"The Problem with Socialism is that you Eventually Run Out of Other People's Money"

The title of this blog posts is one of the best quotes from Margaret Thatcher. The market economy is far more efficient than government at allocating resources and identifying investments in a cost-effective manner. When government grows as a percent of GDP it crowds out the true engine of American society -- entrepreneurs -- to the detriment of future economic growth.

The forthcoming cover story for the February 16, 2009 edition of Newsweek declares "We Are All Socialists Now." Key passage:

Whether we like it or not—or even whether many people have thought much about it or not—the numbers clearly suggest that we are headed in a more European direction. A decade ago U.S. government spending was 34.3 percent of GDP, compared with 48.2 percent in the euro zone—a roughly 14-point gap, according to the Organization for Economic Cooperation and Development. In 2010 U.S. spending is expected to be 39.9 percent of GDP, compared with 47.1 percent in the euro zone—a gap of less than 8 points. As entitlement spending rises over the next decade, we will become even more French.

This is an extremely alarming trend. Politicians, in my experience and perspective, are far more concerned being viewed as "doing something" to address perceived problems than actually solving them. An incredible amount of money is wasted and misallocated by government bureaucrats. When firms fail they go out of business. When firms stop being competitive they lose market share to competitors. Entrepreneurs and businesses thus have powerful incentives to continually look to innovate, increase productivity and seek creativity ideas and solutions. The largest incentive for government bureaucrats is to protect their turf and budgets.

Furthermore, these figures only add to my firm belief George W. Bush was by far the worst President in the history of our republic. Beyond that fact that he did not produce one significant piece of legislation in regards to public policy (Medicare Part D? the education bill? Please...) his assault on liberty was simply stunning:

1. Iraq. If misleading the public and resorting to fear tactics to drive our nation into a war of choice was not bad enough, this misadventure saddled our nation with an incredible debt that only adds to our future massive financial liabilities with the retirement of the baby boom generation.

2. The Patriot Act.

3. Implicitly condoning torture as an acceptable interrogation tactic.

4. Allowing government to grow as a percent of the economy PRIOR to the financial meltdown:
5. Failure to prevent the extent of the financial meltdown. As 43 claimed he was a man who favored less government and the virtues of free trade (despite the steel tariffs in his first administration, allowing the Democratic Party to push Fannie and Freddie to take increased risk with the goal of increasing the home ownership rate, etc.). Consequentially, the ideology that he claimed to adhere to, and aided by his incredibly high disapproval ratings, has has led many to question the virtues of the free market and provided greater credence to the belief that government can and should "solve" people's problems.

edit: Per an op-ed from John Taylor, professor of economics at Stanford and originated of The Taylor Rule:

My research shows that government actions and interventions -- not any inherent failure or instability of the private economy -- caused, prolonged and dramatically worsened the crisis.

6. Bailouts. The government had to prevent the complete meltdown of the financial sector. However, the rush to approve TARP and the failure to have any kind of transparency was simply stunning.

7. Failure to reform long-term entitlement spending.

I'm probably missing a few more. So much for 43's belief that "the advance of liberty is the path to both a safer and better world."

The Politics of Fear

I have noticed that individuals pushing an issue agenda keep using fear to advance their narrative in the public's consensus. While there is evidence that fear and negative campaigning does indeed work to elect candidates into office, I do not think this is an effective method to increase public recognition of a political cause or empower a larger minority to demand change. Furthermore, I think ridiculous projections and/or talking points reduce one's ability to grow their coalition and damages the efforts by many who are working to actually achieve progress on the cause.

I'm going to take two examples to illustrate my rationale: radicals in the environmental movement (this post) and the U.S. right-wing campaign against socialism (future post TBD).

Knowing that an individual has said the following statements over the years do you really think that he is an effective messenger to increase the environmental movement's coalition?

• "the battle to feed all of humanity is over ... In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now" (1968);
  
• "India couldn't possibly feed two hundred million more people by 1980" and "I have yet to meet anyone familiar with the situation who thinks that India will be self-sufficient in food by 1971" (1968);
• "I would take even money that England will not exist in the year 2000" and "'Smog disasters' in 1973 might kill 200,000 people in New York and Los Angeles" (1969);
• "in ten years all important animal life in the sea will be extinct. Large areas of coastline will have to be evacuated because of the stench of dead fish" (1970);
• "before 1985, mankind will enter a genuine age of scarcity . . . in which the accessible supplies of many key minerals will be facing depletion" (1976);
• "by 1985 enough millions will have died to reduce the earth's population to some acceptable level, like 1.5 billion people" (1969);
• "by 1980 the United States would see its life expectancy drop to 42 because of pesticides, and by 1999 its population would drop to 22.6 million" (1969);
• "actually, the problem in the world is that there is much too many rich people..." (1990);
• "giving society cheap, abundant energy would be the equivalent of giving an idiot child a machine gun" (1992); and
  
• "we've already had too much economic growth in the United States. Economic growth in rich countries like ours is the disease, not the cure" (1990)

The answer is clearly a resounding NO!!! I was catching up on some podcasts recently and listened to a Science Friday's from August entitled "Mass Extinction Event on the Horizon?" Host Ira Flatow was interviewing the man responsible for the previous statements... Paul Ehrlich.

Now I strongly consider myself an environmentalist. I believe public policy in regards to the environment must incorporate not only the needs of humans, it must take into consider the interests of plants and animals as we do in fact SHARE this planet with them.

However, it blows my mind why anybody takes Ehrlich seriously or would give him a platform to spew his nonsense... unless they are against growing the global coalition to take public policy measures to combat climate change and pollution caused from human activities. Ehrlich had the audacity to claim:

• "the United States is going to be 439 million people by 2050. That's roughly 300 million people more than anybody has ever given a reason for having alive in the United States at one time";
• "I think people need to be scared (of future environmental devastation)... Fear ought to be a big incentive now if we care anything about our children or grandchildren world" (Paul, fear doesn't work if you have 0 credibility);
  
• "we don't even have a population policy! In the United States we argue about immigration policy without having a population policy. It's kind of like designing an airplane that can load 100 people a minute and when you say how many should it fly and you say well don't worry about that just design a plane that will load 100 people a minute." (Seriously? First off, government doesn't belong in the bedroom!!! Beyond that, Paul has consistently ignored evidence showing that as economic material well-being goes up, birthrates go down & the role technology can and will play to produce goods consumers want far more efficiently.)

This nonsense and tactical advise does not and will not convince anybody who is not a part of the growing environmental coalition to join -- it only reduces the credibility of the movement as a whole and damages the credibility and validity of the environmental brand. For the sake of the planet, please stop giving Ehrlich anymore media opportunities to tarnish the hard fought gains the environmental movement has made with the American and global public.