they fund, not for how they got their money.

I found Elon Musk interesting because he has the eccentric desire to go to Mars and I found James Cameron interesting because of his dive to the deepest part of the ocean.

Bill Gates was hated by some in computer industry because they felt his shrewd business practices allowed him to out compete people who made better software but many people like him for the health improvement efforts of the Gates Foundation.

I would like to meet Larry Ellison, not because I care deeply about Oracle, but because I'm interested in Japanese art and martial arts and he has a large collection of katanas.

And so it goes. Unless a rich person is clearly a thug or a crony capitalist, most folks aren't that interested in their work for the same reason that most people don't want to spend a lot of time talking about scan tools, sway bars, and exhaust manifolds.

Anonymous said...

Marty, the issue I have is this. How much money, fame, adultation, etc. do these people who delayed gratification and made all these awesome goods and services need before they will feel adequately compensated?

Your words suggest that they have to keep receiving more and more so they will feel 'rewarded'. Well, what kind of rewards are there besides the vast amounts of wealth they hold even after taxes and the many awards they get from prestigious institutions (medals, honorary degrees, etc.)

What should we do? Make them nobility? Exempt them from any and all taxes? Demand people bow their heads while in their presence? Pardon the hyperbole and exaggeration but I don't see any other way to express it.

Marty Nemko said...

I am not opposed to some income redistribution from the quite rich. I agree with you there. The problem is that to pay for other redistributions (e..g, raising min wage, extending unemployment) it is the middle class that must pay---even if we tax the rich at 100%, it's nowhere near enough money to pay for all the already enacted let alone proposed redistributions.

Anonymous said...

@Rex: The way I see it is that we have no choice but to become China. Companies exist to make a profit for their owners. Everything else is incidental. For better or for worse, American business has no obligation to American society at large.

Unless average Americans want to do the long and hard work of starting companies to compete with these giants, we have no choice but to be like China. That means we'll have to repeal all the New Deal legislation from the early 20th century, repeal all the regulations, and slash corporate tax down to almost nothing. On top of that Americans will just have to accept whatever the owner offers because we simply have no power to fight anymore. We're going to have to live with much much less so we can survive. It is what it is.

Dave said...

Most recent Anonymous,

I don't think that will happen. If we were to reach that point, whole industries would probably be nationalized. A future of gross inefficiency and shoddy products and services would be preferable to the one you describe.

My question: When will we get to the point where unemployment and underemployment become major national security issues?

The United States is a global power; it is a country that, for nearly seventy years, has projected power on a global scale politically, economically, militarily, and culturally. America's prosperity has been the force that keeps this global superpower operating. If this country is to maintain this unipolar world system it has created, its people must continue to believe that their country is still that "city on a hill."(Matthew 5:14) Yes, I am touching on the providential worldview that seems to be ingrained in the American mind/psyche; a worldview held by the Puritans. For more than two hundred years, we have heard the words 'providence' and 'destiny' from the mouths of the presidents (also used in Puritan sermons). That providential worldview has kept the American spirit alive and has made this country a beacon to all the nations of the world. If it dies, the American spirit will die with it. America will only be shadow of its former self. Marty's father and several members of my family that survived the Holocaust, came here not only to rebuild their lives, but to restore their dignity.

If the United States is to continue on with the legacy left by the Founding Fathers, it must continue to recognize man's worth, his dignity and his natural rights -- even if it can no longer be a superpower.

Will we witness another "end of history" moment?

Anonymous said...

@Dave: I wish I could share your sentiment. The thing is that China doesn't have to nationalize. China got Apple by giving it the red carpet treatment. China built the infrastructure and provided the personnel Apple needed at its own cost and then let them do whatever they wanted. It's funny that a Communist nation has become a better capitalist than the rest of the world.

And that's the reason why big businesses are calling the shots now. They have enough money and influence to make governments beg to have them. Many of these businesses will take a financial hit at first, but then will simply see America as a dry well and focus on selling in other markets. In their minds, we need them far more than they need us. To paraphrase Animal Farm: we're all equal but some are more equal than others. Money buys a better 1st Amendment for business, which is now also a 'person'.

I'm no Socialist, but only government really had the power to keep certain overly ambitious entities from going too far, but that time is long gone.

End of History? I think so.

Anonymous said...

Dave, you may be overlooking the fact that "this country" and its military power are there with the consent of a small ruling elite who clearly don't share the same sense of urgency around keeping the US competitive along non-military dimensions. Individuals' loyalties to the US are dwindling as rapidly as we are dumbing down and bulking up. The large financial interests are totally stateless; they are served by low global production costs regardless of which nation's middle class is hollowed out to accomplish that. We go to war for reasons that are never articulated, and few even bother to ask why. We Americans are answering someone's call, just not Uncle Sam's. Come to think of it, when was the last time you even heard anyone refer to "Uncle Sam"?

 

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