Losing Ground, The Bell Curve and Coming Apart – Commentary on Commentary

Source: http://econlog.econlib.org/archives/2012/03/losing_ground_t.html


Very interesting insights on Charles Murray’s img-murray-charles-hr_101703740559 work on poverty and the underclass.  (1) Seemingly a simple premise; intelligence is required for most high-paying occupations ergo the people with lower intelligence will likely suffer a greater incidence of poverty as they have less access to high-paying jobs. (2) Economic incentives have been proven time and time again to drive behavior and decisions. It then follows if you tax income you get less wealth generation and if you subsidize poverty with welfare payments, you encourage more.

The last point (3) regarding cultural differences between America’s economic classes could be more difficult to understand.  However, one item Murray speaks of in his tomes but Mr. Caplan does not specifically point out is, raising children in single parent families has been shown to enable worse life outcomes when compared to a two parent household.  Data has also highlighted there are more single parents in less affluent communities.


Why we lose our property

One of the most sacrosanct beliefs in a libertarian society is the free right to own property. In the most fundamental sense, this property includes personal possessions such as land, homes, automobiles, and other sundry valuables accumulated over time by an individual or family unit.  In almost in all cases, this private property is obtained from the fruits of ones’ labor; from participation in free market transactions whether from traditional manufacturing – selling of products, by delivering services and expert advice to someone willing to freely purchase them, or even by speculatively investing where one’s original investment is smaller than the final price obtained when the investment is sold.

How much fruit one obtains in a free society is often distributed unequally within the society and is dependent on a multitude of factors including hard work, skill, education, knowledge, experience, and even plain luck.

For some reason, statists despise the inequality of free markets and the fact that someone can be very successful and accumulate significant wealth by conducting free market commence.  To combat this undesirable feature of a capitalist society,  statists have created two large classes of the populace who can be ‘fed’ via the taxation or theft from all wage earners, even those who work within the statist system.  (Very strange, they give money to someone who works for the state and then tax them to pay for their and other government employees’ wages)

The first class to receive the benefits of redistribution of wealth are government employees. Now mind you, many of these employees provide value to society but given their relegation to being employed by the state instead of the private sector they become a protected class that must be supported by the forcible confiscation of wealth (fruits of one’s labor) from workers.

According to the census bureau’s Government Employment and Payroll measure, the number of federal, state, and local civilian government employees and their gross monthly payroll for March of the survey year can be found at. Survey of Public Employment and Payroll website >>

The number within this class is large and as of March of 2015, there are 14,425,359 people drawing wages via the forced taxation of private property.

The other class of people are those who are made dependent on the state for some portion of their existence.  These people receive the fruits of someone’s labor via programs like:

  • Medicaid
  • Supplemental Nutrition Assistance Program (SNAP)
  • Housing Assistance
  • Supplemental Security Income (SSI)
  • Temporary Assistance for Needy Families (TANF)
  • General Assistance (GA)

“Approximately 52.2 million (or 21.3 percent) people in the U.S. participated in major means-tested government assistance programs each month in 2012, according to a U.S. Census Bureau report. “

One final thought to ponder. Do you think these two protected classes (Government employees and people receiving means tested benefits) will ever support changes to our statist system?



War on Poverty has failed

There is a very good article by Arthur Brooks of the American Enterprise Institute titled The dignity deficit: Reclaiming Americans’ sense of purpose.  The piece speaks of the improbable Trump victory and postulates the win came about because of the anger of those citizens left behind economically in America.  This thesis explaining Trump’s win is not unique, many political pundits have offered the same.  However, Brooks extends the story by going back to LBJ’s War on Poverty. Brooks highlights in his article the plight of a poor Kentuckian named Tom Fletcher. Fletcher, despite government assistance (welfare) is never was able to escape poverty.

In 1966, when the War on Poverty programs were finally up and running, the national poverty rate stood at 14.7 percent. By 2014, it stood at 14.8 percent. In other words, the United States had spent trillions of dollars but seen no reduction in the poverty rate.1

There are millions more Tom Fletchers that Twenty trillion dollars of government largess has not helped and they voted in November, 2016.

The solution to poverty is to go back to fundamental economic principles. If you want more of something, then do not tax it. However, this axiom is ignored by statists and we have many Americans being left behind. The solution is simple, stop taxing the fruits of labor (wealth) and you will see more fruit.

The same principle holds true for government regulations that stifle labor and subsequent wealth generation. If you you want less friction on labor which will lead to more wealth creation, stop unnecessary regulation of the actions that generate wealth.

  1. Brooks, Arthur C. “The Dignity Deficit: Reclaiming Americans’ Sense of Purpose.” American Enterprise Institute. Foreign Affairs, 13 Feb. 2017. Web. 09 Mar. 2017.

This is what statists want for us

One of the economic models the statists, especially those on the left, would like the United States to follow is Euro or Democratic Socialism.  This movement, while not pure Marxism, is a state led economy with cradle to grave welfare and can be described officially as:

“Social democracy is an ideological stance that supports a broad balance between market capitalism, on the one hand, and state intervention, on the other hand. Being based on a compromise between the market and the state, social democracy lacks a systematic underlying theory and is, arguably, inherently vague. It is nevertheless associated with the following views: (1) capitalism is the only reliable means of generating wealth, but it is a morally defective means of distributing wealth because of its tendency towards poverty and inequality; (2) the defects of the capitalist system can be rectified through economic and social intervention, the state being the custodian of the public interest […]”. 1

These statists who dream of making America more like Europe have been somewhat successful however, many free market supporters have often fought the statists’ efforts since the origins of Franklin Roosevelt’s New Deal.  In this epic battle, more often than not, the statists have not won and America has kept at least some vestige of free markets and thus a growing Gross Domestic Product (GDP). However, since the mid 1990s Europe has embraced more statism and their economic progress has been greatly retarded as show in the Euro Area’s paltry GDP growth in the chart below which shows GDP Growth Rate in the Euro Area averaging only 0.37 percent from 1995 until 2016. 2

The question is, do we really want to become more like Europe?


  1. Heywood, Andrew (2012). Political Ideologies: An Introduction (5th ed.). Basingstoke, England: Palgrave Macmillan. ISBN 978-0-230-36725-8.
  2. “Euro Area GDP Growth Rate 1995-2016.” Euro Area GDP Growth Rate 1995-2016. Trending Economics, 12 Dec. 2016. Web. 12 Dec. 2016. <http://www.tradingeconomics.com/euro-area/gdp-growth&gt;.

Do we have socialist influences in our economy and should we follow them?

With the death of Fidel Castro and the end of an era, thoughts turned to the failure of his brand of socialism within Cuba.  In announcing his death, the left in America’s media downplay his brutality against political foes and his economic failures thrust upon the Cuban people in their reporting. This oversight is intentional and is taken as to not diminish Castro’s legacy and their desire for America to become more socialistic in a similar manner of Castro.

Few in the media offer opinion as to what will happen in Cuba going forward and Cuba’s future direction is anyone’s guess, but the Cuban people will likely continue to demand more economic and political freedom.  If this happens, information will be kept beneath the surfaces as it does not fit the lefts’ message for America.

In America, those in the media and on the far left side of the political spectrum seem to have a romantic view of Castro and continue to target the benefits of state controlled economies despite documented failures.  This is their continuous attempt to move America and its economy away from free markets and into the arms of the state.

This dash towards the state is ever evolving but for the foreseeable future, it appears America will not quickly adopt a ‘pure socialist’ ‘Castro like’ society however, our nation has been drifting towards an intermediate step called Democratic Socialism which is a more palatable variant of socialism to the many American people who adhere to the left’s view and even to many who do not but are becoming alienated by America’s current crony capitalism.

Democratic Socialism is well understood and has been documented by academics and in the common mass media as a panacea for all those who experience it.  In the later, the mainstream media thrusts Scandinavia forward as model America should and must follow if we as a nation are to achieve something akin to Maslow’s  Self-Actualization for our nation.

Democratic Socialism can be defined as:

the term indicates, combines democracy and socialism. Politically, it involves a commitment to popular, constitutional rule and the protection of basic rights. Economically, it involves an equitable distribution of the community’s wealth. Democratic socialists maintain that key aspects of economic life must be publicly owned or socially controlled to ensure this equitable distribution. Socially, democratic socialism involves the belief that all human beings, in a cooperative community, should have the opportunity to fulfill their good and creative potential. There are many sources of democratic socialism, including the Judaic-Christian tradition’s concern for the poor, the nineteenth-century utopians, Marxist thought, revisionists of Marxist thought, the Fabian socialists in England, and the trade union movement.1

Reading this definition one can easily see Democratic Socialism at work today entrenching itself deeper within America’s economic and political systems. For example, government forced redistribution of income and wealth is common and growing. Millions of lower income Americans are treated to a plethora of publicly funded government programs and have become dependent on these programs for their very existence. A headline form the US Census Bureau states how large this Democratic Socialistic practice already is:

21.3 Percent of U.S. Population Participates in Government Assistance Programs Each Month

Democratic Socialism is also well entrenched and controlling large sectors of our economic system.  Our medical, education, transportation, and energy industries come to mind as they are already highly controlled by the state.    The the factors of production in these economic sectors are regulated and controlled. Obamacare is a prime example of the states’ hands in healthcare.

Land, Labor, Capital, and Enterprise and managed by the state in other areas and its grip within these areas are growing rapidly.  During the last eight years, government regulation of our economy has grown significantly:

see https://libertarian57.wordpress.com/2016/11/17/is-this-democracy/  for details.

The question America must ask given the reality of Democratic Socialism’s penetration  within the nation is do we want to continue down this path or is there a better alternative.
1. Riemer, Neal. “The Challenge of Politics: An Introduction to Political Science, 3rd Edition.” Barnes & Noble. Cqpress, n.d. Web. 26 Nov. 2016.