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Month: March 2016

One Bad Reason to Hate Trump – Article by Sarah Skwire

One Bad Reason to Hate Trump – Article by Sarah Skwire

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The New Renaissance HatSarah Skwire
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99 Reasons, But the Name Ain’t One

I have 99 (thousand) reasons to hate Donald Trump and to find his campaign stomach turning. I won’t list them here. The Google graph showing the rising use of the word “bloviate” in American political discourse should stand in place of any detailed accounting.

bloviategraph

But what’s grabbed most of the attention since John Oliver mentioned it recently on his show, Last Week Tonight, is Trump’s name. As Oliver notes, “Trump sounds like money.” But, he continues in tones of shock and dismay, “It turns out the name Trump was not always his family name.… An ancestor had changed it to Trump from Drumpf.”

My family name wasn’t originally Skwire. It was Skwirsky. My grandfather and his brothers changed it — right around when Trump’s ancestor changed the family name — because back in those days, it was hard to get jobs in the United States with an obviously foreign name. Trump’s ancestors, I’m sure, did the same thing.

There’s no shame in being from places that aren’t America. There’s no shame in having a last name that’s unusual. And I am bothered by the pleasure we are taking in mocking a name that sounds a little bit funny and a whole lot foreign. It sounds like the kind of rhetoric Trump uses. So I’m not going to indulge.

However.

(And this is a very big “however.”)

I do think there’s something to talk about here, and I don’t think it’s funny at all.

The focus on Trump’s original family name is not analogous to the focus on former Republican presidential candidate Chris Christie’s ample girth. Governor Christie’s poundage was immaterial to his campaign. He has not publically bloviated about the need for the obese to stop being lazy, to start exercising, and to start eating right. He has not signed on to regulatory agendas like former New York mayor Michael Bloomberg’s attempts to control what and how much people eat and drink. He hasn’t, in other words, turned his weight into a centerpiece of his campaign.

Trump, however, has made immigration one of his central issues. Even those of us who have tried desperately to avoid the whole political season have heard that he wants a bigger wall along the border with Mexico, that he wants Mexico to pay for it, and that he would deport 11 million illegal immigrants in short order. A little research turns up Trump’s repeated references to immigrants as criminals, drug dealers, and rapists. Birthright citizenship is dumb, he opines. And the barriers to immigration should be towering, because, Trump says over and over, the people born here should be our first concern.

It’s not funny that Trump’s family name used to be Drumpf. That’s just a standard American story that most of us probably share. To be an American, for most of us, means we’re not really from around here.

But the idea that we might have an American president who thinks it’s fine for the Drumpf family to come to America and achieve unimagined success in a few generations, but who will do everything possible to keep the Rodriguez family or the Habib family from doing the same?

That’s a tragedy.

Sarah Skwire is the poetry editor of the Freeman and a senior fellow at Liberty Fund, Inc. She is a poet and author of the writing textbook Writing with a Thesis. She is a member of the FEE Faculty Network.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Free Trade Is the Path to Prosperity – Article by Georgi Vuldzhev

Free Trade Is the Path to Prosperity – Article by Georgi Vuldzhev

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The New Renaissance HatGeorgi Vuldzhev
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The political circus of the 2016 presidential election has revived and reinvigorated popular belief in age-old protectionist fallacies. Currently Donald Trump and Bernie Sanders are both in favor of expanding protectionist trade policy, with both of them arguing that free trade “destroys” jobs and hurts domestic workers and producers by exposing them to foreign competition. Both candidates espouse an utterly misguided zero-sum view of economics, in which one side to an exchange wins only when the other side loses. Both men are, of course, completely wrong.

Free Trade Does Not Destroy Jobs

It is true that greater competition between domestic and foreign workers can lead to a decline in wage rates and possibly unemployment in some sectors of the economy. But this is only a short-term effect. Free competition between foreign and domestic producers also naturally leads to lower prices for the goods and services which can now be freely imported from abroad. So, while nominal wage rates are pushed down in some sectors, real wage rates rise overall for everyone in the economy because of the decline in prices.

Thanks to free trade consumers spend less money on certain goods and services and this allows them to spend more money on others, which leads to rising demand and thus profits in the sectors providing the latter, and consequently leads also to more investment by entrepreneurs. This higher rate of investment naturally leads to the creation of more jobs in these sectors and thus offsets any original rise in unemployment that might have occurred.

Alternatively, the consumers may choose to save the extra disposable income that was freed up by the decline in prices. This rise in the savings rate will lead to a decline in interest rates, which makes profitable certain long-term capital-intensive projects which were not profitable beforehand. Seizing the opportunity presented by this increase in savings, entrepreneurs will start borrowing and investing in those long-term capital intensive projects, which on its own already creates more jobs, but it also leads to a rise in demand for capital goods, which raises profits in the capital goods industries and consequently leads to more investment and job openings in those sectors.

Free Trade Is Win-Win

Free trade not only doesn’t “destroy” jobs, but it also promotes specialization between nations, which improves the efficiency and productivity of workers, and leads to a rise in living standards for all. Trade is not some kind of a zero-sum game in which if one side wins, the other has to lose.

When two countries such as the United States and China, for example, trade freely with one another, their citizens are incentivized to specialize in those lines of production in which they have a comparative advantage. Due to the difference in factors of production endowments it is best for different countries to specialize in producing those types of goods and services which they can produce most efficiently in comparative terms. A higher level of specialization, through the effect of economies of scale, makes production more cost-efficient.

By specializing in a certain line of production and then exchanging the goods and services produced for those that others are specialized in producing, the people of a given country can substantially raise their living standards because the gains in productivity are naturally followed by an increasing supply of goods and services and thus rising real incomes. This way free trade allows for the flourishing of what can be called an “international” division of labor. Just like a greater degree of division of labor can lead to big gains in productivity and thus real incomes on an intra-national (i.e., internal for a given country) level it can also do so on an international level.

Protectionism Makes You Poor

When international trade is restricted, for example, by protectionist legislation which places tariffs on certain imports, this process of specialization is hindered and thus the gains in productive efficiency are diminished. By artificially raising the price of imports, tariffs allow otherwise uncompetitive and inefficient domestic businesses to remain in operation. Consumers are forced to pay higher prices for the goods the importation of which is penalized by tariffs, and this effectively constitutes a redistribution of resources from the consumers to the domestic producers.

More importantly, protectionism hinders the process of specialization described in the previous section and thus prevents living standards from rising in the long-term, or worse — it can even lead to their decline. By propping up the profits of comparatively inefficient domestic producers and keeping in business, tariffs prevent the labor shift from those inefficient sectors, to more comparatively efficient ones. Consequently, because this prevents a higher degree of specialization from taking place, or even reverses it, the benefits that specialization leads to cannot be obtained. Productivity does not increase (or at least not to the same degree as it could) and thus real incomes do not rise.

Contrary to the popular political rhetoric nowadays, free trade does not “destroy jobs.” It can only lead to a shift of resources (labor, capital, and other factors) from one comparatively inefficient sector or group of sectors in the domestic economy to another more comparatively efficient one. This process of specialization in the comparatively advantageous lines of production not only does not destroy jobs, but it also enables big gains in efficiency and productivity to take place, which leads to a rise in real incomes. This is how, far from somehow hurting the domestic workers, free trade actually does the opposite — it makes them richer. It is, in fact, protectionism which makes us all poorer, workers included, by artificially propping up inefficient businesses, leading to a misallocation of resources and a decline in standards of living for us all.

Georgi Vuldzhev is a student and an intern at the Institute for Market Economics in Sofia, Bulgaria. He has written articles on economics and politics for the European Students for Liberty blog, where he is a regular contributor, and various Bulgarian publications. His main interests are Austrian economics and libertarian political theory.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

A Conversation with My Neighbor “Sam” – Article by Mark Brandly

A Conversation with My Neighbor “Sam” – Article by Mark Brandly

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The New Renaissance HatMark Brandly
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Lately, I’ve wondered how my neighbor, Sam, affords to buy so much stuff. He appears to have an unlimited budget. When I asked him about this, Sam asked, “Do you think I’m spending too much?”

“That depends,” I said, “How much money do you make?”

“I take home $100,000 a year.”

That surprised me. I would guess that he’s spending more than that. But I tried to be encouraging, “That sounds like plenty of income. With a little planning, you should be able to budget your spending and be financially stable.”

“But my finances are a mess,” Sam replied. “I spend more than I take home. Last year I had to borrow $12,000 just to cover my spending.”

“Well maybe things will be better this year,” I said, hoping that Sam’s spending issues was a one year problem.

“No,” Sam replied. “Actually, in the first three months of this year, I’ve already spent $19,000 more than I’ve made. It looks like my budget deficit this year will be much worse than it was last year.”

Now I was starting to worry. “Have you been borrowing money to cover your spending for a long time?”

“Oh yes. I have a lot of debt. Part of the problem is that I owe myself $150,000.”

I wondered if Sam misspoke, “Wait, wait, wait, you owe yourself $150,000? Why do you think that you’re in debt to yourself?”

“Well you see, over the years I promised myself that I was going to use my paychecks to pay for a fund for my children’s education, but instead of spending $150,000 on colleges, I spent the money on other expenses. So I figure that I owe myself this money so that I can pay for my children’s college tuitions.”

Obviously Sam doesn’t understand the definition of the word “debt.”

I tried to be polite in my response: “That doesn’t make any sense. It’s true that you’ve made some horrible decisions regarding your spending, but it’s ridiculous to claim that you owe yourself money. A debt occurs when one person owes another person money. Just because you changed your mind about how to spend your paychecks doesn’t mean that you’ve borrowed money from yourself.

“So the first thing you need to do is to think clearly about the amount of debt you have. You don’t owe yourself any money. Now, forgetting about this ridiculous notion of self-debt, how much do you owe?”

“Alright, I think I see your point. Let’s just talk about the rest of my debt. I owe various banks about $420,000. This debt is more than four times my take-home income.”

Sam often lies about his income and spending issues, but he always understates his budget problem. If he’s lying now, then I can be sure that the problem is even greater than he says. I wanted more information.

“That a pretty high debt to income ratio. But that might be somewhat manageable, although unwise, if you’ve borrowed that money at low interest rates.”

“I have some good news and some bad news,” Sam said. “Interest rates are low. In fact, in the last fourteen years, my debt has more than quadrupled, but my interest payments have increased less than 50 percent. That’s because interest rates have collapsed during that time. Isn’t that good news?”

“I suppose, but do you know that interest rates are going to increase over the next several years?”

“Yes, that’s the bad news. In the past year, I only paid $7,000 of interest, but within ten years my debt will increase over 50 percent, and possibly much more, and with higher interest rates I expect to be paying at least four to five times that much in interest annually.”

“That’s a huge problem. So to be able to make your loan payments, I assume that you’ve taken out some long-term loans.”

“No, no, no. In order to take advantage of the low interest rates, most of my borrowing is short term. I rollover my loans quickly. In the past year my principal payments on these loans totaled $207,000.”

“Let me get this straight. Your loan payments, including principal and interest, are well over twice your take home pay?”

“Yes, I take home a little over $8,000 per month and my loan payments are over $17,000 per month. But it’s no problem. In the past year I borrowed $223,000 to cover everything.”

Shocked, I said “How can you say borrowing more than twice your income is not a problem?”

“I simply borrow all the money I need to make all of my loan payments. I never pay any of the loans down. I’ve been doing this for years, ever since I started spending more than I make.”

“Okay. Most of your borrowing goes to cover your increasingly large principal and interest payments. And as interest rates rise, interest payments will become a bigger percentage of your spending. When that happens, your total debt will increase faster than your income. What is your plan, say in the next ten years, to correct this situation?”

“Well I don’t have a plan for correcting anything, because I don’t see how I can cut my spending.”

“What if the banks stop loaning you money to make your payments on your loans? What happens then?”

“I guess I’m assuming that won’t happen.”

Sam’s Budget Situation in Real Numbers
If one of our neighbors budgeted in this manner, we would obviously conclude that the guy is crazy. No such plan could work. Eventually lenders would refuse to fund Sam’s spending.

However, Sam’s situation looks a lot like the federal government budget plan. Take a look at some recent federal budget information and some Congressional Budget Office projections:

  • In FY (fiscal year) 2015, the feds had a budget deficit, counting only debt held by the public, of $339 billion, which is about 10 percent of their tax revenues of $3,248 billion. The deficit has been declining the last few years, but that is now changing.
  • In fact, in the first three months of FY 2016, according to the Treasury Department, federal debt held by the public increased $548 billion. Admittedly, some of this debt was due to the fact that the feds were cooking the books in FY 2015 when they hit the debt ceiling limit. Nonetheless, the first quarter 2016 deficit is already 60 percent larger than the overall 2015 deficit.
  • The federal government claims to owe itself over $5 trillion (they call it intragovernmental debt here). This $5 trillion represents tax revenues that were earmarked for specific spending programs, such as Social Security, but were spent on other programs. Since the feds collected taxes to pay for Social Security, but spent the money on something else, they conclude that they owe it to themselves to collect those tax revenues again. That’s the essence of intragovernmental debt. We should not count this as debt. Give the Treasury Department credit for ignoring this type of “debt” in their Daily Treasury Statements and in their end of the year debt reports.
  • As of September 30, 2015, the feds had $13.1 trillion of debt owed to the public. FY 2015 tax revenues totaled $3.248 trillion. So just like Sam the government has a 4-to-1 debt-to-tax-revenue ratio.
  • In the past fourteen years, from September 30, 2001 (the start of George Bush’s first budget) to September 30, 2015 (the end of Barack Obama’s sixth budget), debt owed to the public increased from $3,339.3 billion to $13,123.8 billion. That’s an increase of 293 percent.
  • According to the Daily Treasury Statements, in the past fourteen years, interest on treasury securities increased from $162.5 billion in fiscal year 2001 to $233.1 billion in fiscal year 2015. That’s a 44 percent increase during the same period when federal debt owed to the public almost quadrupled.
  • In FY 2015, again according to the Daily Treasury Statements, the feds borrowed $7,251.4 billion (see the Public Debt Cash Issues for September 30, 2015), an average of almost $20 billion per day. They spent $6,740.3 billion of this borrowing rolling over their debt. So, Federal principal and interest payments are more than double federal tax revenues.
  • According to the Congressional Budget Office’s baseline projections, debt held by the public in 2025 should exceed $21 trillion and during that time interest rates are expected to increase. Interest rates have been kept artificially low for years. If interest rates return to a more normal level, say to the rates they were paying when George Bush took office fifteen years ago, then interest payments in 2025 will exceed $1.2 trillion. That’s over a 400 percent increase compared to the FY 2015 interest payments. I should note here that the baseline budget projections are optimistic. We should expect the debt situation in 2025 to be significantly worse than these projections.

The federal government’s debt has exploded under the Bush and Obama administrations. Low interest payments due to the low interest rates have masked their budget problems. As interest rates and the spending gap on entitlement programs such as Social Security both increase, the budget problem will compound.

The federal government’s plan is to borrow all of the money they need to pay all of their principal and interest payments and to also pay for the budget deficits in their spending programs. The question we should ask is: what’s going to happen when the world’s lenders refuse to bankroll DC’s spending schemes?

Mark Brandly is a professor of economics at Ferris State University and an adjunct scholar of the Ludwig von Mises Institute.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Do We Need To ‘Rebuild The Military’? – Article by Ron Paul

Do We Need To ‘Rebuild The Military’? – Article by Ron Paul

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The New Renaissance HatRon Paul
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The Republican presidential debates have become so heated and filled with insults, it almost seems we are watching a pro wrestling match. There is no civility, and I wonder whether the candidates are about to come to blows. But despite what appears to be total disagreement among them, there is one area where they all agree. They all promise that if elected they will “rebuild the military.”

What does “rebuild the military” mean? Has the budget been gutted? Have the useless weapons programs like the F-35 finally been shut down? No, the United States still spends more on its military than the next 14 countries combined. And the official military budget is only part of the story. The total spending on the US empire is well over one trillion dollars per year. Under the Obama Administration the military budget is still 41 percent more than it was in 2001, and seven percent higher than at the peak of the Cold War.

Russia, which the neocons claim is the greatest threat to the United States, spends about one-tenth what we do on its military. China, the other “greatest threat,” has a military budget less than 25 percent of ours.

Last week the Pentagon announced it is sending a small naval force of US warships to the South China Sea because, as Commander of the US Pacific Command Adm. Harry Harris told the House Armed Services Committee, China is militarizing the area. Yes, China is supposedly militarizing the area around China, so the US is justified in sending its own military to the area. Is that a wise use of the US military?

The US military maintains over 900 bases in 130 countries. It is actively involved in at least seven wars right now, including in Iraq, Syria, Pakistan, and elsewhere. US Special Forces are deployed in 134 countries across the globe. Does that sound like a military that has been gutted?

I do not agree with the presidential candidates, but I do agree that the military needs to be rebuilt. I would rebuild it in a very different way, however. I would not rebuild it according to the demands of the military-industrial complex, which cares far more about getting rich than about protecting our country. I would not rebuild the military so that it can overthrow more foreign governments who refuse to do the bidding of Washington’s neocons. I would not rebuild the military so that it can better protect our wealthy allies in Europe, NATO, Japan, and South Korea. I would not rebuild the military so that it can better occupy countries overseas and help create conditions for blowback here at home.

No. The best way to really “rebuild” the US military would be to stop abusing the military in the first place. The purpose of the US military is to defend the United States. It is not to make the world safe for oil pipelines, or corrupt Gulf monarchies, or NATO, or Israel. Unlike the neocons who are so eager to send our troops to war, I have actually served in the US military. I understand that to keep our military strong we must constrain our foreign policy. We must adopt a policy of non-intervention and a strong defense of this country. The neocons will weaken our country and our military by promoting more war. We need to “rebuild” the military by restoring as its mission the defense of the United States, not of Washington’s overseas empire.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Thanks to Court Ruling, Student Literally Can’t Attend School Because He’s Black – Article by Carey Wedler

Thanks to Court Ruling, Student Literally Can’t Attend School Because He’s Black – Article by Carey Wedler

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The New Renaissance HatCarey Wedler
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St. Louis, MO — An African-American third-grader in St. Louis, Missouri will be unable to continue attending his charter school due to a decades-old federal court decision intended to fight segregation. Edmund Lee, a high-performing student at Gateway Science Academy, will be forced to leave the school he has attended since kindergarten because he and his mother, La’Shieka White, are moving away from the district where the school is located. Though policy guidelines, pursuant to the court decision, allow students to stay if they move, a provision specifically states he cannot — because he is black.

“When I read the guidelines I was in shock,” White said. “I was crying.”

Though media outlets, including Salon, have reported this anachronistic decision to be a result of state law, the policy is actually a result of a U.S. Court of Appeals ruling from 1980 in response to a 1972 lawsuit challenging segregation. In 1983, a desegregation settlement agreement was reached that included “the transfer of black city students into primarily white suburban districts and white suburban students into magnet schools in the city,” explains the Voluntary Interdistrict Choice Corporation, the organization tasked with overseeing the implementation of the 1983 settlement. Until 1999, VICC stood for the Voluntary Interdistrict Coordinating Council, but in 1999, it became a non-profit corporation and the name was changed.

Kurt Fuchs, an employee with the Missouri Department of Elementary and Secondary Education (MDESE), told Anti-Media that Edmund will be able to finish his current semester at Gateway Science Academy, but noted he will have to relocate to a new school next year. He explained that the 1983 settlement agreement was reached when St. Louis’ demographic was predominantly black, and the court decision sought to implement what could be called reverse discrimination.

Sarah Potter, a communications coordinator for the MDESE, explained the settlement initiated transfers intended to equalize race distribution in schools. She said when the agreement was drafted, the region had predominantly white suburbs and predominantly black cities, a demographic the settlement sought to change.

Though the agreement was intended to undo segregation, more than 30 years later it has become a justification for it. Edmund’s mother expressed a broad view of the issues with the court-mandated policy.

“I don’t want it to be just about an African-American boy,” she said. “I want it to be about all children.”

Staff at the charter school are also dismayed at the way the decades-old policy is now perpetuating the very discrimination it was intended to prevent.

“If this helps us start a conversation about maybe some things that could be different with the law, then that is as good thing,” said Assistant Principal Janet Moak.

Tiffany Luis, Edmund’s third grade teacher, said, “To not see his face in the halls next year would be extremely sad.”

David Glaser, VICC’s chief executive officer, told Anti-Media they are unable to challenge the policy.

“I understand why people would like to do [something] different, but there isn’t anything I can do — or that anyone can do — because we are all under the constraints of the decision, and it’s our job to follow the law,” he said. He suggested it is unlikely an exception will be made for Edmund because the court’s decision — and the subsequent 1983 desegregation agreement — are legally binding federal court mandates. “It’s not like we can unilaterally change it,” he said.

As of Thursday afternoon, a petition seeking to allow Edmund to continue his studies at Gateway has garnered over 35,000 signatures. In spite of public outcry, however, it appears that for now, the anti-segregation policy will continue to enforce discrimination.

Glaser noted that even the state legislature can’t do anything because the state of Missouri signed the agreement when it was crafted.

As Tiffany Luis said, “The family is saying they want to stay. I don’t understand why they can’t.”

Carey Wedler joined Anti-Media as an independent journalist in September of 2014. Her topics of interest include the police and warfare states, the Drug War, the relevance of history to current problems and solutions, and positive developments that drive humanity forward. She currently resides in Los Angeles, California, where she was born and raised.

This article (Thanks to Court Ruling, Student Literally Can’t Attend School Because He’s Black) is free and open source. You have permission to republish this article under a Creative Commons license with attribution to Carey Wedler and theAntiMedia.org. Anti-Media Radio airs weeknights at 11 pm Eastern/8 pm Pacific.

First They Came For the iPhones… – Article by Ron Paul

First They Came For the iPhones… – Article by Ron Paul

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The New Renaissance HatRon Paul
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The FBI tells us that its demand for a back door into the iPhone is all about fighting terrorism, and that it is essential to break in just this one time to find out more about the San Bernardino attack last December. But the truth is they had long sought a way to break Apple’s iPhone encryption and, like 9/11 and the PATRIOT Act, a mass murder provided just the pretext needed. After all, they say, if we are going to be protected from terrorism we have to give up a little of our privacy and liberty. Never mind that government spying on us has not prevented one terrorist attack.

Apple has so far stood up to a federal government’s demand that it force its employees to write a computer program to break into its own product. No doubt Apple CEO Tim Cook understands the damage it would do to his company for the world to know that the US government has a key to supposedly secure iPhones. But the principles at stake are even higher. We have a fundamental right to privacy. We have a fundamental right to go about our daily life without the threat of government surveillance of our activities. We are not East Germany.

Let’s not forget that this new, more secure iPhone was developed partly in response to Ed Snowden’s revelations that the federal government was illegally spying on us. The federal government was caught breaking the law but instead of ending its illegal spying is demanding that private companies make it easier for it to continue.

Last week we also learned that Congress is planning to join the fight against Apple – and us. Members are rushing to set up yet another federal commission to study how our privacy can be violated for false promises of security. Of course they won’t put it that way, but we can be sure that will be the result. Some in Congress are seeking to pass legislation regulating how companies can or cannot encrypt their products. This will suppress the development of new technology and will have a chilling effect on our right to be protected from an intrusive federal government. Any legislation Congress writes limiting encryption will likely be unconstitutional, but unfortunately Congress seldom heeds the Constitution anyway.

When FBI Director James Comey demanded a back door into the San Bernardino shooter’s iPhone, he promised that it was only for this one, extraordinary situation. “The San Bernardino litigation isn’t about trying to set a precedent or send any kind of message,” he said in a statement last week. Testifying before Congress just days later, however, he quickly changed course, telling the Members of the House Intelligence Committee that the court order and Apple’s appeals, “will be instructive for other courts.” Does anyone really believe this will not be considered a precedent-setting case? Does anyone really believe the federal government will not use this technology again and again, with lower and lower thresholds?

According to press reports, Manhattan district attorney Cyrus Vance, Jr., has 175 iPhones with passcodes that the City of New York wants to access. We can be sure that is only the beginning.

We should support Apple’s refusal to bow to the FBI’s dangerous demands, and we should join forces to defend of our precious liberties without compromise. If the people lead, the leaders will follow.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Trump and Sanders Are Both Conservatives – Article by Steven Horwitz

Trump and Sanders Are Both Conservatives – Article by Steven Horwitz

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The New Renaissance HatSteven Horwitz
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Shared Visions of Fear, Force, and Collectivism

Those of us who reject the conventional left-right political spectrum often see things that those working within it cannot. For example, in “Why the Candidates Keep Giving Us Reasons to Use the ‘F’ Word” (Freeman, Winter 2015), I argue that Donald Trump and Bernie Sanders, seen by many as occupying opposite ends of the ideological spectrum, both embrace the thinking of economic nationalism, if not fascism.

They also share a different political tradition. It may seem to contradict their shared fascist pedigree, but Trump and Sanders are both, in a meaningful sense, conservatives.

Trump, of course, has been lambasted by many self-described conservatives precisely because they believe he is not a conservative. And Sanders, the self-described “democratic socialist,” hardly fits our usual conception of a conservative. What exactly am I arguing, then?

They are both conservatives from the perspective of classical liberalism. More specifically, they are conservatives in the sense that F.A. Hayek used the term in 1960 when he wrote the postscript to The Constitution of Liberty titled “Why I Am Not a Conservative.” There he said of conservatives,

They typically lack the courage to welcome the same undesigned change from which new tools of human endeavors will emerge.… This fear of trusting uncontrolled social forces is closely related to two other characteristics of conservatism: its fondness for authority and its lack of understanding of economic forces.… The conservative does not object to coercion or arbitrary power so long as it is used for what he regards as the right purposes. He believes that if government is in the hands of decent men, it ought not to be too much restricted by rigid rules.

That description would seem to apply to both Trump and Sanders. They share a fear of uncontrolled and undesigned change, especially in the economy. This is most obvious in Trump’s bluster about how America never “wins” and his desire to raise tariffs on Chinese imports and close the flow of immigrants, especially from Mexico. Economic globalization is a terrific example of uncontrolled change, and using foreign workers and producers as scapegoats for that change — especially when those changes have largely benefited most Americans — is a good example of this fear of the uncontrolled.

Those policies also show the much-discussed economic ignorance of Trump and his supporters, as shutting off trade and migration would impoverish the very people Trump claims to care about — those who are, in fact, supporting him. International trade and the free migration of labor drive down costs and leave US consumers with more money in their pockets with which to buy new and different goods. They also improve living standards for our trade partners, but Trump and his followers wrongly perceive their gains as necessitating American losses.

The same concerns are echoed in Sanders’s criticisms of free trade and in his claim that immigration is undermining good jobs for the native-born. Trump’s rhetoric might be more about how the US needs to “beat” the Chinese, and Sanders might focus more on the effects on working class Americans, especially union workers, but both fear the uncontrolled change of globalized markets, seeing commerce as a zero-sum game. (See “Why Trump and Sanders See Losers Everywhere,” FEE.org, January 20, 2016.)

For Sanders, fear of change also bubbles up in his criticisms of Uber — even though he uses the service all the time. Part of Hayek’s description was the fear of change producing “new tools of human endeavor.” The new economy emerging from the reduction of transaction costs will continue to threaten labor unions and the old economic understanding of employment and the firm. Sanders’s view of the economy is very much a conservative one as he tries to save the institutions of an economy that no longer exists because it no longer best serves human wants.

In addition, both Trump and Sanders are more than willing to use coercion and arbitrary power to attempt to resist that change. These similarities manifest in different ways, as Trump sees himself as the CEO of America, bossing people and moving resources around as if it were one of his own (frequently bankrupt) companies. CEOs are not bound by constitutional constraints and are used to issuing orders to all who they oversee. This is clearly Trump’s perspective, and many of his followers apparently see him as Hayek’s “decent man” who should not be too constrained by rules.

The same is true of Sanders, though he and his supporters would deny it. One need only consider his more extreme taxation proposals as well as the trillions in new spending he would authorize to see that he will also not be bound by constraints and will happily use coercion to achieve his ends. This is also clear in his policies on trade and immigration, which, like Trump’s, would require a large and intrusive bureaucracy to enforce. As we already know from current immigration restrictions, such bureaucracies are nothing if not arbitrary and coercive. Both Trump and Sanders believe that with the right people in charge, there’s no need for rule-based constraints on political power.

Hayek also said of conservatives that they are characterized by a

hostility to internationalism and [a] proneness to a strident nationalism.… [It is] this nationalistic bias which frequently provides the bridge from conservatism to collectivism: to think in terms of “our” industry or resource is only a short step away from demanding that these national assets be directed in the national interest.

As noted, Sanders and Trump share exactly this hostility and proneness. And despite being seen as political opposites, their distinct views converge in the idea that resources are “ours” as a nation and that it is the president’s job (and the state’s more generally) to direct them in the national interest. For Trump, that interest is “making America great again” and making sure we “beat” the Chinese. For Sanders, that interest is the attempt to protect “the working class” against the predation of two different enemies: the 1 percent and foreign firms and workers, all of whom are destroying our industries and human resources.

All of this fear of uncontrolled change and economic nationalism is in sharp contrast with the position of what Hayek calls “liberalism” or what we might call “classical liberalism” or “libertarianism.” In that same essay, Hayek said of classical liberalism, “The liberal position is based on courage and confidence, on a preparedness to let change run its course even if we cannot predict where it will lead.”

This is why classical liberalism rejects the idea that the path toward progress entails electing the right people (the “decent men”) and the cult of personality that frequently accompanies that idea, as we’ve seen with Trump and Sanders. Classical liberalism understands how, under the right rules and institutions, progress for all is the unintended outcome of allowing each to pursue their own values and ends with an equal respect for others to do the same, regardless of which side of an artificial political boundary they reside on.

If we want to live in peace, prosperity, and cooperation, we need to recognize that progress is a product of unpredictable, uncontrolled, and uncontrollable change.

Trump and Sanders can stand on their porches telling us to get off their lawn, but we’re going to do it in an Uber imported from Asia and driven by a nonunionized immigrant, because we classical liberals welcome the change they fear.

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions. He is a member of the FEE Faculty Network.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Happy Future Day! – Article by Edward Hudgins

Happy Future Day! – Article by Edward Hudgins

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The New Renaissance HatEdward Hudgins
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Stand up for optimism about the future today!

Transhumanism Australia, a non-profit that promotes education in science and technology, has marked March 1 as “Future Day.” It wants this day celebrated worldwide as a time “to consider the future of humanity.” If all of us made a habit of celebrating our potential, it could transform a global culture mired in pessimism and malaise. It would help build an optimistic world that is confident about what humans can accomplish if we put our minds and imaginations to it.

The Future is Bright

The information and communications technology that helps define and shape our world was, 40 years ago, a vision of the future brought into present reality by visionaries like Steve Jobs and Bill Gates. The exponential growth of the power of semiconductors allowed entrepreneurs to create one new industry and cutting-edge good product and service after another.

futureToday, we are at exponential takeoff points in biotech, nanotech, and artificial intelligence. For example, the cost of sequencing a human genome was $100 million in 2001, $10 million in 2007, but it costs only a few thousand dollars today. Steve Jobs created the first Apple computers in his garage. Biohackers similarly housed could transform our lives in the future in ways that still seem to most folks like science fiction; indeed, the prospect of “curing death” is no longer a delusion of madmen but the well-funded research projects in the laboratories of the present.

For a prosperous present and promising future a society needs physical infrastructure—roads, power, communications. It needs a legal infrastructure—laws and political structures that protect the liberty of individuals so they can act freely and flourish in civil society. And it requires moral infrastructure, a culture that promotes the values of reason and individual productive achievement.

Future “Future Days”

We should congratulate our brothers “Down Under” for conceiving of Future Day. They have celebrated it in Sydney with a conference on the science that will produce a bright tomorrow. We in America and folks around the world should build on this idea. Today it’s a neat idea: next year, we could start a powerful tradition, a global Future or Human Achievement Day, promoting the bright future that could be.

Were such a day marked in every school and every media outlet, it could to raise achiever consciousness. It could celebrate achievement in the culture—who invented everything that makes up our world today, and how? It could promote achievement as a central value in the life of each individual, whether the individual is nurturing a child to maturity or a business to profitability, writing a song, poem, business plan or dissertation, laying the bricks to a building or designing it, or arranging for its financing.

Such a day would help create the moral infrastructure necessary for a prosperous, fantastic, non-fiction future, a world as it can be and should be, a world created by humans for humans—or even transhumans!

Dr. Edward Hudgins directs advocacy and is a senior scholar for The Atlas Society, the center for Objectivism in Washington, D.C.

Copyright The Atlas Society. For more information, please visit www.atlassociety.org.