Thursday, January 31, 2013

Liberty and justice for all

I was reading this article on Internet - and as is customary, I grabbed my head with both hands and screamed "How can you people be so stupid?!" But let me go directly to the quotes that show the confusion which is inherent to American so-called "liberalism" and "progressivism"...

A meritocratic society can’t be an entirely egalitarian society, and the principle of limited government recognizes that some injustices can’t be corrected. The challenge of democratic politics is to balance and reconcile these equally indispensable, unavoidably contradictory ideas: on one side liberty, and on the other justice.

In the later part of the article, Clive Crook, the self-described progressive makes it obvious that the type of justice he claims is in conflict with freedom - is the so-called "social justice", and it is clear that he associates justice with equality of result. He never attempts to explain why he believes that justice demands that all people earn same amount of money or achieve equal success. Indeed, it's well understood that justice requires equal treatment under the law - and people of different abilities, treated equally are unlikely to achieve same results. For example, it's obviously absurd to proclaim that the world is unjust because Garry Kasparov was the world chess champion, and not, say, Al Sharpton or Joe Biden. The rules of chess are equally applied to all, and no one stops Al Sharpton from competing in the chess tournament - it is his innate abilities and circumstances of his life which made his participation absurd.

It's also quite obvious that taking at gun point the fruits of labor from one group of people and giving to another is fundamentally unjust. One can support Medicaid, welfare, foodstamps and subsidized housing as acts of mercy - but it's impossible to make a claim that these programs represent an act of justice. Indeed, one could notice that the only type of society that practices justice in any reasonable form is a society where people are left to their devices and allowed to direct their own lives with minimal coercion from the government or fellow citizens.

Liberals often pronounce that no one truly achieves everything in his life due to his own personal efforts. As Barack Obama infamously proclaimed "You did not build that", while the faux-indian Elizabeth Warren muttered that "There is nobody in this country who got rich on his own". But this line of reasoning seems to ignore the obvious - while everyone can use roads, and bridges and schools, only very few people actually succeed, while a great majority of people succumb to an average life. So, what did the successful people do differently? This is a question not asked, let alone answered by Obama and Warren. And if people are treated justly - i.e. equally by the state, who would expect equal results from millions of people, each of them an individual, each of them different, each with his own talents, character traits and personal choices? You can certainly complain that God or destiny or Gaia did not give you the talent to create new things or perseverance to work on the project, but it's irrational to blame society for your own deficiencies - and what's worse, it is actually rather counter-productive.

If anything, history shows that any attempts to fight the conceived "injustice" of freedom ends in the loss of both freedom and justice. Even if I ignore the major experiments in "redistributive justice" in USSR, North Korea and China (which ended in the worst possible injustice in the last 1000 years), one can easily see that if anything, all latest experiments in Western Europe and USA for equality of result did not end up in more justice.  For example, America showed a dramatic reversal in the growth of living standards and equality after the major liberal programs (Medicare, Medicaid, welfare, subsidized housing) were put into effect. Obama's proclaimed attempts to "invest in communities" resulted in expected massive handouts of taxpayer money to his donors, political allies and supporters, while the taxpayers were left with tremendous debt obligations and sluggish economy.

The coming bankruptcy of the welfare state both in Europe and US also demonstrates that the attempt to give up freedom in order to gain justice is also unsustainable. It's clear that American society is getting closer and closer to a crisis - when young and relatively few workers will be faced with massive demands for their fruits of labor to pay for the massive federal, state and local debts - while at the same time supporting tens of millions of retired baby-boomers. Ignoring the obvious financial peril, our president is vastly expanding the welfare state, which in turn promises even steeper tax penalties for the future Americans.

In the final analysis, the concept of justice cannot exist in a society without freedom. Any attempt to ignore this fundamental truth will result in the breakdown of society - and America's choice of Barack Obama in 2012 is another step on the path to destruction of this fine country. When tens of millions of people confidently believe that they have a right to take the fruits of labor of other people - be it "millionaires and billionaires" or the families which earn more than an arbitrary sum ($250k or 400k) , and these people are a majority, the fall of the country into the abyss may be inevitable. No freedom, no justice, no prosperity - Live free or die. This is the choice for our country.

Friday, January 11, 2013

Some statistics for the policy wonks

It is often proclaimed that it normally takes very long time for the economy to recover after a financial crisis. During one of the on-line arguments, I was once challenged to compare the recovery after 2008 crisis with the recoveries from similar financial crises in the past. My opponent offered me a list of recessions - and I arbitrarily chose to analyze the crisis of 1907 (I confess my laziness to check the other ones).

But before wasting a lot of numbers, here is the background for the 1907 recession. According to wikipedia:

The Panic of 1907, also known as the 1907 Bankers' Panic or Knickerbocker Crisis, was a financial crisis that occurred in the United States when the New York Stock Exchange fell almost 50% from its peak the previous year. Panic occurred, as this was during a time of economic recession, and there were numerous runs on banks and trust companies. The 1907 panic eventually spread throughout the nation when many state and local banks and businesses entered bankruptcy. Primary causes of the run include a retraction of market liquidity by a number of New York City banks and a loss of confidence among depositors, exacerbated by unregulated side bets at bucket shops. The panic was triggered by the failed attempt in October 1907 to corner the market on stock of the United Copper Company. When this bid failed, banks that had lent money to the cornering scheme suffered runs that later spread to affiliated banks and trusts, leading a week later to the downfall of the Knickerbocker Trust Company—New York City's third-largest trust. The collapse of the Knickerbocker spread fear throughout the city's trusts as regional banks withdrew reserves from New York City banks. Panic extended across the nation as vast numbers of people withdrew deposits from their regional banks.

Lets examine the aftermath of the 1907 crisis and how quickly economy recovered under the unobstructed free market economy - and then compare with the recovery under president Obama and welfare socialism.

From 1907 to 1912, the real GDP grew from 801 billion dollars to 857 billion dollars (all are in 2008 dollars). The real growth of the economy was 7% , five years after the start of the financial crisis. The data was downloaded from the website "Many Eyes".

In 2007, the US GDP was 14,071 billion dollars (in 2007 dollars) according to the website  Infoplease. In 2012, the US GDP is expected to be 15,903 billion dollars (in 2012 dollars) according to website Forecasts. When I add the 11% total inflation from 2007 to 2012 (inflation calculator is here), the 2007 GDP in 2012 dollars becomes 15,619 billion dollars. This means that the real GDP growth from 2007 to 2012 was only 1.8%.

In short, the US economy recovered much faster from the 1907 financial crisis than from the 2008 financial crisis. After 5 years, the US economy grew by 7% and 1.8% respectively (1907-1912 and 2007-2012).

Please keep these numbers handy when someone tells you that Obama's recovery is not unusually slow.

Thursday, January 10, 2013

Liberals say the darndest things

Liberals say the darnedest things when they think no one is watching them. A hard-left media outlet Huffington Post published an in depth article examining the problems faced by the Republican Party. It's an interesting read for an attentive reader. One passage made me laugh out loud:

"But as I [Huffington Post reporter] sat among the Heritage's luncheon crowd -- part of a daylong anti-poverty forum -- a series of more immediate and pressing questions came to mind: How will the Republican Party and the broader conservative movement it's meant to embody fix their problems with the poor, the disadvantaged, women and minorities? How will the Republican Party evolve?  Romney's loss forced the GOP to recognize that its support is built on a shrinking base of aging, ethnically monolithic, and geographically isolated voters -- while the Democrats have amassed a coalition of growing and engaged constituencies."

Most of the rest of the article is spent on the author challenging the GOP activists on how they plan to rectify this situation and attempt to persuade the "poor and disadvantaged" to vote Republican. The unstated but apparent assumption is that the number of poor people will grow in Obama's America, and will give DNC a ruling majority unless Republicans find a way to appeal to this growing demographic. This logic is based on actual facts on the ground, the number of people on foodstamps went from 28.2 million in 2008 to 47.7 million people in 2012. Not only that - the number of people receiving disability benefits jumped from 9,273,839 in 2008 to 10,890,896 in 2012.

And yet, it makes me wonder - who will notice this pearl of wisdom? Why is it that even the Democrats allies in the media assume that poverty will skyrocket under Obama?  And an even more penetrating question - if "poor and disadvantaged" are the key allies of the DNC, and their number is expected to expand under the Obama administration - is it really unnatural to assume that growth of poverty in the last 4 years may not be accidental? After all, Obama holds the keys to the US economy....