Month: August 2020

Mostly Peaceful Protests

“Other than that, Mrs Lincoln, how did you like the play?”

Spurred by the killing of George Floyd while in police custody, protests against police violence—defined as the unjustified use of force—have erupted across America. These protests are invariably described as “mostly peaceful”. And they are, the way most people at Ford’s Theatre were just there to see the show. 

Then too, there is the matter of Lincoln’s assassin, John Wilkes Booth. He too represented only a small minority of the theatre goers; but of those, he is the one who mattered most. Because his actions defined the event. 

Riots, attacks on police and violence against people and property have taken place in New York, Washington, DC, Chicago, Portland Oregon, Seattle Washington, Minneapolis Minnesota, Los Angeles California, Philadelphia Pennsylvania, Salt Lake City Utah and Atlanta Georgia, to name a few. And by and large, the police, following the orders given them by civil authorities, have backed away. In some cases, like Portland Oregon, organized violence has become a nightly affair. 

The media has studiously ignored the violence, preferring to emphasize the current narrative of “systemic racism” and “structural racism” being at fault. It is especially convenient to blame the violence on systemic and structural racism inasmuch as those terms lack definition and thus present a non-falsifiable hypothesis. And it is a politically convenient ploy because it distracts attention from the fact that America’s cities have been run by Democratic machine politics for generations.  

Virtually all the burning cities are run by Progressives, and have been for decades. In addition to the obvious mistrust felt by significant portions of their citizens, those cities are also notable for their failing public school systems and their chronic fiscal ineptitude. 

Taken together, failing public schools; police mismanagement; fiscal ineptitude, and the presence of powerful public sector unions present a picture of routine managerial incompetence. None of which has precluded the re-election of the same incompetents year after year. The obvious question is why. 

Why is it that year after year the people with the most to lose from failing schools, incompetent policing and fiscal incompetence, insist on voting for the same politicians who routinely produce the same failures of governance? 

The simple (and probably correct) answer is twofold. First, the opposition Republican party has not presented a viable alternative and shows little interest in doing so. Second, the party in power, the Democrats have  effectively become a wholly owned subsidiary of powerful special interest groups like public sector unions and environmental groups who dictate policy. 

In response, upper income groups are increasingly abandoning cities to escape from (1) rising crime and disorder and (2) a rising and oppressive tax burden. The COVID-19 pandemic appears to be the catalyst, not the cause. If the trend continues and turns out to be more than fleeting, the results could be dire for the cities. As the truly wealthy head for suburban enclaves, taking the tax base with them, the cities will become islands of poverty surrounded by wealthy suburbs unwilling to finance urban excess. 

The remaining question is whether upscale former urban dwellers will bring their politics with them to the suburbs, or have they finally had enough? And if they have tired of financing failure, will the cities finally reform? Or will Progressives complete the takeover of the Democratic Party  and produce catastrophic failure nationally rather than just locally? 

We may get a hint in November. 

JFB

Competing Nightmares

We live in a strange political times. One of the strangest things of all is that winning candidates get elected because of who they are not. Donald Trump got elected in 2016 because he was not Hillary Clinton. If Joe Biden gets elected in 2020 it will be because he is not Donald Trump. If Donald Trump manages to get re-elected it won’t be because of his sterling personality. It will be because Biden’s habit of playing footsie with his party’s increasingly assertive radicals is a bridge too far. Or because his obvious problems with cognitive decline have become too obvious to ignore for suburban voters who decide he is not worth the risk. The devil you know and all that. 

Consider the theme that Michelle Obama rolled out on the first night of the convention: Empathy. Joe Biden is empathetic; he is one of us; he knows what you are going through and he is here to help. As a matter of electoral strategy this is probably a pretty smart move, especially when it’s part of a larger bait-and-switch effort. After all, it’s a lot easier getting people who like you to vote for you. Especially when you consider that President Trump, during his tenure, has displayed about as much likability, decency and empathy as say, Ted Bundy. (Apologies to Ted.)

The problem is that all the empathy and flag waving doesn’t cover up the stark reality of the situation, which is that the Democratic Party is increasingly driven by its most radical members. Those members have graduated from being frustrated junior-high hall monitors to legislators. And they include Kamala Harris, the imaginary centrist whose voting record in the Senate is a bit to the left of Bernie Sanders. As a result the values of the party’s leadership and the party’s members are increasingly at odds. Consequently, the party has chosen to emphasize “moderation” in its messaging, but its policy preferences are actually those championed by its radicals. 

The truth is, if Biden is elected and the Democrats take the Senate and hold the House, the U.S. is in for a ride on the wild side. The Democratic Party has promised massive increases in taxing, spending and borrowing. They have promised to include in the Fed’s mandate a requirement for the central bank to seek racial equity. For those unfamiliar with the code, “equity” refers to equal outcomes, not equal opportunity. They have proposed lowering the age for Medicare eligibility from 65 to 60 even though the program is already insolvent.  The party seeks to increase payments and eligibility for Social Security by increasing taxes on “the rich”.

The Party has announced that it will seek to eliminate the Senate filibuster “if necessary”.  The Party has threatened to pack the Supreme Court and to eliminate the Electoral College. And don’t be surprised to see the party seek the imposition of a wealth tax. 

Yes, Joe Biden is not Donald Trump. And he is not a psychopath. But that hardly justifies the enthusiastic embrace of economic illiteracy. Which is an accurate description of the policy prescriptions of Joe Biden and the party of which he is nominally in charge.

JFB

Propaganda as Thought

In an era where bumper sticker slogans substitute for thought, the master propagandists of the BLM Movement have learned their craft well. Plenty of otherwise sensible people have signed on to the sentiment without understanding what they have actually signed up for. Others have simply been intimidated. Still others just use it for marketing campaigns.

But the BLM Movement, led by radical Marxists, will never be satisfied. The video below provides a useful warning of what this is really all about. And it isn’t about equal opportunity for all.

John Stossel

JFB

Government by Executive Decree

According to press reports, by Executive Order President Trump is preparing to suspend the payroll tax through the end of the year retroactive to July 1. He also intends to extend supplemental jobless benefits, although at what level and for how long remains unclear. Add to that his intent to impose a partial moratorium on evictions and assistance with student loans and you have a perfectly tuned re-election program aimed squarely at the economic illiteracy pandemic now afflicting the voting public. 

The program would be a blatant violation of the U.S. Constitution, both in its particulars (Article 1, Section 8, clause 1) and in its violation of the separation of powers.  The precedent for this Constitutional vandalism was firmly established by former President (and University of Chicago Constitutional law lecturer) Barack Obama. Notwithstanding the fact that the U.S. Constitution locates the taxing power in the Congress, President Obama ordered the IRS not to enforce the penalty for non-compliance with the coverage mandate required by the Affordable Care Act, otherwise known as Obamacare.  

While on the hustings, the Obama Administration argued that the mandate did not constitute a tax. However, in front of the Supreme Court the Administration argued that the mandate was in fact a tax. The Supreme Court agreed with them and declared the mandate to be a tax. It was a tax that the Administration pointedly refused to enforce. 

It is worth noting that the mandate was a necessary element of the bill for two reasons. First, the CBO used the mandate to overestimate how many young people would comply with the bill, thus reducing the cost estimate.  Second, the CBO cost estimate served to bolster the Obama Administration’s risible claim that the bill would reduce unit costs and therefore consumer insurance rates. 

In the event, Republicans asked a prescient question: What would happen if a Republican President announced he would not enforce a different section of the tax code, for instance the capital gains tax? Progressives gave their stock answer: “That will never happen”, they said.  That by the way is answer they usually give when pressed about the potential consequences of promoting lawless activity. 

Well, here we are. The president, a Republican, has said that unless certain conditions are met, he will indeed refuse to enforce the tax code in a way that is liable to help him electorally.  And let’s not kid ourselves. This type of lawless governmental behavior has become the rule, not the exception. 

Governors, for instance, often rely on declaring tax holidays, sometimes targeted to dates, sometimes targeted toward geographies. Except that generally sales taxes are not transaction taxes—they are use taxes, and so cannot be legally declared exempt for certain situations within the meaning of the law. And not to put too fine a point on it, there has not exactly been a rush to enforce laws protecting people and property from rioters in large American cities. Nor has much mention been made of the obvious fact that the rioters are on the whole, whiter than the police departments they are accusing of systemic racism. 

 So here we have a situation where a Republican president is threatening to refuse to enforce the law because he expects it to redound to his electoral benefit. It is a stunt that progressive politicians have been pulling for years (See DACA). The depth of the cynicism is notable though. Since there is no “pay for” mechanism and since it extends through election day, it is aimed at a short term goal, namely Trump’s re-election campaign. 

It also creates creates several other political advantages for Trump and the Republicans. He will have the space to claim that he unilaterally delivered on several Democratic-populist goals, namely student loan assistance, and an eviction moratorium. But it does something else that could prove excruciatingly painful for progressives. By suspending payroll tax collections, it would bring the day of insolvency for Social Security that much closer. 

The Social security system is already being battered by the economic downturn with its mass unemployment. A six-month month suspension of payroll tax receipts would constitute a direct and massive hit at the solvency of what we laughingly call the Social Security Trust Fund, thus bringing the day of reckoning closer. 

It should also be noted that something like 75% of taxpayers fork over more in payroll taxes than they do in income taxes. Progressive hysteria aside, the income tax system falls overwhelmingly on people in the upper brackets.  A suspension of the payroll tax would therefore have two important impacts, one direct, the other indirect. On the political side, if the Democrats were to resist, they would effectively be denying a substantial tax cut for a huge proportion of the voting population, particularly the blue collar workers they are trying to win back for the 2020 Presidential contest. 

There is an important indirect consideration as well. A suspension of the payroll tax, and even more so with somewhat reduced supplemental unemployment insurance, changes the back-to-work calculation. It would raise net after-tax compensation for workers who go back on the job, thereby increasing the incentive to work and reducing the incentive to stay home. That would likely increase the pace of economic recovery. 

But there is no such thing as a free lunch. The price to be paid for all this is in the disaster known as public finance. Federal, state and local governments are piling up horrendous deficits and off balance sheet obligations at an unsustainable pace. The time to address those obligations could be, and probably is, just around the corner. The problem is that a pervasive free-lunch mentality has contributed to the creation of a dependent and subservient portion of the population. 

The other price we pay is continued lawlessness by government. By continuing to operate by decree justified by bumper sticker sloganeering, government becomes progressively more authoritarian. It fails to perform its primary function of securing natural rights and protecting ordered liberty. The evidence of failure is all around us, whether it is the near universal failure of urban public schools, public distrust of basic institutions, or the collapse of traditional institutions like the family, spurred on by public policies designed for centralized command-and-control of citizens’ everyday lives. 

JFB