Feeds:
Posts
Comments

Posts Tagged ‘Socialism’

Three years ago, I shared a cartoon that succinctly summarized the problem with socialism and the welfare state.

It’s the same lesson that we also get from Thomas Sowell, which is that redistribution over time creates an ever-larger number of dependents financed by ever-higher taxes on workers.

Or, as this Wizard-of-Id parody and this Little-Red-Hen parody make clear, why work hard if you can get things for free?

Now I have a different way of illustrating the problem with socialism. Here’s a very clever tweet from Young Americans Against Socialism.

Very clever and amusing.

I will add this short video to my collection of socialism humor, but it actually makes a very serious point.

Socialists and other redistributionists want equality of outcomes, but they don’t think about the unintended consequences of such an approach.

Some people will be lured into sloth and dependency, for instance, while others – particularly those with greater ability and/or greater work ethic – will choose to be less productive (especially because they also get hit with higher tax burdens to finance all the handouts).

Bastiat wrote that the failure to consider the “unseen” was the defining quality of a bad economist.

And since we’re on that topic, here’s an example of Crazy Bernie failing to appreciate that actions have unintended consequences.

A perfect metaphor for what would happen to the economy if some of his policies were imposed on the economy.

Except Bernie would still have his comfortable life. It’s the rest of us who would suffer.

Read Full Post »

I’m getting worried that Senator Bernie Sanders is fading in the polls.

That doesn’t make me happy. I want Crazy Bernie to stay relevant.

Why? Because he’s an endless source of clever satire.

Previous editions of Bernie humor can be found here and here.

For today’s edition, let’s start with the fact that Bernie has used political office to become a millionaire, yet he doesn’t put his money where his mouth is (the federal government actually has a website for people who are foolish enough to pay extra tax).

Bernie also has an opinion on the protests in Hong Kong. At least according to the satirists at the Babylon Bee.

As soon as Bernie Sanders heard about the democratic protesters in Hong Kong, he knew something had to be done. The U.S. senator quickly chartered a flight to Hong Kong… Sanders bravely stood in the middle of the conflict between police and protesters, shouting at the “ungrateful little dissenters”… “Remember, you could have it a lot worse—you could be in America!” Sanders bellowed as police officers for the totalitarian regime beat protesters in the background. …Sanders continued his long-winded rant about the need for the government to own the means of production, how great breadlines are, and how bad things are in capitalist America as protesters got dragged away by police to be disappeared. “Just think—in America, we have to pick between 14 different types of deodorant!” he said, his fingers flopping around like limp sausages.

While this story is amusing, the folks at Babylon Bee screwed up. The people of Hong Kong aren’t protesting because they live in a communist system.

They’re protesting because they’re worried that China will sooner or later absorb them into a communist system.

But since so much real media is “fake but accurate” (or is it “accurate but fake”?), I’m not going to worry about details.

Let’s now shift to another example of Babylon Bee satire.

Showing himself to be a compassionate man of the people who cares deeply about the plight of the downtrodden, Senator Bernie Sanders selflessly offered a stack of bills to a homeless man on the street Monday after fishing the money out of a purse sitting next to a woman on a park bench. Sanders had been…on the prowl for people who looked like they had too much money when he leaped out to steal the wallet from the purse… The Vermont senator..saw a homeless man sitting nearby, begging for money. Moved by the pathetic sight of the man’s disheveled appearance, Sanders found it in his heart to commit a random act of kindness, digging through the wallet until he was able to find several $20 bills and slipping them into the man’s hand. “It’s not theft—it’s redistribution,” he told reporters later. “I was simply…doing what any old citizen couldn’t do without committing a crime. But it’s different because I’m the government, see?” At publishing time, the Senator was seen pocketing the rest of the money.

How very generous he is with other people’s money!

Last but not least, here’s a game from Imgur that allows anyone to prepare a Bernie speech. For some reason, it reminds me of State-of-the-Union bingo during the Obama years.

For other examples of Bernie humor, you can click hereherehereherehereherehere, and here.

Read Full Post »

It’s difficult to be optimistic about some parts of the world.

When I look at Greece and Italy, for instance, I can’t help but think that economic renaissance is very unlikely, in part because of demographics, but even more so because voters have been conditioned to think that they have a right to live off the government.

This dependency mindset shows that societal capital has eroded, and it’s why I fear those nations have passed a tipping point.

Another example is Argentina. The Wall Street Journal‘s editorial page is very discouraged that the Peronists may return to power in that country.

Does Argentina have a death wish? That’s the question going around after Peronist Alberto Fernández and his running mate, former President Cristina Kirchner, took first place in Sunday’s presidential “primaries” with 48% of the vote. President Mauricio Macri finished 16 points behind… Clearly investors don’t want to hang around if Mr. Fernández and Mrs. Kirchner—whose eight years as president (2007-2015) were marked by leftwing populism and corruption—get to power. Mr. Macri’s unexpectedly poor showing sent the peso and equities down and default risk for Argentine bonds up.

So why would Argentinians vote for statism and economic collapse, especially since there’s so much evidence that Peronists have done immense damage to the country’s economy?

In part, because they were choosing between Tweedledee and Tweedledum. The supposed center-right incumbent, Mauricio Macri, governed as a statist.

And he’s been doubling down on bad policy in hopes of staying in office.

…he fought back by promising to raise the minimum wage for the second time this year, freeze the price of gasoline for 90 days, increase welfare payments in September and October and give a bonus to federal bureaucrats, police and the military. Perhaps this half-baked populism will move voters, but it augurs poorly for the Argentine future. …Mr. Macri…sought to avoid confrontation. He ought to have set about shrinking the state and its subsidies. Instead he maintained lavish government spending. The kinder, gentler president has been unwilling to tell Argentines in stark terms what they are up against. …Argentine debt has shot up on Mr. Macri’s watch and as a percentage of GDP it is forecast to reach 100% this year. Deficit spending has put pressure on the central bank to print money, and there has been no effort to contain inflation expectations.

Ugh, Macri seems even worse than some of America’s big-government Republicans.

But there is a sliver of good news. If nothing else, Argentina serves as an example of why so-called “democratic socialism” is so misguided.

In some analysis for investors, Michael Cembalest of J.P. Morgan looked around the world for insights and evidence about the ideology championed by Bernie Sanders and Alexandria Ocasio-Cortez (h/t: James Pethokoukis).

He starts off by identifying the key criteria of democratic socialism.

This sounds like Elizabeth Warren’s platform, or perhaps the Green New Deal, so I think this is an accurate list.

Mr. Cembalest points out, though, that the Nordic nations don’t qualify as being socialist of any kind.

Some point to Nordic countries as democratic socialism in action, but…while Nordic countries have higher taxes and greater redistribution of wealth, Nordics are just as business-friendly as the US if not more so. Examples include greater business freedoms, freer trade, …and less of an impact on competition from state control over the economy. …while Nordics raise more taxes than the US, the gap usually results from regressive VAT/consumption taxes and Social Security taxes rather than from progressive income taxes. The bottom line: copy the Nordic model if you like, but understand that it entails a lot of capitalism and pro-business policies, a lot of taxation on middle class spending and wages, minimal reliance on corporate taxation and plenty of co-pays and deductibles in its healthcare system.

He’s right. The Nordic nations get relatively high marks for economic liberty in all areas other than fiscal policy. They’re no more socialist than the United States.

He did find a country, however, that is a very close match for democratic socialism.

I couldn’t find any country that ticked all…democratic socialist boxes, but I did find one that came close: Argentina.

Seems to me that Argentina does tick all the boxes. But since he doesn’t delve into methodology, I’m not sure of his definitions.

In any event, he looks at Argentina’s relative performance over a long period of time, which is the right approach to see if a country is converging or diverging.

There are two ways to look at Argentina’s decline relative to the rest of the world since the early 1900’s. The first shows the ratio of real per capita GDP in 2018 vs the same measure in 1913. Argentina’s ratio barely rose, and is the lowest ratio of all countries for which data is available for both years.

Here’s the relevant chart, and you can see that Argentina has the worst performance over the past 100 years.

He also slices the data using another approach.

The next method illustrates how Argentina used to be among the richest nations in the world, and how far it has fallen. The x axis shows percentile of per capita GDP in 1913, while the y axis shows the same measure in 2018. All countries below the diagonal line have seen their rankings fall, while those above the line have seen their rankings improve. The farther the distance from the diagonal line, the more things have changed; Argentina’s decline from the 83rd percentile in 1913 to the 40th in 2018 is the largest decline on the chart.

And here’s the accompanying chart.

Fast growing nations are above the line, so it’s hardly a surprise to see that the Asian Tigers of Taiwan, South Korea, Hong Kong, and Singapore have done well.

And I’m also not surprised to see that South Africa is almost as bad as Argentina.

At some point, I’ll have to re-crunch the numbers showing the post-WWII era. I imagine that data also will show a very strong relationship between national prosperity and economic liberty.

P.S. One external reason for Argentina’s awful performance is that it keeps getting rewarded for bad policy with IMF bailouts.

P.P.S. Greece is another country that should be a warning sign about what happens with democratic socialism.

Read Full Post »

Cuba has a very sad history.

It traded a regular dictatorship for a communist dictatorship six decades ago, and the results have been predictably awful.

Oppression, persecution, rationing, spying, deprivation, and suffering are facts of life in that socialist hellhole.

For a while, it was subsidized by the Soviet Union, but that communist system eventually collapsed. More recently, it’s been subsidized by Venezuela, but now that socialist system also is collapsing.

And this means extra hardship for the people of Cuba.

Jose Nino explains one of the grim consequences of Cuba’s central planning.

Cuba is now implementing a rationing program to combat its very own shortages of basic goods. A CBC report indicates this program would cover basic items such as chicken, eggs, rice, beans, and soap. …When Fidel Castro took control of Cuba in 1959, the Cuban state maintained an iron grip on the economy. For decades, the country has been a communist garrison state with very little respect for property rights… Because of the economic dislocations caused by state control of many industries, the government has had to provide citizens with Libretas de Abastecimiento (supply booklets) to ration out basic goods like rice, sugar, and matches. …Cuba’s recent political behavior indicates that the country’s leadership still does not get basic economics. …After more than 50 years of embracing socialist governance, Cuba will have to learn that it needs to stick to the basic economic principles if it wants to break free from its long-standing cycle of poverty.

Bizarrely, there are still some proponents of the Cuban dictatorship.

Writing for CapX, Kristian Niemietz ponders this lingering semi-support for Cuba on the left.

…socialist experiments usually go through three stages, in terms of their reception by Western intellectuals. The first is a honeymoon period, during which they are widely held up as a glorious example of “real” socialism in action. The second is a period of angry defensiveness, during which some of the system’s failures are acknowledged, but blamed on external constraints. The third stage is the stage of retroactive disowning: intellectuals now claim that the country in question was never socialist, and that it is a cheap strawman to even mention it. The Western reception of the Soviet Union, Maoist China, Vietnam and, more recently, Venezuela followed this pattern to a tee. Cuba, in contrast, is a bit of an outlier, in that the country seems to be permanently stuck somewhere between stages two and three. It may no longer attract widespread enthusiasm, but Cuban socialism has never completely gone the way of Soviet, Maoist, Vietnamese or North Korean socialism.

Robert Lawson and Benjamin Powell have a book about statism and socialism that’s very informative. But also very entertaining.

Here are some excerpts from their chapter about a visit to Cuba.

In government-directed economies, a disproportionate amount of money is spent on what political leaders desire—typically, great Olympic sports teams, and a few showcase hotels and restaurants to impress foreigners. In Cuba’s case, this included the opulent Hotel Nacional… But we were on a mission to see what life was like inside Cuba’s socialist system. We couldn’t experience that by drinking Cuba libres at a fancy resort… Before the revolution, Cuba had a thriving urban middle class, along with widespread rural poverty. Twentieth-century socialists claimed socialism would deliver greater equality and out-produce capitalism by ending wasteful competition, business cycles, and predatory monopolies. Socialism hasn’t delivered the goods it promised in Cuba or anywhere else. Today, Cuba is a poor country made poorer by socialism. Socialism also gives tremendous power to government officials and bureaucrats who are the system’s planners—and with that power comes corruption, abuse, and tyranny. It is no accident that the worst democides of the twentieth century occurred in socialist countries like the Soviet Union, Communist China, and Nazi (National Socialist) Germany.

The book is basically a travelogue, mixed with economic insights that oscillate between amusing and horrifying.

The hotels are no good.

The Hotel Tritón’s decaying edifice was a crumbling tribute to Cuba’s central-planning problems. Cuba had the resources to make large capital investments in state-run enterprises when it received aid from the Soviet Union. But many of these hotels can’t generate enough revenue to sustain the initial investment. Cuban government planners then had to pick which hotels to subsidize to prevent decay. The Hotel Tritón didn’t make the cut. It was rotting, inside and out. And nobody cared because nobody owned it. …In a capitalist economy, entrepreneurs create businesses to make profits, which they earn by pleasing their customers. But in a socialist system, a bureaucrat decides which businesses can open, where they can operate, and what they can sell, and he really doesn’t care what the customer thinks. Adopting a socialist system is like turning your whole economy into a giant Department of Motor Vehicles.

The shopping is no good.

In Central Havana, the lack of commerce unrelated to tobacco, alcohol, or sex was striking. Habaneros lived in these neighborhoods. So where did they shop? …We found one store that was a large open room with high ceilings and cement support columns. …behind a counter, there were shelves with bottles of rum, cases of the local cola, a few canned goods, cartons of eggs, and large sacks of rice next to a scale. A line of Cubans shopped their way down the counter. The place was an odd mix, somewhere between the worst imaginable version of a grade school cafeteria and a grocery in which 95 percent of the stock is depleted.

The dining is no good.

… we decided on our last evening on the island to try a state-owned “Italian” restaurant on the main boulevard between the shitty Hotel Caribbean and the Capitol. We were disappointed to see that Italian meant nothing more than a few basic pizzas and a couple types of pasta, along with the same chicken, pork, seafood, and beef dishes we found everywhere else. We ordered two beers and “mozzarella from the oven” as an appetizer. To say that it was the equivalent of Taco Bell queso with tomato chunks in it would be insulting to Taco Bell. In fact, it was a steaming pot of greasy white goo. … most Cubans can’t afford to eat at the places we ate, and Cuba’s socialist economic system can’t even deliver variety to rich tourists. We were tired of the food after a week. But we could leave; Cubans are stuck with lousy food (outside the private restaurants), limited ingredients, and little variety for as long as they’re stuck with socialism.

And Che is no good.

Unfortunately for Cubans, Che wasn’t nearly as good at planning production as capitalists have been at plastering his image on merchandise. During Che’s stints as head of the National Bank of Cuba, minister of finance, and minister of industry, Cuba not only failed to industrialize (as promised), but its sugar production collapsed and severe rationing was introduced.

But Cubans are very good, at least when they’re out from under the tyranny of socialism.

We were in Little Havana, in Miami. The economic contrast between Little Havana and the real thing began before we even stepped out of our Uber. The half-hour car ride cost us only $13.72 instead of the absurd taxi costs in Cuba. …Unlike stores in Cuba, this store had hundreds of different items for sale. …we headed off to a Cuban restaurant for dinner. The six-page menu contained more options than we had seen from all of the restaurants in Cuba combined. …Cuban cuisine is excellent—just not when it’s served in Cuba. It’s not the Cubans’ fault. It’s the fact that socialism sucks. Cubans under a socialist system remain poor and eat bland food. Ninety miles away, Cubans who live in Miami become relatively rich and make wonderful food. Same people, two different economic systems, two drastically different economic— and gastronomic—outcomes.

By the way, I recommend the book.

There are also chapters about Sweden, Venezuela, North Korea, China, Georgia, and Russia/Ukraine.

My contribution today is this chart showing per-capita economic output in various Latin nations, derived from the Maddison database. At the time of the revolution, Cuba (orange line) was one of the richest nations. Now it has fallen far behind.

It’s always useful to look at decades of data because short-run blips aren’t a factor. Instead, you really learn a lot about which nations are enjoying good growth and which ones are stagnating.

What we’ve learned today is that the people of Cuba are poor because of awful economic policy. Other nations (most of which started in worse shape) have become much richer.

Perfect policy would be great, but even decent policy creates enough “breathing room” for more prosperity. Unfortunately, even that’s not allowed in Cuba.

P.S. For some unintentional Cuban-related humor, see here and here.

Read Full Post »

I’ve applauded China’s economic progress.

It’s economic liberty score jumped from 3.64 in 1980 to 6.46 in the most recent edition of Economic Freedom of the World.

That shift toward markets (which started in a village) helped to dramatically reduce poverty and turn China into a middle-income nation.

That’s the good news.

The bad news is that most of China’s economic liberalization (from 3.64 to 6.15) occurred between 1980 and 2003.

Since that time, China’s score has improved at a glacial pace. Moreover, because other nations have been more aggressive about reducing the burden of government, China’s relative ranking has actually dropped (from #88 to #107) since 2003.

Which is why I’ve warned that China needs another burst of pro-market reform if it wants to become a rich country.

Regarding this issue, the Wall Street Journal has a very interesting report about how China is under-performing.

The country’s state-led growth model is running out of gas. A recession or crisis may not be imminent, but the long-run implications are just as serious. Absent a change in direction, China may never become rich. …First, official statistics probably paint too flattering a picture. Per-capita income may be a quarter lower than reported, based on a study of nighttime light co-authored by Yingyao Hu of Johns Hopkins University. …Second, it doesn’t measure up to the economies China seeks to emulate. Taiwan, South Korea and Japan all opened their economies to global trade and investment, enjoyed superfast growth for several decades… In fact, China seems to be slowing sooner than the others.

Why is China underperforming?

Too much statism. Simply stated, the government has too much control over the allocation of labor and capital.

For 30 years the Communist Party opened ever more of the economy to private enterprise, trade, foreign investment and market forces. Yet it never relinquished its commitment to socialism and Mr. Brandt says that since the mid-2000s the government has tightened control over sectors… An inefficient state sector matters less if the private sector grows fast enough. But in recent years, private firms in China have faced multiple headwinds. State-controlled banks prefer to lend to state-owned enterprises… The domestic private sector’s share of total sales has dropped about 5 percentage points since 2016, according to Goldman, while the state sector’s share has risen roughly as much.

By the way, many observers (from the American Enterprise Institute, Peterson Institute for International Economics, the New York Times, the New York Post, and Investor’s Business Daily) echo the concern about China becoming more statist in recent years.

I’ll make a more restrained point.

I’ll start by sharing this very interesting chart from the WSJ story. It shows how China’s growth, while impressive, has not been as rapid as the growth enjoyed by other Asian economies.

If you look below, you’ll see I’ve now augmented the chart to explain why China has under-performed.

On the right side, I’ve added the historical rankings from Economic Freedom of the World. As you can see (and just as theory and evidence teaches us), the other nations on the chart enjoyed more growth because they had more economic freedom.

These numbers reinforce my argument that China needs more pro-market reform. Though I should add the caveat that EFW has added more nations over time, so this comparison overstates the degree to which China is lagging.

But it is lagging. The bottom line is that China needs to copy Hong Kong and Singapore if it wants to become a rich nation. Or even Taiwan, which is an under-appreciated success story.

P.S. Keep in mind that China also faces demographic decline, which makes good policy even more necessary and important.

P.P.S. Amazingly, both the OECD and IMF are trying to sabotage China’s economy.

P.P.P.S. The WSJ story is an example of good reporting. If you want an example of bad reporting about China, check out this bizarre story from the New York Times.

Read Full Post »

Yesterday’s column weighed in on the debate whether Jesus was a socialist.

Like Cal Thomas, I don’t think the Bible supports coercive redistribution by government.

Today, let’s look at the same issue, but from a humorous perspective.

For those on the other side of the debate, Socialist Jesus has a very efficient mechanism to collect alms for the poor.

This approach is supported by some parishoners.

From Babylon Bee, we have a story about a disciple of Socialist Jesus.

A lot of Christians are criticized for not being very compassionate to the poor. But you can’t say that about Larry DeManson, a local believer who is so committed to charity for those less fortunate than himself that he always votes for government to steal money from his neighbor and give it to the impoverished. …DeManson no longer has a guilty conscience whenever he sees people in need. “I don’t personally have to do anything,” he said. “The government does it for me.” The man cites the verse “somewhere in James” that says that “true religion before the Father is to forcibly redistribute money from those wealthier than you in order to take care of the poor.”

Now let’s look at an alternative approach.

Except we won’t be sharing insights from Libertarian Jesus.

Instead, courtesy of Imgur, we have the story of Supply-Side Jesus.

And this Supply-Side Jesus is an advocate of trickle-down economics.

He creates lots of jobs.

And he believes in self-sufficiency.

He also opposes class warfare.

Supply-Side Jesus is a fan of the entrepreneur class.

And he understands self-promotion.

But not everyone is happy.

Supply-Side Jesus was in trouble.

But he avoided trouble, thanks to majoritarianism.

Supply-Side Jesus then decided to enter politics.

I don’t know who created this cartoon strip, but kudos for some clever humor (though I imagine practitioners of the “Prosperity Gospel” won’t be amused).

As a general rule, I find that leftists are too dour to create effective political humor (see the Black NRA, for instance). But when they come up with something clever (see here, here, and here), I’m more than willing to applaud.

Even when they mock libertarians!

Read Full Post »

As part of my collection of pro-and-con libertarian humor, I’ve shared some images of “Libertarian Jesus.”

There’s another perspective, of course. Many mainline protestant denominations have very statist political agendas, and there’s a “liberation theology” strain of Catholicism.

Some of these people even might argue that Jesus was a socialist. Back in 2009, I shared some excerpts from a skeptical column by Cal Thomas on this topic. Today, let’s take a deeper look.

In a video for Prager University, Larry Reed looks at the Bible to determine whether Jesus was a socialist.

I’m certainly not an expert on theology, but I definitely liked Larry’s point about the warning against envy in the 10 Commandments.

After all, “Thou shall not covet” certainly seems inconsistent with class-warfare policy.

Let’s see what others have written on this topic.

In her Wall Street Journal column, Mary Anastasia O’Grady explains that socialism, with its emphasis on the collective, is inconsistent with Catholic religious teaching.

Socialists pose as humanitarians and sometimes even as Christians but their system strangles the person, who is at the heart of Catholic teaching. Catholic University of America research fellow Father John McNerney, author of “Wealth of Persons” (2016), describes the “real wellspring” of human progress as emanating from “the unique, irreplaceable and unrepeatable . . . reality of the individual acting in relation to his neighbor.” …Economists understand that the profit motive is integral to entrepreneurship. But it is about much more than material gains. Father McNerney illustrates the point in his book with the story of Agnes Morrogh-Bernard, a Sister of Charity who worked in the west of Ireland in the aftermath of that country’s notorious 19th-century famine. Starvation had wiped out whole communities, when not physically, spiritually. …Sister Agnes recognized that “mere philanthropic handouts could not recover” the annihilated Irish spirit. The community needed a creative outlet; it needed work. …Agnes’s “entrepreneurial acumen,” Father McNerney writes, was “the spark that ignited the bright star of a small industry in post-famine Ireland.”

Writing for FEE, Randy England opines on what is found in the Bible

Jesus spoke many times of the poor. He talked about the last judgment when he would commend those who help others, especially the poor… He said it was easier for a camel to go through the eye of a needle than for a rich man to get into heaven… Jesus’ exhortations to help the poor have been used as arguments for the redistribution of wealth from the rich to the poor. …Jesus looked to personal charity and the state of the rich man’s heart. …It is notable that Jesus never even hinted that third parties or the state should forcibly redistribute the rich man’s wealth. On the one occasion when Jesus was presented with an opportunity to work an equal distribution of wealth, he quickly declined… Instead, he warned against greed while declining to play the busybody.

In other words, Jesus wasn’t a socialist. Or, if we want to be more accurate (since he presumably didn’t have any views about government ownershipcentral planning, or price controls), he wasn’t a redistributionist.

At least not if that required government coercion.

P.S. Also from the humor collection, President Trump disagrees with Jesus.

P.P.S. On the topic of religion and public policy, I’ve been critical of Pope Francis. His heart may be in the right place, but he’s misguided about the policies that actually help the less fortunate. For what it’s worth, it would be helpful if he was guided by the moral wisdom of Walter Williams rather than the destructive statism of Juan Peron.

Read Full Post »

Older Posts »

%d bloggers like this: