Author: Harvey Cody

Here’s some more on what is wrong with Steve Roth’s article “Why Welfare and Redistribution Saves Capitalism from Itself.”^[i]

Roth’s next burst of brilliance is this:

Market capitalism — especially modern “holding-company capitalism,” in which corporations own corporations which own corporations, ad infinitum — inevitably concentrates wealth and income into fewer and fewer hands. It’s just the nature of the beast. Along with its immense, world-changing, manifest benefits, market capitalism labors under that inescapable burden.

So far Roth is batting a thousand on blatant falsehoods.

According to Forbes Magazine, “The 1996 annual ranking of the 400 wealthiest Americans by Forbes magazine includes a record 121 billionaires, 27 more than last year.”^[ii]

According to Forbes Magazine in 2016, “America boasts 540 billionaires, more than any other country on the planet and more than all of Europe combined.”^[iii]

Mr. Roth, how’s that “fewer and fewer hands” comment working out for you so far?

The number of newly minted millionaires between 1996 and 2016 (3.5 million^[iv] compared to 10.8 million^[v]) is massively greater than the number of newly minted billionaires, but more of the difference in millionaires can be attributed to changes in the value of the dollar between the two dates. Nevertheless, these numbers reveal that, rather than “concentrate[ing] wealth and income in fewer and fewer hands” (as Roth claims), the numbers of hands filled with income and wealth grows dramatically in America over time (to say nothing of the astonishing quality and utility improvements and the lowering of real costs of the things that can be purchased with that money).

Consider also that America is considered one of the most “market capitalist” countries among the OECD members; that is, America’s massive redistribution programs are less proportionately massive than the others’. Nevertheless, “of the 1.8M net increase in global millionaires [in 2012], more than 9 out of 10 were Americans.”^[vi] Clearly the approach of one of the least redistributive country (America) is concentrating wealth in relatively^[vii] more hands than those who attempt to more massively redistribute wealth.

Consider these facts:^[viii]

1. “Using a panel of tax returns from 1999 through 2007, this report^[ix] finds that nearly 60 percent of households in the bottom quintile in 1999 are in a higher quintile in 2007 (and more than 16 percent are in one of the top two quintiles in 2007). Roughly 40 percent of tax returns in the top quintile in 1999 are in a lower quintile in 2007 (and more than 14 percent moved down by two or more quintiles by 2007).
2. The report also examines the persistence/transience of millionaires and finds that this group of taxpayers, which has been the focus of millionaire surtaxes among some states and some tax policy proposals at the federal level, is highly transient. Roughly 50 percent of those taxpayers who were millionaires at some point during the 1999 through 2007 period attained this status just once. In contrast, only 6 percent of this group of taxpayers were millionaires in all nine years. . . .
3. “Millionaires are a highly transient group of taxpayers, and it appears that the realization of capital gains is at least one explanation. This income source tends to be lumpy and periodic and is a major explanation for why taxpayers reach millionaire status.”

Contrary to what Roth would have you believe, market capitalism neither reduces the number of hands into which wealth flows nor creates perpetual dynasties of riches. Trust-fund babies have at their disposal only what is left over after estate and inheritance taxes are collected (and presumably spent for the good of society at large). Trust-fund fools and their money are soon parted. (And this represents many trust fund babies if “only 6 percent” of millionaires remain millionaires for as little as nine years.) Wise trust-fund babies tend to give away much of their money (the guilt—which is no fun—of having unearned riches is no doubt a significant factor) and invest what is left over wisely. Wise investments create businesses that efficiently create jobs and serve the wants and needs of people. All in all, many people getting rich ain’t all bad.^[x]

All of this assumes that America’s economy is “market capitalism” and that market capitalism is what causes a greater concentration of wealth than Roth would prefer. I’ll address the fallacy of that assumption in the next post.

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[i] If you haven’t already done so, please read the article, but please also suspend any belief that it makes a lick of sense until you’ve read my several posts about the article.

[ii] See “121 Billionaires Top Forbes List of 400 Richest Americans.”

[iii] See “The Full List Of Every American Billionaire 2016.”

[iv] See “Amway Produces More Millionaires Than Any Other Type of System.”

[v] See “A record number of Americans are now millionaires, new study shows.”

[vi] See “Land of opportunity: Of the 1.8M net increase in global millionaires last year, more than 9 out of 10 were Americans.”

[vii] Currently America’s population is approximately half of Europe’s.

[viii] See “The Highly Transient Millionaires.”

[ix]  “The Tax Foundation, “Income Mobility and the Persistence Of Millionaires, 1999 to 2007.”

[x] See “Income Inequality Is More Than It’s Cracked Up to Be.”

Here’s some more on what is wrong with Steve Roth’s article “Why Welfare and Redistribution Saves Capitalism from Itself.”^[i]

Roth’s next main claim is this:

Now contrast these [massively collectivist] countries to all the countries that have eschewed those freedom-sapping, serf-ifying government programs, and that have emerged as thriving, prosperous utopias of liberty.

Name one.

Why hasn’t it happened? Not even once.

First, observe that Roth has put the cart before the horse. Massively collectivist countries can be massively collectivist only because they have become wealthy enough to become massively collectivist. Mozambique, Niger, and Burundi have no chance of joining the rich countries’ club by adopting massive redistribution programs. (Roth admits as much later in the article.) First of all, they do not have massive amounts of anything to redistribute. Attempting to redistribute more than they currently do would make the countries even poorer (because the redistribution of wealth always involves taking money from those more capable of producing wealth and giving what is left over after “the system” skims off^[ii] a significant amount for political and other unproductive uses). On the contrary, their only chance of becoming prosperous is to adopt the most pro-free trade policies that the populous will stand.

Put succinctly, no country can emerge from relative poverty and join the rich club without keeping freedom-sapping programs sufficiently at bay over a long enough period so that it can create the wealth to become massively collectivist.

Then, realize that, in two respects, Roth has moved the goal posts he established in the preceding paragraphs. In his opening salvo, Roth holds up as the optimum standard “massive doses of redistribution, and universal government programs for social support and financial security.” Note that he refers only to “massive doses.” He did not say that the wealth of the country must be completely redistributed (so that everyone had identical levels of income as well as social and financial security). Therefore, implicit in his claim is that, to some degree, the current members of the rich and prosperous club have and currently do “eschew” full implementation of “freedom-sapping, serf-ifying government programs.”

Note also that nowhere does Roth claim that any of the rich collectivist states he reveres are utopias. He has not taken upon himself the challenge of naming even one collectivist government-run utopia. Nevertheless, Roth suggests that he is proving some point by asking his readers to name a “utopia of liberty” that has thrived and become prosperous. Asking a preposterous question that you would not ask of yourself proves nothing.

While I cannot claim that England, America, Germany, and all of the other current members of the rich countries’ club were or are now utopias, I can claim (and in the immediately preceding post did claim) that they all became members of the club when they eschewed to a very considerable degree the “freedom-sapping, serf-ifying government programs” that Roth is touting.

In short, had Roth set the same standards of measurement (goal posts) for his opponents as he set for himself, it would have become clear that not only one, but many if not all of the current members of the club became members because they sufficiently eschewed “those freedom-sapping, serf-ifying government programs.”

To not engage in half-truths,^[iii] Roth should have named all countries that became too massively collectivist and either fell out of the rich club^[iv] or cut back on collectivist policies in order not to fall out of the rich club.^[v] He also should have noted how much less rich and technologically advanced most of the members of the rich club would be if America did not provide most of the innovations, defense, and funding for the collective state action (e.g., the U.N. and NATO, trying to keep bad actors in the world at bay) upon which they rely. America could not carry such a heavy load and would not be the world’s fountain of innovation if it were to become even more collectivist.^[vi]

China is a glorious example of a country joining the club only after it eschewed much of its quintessential “freedom-sapping, serf-ifying government programs” in favor of free markets and less redistribution. How does Roth reconcile this gigantic contradiction to his thesis? Crickets.

In short, the second claim does not prove that “Welfare and Redistribution Saves Capitalism from Itself.”

Perhaps he will get around to actually advancing his thesis later on in the article. (Don’t hold your breath.)

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[i] If you haven’t already done so, please read the article, but please also suspend any belief that it makes a lick of sense until you’ve read my several posts about the article.

[ii] See “Obamacare – Repeal, or Repeal and Replace? PART I,” specifically Siphoning.

[iii] See “The Truth Is Hard For The New York Times.”

[iv] E.g., Latvia (which went from reasonably non-collectivist to almost completely collectivist as part of the USSR), Venezuela, Greece, Portugal, and Spain remain in the club only because they are being bailed out by the EU (and relying on the U.S. for innovation, defense, and other benefits).

[v] E.g., Sweden.

[vi] See “Income Inequality — the Gap Is Not as Large as You May Think,” “A Comment Worthy of a Post,” and “Two Paths for America.”

A friend who holds a degree in political science from a prestigious university recently shared on Facebook this article by Steve Roth: “Why Welfare and Redistribution Saves Capitalism from Itself.”^[i] It may be the most quintessential example of leftist bromides, non sequiturs, self-congratulations, and just plain ol’ errors I’ve ever seen. Sorting out the many wrong things about the article should be quite useful to obtain a deeper understanding of political debates about economics in America.

[BTW: I’m taking a new approach to this series of posts. See Author’s Note below the endnotes.]

As the title of Mr. Roth’s article implies, the author claims (and seeks to convince his readers) that “welfare and redistribution saves capitalism from itself.” He tries to make that case by several different means. Let’s sort out whether he accomplished his objective.

Mr. Roth’s first point is this:

“No country has ever joined the modern, high-productivity, rich-country club without massive doses of redistribution, and universal government programs for social support and financial security. Not one. Ever.”

(For the sake of brevity, I’ll use the words “collectivist government”^[ii] to represent the government described in this claim.)

Let’s first observe that the claim is patently false. To see this, note that no “modern, high-productivity, rich-country” achieved that status yesterday. All those countries are the product of policies in place as they became more productive and rich relative to other countries. As we will see, collectivist governments of today are nothing like the governments of those countries when they joined the relatively “high-productivity, rich-country club.”

Most “modern, high-productivity, rich-countr[ies]” achieved that status as a result of their participation in the First and Second Industrial Revolutions (1760 to sometime between 1820 and 1840 and between 1840 and 1870, respectively). Although there were many attempts at collectivist governments over the centuries, few, if any, of the countries that had massively collectivist governments before 1870 became highly-productive or rich as a result of the First or Second Industrial Revolutions.

It was only after Germany became rich at the end of the Second Industrial Revolution that Chancellor Bismarck kicked of the modern era of collectivist government. The UK initiated its “welfare state” with the election of the “Liberal Party” in 1906. America kicked off its “welfare state” in the 1930s. The period between 1906 and 1930 was a period in which the US put the UK in the shade economically. All of these welfare states started after counties distinguished themselves as “modern, high-productivity, rich-countr[ies].”

Note also that Mr. Roth offers no example of a country with a massively collectivist government economically gaining on, much less overtaking, a country with a less collectivist form of government.

Worse, he ignores clear examples that refute his claim. I’ll mention one. (While there are several, just one is necessary.) Estonia clearly contradicts his assertion that “no country has ever joined the modern, high-productivity, rich-country club without massive doses of [collectivist government].”

“After Estonia moved away from Communism in the late 1980s and became an independent capitalist economy in 1991, it emerged as a pioneer of the global economy. . . . The country has been quickly catching up with the EU-15; its GDP per capita having grown from 34.8% of the EU-15 average in 1996 to 65% in 2007, similar to that of Central European countries. It is already rated a high-income country by the World Bank. . . .  Because of its economic performance after the Soviet breakup, Estonia has been termed one of the Baltic Tigers.

“In 2008, Estonia was ranked 12th of 162 countries in the Index of Economic Freedom 2008, the best of any former Soviet republic. The same year, the country was on bottom of Europe by labour market freedom. . . .” ^[iii] [Emphasis Added.]

“With a population of just 1.5 million, Estonia does not have a very large welfare budget in either absolute or relative terms.”^[iv] [Emphasis Added.]

Estonia, like all its fellow Soviet satellite states, was impoverished in 1991 when it gained freedom from the USSR, but it was among the poorest.^[v] Before the Berlin Wall fell, Estonia’s estimated GDP per capita was $2000 while neighboring Finland’s was over seven times that. “. . . during 1993-1994, Estonia went from an almost unknown spot in the world for foreign investors to a mecca for them.”^[vi]

How did Estonia pull off “The Estonian Economic Miracle?” Estonia had the good fortune of electing Mart Laar, a fan of Milton Friedman^[vii] (a staunch opponent of collectivist government), as Prime Minister (1992-1994 and 1999-2002).^[viii] Using free-market economics and a small welfare budget, Laar enabled Estonia to become a “modern, high-productivity, rich-country.” In short, contrary to Mr. Roth’s claim, Estonia is a country that became a member of the modern, high-productivity, rich-country club without massive doses of collectivist government.

The main takeaways of this post are: 1) Presenting a factually false claim, as discussed above, proves nothing; 2) The fact that rich countries today are “massively” collectivist proves neither that collectivism is what enabled them to join the rich and collectivist “club” nor the proposition that a country must be collectivist to become rich. Consequently, Mr. Roth’s first claim does not support the general claim that “welfare and redistribution saves capitalism from itself.”

There is much more to this story, which will be taken up in future.

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[i] Please read the article, but please also suspend any belief that it makes a lick of sense until you’ve read my several posts about the article.

[ii] This term is intended to describe any form of government (regardless of its label) that has a primary mission to “run the economy” in way that redistributes wealth from “the rich” to “the poor.”

[iii] “Estonia Investment and Business Guide Volume 1 Strategic and Practical.” Pg. 25.

[iv] “Which are the best countries in the world to live in if you are unemployed or disabled?”

[v]  “The Estonian Economic Miracle.”

[vi] See endnote vi.

[vii]  In “Walking on Water: How to Do It,” Laars said, “It is very fortunate that I was not an economist, I had read only one book on economics – Milton Friedman’s “Free to Choose.”

[viii] “Mart Laar’s Economic Guidebook for Estonia: Free To Choose”

Author’s Note: I’ve been advised that my blog posts are too long. I plead guilty to that charge. My excuse has been that the ideas covered by my blogs are so multifaceted, steeped in misunderstanding, and dangerous that a fairly thorough drubbing of them is necessary for the sake of our children and grandchildren (and everyone else in the world). This is why I spend so much time writing blog posts. I have also been concerned that unless I cover the waterfront, skeptics will jump and cling to what they believe to be unaddressed counterpoints that refute my arguments—and dismiss my arguments on that basis. On the other hand, if my posts are so long and rambling that too few read them, I am defeating my own purposes. Therefore, in tackling the many flaws in the article hyperlinked above, I will try presenting more bite-sized pieces of data and analysis and cover topics over several posts.

In this tweet, James Martin, a Jesuit Priest, said the words in the image above. This image has been circulating around the internet ever since. Martin’s tweet was posted in the context of Congress considering reductions in the future growth of welfare programs. It is fair to consider the tweet to be urging people to oppose such reductions.

I do understand why a Jesuit Priest and his acolytes would say something like this. Wanting to help the poor and sick is highly commendable. On the other hand, whether people can achieve salvation (or deserve the esteem or self-esteem that comes from doing good deeds) by urging others to delegate their personal obligations to help the poor and sick to Caesar is doubtful. (BTW: I believe that encouraging Caesar to take money from others with threats of force does not fulfill one’s personal obligation to personally help the poor and that believing one has done good by doing that is undeserved self-flattery, does not earn salvation, and is damnable; however, that is not the point of this post.)

Before discussing why turning aid to the poor and sick over to Caesar is a failed idea, let’s survey a few other things to criticize about James Martin’s tweet:

1. If there are any politicians who “treat the poor and the sick like dirt,” there are so few of them they have no noticeable impact on policy—such immoral people are too few to be worth mentioning.

2. Presuming or projecting (which the tweet does) immoral motives on the part of people whose motives you do not understand is probably a sin. At a minimum, it is uncharitable. (That a Catholic priest would so judge so many people is remarkable, if not damnable!)

3. Martin appears to be assuming something like the New York Times’s description of Trump’s proposed budget cuts. The Times described them thus: “would cut deeply into programs for the poor,” “deep cuts in entitlement programs,” “slashing more than $800 billion from Medicaid,” “slicing,” “steep reductions,” etc.[i]

Let’s first realize that under the Senate’s proposed “Better Care Reconciliation Act,” spending on Medicaid will increase every year.[ii]

The only thing being cut is how rapidly Medicaid’s authorized budget increases. Medicaid is a program to provide medical aid to those who cannot afford medical assistance.[iii] Medicaid does not include the “unreimbursed” (free) healthcare that the government forces hospitals to give to the poor who show up in the emergency rooms across the country.[iv] Nor do these “cuts” affect any of the medical assistance provided to the poor by private charities. When the “cuts” are compared to all of the healthcare benefits bestowed on the poor through multiple programs, $800 billion is a small number. To characterize the proposal as a “cut,” “slash,” “slice,” or “reduction” is hyperbolic sophistry and mean-spirited. It is designed to prejudice rather than inform.[v]

Medicaid is just one of numerous programs and tax provisions that transfer wealth from the nation’s relatively productive people to its relatively unproductive people. All told, the U.S. government spends $1 trillion per year to fight poverty. A touted reason for Medicaid is that it enables people who otherwise could not be productive due to medical conditions to become productive. So if we are spending over $1 trillion to reduce poverty in America, why doesn’t the incidence of poverty go down? Stated differently, if the government were an effective way to reduce poverty, wouldn’t there be fewer people needing Medicaid assistance over time? As it turns out, all of the projections of Medicaid spending, including the Senate’s plan, are projections of the government’s failure to solve a problem it is trying to fix—and has been aggressively trying to fix for over fifty years. Since LBJ declared the War on Poverty in 1964, the government has spent over $22 trillion[vi] to win that war. Over that time, the number of people “in poverty” has increased from 25 million to 43 million.[vii] What Ronald Reagan said in the 1980s, “We have fought the war on poverty and poverty won,” is even truer today.

During those 50+ years, there were politicians who believed that spending less (say $21 trillion instead of $22 trillion) on this failed effort would free up resources for more advantageous opportunities. Similarly, today’s politicians who were slandered by Martin’s tweet are proposing to spend $4.2 billion instead of $5 billion per year over the next ten years on the poor people who are sick. Saying that politicians who are proposing that the government spend $4.2 billion per year on Medicaid are treating “the poor and sick like dirt” is loathsome.

4. By how much should Medicaid increase per year? For some people (probably including Martin) the answer is always “more,” no matter how much is being or is proposed to be spent. Can enough be spent on the poor to eliminate the poor? Of course not.[viii] So why does Martin think he knows how much should be spent? He surely has no clue, and he is surely even more clueless about how the poor could be better helped by spending on things other than healthcare.

6. Politicians of Martin’s liking told Americans that Obamacare would “bring down the cost of healthcare.” If they really believed the cost of healthcare would fall with the passage of Obamacare, why would the government project increases in the cost of Medicare over time? Note that the projected increases brought about by Obamacare are what Congress is proposing to trim. (Never mind, those promises were just sounds caused by a politician’s lips moving.)
7. Let’s assume, as Martin suggests, that the nation would be treating “the poor and sick like dirt” if it does not take even bigger gobs of money from some people under threat of force and give that extra money to sick, poor people. Throughout human history, there has been no nation on earth that has taken as much money from its citizens for the purpose of treating the needs and wants of it poor and sick as does the U.S. Has every other nation that ever existed therefore necessarily treated its poor and sick people like less than dirt? By some heavenly standard, the answer is surely “yes.” In the real, human world where spending resources on one positive thing means having fewer resources to spend on other positive things, the issues involved in how much to spend on the poor and sick are so complicated that Martin’s comment should be viewed as no more than slander by an insufficiently informed person. (See Author’s Note at the bottom of this page.)

More important than the shortcomings of Martin’s comment and his beliefs, however, is that what the government is doing in its efforts to help the poor actually hurts poor people, especially black poor people,[ix] more than it helps them.[x] In short, if people pay attention to Martin’s slander, Martin would have helped the poor much more had he remained silent.[xi] Let’s sort this out.

🙛

Author’s Note: Who are the poor in America today? For the most part, they are the descendants of the poor of the past. This is in no small part attributable to what is known in economics as the “cycle of poverty”[xii] or the “poverty trap.” While the causes of the cycle of poverty are many and varied, much of it can be boiled down to this: The attitudes, ethics, perspectives, beliefs, and customs (“mores”) of parents tend to be passed on to their children. (Note that I did not include intelligence in this list. With the exception of people with exceedingly low intelligence—much lower than is typical of the vast majority of people who live in poverty—“poor people” have sufficient capacities to flourish in America if the mores to do so are instilled in them.) Some mores produce a higher percentage of thriving people than others. The people with the least effective mores tend to live in communities with poor schools, relatively few positive role models, and other handicaps. Consequently, even in the absence of government involvement, families who find themselves in communities with unproductive or counterproductive mores tend to be stuck there for multiple generations.

Most of what the government does for the purpose of helping the poor creates disincentives and obstacles to escaping the shackles of stultifying communities. As was predicted[xiii] by Daniel Patrick Moynihan, assistant to the Labor Secretaries of JFK and LBJ, having more single-parent households in poor communities leads to poor outcomes for most children in those households. Larry Elder convincingly presented this case in his lecture Black Fathers Matter.[xiv] Not only did the War on Poverty policies enable women to marry the state and render men superfluous to the family unit, it actually made men liabilities to the financial wellbeing of families. Due, not doubt to time limitations, Elder’s video covered only some of the negative impacts that the War on Poverty has inflicted on poor families. I’ll touch on just a few of the many more.

While there are many grand exceptions to the general state of affairs (more on that below), systematically rendering men as liabilities to poor families does great damage to the sense of self-worth of poor boys and men. Feelings of worthlessness are not conducive to human flourishing. Worse, they often induce such men to seek respect in antisocial dimensions. This not only induces men to avoid being positive factors in their communities, it results in menaces to society roaming poor neighborhoods. Men not having a respected role in families has caused poor communities to be poorer than they would otherwise have been.

Again, there are exceptions,[xv] but the children from fatherless families are, on average, less parented than the children of dual-parent families. For example, disciplining children wears parents down. Consequently, two parents can provide more parenting than one. On average, about half of the children of single-parent families are boys. When those boys find themselves in communities in which men are superfluous to families and aren’t around to educate, discipline, and demonstrate how to be men and where many of the men that they see around them are up to no good, their chances of adopting the mores that would enable them to flourish are agonizingly low.

As is typical when a community considers itself to be oppressed, its members tend to circle the wagons to defend themselves against negative judgments of their community by others. Sadly, all too often poor black communities react by ascribing positive qualities to mores that are believed by those who are supposedly oppressing the community to be negative. President Obama identified two of ways in which poor black communities do this as “’acting white’ and its ugly cousin, acting ‘not black enough. . .’[xvi] Eschewing education and work and judging others by the color of their skin is not conducive to flourishing.

What is critical to understand is that the counterproductive pathologies are not the fault of the people living them out—and neither are they to blame. They are the victims of the system imposed on them by well-meaning but myopic people such as Priest Martin. (BTW: For a great discussion of the pathology Martin exhibits with his comment, see “The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy.”)

Thankfully, there are many exceptions to this general rule. For the most part, however, the people who break out of the shackles with which impoverished communities bind their members are only those who are exceptionally talented or smart. Ordinary people, much less those with below average skills or intelligence, have little chance to escape.

That those pathologies are the product of government programs and not of the people suffering under those programs is made clear in Larry Elder’s video linked above. I discussed the same issue in “Equal Rights or Equal Outcomes.” In short, it is factually and morally wrong to assume that poor people, especially black poor people, are not capable of thriving. As Thomas Sowell has documented so extensively,[xvii], “The poverty rate among black families fell from 87 percent in 1940 to 47 percent in 1960, during an era of virtually no major civil rights legislation or anti-poverty programs. It dropped another 17 percentage points during the decade of the 1960s and one percentage point during the 1970s. . .” It appears obvious that the 17 percent drop in the poverty rate among blacks in the 1960s would have been much smaller had LBJ’s “The Great Society Programs” not come online so late in that decade. The thing to note, however, is that the Great Society Programs put a stop to the progress of poor blacks for at least 10 years and have snared far too many black people into multi-generational poverty—something out of which they were rapidly climbing prior to the government trying to help. Though the rates of escaping poverty have improved since their nadir, those rates pale in comparison to the progress that was made before the government started trying to help.

Now, let’s proceed to the nub of the matter.

🙛

When Martin says “the poor,” to whom is he referring? Is it to the people alive today who are poor, or is he talking about the multigenerational descendants of those people? The number of descendants of today’s poor will vastly outnumber the people who are currently poor. For example, as mentioned above, in the late ‘60s, when the effects of the War on Poverty began, there were about 25 million Americans in poverty. There are almost double that number in poverty today. The reality is that paying people (with money or other considerations) to be poor causes more poor people to adopt counterproductive mores. Not only does paying people induce them to adopt lifestyles that conform to the statutory definition of “poor,” the statute defining the term pays more to those poor people who have more children. (The fact that it makes no economic sense to have more children is lost on people who have no economic sense.) Those children are typically raised in communities that produce more poor people.

Even worse, “the system” created by the statutes makes escaping the communities with anti-flourishing lifestyles almost impossible. The loss of benefits that accompanies a welfare recipient getting a job is equivalent to an income tax. That tax rate is the highest income tax rate on the books. Because the government pays people to be poor and punishes them with excessive “income taxes” if they try to escape, the longer the government keeps it up, the more people will live anti-flourishing lifestyles. That is a major factor in the number of people living in poverty keeping pace with the huge rise in the U.S. population since 1965. Demanding that poor people be paid even more to remain poor, as Martin does, will create more poor people over time. Why would a good-hearted person do such a thing?

It is not that these facts are unknowable or unpredictable. Ronald Reagan had it right when he said, “We’re in danger of creating a permanent culture of poverty as inescapable as any chain or bond; a second and separate America, an America of lost dreams and stunted lives.” That danger has now come to fruition. Is Martin intentionally ignoring this ugly reality?

People like Martin actually celebrate how many people are being served by welfare programs—as if trapping more people in poverty is a good thing. They also celebrate the diversity that poor people bring to the larger community and respect the anti-thriving mores of the poor communities as being equally valid as the mores of more prosperous communities—as if diversity is always a good thing. (It would be wonderful if humans could have good with no evil, but the existence of “good” is made tangible by its comparison to “evil.” This should not mean, however, that we should celebrate evil for the sake of diversity.)

Many politicians who have been slandered by Martin object to how, in practice over the long run, the War on Poverty: 1) hurts poor people, 2) creates more poor people, and 3) is, in effect, a war on the better economy (and the higher standards of living that would have accompanied a more robust economy) that could have been. Unlike Martin, they see that a growing economy improves the standard of living of poor people more than it improves the standard of living of the non-poor. As I said in “Wealth,” “With all its faults and narrowness of focus, the wealth brought about by capitalism has lessened human suffering, solved problems, allowed humans to flourish, and enabled billions or more people to partake in the joys of life.” See also “Income Inequality Is More Than It’s Cracked Up to Be.”

America’s current welfare system is a monster that gobbles up lives and traps them there with lower odds of escaping than Jonah’s. Feeding that monster, as Martin and his acolytes do, will enable the monster to gobble up even more lives. Martin should be politicking to reform those programs rather than asking for them to get more money, which would only cause the population of the poor to grow.

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[i] “Trump’s Budget Cuts Deeply Into Medicaid and Anti-Poverty Efforts”

[ii] “Data Underlying Figures – Congressional Budget Office”

[iii] “Guess What? There Are No Cuts in Medicaid.” This article also makes the case that “Piles of studies have shown that people on Medicaid have health outcomes that are no better, and often worse, than those with no insurance at all.” BTW: I am aware that Politifact and others have claimed that the Administration’s claim that “there are no cuts to Medicaid” is “mostly false.” The basis of Politifact’s claim is that Obamacare had authorized higher rates of increases to Medicaid spending than the Senate’s proposed Obamacare replacement would authorize. In other words, Politifact admits that Medicaid spending will increase (not be cut) every year under the proposed law, but insists that Medicaid is being “cut.”

[iv] “The Impact of Unreimbursed Care on the Emergency Physician.” This benefit to the poor and the sick is, in effect, a special tax imposed exclusively on hospitals and emergency room physicians, nurses, and staff. “According to the Centers for Medicare & Medicaid Services, 55% of an emergency physician’s time is spent providing uncompensated care.” (I wonder if Martin took this into account before he uttered his slander.)

[v] See “The Truth Is Hard For the New York Times.”

[vi] http://www.heritage.org/poverty-and-inequality/report/the-war-poverty-after-50-years

[vii] Number in Poverty and Poverty Rate

[viii] “You will always have the poor among you. . . .”

[ix] “Moynihan Black Poverty Report Revisited 50 Years Later”

[x] This is a recurring theme of this blog because there are so many facets of the harm inflicted by the government and it is so consequential. A few examples of previous posts that touch on aspects of this point include:

1. 1. • “Equal Rights or Equal Outcomes?”
      • “You will always have the poor among you. . . .”
      • “Solutions”
      • “Wealth Creation – It’s for the Children, and their Children, and their Children. . . .”
      • “Wealth”
      • “Income Inequality Is More Than It’s Cracked Up To Be”

[xi] Martin and much of the public are seemingly blind to the reality that the government hurts the poor more than it helps them. That people are blind to this reality is an indictment of our educational systems, both secular and parochial.

[xii] The “set of factors or events by which poverty, once started, is likely to continue unless there is outside intervention.”

[xiii] “The Moynihan Report (1965)”

[xiv] See also “Urban America’s Underclass: More Money Won’t Solve the Problems”

[xv] I am well aware of and believe the many studies that have found instances of great parenting from single mothers and other non-traditional families. While there is no doubt such can be the case, I believe that the combinations of education, intelligence, and the mores of successful non-traditional families are on a higher plain than is typical of families in poor communities.

[xvi] “Obama goes there on ‘acting white’”

[xvii] “Race and Culture: A World View” and “Wealth, Poverty and Politics”

Author’s Note: In the original version of this post I used the term, “simpleton” instead of “insufficiently informed person.” I had mistakenly used the term “simpleton” to refer to someone who viewed issues too simplistically.  I have since learned that “simpleton” means “an ignorant, foolish, or silly person.” I do not consider Mr. Martin to be foolish or silly. Only the definition, “ignorant,” is close to what I meant—someone with too little information to make a well informed decision about the subject at hand. Inasmuch as there are definitions of the word “simpleton” that are commentary on the intelligence of a person (something about which I did not intend to comment), I have edited this post to replace the term that is more accurate. I apologize to Mr. Martin to have used term which could be interpreted as a personal attack. I believe Mr. Martin to be mistaken, but good and well-intended person.]

On July 4, 1776, the Declaration of Independence proclaimed the self-evident truths and principles that the Constitution was designed to protect. It saddens me to hear people say that the Constitution was written too long ago to be a worthy guide in a modern world so different from the world of 1776. Those who say as much often concede that the people who conceived and wrote the Constitution were among the most learned and enlightened of their age; however, detractors insist that said age has long passed, and lessons from such enlightened people have little relevance today. Let’s sort out whether these beliefs about the Constitution are valid.

There are, of course, huge differences between today and 1776 (or 1789 when the Constitution was adopted) with respect to what people do, what people know, what people believe, and what technologies people use. On the other hand, there are essentially no differences in human nature since 1776. It just as wrong to kill, steal, rape, and rob today as it was then. The human penchant to desire more than what they have is unchanged. Human propensities of pride, covetousness, lust, anger, gluttony, envy, and sloth (written down as “deadly sins” in about 400 A.D.) are just as present today as they were when those “sins” were first identified, and the vast majority of people still believe them all to be bad. The same is true of the seven virtues: chastity, temperance, charity, diligence, patience, kindness, and humility (the naming of which is about as old as the named sins). Anarchy, the absence of government, would result in as much ruination then as it would today.

The “government” (established by the Articles of Confederation) in place at the time of the adoption of the Constitution was not serving its purposes. A new government based on the spirit of 1776 needed to be formed. The participants at the Constitution Convention in 1787 included many who were extremely learned in the history of governments and politics, philosophy and human nature. They had analyzed the recorded history of ancient Greece, Rome, and many other civilizations, each of which had tried different forms of government (with variations in the forms over time). They teased from the data the forms of government (that is to say, the formal relationships between the people and the governors) that worked best. They had multiple millennia of examples from which to identify the best such relationships. After much discussion and collaboration, the convention produced the Constitution that, over time, produced the most free and prosperous nation in the history of the world.

America certainly has many faults and has committed many errors. It has never and will never (because perfection is unachievable by humans) realized its values to the fullest. Compared to perfection, America is mean and hideous. (There are many things about America today I would change if I could.) Compared, however, to all the other attempts humans have made to strike the right balance between the citizens and the government so as to maximize human flourishing, America remains head and shoulders above every other nation conceived and constituted. The fact that the founders were not perfect is lamentable, but it does not negate the marvel they accomplished.

Every modicum of power ceded to a governor reduces the freedom and power of the people. Without governors having some power (“rope” with which to yoke the people), there is anarchy—a state in which freedom is not worth much, and people’s power is ineffective. What the founders accomplished was a Constitution that struck the best (so far) balance of power between the flawed and fallible citizens and their flawed and fallible governors. Relying on the wisdom of those intelligent students of thousands of years of human history (America’s mere 240 years of existence pales in comparison), the Constitution was designed to give the governors enough rope to govern but not so much rope that they could become the tyrants, an amount of power that essentially all unrestrained governors desire to obtain (and given enough time always do)[i]. Save the unlikely event someone will come up with a better balance of power, that balance will still be the best balance a thousand years from now.

The idea that the correct balance of power between the governors and the governed has substantially changed since 1776 reflects a misunderstanding of the purpose and effect of the Constitution and definitely eschews the spirit of 1776.

[i] “All power tends to corrupt; absolute power corrupts absolutely.”

Hopefully this post will add to the light shed on the poor job[i] the government does in measuring the standard of living of the poor and middle-income people that was discussed in my posts “’You will always have the poor among you. . . .’” and “Income Inequality Is More Than It’s Cracked Up to Be.”

The meaningful standards of living of America’s poor and middle-income people[ii] (e.g., the extent to which they consume more than the minimum to survive for a reasonable life span — probably more than twice[iii] the average life span of all humans who had ever lived before 1900) has advanced more rapidly than those of the rich. The big reasons for this are:

1) Once a person reaches about $60,000 per year of income (and the consumption that goes along with that level of income), additional income and consumption do not make a person significantly happier.[iv] To understand a major reason why this is, ask yourself who got more enjoyment from the following purchases: 1) Bill Koch when he bought a $100,000 bottle of wine, or you when you bought your last phone for less than $1,000? Let’s say a guy is looking to buy a new yacht, but he cannot afford to pay $25 million for the nicest yacht in the club, though he can afford to buy the twentieth-nicest yacht for $4 million or the sixteenth-nicest yacht for $8 million. Although he may choose to buy the $8 million yacht, it is not possible for him to enjoy that yacht twice as much as he would have enjoyed the $4 million one. He could justify choosing the $8 million yacht not because the experience would be twice as nice, but because he is so wealthy that $4 million will not be a big deal given how much money he will have left over after the $8 million expense. And, of course, “money can’t buy me love.”

A middle-income person’s smartphone is no less capable than the wealthiest person’s. Both can afford cars to get from point A to point B in comfort. The people in the back of the plane get there only a few seconds after first-class passengers. The movies, TV, books, plays, and Internet consumed by the rich are the same as those consumed by middle-income people (and for the most part, the poor). When rich people pay five times as much for a 50-yard-line football ticket, they generally do not get five times as much enjoyment as a person seated in the end zone (and many people would prefer to watch the game on TV anyway).

If in a hurry to do something of medium importance, a rich person likely would not walk two blocks out of her way to pick up a free $1,000. A poor person would likely drop just about anything to get the free $1,000 two blocks away. In short, an extra $1,000 dollars is worth much less to a rich person than to a poor person.

(Before you jump to the conclusion that this makes a case for government taking relatively worthless dollars from the rich and giving them to the poor in order to increase the nation’s aggregate of happiness, please see my blog post, “Wealth Creation. No Happiness, Why Bother?”)

2) Having a great amount of wealth can ameliorate, but cannot eliminate, the tragedies of life. The rich, the poor, and everyone in between will get sick and will die. The same is true of their friends and families. The slings and arrows of outrageous fortune come on top of the stresses, slanders, confrontations, 70‒100-hour work weeks (assuming they can “turn it off” when they are not actively engaged in work), demands, and expectations of business executives. Many cannot walk down the street without being harassed or without bodyguards. (I’m not expressing sympathy for high-income people here. I’m simply pointing out that disproportionately high incomes come with disproportionately high costs, which offset some of what might appear to be a standard of living differential between middle-income people and the rich.)

3) Innovators are only able to capture a small fraction of the value they bestow on society.[v] This means that the vast majority of the value created by innovators spreads out to the benefit of everyone else in the world.

Yet the hubbub over income inequality seems to intensify daily.

Income inequality is necessary to progress and does much good.[vi] It also causes harm, especially to the envious among us. In particular, the higher the nearby mountaintop, the lower many people in the bottom of its valley feel themselves to be. It is sad that “the system” makes so many people so unhappy and disgruntled.

History is replete with examples of governments filling valleys by grading off the tops of mountains. Venezuela is just the most recent example of how much happiness that approach brings. The only historical examples in which such systems were sustainable with a reasonable amount of happiness (I am discounting the happiness of the masses in USSR who were relatively happy with their meager existences because they were unaware that their meager supplies came mostly from slave labor[vii] — had they known I do not believe they would have been so sanguine) are those that were propped up by the wealth and innovation of other countries, e.g., Europe at large, but especially Greece.[viii]

As many harms as income inequality entails, the existence of income inequality leads to greater human flourishing than the absence of income inequality, and, hopefully, now you see that the income inequality gap in America is smaller than you may have thought.

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[i] In the future, I will likely write a post on why and how producing misleading assessments of the standard of living of poor and middle-income people is in the best interest of politicians and bureaucrats who want to constantly expand government activities at the expense of the public — which is essentially all of them.

[ii] What I am defining here is substantially different, but far more relevant, than the ways in which the government measures standards of living. See also, “The Income Inequality Obsession.”

[iii] Historical life expectancies.

[iv] See this Jordan Peterson video at 4:38.

[v] This concept was discussed in my post, “A Comment Worthy of a Post.”

[vi] “Income Inequality Is More Than It’s Cracked Up To Be.”

[vii] See Aleksandr Solzhenitsyn’s “The Gulag Archipelago.”

[viii] See my post, “Equal Rights or Equal Outcomes?”

Here I will explore the truth of these words of Jesus, according to Matthew, in a context very different from the standard context. The context explored here is relevant to what the country should do about healthcare.

Unless otherwise stated, by “the poor,” I am referring to those living in the United States who are generally perceived to be poor. As I discussed in my blog post “Wealth,” “[Poor Americans] are rich compared to 99% of all humans who have ever lived, i.e., all Americans living today, including ‘the poor,’ are in the top 1% by this standard.” I have also claimed that if “income” were equalized among all the people of the world, Americans who live under the “poverty line” would have to pay into the world’s commonwealth. Using the term “income” so loosely was fine in those contexts. In the context of this post specifically about “the poor,” I will be more precise.

Trying to define the income of the poor has proven to be remarkably complex.[i] Those efforts are interesting and have shed some light on the subject, but focusing on income obscures essential features of the wellbeing of the poor. Making matters more obscure is that poverty in the U.S. is defined by cash income, which does not include non-cash provision of governmental or private benefits (e.g., food stamps). However, even counting cash and benefits would not be an effective way to describe the differences between America’s poor and the poor in the poorest countries. Far more important than income is their relative quantity and quality of consumption, opportunities to access education, quality medical attention, a job, a climate-controlled respite, on-call emergency response teams, and quality entertainment as well as a relative lack of fear of injustice, war, pestilence, disease, and famine. Reasonably quantifying the value of any of these factors would be nearly, if not actually, impossible. On the other hand, it would be nearly, if not actually, impossible for one to conclude that America’s poor would not have to give up some of what they are able to consume in order to equalize the consumption of every human on Earth.

Nevertheless, any reasonable American would conclude that there are many Americans who can fairly be considered to be genuinely poor. Their high absolute wealth[ii] does not diminish the reality that they feel poor and that others believe them to be poor. Let’s sort out the implications of this reality in light of what the country should do with healthcare.

First, let’s explore why the reality described above exists. Humans, like so many animals, have hierarchies.[iii] For example, if a bowl of food is placed in a chicken coop, the chicken with the highest status will eat first, the next-highest-status chicken will eat second, and so on, until the lowest-status chicken has a turn (assuming any food is left). Not surprisingly, that is called a “pecking order.” Chafing at their situation, low-status chickens will often try to insert themselves higher in the pecking order. That’s when the feathers fly. Preventing the chickens from continually maiming and killing each other is one of the main reasons chickens are kept in individual cages (other reasons include control of temperature, protection from predators, and other environmental niceties).[iv]

Obviously, in all non-human species, money or other possessions have nothing to do with the status of individuals — yet status is every bit as real and consequential as it is in human hierarchies. On the other hand, money is not the whole story concerning human status either. (By “status,” I am not referring to people’s legal status,[v] and I am not implying that people of high status necessarily deserve their status[vi].) For good reasons, little respect or status is accorded to lottery winners.[vii] Much respect and status is accorded to Mother Teresa, Nelson Mandela, Gandhi, and Martin Luther King despite their meager wealth. Truman and Carter did not become president because of their wealth (they had relatively little), and Gore, Kerry, and Hillary did not become president despite their wealth. Also, a person who rises out of a government housing project by applying herself in school, getting a job, and earning an honest living that enables her to take care of herself and her family deserves enormous respect. Note also that to a large degree, people who inherit wealth but do not personally do things for the betterment of society are disregarded as “trust fund babies.” Even more disrespected are those who gain their wealth dishonestly.

How society dispenses status is far from perfectly fair or useful. It is useful to the extent that status is attributed to a person in proportion to the extent by which the value the person produces for the benefit of others exceeds the value of what the person consumes. To a large degree, this is how status is assigned. Wishing society were better at assigning status will not change anything.

In general, the higher a person’s status, the more she or he garners money and other benefits — e.g., fame, respect, adoration, invitations to grand events, and a following. In terms of how humans naturally sort things out, it is extremely consequential that women find men of equal or higher status to themselves to be more attractive than men of lower status, while men place relatively little importance on a woman’s status.[viii] Among the very many consequences of these facts is that competition for status among men is particularly fierce.[ix] (Perhaps I will write more on this subject in a future post. I mention these facts here only to highlight that status is a large non-monetary factor in human relations.)

Fortunately there are many dimensions on which humans can compete; i.e., many ways to gain status.[x] Unfortunately, when there is competition on any dimension, just as many people are below the median as are above the median. Some of the sting of this reality is mitigated by there being very many dimensions on which humans compete, and people’s tastes and value systems vary. In fact, some people could not care less about status, but not nearly as many as tell themselves and others such is the case. (Being the best at something, however, is of little help if a person is sufficiently despicable in other dimensions, but that fact is not relevant to this discussion.)

Sadly, however, some people are below the median on every dimension on which people compete to gain status, while others are above the median on many dimensions. (This is the result of a wide variety of causes, but this is a post about effects and consequences of differential status, not causes.) Good people justifiably feel sorry and empathetic for people plagued by low status. Not surprisingly, people want the government to “do something” to help those people. That impulse is good. It is bad, however, not to understand that such a task is very likely beyond the ability of government.

The truth of the above statement is obscured by our common nomenclature. People, myself included, tend to refer to low-status people as “the poor.” As mentioned above and elsewhere, it is unarguable that by historical standards, America’s “poor” are astoundingly financially wealthy and live in one of the safest and cleanest places the world has ever known. There is a dearth of historical examples of obesity being one of the major problems of a nation’s poor. You would also be hard-pressed to find an example of such a high percentage of working-age people in a relatively wealthy nation working so little or not at all.

Perhaps more important, if government payments to “the poor” were to double tomorrow, “the poor” would go from being in the top 1% of the wealthiest humans who ever lived to, say, the top 0.8%. The number of humans alive today who consume less than they do might go from two billion to three billion. The jubilation from the extra wealth, however, would last but a short period before the recipients of the extra benefits would realize that their place in the pecking order had not improved. Their status might actually drop because they would be getting more from society while their contributions to society might change little. Their consumption might be closer to the consumption of middle-income earners, but they would not be significantly closer to being able to afford any of the fancy cars and yachts they see others enjoying. The number of “poor people” on assistance would balloon because working would have less of an effect on a person’s ability to consume. Because of this, we will have even more people who are justifiably aggrieved and, perhaps, even further from an acceptable status. They will have more stuff, but good people will still feel sorry and empathetic for an even larger number of “the (richer) poor.”

Even if you do not accept the theories presented above, consider this. Over the last 50 years, $22 trillion has been spent in the “War on Poverty”[xi] and a multiplicity of programs have been tried to improve the lives (in terms of status, opportunities, health, income, and access) of “the poor.” (I am not referring here to the improvements in civil rights, which is a great but separate issue.) Yet disgruntlement by and about “the poor” in America has grown. In light of this reality, there is a strong case based on evidence that the government making the already wealthy poor even wealthier will not relieve the misery of “the poor,” much less make them happy; i.e., the government will not eliminate what we call “poverty.”

In any event, it is likely that providing more benefits (e.g., healthcare) to “the poor” will reduce happiness overall[xii] (after the short period of jubilation). It is certain that increased benefits to “the poor” will cause society to be less productive, less innovative, and less prosperous, that society will create fewer jobs as a result, and that pay will increase more slowly. Paying those costs would be much more easily justified if total happiness would increase as a consequence and we had good reason to believe it would cause the lives of “the poor” to improve. Adding a loss of total happiness to those costs makes justifying the pursuit of that course much more difficult.

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[i] See, for example, Brookings Institute and Heritage.

[ii] As I have said before, few of them would choose to trade places with John D. Rockefeller. (See my blog post, “Greed.”)

[iii] I highly recommend “The Lucifer Principle” by Howard Bloom for a full and compelling discussion of this phenomenon and its implications. Jordan Peterson gets at some aspects of the phenomenon in his discussion of what he calls the “dominance hierarchy.” Here is a discussion of the male version of the hierarchy.

[iv] Speaking of no “solutions,” there are no solutions when it comes to caging or free-ranging chickens. See “Picture-perfect images of ‘free range’ hindering creation of realistic national egg standard, says producer.”

[v] Status is something that humans confer on each other. Humans should, and good Americans do, “hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness,” and no citizen should be denied “the right to vote based on that citizen’s ‘race, color, or previous condition of servitude.’”

[vi] Even people deserving the highest respect for a particular skill, deed, or trait could be, and often are, reprehensible on balance due to other disrespectful aspects of their being.

[vii] In fact, many people view lotto to be a fool’s game and an exploitation of the poor and ignorant by the government (so what else is new?). Consequently, a person can win $390 million and still gain no respect for having done so. (The odds of making money playing lotto are far lower than playing any of the “heads, I lose; tails, they win” games at a casino.)

[viii] Jordan Peterson again. “Women Prefer Men with High Status“! Interestingly, while few women will marry a man of lower social status, social status is not much of a factor in males’ mate selection.

[ix] Warren Beatty is said to have had encounters with 13,000 women, Wilt Chamberlin claimed he had 20,000. As I was leaving the 2011 Master’s golf tournament at the end of the day, the number of beautiful women dressed to the nines standing outside the entrance (none of whom looked like hired help) was amazing.

[x] Personality, appearance, intelligence, strength, knowledge, business acumen, inventiveness, athletic ability, talent to entertain, and politics — to name just a few of the dimensions. There are multiple dimensions of competition within each of dimension of achievement, meaning one can excel in any number of sports, including ones that were made up by the person who gained status; e.g., Earthing. The Kardashians have proven that extraordinary status can be achieved on the basis of nothing in particular.

[xi] “The War on Poverty After 50 Years”

[xii] $22 trillion has been transferred from everyone in society (see my post, “Solutions”) to “the poor” since LBJ started the Great Society projects. In addition to wealth transfers, since the ’60s, civil rights have improved and many non-monetary affirmative action programs have been passed. Has anyone detected that “the poor” have become happier?

Author’s Note: I regret to report that this post is a little longer than my normally long posts. Some of that is due to the inclusion of more anecdotes than I typically add in an effort to provide more context for the ideas. The length, however, is mostly because the ubiquitous idea that there are unalloyed solutions to public policy issues is so wrong and debunking it is so important that it took a lot of paragraphs to sort out its many aspects. I hope you find the ideas worth your while. I’ll try to be briefer in future posts.

Two weeks ago, I was enjoying a Guinness in Dalton’s Bar in Killarney, Ireland when I struck up a conversation with the fellow sitting next to me. When he learned that I had a career in the energy business, he asked me, “Is fracking safe?” I told him that the answer to that question is extremely complicated and gave him an overview of why that is.^[i] The presuppositions of his question, however, are more important than its answer.

The question was predicated on two irrational presuppositions: 1) that there are safe ways to access the volume of energy that people need today, and 2) that safety is or should be the ultimate (or near ultimate) goal for public policies. The reality is: 1) almost nothing is safe, and 2) safety cannot and should not be our ultimate goal with respect to anything, i.e., the goal to which all other considerations must be subjugated. Let’s sort this out.

It is often said that “The government’s job is to keep us safe.” Some say that this is the government’s number one job and duty. Does the government advance safety over all other considerations? Of course not. Automobile accidents are the cause of about 30,000 deaths per year in the U.S. Serious injuries from such accidents are surely many multiples of that number.^[ii] As George Will observed,^[iii] the number of automobile accidents could be slashed to insignificance with two simple changes to traffic laws and strict law enforcement: lowering highway speeds to 35 mph with a comparable lowering of speeds in town and banning left-hand turns. (All in favor, say “Aye.”)

Schools could be made safer by hiring enough police to adequately surround the perimeters. Maybe a high, electrified fence should be added for good measure. A moat? But then there are all of the other things that are not sufficiently protected to be fairly called “safe.” The government cannot make everything safe because there is not enough money in the world to make everything safe.

Nor does the government even try to maximize safety when it makes laws or regulations. For example, the EPA creates rules as to how much of various toxins/carcinogens are permitted in drinking water. The law requires the EPA to perform a cost/benefit analysis before adopting any rule.^[iv] The benefits to be derived from a new rule (e.g., the benefits of lowering the permitted contaminants in tap water) must exceed the costs of implementing the rule. Typically, the more safety the rule achieves, the more its implementation will cost. Therefore, if the cost to lower toxins in water was infinite, the rule must be rejected. There might, however, be a level of toxins that is lower than the current permitted level that could be achieved at a cost that equals the value of lowering toxins to that level. If so, a new rule to do that would be legal. Note, however, that this example reveals that even if a lower level of toxins would make water safer, the law says that the EPA may not adopt the safer standard. This is not a solution to water safety; it is a tradeoff.

The government typically tries to hide this kind of reality from the public. In connection with a lawsuit with which I was involved, I reviewed a cost-benefit analysis that the EPA published long ago in relation to the adoption of a rule to reduce the permitted level of benzene (a known carcinogen) in drinking water. I cannot quote what it said verbatim because, to my chagrin, the publication was deleted from the website and I have not been able to find it since.

While my numbers may be imprecise (because I’m going by memory from over 20 years ago), the gist of the later deleted analysis said that the new rule would lower the incidence of deaths from exposure to benzene in drinking water from one level to a lower level. (If memory serves, it was from 1 in 100,000 deaths per year to 1 in 1,000,000 deaths per year.) So, the EPA was establishing a rule knowing full well that people would die (up to 320 people per year if my recollection serves) because the EPA did not set an even lower permitted level of benzene. My guess is, the EPA decided to withdraw the analysis from the public record because it was too revealing about the reality of EPA’s rulemaking for it to maintain its public image of pure benevolence.

Cost/benefit analyses conducted by bureaucrats are systematically biased in favor of what serves the bureaucrats’ self-interest: more regulation. They systematically ignore very important considerations.

“We” (however you choose to define what resources are available to the government) only have the resources “we” have. Resources spent on one thing cannot also be spent on something else. As more of our resources are spent making water safer, the amount of money left to do other positive things goes down. Assume that reducing the deaths from drinking benzene in tap water from 3,200 per year to 320 per year (2,880 lives) costs $1 billion per year. What if that $1 billion could have been spent on something that would have saved twice as many lives – had the money not been spent on benzene reduction? An example might be funding medical research. Despite the very real possibility of these very real costs, the EPA and other agencies ignore “lost opportunity costs” (especially if the other use for the money would be spent by a different government agency) in what passes as government “cost/benefit analysis.” Neither do they consider the cost of less vitality in the economy by virtue of government spending.

The government gets away with such bureaucratic “analysis” because far too many people do not seriously consider the costs of any proposal that will make something they like better. (The government does not consider all the costs of regulation because the public does not demand it and it is in the personal best interests of politicians and bureaucrats to regulate.) For too many people, “Cost is no object” – literally. Many years ago, Cokie Roberts participated in a Sunday morning roundtable discussion of an EPA proposal to lower the level of arsenic in drinking water. Someone on the panel claimed that lowering the arsenic standard was not worth the cost. Cokie’s jaw dropped. Dumbfounded, she asked how anyone could be opposed to lowering the amount of arsenic in drinking water. She knew as little about the benefits of lowering arsenic levels in drinking water as she did the about the costs of lowering it, i.e., next to nothing. Nevertheless, she was all for it. Even worse, although she was staggeringly insufficiently informed to offer commentary on the subject, she knew more about it than most of the voting public.

Let’s look at how preposterous the “safety at any cost” notion is by considering a hypothetical possibility. The federal budget is about $4 trillion per year. Infant mortality in the U.S. is about 23,000^[v] per year. What if Congress correctly determines that infant mortality could be reduced by 1,000 infants per year at a cost of an additional $1 trillion per year? That is to say, we could save the lives of 1,000 infants at a cost of $1 billion per infant.

Should we urge members of Congress to vote for the proposal? The answer is clearly no if the resulting devastation of the economy would cause even more lives to be lost (e.g., people could no longer afford safety items they could have otherwise purchased, lifesaving medical research could not be funded, etc.) and would wreak financial hardships on everyone in many and sundry ways. (If for some reason you do not believe that an additional $1 trillion would do that much harm, increase the cost of the bill to an amount that even you would agree would crush the economy.)

But tradeoffs are not just about money. Consider the EPA’s standards for arsenic in drinking water. Arsenic in large enough doses will kill people. Apparently, arsenic in small doses can improve people’s health and immunize them from arsenic poisoning. What constitutes a “large enough dose” depends on an individual’s tolerance for arsenic. Some people have a very low tolerance for arsenic. Others have relatively high tolerance to arsenic, and others are immune. So lowering arsenic levels would save some people, have no health effect on a great many, and cause others to be less healthy or die. Assume that lowering the arsenic level would save the lives of X number of people a year, but cause 1000X people to be less healthy. How much less healthy would the 1000X people have to be before you would say that lowering the level was a bad idea? The point of this example is, there is no solution to this problem. There are only tradeoffs. The point of this blog post is that the same is true with respect to all public policies.

There are high costs of the government making things too safe. “In the United States, it takes an average of 12 years for an experimental drug to travel from the laboratory to your medicine cabinet.”^[vi] Only one in 5,000 invented drugs makes it through the FDA process. The cost of obtaining an approval is so huge and the risk of being rejected is so high that only giant pharmaceutical companies can participate. (Politicians benefit from passing laws with which only large companies can comply.^[vii]) Presumably, every approved drug improves health or comfort, and some extend life and are safe for most of the people who consume them. Think, however, of the cost to all of the people who suffered or died because of the slowness with which the FDA approved the drug. Think of all of the drugs that were not invented or developed because the cost and risk of approval is so high. Are there benefits from the FDA’s approval process? Sure. Does the FDA deliver on the promise of efficacy and safety? Not always.^[viii] What is clear, however, is that if the FDA is too safe, people will unnecessarily suffer and die. It is also clear that European countries choose a very different set of tradeoffs than the U.S. A 2016 JACC study concluded, “. . . the FDA is sometimes seen as overplaying safety concerns at the cost of commercial enterprise, whereas the European systems are sometimes characterized as being primarily concerned with preserving commercial interests to the detriment of patient safety.”^[ix]

Policies to make things safer also cost in terms of convenience, diminishment in rights to privacy, and happiness. Should everyone be frisked before they enter a mall, stadium, or train station? Is anything short of a strip search really safe? The NSA may make us safer from foreign governments and other bad actors, but it clearly makes us more vulnerable to harm from our own government.

When government budget cuts are proposed, leftist politicians are quick to declare things like what New York Mayor De Blasio said about Trump’s first budget proposal: “It is not an overstatement to say that some children will die because of this.” This could be true. What is certainly true is that some children will die as the economy grows more slowly than would be the case because of spending by the government. At best, De Blasio’s statement is a half-truth. [See, “Truth Is Hard For The New York Times.”]

While non-monetary tradeoffs should be carefully considered in deciding whether to support a proposal, the necessity to consider the dollar cost of government spending is woefully misunderstood, ignored, or both. Some of this is because, when discussing government spending, people’s attention is almost always directed exclusively to taxes and government debt. This is wholly inadequate.

Taxes account for only a fraction of what the government spends. (Tax receipts as a percentage of spending outlays improved during the middle of BHO’s terms, but began falling again toward the end. On average, the federal government’s tax receipts were only 75% of outlays.^[x]) The fraction that is not funded by taxes is funded by “printing”^[xi] and borrowing money. The facts that unfunded future liabilities are gigantic^[xii] and that people are demanding ever more government spending (e.g., government-funded healthcare) leaves little reason to believe that the country’s financial condition will improve and good reason to believe that the national debt will continue to grow.^[xiii] If history is a guide, there is every reason to believe that much of the borrowed money will be repaid with devalued currency (i.e., currency with less buying power because of “printing”). In short, over the last several years, taxpayers have been funding with taxes a smaller fraction of government spending (the national debt increased by approximately $10 trillion under BHO) and unfunded future promises to pay skyrocketed. That means that the burden of government spending is increasingly falling on everyone.

Constant devaluation of the currency does not hurt everyone equally. Of course devaluation of currency hurts lenders in particular, but that also results in higher interest costs for consumers.^[xiv] More important, currency devaluation saps resources (the buying power of retained capital) and vitality from the economy. A less robust economy means fewer jobs, which means more people are subsidized by the government. It also means slower investment, productivity gains, pay raises,^[xv] product improvements, and cost reductions. A less robust economy especially hurts those who are looking for a job or a pay raise and people on fixed incomes.

Taxpayers, as such, actually pay fewer taxes as a result of currency devaluation because they make less taxable income and gain than they would have had the economy not been suppressed by government spending.

All government spending takes money from activities that are relatively more productive and spends it on things that are relatively less productive.^[xvi] Progressive taxation takes disproportionately more money from the most productive activities and progressive redistribution disproportionately distributes money to less productive things. (This is not to say that all redistribution is unproductive. In fact, some redistribution can be justified. This is to say that redistribution is much more costly to everyone than most people understand.) Though benefits are gained from such activities, it is a mistake to ignore the costs of those benefits. A less robust economy (slower wealth creation) is a big deal – for everyone!^[xvii]

Many people dismiss the ideas of the previous paragraph because they believe that taxing the rich is so just and good that “soaking the rich” should be considered to be a benefit, not a cost. Be that as it may (depending on your values and beliefs), everyone bears the burden of government taxing and spending, not just the rich.

In addition to being partially inaccurate, people believing and saying that “taxpayers pay the cost of government spending” creates two problems: 1) People other than taxpayers who are bearing the negative consequences of government taxing and spending are not made aware that they are bearing that burden – which causes them to be in more favor of more government taxing and spending than they would be if they knew how much government spending was costing them, and 2) The people who inspirer and listen to social justice warriors (who believe that punishing “the rich” with more taxes is good and just) remain oblivious to the fact that government spending greatly hurts the people they believe their policies will help, perhaps even more than it hurts the taxpayers they want to punish.

In general, to the rich, sluggish economies are annoying and cause their aspirations to be fulfilled less rapidly. Their more slowly rising wages are at a comfortable level (perhaps making them have to settle for a new car every other year instead of annually). Compare that situation to someone whose wages are low and who will achieve her aspirations in the future, if at all. The benefit of a faster-growing wage or salary for a person hoping to buy her first home is more valuable than for a person hoping to afford a Ferrari instead of his Porsche. Push the possibility of poorer people achieving their aspirations too far into the future, and many will give up and grow more disgruntled.

Much of the above flies in the face of “Keynesian Economics,” which hold that government spending can stimulate the economy in certain circumstances. Many economists opposed Lord Keynes^[xviii] in the 1930s when his ideas came to prominence (the most formidable of which was Friedrich Hayek^[xix]). I and many others believe that Keynesian Economics is a primary reason that the recession following the stock market crash of 1929 turned into the first and only Great Depression.^[xx] His ideas were widely rejected by economists by the 1980s.^[xxi] Keynesianism made a strong comeback among academics when Democrat Congresses wanted the government to spend a lot of money and college professors got wise to which side of the bread the butter was on. You might note that all of the government “stimulus plans” since then did not stimulate anything other than the profits of the companies and organizations that received the stimulus money (and the wages and benefits of those companies and organizations and the politicians they support) – at the expense of all other companies, organizations, and everyone else. Overall, wealth was destroyed and wealth creation was retarded by the process. Note also that federal spending during the Clinton presidency was essentially flat^[xxii] due to Republicans taking control of Congress – and the economy boomed.

Hopefully, the above discussion establishes two propositions: 1) assessing whether a proposal will create benefits constitutes only half of the necessary analysis to justify being for or against it (i.e., assessing the benefits without assessing the costs is insufficient), and 2) every policy proposal has both known and unknown positive and negative consequences. Separately, there are both intended and unintended negative consequences of every proposal. (For example, some American politicians – usually surreptitiously – support policies they know will be harmful to America because they believe the policies will serve some higher purpose. Making matters worse, no politician or bureaucrat is omniscient, sufficiently smart, wise, competent, diligent, caring, unbiased, solely focused on serving the public and not themselves, or properly motivated to achieve anything close to the full potential of even well-conceived and well-crafted laws. For the most part, when deciding whether to support a policy proposal, people focus on only the benefits about which they happen to be aware. They either do not know or do not care that the touted benefits will not be fully achieved and that the costs of what good is accomplished can easily be a small fraction of the known benefits that people support.

The object of this blog post was to show that there is no such thing as a “solution” when it comes to public policies. There are only tradeoffs. Of course, some tradeoffs are better than others, and some tradeoffs are necessary. Blindness to this fact of life is especially harmful when we consider things like tinkering with our healthcare systems. It is because of this that I felt compelled to post this article before I post Obamacare – Repeal, or Repeal and Replace? Part III. It will not propose a solution to healthcare in America. It will propose what I believe to be the best set of tradeoffs with respect to healthcare.

^[i] A super-brief summary: 1) There are some hazards associated with fracking; 2) fracking operations causing water contamination, and earthquakes are the primary stated concerns with respect to fracking; 3) the probability of such hazards coming to fruition to the extent they might justify shutting down fracking is unknown, but it is not zero; 3) detractors of fracking overstate credible risks and make up data in support of their claims, while promoters understate the risks and purvey data that supports their claims of safety; and 4) other forms of producing energy are much less safe than fracking (e.g., nuclear).

I did not discuss with my bar mate something that is extremely important with respect to environmental matters. That is the driving force that got the environmental movement going in the first place and continues to be a major force in opposition to fracking and all other fossil fuel development. That force comes from people who believe that humans, with their intellectual and technological advantage over all other species and their unacceptable indifference to the negative effects that they have on other species and nature itself, are the bane of the Earth. It was these “anti-industrialists” who stumbled on the brilliant idea that they could slow, if not shut down, humanity’s exorable juggernaut of advancement and self-aggrandizement by getting a majority of people to focus their attention and political demands on “saving the Earth” and perfect safety. As evidenced by the hysteria over fracking afoot in the populous, the anti-industrialists have been remarkably successful with those who they consider to be “useful idiots.”

^[ii] It is interesting to note that in the 1970s, before many of the lifesaving innovations we take for granted today were invented and the general public was less able to afford to buy all the safety features that were available, annual fatalities from car accidents were 50,000 per year. Deaths per vehicle mile in 1969 were about five times more than they are today.

^[iii] I’m describing here what I recall George Will said in a Sunday roundtable discussion. I can’t find a transcript of that show, so I’m guessing at some of the specifics. Hopefully, I’m getting the gist of his argument correct.

^[iv] “The Safe Drinking Water Act (SDWA) and other regulatory process laws require EPA to conduct economic analysis during the development of new drinking water contaminant regulations.”

^[v] https://www.sciencedaily.com/releases/2016/10/161013103132.htm

^[vi] “Drug Approvals – From Invention to Market … A 12-Year Trip.”

^[vii] As it does with the financial sector, the government enacts regulations with which only large companies can economically comply, thereby creating monopolies or oligopolies. Government-facilitated or protected oligopolies can grow larger faster than firms that are forced to compete in the market. The purpose is to enable companies to become huge. Politicians crave control of money (for personal use and power). Taxing small companies and individuals is unpopular, so politicians need long-term, reliable, hated giant companies because those companies can be fleeced for the benefit of the government and politicians to the jubilation of most of the public. Politicians kill two birds with this stone — securing more money for themselves and making duped voters happy. Politicians claim many other reasons for adopting the regulations, e.g., safety. If they were really that interested in safety, they would lower speed limits, but politicians cannot make much money by lowering speed limits.

^[viii] FDA apology. 35 FDA-Approved Prescription Drugs Later Pulled from the Market

^[ix] Drugs and Devices: Comparison of European and U.S. Approval Processes

^[x] http://www.taxpolicycenter.org/statistics/federal-receipt-and-outlay-summary

^[xi] “Print” is put into quotes because such a large percentage of the currency is now in the form of digital code rather than bills.

^[xii] “You Think The Deficit Is Bad? Federal Unfunded Liabilities Exceed $127 Trillion.” State and local governments are also facing serious unfunded liabilities problems.

^[xiii] While robust growth in the economy could change America’s financial future in theory, the public outcry for more government spending, more worker protections and benefits, more regulation of business, and more trade barriers and taxes (all of which are antithetical to rapid growth) appears to be winning the day politically.

^[xiv] Some may think that interest rates have been and currently are historically low, so currency valuation has not affected interest rates. This overlooks the fundamental economic reality of the devaluation of a currency. Interest rates would have been even lower had the currency not been devalued.

^[xv] See “Income Inequality Is More Than It’s Cracked Up To Be.”

^[xvi] For a discussion of how the government siphons off the nation’s resources to non-productive and corrupt purposes, see, “Siphoning.”

^[xvii] See “Wealth” and “Wealth Creation. No Happiness, Why Bother?”

^[xviii] I prefer John Maynard Keynes (good lord!).

^[xix] Hayek was the author of the seminal book Road to Serfdom, of which more than two million copies were sold (a book that I highly recommend).

^[xx] “Keynesian Economics and the Great Depression.”

^[xxi] “History shows Keynesian economics doesn’t work”

^[xxii] History of Federal Spending

In a comment to my “Two Paths for America” post, a friend made some interesting observations. Two of the points raised in those observations are worthy of this separate post.

“. . . the argument [whether collectivized healthcare is good or bad] will never be settled until America universalizes healthcare and we find out what happens here and in the rest or the world.”

There are two reasons this is incorrect. First, no matter what happens, there will be no counterfactual against which to measure irrefutably “what happened.” There will be no agreement as to what was proved by the experiment. [i] But, second, there should also be little doubt that if America “universalizes” (I prefer the term, “collectivizes”) healthcare, the rate of innovation of medical treatments and drugs will slow. [ii]  How much faster healthcare would have improved had America not collectivized healthcare would be the subject of interminable speculation; and multiple bias driven and confirming “empirical research.” (If sound theory and history tell us anything, however, the truth is that the rate of innovation will slow.) Similarly, if America does not collectivize there will be no way to measure how much more slowly healthcare would have improved had it been collectivized. Either way, we would see endless “studies” purporting to prove each side of the argument. This is why sound economic theory is the only way to make a reasonable judgment about how to proceed. The economic theories are good enough now to justify minimizing the degree to which the healthcare system is collectivized to the greatest extent politically possible. (This is not to say that there should be no collectivization. As I’ve conceded in prior posts, that bird has flown.)

“. . . that America subsidizes all the other ‘model’ countries universal health care programs, if true, is an unfair situation.”

Yes, it is unfair. Much of life is unfair. So what? The choice before America is whether to continue to reap the advantages of inventing new and better medical treatments and drugs at a fast pace or to slow the pace of improvements to medical treatments and drugs. Collectivizing healthcare would also mean forestalling the benefits of the advances that would be built on top of the deferred advances. I urge the country not to slow the pace of healthcare improvement any more than necessary despite the fact that it is unfair that other countries will not carry their fair share of the burden[iii]. (I don’t get the logic of pointing a loaded gun at my foot and declaring, “If you guys don’t do your fair share, I’m going to pull the trigger.”[iv])

Unfair assumptions of burdens are ubiquitous (check out the discussion at 52:25 of THIS OUTSTANDING TALK) and unavoidable if progress is to be made.  Consider what life would have been like had Steve Jobs never lived. His influence on the advancement of smartphone technology was tremendous. To be sure, had he never lived, smartphones would eventually have acquired features very similar to those that we enjoy today–but probably many years from now. It is probably fair to say, that had Jobs never lived, smartphones today would be comparable to those we had five years ago. (Compare specs[v], and consider all the apps that were not invented five years ago—and how many of today’s apps would be unable to function on an iPhone 5 had those apps been nevertheless invented.

Steve Jobs became fabulously wealthy. But consider the raw deal he got in return for the joy and productivity he bestowed on humanity. All inventors of today stand on the shoulders of all previous inventors in their fields. (For example, high-efficiency fuel injectors could not have been invented to replace carburetors had the internal combustion engine not yet been invented.) Jobs and Apple Inc. received a fraction of the income made by creators of all of the iPhone apps that were made possible by the platform his company created. But he received little or nothing for all the apps on other platforms that were inspired by his creations. Apple received only a small fraction of the value of the customers’ enjoyment of their phones—and most iPhone customers would have paid more if they’d had to. How much would someone have to pay you to forevermore use a five-year-old phone? Multiply that number by the number of smartphones in the world and figure out the percentage of that amount Jobs got paid. Outright piracy of Jobs’s innovations was commonplace around the world.

The innovations made possible by Steve Jobs rendered obsolete generation after generation of smartphone. Millions of those no-longer-cutting-edge phones wound up in the hands of much poorer people around the world, to their great benefit. Jobs and his company received none of the value of the entertainment and productivity that those people have enjoyed.

It is unfair that Jobs did not receive a greater share of the wealth he bestowed on the world. It is also unfair that America should foot most of the bill to fund innovation of medical treatments and drugs[vi] while also being the most charitable provider of foreign aid the world has ever had.

This is the tradeoff, however. Either America continues to bestow those benefits from the faster pace of innovation on its own citizens and all citizens of the world, or no one will. It is unfair. But we should do it anyway because no one else can, and it needs to be done. The more collectivist America becomes, the less able it will be to fill that role.

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[i] It would be much like the continued debate about the effects of minimum wages. The weight of evidence against collectivized medicine could be as overwhelming as the weight of evidence against minimum wage, but the debate would go on.

[ii] See PART I and PART II of my posts about repealing and replacing Obamacare. Also note that Germany was the leader in medical innovation before it collectivized its healthcare systems.

[iii] It is equally unfair that other countries do not bear their share of the burden of defending Western (liberal) ideals. That does not mean that America should not continue to defend those ideals.

[iv] It strikes me this as similar to the logic people use to defend imposing tariffs on less expensive goods from other countries. “If you (foreign country) do not quit subsidizing our purchases of your goods (making the things we want and need less expensive), we’re going to pull the trigger.”

[v]

[vi] The same is true with respect to defense and disaster aid.

As I was writing PART III of “Obamacare – Repeal, or Repeal and Replace?” I realized that any recommendation for what government should do about healthcare (or any other policy) largely depends on which of two paths the country will take going forward. The vast majority of Americans wish that all people, everywhere were healthy and had access to the healthcare they need. They do not believe that distinctions as to who gets government benefits or punishments should be made on the basis of race, religion, sex, age, political beliefs, country of origin, or whether the person was born in America or elsewhere. Americans also believe that it is society’s and the government’s responsibility to improve the lives of the poor—especially the American poor, but also the poor everywhere. Americans should be happy and proud about these aspects of American culture.

All wishes, however, must be tempered by reality. America should pursue no policy, no matter how great the benefits, with goals that are impossible to achieve or if its costs – in both money and other forms – are greater than its benefits. Because people are so apt to focus on the bright and shiny benefits of every policy that politicians dangle before their eyes and sing into their ears, we should sort out some costs that are all-too-often overlooked.

Despite its many shortfalls and shortcomings, over the last 100 years or so, America has advanced the People’s wishes related to equal protection, due process, and non-discrimination[i] and in terms of improving the standard of living of the poor to a substantial degree.[ii] Certainly no other country has ever accomplished so much in so little time. The benefits of these accomplishments have swept (some would say “trickled down”) across the world.[iii] Other countries have contributed to these accomplishments, but no country has so consistently and for such a long time contributed as much prosperity and peace with freedom to the world as America has. In addition, no other country has come close to America’s ability to innovate and create wealth (which also “trickles down” across the world).[iv] I’m not saying this to boast, I’m presenting what I believe to be a fact for your consideration.

America’s accomplishments are primarily attributable to certain traditional attitudes, philosophies, and morals, which can be summarized as follows:

1. Attitudes: Tradition should not be too much of a restraint to positive change.[v] It is legal to do/try anything that is not explicitly made illegal (in contrast to the European attitude that everything is illegal that is not explicitly declared to be legal). Success should be encouraged and honored.
2. Philosophy:
   1. All humans are created equal and have the inalienable rights to life, liberty, and property. “. . . the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately. . . .”[vi] “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”[vii]
   2. Extolling individual liberty over collective results fosters better outcomes than the reverse.
3. Morals: The Protestant work ethic. For the majority of the last 100 years, most Americans refused or were at least embarrassed to accept welfare. People generally believed that it was their duty not only to avoid being a burden to their fellow humans unless physically or mentally incapacitated, but also to add to the common wealth of the country or humankind. Able-bodied and sane people who refused to “do their part” were dishonored. The distinction between “the deserving poor” and “the poor” made a big difference.[viii]

As America has moved away from its exceptional traditional attitudes, philosophy, and morals, it has slid back toward the pack of humankind.

In my estimation, the benefits demonstrably derived from America’s traditional attitudes, philosophy, and morals are exceedingly valuable for Americans and everyone else in the world, and the cost of abandoning them is very high and often overlooked. See my blog posts Wealth, Wealth Creation – No Happiness, Why Bother?, Wealth Creation – It’s For The Children, and their children, and their children. . . ., and Income Inequality Is More Than It is Cracked Up to Be.

Going forward, America will choose between two paths:

1. Continuing to be (a) the primary fountain of innovation and wealth creation and (b) the only country with the power to make a significant difference in maintaining semblances of world peace (and quit stirring up world agitation, as it has done in recent times);

OR

2. Continuing to shut down the engine of prosperity and the force for peace in the world by abandoning its traditional attitudes, philosophy, and morals, i.e., becoming more collectivist.

Given the intensity of current public sentiment in favor collectivist policies, America will not eliminate all (or even many) of its collectivist policies anytime soon. There is reason to strive for better public understanding of the issues so that America changes paths before falling headlong off the collectivist cliff. The next step with respect to healthcare could be the step from which there is no turning back. Obamacare is an abject failure, except for its primary purpose. Its primary purpose was to create a right to obtain healthcare. Mission accomplished! Because it is manifestly unworkable, it must be drastically amended or replaced. That can be done in a way that maximizes the collectivist damage it is doing to America (and the rest of the world), or in a way that minimizes that damage. I’ll attempt to sort this out in future posts.

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[i] As America gains more achievements with respect to the listed categories, people have a tendency to want to create new categories about which to complain and clamor for protection.

[ii] In 1900, racial discrimination was commonplace and generally accepted, and racists had political power. Today, racists are shunned more than almost anyone else, and no politician dares to engage in overtly racist activity. In general, poor people had no sources air conditioning other than wood or coal fires, lived at or near the brink of hunger, had little to no healthcare that actually cured anything, were limited in entertainment to what they could produce themselves as well as many other depravities.

[iii] See also, THIS.

[iv] Obviously other countries have outperformed America in certain aspects of those areas in which America has excelled, and in areas in which America has not excelled. On balance in the key areas Americans value most, however, America has been truly exceptional.

[v] In general, “progressives” and libertarians see little to no value in tradition, while conservatives believe “progressives” and libertarians fail to sufficiently consider and appreciate the received wisdom and evolutionary selection embodied in tradition. Note, however, that conservatives in America are far more open to change than conservatives in many other places.

[vi] Thomas Jefferson.

[vii] The Fourteenth Amendment.

[viii] It has never been fun telling a person who is choosing to be a slothful ingrate that the organization’s scarce resources should be allocated to those who could want to improve their lives (and possibly become helpful members of society). People who did this had to fade a lot of heat. As the government took over more and more of society’s obligation to care of the poor, fading that heat was an unpleasant duty of the bureaucrats who dispensed welfare. Consequently, over time, the concept of the “deserving poor” was officially abandoned. The human understanding and acceptance of the concept was not so easily dispensed with, however. Therefore, people keep dreaming up new grievances to justify (in some people’s minds) the giving of welfare to those who do not take advantage of the many things that society tries to do to improve their lives, e.g., providing free education.