Washington's War on Men

Wall Street Journal editor David Wessel says on this video, which I picked up from Market Watch, that even when the economy recovers Larry Summers expects one in six men to remain permanently unemployed. This would likely be among the less educated and lower income.  In another Market Watch article Eleanore Goldberg points out that single women purchasing homes outnumber single men purchasing homes two to one.

The Federal Reserve Bank's policies have harmed low-wage workers, squeezing their pay through inflation while subsidizing investment and commercial banks through monetary creation.  I am not so clear why women should be outperforming men in America's declining economy, declining because finance has been massively subsidized at the expense of innovation and hard work.

Men need to make more efforts to learn marketable skills, obviously.  Perhaps false expectations have deluded many men, whereas women have tended to assume that they are at a disadvantage and so tried harder.  America increasingly strikes me as a place much less desirable in which to live than it was several decades ago when, say, I entered college.  I did not dream that so much decline would occur so fast.  Big government and a socialized economy, the policies that American universities advocate, have hammered America into the dust.

Americans need to wake up to the decline and end the socialism with which Washington has harmed so many.

How to Cut State Government

Gus Murphy of Brooklyn had written to our local newspaper, the Olive Press, asking how to cut government. Here is my response:

Dear Editor:

Gus Murphy asks for specifics as to how to cut government spending (May 6) and the Wicks Law is one of many.   

30-50% of New York State's budget is waste.  Medicaid and other health-related fraud amounts to billions.  A nurse at the Kingston/Rhinebeck Tea Party told me that in her opinion nearly half of Medicaid spending is for waste. Until this year New York's per capita spending on Medicaid was double that of California's. If she is even half right, the savings from Medicaid fraud and waste alone amount to ten percent of the state's budget.  

One national statistic is that the average public sector employee's pay is $39.22 per hour and the average private sector employee's pay is $27.42 per hour.   How about if public sector employees, starting with school teachers, earned parity with the equivalent work in the private sector using comparable worth (pay evaluation) methods?

Moreover, why can't school teachers be paid for productivity?  School vouchers would do this through competition.  Too many public schools have become ideological brainwashing centers and have failed to teach the three 'rs.  Diane Ravitch shows in her book Left Back: A Century of Battles over School Reform that "Progressive" education techniques have demonstrably failed, yet education schools, school districts and teachers insist on them.  Vouchers could cure this, and cure excessive administration and pay levels.

Procurement is a problem.  The balance of quality and low bid practices depends on management knowledge that government cannot develop because it depends on annual budgets rather than long term performance measures.  Leasing decisions are made that make this year's budget look good at the expense of next year's. Infrastructure repairs cost money this year but save money over the long term.  Bridges and roads become more expensive to repair as time passes. Vehicle fleets are allowed to fall apart, in part because public perception favors state employees driving older cars, but the older cars are more expensive because of repair bills. 

As of the early 1990s the state did not know and could not value its own land holdings. Land was being given away to various parties such as charities without knowing the land's value.  The Erie Canal was a major tract and the state had to do a major survey just to figure out what it owned before it could start re-development. 

Because public sector accounting remains obfuscatory, it is difficult to compare state operations across states, which is essential to good management. Rather than fighting for coherent budget and financial statement categories that can be compared across states, and for integrated accounting system within the state, the Governmental Accounting Standards Board was set up in the mid 1990s and created half-way measures.  Depreciation still is not charged against state buildings, for instance.  Programs cannot be compared to programs across states.   Budgets for construction are backcharged to agencies and made difficult to compare because they are co-mingled with other program costs.

The bottom line is that no one can look at the operation of a program, say a commission on banking, and compare its costs to a comparable commission in other states. That is no accident.  No media source has raised the desirability of having this. No media source has discussed the effects of annual budgeting on long term costs.  No media source has made an issue of accounting practices since the 1970s.  The attitude in New York is: if it's broken, don't fix it; and if money is wasted, so what? 

After decades of Democratic Party rule in this state, millions have fled, services are dismal, and the economy is in steep decline. Here we see the result of the ideologically driven school system, because the public cannot figure out that if you keep raising taxes and squandering the money, the state will become poorer and decline.  New Yorkers are going to need to learn for themselves what the Greeks are learning for themselves. And like the Greeks, given 12 years of brainwashing that they went through in school, New Yorkers will blame everyone else in the world and will call them "racists" but will not blame the true culprit: the voters and public of New York State that has voted for self-destructive policies and the Democratic Party. 

Sincerely,

 

Mitchell Langbert

Democratic Paradox

The Democrats have an interesting plan. Faced with the failure of 90 years of Progressivism and New Deal redistribution; a stagnant real hourly wage; a failed, monopolistic investment and commercial banking system that is the product of New Deal social democracy; an international monetary system that is a Rube Goldberg device fastened to a casino; wasteful real estate and stock market bubbles; and cities that have survived by gutting their economic identities and riding the crest of the same stock and real estate bubbles, the Democrats aim to further restrict economic opportunity; raise taxes; smash economic innovation and impoverish future generations. The Democratic paradox is this: when faced with economic decline, resolve it by deepening the decline. They did it during the depression, causing the 1930s to constitute a much longer correction than any before the existence of the Fed, social democratic programs and Keynesian monetary policy. They aim to do it now.

Cure decline by deepening the decline. The Democratic paradox.

New Yorkers Turned New York into A Hellhole--Now They're Doing The Same to Florida

New York City exemplifies the terrible destruction that the "progressive" or social democratic ideology has wrought. Once a center of innovation, the corrupt Ochs Sulzbergers and their minions, Robert Moses and the long list of social democratic bozos, have turned New York City into a playground for the super rich. Destroying the light manufacturing and business base; imposing regulation that destroys innovation; attacking business and private initiative through taxes; only the highest-margin service businesses, law, advertising, consulting and investment banking remain in New York. Destroying the housing stock through regulation, labor unions and rent control, the Ochs Sulzbergers and their mindless supporters trumpet how they help the poor and middle class, while they have ghettoized and made the lives of the poor and minority groups hopeless.

New Yorkers have fled the disaster that they have created. But brainwashed by the city's ideological elementary and high schools and by the city's ignorant mediazvestia, New Yorkers continue to advocate the very policies that have made it impossible to remain in New York. One must suppose that in the coming years places like Florida and California will continue to become incompetently run centers of decline, much like New York City.

Community and Progressivism

Progressivism expressed the moral impulse of social Gospel Christianity and Populism as well as the social democratic ideas that late nineteenth century American university students brought home from the University of Berlin and other German universities. But the intent of morality is not the same as its execution. We can try to improve a bridge, but if the new bridge does not stand, then we have not helped. Moral action requires efficacy.

Progressivism emphasized large scale. In urban redevelopment, Robert Moses built roads, beaches, highways and public housing, but disregarded the effects on neighborhoods and personal networks within them. Jane Jacobs dissected his work on the Cross Bronx Expressway and New York City's public housing projects in her book Death and Life of Great American Cities. Progressivism aimed to improve efficiency and quality by increasing scale and applying a regularized pattern. But large scale often does not work. It is inflexible and difficult to change.

Robert Putnam has written an excellent book, Bowling Alone, about the decline of community. But the last thirty years has increasingly seen the failure of Progressivism, so it is not surprising that many Americans have chosen to shift from what Daniel Elazar calls the moralistic to the individualistic political pattern. Not only neighborhoods but the individual's relationship to the state, to his family, his employer and his economic future have been modified by the centralizing tendency of Progressivism, resulting in increasing distance from decisions and processes that modify his life. The classic example of this transformation is the Great Depression of the 1930s, which was the first major failure of Progressivism. Caused by a combination of inappropriate central bank tightening (Milton Friedman) or by President Hoover's mistaken attempt to cajole major employers into refusing to cut wages (Murray Rothbard), the Depression followed the establishment of the Federal Reserve Bank by less than twenty years and the implementation of Wilson's World War I economy (in which Hoover played a crucial role as Food Administrator) by less than ten.

Increasingly, government has been centralized and inflexible and incapable bureaucracies have been established. The Progressives claimed that "experts" could solve problems, so a hierarchy of expertise was established, and citizens' opinions became less important. Americans allowed themselves to be convinced that experts knew better. The news media also centralized, in part in response to growing labor costs facilitated by the National Labor Relations Act and the advent of television. The centralized news media became an advocate for government by expertise, the wisdom of Keynesian economics and bureaucracy.

The Progressive policies of urban redevelopment led to near-extinction of urban centers and the subsidization of suburbs, which in turn led to increasing commutes. As well, since the abolition of the international gold standard in 1971, declining hourly real wages have led to increasing hours of work as Americans have struggled to keep up with the declining economic opportunity that central planning has caused. The pure exhaustion of multiple jobs coupled with the distraction of television and the need to decompress has increasingly alienated Americans from their communities.

Moreover, a sense of apathy has set in because the centralized, unresponsive firms and government bureaucracies that Progressivim has established seem to be beyond the efforts of most Americans. As a result, a society that is increasingly stratified between those who benefit from Federal Reserve and governmental subsidies and those who do not has been accomplished in the rhetoric of moralistic, Progressive reform. The dissonance created by the discrepancy between the ideology of Progressivism and its assault on human dignity and living standards leads inexorably to loss of community and economic decline.

John "Zippy" Callister, Doug Ross and the MSM's Three Biggest Lies

Doug Ross has an interesting blog about John "Zippy" Callister's letter to the Wall Street Journal (courtesy of Larwyn). Mr. Callister had written to the Wall Street Journal complaining that while his portfolio went up during the eight Clinton years, the S&P 500 has done little during the Bush years (actually it has done alot if, as Howard Katz and I have done, you bought in 2002 and sold last year). Mr. Callister, publicly-spirited as he is, complains that he does not care about terrorism, overseas wars, social security or income tax:

"...But, a 100 point gain in the S&P 500 means about $50,000 in my pocket... It is odd that so many people forget the stock market boom of the late 1990s."

Doug is annoyed at Zippy, and rightly so, although Zippy's argument is more revealing about the Democrats and the mainstream media than Doug suggests.

According to my broker at Smith Barney, the S&P 500 is currently at 1409. If 100 points (7% x 1409) means $50,000 to Zippy, that means his portfolio is roughly $50,000/ .07 = $714,000.

Zippy suggests that his portfolio hasn't increased since 2000, so I assume it was $714,000 in 2000. In contrast, the Census Bureau says that the median household net worth in 2000 was $55,000. The median household net worth for households in the highest income quintile was $185,000. In 2000, only 27.1% of households owned stocks and mutual fund shares at all, and these had an average value of $19,268. 29.9% of households had 401k plans with average assets of $29,900. Thus, Zippy's household wealth of $714,000 put him well above the median for the highest quintile in 2000. That Zippy favors the Democrats is revealing of the the MSM's three biggest lies:

Lie Number One: The Democrats are for wage earners, not the wealthy.
Lie Number Two: Corporate interests reflect the public interest.
Lie Number Three: The stock market goes up because of general prosperity.

MSM Lie Number One: The Democrats Favor Wage Earners, Not The Wealthy

Conservatives and libertarians often wonder why the wealthy, such as George Soros, Warren Buffett, Nancy Pelosi and Zippy, tend to prefer progressive-liberals and Democrats. The "Red" states, it has been noticed, are concentrated where there are many trust fund babies and millionaires, while the "Blue" states tend to be poorer. This is chalked up to left-wing education. But progressive-liberal dogma is consistent with the economic interests of the wealthy. The reason is that the Democrats tend to be even more inflationary than the Republicans, who are also inflationary, just not so much.

Yet, the MSM repeats the claim that inflationary, high-tax, high-regulation policies favor the average American rather than the wealthy, "Red State" trust fund babies whom such policies do favor. Zippy is merely the bull in the china shop who reveals to us that selfish impulses do matter. The Republicans' policies help the average working man while the Democrats, who claim to be for the poor, help Zippy.

MSM Lie Number Two: The Stock Market Reflects The General Prosperity

Advocates of mainstream finance theories argue that markets are rational. This has a clinical sound to it. However, even if true, rational markets do not require rationally run corporations. In fact, most big businesses aren't run rationally. They require subsidies at public expense. Even if large businesses were run efficiently without the need for government welfare, their interests would not coincide with the general public's for several reasons. Laws that protect business from competition serve corporate interests but do not serve the public interest. Since the 1850s, business has lobbied, often effectively, for protectionism, regulation to rationalize markets, easy credit, lucrative government contracts and the like. Public waste is private profit. Stockholders of firms that benefit from wasteful government contracts, protectionism, regulation and subsidies become wealthier as the public becomes poorer. Joint gains are only possible in a market economy. Yet, the MSM repeatedly claims that stock market increases are good for the general public. This is not the case in a mixed economy where government subsidies are common. They are certainly good for Zippy, who is wealthier than average and who benefits from secular stock market increases. They are also good for government contractors. But they are not good for the average person.

MSM Lie Number Three: The Stock Market Goes Up Because of General Prosperity

This is perhaps the most pernicious lie because it encourages the public to harm itself. The chief driver of the stock market is interest rates. Interest rates are chiefly influenced by the Federal Reserve Bank. The Federal Reserve Bank can raise interest rates by contracting the money supply and can reduce interest rates by increasing the money supply, i.e., printing money. The advocates of printing money were known as Populists in the 19th century. In the twentieth century they realized that if they pretended to be scientists their self-serving claims would be more convincing. Thus, they packaged their argument for increasing the money supply in the garb of "science", calling themselves "macro-economists". The "macro-economics" that they advocate is in substance the same as the arguments of the 19th century Populists, who advocated greenbacks and free silver. The macro-economists claim that they can adjust the money supply at different stages of the economic cycle, but the Fed doesn't do this. Although the Fed has never done this, the "scientists" do not revise their opinions, and when they gain power they do the same thing that the Fed has always done, namely, they support the stock and real estate markets at the expense of the general public. The money supply has gone in one consistent direction since the Fed was founded--UP. The US money supply is 16 times greater today than when the Fed was founded in 1913.

Stock and real estate markets inflate along with the money supply because of low interest rates. But increasing the money supply has another effect, namely, because the number of dollars in circulation is increased at a faster rate than the value of output increases (a painfully difficult fact for progressive-liberal advocates of the large-corporations-are-rational philosophy) there are general price increases, i.e., inflation in food, energy, labor and other prices. Prices have indeed gone up by 3.5% on average since 1979. A dollar in 1979 is worth 38 cents today. The mother of three must pay more for milk and her children might be hungry, but Zippy and his fellow Democrats gets to pocket the increase, and he is happy.

In the past six years the price of gold has gone from $250/oz. to nearly $900/oz. Thus, although the Republicans may not have been as good at inflating the stock market as the Democrats, they have been much better at inflating commodity prices. Of course, neither party is different from the other because they are both following the same inflationary policy. They are the ReInflateoCrat Party (the In stands for Bloomberg Independent). Howard S. Katz argues that there is a commodity "pendulum" which causes first declines in commodity prices and increasing stock market prices then increases in commodity prices. Katz argues that we are only at the beginning of the pendulum swing favoring commodity prices and that we still have a decade or even two to go. This will be true whether Democrats or Republicans win.

In other words, the stock market increases of the Clinton years are desirable only to trust fund babies, the wealthy, Democrats and Zippy. They are not beneficial to the average American.

What is perhaps most telling about Zippy's letter is his simple-minded selfishness, a characteristic of today's wealthy that did not characterize the wealthy of the late 19th century. I attribute this to progressive-liberal education and the general triumph of progressive-liberalism, which is a philosophy of pretended altruism coupled with the devastation of the average American through taxation and other violent state policies that progressive-liberals gleefully depict as altruistic when they are mostly self-serving.