2012 - Freedom at the Crossroads

It has become abundantly clear that Americans are facing a pivotal choice in the 2012 election. On one side are those who would like to see America preserve its original premise – a place where liberty is paramount, and where everyone is free to pursue their dreams and aspirations, constrained only by their own skills, intelligence, drive to achieve, and willingness to risk. But without a guarantee of success.  In the original America of free market capitalism, government is established as a neutral “umpire” – limited to protecting individual liberty, not an all-powerful arbiter of “fairness” that takes from one citizen in order to give to another.

On the other side are those who seek to remake America into a European-style socialist state, where a certain standard of living is viewed as a “right” and government exists for the purpose of providing it, primarily through the tax code. Those with this view see nothing wrong with government taking, by force, the lawful earnings of someone they deem “too rich” in order to give it to someone else that they see as more “deserving” – that to do so is nothing less than legalized theft bothers them not one bit.

In 2008, then candidate Obama inadvertently revealed his own deep-seated socialist leanings when he blurted out to Joe the Plumber that he wanted to “spread the wealth” – he seemed to ignore the obvious: it’s not his money to spread around. More recently (September 21, 2011), Obama senior adviser Valerie Jarrett stated, on video no less, that “we have to give people a livelihood so they can provide for their families” and “that’s what government is supposed to do.” If that statement does not send chills down your spine, then you might want to step back and read the Constitution.

Nor do America’s socialists seem to know, or care, that free-market capitalism has produced the greatest prosperity in the history of the world, while socialism and communism have resulted in poverty, economic stagnation, and death, often by starvation. In the 20th Century alone, more than 50 million people were killed by socialist governments, most notably Stalin’s Russia and Mao’s China.

History is filled with examples of the repeated failures of socialism, even when attempted in Western democracies. For example, shortly after World War II, the British people elected Clement Atlee, a radical socialist, as their Prime Minister. He immediately nationalized industries, created government healthcare, and instituted confiscatory taxation.

What followed were 35 years of economic stagnation and collapse, exacerbated by trade-union domination which strangled business, and Soviet style central government planning and control of the private sector. Unfortunately, since England was still a major player on the world economic stage, much of the developed world followed suit, adopting many of the same socialist policies the UK had put in place.

But in 1979, everything changed. The British people elected Margaret Thatcher Prime Minister, a visionary leader who was the polar opposite of Atlee. In what can only be called a political and economic whirlwind, Thatcher first returned two thirds of the state run industries to the private sector, and deregulated others.

Perhaps even more importantly, Thatcher cut taxes, lowering the basic tax rate from 35% down to 25%, and cutting the top marginal rate from 98% down to 40%. Long before Thatcher’s time, the Beatles song “Tax Man” was written specifically as a protest against the onerous tax burden place on the British people. It was also one of the reasons that the “Fab Four” left England and came to America. They simply couldn’t justify turning over virtually all of their income to the government.

But alas, Maggie Thatcher is no more, and England, as well as much of the developed world, has reverted to increasingly socialist policies, with predictable results.  The problems faced today by Greece, Spain, and many other European nations is a direct result of their adopting ever more socialist policies – many are nearing outright bankruptcy.

American neo-communists even ignore (or distort) the lessons learned right here at home. In 1980, shortly after Britain’s Maggie Thatcher took office, Americans elected another free market supporter, Ronald Reagan. And like Thatcher, Reagan cut taxes. During his administration, the top marginal tax rate was cut from 78% to 35%. Reagan had learned firsthand how the folly of “taxing the rich” ultimately hurts everyone, often the lower income earners most of all. While an actor in 1961, when the top marginal rate was an outrageous 91%, he recalled that he quit working in May, knowing that he would keep only 9 cents out of every additional dollar he earned.

He later remarked that it was an economic epiphany, because he realized that many of the stagehands, technicians, and other support people in the movie business were dependent on him – if he didn’t work, they didn’t work. He never forgot the lesson that taxing the highest earners is a huge disincentive to work, which invariably hurts everyone down the line who is part of the enterprise.

Perhaps most ironically, it was the adoption of free-market capitalism that was the seminal event in China’s dramatic economic growth. In 1983-84, Deng Xiaoping took the unprecedented step of introducing free market, private enterprise principles into what was at the time a purely communist system. He cleverly named it “market-socialism” to mollify the communist hard-liners, but the fact remains that he “de-collectivized” the previously state-run farms, and promoted individual property rights through long-term land leases.

Previously, China’s peasant farmers had always been forced to farm solely for the state. Not surprisingly, they didn’t put forth too much effort in doing so. Why would they? As long as there was nothing in it for them, there was no point in any effort beyond the minimum required. But by giving them long-term leases on the property, they set up a system whereby the farmer could personally profit.

As a result of China’s first foray into private property rights and the beginnings of free enterprise, the peasant farmers substantially increased production. By increasing his yield per acre, the farmer could pay off this lease, and everything above their production quota became profit. Using simple hand tools, on gardens no bigger than the average American back yard, they produced 500 Million tons of grain, a huge increase over the old state controlled system.

Oddly, while former hardcore communist nations like Russia and China are recognizing the benefits of free market capitalism, Western nations, including the United States, seem to be sliding deeper into debt, crushed under the burdens of taxation, borrowing, and deficit spending, all in a futile attempt to maintain an unsustainable welfare state.  Obama and the Democrats push for endless extensions of unemployment benefits, which do nothing but discourage people from looking for work.

Liberal Democrats relentlessly demonize the oil and coal industries that provide most of our energy, strangling them with regulations and taxes, under the guise of combating an imaginary threat (“climate change’). At the same time, they get in bed with corporate parasites like General Electric and the Ethanol cabal, all in the pursuit of some “green” fantasy – the Solyndra scandal is merely the latest example of eco-insanity, not to mention the rampant corruption that infects the Obama administration.

But sadly, to the “progressive” true believers, neither facts nor economic reality nor history will change their minds. They are convinced that their looting of the wallets of our most successful citizens in order to redistribute wealth is “compassionate” and therefore justified. They truly believe that you are too stupid to know what kind of light-bulbs you “should” have in your home – they, and they alone, know what’s best for you.  And no matter how immoral, misguided, and economically disastrous their policies turn out to be, Obama and the Democrats will never stop. Not ever.

Only you can stop them.

In 2012.