Progressives leaving sorry legacy

By Ron Knecht

What caused the financial crash of 2008, the recession and the continuing hangover of slow and negative per-capita real economic growth? What are the prospects for the future?

Because the crash involved high-profile financial firms and occurred mainly in capital markets, early popular explanations rested on simplistic narratives of deregulation, fraud and private-firm management error. Fraud and error were, indeed, exposed in the blow-up, as is typical of financial crises — but they were not causes.

Moreover, deregulation is a false explanation, because the crash, recession and continuing malaise were caused more by government excess in monetary, credit allocation and housing policies, plus loose fiscal policies. There really has been little deregulation and government forbearance.

For the foreseeable future, long-term slow and even negative growth is probable due to accumulated and still growing excesses in the United States, Old Europe and Japan in:

• Public spending, taxes, deficits and debt.
• Monetary and credit policies.
• Regulatory overreach in health care and insurance, labor markets, energy, environment, public health and safety, education, telecommunications, anti-trust, etc.

New economic research shows that today’s high levels of public debt will cripple economic growth and employment and likely ignite inflation. Loose monetary policy is being used as an offset, but that will fail sooner or later.

Coupled with population declines already underway in many countries and those that will follow in many others, — developments that were also express goals of 20th century progressives — these policies and problems suggest a long-term future here and abroad of:

• Slow economic growth (perhaps often negative) and high unemployment.
• Low real returns on investment and thus delayed retirements and lower pensions.
• Likely and perhaps severe flareups of inflation in the next decade and bankruptcy of health insurance systems thereafter.
• Continuing and maybe increasing social discord as a consequence of these trends.

As public-sector fiscal and regulatory excesses grew in developed economies throughout the 20th century and the worldwide demographic implosion took shape in its second half, negative trends were mostly trumped by technological advances and business innovations based on those advances, helped by some late-century deregulation. Growth of economic freedom in many places, plus technological advances and business innovation also caused great increases in trade and the flowering of some developing economies in this century.

However, huge mistakes in developed-country monetary and credit policies in this century, plus massive fiscal and regulatory excesses since 2007, accumulated to a critical mass that, coupled with the slowing growth of developing countries and the demographic implosions, are likely to overwhelm the beneficial effects of technology, innovation and trade. The only bright spot is that, as bad as things look in the United States, they are generally worse in other developed economies.

Progressivism, the political religion of the 20th century, promised nirvana through planning and central/scientific command and control. Its collectivist, statist, politically correct reality for the 21st century is, instead, a sorry legacy to our children and grandchildren.

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Ron Knecht is a member of the Board of Regents from Carson City and an economist. This column summarizes a lecture given to the Economics Club at the University of Nevada, Reno.

The First Amendment prohibits the establishment of a religion and guarantees the free exercise of religion. That freedom has its application in the conscience clause, which allows citizens to avoid mandates repugnant to their religious beliefs. Thus, we had “conscientious objectors” during the war. And since Roe v. Wade, it has protected health care providers from being forced to provide services repugnant to their beliefs.

This latter application was significantly applicable to our medical delivery system in Catholic hospitals. Significant because 16% of the hospital beds in this country are provided by Catholic hospitals. And, significant portions of the non-compensated services are rendered by Catholic hospitals. This comports with the Catholic charitable mission.

Catholic hospitals were delivering medical care long before the government took over this part of the U.S. economy. Medicare and Medicaid only recently came into existence in 1965 as part of Lyndon Johnson’s “Great Society.”  These social programs continued to grow with George Bush’s Medicare Drug coverage. They have reached a recent apex with Obamacare. With this legislation Obama and the Democrats have taken over fully 16% of the U.S. economy. Catholic hospitals as existing health care providers are compensated for medical services under these social programs, as are other hospitals.

But now Obama under Obamacare, has mandated that Catholic hospitals provide abortion insurance coverage for all employees knowing full well that abortion, the intentional taking of an innocent human life, is abhorrent to the Catholic faith. This leaves Catholic hospitals little choice but to cease serving the communities in which they operate. Such a result will put further strain on the delivery of medical services, particularly Medicaid services and charitable services to the poor. Strain on the welfare system is exactly what Cloward-Piven posits as the necessary step, the sine qua non, to the system overload that would eventually result in socialism.

Now, to review the bidding, half the population pays no income tax, almost half is dependent on government assistance, and Obama is waging a class warfare campaign. He’s right on board with the “Occupy Whatever” movement and is clearly using welfare checks to buy the necessary votes to maintain power.

That Obama would abrogate the First Amendment freedom of religion to further strain the welfare shows how dangerous the man is and how far he would drive the country to socialism. And, if he will intentionally do this with Catholics on the abortion issue, he will stop at nothing. What will prevent him from conditioning FCC licensing on a loyalty oath, or federal education aid on party registration, or federal contracts on direct union membership rather than prevailing wage compliance. All these are contrary to the basic freedom and limited government upon which this country was founded.

If you think this view of Obama’s actions are far fetched, I invite you to listen to Fr. Sammie Maletta’s homily claiming his right as an American citizen and duty as a Catholic priest to object to this violation of First Amendment’s rights, here. This priest has credentials as a civil attorney and has intelligence and courage that few bishops have. He correctly predicts socialism will result.

The decision of HHS Secretary Sebelius’ to narrow the conscience exception should come as no surprise. Under her interpretation, employers must provide contraception as “preventive health service” under Obamacare. That includes abortifacients, like the morning-after pill. Religious institutions, like hospitals and schools, are not exempt.

In 2007, Jonah Goldberg authored a book with the provocative title of Liberal Fascism. Goldberg’s thesis is that there is an affinity between modern American liberalism and fascism.  He defined liberalism as the “ideology of good intentions” that can end up in “the totalitarian temptation.” The Sebelius decision was a classic example of what Goldberg meant.

He defined Fascism as “the religion of the state.” Mussolini was clear about that. “Everything in the State, nothing outside the State, nothing against the State.” The current conflict between the Obama administration and the Catholic Church (and other religions) has an historical precursor.

Mussolini waged jihad against Catholic social organizations, notably Catholic Action. Their social activities, including with youth, were viewed as operations “outside the State” and hence a threat to it. The activities were treated as political actions adverse to the state. In the fascist mindset, all mediating institutions threaten the state. In this instance, the Obama Administration is dangerously close to adopting that mindset.

In 1931, Pope Pius XI issued an Encyclical defending Catholic Action and the Church (Non Abbiamao Bisogno). He noted that “liberty and right are the heritage of souls.” In strong language, reminiscent of the strong language of U.S. Bishops today, Pius XI said the fascist ideology “clearly resolves itself into a true, a real pagan worship of the State – the ‘Statolatry’ which is no less in contrast with the natural rights of the family than it is in contradiction with the supernatural rights of the Church.”

In its pursuit of the good intentions of promoting women’s health, the Obama administration has succumbed to the totalitarian temptation. It has trampled the Constitution’s protection of the free exercise of religion. Instead of permitting Americans to practice the faith of their choosing, it endeavors to make us all worship in the pagan religion of the State.

Jerry O’Driscoll

Note the conclusion in the third to last paragraph: To abide by the law, leads to a violation of our moral teachings. To ignore the law makes us subject to fines and other consequences. To act within the “nonexemption” leads us to abandon our mission to serve people in need. None of these is acceptable to people of faith.

This is what lead to the founding of our great nation. Freedom from religious persecution.

And the critical last question posed by the Nevada bishops: “Where else will this regulation lead?”

Obama and his ilk must be stopped for the sake of our freedoms.

The suppressive equality argument that a desperate president is trying to sell to distract attention from his miserable performance in office is falling flat on its face. Why, you ask? Because it is against the very core of human nature. Man by nature wants to grow, to improve, to succeed. That nature demands the hope that this core need can be met by individual effort. Essential to that hope is the freedom enshrined in law to pursue dreams, to succeed and yes to fail. Obama’s equality argument dims that hope, puts a lid on that freedom, turns success into something to be condemned. He has traveled the country railing against the successful.

Ryan Streeter posits a kinder opinion for the OWS misfits’ protests in his Indystar post, How to succeed by merit. He suggests that what the protestors really oppose is unearned wealth: “America isn’t a land divided by the 99 percent and the 1 percent. It’s a land divided by those who earn their success day after day and those who don’t. This class distinction has nothing to do with how rich or poor you are. It has everything to do with what kind of person you are.”

Streeter contrasts Steve Jobs with Bernie Madoff then gives examples of unearned success: lottery winners, Fannie and Freddie executives, unionized public employees, ineffective tenured teachers, spoiled rich kids, and too-big-to fail corporations. Trying to put a good face on and ascribe good intentions to “the bearded misfit sitting in a festering tent on public property” Streeter suggests that what he really objects to is this “unearned success.”

In a hopeful conclusion he argues: “It’s time to stop protesting a false premise and focus instead on promoting earned success. Do we need to end too-big-too-fail policies? Yes. Do we need to end harmful welfare programs? Yes. But most of all, we need to encourage earned success in our own homes. That’s where the real change begins.”

Now I would submit that income inequality is good. It sets the ever changing level to which to aspire. The lower views the higher status as something to be strived for and eventually attained. Even if not in his current generation so long as his children will be in positions to continue to improve. Challenge to improve is key to success; the lower the position on the income scale the greater the challenge.

The beauty of inequality is that it exists all up and down the income scale. It causes challenge, effort and either success or failure up and down the ladder. Those close to the top want to leapfrog into the number one position. And once that is attained someone below will always be striving to leapfrog again.This in turn promotes an aggregate rise in the standard of living for the whole of society. It’s Adam Smith’s “invisible hand” at work.

So we should reject Obama’s socialistic, big-government equality hogwash and promote freedom to succeed with fewer limits and less government.

Rany York sent the following video in which Nigel Farage, MEP and UKIP, describes the situation with some accurate historical perspective. He correctly points out the shaky assumptions on which the EU and European Monetary Union were based. His fiery indictment of the unelected technocrats should serve as a warning to us in America: our bureaucrats, agencies, commissions, and tzars are nothing other than unelected technocrats!

Witness the financial upheaval in European financial markets resulting in yesterday’s failed German bond auction, to see where socialism leads. Sadly our President and the leftist Democrats think we are somehow immune.

“So we get hauled in front of the Congress for developing a product that’s free, that serves a billion people. OK? I mean, I don’t know how to say it any clearer,” Mr. Schmidt told the Post. “It’s not like we raised prices. We could lower prices from free to . . . lower than free? You see what I’m saying?” HARD TO ARGUE.

“Mr. Schmidt recounted a dinner in 1995 featuring a talk by Andy Grove, a founder of Intel: “He says, ‘This is easy to understand. High tech runs three times faster than normal businesses. And the government runs three times slower than normal businesses. So we have a nine-times gap.’ All of my experiences are consistent with Andy Grove’s observation.”

“Mr. Schmidt explained there was only one way to deal with this nine-times gap, which this column hereby christens “Grove’s Law of Government.” That is “to make sure that the government does not get in the way and slow things down.”

In other words: GET OUT OF THE WAY! This is not exactly what President Obama advocates. He wants Silicon Valley money, he wants Wall Street money, and he gets both. Yet when he and his liberal ilk need political pinatas or need, as in this case, to extort juice from other rent seekers, they bash both. For show or for real? Who knows?

Don’t you just love Obama voters facing Obama reality?