It's a Social Security Scheme

Jim Rickards' s Agora Financial forwarded this Vanity Fair article and video-taped interview with Jeffery Gundlach, a Forbes 400 Wall Streeter. According to Wikipedia Gundlach was the fund manager for the TCW total return bond fund. He was fired; then, he founded Doubleline Capital. Wikipedia suggests that he has sometimes been overly bearish. In 2011 he liquidated 55% of his position in municipal bonds, but municipals did not decline.

It is easier to know what will happen than when. Rickards forwarded the piece because Gundlach is bearish on bonds--six years after his pullout from munis.  That is understandable.  I too have been  bearish, cutting back on my stock holdings in 2016 and hence getting a smaller benefit from the 2017 rally than I might have. (As well, I am a tech skeptic, which also has been a costly mistake. C'est la vie.)

The current rally will snap, either in '18 or later, and there will be a correction. There will then be monetary expansion on top of the already immense monetary expansion since 2008, and Americans will continue to suffer declines in their real wages and real household income as Wall Streeters like Gundlach benefit handsomely and those with at least some assets in the market continue to gain.

What I found most interesting about Gundlach's talk is his cavalier attitude toward screwing middle income baby boomers by instituting means testing for Social Security. He does not seem to have thought through the issue carefully, but he seems to suggest that currently benefit-eligible elderly should have their benefits cut in order to make federal government bonds more attractive to him.

Like all Wall Streeters, Gundlach has benefited handsomely from public subsidization.  No one knows how wealthy Warren Buffett or Jeff Gundlach would have been without the massive monetary expansion since 1971, but neither would be nearly as wealthy as they are.  Feeling comfortable with his own benefits from the public purse, Gundlach sees the need to cure federal indebtedness fast by reducing Social Security benefits. That way bonds will surely rally.

Gundlach is right that benefits need to be reduced. Federal indebtedness is now in excess of 100% of GDP, not including the future unfunded liabilities of the Social Security System.   According to CNBC, if actuaries use an unlimited time horizon (beyond 75 years)  rather than a 75-year horizon, the future unfunded liabilities of the system are $32 trillion.  Current GDP is $19 trillion.

Projections beyond 10 or 20 years have little meaning because the assumptions that actuaries make become increasingly inaccurate.  Technological shifts, demographic shifts, wars, diseases, impoverishment of the middle class, inflation, and monetary expansion change life expectancy.  CNBC claims  that until 2034 Social Security will be able to cover benefits. Thereafter, there will be a 25% deficit until 2090.  After that the system will be in extremis.

Gundlach suggests that boomers' benefits be cut by instituting means testing.  In other words, the middle income savers whom Gundlach's backers at the Fed have screwed by reducing interest rates should be screwed again by means testing Social Security.  Those who made life decisions based on government lies that Social Security is an insurance plan should end their lives in poverty. Gundlach is confident that boomers will not complain. He claims that they are a unique generation, but he does not offer a reason. 

Gundlach is right: Through monetary policy Wall Street has screwed boomers who save, and they have been too dumb to complain for 40 years, so Wall Street's lackeys in Congress might as well once again screw them by cutting Social Security in order to gain a few extra years' bond rally. They likely won't complain again.   Gundlach will profit. That's what the phrase "a good economy" means in today's English language.

As Gundlach suggests, the retirement age should be raised.  An increase of one year beginning with  two years from now might be a fair solution. Thus, people born in 1953 wouldn't get full benefits until 2020; people born in 1954 (my birth year) wouldn't get full benefits until 2022, and so on. The full-benefit age might be raised to 72.  That would likely solve the short-term problem. Actuaries will need to determine the precise increase in retirement age.  Fairer still would be slower increases of say six months or to start the increases five years hence so that those nearing retirement will have time to plan.

In some areas Gundlach is surprisingly uninformed.  He suggests, for instance, that air conditioning repair men, competent, technically trained blue collar workers, are now permanently unemployed. That claim reflects economic illiteracy. I have seen this strange claim repeatedly coming from elite America. It reflects the lack of competent economic instruction at elite, left-wing universities.

In any case, the employment rate in America is currently at an all-time high. Many technical jobs remain unfilled.  The employment-to-population ratio  is slightly lower than in 2008, but that is to be expected given an aging population.  The employment-to-population ratio in Nov. 2017 was 60.1; it was 63.3 in January 2007. The number of employed is at an all-time high.

The high employment rate has been achieved by reducing real wages through monetary expansion.  More Americans work; they earn lower wages.  The wealth is transferred to Wall Street because the low interest rates boost the bond market. Insiders like Gundlach and Buffett benefit most as Americans work harder for suppressed wages.

Social Security was originally sold to Americans as an insurance plan combined with a welfare plan. There is no such thing. Insurance is actuarially fair. If there is no actuarial relationship between contributions and benefits, then the plan is not insurance. Social Security was designed to give higher benefits to lower earners than they have earned and lower benefits to higher earners than they have earned.  There was never any connection between the FICA tax and the OASDI Social Security benefit.

The plan was set up to fool people. It was set up to be a fraud.  The biggest fraud was the impression given to Americans that there is a fund into which their contributions go to fund their own retirement.  That deception was accomplished by pretending that FICA was somehow separate from other federal taxes and somehow linked to OASDI. It has always been just another, albeit regressive, income tax with no connection to the statutory welfare benefit that OASDI provides.

There is no easy way out of the mess that the two parties have caused with respect to Social Security.  There are ways to reformulate monetary policy.  The two parties will not betray Wall Street, and I'm afraid Americans are unable to think without the say-so of Wall Street-backed media.  Perhaps in the future the phrase "Social Security scheme" can replace the phrase "Ponzi scheme."

The Democrats' War on Rural America

 A piece by Paul Overberg in today's  Wall Street Journal shows 20 charts that indicate how badly rural Americans have fared. The election of Donald Trump, mostly by rural voters, can be interpreted to be a reaction, and the campaign to eliminate the Electoral College a counterreaction.

Inflation-adjusted household income has declined since 2000, and it has declined the most in rural areas. Much of the  decline occurred during the Obama years. That contrasts with the stock market, which has received massive public subsidization.

Those who foot the bill for "too-big-to-fail" banks are the same people who are dying at increasing rates.

Where I live, Olive, NY, New York City has long played an imperialistic role similar to that of any Roman-style power. It has done so to procure virtually free water; it chose to go the imperial route rather than purchase water ethically back in the 19th century.

In his book Empire of Water, David Soll outlines the 100-year history of theft, exploitation, and regulatory caprice that deprived the ancestors of many people I see each day of their homes and businesses, forcing many who had owned family businesses into becoming day laborers.

Environmentalists, dominant in the Democratic Party,  have learned from New York City and since the 1990s have systematically attacked rural areas. This occurred most aggressively during the Obama years.

Not satisfied with increasing death rates in rural areas,  Robert Reich, the American media, and their fellow Democrats campaign for more political power to be concentrated in urban centers by abolishing the Electoral College.

The Banking Interests Behind the New Deal

In 2014 Nomi Prins wrote this piece in Fortune about the bankers behind the New Deal.  The New Deal was a banking revolution. The social aspects, cherished by the Democratic Party, were window dressing. Franklin Roosevelt had been a Wall Street fund manager, and he gave the American monetary system to Wall Street. That was the main point of the New Deal. 

Prins's story leads to Winthrop Aldrich, uncle of Nelson Aldrich Rockefeller and David Rockefeller.

Aldrich's father, Senator Nelson W. Aldrich, was the architect of the Federal Reserve Bank.

Incidentally, Bush's great grandfather, Samuel P. Bush, had served on the first board of the Cleveland Federal Reserve Bank. Samuel had been the president of Frank Rockefeller, John D. Rockefeller's brother's, company, Buckeye Steel.

FDR's great great grandfather, Isaac Roosevelt, had been Alexander Hamilton's partner in founding the Bank of New York, now part of Mellon. There's documentation, including a court case, that a bank for which Prescott Bush, Bush's grandfather, served on the board had helped fund Hitler.

Franklin Delano Roosevelt's uncle, Frederic A. Delano, was a Hong Kong-based railroad tycoon who served as the first vice chairman of the Federal Reserve Bank in Washington in 1914.

FDR represented the open control of America by elite financial interests that his cousin, Theodore Roosevelt, had put into play. Wilson signed the Federal Reserve Act, but Wilson would not have been elected if TR had not run as a third party candidate. The funder of his party, the Progressive or Bull Moose Party, was George Perkins, a close assistant to JP Morgan and former president of International Harvester.

Frank Vanderlip, who was present at the famous Fed-planning session at Jeckyll Island in 1910, was also a personal friend of Woodrow Wilson because of their work on shaping the modern American university system. Wilson, who had met JP Morgan because Morgan was a donor to Princeton, dropped Vanderlip as a friend and associate at the point at which Wilson entered the 1912 race. Vanderlip talks about that in his letters. No one knows the reason for sure, but it seems obvious.

Long Live the Electoral College

I favor the Electoral College. Direct democracy was a failure in Athens; it is a failure in the US. The American people are easily manipulated by special interests and hardcore, tyrannical socialists like Bernie Sanders.

American politics has become a debate between two self-interested, elite interest groups: the Democratic Party, including academics, professional interests like psychologists, schoolteachers, and lawyers, and some investment banks; and the Republican Party, including economic special interests like pharmaceutical companies, natural resource interests, agribusiness, and some investment banks.

Direct democracy represents one or the other of the corrupt special interest constellations, so it has failed. Big government is incompatible with direct democracy. The delusion of direct democracy is one of the principle methods that the Democrats use to manipulate the public into imagining that the Democrats' corrupt special interests somehow represent the public,

The public has done much worse since the establishment of the current presidential primary system and the ending of the republican principle by the 16th, 17th, and 18th Amendments.

The founders saw the need for a republican form of government, one that combines majority and aristocratic rule. Overt aristocratic rule by the Senate led to the best American statesmanship, a point that De Tocqueville explicitly observes in Democracy in America.

American workers fared much better before the Progressive era than they do today. There was more freedom; wages increased every year; savings rates were at 30%. The use of eminent domain to steal private property was comparatively rare. There was more income equality (less income inequality) under the republican system than under the Progressive and post-New Deal systems.

One of the safeguards the founders put in place was to limit the power of urban areas. Urban areas are prone to totalitarian, extremist impulses, and we witness that today with Mayor de Blasio's Red Guard-like lynching of history and his eagerness to smash statutes of Christopher Columbus and Theodore Roosevelt.

The states signed on to a Constitution (a) that was limited to delegated powers and (b) that weighted voting power to limit the authority of the totalitarian-tending masses in urban areas. One of the ways it did this was the Electoral College.

The principle of delegated powers was overthrown by authoritarian, urban elites (in the person of Hamilton and the party of the Federalists) almost as soon as the Constitution was passed; the principle in the Declaration that government exists by the consent of the governed was overturned in the Civil War; the republican principle was overturned by the Progressives in the 16th, 17th, 18th Amendments. All of these centralizing policies were mistakes, but only the 18th Amendment, Prohibition, was repealed.

The people of rural America would be fools to favor ending the Electoral College.

Growing States Have Right to Work Laws; Declining States Do Not

According to the  Albany Times Union:

New York’s [population] percentage increase was just 0.1 percent making it the 41st fastest-growing state in terms of percentage increase. Idaho was the fastest growing at 2.2 percent from July 1, 2016 to July 1, 2017, according the Census Bureau.  

The high-tax, pro-union states are the slowest-growing or declining while the low-tax, right to work states are the fastest growing: 

Right behind Idaho, with increases were Nevada at 2 percent; Utah, 1.9 percent; Washington; 1.7 percent; and at 1.6 percent each, Florida and Arizona.  

Only one of the high-population-growth states, Washington, is not a right to work state.  

According to Governing.com, the states with declining populations include Illinois, New Mexico, Maine, and Vermont, which don't have right to work laws. Vermont is the state that has repeatedly elected Bernie Sanders. It has among the worst population declines in the country.

West Virginia passed its right to work law in 2016, so although it has had a declining population and numerous other problems, it will be interesting to see whether its declines start to reverse as it deregulates. Vermont is the state that has repeatedly elected Bernie Sanders. It has among the worst population declines in the country.

The only state with a declining population and a longstanding right to work laws is Mississippi.

The Disadvantages of Trade Are Due to Federal Intervention

The federal government, not trade, is the source of social losses from the exit of manufacturing firms. Trade always results in making the parties to the trade better off. It may result in one party's being made better off to a greater degree than the other, but without both parties' being made better off they wouldn't trade.

The declining automobile industry and Chinese manufacturing illustrate separate issues. With respect to the US auto industry in the 1960s and into the 1970s, when I was in high school and after, consumer advocates talked in terms of "planned obsolescence"--that American car makers deliberately produced badly made cars so that consumers would be forced to buy new ones within a few years. That was probably an exaggeration of the Big Three's competence: They produced bad cars because their management systems were crummy, not because they consciously made bad cars. The 1979 book by John Z. DeLorean and Patrick Wright "On a Clear Day You Can See General Motors" covers GM's often laughable incompetence.

Thus, global competition has been a boon to Americans. It increased the quality of cars because of the Toyota production system invented by Taiichi Ohno and the Toyoda family. The result is that cars that once had to be junked at 100,000 miles or less now frequently last 300,000 miles.

That means every American who buys a car enjoys three times the value. Although American auto workers lost their jobs (a plight amply illustrated in Michael Moore's best work, "Roger and Me"), Americans have on balance been made better off by trade.

With respect to China, there is a combination of issues. First, labor costs are lower in China, and there is a reason to move labor-intensive plants there and to other low-wage countries. Low labor costs mean lower prices to Americans. One of the reasons we have sustained a relatively high standard of living is the inexpensive merchandise at big box stores due to low labor costs in China.

At the same time, plant relocation requires capital investment, and when capital is at its market rate, there is an impediment to making risky and costly moves. The costs of relocation have been suppressed by the federal government and the Federal Reserve Bank. By keeping interest rates artificially low, firms have been able to invest in plant relocation and make other labor-cutting capital investment at subsidized cost. There likely has been overinvestment in labor-saving technology as well as plant relocation because of suppressed capital costs.

Hence, the relocations and the loss of blue collar jobs are not entirely due to free trade. They are in part due to the federal government's subsidization of capital investment.

That's not the only way, though, that big government interventionists have hurt blue collar workers. During the same period that it subsidized plant relocations, the federal government increased all kinds of regulation, from human resources and employee benefits to OSHA, to environmental regulation, to Sarbanes-Oxley, to product liability. In addition, it raised corporate tax rates. The Democratic Party's policy mix seems designed to force manufacturing to move overseas.

Moreover, and most importantly, the federal government through its protected monopoly, the Federal Reserve Bank, has inflated the money supply while the dollar is used as the world's reserve currency. Foreign holdings of dollars limit the inflationary effect of historically low interest rates. The dollar remains relatively strong despite massive increases in the number of dollars.

In a free market trade regime, if many manufacturers exit a home country and sell their goods back to the home country, the value of the home currency will decline. That has not occurred. Rather, the dollar has retained its relative value despite the exodus of manufacturing to China. The reserve currency status of the dollar allows the Fed to subsidize privileged industries in services, government, education, and health care while it drives productive industry to China.

It is not surprising that President Trump's often-blue collar supporters have been skeptical of trade, for the managed version of it has harmed their interests. In contrast, the well-to-do beneficiaries of Fed policies, stock market investors, Wall Street, government employees, beneficiaries of government welfare plans, real estate developers, professionals like psychologists who benefit from state programs, are key constituencies of the big government economy. Notice that none of these produce much of value. America's has increasingly become a vampire economy.

Walter Weyl and the Escalation of American Mental Uniformity

In the late nineteenth century the standardization of parts contributed to American competitiveness. That idea was taken further by the Progressives, who incorrectly assumed that increasing scale and centralizing management would improve efficiency. The assumption of the historian Alfred Chandler (in his books The Visible Hand and Strategy and Structure) that increased scale means increased efficiency is not a rule at all. Toyota showed that nimble management technique can easily overcome inefficient manufacturers of the largest scale.

The current trend toward conformity of thought, standardization of consumption, and media-induced mass hysteria continues the incorrect, 130-year-old theory of the Progressives that standardization and scale are the most important sources of efficiency.

Centralized financial control via the Fed is central to this process. I wrote a piece that hasn't been published about how a similar process applied to higher education. You see the same thing with K-12 education. The Dept. of Education was a first step toward national centralization, but the process began in the first half of the 19th century with Horace Mann's advocacy of public education. Widespread adoption of teacher education in the mid-twentieth century standardized the ideological framework that infuses K-12. Diane Ravitch's Left Back: A Century of Battles over School Reform focuses on teaching methodology and progressive education, but there was ideological content affiliated with progressive education theory.

The result of a century of increasingly standardized training is increased standardization of thinking. The now-declining centralized mass media has also played an important role, and I suspect that the debate about Internet regulation is linked to the need to think strategically about homogenizing content by regulators in the Progressive tradition.

The argument for obtaining ever more education in the name of supposed higher wages of graduates is a tacit argument for uniformity of thinking. Relatively few grads study science or technology. The bulk study business, education, and psychology. They often learn little, but their behavior and thinking are standardized. (Christopher Loss discusses the emphasis on human resource management as an aim of higher education in the first chapter of his important book Between Citizen and State.)

The Progressives were the ones who instituted today's educational system. Horace Mann was the first advocate of public education, but the current approach with high school, elementary school, and college admission based on standardized testing was the creation of the early 1900s.

What we are witnessing is a playing out of the Progressive ideology of someone like Progressive ideologue Walter Weyl. (Weyl cofounded the New Republic magazine with two other central Progressive thinkers, Walter Lippmann and Herbert Croly.) Weyl saw Progressivism as leading to socialism, and in this he was prescient. He did not anticipate the continued vibrancy of the free market economy, and its ability to innovate.

For instance, Weyl thought that Progressivism would lead to a perfectly planned national train system; he didn't realize that air travel would replace trains. Progressivism has no place for the kind of rapid innovation that took place under laissez faire capitalism. It requires a slow, limited rate of innovation, and it incorrectly assumes that scale and standardization increase efficiency and wealth. 

Government Regulation and Monopoly

Since the days of Standard Oil government has claimed that it was necessary to regulate monopolies. Since those same days, the chief monopolies have been the result of the regulation, and the least monopoly has occurred in the least -regulated industries. The calls for regulation of firms like A&P would have retarded innovations like Wal-Mart; regulation of Wal-Mart would have retarded Amazon. Government regulation is the chief source of monopoly. It has been consistently unsuccessful at stopping it, and it has been consistently successful at causing it.

Wall Street Journal Op-Ed Cites My Work

On November 13, 2017 the Wall Street Journal published an op-ed by John M. Ellis. It cites the research I had done with Dan Klein and Anthony Quain on the political affiliation of social science faculty in the social science departments of leading national universities.

My Quote Today in the Christian Science Monitor

I was quoted today in the Christian Science Monitor on the subject of removing statutes of Columbus and Roosevelt.  The left-wing movement to do so reflects a direct assault on American culture and history.  Harry Bruinius of the Christian Science Monitor writes:

“A common fallacy in history is to attribute current beliefs and moral interpretations to historical actors,” says Mitchell Langbert, a professor at the Koppelman School of Business at Brooklyn College. “The past needs to be understood in its own terms, and the effects of admittedly brutal historical actors like Columbus are not in the immoral things that they did … but in one or two unique things they did that changed their world.”

“Roosevelt is another story, because he was one of the good guys, relatively speaking,” argues Professor Langbert, noting the progressive Republican’s 1905 speech on the state of race relations, when he warned an audience at the New York City Republican Club: “The debasement of the blacks will, in the end, carry with it the debasement of the whites.”

Socialism and Militarism Go Hand in Hand

A (hopefully) young Facebook poster just made the claim that America (a) has a free market economy and (b) the free market economy has made America militaristic. Both claims are false. American militarism in the laissez-faire period was limited to westward expansion—manifest destiny—and some creation of overseas outposts to protect trade. Hence, Adams recreated the Navy and Marines to fight the French (and Jefferson used them to stop the Barbary Pirates, who impeded American shipping), and Jefferson established an embargo to curtail British attacks on US ships, and specifically British impressment of US sailors. The Mexican War was also fought for westward expansion. It wasn’t until the age of Progressivism, which arguably began in 1890, that the US became overtly imperialistic. McKinley’s invasion of the Philippines and the Spanish-American War coincided with the beginnings of the Progressive era (as did government-mandated racial or Jim Crow laws).

In the Progressive era America adopted a combination of capitalism and socialism sometimes called "the third way"--neither laissez faire capitalism nor socialism. It was invented in 19th century Germany by the German historical school of economics (led by Knies, Wagner, Schmoller, and Sombart) and then advocated here by academics and wealthy Americans who had studied in Germany, notably Richard T. Ely. It subsequently was popularized by Herbert Croly in his book The Promise of American Life. Progressivism advocated (1) strengthening of the state, (2) government intervention in society, and (3) imperialism.

In its practical applications under Roosevelt and Wilson, it included strengthening of government police powers and the creation of the FBI (in 1908, under Roosevelt). During the Progressive era the failed overt Imperialism of McKinley was carried forward as the (Theodore) Roosevelt corollary to the Monroe doctrine and evolved into dollar diplomacy and soft imperialism. Woodrow Wilson started more wars than any other president, mostly in Latin America.

Progressivism involved a socialistic economic policy that imposed government intervention, which I loosely call socialism, on laissez faire. This was coupled with enhanced federal police power, the Red Scare and deportation of dissidents (under Wilson), and the creation of the FBI (under Theodore Roosevelt) and later the CIA (under Franklin Roosevelt and Truman).

These are not contested pieces of information except by people who don't learn history. What is contested is whether the socialistic interventions associated with police power and militarism were in the interest of capitalistic enterprise or were in the interest of the public. New Left and libertarian historians such as Gabriel Kolko, Allan Appleman Williams, and Murray Rothbard have shown that the socialistic interventions favored big business owners, notably Rockefeller, Morgan, Kuhn Loeb, and other Wall Street interests.

The historian Martin J. Sklar, in his book The Corporate Reconstruction of American Capitalism, 1890-1916, argues that Roosevelt was socialistic, specifically in his (failed) intentions for the Federal Trade Commission and that his conflict with William Howard Taft was over how to enforce the Sherman Anti-trust Act. Taft favored a less interventionist litigation approach to anti-trust enforcement while Roosevelt, advocate of carrying a big stick, favored direct socialization.

Thus, from the days of Theodore Roosevelt, American socialism has been associated with militarism. Ronald Radosh and Murray Rothbard detail the link between socialization of the economy and war in  their book A New History of Leviathan.

The (hopefully) young Facebook poster’s claim that militarism is due to laissez faire capitalism thus lacks both historical and logical foundation. Historically, the growth of state police and military power was advocated by and occurred under the Progressives, opponents of laissez faire. As well, laissez faire capitalism favors limitations on state power, including police and military power. The natural rights doctrine was the foundation of the laissez faire political system, and no socialist country has ever recognized rights to freedom from the state to the degree that laissez faire capitalist countries have. Because laissez faire capitalism advocates limitations on the state, it is illogical to claim that the expansion of the state that militarism and police power require is related to laissez faire capitlism. Only socialists can favor expansive police powers precisely because police powers are associated with state power. Historically, the most extreme applications of state and military power have been in socialist states: National Socialist Germany, the Union of Soviet Socialist Republics, the Democratic People's Republic of Korea, the Republic of Cuba, and so on.

Wes Benedict Responds Concerning Racism in the Libertarian Party

I was pleased to receive an email from Wes Benedict, executive director of the Libertarian Party, indicating that the LP has become concerned about infiltration by racists and has issued a formal statement.  I have copied his email, which includes a link to the statement, and part of the statement:

From: Wes Benedict

Sent: Monday, August 21, 2017 7:08 PM

To: Mitchell Langbert

Subject: Re: Anti-Semitism, Racism, and the LP

Hi Mr. Langbert,

Did you see the piece I put out last week?

https://www.lp.org/libertarians-condemn-bigotry-irrational-repugnant/

I think that makes it clear we're aware of some racists and anti-Semitism in and close to the Libertarian Party and we are driving them out.

Thanks for your support.

Wes Benedict, Executive Director

The statement starts as follows:

The Libertarian Party condemns bigotry as irrational and repugnant, and offers its condolences to the family of the woman killed in Charlottesville, Va.

There is no room for racists and bigots in the Libertarian Party. If there are white nationalists who — inappropriately — are members of the Libertarian Party, I ask them to submit their resignations today. We don’t want them to associate with the Libertarian Party, and we don’t want their money. I’m not expecting many resignations, because our membership already knows this well.

The Libertarian Party Platform states, “We condemn bigotry as irrational and repugnant. Government should neither deny nor abridge any individual’s human right based upon sex, wealth, ethnicity, creed, age, national origin, personal habits, political preference, or sexual orientation.”

The Libertarian Party is tolerant and accepting, supporting civil liberties, gay marriage, and freedom of religion for all, including Jews, Muslims, Christians, and atheists. The Libertarian Party supports open borders, civil liberties, racial diversity, and free trade — things that white nationalists abhor.

I think many people in America are worried about jobs and security, and feel compelled to do something about it. Years of inflammatory messaging from Republican and Democratic leadership have poisoned the well of civil discourse, and unfortunately, much of what the extremists on both the left and right are asking for will make matters worse.

Republican leaders have demonized immigrants and free trade, and have scared people into thinking that free trade and immigration will cost current citizens their jobs and their standard of living. Yet countries with free trade and immigration have the highest standards of living in the world, and those without freedom of movement and exchange have the lowest. If politicians are truly interested in improving American prosperity, they need to brush up on their understanding of “gains from trade” and “comparative advantage,” then stop goading their supporters into supporting counterproductive policies. Protectionist policies are irrational and cowardly, and will make America weaker.

The LP Must Come Clean

 PO Box 130

West Shokan, NY 12494

August 19, 2017

Wes Benedict

Executive Director
Libertarian Party

1444 Duke Street

Alexandria Virginia 22314-3403

Sent via US Mail and Email

Dear Mr. Benedict:

I joined the Libertarian Party in 1977, and I was active in the New York chapter, at that time called the Free Libertarian Party, for several years.  I stopped being active, but I have contributed to the LP and the campaigns of Gary Johnson.  Part of the reason I stopped being active in the 1980s was an apparent anti-Israel tendency in the LP.  As well, I have repeatedly detected anti-Semitism not only in association with the LP but also, and more emphatically, with the Ron Paul movement.  Because of recent events in Charlottesville, this issue has come to a head.  

If I am to be supportive of the LP in the future, I need to have a clear accounting of the degree to which racists and anti-Semites have infiltrated  it.  I also need to have a clear picture of what you and the LP are doing to rid it of the infiltration.  If you wish to reply that it doesn’t exist or that you will do nothing, my support for the LP will end, and I hereby request that you remove me from your mailing list. What I need to know for my support to continue is what the LP is doing to establish a litmus test that excludes anti-Semites and racists.  If the answer is nothing, then please remove me from your mailing list.

Sincerely,

Mitchell Langbert

What the Democrats Have Become

The Democratic Party reduces human nature to demographic categories: race, gender, creed, and class. To the Democratic Party, these categories define and delimit human experience. The Democrats eliminate ambition, persistence, achievement, genius, moral choice, hard work, and vision. In so doing, they attack human essence.  The Democrats are redefining totalitarian ideology into one of dehumanization through categorization.   

The Science Is Settled: Socialism Has Failed

What seemed to have been the death of socialism when the Berlin Wall fell nearly 30 years ago has not been so.  Like Lucky Luciano socialism was taken for dead but has managed to survive and flourish.  According to a Gallup poll, about 35% of Americans now have a positive view of socialism. Bernie Sanders's showing in the last Democratic primary, in which he received 13.2 million votes to Clinton's 16.8 million, suggests that a large section of the Democratic Party now favors socialism. That may be even greater support than, or at least comparable support to, the 1940s, when a Fortune poll (see note on p. 341 here) found that 25% of the public favored socialism and another 35% was open minded about it.

The evidence has been in for decades: Socialism is a failure.  It has been tried, and it has failed. The chief response, the claim that"there's never been a real socialism," is vacuous. That is, it can be made with respect to any ism, social arrangement or institution. There's never been a real capitalism; there's never been a real Nazism; there's never been a real anarchism. 

The "there's never been real socialism" argument is antithetical to empirical science, which aims to falsify, prove false, hypotheses through systematic testing.  The best scientific evidence with respect to social arrangements is their real-life outcomes. There have been a number of liberal (I use the word "liberal" to mean "capitalist") societies, and there have been a number of socialist ones. The liberal societies have outperformed the socialist ones on all measures save equality when measured with broad statistical measures like the Gini coefficient. 

With respect to how well off the worst-off individual is, liberalism performs better than socialism. With respect to how well off the average person is, liberalism also performs better than socialism. When compared as to how much innovation or progress occurs, liberalism also performs better than socialism. When one compares the pattern of state violence, mass murder, and freedom of expression, socialist societies have performed worse. 

While socialism seemed like a good idea until, say, 1970, it has proven not to work. Why, then, are so many Americans committed to a superstitious belief in it? The superstition permeates our universities, the Democratic media, and even mainstream religious institutions.  The primitive belief that violence and redistribution are more efficient than voluntarism can explain it. Socialism is a persistent superstition because human beings are genetically tribal, and the impulse toward tribalism is thwarted in the modern world.  However, tribal arrangements impede prograss.  Socialism is the ultimate reactionary form of government.

The Republican Congress Is Allowing the Democratic Media to Set Its Agenda

The Republican Congress is allowing the Democratic media to set its agenda.The investigations and accusations are ongoing but going nowhere. They need to stop.  In 2014 Andrew Cuomo dissolved a Moreland Act commission that was investigating his administration.  In New York the Moreland Act establishes a procedure for the governor to appoint investigative commissions. None of the media that is now so agitated about Trump's interference in the Russian investigation called for Cuomo's impeachment.

The 20th century media, the Democratic TV and radio stations, have proven themselves incapable of reporting news coherently, so it is time for the Congress to assert its legitimate authority and to tell the media that they cannot assert an agenda for the nation.   The media was not elected to do this, yet the Republicans seem confused about that.

Congress can use bloggers and social media to communicate with the public. Television, radio, and the Democratic newspapers have increasingly become irrelevant.  The Republicans made fools of themselves in the late 1990s when they impeached Clinton, and now they are making even bigger fools of themselves.  They control both houses and the presidency, but they are allowing media Democrats to dictate their agenda and focus on investigation of a Republican president. It is time that this circus ended.

CNS News Covers My Blog

Stan Greer posted a piece in CNS News that quotes my recent blog about the positive effect of right-to-work laws on disposable income.  Greer shows that the seven states with the highest growth in demand for college-educated workers are all right-to-work states: North Dakota, Wyoming, Texas, Utah, North Carolina, South Carolina, and Virginia. Moreover, all of the five-poorest-performing states and 11 of the 12-poorest-performing states are forced unionism states. These include  New Hampshire, New Mexico, New York, Rhode Island, and Vermont. 

The Media's Trump/Cuomo Double Standard

In 2014 Andrew Cuomo dissolved a Moreland Act commission that was investigating corruption in Cuomo's administration. Neither the New York Times nor MSNBC called for Cuomo's impeachment. In 2017 Donald Trump made a comment to an FBI director investigating his presidency. The reverse was true--the media called for Trump's impeachment. Can we at least agree that there is a double standard here?

Adam Kissel's Appointment Reflects Brilliantly on the Trump Administration

A friend just forwarded an article in Reason.com about  Education Secretary Betsy DeVos's appointment of Adam Kissel to deputy assistant secretary for higher education programs.  I worked with Adam on a grant several years ago when he was with the Charles G. Koch Foundation, and he was professional, knowledgeable, and effective. He had previously worked for the Foundation for Individual Rights in Education, where he also had done important work.  Adam combines a restrained brilliance with integrity and a commitment to civil liberties. President Trump's appointments of Deputy Assistant Secretary Kissel, Secretary DeVos, and regulatory czar Neomi Rao augur well for the course the Trump administration will take.

The National Right to Work Committee Covers My Blog

The National Right to Work Committee blogged a piece on its website concerning my blog about the effect of right-to-work laws on disposable income.  The original blog post is at http://mitchell-langbert.blogspot.com/2017/05/right-to-work-laws-increase-wages.html

If Not Now, When? Repeal Agenda 21

PO Box 130

West Shokan, NY 12494

June 6, 2017

President Trump

The White House

1600 Pennsylvania Avenue NW

Washington, DC 20500

Via First Class Mail and Email

Dear President Trump

I support your decision about the Paris Agreement.  In addition, I urge your administration to consider rescinding US support for the Rio Declaration of 1992, which is associated with UN Agenda 21 and the Statement of Principles for the Sustainable Management of Forests.  As well, I urge the United States to withhold funding for all government and UN programs aimed to implement these documents.

The Rio Declaration on Environment and Development and Agenda 21 are couched in economically illiterate claims about how economic development occurs and how economic inequality ought to be addressed.   For instance, they commit the United States to reducing consumption and to “promoting appropriate demographic policies.”  They do not recognize that freedom and free markets are the sine qua non for meaningful economic development.

       

The Rio Declaration is anti-scientific.  Principle 15 advocates a precautionary principle whereby if “threats,” as defined by environmental extremists, exist, “lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures.” Such vague, anti-scientific language gives a carte blanche to scientism.   It is opposed to real science, and its anti-science bias was reflected in Al Gore’s ignorant claim that science can be “settled.”

Your administration can rescind American support for the Rio Declaration, Agenda 21, and the statement on sustainable forests. It can rescind all budgetary items that support implementation of these totalitarian commitments.

                   

Sincerely,

Mitchell Langbert,Ph.D.