The Profound Rush Limbaugh: ”Have you ever noticed how under capitalism the rich become powerful, and under socialism the powerful become rich?

Love him or hate him, there is no debate about the fact that Rush Limbaugh is a genius. Last week he said the following:

”Have you ever noticed how under capitalism the rich become powerful, and under socialism the powerful become rich? It's amazing when you look at it that way. Under capitalism, the rich become powerful. Under socialism, the powerful get rich. They exploit others. They get rich by taking from others, by using their power. In capitalism, the rich become powerful. It's a minor little distinction. It's one of those little pithy bullet points that is just shy of a profundity.”

I have to disagree with Rush slightly… that statement is indeed profound. Although he characterizes it as a minor little distinction for rhetorical purposes, his context demonstrates exactly how significant it really is.

When you think about it, on the most basic level, it makes perfect sense. In socialist, communist and fascist countries, despite the egalitarian rhetoric, invariably it is the people who control the infrastructure of the state who end up with the biggest bank accounts and grandest (relative) lifesyles. They decide who can do what jobs, who can get what permits, who can open up what businesses. Given that the state controls the avenues through which so much of life runs, is it any wonder that corruption is often rampant? Is it any wonder that while Muscovites were looking for food on barren supermarket shelves Brezhnev gorged himself at his Jurmala dacha? Or is it much of a surprise that while Mugabe has turned Zimbabwe into one of the poorest countries in the world he has accumulated billions of dollars in personal wealth? It comes as no shock that to get anything done in Mexico takes the greasing of palms of government officials all along the way. The reality is, when government controls most aspects of life, from the major to minutiae, they get to decide who is successful and who is not, and often they choose themselves their friends and their families.

Of course everyone wants success, but the difference between state control and free markets is who gets to decide what constitutes success and who gets to enjoy its fruits. With state control it’s the bureaucrats who get to decide while in free markets it is the citizens. One can quickly guess which produced "green" cars no one wants, a healthcare system that doesn’t work or a tax code so complex even its authors can't understand it. 

You may hate Wal-Mart, but no one ever forced you to shop there. Wal-Mart became a half a trillion dollar behemoth not by forcing customers to come into their stores, but rather by advertising what they were willing to sell and for how much. People willingly walk into their stores and voluntarily exchange their hard earned dollars for Wal-Mart’s goods. You may have heard that JD Rockefeller was a “son of a bitch” businessman, and you’d be right. But he earned his money by standardizing the industry and lowering prices on kerosene, gasoline, and a wide variety of other petroleum products as well. Although competitors were sometimes mad, consumers and the economy benefited dramatically. The success of Standard Oil was based on selling products to willing consumers, not on government redistribution. The same holds true today for Intel, Apple and Frito Lay, just as it did for others like Sears and Roebuck, Gillette and Howard Johnson a century ago.

In the United States numerous rich businessmen have converted their success into power. The Koch brothers come to mind. So too does George Soros and Michael Bloomberg. But the difference is, what those guys are selling, we don’t have to buy.

While the US may still ostensibly be a capitalist system, how long that will last is open for debate. Today we are rapidly becoming a command and control socialist country with Washington as the vortex. Government tells you what kinds of bulbs you can buy, who you have to rent your house to and how you can use your property among other things. It takes the money you worked for and uses it to give phones, EBT cards and birth control pills to those who didn’t. Basically Washington has the power, and now it has the money too. The Washington DC area now has 6 of the 10 richest counties in the country. Out of 3,100 counties in the US, 6 of the 10 richest in the Washington DC Metro area! To put that in perspective, Occupy Wall Street was worried about the country being run by the richest 1%. Those 1% guys are pikers, in reality the country is run by .0019% richest, and they live in Washington.

And why does money flow to Washington?  Simple.  That’s where the power is. Because that's where the laws and regulations that restrict your freedom come from. Washington’s bureaucrats don’t solicit explicit bribes like they do in third world countries… but then they don’t have to. They earn twice what private sector workers do, have virtual lifetime employment, and have the "respect" that comes from having the power to destroy a business or an industry with a stoke of a pen. As a result, while some companies spend money in Washington seeking to suckle at the public teat, (defense, agribusiness and green energy industries come to mind) most firms today spend their money on lobbyists not to get dollars from government, but rather to influence legislation and regulations so that they can simply survive.

Capitalism is not yet completely dead in America. Thankfully guys like Mark Zuckerberg, Simon Cowell, Sean Combs and lots of other people whose names we’ll never know are able to create businesses that earn them millions or billions of dollars without stealing a single dollar from any one of us or eviscerating one iota of our freedom. But one has to wonder how long that will last. Today there are 92 million adults in the United States who are not working. From unemployment benefits that last for years to welfare programs that create lifelong wards of the state to regulations and taxes that disincentivize work, one has to wonder what the real agenda of Washington is. Is it to see a resurgent private sector where more Americans can support themselves and their families without government help, thereby inducing a reduction in the size of the army of bureaucrats and lobbyists? Or is it to slowly strangle capitalism so that more and more jobs and lives look to Washington for their preservation, which in turn means bigger government, more lobbyists and of course more money for Washington.

With Mark Zuckerberg getting rich off of us and our data, it’s an even exchange in that we have a free choice in deciding how much of that data we’re willing to exchange. If we don’t like it we can simply delete our Facebook accounts. However, when the Washington establishment uses the police power of government to get rich off of us, we have no options, we can’t simply choose to not pay taxes or simply start another business without Washington’s interference. It’s not possible. What we can do however is work fewer hours, shut down our businesses or take the path that more and more Americans are taking every day; to simply give up working altogether and look to Washington for our every need. My guess is that Rush would probably say that is exactly what the left's agenda is. And as usual he would be right.

A trillion dollar hit job - who really wins from the Herman Cain scandal?

Having spent three quarters of my adult life working in restaurants, I can tell you that I find the accusations against Herman Cain difficult to believe. Not that sexual harassment doesn’t occur in the restaurant industry, because it does. Rather, because the industry has no shortage of itinerant and attractive young women who would be more than happy to indulge Mr. Cain in whatever peccadilloes he might have. If Mr. Cain were prone to using his position to coerce women into sexual favors, which is exactly what Ms. Bialek is accusing him of, I cannot imagine that there would not be women coming out of the woodwork with stories of his antics. Frankly, he wouldn’t have even needed to use coercion. For a man of power and influence seeking to find willing partners, the restaurant industry would be the equivalent of shooting fish in a barrel.

Instead of credible, demonstrably true charges, what we have is a handful of women coming out with specifically non specific accusations of “sexual harassment”. And the problem is, there seems to be no way for Mr. Cain to escape the attacks. It’s like being asked “Mr. Smith, are you still beating your wife?” and you respond that you’ve never laid a hand on her but the headline the next day shouts “Mr. Smith says he’s no longer beating his wife.” The accusation alone is enough. Enabled by a pliant media, these women have been able to detour, if not derail, a promising political campaign.

Who might benefit from this? Primarily two groups: The left (read Democrats) and Washington insiders of both parties.

The left does not like Herman Cain for two reasons. The first is because he’s an unabashed believer in American exceptionalism. At the end of the day he believes that a man in America has the opportunity to succeed through his own efforts, regardless of their background or demographic characteristics. The second reason they don’t like him is that he has the temerity to believe those things while being black.

That latter bit is what really makes the Democrats nervous. The fact that Herman Cain is a black conservative who is a vociferous opponent of the entitlement state creates a potential fatal crack in one of their core constituencies, blacks. Blacks make up about 13% of the population and they vote Democrat in excess of 90% of the time – 96% of blacks voted for Barack Obama. To put that in perspective, if a candidate needs 50% of the total vote to claim victory and they automatically get 90% of the black vote, they already have 11% of their 50% right there. That means that of the remaining 87% of the population, said candidate need only attract 39% of the vote. That’s a pretty good deal for Democrats.

Herman Cain puts that math in jeopardy. By demonstrating that a black man can succeed in the United States without depending on affirmative action, without being a ward of the state, without being an agitator for redistribution of wealth, he shatters the myth propagated by the left that blacks are victims and cannot succeed without government help. Once they recognize that, that 90% Democratic foundation begins to crumble.

The veracity of this fact can be seen in the way that the left treats Cain. “He’s a black man who knows his place” or he needs to “Get off the symbolic crack pipe”. They are trying to demonstrate that he is not an authentic black, his story is an aberration and that his success is not the kind of success that other blacks can aspire to or expect from themselves or their families.

Therefore, his candidacy must be destroyed. It must not be allowed to succeed because if he were to convince even 20% of blacks to vote for him, President Obama and much of the Democratic machine would be toast. A Democrat party without its most reliable constituency would crumble.

At the same time, political insiders on both sides of the isle dislike Cain for a completely different reason. He seeks to upset their Washington metro apple cart. You know, the one that has the highest income level in the United States. The one that has the power to set the rules for the rest of the country.

The Herman Cain candidacy is potentially Armageddon for those people. As a conservative, Cain believes that the government should be limited to doing only those things it is constitutionally empowered to do, rather than all the things politicians and bureaucrats want to do. As such, he would likely clean house. He would likely slash, if not eliminate, major elements of the government bureaucracy, particularly in the areas of education and energy as well as environmental and corporate regulation.

To understand why this scares insiders so much, imagine the impact of his 999 plan. By streamlining and simplifying the tax code, by eliminating most exemptions, he would immediately gut the number of accountants America needs, as well as making tens of thousands of IRS employees redundant. That proposal alone would immediately save Americans’ hundreds of billions of dollars in accounting costs. Thousands of accountants and IRS types would have to find productive jobs elsewhere. Now imagine that same level of efficiency brought to the Departments of Education, Energy, HUD and HHS.

Simply put, Herman Cain is an outsider to the Washington insider cabal. That cabal, which includes bureaucrats, lobbyists and politicians of both parties, is shaking in its boots. The prospect of a businessman not accustomed to the built in inefficiencies, the go along to get along mentality that permeates Washington, scares those people to death. Unfortunately for them, Cain worries about the effects of government employees and regulation on the American people and the American economy, not the other way around.

His goal is to remove the yoke of government from the backs of the American entrepreneur so that prosperity can return. If you are a lobbying firm who collects hundreds of millions of dollars a year to influence government, you don’t want to see someone elected who might sink your ship. Same thing if you’re a bureaucrat living in Mclean Virginia and making $150,000 a year with rock solid job security. Same if you are a politician who sits on a committee that gives you power over 10% of the American economy. If you are part of that yoke on the neck of the American people, you don’t want to see Cain get elected and would do whatever is necessary to make it not so.

Herman Cain’s unorthodox candidacy and his outsider perspective presents a sufficient threat to both Democrats and Washington insiders that they will do whatever they must in order to get him out of the race. For the Democrats it’s their party, for the insiders it’s their power and privilege and for both it’s their basic survival. At the root, there are literally trillions of dollars are at stake. Every day we read about the most heinous of crimes being committed for far lower stakes, so why then does it seem so farfetched that this just might be an orchestrated hit job to sink the Cain campaign? Maybe it’s not so farfetched after all.