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Archive for the ‘Obama’ Category

It’s no secret that I’m very leery of Donald Trump. Simply stated, I don’t sense any genuine commitment to smaller government and free markets.

In addition to fretting about his overall approach on the big issue of liberty vs. government, I’ve specifically criticized his views on protectionism, on bailouts, on entitlements, monetary policy, tax policy, and (just yesterday) distorting tax loopholes.

But skepticism isn’t the same as bias.

I commend Trump when he says something accurate or when he proposes good policies, and I defend him when he’s unfairly attacked.

With this in mind, it’s time to point out something very accurate in his big speech yesterday to the Detroit Economic Club.

He issued a strong and effective indictment of Obamanomics.

…let’s look at what the Obama-Clinton policies have done nationally. Their policies produced 1.2% growth, the weakest so-called recovery since the Great Depression… There are now 94.3 million Americans outside the labor force. …We have the lowest labor force participation rates in four decades. …Meanwhile, American households are earning more than $4,000 less today than they were sixteen years ago.

Trump’s basically right. No matter how you slice and dice the data, Obamanomics (which he refers to as Obama-Clinton policies for obvious reasons) clearly hasn’t worked.

We’ve had the weakest recovery since the Great Depression. Labor-force participation is dismal. And median household income has lagged.

I touched on some of those issues in this discussion on Fox Business News.

But you don’t have to believe me.

Former Senator Phil Gramm and former Senate staffer Mike Solon dissect Obamanomics in a column for the Wall Street Journal.

When President Obama took office during the 2007-09 recession no president was ever better positioned to lead a strong recovery. With an impressive electoral mandate, Mr. Obama enjoyed a filibuster-proof Senate supermajority, a 79-vote House majority and a nation ready for change. History too seemed to smile on Mr. Obama’s endeavor. The recession ended just six months into his first term and, with the sole exception of the Great Depression, every severe recession since 1870—when reliable annual data were first collected—had been followed by a vigorous recovery.

They point out that President Obama used the opportunity to push Keynesian fiscal and monetary policy.

No resources were spared. The Obama $836 billion stimulus exceeded all previous U.S. economic stimulus programs combined. The Treasury borrowed over $1 trillion a year for four years in a row, according to Office of Management and Budget data. The Federal Reserve injected $3 trillion of new reserves into the banking system, generating record-low interest rates.

And the institutions with Keynesian models predicted (what a surprise) that we would get good results.

In August 2010, the Congressional Budget Office projected 3.3% average real GDP growth for 2010-15. The Federal Reserve forecast growth as strong as 3.7%. Mr. Obama’s own Office of Management and Budget expected peak growth of 4.5%.

Unfortunately, these models were wrong. Wildly wrong.

…not once in the last seven years has annual economic growth ever reached 3%. Average real per capita income grew five times faster during the Clinton recovery, seven times faster during the Reagan recovery and 10 times faster during the Kennedy/Johnson recovery than during the Obama recovery.

Gramm and Solon point out that there’s only been one other “recovery” remotely similar to the one we’re having now.

…in only two recoveries did government impose economic policies radically different from the policies pursued in all the other recoveries—different than traditional policy but similar to each other— FDR’s Great Depression and Mr. Obama’s Great Recession. …When Mr. Obama replicated some of FDR’s “progressive” policies, history was there to reteach its lessons.

Amen.

The so-called New Deal was a statist disaster than lengthened and deepened the Great Depression.

Indeed, it was only a Great Depression because of awful policies that began under Herbert Hoover and then continued under Franklin Roosevelt.

Obama wanted the second coming of the New Deal.

The good news is that he wasn’t able to impose nearly as much bad policy as Hoover and FDR.

The bad news is that he imposed enough bad policy to produce an abnormally weak recovery.

Which leads to the lesson that everyone should learn.

The dominant lesson of the Great Depression and the Great Recession is that when government overspends, overtaxes and over-regulates, economic freedom is suppressed and economic growth vanishes.

Sadly, I don’t think either Donald Trump or Hillary Clinton understand this lesson.

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What’s the most important economic statistic to gauge a society’s prosperity?

I often use per-capita economic output when comparing nations.

But for ordinary people, what probably matters most is household income. And if you look at the median household income numbers for the United States, Obamanomics is a failure. According to the Census Bureau’s latest numbers, the average family today has less income (after adjusting for inflation) than when Obama took office.

In an amazing feat of chutzpah, however, the President is actually arguing that he’s done a good job with the economy. His main talking point is that the unemployment rate is down to 4.7 percent.

Yet as discussed in this Blaze TV interview, sometimes the unemployment rate falls for less-than-ideal reasons.

Since I’m a wonky economist, I think my most important point was about long-run prosperity being dependent on the amount of labor and capital being productively utilized in an economy.

And that’s why the unemployment rate, while important, is not as important as the labor force participation rate.

Here’s the data, directly from the Bureau of Labor Statistics.

As you can see, the trend over the past 10 years is not very heartening.

To be sure, Obama should not be blamed for the fact that a downward trend that began in 2008 (except to the extent that he supported the big-government policies of the Bush Administration).

But he can be blamed for the fact that the numbers haven’t recovered, as would normally happen as an economy pulls out of a recession. This is a rather damning indictment of Obamanomics.

By the way, I can’t resist commenting on what Obama said in the soundbite that preceded my interview. He asserted that “we cut unemployment in half years before a lot of economists thought we could.”

My jaw almost hit the floor. This is a White House that promised the unemployment rate would peak at only 8 percent and then quickly fall if the so-called stimulus was approved. Yet the joblessness rate jumped to 10 percent and only began to fall after there was a shift in policy that resulted in a spending freeze.

In effect, the President airbrushed history and then tried to take credit for something that happened, at least in part, because of policies he opposed.

Wow.

One final point. I was asked in the interview which policy deserves the lion’s share of the blame for the economy’s tepid performance and weak job numbers.

I wasn’t expecting that question, so I fumbled around a bit before choosing Obamacare.

But with the wisdom of hindsight, I think I stumbled onto the right answer. Yes, the stimulus was a flop, and yes, Dodd-Frank has been a regulatory nightmare, but Obamacare was (and continues to be) a perfect storm of taxes, spending, and regulatory intervention.

And even the Congressional Budget Office estimates it has cost the economy two million jobs.

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Imagine if you had the chance to play basketball against a superstar from the NBA like Stephen Curry.

No matter how hard you practiced beforehand, you surely would lose.

For most people, that would be fine. We would console ourselves with the knowledge that we tried our best and relish he fact that we even got the chance to be on the same court as a professional player.

But some people would want to cheat to make things “equal” and “fair.” So they would say that the NBA player should have to play blindfolded, or while wearing high-heeled shoes.

And perhaps they could impose enough restrictions on the NBA player that they could prevail in a contest.

But most of us wouldn’t feel good about “winning” that kind of battle. We would be ashamed that our “victory” only occurred because we curtailed the talents of our opponent.

Now let’s think about this unseemly tactic in the context of corporate taxation and international competitiveness.

The United States has the highest corporate tax rate in the industrialized world, combined with having the most onerous “worldwide” tax system among all developed nations.

This greatly undermines the ability of U.S.-domiciled companies to compete in world markets and it’s the main reason why so many companies feel the need to engage in inversions.

So how does the Obama Administration want to address these problems? What’s their plan to reform the system to that American-based firms can better compete with companies from other countries?

Unfortunately, there’s no desire to make the tax code more competitive. Instead, the Obama Administration wants to change the laws to make it less attractive to do business in other nations. Sort of the tax version of hobbling the NBA basketball player in the above example.

Here are some of the details from the Treasury Department’s legislative wish list.

The Administration proposes to supplement the existing subpart F regime with a per-country minimum tax on the foreign earnings of entities taxed as domestic C corporations (U.S. corporations) and their CFCs. …Under the proposal, the foreign earnings of a CFC or branch or from the performance of services would be subject to current U.S. taxation at a rate (not below zero) of 19 percent less 85 percent of the per-country foreign effective tax rate (the residual minimum tax rate). …The minimum tax would be imposed on current foreign earnings regardless of whether they are repatriated to the United States.

There’s a lot of jargon in those passages, and even more if you click on the underlying link.

So let’s augment by excerpting some of the remarks, at a recent Brookings Institution event, by the Treasury Department’s Deputy Assistant Secretary for International Tax Affairs. Robert Stack was pushing the President’s agenda, which would undermine American companies by making it difficult for them to benefit from good tax policy in other jurisdictions.

He actually argued, for instance, that business tax reform should be “more than a cry to join the race to the bottom.”

In other words, he doesn’t (or, to be more accurate, his boss doesn’t) want to fix what’s wrong with the American tax code.

So he doesn’t seem to care that other nations are achieving good results with lower corporate tax rates.

I do not buy into the notion that the U.S. must willy-nilly do what everyone else is doing.

And he also criticizes the policy of “deferral,” which is a provision of the tax code that enables American-based companies to delay the second layer of tax that the IRS imposes on income that is earned (and already subject to tax) in other jurisdictions.

I don’t think it’s open to debate that the ability of US multinationals to defer income has been a dramatic contributor to global tax instability.

He doesn’t really explain why it is destabilizing for companies to protect themselves against a second layer of tax that shouldn’t exist.

But he does acknowledge that there are big supply-side responses to high tax rates.

…large disparity in income tax rates…will inevitably drive behavior.

Too bad he doesn’t draw the obvious lesson about the benefits of low tax rates.

Anyhow, here’s what he says about the President’s tax scheme.

The President’s global minimum tax proposal…permits tax-free repatriation of amounts earned in countries taxed at rates above the global minimum rate. …the global minimum tax plan also takes the benefit out of shifting income into low and no-tax jurisdictions by requiring that the multinational pay to the US the difference between the tax haven rate and the U.S. rate.

The bottom line is that American companies would be taxed by the IRS for doing business in low-tax jurisdictions such as Ireland, Hong Kong, Switzerland, and Bermuda.

But if they do business in high-tax nations such as France, there’s no extra layer of tax.

The bottom line is that the U.S. tax code would be used to encourage bad policy in other countries.

Though Mr. Stack sees that as a feature rather than a bug, based on the preposterous assertion that other counties will grow faster if the burden of government spending is increased.

…the global minimum tax concept has an added benefit as well…protecting developing and low-income countries…so they can mobilize the necessary resources to grow their economies.

And he seems to think that support from the IMF is a good thing rather than (given that bureaucracy’s statist orientation) a sign of bad policy.

At a recent IMF symposium, the minimum tax was identified as something that could be of great help.

The bottom line is that the White House and the Treasury Department are fixated at hobbling competitors by encouraging higher tax rates around the world and making sure that American-based companies are penalized with an extra layer of tax if they do business in low-tax jurisdictions

For what it’s worth, the right approach, both ethically and economically, is for American policy makers to focus on fixing what’s wrong with the American tax system.

P.S. When I debunked Jeffrey Sachs on the “race to the bottom,” I showed that lower tax rates do not mean lower tax revenue.

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Let’s take a look at President Obama’s economic legacy.

The Washington Examiner opines on President Obama’s remarkable claim that he saved the world economy.

President Obama…wants to be remembered for…[being]…the savior of the American and global economies. “There are things I’m proud of,” he said, citing Obamacare, then added, “Saving the world economy from a Great Depression, that was pretty good.”

Not so fast. Looking at the economy’s anemic numbers the editors are less than impressed.

Obama will end eight years in office without presiding over a thriving economy of the sort America enjoyed in the past. It also suggests that even the mediocre growth of recent years depended on high oil prices, which have collapsed by more than half. This is the bitter fruit of creationist economics, the erroneous belief that government activity can somehow conjure new wealth and value.

The Wall Street Journal is similarly dour about Obama’s economic legacy.

When did Americans decide that 1% or 2% economic growth is acceptable, that puny wage increases are inevitable, and that we should all merely shrug and get used to the country’s diminished expectations? …the first quarter is further evidence of what has been the weakest economic expansion in the postwar era. …All of this continues the slow-or-slower pace of this entire expansion that began nearly seven years ago. Each year has had a similar GDP dip, and growth has never exceeded 2.5% (2010). The American economy hasn’t grown by more than 3% since 2005 (3.3%), the longest such stretch of malaise that we can find in the Bureau of Economic analysis tables going back to 1930. …Faster growth is possible, but it will take better policies.

In a column for Bloomberg, Narayana Kocherlakota, looks at what’s happened and compares it to what CBO projected would happen.

it’s not hard to see why many people are disappointed with the performance of the economy during Obama’s time in office. In January 2009, at the beginning of Obama’s first term, the nonpartisan Congressional Budget Office issued a 10-year forecast for the U.S. economy, including such indicators as unemployment, gross domestic product, the budget deficit, government debt and interest rates. …The unemployment rate has come closest to expectations. …Elsewhere, the story is less positive. Total income growth in the U.S. has fallen well short of expectations, in both nominal and inflation-adjusted terms. …the federal budget deficit…still much larger than the CBO forecast in 2009 — as is the ratio of government debt to GDP.

Here’s his chart.

Last, but not least, Louis Woodhill shares some numbers that capture Obama’s real legacy.

America’s elites have largely given up on growth, and are now distracting themselves with academic musings about “secular stagnation.” …assuming 2.67% RGDP growth for 2016, Obama will leave office having produced an average of 1.55% growth. This would place his presidency fourth from the bottom of the list of 39*, above only those of Herbert Hoover (-5.65%), Andrew Johnson (-0.70%) and Theodore Roosevelt (1.41%)

What makes this final comparison so damning is that Obama had the comparative good fortune to enter office in the middle of a recession. Which means, all things equal, that his numbers should look very positive.

Instead, he’s managed to compile one of the worst track records.

When I do comparisons, I like using the interactive recession/recovery site of the Minneapolis Federal Reserve, which allows users to compare every recession and recovery since the end of World War II.

Here’s how President Obama (red line) ranks on GDP growth.

As you can see, whether your starting point is the beginning of the recovery or the beginning of the recession, Obama is in last place.

He does slightly better on employment. He still has one of the worst records (again, the red line), but he does beat George W. Bush’s also-anemic performance on job creation.

By the way, some of you may be wondering why the employment data for Obama is so weak when the unemployment rate has significantly fallen.

The answer is that the unemployment rate doesn’t count people who have given up on finding a job, whereas the Minneapolis Fed data counts how many new jobs are being created.

And it’s the amount of people productively employed that matters if we want more economic output, so the Minneapolis Fed data is far more important and revealing than the official unemployment rate numbers.

Unfortunately, Obama and his team haven’t figured out (or simply don’t care) that jobs are more likely to be created when government is smaller rather than bigger.

By the way, this analysis presumably won’t be very compelling for Obama supporters because they’ll simply assert things could have been much worse without his policies.

They may even believe the President’s claim that he saved the American economy from a Great Depression.

But they overlook the fact that the economy normally bounces back quickly from a downturn. It was only during the 1930s, when Hoover and Roosevelt competed to impose bad policy, that a recession became a depression.

The bad news is that President Obama’s policies haven’t helped today’s economy, but the good news is that his policies are nowhere near as harmful as the combined statist agendas of Hoover and Roosevelt.

So if we want to learn a lesson on what works, the economy’s very strong boom under Reagan is a good case study. And if you want to go back further, the anti-Keynesian booms after World War I and World War II also teach important lessons.

P.S. President Obama is completely correct when he points out that America’s economy is generally stronger than European economies. Unfortunately, he doesn’t seem to realize what this implies.

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The ongoing cluster-you-know-what of Obamacare is a source of unhappy satisfaction.

Part of me is glad the law is such a failure, but it’s tragic that millions of people are suffering adverse consequences. These are folks who did nothing wrong, but now are paying more, losing employment, suffering income losses, and/or being forced to find new plans and new doctors.

And it seems we get more bad news every day, as noted in a new editorial from Investor’s Business Daily.

ObamaCare rates will skyrocket next year, according to its former chief. Enrollment is tumbling this year. And a big insurer is quitting most exchanges. That’s what we learned in just the past few days.

Why do we know these three bad things are happening? Because that’s what we’re being told by Mary Tavenner, the former head of the Center for Medicare and Medicaid Services for the Obama Administration who has now cashed out and is pimping for the health insurance companies that got in bed with the White House to foist Obamacare on the American people.

IBD gives us the sordid details.

Why will 2017 rates spike even higher? In addition to the cost of complying with ObamaCare’s insurance regulations and mandates, there’s the fact that the ObamaCare exchanges have failed to attract enough young and healthy people needed to keep premiums down. Plus, two industry bailout programs expire this year, Tavenner notes. Oh, and she admits that people are gaming ObamaCare just like critics said they would: buying coverage after they get sick — since insurance companies can no longer turn them down or charge them more — then dropping it when they’re done with treatments. “That churn increases premiums. So you have to kind of price over that.”

And that’s just one slice of bad news.

Here’s more.

ObamaCare enrollment has already dropped an average of more than 14% in five states since February — a faster rate of decline than last year — as people get kicked off for not paying premiums. Finally, we learned on Tuesday that UnitedHealth Group (UNH) is planning to drop out of almost every ObamaCare market it currently serves after losing $1 billion on those policies. …Skyrocketing premiums, fewer choices in the marketplace, and people fleeing ObamaCare in droves after signing up. This isn’t exactly what Obama promised when he signed ObamaCare into law.

For those who were paying attention, none of this is a surprise. It was always a fantasy to think that more government intervention was going to improve a healthcare system that already was cumbersome and expensive because of previous government interventions.

By the way, IBD isn’t the only outlet to notice the ongoing disaster of Obamacare.

Let’s look at some other recent revelations.

Chris Jacobs writes that “For millions of Americans, the Left’s insurance utopia has rapidly deteriorated into a bleak dystopia” and that “the ‘cheaper prices’ that the president promised evaporated as quickly as the morning dew.”

John Graham explains that “CBO estimates Obamacare will leave 27 million uninsured through 2019 – an increase of almost one quarter” and that “CBO estimates 68 million will be dependent on the program this year through 2019 – an increase of almost one third in the welfare caseload.”

Betsy McCaughey opines that, “Obamacare is already hugely in the red. …over the next ten years Obamacare will add $1.4 trillion to the nation’s debt” and that “Insurers struggling with Obamacare are already drastically reducing your choice of doctors and hospitals to cut costs.”

Devon Herrick reveals that “Obamacare has caused more people to reach for their wallets after a medical encounter — not less” and that “all but the most heavily subsidized Obamacare enrollees would be better off financially if they skipped coverage and pay for their own medical care out of pocket.”

Jeffrey Anderson observes that “it seems possible that Obamacare has actually reduced the number of people with private health insurance” and that “Obamacare is basically an expensive Medicaid expansion coupled with 2,400 pages of liberty-sapping mandates.”

John Goodman notes that “Prior to Obamacare, many employers of low-wage workers offered their employees a “mini med” plan, covering, say, the first $25,000 of expenses” and that “Those plans are now gone… employees…are…completely uninsured”

The CEO of CKE Restaurants warns that “fewer people buying insurance through the exchanges, the economics aren’t holding up” and that “Ten of the 23 innovative health-insurance plans known as co-ops—established with $2.4 billion in ObamaCare loans—will be out of business by the end of 2015 because of weak balance sheets.”

Critics of Obamacare now get to say “we told you so.”

As the Washington Examiner opines:

…conservatives screamed a simple fact from the rooftops: Obamacare will not work. No one wanted to listen then, but their warnings are now coming into fruition. Obamacare, as constructed, attempted to fix a dysfunctional health care payment system by creating an even more complicated system on top of it, filled with subsidies, coverage mandates, and other artificial government incentives. But its result has been a system that plucked Americans out of coverage they like and forced them to pay more for less. …Taxpayers and insurance customers alike should demand replacing Obamacare with a system that reduces costs and improves quality by injecting actual choice and competition into the insurance market.

I especially like the last part of the excerpt. Which is why we need to go well beyond simply repealing Obamacare if we want to restore market forces to the healthcare sector.

P.S. I wrote about that it’s tragic that so many people are suffering because of Obamacare. I should add that there are some victims who actually are getting what they deserve.

P.P.S. In the long run, I fear taxpayers will be the biggest (and most undeserving) victims.

P.P.P.S.Though, in fairness, the law does have at least one redeeming feature.

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Over the years, Barack Obama has made some statements that indicate a very statist worldview.

Now he may have added to that list. Check out this excerpt from a report in the Daily Caller.

President Barack Obama downplayed the differences between capitalism and communism, claiming that they are just “intellectual arguments.” …Obama said…”I think for your generation, you should be practical and just choose from what works.”

It’s hard to object to the notion that people should choose “what works,” so perhaps there’s not a specific quote that I can add to my collection. However, the President’s implication that there’s some kind of equivalence between capitalism and communism, which both systems having desirable features, is morally offensive. Sort of like saying that we should “choose from what works” in Hitler’s national socialism.

Communism is a disgusting system that butchered more than 100,000,000 people.

It is a system that leads to starvation and suffering.

Communism produces Nazi-level horrors of brutality.

So what exactly “works” in that system, Mr. President? If you watch Obama’s speech, you’ll notice there’s not a lot of substance. There is a bit of praise for Cuba’s decrepit government-run healthcare system (you can click here, here, and here if you want to learn why the system is horrifying and terrible for ordinary citizens). And he also seems to think it’s some sort of achievement that Cuba has schools.

So let’s take a closer look at what Cuba actually has to offer. Natalie Morales is a Cuban-American actor, writer, and filmmaker. Here’s some of what she wrote about her country and her relatives still trapped on the island.

…we send money, medicine or syringes for the diabetic aunt (since the hospital doesn’t have any unused disposable ones), baby clothes, adult clothes, shoes, or food… a doctor, a lawyer, or another similar profession that is considered to be high-earning everywhere else in the world will make about twenty to thirty dollars per month in Cuba. Yet shampoo at the store still costs three dollars. This is because everything is supposed to be rationed out to you, but the reality is that they’re always out of most things, and your designated ration is always meager. …if you’re a farmer and you’ve raised a cow, and you’re starving, and your family is also starving, and you decide to kill that cow and eat it? You’ll be put in jail for life. Because it’s not “your” cow, it’s everyone’s cow. That’s good ol’ Communism in practice.

Ms. Morales is especially irritated by Americans who fret that capitalism will “ruin” Cuba.

…picture me at any dinner party or Hollywood event or drugstore or press interview or pretty much any situation where someone who considers themselves “cultured” finds out I’m Cuban. I prepare myself for the seemingly unavoidable…“I have to go there before it’s ruined!”…I will say some version of this: “What exactly do you think will ruin Cuba? Running water? Available food? Freedom of speech? Uncontrolled media and Internet? Access to proper healthcare? You want to go to Cuba before the buildings get repaired? Before people can actually live off their wages? Or before the oppressive Communist regime is someday overthrown?”

Here’s more about Cuba’s communist paradise, including her observations of the healthcare system that Obama admires.

The very, very young girls prostituting themselves are not doing it because they can’t get enough of old Canadian men, but because it pays more than being a doctor does. Hospitals for regular Cuban citizens are not what Michael Moore showed you in Sicko. …That was a Communist hospital for members of the Party and for tourists… There are no janitors in the hospitals because it pays more money to steal janitorial supplies and sell them on the street than it does to actually have a job there. Therefore, the halls and rooms are covered in blood, urine, and feces, and you need to bring your own sheets, blankets, pillows, towels, and mattresses when you are admitted. Doctors have to reuse needles on patients. My mom’s aunt had a stroke and the doctor’s course of treatment was to “put her feet up and let the blood rush back to her head.”

She closes with a PG-13 request for idiotic westerners.

…for God’s sake, please don’t wear a fucking Che t-shirt.

Very well said.

By the way, none of this means we shouldn’t normalize relations with Cuba. There’s no longer a Soviet Union, so Cuba doesn’t represent a strategic threat. So, yes, relax restrictions on trade and travel, just like we have for China, Zimbabwe, Vietnam, Russia, Venezuela, and other nations that have unsavory political systems.

But the opening of relations doesn’t mean we should pretend that other systems are somehow good or equivalent to capitalism and classical liberalism.

Let’s close by sharing some news from another garden spot of communism.

If North Korea’s reputation as a place of hunger, hardship and repression was not bad enough, scientists have now discovered that it is too grim even for vultures. …Eurasian black vultures are no longer bothering to stop over in North Korea as they fly from their breeding grounds in Mongolia to their winter homes in South Korea. They concluded that food is so short under the communist regime that even the world’s best-known carrion birds cannot feed themselves. …Lee Han Su, of the institute, said: “This seems to happen because in North Korea the vultures can barely find animal corpses, which are major food resources for them.” Under the draconian regime of Kim Jong Un the country is unable to feed itself. International aid agencies report chronic malnutrition in some regions. …wild animals face the risk of being eaten by people. Defectors describe how victims of the famine were driven to eat dogs, cats, rats, grasshoppers, dragonflies, sparrows and crows. Vultures, for the time being at least, are off the menu.

I’m not sure what American leftists will say we can learn from North Korea. Even PETA presumably won’t be happy that starving North Koreans are eating sparrows and grasshoppers.

The bottom line is that there is zero moral equivalence between communism and capitalism. The former is based on servility to the state and the latter is based on liberty.

But if you’re amoral and simply want to know what works, compare the performance of North Korea and South Korea. Or look at the difference between Cuba and Hong Kong.

Very compelling evidence.

But this isn’t an issue that should be decided on the basis of utilitarian comparisons. What should matter most is that communism is evil.

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Which group has suffered the most because of Obamanomics?

That’s hard to answer. We know that the average family has less income today than when Obama took office.

If we want to narrow things down, we know that blacks have endured hardship because of a weak economy.

But you also could make a strong case that young people have been the biggest victims.

Which is why it is so discouraging that many of them support big government. Here are some depressing numbers from a Frank Luntz survey, as reported by U.S. News & World Report.

Fifty-eight percent of young people choose socialism over capitalism (33 percent) as the most compassionate system. …A plurality of 28 percent say the most pressing issue facing the country is income inequality – one of Sanders’ top themes.

I strongly suspect, by the way, that these young people (just like Hillary Clinton and Debbie Wasserman-Schultz) have no idea how to define socialism.

But that’s hardly a cause for cheer. Even if they simply think socialism is class-warfare taxation and lots of redistribution, it’s still bad news that so many of them have been seduced by the politics of hate and envy.

It’s like they’re totally oblivious to the damage that big government has caused for young people in Europe.

Their views on income inequality are similarly flawed, though perhaps slightly more understandable since millennials have suffered through a very weak economy.

But that’s what makes this polling data so puzzling. Why on earth are young people supportive of statism when they’ve been among the main victims of the weak Obama economy?!?

Writing in the Wall Street Journal, Daniel Arbess ponders the bizarre fact that so many young people support Bernie Sanders.

…voters in the millennial bracket, 18- to 34-year-olds, will for the first time equal the baby-boomer share of the electorate, at 31%. These young voters appear to be falling headlong for the Vermont senator’s plaintive narrative of economic “unfairness.”…throwaway prescriptions for redistributing income and wealth… These young voters seem not to realize that the economic policies they find so resonant are the least likely to promote the growth and the social mobility they desire.

Arbess looks at some of the data about how Obamanomics has been bad for young people.

The millennials can’t be faulted for being anxious about their economic prospects. They are coming of age in the weakest economy in generations. The underemployment rate (measuring those working a job for which they’re overqualified and underpaid) for young adults below age 30 is 60%. The overall employment-to-population ratio of 77.4% for those in the prime-of-working-life 25-54 age bracket translates into 1.5 million jobs below the 20-year average. The college graduate living in his parents’ basement and working a marginal job to service a student loan is by now an archetype of the Obama era.

He then elaborates on the self-destructive instincts of many young voters.

…Why wouldn’t young voters want “free stuff” paid for by the rich, as the Bernie Sanders and Hillary Clinton narrative promises? Because the no-free-lunch axiom is still true: Mr. Sanders’s socialized education, health care and other policies would cost up to $20 trillion, according to analysts, requiring tax collections to increase up to 47%. And have we not at least learned from the collapse and dismantling of socialism over the past quarter century that governments lack the incentives and resources to effectively allocate and manage capital in the microeconomy? …Yet millennials, who would most benefit from a real economic recovery, replacing the false one of the past several years, so far seem intent on voting against their interests.

This video is a good summary of the issue.

Given all this evidence, I’m mystified that young people are big supporters of statism.

And it’s not just what we’ve looked at today. I’ve previously shared data indicating that they are clueless on public policy issues.

At the risk of sounding like some old guy who yells “you kids get off my lawn,” maybe the solution is to raise the voting age. Or, better yet, change the rules to that you only get to vote when you have a job and pay taxes!

More seriously, the answer is more education.

P.S. The good news is that suffering through Obamacare may change the minds of some young people.

P.P.S. In any case, the polling data on guns shows that young people are not totally hopeless.

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