A Horrible Week for Global Socialism

By Alan Caruba

Over the weekend of August 6-7, the Wall Street Journal’s lead headline was “U.S. Loses Triple-A Credit Rating.”

On Monday, August 8, the Journal’s headline was “Markets Brace for Downgrade’s Toll.”

By Tuesday, August 9, it was “Downgrade Ignites a Global Sell-Off.”

On Wednesday, August 10, it was “Markets Sink Then Soar After Fed Speaks.”

Thursday, August 11, the Journal cast its eyes across the Big Pond noting that “Italy’s Woes Weigh on Europe.”

On Friday, 12, the headline said, “Stocks Swing Up in Wild Week.”

A week after the Standard & Poor’s downgrade of the U.S. credit rating from AAA to AA+, in the August 13-14 edition, the Journal took note of a “Global Crisis of Confidence”, adding that “World Policy Makers’ Inability to Agree on Fixes Led Markets on Wild Ride.”

As the new week dawned on August 15, the Journal said, “Markets Gird for Fresh Drama.”

It was a great week for dramatic headlines and a horrible week for the rest of the world. Mostly, though, it was a fulfillment of former British Prime Minister Margaret Thatcher’s observation that socialism works just fine until you run out of “other people’s money.”

That is a perfect definition of “redistribution” or, as President Obama once observed, “At some point you’ve made enough money.” A more un-American statement has rarely been uttered by an American President.

The U.S. has been engaged in a huge experiment in redistribution since the years of the Great Depression when Franklin D. Roosevelt, a man who knew absolutely nothing about running a business and who had spent most of his life living off an allowance from his mother, tried everything he could think of to get the economy going again.

FDR could have tried cutting taxes. He could have encouraged Congress to avoid voting for trade barriers in a fit of protectionism. Instead, he came up with Social Security, among an alphabet soup of government programs which were a disaster when it came to encouraging private sector job creation. Not unlike President Obama's "stimulus" and other doomed-to-fail experiments

The history of Social Security is one long succession of lies that Americans have been told. By the time Lyndon B. Johnson was President, the funds set aside for Social Security payments were moved to the general fund where they could be plundered by Congress. Under President Clinton Social Security payments began to be taxed as income.

World War Two arrived in the U.S. on December 7, 1941, and full employment followed to defeat the fascists in Germany and Japan. The government that had expanded during the FDR years continued to expand.

Americans emerged from the war without a scratch on the homeland. With the exception of Hawaii’s Pearl Harbor, none of our cities were bombed. We had a million battle-tested young men returning home in 1945, the GI bill let them go to college if they wanted, and by the 1950s we were on our way to being the greatest military power in the world and the greatest economy ever known.

And the federal government never stopped expanding. It needed more money, but the stock market, with occasional recessions, just kept growing too. As time went along, Great Britain and Western Europe rebuilt, alliances such as NATO were created to thwart the Soviet Union’s ambitions, while Eastern Europe stagnated under Soviet imposed communism.

In Asia, Japan became an economic powerhouse and South Korea too. China which had suffered under Chairman Mao waited until he died to convert its economy to a capitalist model, while retaining all the worst aspects of an Orwellian communist government. In the Middle East, oil allowed nations led by a handful of tribal chiefs and assorted despots acquire wealth beyond belief. Their populations remained oppressed. Now they are in the streets demanding freedom and justice. They will get Sharia law and more oppression.

Economies became increasingly global and interconnected. Europe became the European Union, a huge bureaucratic mess with the Euro as a common currency. Western bankers purchased Europe’s securities and vice versa. When the housing market imploded in September 2008, they discovered that most were de-linked from the original mortgage assets and were essentially worthless to the tune of billions.

The Federal Reserve responded by shipping $600 billion to prop up European central banks and Congress responded by authorizing the Treasury Department to “bail out” U.S. banks and the huge insurance company, AIG, with public funds--your money.

So what have we learned from all this? Foremost of all, socialist economies are inherently unfair and disconnected from the real world of hard work, property ownership, and capital investment. We learned that bankers are greedy and take greater risks than they should.

Great Britain, which has become one of the greatest welfare states in the world, was rewarded for its generosity with looting and rioting by youths whose families had lived on the dole their entire lives. Greece had already had its spate of riots.

Everyone keeps saying that the U.S. must not become Greece, but the U.S. has become Greece and that accounts for all those horrible headlines from last week.

The Obama administration, which has steadfastly ignored every previous “commission” that has studied the economy, has now engineered “a super committee” in Congress. It is composed of the twelve worst ideologues on either side of the economic policy divide in an effort to cut some spending, any spending! Failure has been baked into that cake.

The old way of conducting the affairs of nations, particularly their economies, is coming apart at the seams. It has exposed the hypocrisy of socialism here in the United States and everywhere else it has been practiced.

© Alan Caruba, 2011

Living Through History

By Alan Caruba

We live our lives one day at a time and, at best, understand them only in hindsight. The chief advantage of old age is the ability to look back and, hopefully, to draw some lessons from the history through which we have lived.

My chief regret is that so many among the generations coming up behind me have so little real knowledge of America’s or the world’s history, be it recent or long past. Indeed, history books in our nation’s classrooms have become a battleground between competing ideologies because those who determine what history is taught will shape what history is to come.

The destruction of our education system since the 1960s is not an accident. It has been deliberate.

I have lived through seven decades of history. Born in 1937 in the midst of the Great Depression, I have lived to see a comparable Depression.

Anyone who persists in calling our present economic crisis a Recession is whistling passed the graveyard. You cannot have as many unemployed people as we do today, owe as much as we do to foreign central banks, and continue to spend as senselessly as the federal government, and not call this a Depression.

The main difference, as I see it, is that while Franklin D. Roosevelt and his advisors were sincerely, but ineptly, trying to turn the economy around, the Obama administration sees it as an opportunity to totally destroy the nation by bankrupting it, by refusing to seal off its southern border from an invasion of illegal aliens, by imposing a healthcare act that nationalized one sixth of the economy, and via other comparable abuses.

I have been thinking about the seven decades of my life because I have been reading about them in an excellent book, “American Dreams: The United States Since 1945” by H. W. Brands ($32.95, Penguin Press).

What struck me most forcefully and personally was the fact that I was so utterly clueless throughout much of my early years, despite having graduated from university, served in the U.S. Army, and been a working journalist until I approached my thirties. Even then, jobs with the New York Housing Finance Agency, followed by a stint with the New Jersey Institute of Technology, did not connect me with the events swirling around me.

It was not that I was unaware of events. My childhood coincided with the Cold War that had shaped national policy under Truman, Eisenhower, Kennedy, Johnson, and Nixon. I graduated university the same year Fidel Castro took over Cuba in 1959 and I finished out my Army service waiting for the outcome the Cuban missile crisis, grateful that it passed like a quick storm. The only thing I knew with certainty was that Communism was evil.

My politics were not particularly nuanced. My parents were Democrats and liberals. I followed suit because I knew no better. To their credit, they both began to have doubts with the advent of the Vietnam War and the Great Society spending. They had, however, benefited from the tremendous prosperity that followed the end of WWII, owned their home, had happily purchased all the new appliances that enhanced everyone’s lives, and raised my older brother and me in comfort.

I, along with other Americans, had seen the nation put a man on the Moon, had seen the enormous productivity of our manufacturing sector and assumed it could not end. It not only could end, it began to end as globalization undermined domestic growth. America has increasingly become a service industry economy, one dependent on easy credit, and an ever-expanding federal government.

I was into my 40s by the 1980s and only beginning to connect the dots of the history happening in the nation and the world. By then I was enjoying a career in public relations that took me all over the nation and introduced me to a wide variety of people in business, industry, and agriculture. Until then I had not realized the enormous inhibiting effect the federal government had on the economy through its intensive, expanding regulatory powers.

The environmental movement had gained momentum by then and in time it would determine how much water a toilet could use, how many miles per gallon autos must provide, and the soon to be enforced edict that literally bans the incandescent light bulb! Significantly, the Greens have seen to it that more and more of the nation’s vast sources of energy were put off limits.

The era of Ronald Reagan transformed my thinking. I became a Republican. Others did too, but it was the Clinton years in the 1990s that confirmed my distaste for the Democrat Party. When the GOP regained control of Congress in 1994, Clinton was smart enough to adopt much of the legislation they proposed and take credit for it.

The collapse of the Soviet Union was followed by the most transformative event since WWII. September 11, 2001 and the subsequent military engagements in Afghanistan and Iraq flowed from that Islamic treachery. I suspect that history will judge George W. Bush less harshly than his peers. The financial crisis in 2008 plunged the nation into a downward economic spiral that brings us to today. The election of Barack Obama has only served to exacerbate it.

The Internet loosened the grip of the “mainstream” news media as Americans with access to information as no previous generation, discovered they had been betrayed for decades by the liberal “spin” the news included. The advent of talk radio was a revelation for many.

At a time when what is most needed is serious investigative journalism regarding a virtually fictitious President, Americans must depend heavily on Rush Limbaugh and Fox News to inform them of the damage being inflicted on the nation.

You cannot be, as I was, indifferent to who is in public office, intent only on your personal life as if some mysterious force will intervene to make things turn out right.

There is nothing mysterious about “the consent of the governed.”

There is nothing mysterious about the ability of Americans to put things on the right path again. The American Dream can be made to work if we elect the right people to represent us and begin to shrink the federal government. That is the lesson I have drawn from my years and one I hope to see reignited in the years to come.

© Alan Caruba, 2010

Sorting Out Global Grievances

By Alan Caruba

“Cry havoc and let slip the dogs of war!” – Shakespeare, Julius Caesar

Every couple of decades, the world needs to sort out its various grievances. The most common mode of doing this is war and it is a truism of war that those waging it, successfully or not, sooner or later want it over. Empires, great and small, are always exhausted and generally ended by wars, even if they are on the winning side.

The last century was distinguished by two World Wars. The first was largely limited to Europe. Mechanization increased the numbers killed and it ended so poorly for Germany that it felt compelled to go to war again a mere twenty years later. That ended poorly for them as well. Making matters worse, the Japanese had dreams of empire at the same time, thus making both conflicts truly global. Their dreams ended under a mushroom cloud on August 6, 1945.

This did not dissuade the North Koreans from invading South Korea a few years later. The United States led a so-called United Nations coalition of forces, but as usual we did the most fighting. We went that route again in Vietnam until Americans began to fill the streets of Washington, D.C. with protests and, eventually, we left.

Things quieted down for Americans after that. We had a sortie or two in Panama and Grenada, and suffered losses as part of a peacekeeping force in Beirut. The Russians decided to invade Afghanistan and that turned out as badly for them as Vietnam for us.

After 9/11 we were the next ones into Afghanistan and have still been unable to leave. After Iraqi dictator, Saddam Hussein, had finished unsuccessfully waging war with Iran and then invaded Kuwait, it was a fairly easy decision to put troops in Iraq to get rid of him. We are still there.

At the end of World War One, the League of Nations was created to avoid future wars and then ignored. After World War Two, the United Nations, a pet project of Franklin D. Roosevelt, was created. Its first, interim Secretary General was a Soviet spy who worked at the highest levels of the U.S. State Department. Not a good start.

The United Nations is now the solely owned property of a coalition of Middle Eastern, African, and various socialist nations in South America and elsewhere. It is not merely useless, it is evil incarnate. Everyone in its headquarters on the East River should be told to find someplace else in which to intrigue against the U.S. After that, the headquarters should be fumigated and turned into condos.

After the world wars there was a passion to create international organizations whose purpose was to resolve conflicts, create trade agreements, and, in the case of the International Monetary Fund, bail out nations too stupid or criminal to conduct their own affairs without adult supervision.

Along with the World Trade Organization and similar organizations, ostensibly, the object was to maintain global stability, but the reality has been the establishment of global governance; one in which the central banks play an important role. To achieve this, nations must be induced to relinquish their national sovereignty.

In Europe, to avoid any more wars between Germany and France (which dragged everyone else into the mess) the European Union was formed. It sports a common currency and open borders. It came complete with a huge bureaucracy to promulgate thousands of regulations and a whole new class of useless political jobs.

None of this international fervor seems to turn out well and the EU is watching its plans for a united Europe go up in smoke thanks to Greece and other members tottering on bankruptcy. So much for the theory that global or multinational organizations are any better at running their own affairs than individual states, particularly if they are socialist economies.

If you think about it, getting all of the now fifty American States to work together as we have since the Constitution was ratified in 1788 is nothing short of a miracle, although we did take time out in 1861-1865 to sort out the nasty business of slavery. As usual, war was the way the matter was settled.

We have now arrived at 2010 and, as we look around, the U.S. has its military in Afghanistan and Iraq, along with an estimated 700 to 800 bases and missions, large and small, around the world. It has personnel in some 156 nations and always by invitation unless, as is the case with Afghanistan and Iraq, we’re there due to provocation and national security.

The entire world’s security is threatened by the rise of militant Islam and that genie has to somehow get put back in the bottle. Killing the Islamists from among 1.3 billion Muslims seems to be the only way to do it.

The United Nations is useless. The European Union is facing a financial meltdown. Its socialist member nations such as Greece, Spain, Portugal, Ireland, Italy, and even England have managed to spend their citizen’s money until there is none left to spend. Just as the Soviet Union imploded in 1991, it too may fall apart. As far back as 1848, Frederic Bastiat defined socialism as “legalized plunder.”

The contagion of financial failure is likely to lead to worse problems and, unfortunately, the United States will not be exempt because it too is deeply in debt. The national debt under the present administration has been tripled. Collapse is a very real possibility. Nations in the Middle East and anywhere they are run by despots will see an opportunity to resort to military means to expand their power.

In the same way the world fell to making war in the 1930s, it is on the brink of a similar scenario unless the prospect so frightens the leaders of Western and Asian nations that they will be left with little else than to threaten all others to settle for solutions that do not involve missiles, armies, navies and air forces.

The much vaunted “globalization” has masked the reality that individual nations must act responsibly or pay the price. History does not forecast a good outcome.

© Alan Caruba, 2010

A Trip to the Mall

By Alan Caruba

A trip to a local mall today was instructive, if not a bit enervating. What is most obvious is the astonishing amount of merchandize there is for sale; clothes, clothes, and more clothes, followed by all manner of other goods. I was there to check out flat-screen televisions. I could say I thought it was my patriotic duty to buy one, but the truth is I was looking for sales.

The really big ones are still pricey, but the smaller models are within most people’s budgets and I saw a fair number of fellow patriots checking them out.

The mall is the quintessential American invention, not unlike supermarkets. Ours is a consumer society, but a lot of people are asking if we have forgotten how to manufacture anything any more. In truth, Americans still manufacture lots of stuff.

This thing called “globalization” is just capitalism at work as corporations and others look for the most competitive, best price to get their goods made. As much as I would like to see “Made in America” on anything I purchase, I must confess it no longer matters that much to me. Perhaps the most unexpected result has been the co-dependence we now share with China.

Herbert Meyer, a former intelligence analyst during the Reagan administration, has pointed out that American business has been going through a major restructuring for a long time. “A generation ago, IBM used to make every part of their computer. Now Intel makes the chips, Microsoft makes the software, and someone else makes the modems, hard drives, monitors, etc. IBM even out-sources their call center.”

IBM, like so many U.S. corporations, has become an aggregator as opposed to a manufacturer. It creates a vast network of companies, some here in the U.S., others overseas, all of whom are dependent on the other for the ultimate success of the product. It’s a very good reason for reducing the endless regulations imposed on American businesses, large and small, to the tune of costing a trillion dollars annually. It’s a good reason for tax cuts to encourage consumers to consume.

After wasting a lot of time trying to make communism work, the Chinese have embraced capitalism. By 2020, they will be producing more cars than the U.S. They have a billion people, compared to our current three hundred million. That means a lot of Chinese are going to want to drive to work and elsewhere. Unlike the U.S., the Chinese are building and upgrading their infrastructure of highways and bridges while ours are full of potholes and bridges that occasionally collapse. Investment in our infrastructure would be good for a dozen reasons.

The urge to have the federal government “bail out” companies that have been poorly managed is strong, but it is not the way capitalism is supposed to work. On the other hand, when the U.S. Postal Service makes ready to lay off 40,000 workers, it is an example of how new technologies drive out earlier ones. It’s sad for the workers, but then we no longer get around in horse drawn carriages, and milk and ice are not delivered to one’s home by horse drawn wagons.

I needed to actually see and compare the flat-screen television sets competing for my dollar. Proof, I guess, that sometimes, you just have to go to the mall. And sometimes, while you’re there, you realize how the world has shrunk and how our American style of doing things has been embraced by the world.