The 1% the 99% SHOULD be protesting
Currently, the “We are the 99%” and the “Occupy Wall Street” crowd are (in theory) protesting against the “1%”. The problem is that these 1 percent make up the people who create and invent new goods and services for people. They are protesting the most productive people around. Societies that lack these people collapse. However, there is another 1% that the protesters SHOULD be protesting. This 1 percent really does live parasitically off the other 99 percent. Who makes up this villainous class? The STATE. Llewellyn H. Rockwell Jr. of the Mises institute has more on this here:
The State Is the 1 Percent
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Cuckoo for Switzerland
I came across this article from the American Enterprise Institute on the success of Switzerland. Switzerland, in my view, is a prime example of the benefits of an English Style, bottom up society. In Switzerland, due to its system of citizen based referenda and it preference of keeping decision making as close to the people as possible, is now one of the most successful countries in the world. Read on to learn more about Switzerland’s success.
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Top Down America – A $500 fine for home bible study?
In my book “Understanding American Exceptionalism ,” I outline how there are two ways to organize any given society. One is the English style, or bottom up, model. Its opposite is the French style, or top down system. What differentiates the two is that the English style places the greatest amount of freedom possible with the people. It puts its faith in the many. The French style, not surprisingly, is directly opposed to this. It places its faith in the wisdom of the few. In top down societies, government officials and bureaucrats make the decisions and impose them on the citizenry.
The story of modern America has been its transition from the world’s ultimate bottom up society to the worlds largest top down nation. Everywhere you look you see power being taken away from people as rules and regulations are imposed from on high by politicians and unelected bureaucrats. The most recent example of this is an Orange Country couple who were threatened with a $500 fine for holding home bible study classes. Read more about this outrageous story here.
When a county thinks it has the power to fine people for holding bible study classes in their own home, something is seriously out of whack. This is top down thinking at its worse and is directly opposed to America’s founding. I’m not sure what the answer to this is, but I suspect it has to do with the reemphasis of private property rights. Trying to take out individual regulations like this is a losing proposition. The regulatory hydra will always grow more heads. Only some kind of systemic change, like re-emphasing private property rights, will slay this beast. What do you think? Any other ideas?
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Budget Cuts vs Tax Increases
How should the United States balance its budget? The Republican view is that Washington has a spending problem, not a revenue problem. This is why they advocate spending cuts over tax increases. The Democratic view, as expressed by President Obama, is that a more balanced approach is needed, meaning tax increases and spending cuts. Whose right? When considering this question it makes sense to look at countries who have successfully balanced their budgets … like Canada. How did Canada bring its bloated budget deficit into line? As Terence Corcoran notes, it was all done with spending cuts, not tax increases. Click here to learn more about the Canadian experience.
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Why The Left Is Skeptical Of American Exceptionalism
Recently, I’ve been thinking a lot about American Exceptionalism and just what it means. In fact, I’ve written a little book on the subject (now available on Kindle, soon to be available in paperback from Amazon 
It can be read in under 2 hours! ). My conclusion is that what made America exceptional was that it was founded as what I call the ultimate bottom up, or English Style, society. This style of governing reserves the greatest amount of sovereignty possible with the individual. This results in a nation of dynamic, resourceful citizens, which is the true foundation for any great nation. America did this on a scale which has never been seen before in human history.
This also explains why you often see such hostility to the idea of American Exceptionalism from the political left. The left is typically hostile to the English style of governing as it prefers what I call the top down, or French style. This style of government puts its faith in the rule of educated elites. It ultimately puts its faith in the few at the expense of the many.
When the left looks at issues that America is facing it believes it knows the solutions, and it wants to impose them on a national level right away. Obamacare is a good example of this. It is a solution imposed from the top. Implicit in doing this is the arrogant assumption that it is the right solution. That you can impose new rules and regulations over 1/6 of the US economy and there will be no unintended consequences.
The English style says whoa, hold on a second. Health care is complicated. It is better to allow the states to experiment in the real world in order to figure out the optimal solution. This is what Romneycare (which is by all accounts is simply Obamacare at the state level) is. If Romneycare is the greatest things ever, other states will begin to copy it. If it isn’t, they won’t. This method is slower but it speaks to the strength of the federal system. It allows experimentation. This is, historically, the truly American way of doing things.
On issue after issue, the left thinks it knows what to do. High speed rail needs to be built, unspecified green jobs need to be created, light bulb needs to be banned. The common thread running through all of these ideas is a disrespect for individual initiative and choice. American exceptionalism, with its bottom up roots, runs completely counter to this. This is why the left dumps on the idea of American exceptionalism at every turn. It prevents them from taking the power and imposing the solutions it wants.
In my book Understanding American Exceptionalism: What it is, how it came to be, and why it’s fading, I go into greater detail on the benefits of bottom up societies vs top down ones. I show how early America was the greatest example of a bottom up society the world has ever seen and why. I then look at the results of this founding and some of the exceptional things America has done as a result. Lastly I point out the reasons why America has been moving away from its bottom up roots to the largest top down society the world has ever seen.
In future posts I’ll be talking more about this, including why I don’t think America can survive as a top down society. Stay tuned!
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The Incredible Shrinking President
One of the things I find most fascinating about the collapsing Obama presidency is how President Obama seems to be literally shrinking before our eyes. Bill McGurn, writing in the Wall Street Journal, has a good article on this. Entitled “The President’s Speech Impediment” he explains why the grander the stage, the smaller Obama comes across.
In the past Obama reveled in giving speeches in grand locations. Campaigning in Berlin or giving a speech in front of false Greek columns, for example. The reason why he was able to get away with this is that his soaring rhetoric seemed to match his glorious surroundings. Now that reality has set in it turns out that Obama isn’t some kind of new or transformational character. In fact, in many ways he’s just a regular Chicago style politician. The substance is not living up to the hope. That’s why he is becoming smaller with every speech he gives. What’s worse is that he doesn’t seem to understand this reality. As Maureen Dowd put it in the New York Times:
Obama is still suffering from the Speech Illusion, the idea that he can come down from the mountain, read from a Teleprompter, cast a magic spell with his words and climb back up the mountain, while we scurry around and do what he proclaimed.
The Speech Illusion is a good way to put it. The illusion of what he promised isn’t matching the reality of what’s he’s done. That’s why he’s shrinking.
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What Obama Can Learn From Gilligan’s Island
If you take an Economics 101 class in college at some point you are going to encounter what is called “Crusoe Economics”. Crusoe economics teaches basic economic principles by creating a very simple economy, one in which there is only one actor, namely Robinson Crusoe. With President Obama planning a major jobs speech in the upcoming week it got me to thinking what he could learn from such a simple economy. It seems to me that Obama’s economic team could use some help on basic economic principles, as everything he’s tried so far hasn’t really worked out. Having never read Robinson Crusoe, however, I will use another group of famous castaways that I (and I bet, Obama as well) is very familiar with. Namely, Gilligan’s Island.
Imagine we drop Obama right into the middle of Gilligan’s Island. Right away he’s faced with an enormous unemployment problem. In fact, unemployment is at 100%. At the moment, everyone is just standing around. What can Obama do?
Consulting his Keynesian economic playbook, he immediately sees the need for an economic stimulus plan. But how can he do this? He has no money, as government has no money of its own. Thinking quickly, he quickly taxes the Skipper by literally taking the shirt of his back. In an act of even greater Harvard cleverness, he decides to create a “Green Job”. He hires Mary Ann to create a flag for the island made from the Skipper’s shirt. Mary Ann gets to work and at least temporally the unemployment rate drops. But very quickly the job is done and the environmentally friendly flag is hoisted. Obama looks around to see what the results from his actions are, and realizes things are actually worse off than before. The flag, although it looks nice, doesn’t really help anyone. What’s worse though is that everyone is now eyeing him suspiciously, worried Obama may try and steal the shirt from their back! And this doesn’t even mention the fact that the Skipper is now walking around shirtless, which isn’t pleasant for anyone.
Undaunted, Obama thinks back through his multi million dollar education and decides that what the island needs is some regulation. Promising to pay him next week, he hires Gilligan to be the islands first environmental inspector. Flush with his new and unspecified authority, Gilligan starts to harass the Professor, who has been trying to turn the radio into a transmitter. Gilligan has no idea what the Professor is trying to do, so he makes a series of arbitrary rules and attempts to impose them. The Professor, who is having a tough enough time turning the radio into a transmitter, just gives up.
With new regulations not helping, Obama hits on a new plan. He need to increase taxes on the wealthy! And whose wealthier than the Howell’s! Everyone knows they brought great amount of cash on the 3 hour tour, for some reason. He starts to give speech after speech telling the rest of the castaways how he plans to impose taxes on millionaires and billionaires. The result? The Howell’s didn’t become rich by being dumb. They can see where this is headed. When no one is looking they decide to hide their wealth near the cave at the back of the island. Whatever wealth they do have is now unavailable to the castaways.
Obama is exasperated. He’s tried everything he knows how to do and yet the island’s unemployment rate remains stubbornly stuck at 100%. He walk forlornly to the shade of one of the many coconut trees on the island and sits down. What can he do?
And that’s when the miracle happens.
Free from his hectoring, the castaways get to work. Gilligan goes to the lagoon and starts fishing. The Skipper starts to gather the material needed for new huts. Ginger and Mary Ann start to gather coconuts in order to make coconut pies. The Professor gets back to work fixing the radio with the hope of turning it into a transmitter. The Howell’s, not really being the manual labor type, get their money from the cave and hire others to do little tasks for them. Very quickly, the island has gone from 100% unemployment to a booming economy.
From under his coconut tree Obama rubs his eyes in disbelief. How is this possible? When he tried to direct people everything fell apart. But now, left to their own devices and without his meddling, things are humming.
And that’s the lesson that Gilligan’s Island economics presents for Team Obama.
Strip everything away, what is the prime mover that actually gets an economy going? Anything the government does can only be done if it first takes away from someone else. The government, or Obama, in this little tale, is never a wealth generator. Wealth is only generated when someone you’ve never met or even heard of decides to create a product or service that someone else is willing to pay for. To the extent that a government helps this or hinders this goes a long way in determining how well an economy does, whether on Gilligan’s Island, or a nation as a whole. Politicians like to put on a grand show like the mighty Wizard of Oz, proclaiming how their policies are indispensable to the nation’s well being. In reality, though, this is a sideshow put on for the sole purpose of getting elected. When it comes to real wealth creation, governments have very little to do with it at all.
Top Down vs Bottom Up Thinking – The EPA
An article on new EPA recently caught my eye, as I think it nicely demonstrates how the top down governing style operates vs the bottom up method.
The Washington Post article by Ezra Klein discusses how the EPA is about to pass a whole host of new regulations which may result in many coal powered power plants from being shut down. As you might imagine, industry groups say it is going to be a disaster, whereas the EPA says everything is going to be fine.
Ezra also points out that the nonpartisan Congressional Research Service is highly skeptical of any “train wreck” predictions.
Whose right?
The top down (or French style) style places its faith in experts such as the CRS in deciding questions like this. It sees no problem in imposing regulations nationwide in one swoop.
The bottom up (or English style) assumes it doesn’t have all of the information before it. Any guesses it makes as to the impact of such a decision are just that, guesses. The bottom up way to deal with this decision is to not make it at all at the national level. In the America this means individual states should be allowed to pass regulations such as this as they see fit. This is the way you test ideas and get a real sense as to the value of said regulations. If state A passes it and everything is great and real benefits can be seen, other states will follow. If it doesn’t work out, obviously, other states won’t.
The bottom up style, by assuming it doesn’t know everything, is much more willing to test things in the real world. The top down style relies on theories and guesstimates, and is not nearly so concerned with the results. Whatever happens, the top down bureaucrats are usually too busy planning their next big idea to be bothered with looking at the past results of their previous plans.
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A Quote I’m Sure Mark Steyn Would Agree With
Currently I’m working my way through Mark Steyn‘s “After America”. On another blog (The Hyacinth Girl) I found this great quote from Malcolm Muggeridge. I think it encapsulates what we’ve been doing to ourselves across the western world quite nicely. I’m sure Steyn would agree with his sentiments whole heartedly.
”So the final conclusion would seem to be that whereas other civilizations had been brought down by attacks of barbarians from without, ours had the unique distinction of training its own destroyers at its own educational institutions and providing them with facilities for propagating their destructive ideology far and wide, all at the public expense. Thus did Western man decide to abolish himself, creating his own boredom out of his own affluence, his own vulnerability out of his own strength, his own impotence out of his own erotomania; himself blowing the trumpet that brought the walls of his own city tumbling down. And having convinced himself that he was too numerous, labored with pill and scalpel and syringe to make himself fewer, until at last, having educated himself into imbecility and polluted and drugged himself into stupefaction, he keeled over, a weary, battered old brontosaurus, and became extinct.”
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Obama: The Hollow Colossus
It’s amusing to me to read and watch as lefties discover just what an empty shell Obama really is.
Here’s Cenk Uygur from the Huffington Post
Jennifer Rubin, a rightie, provides much the same analysis from a different perspective.
Here’s Jennifer Rubin’s take from the Washington Post
In the end what they’ll all realizing is what I’ve thought from the beginning. With no record of accomplishment Obama was able to present himself as being all things to all people. Voters could project their wants and desires onto him, seeing whatever they wanted to see. This has been the secret of Obama’s whole career. Doing nothing as he wafted up like a feather to ever higher positions. This, of course, has all come to a crashing halt. You can’t vote “present” when your president.
