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Redistribution Failure

homer-simpson-doh

From The New York Review of Books, Are the Authoritarians Winning? by

excerpts:

Are contemporary politicians, on either side of the aisle, actually taking action to make the state more just and more efficient? The editors ofThe Economist do find some democratic heroes, here and there, mostly big-city mayors trying to make government more effective, but by and large they paint a scathing picture of democratic dysfunction at the national level. When conservatives win elections, corporate interests often take control. When progressives win back power, they only succeed in making the state more domineering. When conservatives are restored to office, they cut back. And so it goes, a continuing dynamic of political alternation that leaves the state unreformed and, worst of all, ever more intrusive. Both sides of modern democratic politics say they want to protect the freedom of citizens, and both end up increasing the state’s powers of surveillance.

Battered by this ever more futile political alternation, the liberal state is ever less liberal and ever less capable of controlling the interests it is supposed to regulate. Its tax and benefit systems are so distorted by special interests that it has lost the capacity to redistribute. Far from reducing inequality, the modern state is making the problem worse. As Micklethwait and Wooldridge observe, “If you put spending and taxes together, including all the deductions, the government lavishes more dollars overall on the top fifth of the income distribution than the bottom fifth.”

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Myths of Capitalism

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Unfinished Wars

We debate the War in Iraq and the War in Afghanistan, but these are merely campaigns, engagements or battles in a much greater conflict.

We can afford to lose a battle or two, or even the majority of the engagements;  but we cannot afford to lose the war.

This is a war between radical Islamists and the modern world; a world of reason, tolerance and individual liberty.  When we lose sight of this center of conflict and frame the conflict in the small subtext of a single nation we quit too soon.  American’s greatest weakness is patience: we want our wars fast and cheap.

When we use language to minimize the threat – such as referring to the strategy of isolating and annihilating terrorists as “ wac-a-mole” then we eliminate a tool from an ever shrinking bag of options.

As controversial as the Iraq and Afghanistan Campaigns were they succeeded in eliminating ten thousand terrorist operatives.  We went over ten years after 9/11 without another attack, not without effort or intent on the part of our mortal enemies. We forget that this seemed unlikely at the time.

Allowing ISIS to retake Iraq is a giant step backward, but many of the battles we have lost before were critical to our ultimate success.  The soldiers of the American Revolution learned what did and did not work before their victory in Yorktown.  The southerners’ early victory simply made clear what the North needed to accomplish for victory.  Our initial setbacks in North Africa (before Rommel’s eventual defeat) were great lessons in the operations and equipment of the German Army.

The world will never accept the brutality of ISIS or the many other variations of Islamic terrorists.  By underestimating   the nature of the conflict and the brutality and resilience of our enemies we will cost lives and fertilize dangerous ground, but this can be reversed.  Once we understand that the enemy is not vanquished, and that diplomacy is very limited without force, we may find the resolve to continue the fight and stay with it until it is finished.  Unfinished wars can be more deadly than we thought the war would ever be.

Cheers for Obama for actualizing his promised withdrawal from Iraq may prove as hollow as Chamberlain’s claim to have achieved “peace in our time.”

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Meaningless Averages

From my article in American Thinker, Everything that Counts

excerpt:

Just as Piketty’s task is distorted by the focus on categories instead of real people, so is his categorization of the “average” rate of return, which is critical to his thesis that investment returns are greater than economic growth and thus inevitably a source of growing inequality.

Averages are often misleading and irrelevant.  A six-foot man can drown crossing a river with an average depth of four feet.  A man with one foot in the freezer and one foot in the oven is not comfortable just because the average temperature is normal.

Within the average return on capital are the hugely successful and the bankrupt.  But that return is what drives capital to socially productive purposes.  Efforts to centrally influence or control the flow of capital can have disastrous ramifications, as we observed during the mortgage collapse.

HKO

Think how much the capital markets would change if every investor was guaranteed a 5% return vs that chance or opportunity to make a 500% return or lose everything. Averages in this case tell us nothing.

 

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The Imperial Poor

From Daniel Greenfield a Frontpage, Poor Little Rich Liberals:

The concentration of wealth around Washington D.C. is not the work of the Tea Party. It certainly isn’t something that the Koch Brothers did. It’s what happens around an imperial capital. It’s not that the rich are getting richer while the poor get poorer; it’s that the politically connected get richer while the politically disconnected get poorer.

The significant division is not along lines of class, but of corruption. The working poor may be suffering, but the politically connected welfare poor have plenty of opportunities to game the system. Most of all it’s the politically disconnected private sector middle class that invests its time in working instead of voting that is sliding down the hole and taking the economy with it.

The radical technocrats of the Democratic Party champion big government policies that concentrate wealth in a smaller number of hands while campaigning against income inequality. They denounce the rich at fundraisers for the rich. They buy mansions so that they can run for higher office and then claim to be dead broke. They create the income inequality they condemn.

Faking poverty isn’t just an election strategy; it’s also protective camouflage as the politicians robbing the country cry poverty.

The Clintons want to enjoy the privileges of their ill-gotten wealth without accepting any of the responsibility. They want to have their mansions and their class warfare. They want to pile up vast fortunes and then talk about the problems of income inequality. They want to have the radical privileges of poverty and the prosperous luxuries of wealth.

The poor little rich liberals have made themselves wealthier and the country poorer. Now they are exploiting the miserable economy that they are responsible for with more class warfare.

They are poor, but not in money. They suffer from severe poverties of honesty, decency and shame. They hardly have a single truth to their name and their poverty is as fake as their concern for the poor.