Saturday, November 1, 2008

All Republicans Should Go On Welfare and Bring Social Democracy Down

Part of the reason America has pursued the path of redistribution, socialization and monetary inflation over the past century is that hard working people have been willing to allow themselves to be exploited. There is a distinction between achievement and security. Two psychologists, David McClelland and Abraham Maslow talk about these needs. Achievement is targeting a standard of excellence and security means being free from anxiety. Americans have a strong need for achievement and for security, and these often transcend the need for money.

Redistribution from achievement in the interest of security means that the individual who focuses on achievement becomes a fool, a sucker. He is willing to work hard but allow the fruit from his hard work to be stolen from him and redistributed to others who are disinterested in hard work. This is true in the corporate system, which emphasizes teamwork and interpersonal skills, the indulgence of power needs and kowtowing, at the expense of innovation and achievement. It is also true across the economy, where unproductive teachers and academics, quack medical researchers, lawyers who destroy rather than produce wealth and investment bankers who speculate are rewarded and those who till, produce and innovate are taxed in order to subsidize the special interests.

There has likely been a destruction of innovation since the New Deal and Great Society. It is impossible to know how much innovation there would have been had there not been increased taxation, inflation and regulation in the twentieth century. At the same time, security needs were frustrated in a laissez faire economy. The game plan of the social democrats has been to provide two cents to the poor to enhance the psychology of security, and then transfer 98 cents to special interests and the educated elite who produce little and have become the chief beneficiaries of the state.

In the 19th century there were considerable fluctuations in prices and in the late 19th century a long deflation due to productive innovation. This created insecurity. But there was a link between the explosion of innovation and the price deflation. Through inflation, non-innovative investments are subsidized. In turn, there is an incentive to turn from engineering and innovation to investment banking and law. Innovation slows but income inequality increases as inflation erodes wages and capital is diverted into the hands of Wall Street and hedge funds. When the speculators fail, the entire system, Democratic and Republican, lurches up to advocate further direct subsidies to the unproductive interests. Faux cries of deflation energize demands for ever greater money creation placed into the hands of Wall Street. Thus, the Progressive state enhances an illusion of safety at the expense of achievement.

What sustains this exploitation of achievement are the achievers themselves, who are willing to work despite the harrassment that they receive from inflation, taxation and regulation.

In the 1950s in Atlas Shrugged Ayn Rand postulated a situtation where the most productive Americans simply drop out. Hard working people should begin to consider giving up hard work. Hard workers are fools under a socialist economy. It is time for those who work to consider putting their dollars into Euros and gold and simply retiring. If millions of Republicans go on welfare, then the system will collapse. Then, achievers can begin building a new America from scratch.

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