California Dreamin'

Lately, state legislators from California have been going to emergency rooms at an alarming rate. Why? Repetitive motion injuries for patting themselves on the back. They finally passed a balanced budget on time. Of course, a new voter-passed law requiring the forfeiture of their pay for tardiness surely had something to do with it. The budget still has some accounting gimmicks and laughable revenue projections but it’s considered a victory for the perennial masochist Republicans as it indeed did not include any tax increases. This outrages many Democrats who say California’s whole problem is because some people just don’t want to pay their fair share.

What they don’t understand is how devastating this mindset is to the very economy they are so desperate to save. Critics say California’s taxes and regulatory environment are driving people out of the state in record numbers. Critics of the critics say, “pfff”. Who’s right? Let’s compare the Golden State to Texas.

California has an unemployment rate of 11.7%. Texas’ is 8%. In fact, 45% of all non farm jobs created in the U.S. during the recent recovery are in that one state. In comparing the overall tax burden, California is ranked 6^th at 10.6%. Texas is 45^th at 7.9%. Taxfoundation.org ranked California’s overall business climate at #49. Texas is ranked 13^th. Before the recession, both states greatly increased the number of jobs. When recession hit, Texas’ # of jobs leveled off while California lost approximately 1.2 million.

The economy has hit this nation hard but business is booming for Joe Vranic, a business relocation coach from Irvine, CA. A frequent guest on major networks, cable news, and NPR, Joe explains how he shows businesses how to leave CA. The top five destinations are Texas, Arizona, Colorado, Nevada and Utah. Why would anyone in their right mind want to leave such natural beauty and perfect weather for Texas’ miles of tumbleweeds and ridiculous heat? Texas has low taxes overall, no income tax, and a less burdensome regulatory system. “…California is such fertile ground that representatives for economic development agencies are visiting companies to dissect our high taxes, extreme regulatory environment and other expenses to show annual savings of between 20 and 40 percent after an out-of-state move….California may suffer more than 1,000 disinvestment events this year. The capital directed to out-of-state or out-of-country, while difficult to calculate, is nonetheless in the billions of dollars”. Who’s leaving? How about companies like Toyota, Nissan, Facebook, McAfee, and SAIC?

And it’s not just the crassness of money that drives people away. Joe says it is “death by a thousand cuts”. He points to quality of life issues such as bad schools, bad traffic, powerful unions and restrictive labor laws, and policies that create boom and bust housing cycles.

California is just difficult to do business in. Ask Rick Newcomb. He started Creators Syndicate to protect cartoonists and syndicated columnists. “A form of tax madness has taken over Sacramento”, he said. He encountered hostility from the city of Los Angeles who wanted to arbitrarily move them into a higher tax rate. They ruled for him and then changed their mind and made the decision retroactive. They owe $400,000 in back taxes and if they pay it, they will have to lay off ten employees.

The left is not good at creating wealth. It just wants to spread it around. More infuriating is that they don’t seem to care to even try to understand how it all works. California politics is dominated by this anti rich, anti business mindset. It may feel good to hate the rich but it doesn’t help the poor. Given the political dominance of unions and environmental activists, will adults ever be able to step in and make this right? I’m not holding my breath.

Sons of Revolution Part II

5/24/11

The Arab Spring is in full bloom. The Street is trying to shake off their oppressors. Yet, as discussed in “Tahrir Square and Andy Dick”, there must be positive values that displace the tyranny. Otherwise, the flowers of the Arab Spring will die and be thrown on the compost heap of history.

In S.O.R. Part I, the values of the Enlightenment: science, reason, and equality, did not help the French create a Great Society. Yet who would discard these values completely? The Enlightenment did, in fact, enlighten. But are these values incomplete? Our own founders would say yes.

Robespierre said, “Vox populari est vox dei” (The voice of the people is the voice of God). However, many of the American founders would more likely say “vox populari est vox idiotes” (at least sometimes). They were not elitists but they believed a pure democracy would lead to tyranny of the majority, a mobocracy. There were partial exceptions, of course. The more utopian minded Thomas Jefferson disagreed sharply with John Adams about the French Revolution. Adams, both a deeply religious man and a man of science who saw no contradiction between the two said, “I know not what to make of a nation of thirty million atheists”. After the French experiment ended in blood and chaos, Jefferson eventually acknowledged the failure.

Though the American founders certainly were influenced by Enlightenment thinkers such as John Locke, (little known fact is that he was a rather enthusiastic and orthodox Christian) it could also be argued that the most influential figure of the American Revolution was actually John Calvin. Fully two thirds of early American settlers were trained in this doctrine that was deeply distrustful of human nature. Humanity was seen as duplicitous and ambitious, selfish to the core. In the book of Romans, Paul stated that no one seeks after God. “No one does good, not one”. Early Calvinists did not view this as hyperbole.

Though the founders were slightly more charitable towards humanity, the record is filled with quotes about the problems of human nature. James Madison viewed man as “wicked and capricious”. Alexander Hamilton wrote, “The passions of men will not conform to the dictates of reason and justice”. He believed that all bodies politik will be mingled with the poison of faction and by men who love power. While the founders read the same philosophers and thinkers as the French Jacobins, they also were influenced by Scottish philosophers Adam Smith and Edmund Burke, who viewed reason and emotion as inseparable. It is not that our founders disbelieved in reason, but that, given man’s fallibility, purity of reason was not only elusive, but impossible.

The American Founders were quite religious compared to the French. An oft repeated lie is that most were deist. According to M.E. Bradford of the University of Dallas, of the 55 delegates to the Constitutional Convention, only two, maybe three were deist. He includes Benjamin Franklin but during the constitutional convention, Franklin pleaded for paid clergy to pray daily over the convention, saying, “God governs in the affairs of men” and, “except the Lord build the house, they labor in vain…” Franklin never fully embraced orthodox Christianity but in his old age, a deist he was not.

Religious as they were, they certainly did not set out to make a theocracy. And with the exception of maybe John Jay, Samuel Adams, and a few others, the founders were not the equivalent of modern day born again evangelicals. However, as a group, they did respect Christianity greatly and had a distinctly different view of separation of church and state than our modern ACLU. Jefferson signed into law funds for Christian missionaries to the Indians. The halls of congress doubled as a chapel. Even that dirty atheist Thomas Payne advocated government funded religious education.

So while equality and liberty were hallmarks of the Enlightenment, our constitution was also founded on the values of the Bible. While France believed that pure democracy would lead to happiness, our forefathers believed in checks and balances, not only for the branches of government but for the people as well. Thus was born republicanism.

What is government but the extension of your view of man? Thomas Sowell’s “Constrained Man” and “Unconstrained Man” and Steven Pinker’s “Tragic Man” and “Utopian Man” both describe the competing views of every political experiment in history: One is that man is unchanging and selfish. The other is that man is malleable and perfectible. The French and the Americans were the first to fully put these ideas in their purity to the test. One failed miserably. The other became the greatest nation in history.

Economics for Dummies or....Something about a Goose and an Egg

4/24/11

Talk about taxes and deficits seems all the rage now. More popular than Jersey Shores? Of course not. Still, fiscal policy is getting some attention these days. I’m largely ignorant about economics. I don’t understand monetary theory, how China manipulates their currency or why conservatives are more concerned about inflation (BUY GOLD NOW!) and liberals are more concerned about deflation. Still, before we decide where we want our country to go, there are a few things everyone should know.

#1 foolish misconception: Wealth is static. Some people (liberals) seem to think there is a fixed amount of money and if one person makes a lot, it’s because it was taken from someone else. Wealth is not so much to be made by all but to be spread around. Two seconds of thought would obliterate this foolish notion. 150 years ago, most babies died and leisure time was only for the rich. In the last 50 years, people have gained leisure time, bigger houses (The size of homes has more than doubled since 1950.), more mobility, more and better gadgets, and longer life spans. Across ALL income levels we spend less of our income on food and necessities.

#2 foolish misconception (a favorite of the left): The government creates jobs. The government does not make money and therefore cannot create a job. All it does is take money out of the economy and put it somewhere else. At best, that is a net wash of jobs. More likely, however, that money would have flowed naturally and efficiently to where it was needed. The government artificially moves it to somewhere after it is eaten up by the usual waste and fraud.

#3 foolish misconception: The rich hardly pay any taxes. The top 1% of earners pay 38% of all federal income taxes. The top 5%? 59%. The bottom 50%? Less than 3%. The percentage of federal income tax that the bottom 50% pays has also dropped substantially since 1980, from 7% to 2.7%. http://www.taxfoundation.org/news/show/250.html

#4 foolish misconception: The rich get richer and the poor get poorer. This is half true. The stinking rich are indeed stinkier and as a share of total income, the bottom 50% do have a smaller percentage, 17.68% in 1980 and 12.75% in 2008. However, looking at data to 2008, the poor are not getting poorer. The poverty rate has dropped from 22.4% in the 1950’s to 12 percent in recent years. http://en.wikipedia.org/wiki/File:US_poverty_rate_timeline.gif. The bottom 20% average income dollars has roughly stayed the same according to one source, http://en.wikipedia.org/wiki/File:United_States_Income_Distribution_1967-2003.svg , but has risen greatly according to others. A May 2007 report by the nonpartisan Congressional Budget Office, http://www.cbo.gov/doc.cfm?index=8113, stated that the poorest fifth of families with children had the fastest overall earnings growth, more than 33% between 1991 and 2005. It’s true that top incomes have climbed substantially but the poor are no worse off and are indeed much better off by many measures. Poverty used to mean hunger. Now, the poor are often obese, the problem being an abundance of cheap and tasty food. (Taco Bell, oppressor of the masses?)

#5 foolish misconception: Our governments are not really broke; They just lack the political will to tax the rich. It’s true there is a great deal of money out there and if the government just took it, it would indeed solve the budget problem. But what would we do next year when the economy collapses? Why do some people (liberals) fail to realize that if the rich are targeted, they will invest their time in tax avoidance or, God forbid, stop spending money altogether. At some point, higher taxes have to discourage the risk taking necessary to invest and create new businesses. They don’t hide their money under mattresses (not yet anyway). They put it to work, which creates jobs. This was a major lesson FDR never learned. He raised the top rates and got less and less revenue. Enraged at their greed, he did nothing to create incentive for economic investment.

Clearly, it is frustrating for those who struggle, who have been laid off, who are deeply insecure about their finances, to see others living in luxury. I’m no fan of the rich myself. Frankly, I’m jealous of their cool cars. I have no problem with taking their money but at some point, going after the wealth makers and job creators shoots us all in the foot. Why kill the goose that lays the golden egg?

Sons of Revolution: Part I

3/9/11

Sons of Revolution: Part 1

The world is going to hell in a hand basket. Japan is glowing. The earthquake did more damage than Godzilla. Ghadaffi is strafing civilians and the rest of the Middle East is still in turmoil. While Japan will probably remain stable, the Arabs still have revolution on their minds and, while revolutions are exciting and fun, we must continue to think of the values that drive them.

The longer I live, the more I’m convinced there are only two great political philosophies: The left and the right. Little in modern history illustrates their differences more than comparing the American and French Revolutions. Sorry for the pretentious history lesson but this is relevant stuff. What were the values that compelled our founders to fight George III? Where did these values come from? What about the French? You may have heard that Marie Antoinette uttered, “Let them eat cake”, (she did not) or that the oblivious Louis XVI was downright callous during a time of great hardship (he was). But what really caused the French Revolution (1789-1799) and why was it so bloody?

Hordes of women tearing through the palace of Versaille in 1789 looking to put the queen’s head on a pike, starving and angry as they were, did not drive the revolution. It was driven by the values of the Enlightenment: Science and reason, progress, the goodness of human nature, the individual as master of his future. This was a true revolution, complete, compelled by radical egalitarianism and the total eradication of all class and distinction.

The charismatic utopian, Maximilien Robespierre, sought a dramatic restructuring of society. All vestiges of privilege were pounced upon and torn apart. Words like “madame” and “monsieur” were banished because they sounded bourgeois. The Catholic Church was effectively banned. Its property was seized. Priests were tortured and sometimes executed. While many of the movement leaders were atheist, Robespierre was a deist. Believing that religion was important for the people, he instituted, “The Cult of Reason”. To commemorate it, he had a huge papier mache mountain built at Notre Dame. Robespierre descended the mountain as “The Goddess of Reason”. Up to then the citizens of Paris had been fine with the rolling heads and property seizures but even they seemed to be saying, “Who does he think he is, God?”

During the 1793-1794 Reign Of Terror (otherwise known as the year the French really lost it*), up to 40,000 had been executed for the sin of having money or simply not having sufficient revolutionary zeal. Blood literally ran through the streets on days when the guillotine was busy. Professional malcontent and chief agitator, Jean Paul Marat, stoked the violence from his bathtub. On 7/26/1790, he raged against those revolutionaries he judged too conservative, saying, “Five or six hundred heads would have guaranteed your freedom and happiness but a false humanity has restrained your arms and stopped your blows…”

Perpetually bloodthirsty, the revolution eventually turned on Robespierre himself and many of the other leaders. The chaos finally ended with the dictatorship of Napolean Bonaparte. Since 1789, France has seen the Monarchy restored twice, two more revolutions, and a total of 15 different governments. But they make good wine.

Part II: Why the American Revolution was so different and why anybody should care.

* Amidst much competition for this title.

Tahrir Square and Andy Dick

2/16/11

 

Tahrir Square

and Andy Dick

The Middle East is ablaze right now. Not with the usual perpetual outrage, mind you; Real revolution is on the mind of everyone and no one knows how this will turn out. When I think the of word “revolution”, the first thing that comes to mind is not what you think; It’s the drug fueled comedic genius of Andy Dick. Suffering a mid life crisis at 30, his character Matthew Brock on Newsradio becomes a punk rocker with a bad Cockney accent. When confronted by his boss, he lifts up his shirt and screams “REVOLUTION!!”

 Watch http://www.youtube.com/watch?v=3IX-9zdNkpw&feature=related from 7:50 to 9:06.

So the question is: Will the uprisings in Egypt, Tunisia, Iran, Bahrain, Jordan, and others spawn democracy, peace with Israel, greater economic opportunity?

In the last 50 years, there have been a few revolutions that didn’t turn out so well. The 1956 Hungarian uprising started pleasantly with the toppling of a 30 foot Stalin statue and the overthrow of their communist dictatorship. Their jubilation ended with Soviet tanks, 200,000 refugees and 2500 dead Hungarians. Between 1956 and 1959, Tibetans rebelled against the Chinese. The result? 180,000 dead, many by execution and torture. More recently, the massive uprisings in Iran resulted in mass beatings and even a few being shot.

Of course, many revolutions in history were indeed successful: Ours for one, the French for another. In 1979, the corrupt Shah of Iran was successfully overthrown. But even though the uprising was populist and driven by freedom minded modernists, it was stolen by the more organized and motivated Islamists. The Cedar revolution in Lebanon also began with democracy and hope. Just last month, Hezbollah, a decidedly undemocratic movement, took over the government through dubious but totally legal means. The results remain to be seen but most experts do not predict liberty will flourish.

So what makes for a good revolution? Surely the Facebook savvy youth in Egypt are righteous and justified. Surely they deserve our support. Our own nation was birthed by radicals with guns. But all this recent upheaval has caused me to ponder the nature of revolution itself and I keep coming to the question of values. What is in the hearts of the rebels and does it matter? The “whys” of the revolutions do matter. The American and French Revolutions had some similarities. Both were driven by Enlightenment ideals but the Americans were also driven by religious values. Why does it matter? Because the two rebellions themselves and the results they gave us were so drastically different. The American Revolution turned out pretty well. The French Revolution was a blood bath ending in dictatorship.

So as I watch the ecstatic cheers of the Egyptians in

Tahrir Square

, I can’t be helped but be filled with hope and anticipation. But I also can’t get the images of Iran’s Ayatollah Khomeini and Hezbollah’s Hassan Nasrallah out of my head. Matthew Brock’s rebellion wasn’t born of nobility but by a childish sense of oppression and angst. So I have just one question for you, the Arab youth with your fist in the air: Are you George Washington? Or Andy Dick.