You Can’t Deny that Venezuela Is a Socialist Calamity by Steven Horwitz

As Venezuela descends into a nightmare of starvation and violence, the long-standing debate over the feasibility of socialism takes on new relevance. Years of explicitly socialist policies from the Chavez and Maduro regimes have taken their toll, as nationalization and a variety of other attempts to abolish or subvert market processes have destroyed what was once one of South America’s richest countries.

Even with the wealth of their oil reserves, redistribution and price controls have brought production, and therefore consumption, to a halt. Once they exported grain to the rest of the world, now they can’t even feed their own people.

Who Is at Fault?

This humanitarian disaster has raised the question of who or what to blame. That question puts self-proclaimed socialists and their progressive sympathizers in a difficult spot. After all, one can easily find lots of examples (from Michael Moore to Bernie Sanders) of people on the left praising or endorsing Chavez’s economic policies. So what can people who took that position say in the face of this disaster? And what can the defenders of free enterprise say as well?

Many on the left will start by denying that socialism is at fault. Sometimes they’ll deny that the Chavez-Maduro policies were “real” socialism. In other cases, they’ll argue that while their intentions might have been good, corruption and poor implementation doomed good policies to failure.

Both of these arguments have real problems.

If those policies were not “real” socialism, then why did so many sympathetic to socialism express so much support for them and argue that they would be transformative in ways socialists value? Chavez himself made such claims.

Do all of them not understand what socialism is? The variety of attempts Chavez made to prevent markets and prices from working and to substitute some form of economic planning in the name of the people have been broadly consistent with socialism since Marx. If that’s not socialism, what exactly is meant by that word anymore?

Real Socialism

For many on the left, the answer to the last question is “the Scandinavian countries.” The problem, however, is that the Scandinavian countries have, by some measures, freer markets than the US, which the left sees as the archetype of capitalism. At the very least, they are not significantly different from the US in their degree of economic freedom.

Historically, socialism has broadly been defined as the elimination of the private ownership of the means of production and the substitution of common or public ownership and economic planning for what Marx called the “anarchy of production” of the market.

Doing away with private ownership, exchange, prices, and profits would, in Marx’s view, end the alienation, exploitation, and crises that characterized capitalism. In addition, rationalizing production through planning, rather than leaving matters to the trial and error method of the market, would eliminate waste and bring on a burst of productivity that would enrich us all.

Abolishing markets does not describe the Scandinavian countries, though it does capture a lot of what was going on in Venezuela. Socialism, at least historically, did not simply mean “a large welfare state” as we see in Scandinavia. In fact, the only way countries can afford larger welfare states is to have economies productive enough to produce the wealth that can be taxed away to support such programs. This is why the Scandinavian countries deregulated (and lowered tax rates) so much in the last decade or two: only through freer markets could they afford their transfer programs.

If you love the Scandinavian model, you don’t love socialism. You love market capitalism, because that’s what makes that model possible. (Whether large welfare states are necessary or desirable is a matter for another column.)

What of the argument that well-intentioned policies were frustrated by corruption and poor implementation? The problem here is that this seems to happen every time socialism has been tried. The Bolsheviks began to implement Marxian socialism within a year of taking power and a decade later they had Stalinism. Cuba quickly turned to a dictatorship. China. North Korea. The list goes on. At what point are these not all coincidences?

Every. Single. Time.

Economists have long understood the dynamic at work here. Marx and other socialists thought that those in charge of the planning process, and for Marx that was the whole community, could rationally determine what to produce and how best to produce it in the absence of markets, exchange, and prices. Since Mises’s famous essay in 1920, however, we have known that doing so is not possible.

Genuine market prices are necessary for people be able to make determinations of value in anything larger than a household. Without prices, there is no way to know, not just what people value but (more importantly) how to make what they value using the least valuable resources possible.

In other words, rational production decisions are impossible without market prices, and market prices can’t exist without exchange and therefore there has to be private ownership, especially of the means of production.

Markets are like weeds in that they will grow in the cracks left by the failures of planning.

But what happens when those given the power to make such decisions realize they cannot achieve their perhaps well-intentioned goals? The power does not go away. More often than not, the first reaction is precisely what we’ve seen in Venezuela: crack down harder on producers for not living up to impossible demands and ration goods to punish consumers for “hoarding.” And when that doesn’t work, go to more draconian authoritarianism, and do whatever it takes to hold on to power.

After a while, these exercises of brute power have consequences. They attract those with a comparative advantage in exercising such power (and perhaps those who have a high consumption value for doing so) into positions of power. Marxism is not Stalinism, but the inability of Marxian socialism to live up to its promises creates the conditions that make Stalinism possible and likely. In other words, Stalinism is an unintended consequence of Marxian socialism.

In addition, as state control becomes more clearly ineffective, people start to work around it by establishing distorted forms of market exchange. Bribery of politicians and bureaucrats, threats to producers, cronyism, and nepotism all become the ways of getting things done. Scarce resources have to be allocated somehow, and markets are like weeds in that they will grow in the cracks left by the failures of planning.

Intellectual Negligence

To the outside world, corruption and poor implementation caused socialism to fail. But that gets matters completely backward: corruption and ineffective political actors are not the cause of socialism’s failure, but a result of that failure. When you make real markets illegal and when your attempts at planning inevitably fail, what you get is the bribery and corruption of black markets. Once again, these are not what Marxism intends, but they are an inevitable unintended consequence.

So what does this say about those who supported the policies of Chavez and Maduro? It’s easy to say that they are evil for wishing starvation and destruction on the Venezuelan people, but I think that’s too easy. I do believe that many who supported those policies genuinely believed they would have good results. In that sense, they did not act immorally.

However, they are guilty of a severe intellectual error that has real moral consequences. Though they may not have intended the humanitarian disaster that we now see, they do bear responsibility for not being aware of the long-standing criticisms of socialism that have given us reasons to expect such a disaster.

Our friends on the left who supported Chavez’s policies are by and large not guilty of the intentional evil we broadly call “vice.” What they are guilty of is something more like intellectual “negligence.” They didn’t mean “that” in the case of Venezuela, but there’s no doubt that they should have known better.

Those of us who understand the power of markets to improve the lives of all of us won’t be very effective in persuading others of that truth if we write off those sympathetic to socialism as evil-doers. It’s better to engage them gently and intellectually, and offer them an alternative narrative, than to write them off as irredeemable.

Moral condemnation ends productive dialogue – offering an alternative narrative can start it. The human cost of socialism is too high to not engage those sympathetic to it in the most effective ways possible.

Steven Horwitz

Steven Horwitz is the Schnatter Distinguished Professor of Free Enterprise in the Department of Economics at Ball State University, where he also is a Fellow at the John H. Schnatter Institute for Entrepreneurship and Free Enterprise. He is the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions and is a Distinguished Fellow at FEE and a member of the FEE Faculty Network.

Gay Effort to Reintroduce Slavery in the South Fails

Blaine Adamson

Blaine Adamson is the owner of a T-shirt shop in Frankfort, Kentucky, Hands On Originals. He is also a sincerely devoted follower of Jesus Christ. So naturally when he was approached in 2012 by a local homosexual activist group to print a shirt promoting The Lexington “Pride” Festival, he politely declined, and courteously referred them to a nearby shop who would be happy to provide the service.

In fact, a quick look at the Frankfort area Yellow Pages lists no less than 21 different businesses which cater to the T-shirt printing crowd, so there was simply no need for Adamson to be forced under the threat of fines and worse to do a job which would have caused him to violate his conscience. Plus, the gay activists wound up getting their shirts for free from another vendor.

But for politely exercising his First Amendment right to the free exercise of religion, Adamson was promptly sued. His case finally made it to the Court of Appeals in Kentucky.  (The Court of Appeals is one step below the state supreme court). In a surprising move, given the almost total obeisance of judges to the bullies and bigots of the homosexual lobby, the court actually ruled in favor of religious liberty and freedom of speech.

The opinion, written by Chief Judge Joy Kramer, pointed out that Adamson had not been guilty of discrimination at all. There is no evidence, she wrote, that Hands On Originals had “refused any individual the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and accommodations it offered to everyone else because the individual in question had a specific sexual orientation or gender identity” (emphasis in original). In fact, Adamson has routinely done business with members of the LGBT community and even employs them.

The issue, in other words, was not about sexual orientation at all but about speech. It was about whether an American can be compelled by government force to communicate a message which violates his conscience and deeply held religious belief.

Section 5 of the Kentucky constitution is quite clear, unambiguous, and emphatic on the issue (emphasis mine):

“[T]he civil rights, privileges or capacities of no person shall be taken away, or in anywise diminished or enlarged, on account of his belief or disbelief of any religious tenet, dogma or teaching. No human authority shall, in any case whatever, control or interfere with the rights of conscience.”

As further proof that the issue for Adamson is one of conscience and religious scruple, and not an expression of some kind of hate-filled homophobia, he has also declined to print T-Shirts that use the word “b**ches” or that featured Jesus dressed as a pirate.

What should not be missed here is that there are two larger issues involved, as lesbian writer Tammy Bruce pointed out some time ago. For the government to force someone to do work that violates his conscience is nothing less than tyranny. And for a man to be compelled under threat of punishment to perform work against his will is slavery.

The reality is that the LGBT lobby is the reincarnation of some of the worst elements of the mindless prejudice of the Old South in its irrational venom toward people (Christians) who are not like them. The rainbow flag is the new Confederate flag. It is as much a symbol of bigotry as that flag ever was in the minds of the left.

Bottom line: in Frankfort, Kentucky, homosexual activists tried to reintroduce slavery to the Deep South. They failed in the attempt. And the Constitution’s protections for religious liberty and freedom of speech were upheld. Let’s pray that this court will be just the first of many to protect our first freedom against the tyranny of the left.

Poland Continues Its Rise from the Ashes of Communism by Daniel J. Mitchell

Earlier today, I gave a speech about populism and capitalism at the Free Market Road Show in Thessaloniki, Greece.

But I’m not writing about my speech (read this and this if you want to get an idea of what I said about American policy under Trump). Instead, I want to share some remarkable data from a presentation by Ewa Balcerowicz of Poland’s Center for Social and Economic Research.

She talked about “The Post Socialist Transition in Poland in a Comparative Perspective” and showed that Poland and Spain had similar living standards after World War II. But over the next 40 years, thanks to the brutal communist system imposed by the Soviet Union, Poland fell far behind.

But look what has happened over the past 25 years.

Per-capita GDP has skyrocketed in Poland and the gap between the two nations has dramatically narrowed.

So why is Poland now rising relative to Spain?

For the simple reason that public policy has moved in the right direction. Here’s the data from Economic Freedom of the World, comparing Poland’s score in 1990 and today. Poland has jumped from 3.54 to 7.42, and the nation has jumped from a dismal ranking of #104 to a respectable ranking of #40.

By the way, Spain’s score also has increased, but by a much smaller amount. And because the world has become more free, Spain’s ranking has dropped. Indeed, Spain now ranks below Poland.

Which means that we shouldn’t be surprised if per-capita GDP in Poland soon jumps to about Spanish levels.

Just as Poland has out-paced Ukraine because it has better policy.

Here are additional examples showing the long-run benefits of pro-market policy.

And here’s a must-watch video on the relationship between good policy and better economics performance.

All of which helps to explain why I’m so disappointed in both Bush and Obama. Their statist policies have caused a drop in America’s score and relative ranking.

Reprinted from International Liberty.

Daniel J. Mitchell

Daniel J. Mitchell

Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

EDITORS NOTE: Get trained for success by leading entrepreneurs.  Learn more at FEEcon.org

EXPLAINED: The Spectacular Failure of Socialism

“The problem with socialism is that you eventually run out of other people’s money.” – Margaret Thatcher

In full deference to the Iron Lady, that’s not the only problem. That is a functional reality that dooms socialism in action. But at its core, socialism is a violation of elemental human nature that desires to build, innovate, expand and improve life — the same nature that drives parents to be always working towards a better future for their children.

Socialism denies that elemental nature and so not only dooms itself to eventual self-destruction, but creates enormous misery enroute. This has been demonstrated in every country where it has been substantially put in place, from the Soviet Union to Cuba to Vietnam to Venezuela.

Yet for many — from college campuses to Reddit to a recent major presidential candidate — socialism still holds a dreamy-eyed allure. They passionately to angrily believe the world would be dramatically better if socialism supplanted capitalism. This defies not only human nature, but also all historical experience. And yet it persists at amazing levels.

So let’s start with defining socialism, no small task really.

“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” — Winston Churchill

Socialist ideology defined

Wikipedia has a fair if somewhat dry definition of socialism, summarized as being a range of economic and social systems characterised by social ownership and control of every aspect of production. Social ownership includes public, collective, or cooperative ownership.

Means of production is the key. The means of production is essentially anything that is not human that is part of an economy. In socialism, the means of producing everything are in the hands of the “everyone.” There are no individual property rights, there is no individual ownership. Everything is owned by the collective, the hive, an economic Star Trek Borg 100 percent antithetical to the founders and the Constitution.

Socialism grew out of pre-Marxist ideologies that saw the inherent problems with feudalism. But it’s popularity exploded with Karl Marx and others as the industrial revolution took hold in the 1800s and abuses of the low-end labor pool grew exponentially at the same time wealth did. Socialism was a response to that by upending the entire system.

People power. But not person power.

Merriam-Webster defines socialism as “any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.” Google defines socialism as “a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.”

“Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.” Alexis de Tocqueville

What it looks like in reality

The Russian Revolution of 1917 led to the largest experiment in socialism. The doey-eyed utopianism of Trotsky led to the authoritarianism of Lenin which led to the brutal tyranny of Stalin and the soul-crushing Communist Soviet Union.

That story is pretty well known but also a well-worn path for every socialist experiment, albeit it was on maybe the largest scale.

Cuba was the people’s revolution heralding in a communistic state that was ruled with an iron fist by Fidel Castro, just as Stalin, Khrushchev and the rest did in the Soviet Union. That was a thriving little island economically, but it was not hugely free and it was not a democracy. The income disparities and relative poverty in large swaths fueled Castro’s form of socialism and people followed him.

Venezuela is the most recent example. Due to its oil wealth, Venezuela had the highest per capita GDP in South America in 2005. It had not been well run and was fairly corrupt and incompetent at the government level. But it was still the best and richest in South America — a continent known for corruption and incompetence in government.

In 2005, President Hugo Chavez took the country in a deep socialist direction. He began nationalizing industries such as oil companies and the media — natural steps for socialism — and started transferring large sums to the poor. The results are truly epic. Venezuela now has a totally collapsed economy with starvation and the lack of basic infrastructure becoming more common. A failure on an amazing level.

In an explanation of Venezuela’s collapse, Bloomberg noted:

“The last years of Chavez — he died of cancer in 2013 — and the first under his handpicked successor Nicolas Maduro have been a time of unparalleled fiscal profligacy.”

But that is always the case in socialism. Massive government debt driven by a declining economy — a common side effect of socialism — and huge welfare spending generated hyper-inflation has made the country the poorest in South America. In eight years it went from the richest to the poorest by pivoting sharply to socialism.

“Socialism only works in two places: Heaven where they don’t need it and hell where they already have it.” Ronald Reagan

Capitalism’s inequality “problem”

Capitalism is duty-bound to create inequality in wealth. Some people are just great at making money. Some are great at making things. Some are clever and some are lucky. Those generally do very well in capitalism. Many others are simply hard workers and they often do well, though in more of a middle class sort of way.

Other people are bad at making money and worse at money management. Others are not clever and some are unlucky. Some are just lazy. These all do relatively poorly in capitalism.

Relatively.

The question is whether inequalities are bad if all or most boats are being lifted, just some lifted higher than others. In the United States, the poorest 10 percent of people are better off than the richest 10 percent in any third world or developing nation. But Forbes points out an Economist chart that shows that America’s poor are better off than most of Europe’s poor, including better off than in far more socialist countries such as Germany, France, Great Britain and Italy.

This is worth noting because those are considered social democratic nations, where they have heavy socialist programs but retained some capitalistic free markets, too. They are often heralded as examples for America to follow. Seems like the trade-off of inequality is worth it for the poor — unless envy trumps quality of life.

China is the largest socialist/communist country and struggled with universal poverty for decades after its revolution. But as it instituted capitalism’s free market reforms beginning in the 1980s — while retaining its authoritarianism, and socialist structure in name anyway — China’s economy began booming and is now second only to the United States. Capitalism did that. But it also created the inevitable inequalities.

Vietnam became socialist/communist after the Vietnam War. The country was already a disaster from the long war, but socialism provided no means for pulling it out. In recent years, the leadership has instituted more capitalist-based market reforms, a la China. That has begun creating more wealth for the country, but it is mostly flowing into a few hands — starting with those most connected to government leadership.

So capitalism works everywhere to generate more wealth. But it will always be unequal. Socialism equalizes, but does so by making everyone but those in charge poorer.

“Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.” Thomas Sowell

What it might look like in America

Long food lines in Venezuela.

What happened in Venezuela is instructive, because it is similar to Cuba and even the Soviet Union, although every situation will have its unique dynamics.

In a hint of what socialism would look like in the United States, Democratic presidential candidate Sen. Bernie Sanders, undoubtedly the most well-known American socialist, laid out his initial steps for making America more socialist. During the 2016 campaign, Sanders promised $15 trillion to pay for a Single-Payer Healthcare program, expand Social Security and make tuition free at all public universities.

To pay for it — and this is where Thatcher is just so right — Sanders would dramatically increase taxes by trillions of dollars. In fact, he expected tax increases to pay for all of the nationalized healthcare plan. That’s just taking other people’s money on a more massive scale.

Sanders’ proposals were only a small step toward full-blown utopian socialism. A totally predictable outcome would be that the high taxes would start slowing the economy, necessitating more tax increases, which would further slow the economy. You see the spiral.

The tax increases would never keep up with the expenses being run up in national healthcare, free college, expanded Social Security and the host of further steps that would ultimately be taken. The United States would not be immune to the immutable laws of economics and human nature. Eventually, we would succumb as has every other nation.

Socialism is a siren song to the idealistic, the frustrated and the naive. But it is a fool’s errand.

Socialism’s end is the proverbial pack of wolves and a sheep deciding what’s for dinner. There is a new sheep member each dinner until there are no more sheep, and the wolves starve.

And you have Venezuela. Or Cuba. Or Vietnam. Or the Soviet Union.

EDITORS NOTE: This column originally appeared in The Revolutionary Act.

The High Cost of Not Owning Your Healthcare by Rachel Mills

You either pay in dollars or control. And loss of autonomy in your own healthcare decisions can be much more expensive.

For example, I have excellent teeth, thanks to my dad and his excellent teeth genes. However, even though I have no particularly bad dentist stories to tell, I am terrified of the dentist. I can only attribute this to the ‘fear of the unknown’ factor. I have no better explanation.During my “Year of Adulting” last year I had my first checkup in about 8 years and two small cavities were found. I had them filled last week and was very afraid. Facebook assured me beforehand that the survival rate for these procedures is pretty high. Afterwards, I proudly proclaimed on Facebook that I had voluntarily gone to the dentist to have a procedure done.

Voluntarily?

Someone inquired. What other way is there to go?

Ohhhhh, dear sir! Involuntarily, as per when I was a child. Our mother took us kids dutifully for checkups on the regular! Every second of that was involuntary, I assure you. My mother had my best interests at heart, but she was calling the shots and paying the bills and cries to CPS about forced dental visits fell on deaf ears, so I said “ahhhhh” and went to my happy place and hoped nothing horrible would happen to me.

It almost did.

At 16, I still had a stubborn baby tooth that hadn’t dislodged itself yet and the dentist proclaimed braces and head gear were in order to bring the adult tooth down. Mom opted for a more conservative approach as she saw large tears coursing down my angsty teenage face (and, being a frugal woman, wondering what all that could possibly cost) and viola! In a few months, after a mere extraction, the adult tooth made its appearance, no embarrassing, expensive headgear required.Bullet dodged, thanks to my mother listening to either/both the concerns of weeping teenage daughter and/or her own pocketbook.

Walk Away

But it was kind of a relief to remind myself in the chair last week that I could leave the dentist office at any time. I can walk right out of there untreated at basically any point. Or I could go through with it. I could even opt for tooth whitening if I am having a particularly nice time.

The bill comes to me. I call the shots. I am in control.

I could get treatment. Or not. It felt reassuring. And that’s the point. He who pays the piper calls the tune. When my mother was in charge, that was one thing. She was truly concerned with my long term well-being.

Government Loves You Not

When you ask or force some other entity that doesn’t love you to pay for your healthcare (or education for that matter) for how long will you suffer under the illusion that you also retain control or that decisions made for you are truly in your best interest?

Put a large layer of bureaucracy between you and your doctor and what do you imagine you might get?

I promise you it won’t be more control.

Health insurance companies routinely deny this or that course of treatment, for whatever reason and they largely get their way. They are paying the piper.

He who pays the bills will always preeminently care about smaller bills. I just don’t know how you get around that. Only you’re slathering on an additional thick, thick layer of bureaucrats into the mix who need specialized knowledge of how to deny claims and fight court battles and they don’t come cheap. Instead of paying medical bills, you’ll be paying them.

If what you want is healthcare, be the one paying the doctor, as directly as possible. If what you want is denial of treatment, give as much of the money that should go to your doctors as possible to entities that deny treatments. It is basically as simple as that, in the long run.

Do you have a right to healthcare?

Does the doctor have a right to work and make a living at a wage commensurate with the time and money spent on the necessary education?

Here is what you have a right to:

You have a right to see the doctor. But the doctor is also not your slave. Neither is he/she your slave by proxy.

When you argue that everyone else should shoulder your healthcare costs and/or for doctors to be forced to serve you, think about what you are advocating.

You are advocating for people charged with controlling costs (denying healthcare) to be in charge of healthcare.

You are advocating for an unsustainable system in which the financial burden of years of expensive medical training can never be recovered. In other words: You are arguing for a doctor shortage. And long waits instead of large bills. You pay one way or the other.You are arguing for the stable and lucrative employment of faceless bureaucrats whose measure of success will very probably not be how healthy you are but how much they saved the system in payouts. (You can see how there might be a conflict there.)

In short, you are not advocating for your own health.

We need other solutions. The “health insurance” model as a whole is failing.

A Real Market

Here’s an idea: How about payment plans? You can negotiate these with the hospital already and often for very reduced rates. If healthcare is so exorbitantly expensive, how about saving money on all these middle men, and only using insurance for major medical events like accidents and cancer? Anything under 6 figures, you could just pay directly to the doctor/hospital in installments?

But that is currently illegal as of the ACA. That model was actually insurance. What we call health insurance now is nothing of the sort. It is some kind of paperwork producing bureaucratic jobs program that makes the “health insurance” industry about 10 times bigger than it needs to be.

I don’t know about you, but as a grown adult myself, I take comfort in owning my own healthcare decisions as much as I can. And if I could legally own even more of them in the form of a cheaper major medical insurance plan instead of what has been forced down our throats by Obama, and now his successor, I would.

Rachel Mills

racial millsRachel served as Ron Paul’s communications director on Capitol Hill for 5 years. She is now a freelance-from-home wife and mom who writes extensively about gold and financial markets and occasionally consults on political campaigns, most recently for Sean Haugh for US Senate.

EDITORS NOTE: Get trained for success by leading entrepreneurs. Learn more at FEEcon.org

Temporary refugees taking jobs from Americans sent $1.3 billion back to Haiti in 2015

Steve Forester

Steve Forester

At first I didn’t think they were going to get to the crux of the matter when Tucker Carlson last night grilled Steve Forester, an attorney for the Institute for Justice and Democracy in Haiti, about the upcoming Trump decision about whether to extend Temporary Protected Status (TPS) for Haiti (we mentioned it here the other day).

At first they beat around the bush on whether there were any criminals in the Haitian population living legally (temporarily!) in the US, but with continued questioning Forester finally mentioned the ‘R-word’—remittances!

The 50,000 or so Haitians who got in to the US (mostly illegally) prior to the earthquake of 2010 were given a temporary amnesty to stay and work in America and according to Forester in 2015 alone sent $1.3 billion American dollars back to their home country.  That money is propping up Haiti and Forester says the country will be destabilized if those ‘temporary’ legal workers are returned to Haiti!

However, the question I have is: so what about the fact that that money is now lost to the US economy? And are those Haitian workers taking jobs Americans can do (or legal refugees might do).

You know I mostly write about the UN/US Refugee Admissions Program where of course refugees are also sending billions ‘home,’ but it’s important for you to know about the many other programs for legal immigration, like TPS and the ‘Diversity Visa Lottery’ I told you about here the other day.

Disney wants the Haitian workers!

Forester told Tucker there were 50,000 Haitians here enjoying temporary protected status and have been here 7-15 years. I think Forester completely lost the audience (and Tucker) when he got to his final argument—Disney would lose 500 workers if TPS is not extended—instead of continuing his ‘humanitarian’ shtick.

Tucker commented that maybe Disney would have to pay higher wages to hire new (American) workers!

Watch the whole interview starting at 22:49 and ending at around 28:43.  You might want to watch the segment prior to the Haiti piece about how Mexicans aren’t too happy with all the Central Americans parked in their country who are no longer headed to the US border!

I have a category on Haiti here, with 56 previous posts!

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On this Europe Day, Let’s Oppose the EU for the Right Reasons by Bill Wirtz

The 9th of May is supposed to mark a celebratory day for the European Union, congratulating itself for peace and unity in Europe. On May 9th 1950, Robert Schuman, then Foreign minister of France, set out his so-called Schuman Plan, which suggested that Germany and France should ease the sharing of strategic resources like coal in order to make a war between the two countries virtually impossible. This policy led to the European Community on Coal and Steel: a forerunner in the creation of what would become the European Union in the early 1990’s.

While the EU might celebrate the legacy of Robert Schuman’s free trade advocacy, its political structure has degenerated into something far more invasive than the mere easement of political dialogue. It actively combats the free market. For instance, the EU constantly considers tax harmonisation and over-regulates people’s personal habits (the EU recently introduced heavy regulation regarding e-cigarettes).

While trade barriers inside the EU have been abolished, the EU acts like a protectionist block when it comes to non-EU members: it subsidises European farmers, sets very high food standards (which keep African goods off the market) and imposes import taxes.

Anglo-Saxon Euroscepticism

“Only a fourth of all Brexit voters support UKIP”, said the conservative Member of the European Parliament (MEP) Daniel Hannan in a speech in Strasbourg last July. And indeed, while public perception of the European continent classifies many Brexit fans as anti-immigration and, all too often, as racists and bigots, there is a genuine Anglo-Saxon euroscepticism out there, which relies on the following principles:

  • Localism (the belief that the policymakers should be as close to citizens as possible, so that many important decisions should actually be taken on the local level),
  • Small government (a palpable scepticism towards big government and its tendency to constantly grow), and
  • Free markets (the opposition to government interfering in prices and interactions on the labour market).

These principles, while sometimes forgotten by certain governments, have been engrained in the Anglo-Saxon spirit for a long time and they have driven the Brexit spirit. Without the British small-government opposition to the EU, Brexit never would have happened. In fact, by illustrating that the union has lost its free trade roots (and become a poster child for social democracy), Brexiteers should be an inspiration to the political personnel in Brussels.

Don’t Be that Populist

Meanwhile, the eurosceptic movement, including that inside the liberty movement, has been infested with a different kind of opposition to the Brussels bureaucracy. These members of the new political right are not allies to the liberty movement, as they reject the EU for the one reason: they believe that the immigration that the EU allows for is to the detriment of the European culture.

We could point out that the European Union’s immigration policy guides movement inside of its own borders, while immigration from outside is left up to its member states, but, more important than setting the facts straight, we need to address one important point: The enemies of our enemies aren’t our friends.

When we shout ‘power to the people’ we defend individualism, the power of the people to govern themselves, not the power of the people to bully their neighbours, even if they have different reasons than those who are already in charge. We may agree with advocates of different political agendas, but let us not forget what their motivations are.

Europe Day is a day when we should remind officials in Brussels that the EU was a project of mutual cooperation, not that of crushing regulation, instead of burning the EU flag in an attempt to gain attention.

If the European Union does fail in the end, it will need advocates of small government and free markets to replace the void with liberty, not nationalists who wish to replace the EU with another brand of big government.

Lovers of liberty, in the United Kingdom or abroad, need to understand that we don’t oppose the European Union because we are contrarians, or because we enjoy the rush of being the negating viewpoint, but because our belief in small government is sincere. International organisations should not have the vast power to interfere in the life of individuals.

And neither should anyone else.

Bill Wirtz

Bill Wirtz

Bill Wirtz

Bill Wirtz studies French Law at the University of Lorraine in Nancy, France.

Useful Idiots: American Workers Protesting Trump’s Immigration Policies

The first day of May is also known as “May Day” a day that brings out demonstrators around the world to ostensibly support workers around the world.

On May 1, 2017 supposedly pro-labor demonstrations were carried out around the United States purportedly to defend workers’ rights, wages and working conditions.  In some instances the May Day demonstrations became “Mayhem” demonstrations with participants rioting and destroying property.

Incredibly, in addition to demanding better wages and working conditions, these same demonstrators and rioters demanded an end to the Trump administration’s immigration policies and efforts to effectively and fairly enforce our immigration laws.

In point of fact, President Trump’s immigration policies are pro-labor and pro-American.

The demonstrators apparently don’t understand the principle of “Supply and Demand” and that flooding the labor pool with millions of foreign workers suppresses wages and working conditions and also results in American and lawful immigrant workers being displaced by foreign workers.

cair seiu logosToday all too many Americans have fallen victim to the massive fraud campaign that has been foisted on Americans by politicians and a laundry list of special interest groups including the U.S. Chamber of Commerce and labor unions such as the SEIU (Service Employees International Union). that are literally and figuratively “making out like bandits” by exploiting the immigration system.

These unions are betraying America and their members, seeking to flood America with foreign workers whom they seek to enroll as dues paying members.  More members provides unions with more political leverage and more money in the form of dues.

As for the notion that “immigrants” need protection from federal immigration law enforcement personnel is utterly fatuous and is part and parcel of the Orwellian Newspeak tactic of the open-borders / immigration anarchists begun when President Jimmy Carter insisted that illegal aliens be referred to as “undocumented immigrants.”

Demanding protection for immigrants is not unlike the rhetoric of President George W. Bush who attempted to create a Guest Worker Amnesty program for illegal aliens to provide them with lawful status.  Back then I said that Bush’s offer to make immigrants legal was as absurd as offering to make water wet.

Water is already wet and immigrants are already legal.

Simply stated, Bush wanted to legalize illegal aliens through an amnesty program even though he knew that the Reagan amnesty that was an integral part of the Immigration Reform and Control Act of 1986 was a disaster that ultimately led to the greatest influx of illegal aliens in the history of the United States.

Today President Trump’s immigration policies which stand out in stark contrast to the policies of Both Presidents George W. Bush and Barack Obama, employers are whining that they have to “resort” to hiring Americans.

Under our immigration laws Americans are supposed to get first crack at jobs and not be the employees of last resort.

By now most Americans have heard about the H-1B Visa Program that enables highly skilled nonimmigrant workers to be employed in the United States.  Another category of temporary work visa is the H-2B visa for Temporary Non-Agricultural Workers.

These visas are issued to aliens to work at non-agricultural jobs such as cooks, waiters/waitresses and hotel workers provided that these foreign workers don’t displace American workers or harm the wages and working conditions of Americans who are similarly employed.

On April 28, 2017 the Bangor Daily News reported, Amid foreign worker shortage, Bar Harbor businesses turn to local labor.

Consider this excerpt from the article:

“There are people who have come here year after year after year and worked in the same restaurants as cooks, as waiters, as whatever is needed, and they’re like family. And now for the first time, it’s uncertain that they’ll be able to come back,” says Bar Harbor Chamber of Commerce Executive Director Martha says that’s why the chamber is holding a job fair Saturday, hoping to attract significant numbers of workers from the area and the region to fill a long list of openings.

The article went on to note:

“The best thing that can happen right now is for the administration to do an audit of how many of these visas are actually being used, because the indications are that the visas are taken out early in this sort of deadline process and a lot of them never get used,” he says. “So if we can determine — and the administration can do this very quickly — which ones haven’t been used, that would open up an allocation that would be available to our businesses for this summer.”

Until then, Bar Harbor area employers are enticing workers in other ways. Higher wages are part of the solution. Searchfield says some businesses are also weighing new schedules that might appeal to older workers in the region, interested in working only a day or two each week.

It is important to focus on the statement that “Higher wages are part of the solution.”

According to requirements of the H-2B visa program, as posted on the official USCIS website, an element of this program requires that:

  • There are not enough U.S. workers who are able, willing, qualified, and available to do the temporary work.
  • Employing H-2B workers will not adversely affect the wages and working conditions of similarly employed U.S. workers.
  • Its need for the prospective worker’s services or labor is temporary, regardless of whether the underlying job can be described as temporary.

It it would appear that American workers are available since employers are now seeking to hire Americans and would likely have to raise wages in order to do so.

Clearly these employers have been gaming the H-2B visa program which requires that visas should only be issued when American workers are not available to do the work.  Furthermore, it is obvious that unscrupulous employers have also used the H-2B visa to suppress wages inasmuch as the article noted that in order to hire Americans wages would have to be increased.

To put it succinctly, the immigration policies of the Trump administration are actually meeting the demands of the protestors, freeing up jobs for Americans and, at the same time, increasing wages.

Yet the May Day “Mayhem” protestors who profess that they are fighting for better wages and working conditions even as they protest President Trump’s effective and beneficial immigration policies.

Of course not all of the demonstrators are motivated by the same factors.  Some, particularly those who went on a rampage are likely anarchists who are looking for opportunities to justify their aggressive actions.

There are, however, undoubtedly some naive folks who have been caught up in the rhetoric about how the Trump immigration policies are “Anti-Immigrant” when, in reality, the only aliens who have to fear arrest are those who are present in the United States in violation of our laws.

I recently wrote, an extensive article, “Immigration Fraud: Lies That Kill – 9/11 Commission identified immigration fraud as a key embedding tactic of terrorists,” in which I not only explored the two traditional forms of immigration fraud- fraudulent documents and fraud schemes such as marriage fraud, visa fraud and political asylum fraud, but also looked at the fraud perpetrated upon Americans by politicians, pollsters and special interest groups.

It is likely that a significant percentage of the protestors have been snookered by these open borders fraudsters.

These protestors should consider that the exhortations of the SEIU and other unions parallel the open borders demands of the United States Chamber of Commerce, one of the most anti-American and anti-labor special groups in the United States today

It is, for example, the U.S. Chamber of Commerce that has been responsible for the continual increase in the number of Visa Waiver Countries since the terror attacks of September 11, 2001 even though the Visa Waiver Program violates the findings and recommendations of the 9/11 Commission.

My article, Immigration Failure By Design– Immigration Failure By Design– Doing the bidding of the Open Borders anarchists, lays out the way that the U.S. Chamber of Commerce, motivated by blind and unbridled greed has applied extreme pressure upon our government to endanger national security and public safety by expanding this dangerous program.

One of the key goals of the globalist U.S. Chamber of Commerce is to flood America with a limitless supply of cheap exploitable labor by opening our borders to foreign workers.

This precisely parallels the cries for open borders and Sanctuary Cities by the leaders of the SEIU and other such unions.

Apparently, as the memorable saying in the film, “Cool Hand Luke” starring Paul Newman goes, “What we have here is a failure to communicate.”

If only the mainstream media would tell the truth, perhaps the protestors wouldn’t have bothered to demonstrate, except, perhaps to demonstrate on behalf of President Trump’s immigration policies.

RELATED ARTICLE: San Francisco Chronicle Admits: Some Anti-Trump Protesters are Paid – Breitbart

Australian Manufacturing CEO Investing $2 Billion in U.S., citing ‘Confidence in Trump’

President Trump is making good on his promise to make America great again. Unemployment has plummeted. Americans are going back to work. In response, the Democrats continue to relentlessly pursue their Trump-Russia fantasies. The party of treason at work.

“Manufacturing CEO Says He’s Investing $2 Billion in US Because of ‘Confidence in Trump,’” by Andrew Kugle, Washington Free Beacon,

Australian billionaire and manufacturing CEO Anthony Pratt said Friday on Fox Business that he is investing $2 billion in the United States because he has “confidence” in President Trump.

“We have enormous confidence in President Trump. He’s doing a wonderful job, and we think he will continue to do a great job,” Pratt said. “He’s reducing unemployment. As we saw today, the job figures show unemployment is the lowest it’s been for a decade, and he’s supporting manufacturing.”

“And that’s why we are doubling down on our investment in the United States, creating 7,000 high-paying manufacturing jobs, mainly in the Midwest,” Pratt added.

The latest jobs report was released Friday and showed the U.S. created 211,000 jobs in April, leading the unemployment rate to fall to its lowest level in a decade, 4.4 percent. The report also showed 12,000 more Americans joined the labor force in April.

Fox Business reporter Elizabeth MacDonald asked Pratt in which states these new manufacturing jobs would be located.

“Well, it’s everything from Wisconsin, for example. Last month in March, Gov. Scott Walker opened our new Wisconsin factory recently,” Pratt said. “Then Gov. [Mike] Pence opened our paper mill in Indiana. We got plants in Ohio. We got plants in Pennsylvania. We got plants in a lot of the Midwest.”…

EDITORS NOTE: This column with video originally appeared in The Geller Report.

President Trump Loosens Free Speech Cuffs on Churches

President Donald Trump, in an executive order released Thursday — timed to coincide with National Prayer Day — loosened some of the Internal Revenue Service restrictions on churches that prevented pastors from preaching about politics from the pulpits.

Specifically, he called for the easing of the tax agency’s enforcement of the Johnson Amendment, a decades-old rule that bans churches from openly endorsing political candidates.

Churches and places of worship may have an easier time getting in the political game, thanks to a new executive order signed by President Donald Trump that loosens some of the regulations guiding nonprofits and tax exemptions.

The rule’s been used by far-leftists and atheist groups, like the Freedom From Religious Foundation, in recent years to clamp all types of speech in churches that seem applicable to modern day issues, however. The FFRF, for example, complained in 2012 to the IRS that a bishop was breaking the Johbnson Amendment by telling readers of a local newspaper in a letter to the editor that Catholics, in good conscience, could not vote for candidates who favored gay marriage and abortion.

Trump’s newest executive order makes clear: such enforcement is above and beyond the scope of the Johnson Amendment.

USA Today writes:

“Seeking to redefine the balance between church and state, President Trump signed an executive order that – depending on your point of view – either protects religious liberty, licenses religious groups to practice discrimination, or doesn’t go far enough in any direction.

“‘We’re a nation of believers,’ Trump told supporters during a signing ceremony in the Rose Garden at the White House. “Faith is deeply embedded in the history of our country… No American should be forced to choose between the dictates of the American government and the tenets of their faith.’

“Trump’s executive order, which he signed on Thursday to coincide with the National Day of Prayer, calls for easing of Internal Revenue Service enforcement of the so-called ‘Johnson Amendment,’ which prohibits churches from getting directly involved in political campaigns.

“While only Congress can formally do away with the law, this will pave the way for churches and other religious leaders to speak about politics and endorse candidates without worrying about losing their tax-exempt status.

“Trump, criticizing the Johnson amendment as a violation of free speech rights, views his actions as fulfillment of a campaign pledge. “I talked about it a lot” during last year’s presidential campaign, and “promised to take action,” he said. “I won.”

“The Executive Order on Promoting Free Speech and Religious Liberty also aims to make it easier for employers with religious objections not to include contraception coverage in workers’ health care plans, although it would be up to federal agencies to determine how that would happen.

“At the ceremony, Trump recognized members of the Little Sisters of the Poor, an order of nuns which runs homes for the elderly. The group objected to the Obama administration’s policy that while religious organizations don’t have to directly provide birth control to employees, workers could still get it through a third party. ‘Your long ordeal will soon be over,’ he told them.

“Vowing to fight what he called discrimination against religious people and institutions, Trump said, ‘We will not allow people of faith to be bullied, targeted, or silenced any more.’ The government, he added, has been used as ‘a weapon’ against religion and people of faith.

RELATED ARTICLES:

Trump: ‘No One Should Be Censoring Sermons or Targeting Pastors’

Trump’s Executive Order Fails to Address Most Pressing Religious Liberty Threats

EDITORS NOTE: This column originally appeared in The Geller Report.

Trump’s America: 100 Days Later

Here we are folks, 100 days into Trump’s presidency. My “Never Trump” friends are still itching for Trump to betray us so they can say, “I told you so.” Well, if Trump betrays us tomorrow, we are still winners; light years down the road to making America great again than where we would be had another Republican won.

I was accused of betraying conservatism when I jumped aboard the Trump train after my candidate Ted Cruz dropped out. For me it was a no brainer. Hillary in the Oval Office would have ended America as founded. I care more about saving my country than saving conservatism.

I have also come to realize that Trump is you and me. While I have voted Republican ever since Ronald Reagan, I never got involved in politics until the Tea Party. As a rookie, political experts instructed me to walk-on-eggshells during media interviews, less the press brand our side mean and racist.

My Baltimore projects instincts kept nagging me; why please dishonest bullies who don’t care about truth and only seek to destroy you? When Trump entered the political arena, he blew up everything I was taught about how to deal with fake news media. I cheered Trump on feeling vindicated and liberated.

NeverTrumps are still embarrassed by Trump and Press Secretary Spicer. It is like NeverTrumps are in high school and fake news media are the cool kids they want to like them. I do not give a rat’s derriere about what Leftists think about me. I am focused on defeating their evil agenda. Therefore, Trump is you and me.

I suspect it has been eye-opening for our non-ideological president to see how insanely and viciously Leftists have responded to him doing common-sense things in the best interest of our country. Conservatives are the every day common-sense thinking Americans. Leftists are the extremist and wackos who are out-of-touch and out-of-sync with American values and culture.

So, while Leftists continue to have foot-stomping, pulling-out-their-hair, temper-tandems in frustration, here are several of Trump’s incredible reversals of Obama’s mess in only 100 days.

Trump ended Obama’s War on coal, bringing back jobs.

Trump reversed various Obama attempts to disarm Americans

Trump has begun rolling back Obama’s nonsensical climate change regulations.

Trump reversed Obama’s dangerous mandate for public schools to allow boys into girl’s restrooms and locker rooms. 

Trump ended Obama’s policy of forcing us to pay for abortions overseas

Trump ended Obama’s iron-fist mandate that states fund Planned Parenthood

Trump has begun unclogging Obama’s overreaching EPA water rules

Trump is fixing Obama’s awful deal in which he funded the world’s leading state sponsor of terrorism.

Thus far, Trump has signed 37 orders reversing Obama’s Make America Last policies/agenda.

Meanwhile, fake news media relentlessly promotes their false narratives; Trump has backtracked on all of his crazy/naive campaign promises; his supporters are dispirited; his administration of bulls in Washington DC’s china shop cannot get anything done.

Oh how they lie and lie and lie. Congrats Mr President on your amazing first 100 days. We are all behind you, looking forward to tax reform and repealing Obamacare.

Trump Administration Steps Up to the Plate with Tax Reform Plan

The big news on taxes this week was the Trump administration releasing its tax reform proposal.

The U.S. Chamber’s tax expert welcomed it, calling it, “the start of the conversation.”

Releasing the plan shows the administration is “stepping up to the plate and engaging and working towards pro-growth tax reform,” Caroline Harris, chief tax council and vice president for tax policy, told Bloomberg.

Harris brought up three principles of tax reform: Permanence; moving to a territorial system; and appropriate transition rules.

  1. “Businesses want certainty; they want permanence,” Harris said. Knowing what to expect will help companies determine how to best deploy investments and hire workers.
  2. “We need to shift to a territorial system, which is something we heard from the Trump White House talk about,” Harris explained. “If you have a territorial system you’re not subjecting cash to that extra layer of tax when you bring it back to the United States, and it frees that capital up going forward.”
  3. “Businesses also need time to change how they operate to respond to changes in the tax code,” said Harris. Reform should avoid causing unnecessary business disruptions.

[Here is the U.S. Chamber’s list of principles for pro-growth tax reform.]

To keep the momentum going, Harris said President Trump is “going to have to start having conversations with Chairman Brady in the House, Hatch in the Senate, with leadership—with Speaker Ryan—with Leader McConnell and parse out what they want to do and how we can have the most pro-growth tax code.”

Also, all sides need to be involved in the conversation. Republicans, Democrats, the White House, Congress, and the business community have to work together. “Everyone has to come to the table. This has to be a group effort,” she emphasized.

EDITORS NOTE: The featured image is of Steven Mnuchin, Treasury secretary (right), and Gary Cohn, director of the U.S. National Economic Council. Photo credit: Andrew Harrer/Bloomberg.

Trump’s Tax Plan Is Brilliant Politics and Even Better Economics by Jeffrey A. Tucker

Donald Trump’s tax plan seems to mark a new chapter in his presidency, from floundering around with strange and sometimes scary policies (bombings, border closings, saber rattling) to focusing on what actually matters and what can actually make the difference for the American people and the American economy.

Under Trump’s plan, taxes on corporate profits go from 35% to 15%. They should be zero (like the Bahamas), but this is a good start. Taxes on capital gains go from 23.8% to 20%. Again, it should be zero (as with New Zealand), but it is a start. Rates for all individuals are lowered to three: 10%, 25%, and 35%. The standard deduction for individuals is doubled (politically brilliant). The estate tax and the alternative minimum tax is gone. Popular deductions for charitable giving and mortgage interest are preserved. The hare-brained idea of a “border adjustment tax” is toast.

All of this is wonderful, but the shining light of this plan is the dramatic reduction in taxes on corporate profits. The economics of this are based on a simple but profoundly true insight. Economic growth is the key to a good society. This is where good jobs come from. This is how technology improves. This is what gives everyone a brighter outlook on life. If you can imagine that your tomorrow will be more prosperous and flourishing than today, your life seems to be on track.

Tax Capital, Wreck Prosperity

Where does economic growth come from? For decades dating back perhaps a hundred-plus years, people imagined that it could come from government programs and policy manipulation. Surely there are some levers somewhere in the center of power that can cause this thing we call economic growth. We just need solid experts with power, resources, and intelligence to manage the system.

This turns out to be entirely wrong. It hasn’t worked. Since 2008, government has tried to mastermind an economic recovery. It has floundered. We are coming up on a full decade of this nonsense with economic growth barely crawling along. We are surviving, not thriving, and income growth, capital formation, and entrepreneurial opportunity restricted and punished at every turn.

The Trump tax plan is rooted in a much better idea. Economic growth must come from the private sector. It must come from investment in private capital. The owners of this capital who are doing well and earn profits should be allowed to keep them and invest them. This creates new job opportunities. It allows for more complex production strategies. It expands the division of labor.

The crucial institution here is capital. Sorry, anti-capitalists. It’s just true. Capital can be defined as the produced goods for production, not consumption. It is making things for the purpose of making other things. Think about it. Without capital, you can still have markets, creativity, hard work, enterprise. But so long as you have an absence of capital, you are forever floundering around just working to make and sell things for consumption. This is called living hand to mouth.Without capital, and the private ownership of capital, and security over your property rights, you can’t have economic growth. You can’t have complex production. You can’t raise wages. You can’t live a better life. Every tax on capital, capital formation, capital accumulation, and business profit reduces the security of property rights over capital. This is a sure way to attack economic growth at its source.

And this is precisely what American policy has done. The rest of the world has been wising up about this, reducing taxes on capital for the last 15 years. But the US has languished in the mythology of the past, regarding capital not as a font of prosperity but rather a fund of stagnant resources to be pillaged by planners in government. It is not surprising that this strategy results in slow growth and even permanent recession.

What This Can Do for Growth

I have no regression to present to you but this much I can say out of experience and intuition. If this tax plan goes through, the entire class of entrepreneurs, investors, and merchants will receiving a loud signal: this country is safe for you to realize your dreams and make the dreams of others come true.It wouldn’t surprise me to see GDP growth go from an anemic 1-2% to reach 4% and higher in one year. There is so much pent-up energy in this country. This tax cut will unleash it. And think what it means for the next recession or financial crisis. It prepares the entire country to weather such an event better than we otherwise would.

The beauty of unleashing the power of private capital is that the brilliant results will always be surprising. We don’t know what kind of experimentation in investment and business expansion this will create. This is the nature of a capitalist economy rooted in the freedom of enterprise. It defies our every expectation. No model can forecast with precision the range of results here. We only know that good things will come.

Now, of course, the opponents will talk of the deficit and the national debt. What about the lost revenue? The problem is that every revenue forecast is based on a static model. But an economy rooted in capital formation is not a static one. It is entirely possible that new profits and business expansion will produce even more revenue, even if it is taxed at a lower rate.If you want to cut the deficit, there is only one way: cut spending. I see no evidence that either party wants to do this. Too bad. This should change. But it is both economically stupid and morally unsound to attempt to balance the budget on the backs of taxpayers. Letting people keep more of what they earn is the right thing to do, regardless of government’s fiscal problems.

In the meantime, these pious incantations of the word “deficit, deficit, deficit,” should be seen for what they are: excuses to continue to loot people of their just earnings.

The Politics of It

Already the opponents of this plan are kvetching in the predictable way. This is a tax cut for the rich! Well, yes, and that’s good. Rich capitalists  – sorry for yet another hard truth – are society’s benefactors.

But you know why this line of attack isn’t going to work this time? Take a look at the standard deduction change. It is doubled. Not a single middle-class taxpayer is unaware of what this means. This is because they are profoundly aware of how the tax system works. If you take the standard deduction from $6,200 to $15,000, that means people are going to keep far more of their own money. There is not a single taxpayer in this country who will not welcome that.

This is why it strikes me as crazy for Democrats to inveigh against this plan. Doing so only cements their reputation as the party of pillage. Do they really want the United States to be outcompeted by every other nation in the OECD? What they should do is rally behind this, forgetting all the ridiculous pieties about the deficit and the rich and so on. Do they favor the interests of the American people are not?It’s also fantastic politics to retain the deductions for charitable giving and mortgage interest. These are popular for a reason. They are two of the only ways that average people can save on their tax bill. It always pained me when the GOP would propose a “flat tax” that eliminated these provisions. People are very aware: taking away an existing tax break is a terrible foreshadowing of bad things to come. So this Trump plan dispenses with all that. Good.

As for compliance costs of the current system, the elimination of the Alternative Minimum Tax will do worlds of good.

What I love most about this plan is its real-world economic foundation. It embraces a truth that so many want to avoid. If you want jobs, rising wages, and economic growth, you have to stop the war on capital. You have to go the other way. You need to celebrate capital and allow rewards to flow to those who are driving forward economic progress.

It’s a simple but brilliant point. Finally, we’ve got a tax proposal that embraces it.

Jeffrey A. Tucker

Jeffrey A. Tucker

Jeffrey Tucker is Director of Content for the Foundation for Economic Education. He is also Chief Liberty Officer and founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books. He has written 150 introductions to books and many thousands of articles appearing in the scholarly and popular press.

The President’s Tax Plan Massacres the 1%ers in the 10 States with Highest-Tax Rates

As the media slices and dices the proposed tax plan offered by President Trump’s Treasury Secretary Steven Mnuchin on April 26th, one thing is clear – the rich will pay more in taxes than the working class.

In the Daily Signal article How Trump’s Tax Plan Would Affect High-Tax States Like California, New York Fred Lucas writes:

High-income earners in high-tax states would see a federal tax rate cut, but may pay more in the end if they’re unable to deduct state and local taxes under President Donald Trump’s tax reform proposal announced Wednesday.

The White House released the contours of his tax reform proposal that would lower tax rates and reduce the number of tax brackets. However, the plan would also reduce the number of tax deductions.

When a reporter asked if deducting taxes on state and local income taxes would also be eliminated, Treasury Secretary Steven Mnuchin answered, “Yes.”

U.S._Democratic_Party_logo_(transparent).svgSo, Democrats should be very excited about taxing the rich, so will the 99%ers, like Occupy Wall Street, who have been for taxing the rich. This has been the mantra of the Democrat Party – Tax the Rich!

So which are the states with the highest tax rates? The national average for state income taxes is 9.9%. According to the 2017 Tax Guide published on BankRate.com the 10 highest taxed states are:

  1. New York – Tax burden: 12.7%

  2. Connecticut – Tax burden: 12.6%

  3. New Jersey – Tax burden: 12.2%

  4. Wisconsin – Tax burden: 11%

  5. Illinois – Tax burden: 11%

  6. California – Tax burden: 11%

  7. Maryland – Tax burden: 10.9%

  8. Minnesota – Tax burden: 10.8%

  9. Rhode Island – Tax burden: 10.8%

  10. Oregon – Tax burden: 10.3%

President Trump’s plan does what Democrats have made the goal of their platform. Make the rich pay more. But wait!

Lucas reports, “House Republicans were already reportedly considering eliminating the deduction on state and local taxes, which could disproportionately affect wealthy people in high-tax blue states such as New York and California.” The question is: Why?

The President’s tax plan would put pressure on the ten states listed above to lower their state income tax rates. Isn’t this ultimately good for the successful working class people of New York and California? The 99%ers!

This provision, among the other key policy shifts in the President’s tax plan are bold and make good on his promise to cut taxes, just not on the rich, many of whom have said they are happy to pay more in taxes.

Seems like a win-win to me. How about you.

RELATED ARTICLES:

Trump goes big on tax reform

Trump tax plan prompts GOP fears about deficit

Trump Tax Plan Cheat Sheet | Fox Business

This Senate Bill Will Make Federal Regulations Smarter and More Effective

Americans complain about over regulation. As rule after rule has piled up over the decades, they have good reason to complain.

But here’s an interesting observation: Regulations written by the Obama administration operated under something like a power law. The biggest regulatory costs came from a few regulations, as this American Action Forum chart shows.

American Action Forum chart: Regulatory costs for Top 3 rules versus all others, by year, 2009-2016.
Source: American Action Forum.

Another way of looking at this is a chart from an important report, Taming the Administration State, by the U.S. Chamber’s Environment, Technology & Regulatory Affairs Division.

4x

“The regulatory world is top-heavy, where a majority of costs and benefits are concentrated in three or four measures,” explained AAF’s Sam Bakins.

Regulations with massive burdens include the FCC’s Open Internet Order that converted the internet into a publicly utility, the (stayed) Waters of the United States rule that would give EPA authority over how land is used over large portions of the country, and the (also stayed) Clean Power Plan that would wipe out affordable coal-fueled power plants.

Businesses—especially small businesses— have had to cope with these costly rules and know full well they hold back investment, job creation, and economic growth.

If we focus on the costliest rules, regulators can limit their detrimental effects, make them more effective at achieving their intended goals, or even reevaluate their intended purpose.

To the rescue is the Regulatory Accountability Act (RAA). Sens.  Rob Portman (R-Ohio) and Heidi Heitkamp (D-N.D.) introduced the bipartisan bill in the Senate that would make the first major changes to the federal regulatory process in seven decades.

The RAA is based on three principles for regulatory reform William Kovacs, U.S. Chamber Senior Vice President, Environment, Technology & Regulatory Affairs, laid out earlier this year:

·  Accountability. Federal agencies need to show that the costliest rules are truly needed and are written to use the least costly option available to achieve their objective.

·  Transparency. Agencies must be open about why and how they make key decisions to regulate, and avoid making those decisions in secret under pressure from special interest groups, entirely outside of the normal rulemaking process.

·  Participation. Agencies should be required to inform the public of pending regulatory decisions on high-impact rules early in the process, share their data and economic models, and allow those who will be affected adequate time for public input.

The RAA would focus federal agency efforts on proposed regulations that would have the biggest effects on the economy. The federal government would still have the ability to write necessary regulations. The RAA would only require additional effort on the most-expensive ones in order for them to achieve their intended goals at the lowest cost to our economy.

“Our bipartisan bill would make federal regulations smarter and more effective for everyone impacted by them, support job growth, create certainty, and provide an important check and balance on the president no matter who is in charge,” said Sen. Heitkamp. “Can you imagine if we still used telecommunications systems from World War II? They might get the job done, but they would be slow, potentially faulty, and incredibly inefficient. The same goes for the current 70-year old law which still governs the way federal agencies propose and establish regulations.”

“This legislation would bring our outdated federal regulatory process into the 21st Century by requiring agencies to use the best scientific and economic data available, strengthening checks and balances, and giving the public a voice in the process,” Sen. Portman added.

Business groups support the RAA. Neil Bradley, U.S. Chamber Senior Vice President and Chief Policy Officer, said in a statement:

The rules governing the federal regulatory system were written in the Truman administration, with few updates since then. Now, under the Trump administration, it’s past time to modernize the process. The Regulatory Accountability Act would increase scrutiny of the most expensive rules that cut across industries and sectors, requiring greater transparency and agency accountability. We encourage all Senators to support this bipartisan reform legislation that can encourage business expansion, spur job creation, and ultimately help grow the American economy.

After the House passed the RAA earlier this year, business groups urged the Senate to do the same. “The RAA stands for good governance and getting rules right by bringing transparency, accountability, and integrity to the rulemaking process at federal agencies,” the letter stated. “With the passage of RAA, Congress would be restoring the checks granted to it by the Constitution over a federal regulatory bureaucracy that is opaque, unaccountable, and at times overreaching in its exercise of authority.”

President Trump and the Congress have done quite a bit in the first 100 days of the new administration to lower regulatory burdens on businesses. By passing the RAA into law and improving how federal regulations are made, it would be a victory for a more competitive economy.

Watch Sens. Portman’s and Heidkamp’s press conference where they introduced the RAA.

MORE ARTICLES ON: REGULATORY REFORM

EDITORS NOTE: The featured image is by photographer Andrew Harrer/Bloomberg.