The Cost of Prosperity - Distraction From What Really Counts

Americans are busy people—but the real risk in the lead-up to 2024 is that we may be too busy to pay attention to our last chance to preserve our liberties.

In one respect we’re no different than any other people on the planet given that our primary needs are food, water and shelter. Beyond that however, Americans enjoy a life of leisure opportunities that virtually no one else on the planet enjoys. Not leisure that’s measured in hours worked as in France or Germany. Workers in most developed countries work fewer hours per year than Americans do.

No, what’s different is that Americans have so many ways to spend their leisure time: Motocross. Shopping. Video games. Countless cable channels. Amusement parks. Golf. Swimming. Skiing. Football. Baseball. Golf. Putt putt golf. Pickleball. Off-track betting. Gymnastics. Theater. Karate. Star Trek conventions. Habitat for Humanity. Cornhole. BBQ competitions. Quilting competitions. Beauty pageants for kids. These are only a tiny fraction of the myriad options Americans have at their disposal to entertain themselves or spend their leisure time watching or participating in.

If one were to compare the spectrum of activities available to the average American with the equivalent spectrum for any other country on the planet, it wouldn’t take long to see an enormous difference. Many countries share some of our pursuits, but the depth and breadth available to Americans is unparalleled. None of this came about by accident. The reason Americans have dozens of sports and thousands of activities to participate in, from grade school to the senior center, is because the nation has been so prosperous for so long, and the nation has exemplified creativity for things both consequential and not. The result is a nation where most people have available a level of entertainment and leisure unparalleled in history.

One consequence of such is that Americans are busy. So busy, in fact, that they forget to pay attention to some things that really matter—specifically, government. In a perfect world, no one would have to pay much attention to the government because it would be run like a well-oiled machine in the background that wouldn’t cause any trouble. But that’s not how governments work. Our Founding Fathers knew that, which is why they gave us a government of separated powers with staggered terms for those responsible for exercising them. But even such a near-perfect document cannot stand forever in the face of avarice and the lust for power.

That greed and lust for power is the defining characteristic of what we call the Swamp. And it was enabled by a plethora of acts that strengthened and emboldened the apparatchiks who man it. These included Executive Orders by JFK and Nixon giving federal employees powers or “protections” they’d never previously had, as well as a 1984 Supreme Court case that required courts to defer to federal agencies as it relates to rule-making when there is ambiguity in the legislation.

Together, these and other acts made the Swamp possible. They built a federal government where it’s almost impossible to fire anyone, and agencies essentially get to decide who and what they regulate while those affected have limited redress. So basically, we have agencies that decide what laws they want to write staffed by people who can’t be fired regardless of their failure, incompetence, or criminality.

Of course, every two years, the cacophony that is American life is made that much more dissonant by elections. Most Americans, however, unfortunately, spend less time learning what’s really at stake in those elections than they do selecting teams for their March Madness brackets or wondering what’s going on in the dysfunctional Kardashian universe. The reality of this disaster was demonstrated 15 years ago by John Ziegler.

This situation might have been acceptable 100 years ago when the federal government was relatively small and had little discernible impact on most American lives. Today, however, when the leviathan of the federal government seeks to control virtually every aspect of our lives, it’s simply not. There’s a tipping point in every endeavor in life, and the lifecycle of a Republic is no exception. Leaving the Constitutional Convention, Benjamin Franklin was asked: “Doctor, what have we got—a Republic or a Monarchy?” He responded: “A Republic, if you can keep it.”

Two hundred and thirty years later we are on the verge of losing it. The problem is that too many Americans have no idea what the danger is and have little interest in finding out. They’ve spent so much of their lives enjoying the leisure and entertainment our Republic has made possible that they’ve forgotten that the foundation of freedom and prosperity upon which those conditions are built are not ordained by God, not set in stone, and not guaranteed. The conditions underlying Americans’ freedoms and prosperity are far more fragile than most recognize but, like frogs in a pot of slowly warming water, they’re succumbing to the creeping threat. Indeed, there’s an inverse relationship between government micromanagement and citizens’ freedom.

In what might be the single most crystallizing example of government micromanagement of Americans’ everyday lives since Barack Obama’s attempts to destroy the suburbs, the Biden Administration is considering banning gas stoves and a plethora of other items Americans use in the normal routine of their daily lives. Think about that…

Natural gas has been a key element of cooking in America for centuries. It’s a clean-burning fuel, cheap and plentiful, with a variety of sources, mostly in red states, which makes it hard to control. So, if Democrats can’t control the supply of something, they simply take control of the demand. Doing so in this case has the twin virtues of harming the economies of red states while forcing Americans to buy new, “green lobby approved”—read: dysfunctional and expensive—appliances. All, of course, in the name of the “Climate Change” hoax.

These and literally tens of thousands of other federal regulations are the cost to Americans of not paying attention, summed up by the notion that politics is downstream from culture. Hollywood and the media destroyed American culture, which made turning Washington’s alphabet departments, agencies, and bureaus into tools of tyranny easy.

The question is, can anyone shake the American people out of this political stupor long enough for them to recognize the danger they face? Will Americans rise to the occasion in 2024, or will they instead continue to eat the fruit from the tree of liberty, oblivious to the rot of its roots?

Perhaps a paraphrasing of Martin Niemöller might help:

First, they raised the minimum wage, and I cheered because I had a job.

Then, they destroyed public education, and I didn’t act because I sent my kid to private school.

Next, they limited cable rates, and I applauded because I saved $20 a month.

When they came for my light bulbs, I didn’t react because it made me feel good to help the environment.

One day, they said ethnicity was more important than ability for college acceptance, but I said nothing because I’d already graduated.

They increased taxes on the rich, and I didn’t care because I wasn’t rich.

Then they came for my gun, my car, my job, and eventually everything I hold dear, but there was no one left to stand with me because no one remembered what real liberty was or how it was supposed to be protected in the first place.

How Did Weak Men Become Strong Enough To Topple The Most Powerful Nation In History?

Donald Trump failed at business… a lot. USFL, Tour de Trump, Trump Resorts, Trump Airlines, Trump University, ect. Leftists love to point that out. But that’s not the whole story. Trump had great successes as well. Not only has he developed world class properties around the globe, but he was also the producer and star of one of the most popular television shows on TV for a more than a decade. Most tellingly of all was his renovation of the Wolman Ice Rink. New York had spent $13 million and six years trying to renovate the Central Park icon when in 1986 they admitted they’d failed and had to start from scratch. Trump offered to do the job in six months and under the $3 million budget. Reluctantly the city gave him the contract and he finished in 4 months at a cost of $2.25 million. In just four months Donald Trump demonstrated exactly how dysfunctional government is!

But it’s his failures that provide the life lesson that leftists never get: Whether in business, love or most things non-government related, failure is the sign that someone was willing to risk the consequences that come with it in order to actually try and accomplish something. I say non-government related because government is one of the few aspects of life where failure is the rule rather than the exception, and rarely does it result in soul searching.

Proof abounds! From a failed fifty year War on Poverty to the abject failure of government schools, to twenty year wars that end exactly where they started, government continues to grow and accumulate more power year after year, regardless of the demonstrable and perpetual lack of success.

But government is not the nation. Government is not the people. Government is supposed to be a mechanism by which citizens protect individual rights and defend the nation. But that’s not what it is today. Today it’s everywhere, all the time. There is nothing in our lives that is more ubiquitous than government regulation.

Leonard Read wrote an essay called I Pencil that looked at the countless elements and activities necessary to make #2 pencil. The whole point of the piece, written in 1958 in the midst of the Cold War, was to demonstrate the complexity of what goes into making a simple pencil, and how society benefits from freeing up markets to provide all of the necessary inputs and how it’s unlikely government control could accomplish that task. It’s extraordinary, and it’s just a simple pencil!

Now exponentially expand the complexity of that process from a pencil to our modern society and you understand what the challenge is. On the one hand, you look at the iPhone or Google or Tesla and you might conclude we’re doing pretty well with government regulating as much as it does… but in reality, that’s a mirage. While a Tesla may be a step up from a 55 Ford, it’s still just a car. While carrying your iPhone in your hand is a leap from being tethered to a wall phone, it’s still just a mobile phone and a personal computer, both invented in the early 70’s, years after the beginnings of the Internet.  

Over the last 50 years things have gotten smaller, faster and portable, but we haven’t cured cancer, we don’t have teleportation, time travel – as far as we know, and haven’t been back to the moon or beyond. We have lots of apps and services, but not much truly revolutionary.

Compare that to the 50 years from 1850 to 1900 when Americans invented such revolutionary things as the light bulb, the safety elevator, the telephone, the phonograph, the vacuum cleaner and the dishwasher. Or between 1900 & 1950 when they invented air conditioning, plastic, vulcanized rubber, television, talking movies, the photocopier and the transistor. Not to mention the airplane, helicopters, and nuclear power.

While technology is most certainly unleashing heretofore impossible advances in research, medicine and data analysis, (MRI machine, sequence of the human genome…) the relative lack of tangible revolutionary advances is extraordinary. And why is that? Are we at the end of science? Have we accomplished everything that man can do? Obviously not. It’s almost as if there’s something holding America back...

There is. It’s called regulation. Federal regulation from a seemingly endless array of agencies: IRS, EPA, OSHA, DOE, DOT, etc. The Competitive Enterprise Institute estimates that federal regulation alone costs the US almost $2 trillion per year in lost productivity. That’s essentially 10% of our GDP, annually!

Over the 50 years between 1921 and 1970 the American GDP grew at an average annual rate of 4.02%, while between 1971 to 2020 it grew at an annual rate of 2.73%, dropping down to 1.77% for the last 20 years. The result of that slowdown has been staggering. In 2020, after growing at a rate of 2.73% a year for 50 years the American GDP was approximately $21 trillion. Had it instead grown at the same rate it had the previous 50 years, the 2020 GDP would have been almost twice as high, $39 trillion. Imagine the R&D a whole additional US GDP could fund! $18 trillion, or put another way, every American household would have had another $50,000 to spend annually.

But they don’t. And it’s directly related to regulation. The Code of Federal Regulations contains every law and rule of the federal government. In 1938 it was 18,193 pages. After dropping down to 9,745 pages in 1950 it shot up to 56,720 pages in 1972 and by 2019 it stood at 185,984 pages.

On every one of those pages are rules that govern American’s lives. From what goes into their food to the employment conditions of every person who manufactured or transported or sold every single product they buy. From reporting rules for companies to bank deposit info to what's printed on the side of a can of corn or a box of cereal. Then there’s who you can or must rent your home to, how much energy your computer monitor uses, what you pay for gas and now what you have to put into your body.

That is the world the swamp dwellers have built, the one Donald Trump fearlessly leapt into a cauldron of fire to fight. Sadly, far too many Americans are either part of that system or comfortable with the illusion of security it provides. This exemplifies a line by G. Michael Hopf: “Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times.” Those who oppose Donald Trump’s attempt to save America from itself are those “weak” men. Like the European nations who grew soft under the security umbrella provided by the United States, those “weak” men flourished and took over media, academia, Wall Street and high tech while working America was focused on building on the promise of opportunity. Weak men’s control of culture has undermined the nation that allowed them to flourish in the first place, but as Joe Biden delivers the omnipresent government they desire, reality will shatter the illusions of security they hid behind while strong men’s failures and successes were building Pax Americana.

Ted Cruz's Only Hope for Indiana and Beyond: "The Government didn't build the American Dream..."

This has been a tough week for Ted Cruz. He lost 5 states by double digits. Of course they were all northeastern states which means there’s a snowball’s chance in Hell that they will be landing in the red column in November. Nonetheless Trump won them fair and square and he appears to have momentum.

So now there’s Indiana. The numbers are such that if Cruz does not win Indiana, it becomes almost impossible for him to stop Trump from getting to 1237. Given the glowing coverage that Trump gets from the mainstream media, as well as his cheerleaders in the erstwhile conservative media such as Drudge, Rush, and Hannity, Cruz finds himself very much fighting an uphill battle.

He can’t outTrump Trump. He can’t accuse Trump of lying – despite the fact that he is. He can’t accuse Trump of seeking to intimidate delegates – which he is doing. He can’t make nonsensical appeals to uninformed voters’ base instincts – because that’s not who he (Cruz) is. No, the only chance Ted Cruz has to win Indiana – and California beyond that – is to make his pitch for the American Dream.

Basically, it's that Dream that is behind so many voters flocking to Trump in the first place… that along with our celebrity worship culture where many elevate celebrities to a demigod state, regardless of their less than godlike behavior. Americans are angry that opportunities for advancement are disappearing. Americans are angry that every widget found in Wal-Mart is manufactured in China and every tee shirt in Pakistan. Americans are angry that an American icon, Ford, would reduce production here just to add production in Mexico. And Indianans are angry that Carrier would close a plant in Indiana just to open one in Mexico. The bottom line is, many Americans wonder what happened to a country where hard work and innovation were rewarded and where half the population was not on welfare of one sort of another.

One guy seems to be harnessing their anger and making it so they don’t feel like no one is listening… and that guy is Donald Trump. Ted Cruz needs to jump into the scrum. Ted Cruz needs to be crystal clear that he understands what they are feeling… but he shouldn’t pander while doing so… or he’ll be seen like Hillary trying to use an MTA card. No, Cruz has to talk about their issues, but do so in the context of what is causing them. Manufacturing is indeed moving the Mexico and China… but it’s not because companies like Ford and Carrier hate Americans… it’s because the government has made it so difficult for them to operate and earn a profit in the United States. And it’s not just labor costs, because Ford could have saved half its labor costs simply building the Focus in Alabama or Kentucky rather than Michigan. No, the much bigger problem for companies trying to manufacture and keep jobs in the United States is regulation.

Ted Cruz needs to point out that it’s not malice that encourages American companies to build products outside our borders… it’s government. Federal regulation costs the US $2 trillion a year… Looked at in jobs, just half that total would translate to 10 million new jobs at an average salary of $75,000 each. Unfortunately, this regulatory burden not only makes it more difficult for American companies to build here, it scares off international companies who might otherwise invest in the United States. Fundamentally, if the government would loosen the regulatory yoke and unleash American industry, our economy would once again dominate the world.

And then there is the IRS. Because at 40%, the United States has the highest corporate income tax rate in the developed world, companies find it less competitive to invest in the United States. Not only that, American companies have $2 trillion in profits sitting in subsidiaries around the world that they can’t bring home because it would cost them too much in taxes. That $2 trillion alone would provide 2 years of paychecks for 15 million Americans at $50,000 a year. By eliminating the IRS and implementing the Fair Tax – which Cruz likes but doesn’t push – a President Cruz would welcome trillions of dollars of investment in the United States from around the world.  Cruz's 10% income tax would have a similar, albeit a somewhat smaller impact.

At the end of the day, the only chance Cruz has to win Indiana and keep Trump from becoming the nominee is to clearly and forcefully articulate that the enemy of prosperity is not Carrier moving a plant to Mexico or Burger King moving its headquarters to Canada… it’s government strangling the American Dream one regulation at a time, it’s tax rates that handicap the country relative to the rest of the world. And in setting up that argument, he has to highlight the fact that Donald Trump’s solution of trying to tax Carrier back into the country is not the answer because for every Carrier that makes the news, there are hundreds of other companies around the world that aren’t located here and never will be because taxes and regulations simply make it too expensive to invest in the United States and create American jobs.

Donald Trump wants to scare companies into staying in the United States and employing Americans. Ted Cruz wants to inspire companies, both American and foreign, to invest in the United States and employ American workers. That’s a big difference and Cruz has to make that clear to voters. Trump wants to use the government to coerce companies to do what he wants while Cruz wants to lighten the government burden and allow American companies and American workers do what they do best, which is innovate and build their way to prosperity. The government did not invent the air conditioner, Willis Carrier did. The government did not bring the assembly line to the automobile, Henry Ford did. But government regulations have sent the companies those two men founded scurrying south of the border to build products in their names.  That is the shame of America in 2016... America used to be a place for entrepreneurship, innovation, invention and most of all, prosperity.  It's not today because of government.  The American Dream used to inspire both Americans and the rest of the world.  It doesn't do that much today because the government has smothered it...

And that's the message Cruz needs to get out:  "The government needs to get out of the prosperity killing business and out of the dream killing business... I understand that and I'll make it happen... Lifelong crony capitalist and John Boehner's golfing and texting buddy Donald Trump won't." 

Net Neutrality exposes Barack Obama's not so well hidden inner Vladimir Putin

On Thursday the FCC moved to regulate the Internet via what’s commonly called Net Neutrality – although like Obamacare before it was passed, we don’t know everything that’s included in it! Net Neutrality is beyond a doubt the single most despicable thing Barack Obama has done as president. (The FCC is ostensibly an independent agency, but under Obama it’s been anything but.) The big push for Net Neutrality came from Silicon Valley content companies who were whining that ISPs such as Comcast, Time Warner and AT&T were slowing or threatening to slow content that sucked up massive amounts of bandwidth. They are after all the ones who have to invest to expand that bandwidth. These ISPs were at the same time telling companies like Netflix and Google that they could ensure timely delivery of their content if they paid for the extra bandwidth that was being used. The Silicon Valley companies squealed to Barack Obama and he started leaning on the FCC.

Now this should not be viewed as a defense of Comcast or Time Warner. Both are horrible companies when it comes to service and customer service. Terrible! And you might ask how can they survive if they piss off so many customers? Government, of course. In most places they reign as the result monopolies… imposed by government.

This might sound like it’s just about whether you can have House of Cards running simultaneously in three rooms in your house or in every home in your neighborhood. It’s not. It’s about the government seeking to control the Internet, the single most powerful vehicle for the advancement of the human condition in history. That might sound like hyperbole, but it’s not. Today, because of the Internet more people have access to more information, more quickly than at any point since… well, ever. Not only that, they also have access to more products and services, usually at lower cost than any generation ever enjoyed. And perhaps most importantly, they have a vehicle through which they can express their thoughts and share their ideas and highlight oppression & injustice more freely and to more people more quickly than has ever been possible in human history.

A decade from now much of that will be a mere distant memory. Not that the Internet won’t exist, it will. But it will be a government controlled utility rather than the Wild West platform for the free exchange of ideas that it is today. Don’t believe it? Don’t forget, a year ago this same FCC proposed sending “researchers to grill reporters, editors and station owners about how they decide which stories to run.” Six months before that Democrat Senators Dianne Feinstein and Richard Durbin were debating whether bloggers deserved 1st Amendment protections. And of course this is the administration that used IRS commissioners to stifle the free speech of opponents and the Justice Department to go after reporter James Rosen who just happened to be critical of it.

So now, we have Barack Obama’s FCC telling the country that the government gets to be the arbitrators of what can be said or done on the Internet. Imagine if the government decided that WiFi was a bridge too far when we were all hooked up to the Internet by those static filled phone lines. Imagine if the government put the kibosh on online music sharing when record companies complained about declining CD sales. Imagine if the government supported the status quo when Yahoo was the dominant search provider or MySpace was the dominant social networking site. In what universe would have any of that have been a good thing?

As bad as stifling innovation is, that’s not the worst of it. The worst? The death of free speech. Imagine if Richard Nixon had at his disposal the kind of control the FCC says it has now during Watergate. Ronald Reagan during Iran-Contra. Bill Clinton during the Monica Lewinski affair. George Bush in reference to GTMO or Abu Ghraib.

Barack Obama no doubt wishes he had that kind of power during Fast and Furious, the IRS Tea Party Scandal, Benghazi and countless other times. Now he pretty much will have it through his puppets on the FCC. Unfortunately the spineless obsequious leadership in the GOP will likely do nothing to stop this abuse of power. The result will be something slightly less onerous than being perpetrated by Barack Obama’s hero, Vladimir Putin, in Moscow. Putin can simply kill his opponents with little worry of consequence. Here in the United States, thankfully, that’s unlikely to go over as smoothly, however with the FCC’s unconstitutional overreach such measures wouldn’t be necessary. Why kill someone and make a martyr out of them when it’s much easier to simply muzzle them, or if that doesn’t work, label them a criminal and jail them with arbitrary regulations that you’ve set up specifically to target opponents? When government gets to decide who can be its critics or what its critics can say, it’s not a long march to a dictatorship.

Alas, our freedoms aren’t being taken from us by some foreign power with a gun pointed at our collective heads. No, staggeringly, American freedoms are being taken away by the very government a majority of brain-dead voters somehow sent to Washington. What’s worse, the opposition in Congress seems more than willing to capitulate and let the president get away with whatever he does, regardless of what’s in the Constitution, so long as they can stay in power in their little fiefdoms. With Obamacare and what the WSJ dubs the Obamanet, Barack Obama has succeeded in gutting both economic freedom and the freedom of speech in less than six years. Things that largely survived for 220 years... down the drain in six years! The consequences of the mistake that is Barack Obama in the White House will haunt Americans for decades to come, including those who were smart enough not to hand the keys of the greatest kingdom in human history to a petulant man more than willing to lie to get what he wants and a disdain for the very Constitution he swore to uphold.

A dab of Communism and a dash of Fascism, Barack Obama's economic philosophy in practice

The primary reason Communism doesn’t work is that it goes against the very nature of man. In Communism there is simply no motivation for anyone to work hard. When there is a zero correlation between the amount or quality of work you do and the compensation you receive, your motivation to work hard, or maybe work at all, simply evaporates. This is particularly true given that the compensation for the slacker at the next desk is equally without correlation as he continues to get the same salary regardless of whether he actually gets anything done or not. And while Communism as we know it has only been around since 1848, the ideas behind it have been around for much longer… and not surprisingly it was a failed ideology long before Marx and Engels gave it a brand name.

I’m not going to suggest that Barack Obama is exactly a Communist… even if he was, apparently he’s smart enough to lie about it if he knew it would harm his image… I do however think he’s a fan of one of the basic mantras of Communism: “From each according to his ability, to each according to his need,” with him deciding who needs what. At the same time he’s very much a fan of the Fascist economic model where private property exists but government mandates much if not all of its activity. For him everything else is to simply be manipulated in order to achieve those two tenets of his philosophy.

For six years Barack Obama has been doing everything in his considerable power to bring that philosophy into effect in the United States. In all fairness, many of the things he has pursued had their genesis in previous administrations, but under Barack Obama they found an unabashed champion who was willing to turbo charge them as he sought to “fundamentally transformed America”.

The scorecard of Obama’s accomplishments is breathtaking:

• The percentage of Americans working to support the nation is at a record low. 44% 
• The number of Americans on food stamps has exceeded 46 million for an unprecedented 3 years. 
•  The number and percentage of Americans on "disability" are at record highs: 8.9 million & 6.4% 
• The federal income tax is at its most progressive point in modern times with the top 20% paying 94% of all income taxes while the bottom 40% actually get money from the government. 
• With Obamacare the government has taken direct control of almost 20% of the American economy, while the EPA has a death grip on a vast expanse of industries from autos to energy to dry cleaning. Regulations are accumulating at an unprecedented rate and their scope seems boundless. 
•  And finally, as a result of all of this, more businesses are failing than are starting and the country is experiencing the slowest economic recovery in over half a century. 

If the words Communist or Fascist are too strong for delicate sensibilities, let me paint the picture in a slightly different way. Imagine the United States is a wagon with a combination of passengers and people pulling it. Where the wagon goes to find food and sustenance and to build prosperity is determined by the people pulling it. As long as there are enough people on the ground pulling the wagon, and those people are willing and able to put forth the effort to figure out where they should go and how best to get there, everything works out fine. Over time however if enough people stop pulling and jump into the wagon such that the ratio of passengers to pullers becomes too great, the wagon will eventually stop, as will the pursuit of sustenance, prosperity and everything else and stagnation and collapse will begin. But wait! It gets worse! Not only are there too many passengers in the wagon, but they have put chains on the ankles of those pulling it, have decided they know better how to pull the wagon – despite the fact that they are not pulling anything – and they have decreed that they get to decide how everything is distributed. Welcome to Barack Obama’s world. To put things in explicit terms, in Barack Obama’s America 140 million people are working to support a population of 320 million, which includes a record 100 million adults not working. That is the lowest rate in history.

So, while the Communist Party USA may not be celebrating their party’s ascendance into the White House, they are no doubt cheered by the fact that the country is being “transformed” in their direction. That does not bode well for anybody associated with the American wagon, whether pulling it or passenger…

A solution for American economic malaise - Detroit as a proving ground for economic prosperity.

The United States is in the midst of an economic malaise. 92 million Americans are out of work. 35% of the population is on welfare. The economy is barely growing. While incomes for the richest have been skyrocketing, the middle class has seen their incomes decline by 5% in the last 5 years. The federal debt stands at $17 trillion, up $6 trillion since Barack Obama became president. All of this while the Fed has been pumping tens of billions of dollars a month into the economy for years…

Although Barack Obama has made much of this worse, the truth is, things have been going the wrong way for half a century and rather dramatically for a quarter century. Of all of the problems that exist today – and their numbers are legion – there are two that are most troublesome: regulations and taxes. These two things have hammered the fount of American prosperity, the middle class.

First is the regulatory state – particularly federal regulations. Being an entrepreneur, running a successful small business (from whence 2/3 of all new jobs emerge) takes a great deal of work, tenacity and effort. Unfortunately however, the cost of complying with regulations has skyrocketed over the last 40 years. From the EPA to OSHA to the NLRB to HHS and a seemingly endless array of acronymmed bureaucracies come regulations that strangle job creation, and in the process, prosperity. According to the US Chamber of Commerce – no friend to small business – the cost of complying with government regulations at all levels has almost quadrupled since 2000… and all of those increasing costs contribute to the growing death rate among small businesses, which in turn take jobs with them.

Then there are taxes, again, particularly federal taxes and the insane complexity of the IRS tax code. This can be summed up in one measure: According to the Tax Foundation’s 2014 International Tax Competitiveness Index the United States ranks 32 out of 34 developed countries in terms of the competitiveness of our tax system – and if it weren’t for our relatively low consumption taxes, ranked 5 out of 34, we’d be dead last. That means, for companies seeking to invest their money, of the 34 OECD nations, only 2 of them have tax structures that are less inviting than the United States, Portugal and France. Imagine that, that the United States tax system is less attractive to investors – and prospective employers – than Turkey, Estonia, Chile… and even the dysfunctional Greece! While the United States does have advantages… for investors, tax consequences are an extraordinary driver of their choices. And unfortunately for American workers, the government is making the choice to invest in the United States less and less appealing every year.

Despite what you might hear on the Sunday morning news programs or read in the NY Times, this new American malaise is not an intractable problem, is not an unsolvable problem, in fact, the solution is rather simple. Fix those two problems. “How?” you say.

First, sunset every federal regulation on the books. If necessary, pass a Constitutional Amendment that states that every federal law has an implicit sunset provision of 10 years unless it passes each house of Congress by at least 60%. It would also stipulate that all federal regulations sunset after 10 years, regardless of the margin of passage of the underlying law. If such regulations demonstrate themselves to be effective and necessary, they can be renewed. If a regulation were deemed or proven to be sufficiently important to be granted permanent status it should then be passed as a law rather than remaining a regulation.

Second, implement the Fair Tax – although a 10% flat tax might be a distant second suggestion. In 2014 investors have the world at their fingertips. Choices abound from Estonia to Singapore to Switzerland to Canada. If the United States were to implement the Fair Tax, not only would the economy be jolted by an immediate influx of an estimated $2 trillion from the offshore holdings of American companies, it would likely experience an additional annual influx of hundreds of billions of dollars of direct investment from foreign companies seeking to set up shop in the United States. Those additional trillions of dollars would result in the creation of millions of jobs – and these would be real jobs in the real economy, unlike the boondoggles inflicted on the country by President Obama’s “Stimulus”. In addition, the resulting savings of the hundreds of billions of dollars wasted each year simply trying to comply with the incomprehensible IRS tax code could be spent on useful things – or just fun – and the hundreds of millions of hours saved could be spent on work or leisure.

Of course it’s one thing to point these things out and another to actually get them done. So, as in an effort to demonstrate the potential effectiveness of the above I’d like to suggest using Wayne County, Michigan – where the disaster area known as Detroit is located – as an “Enterprise Zone” proving ground. This demonstration would turn Wayne County into a federal tax and regulation free zone. Eliminate all federal regulations within the county and eliminate all federal taxes save a 23% embedded tax.

This wouldn’t impact public safety or individual rights as public safety and law enforcement are state and local functions while citizens’ rights don’t come from regulations but from the Constitution… which would still be in force.

Creating a county wide Enterprise Zone centered on the country’s most economically dysfunctional city would be a perfect opportunity to demonstrate the potential prosperity free market competition can create. Massive amounts of investment would take place and a cacophony of companies would be started, sometimes built on nothing more than an entrepreneur’s idea and a willingness to take a risk. And at the same time, jobs would be created… lots of jobs would be created, with employers competing for the best workers.

While there would be some logistical challenges to implementation due to the fact that the proving ground would be surrounded by non participating counties and cities, at the end of the day the results would demonstrate clearly the potential benefits of dialing back the twin garrotes of federal action that have been strangling American prosperity for half a century. With actual data in hand then the debate over applying the same to rest of the country could begin. Maybe then the country could get back on the road to prosperity where a rising tide lifts all boats rather than today’s perpetually receding tide that leaves most American boats slowly sinking in the mud of the exposed sea floor.

My rapidly fading love affair with Wal-Mart

The first time I ever saw a Wal-Mart I was a grad student getting my MBA down in Tallahassee, FL. One opened up down the road from my apartment and I was immediately taken by the big bright stores with lots of stuff and what seemed to be pretty low prices. In class I learned the secrets to Wal-Mart’s success in its niche of “Always low prices”.   It demanded efficiencies from its suppliers. It became fanatical about using information technology to optimize its sourcing and distribution channels. It paid its employees the community average or sometimes slightly more, but never significantly so. And of course the company benefited tremendously from scale. At the end of the day Wal-Mart became a spectacular success because it provided the goods people wanted at the lowest prices possible.

Thus began a two decade long love affair with Wal-Mart. For most of the last twenty years I’ve spent most of my shopping dollars, particularly food, but other items as well, at Wal-Mart. It helped that, as I hate to shop, I could go there and get pretty much everything I needed in one place, from apple juice to socks to those little trees you put in your car to make it smell good.

I remember around 2003 when a friend of mine got married in Key West. I went to Wal-Mart and purchased a pair of those mesh shoes with the rubber sole that you could wear in the ocean. They cost about $7.95. I remember how amazed I was that they could manufacture that pair of shoes in China, label them, ship them across the ocean, transport them to my store where people would receive them, inventory them, display them and eventually charge me for them, and do so at a profit! Even if they paid their workers in China a penny a day I still didn’t see how they could do all of those things and still make a profit.

When my love affair with Wal-Mart began the company had 1,500 stores mostly serving rural communities across the country and generated about $25 billion a year in sales. Today they have 10,000 stores around the world and generate half a trillion dollars in revenue annually.

Like it or not, Wal-Mart has changed the face of American retail. By using the best of the free market the company has saved Americans hundreds of billions of dollars over its lifetime, savings that they might have used to can use to provide more food to their children, to give to charity to buy their kid a computer for college, or just buy another flat screen TV. By any definition Wal-Mart is an American success story.

Unfortunately however, my love affair with Wal-Mart is fading… and fast. The first injury to the relationship was when the company supported ObamaCare in an effort to increase pressure on its smaller competitors. The second was when they supported the taxing of online sales. Since those two events I’ve reduced the money I spend in Wal-Mart by well over 50%. Now I’m beginning to wonder if I need to redirect most of what’s left. According to Bloomberg, the company is considering supporting the Obama administration’s move to raise the minimum wage. While Wal-Mart knows that it would incur higher wage costs, it also knows that because of its size and efficiency it can better weather the increase than most of its competitors.

And that’s the problem. If Wal-Mart wants to raise the wages of its employees, it has every right to do so and most people would applaud it in the process. Indeed that is the route the Gap and Costco have chosen. But alas, that is not the route Wal-Mart seems to be taking. (They supported an increase back in 2007 as well.) Instead the company is seeking to use to use the power of government to tilt the marketplace in its favor. It wants to use the government to force higher costs on its smaller, less efficient competitors. Essentially it wants the government to put its competitors at a competitive disadvantage.

This is the worst of capitalism – crony capitalism – when businesses use government to harm competitors or keep them at bay. Whether it’s Obamacare or a minimum wage increase or restaurants seeking to keep food trucks off the streets, it’s not only the competitors who lose, it’s the consumers and the market itself. Had Sears or K-Mart used the power of government to strangle baby Wal-Mart in its crib the company would not today be the largest retailer in the world. If AT&T had succeed in defending its government sanctioned monopoly and keeping MCI and other startup telephone companies at bay for another 100 years do you think we’d have iPhones, Netflix, or fixed price wireless plans? No. Of course not. The marketplace survives and thrives the less government intervenes. Wal-Mart of all companies should understand this.

By getting into bed with government Wal-Mart is repudiating the very thing that allowed it to prosper in the first place – the free market. Now that the company has used that free market to become the 800 lb gorilla in the retail marketplace it has repeatedly sought to harness the power of government to keep potential rivals from enjoying the same opportunity. Crony capitalism is the most despicable form of capitalism because it hides behind the mask of free markets.  Thankfully however crony capitalism usually fails because the propped up company often becomes fat and lazy and forgets how to compete. If Wal-Mart wants to betray free markets, so be it, I just hope it’s not too long before the markets decide to strike back.

Memento: The story of liberals who can't seem to learn from reality...

If you’ve never seen the movie Memento, I would highly recommend it… The main character, Leonard, is suffering from anterograde amnesia – the inability to create new memories – the result of a violent attack. Unable to create new memories, Leonard uses tattoos and notes to help him find the person he believes is responsible for the last thing he does remember, his wife’s murder. Throughout the movie we see Leonard writing himself notes and getting new tattoos to help him take the next step in his pursuit of the culprit. By the end of the movie Leonard finds and kills “John G” the man he believes is responsible for his wife’s murder. Or at least he thinks he has, and something we discover he’s apparently done before. At the end of the movie the viewer discovers that despite Leonard’s “system” there really is no correlation between his actions and reality. Even those memories he can recall are suspect. In a nutshell, Leonard is lost in a world where reality simply doesn’t exist. Friends and foes are interchangeable and he knows what he knows only because he reads it in his own handwriting. Actions have no consequences because lessons are never learned.

One has to wonder, is to exist in such a world really living? Think about all of the things you know, from when you first learned the fact that a hissing radiator is probably hot to the realization that not everything everyone tells you is true, most of us never stop learning. It’s how we grow, it’s how we discover what works in the world – and what doesn’t – in the pursuit of solving problems, finding pleasure and virtually everything in between. Without learning we don’t grow and are destined to face an endless cycle of reliving the same exact problems day after day.

Such is the world that liberals have created for themselves… and increasingly have imprisoned the rest of us in. They seem to be unable to make new memories. They seem to be stuck in a universe where reality is disconnected from what actually goes on in the world and they believe what they believe only because they read it in their own handwriting… or in this case the typed letters of the New York Times or the spoken word on MSNBC. Reality simply doesn’t intrude on their universe.

From the trope that throwing money is the solution to America’s education mess to the mantra that more government regulation is the solution to all problems, liberals never seem to learn. One can only look at the performance of American schools and know that money and performance do not move in tandem. What liberals don’t learn is what actually works and what doesn’t. The examples are legion. From the fact that tax cuts actually spur economic growth to the folly that massive government spending can spur an economy to the notion that “You can keep your health insurance”, liberals fail to look at what is going on right in front of them. Or maybe fail to look is the wrong characterization… maybe fail to recognize is more accurate. It’s like when you look at one of those optical illusions with the old lady and the young girl. Depending on what you focus on, you see something different. Liberals look at the economic juggernaut of Ronald Reagan and focus on his tax cuts “for the rich” yet somehow fail to see that 15 million private sector jobs were created under his watch and GDP was booming. That’s 15 million families with a paycheck rather than depending on the government for support and hundreds of billions of dollars in American’s pockets. Conversely they laud Barack Obama because of his concern for the poor and minorities while his policies have resulted in record levels of poverty and massive numbers of people simply leaving the workforce because they can’t find jobs, with minorities hit the hardest.

One has to wonder how is it that liberals consistently fail to learn from the stark failures that are in front of them and have been recurring for decades. Whether it’s the collapse of urban America under generations of Democrat rule to the inverse relationship between government regulation and economic growth, one has to wonder if, perhaps there is not some widespread mental problem there. One can certainly choose to support economic policies that put “fairness” above economic growth, but to proffer the notion that higher taxes, increased government spending and more regulation is good for the economic well being of the nation is to simply ignore the history of the last 40 years. To have watched as government regulation of the housing industry brought the meltdown of the economy and then somehow choose to double down on that very regulation suggests that a portion of America’s liberal’s brains have simply atrophied to the point where they simply no longer process the learning of new material. They find themselves stuck reading the same notes they wrote to themselves decades ago such as “fairness”, “more government regulation”, “higher taxes” and of course the ubiquitous target of everything liberal: “the evil capitalists”. Like Leonard in Mememto, who blindly follows his notes and ends up killing an uncounted number of John Gs, liberals in America follow their notes (or teleprompters) and kill jobs, opportunity, prosperity and perhaps eventually the American Dream itself. One can only hope that at some point they misplace the notes and forget where they’ve put them.

Prosperity's Bible & Einstein's Definition of Insanity

Albert Einstein defined Insanity thus: Doing the same thing over and over again and expecting different results.

One has to wonder what Einstein would think of the left’s continued desire to inflict centralized planning on the citizens of the United States. Central planning has been a failure virtually every time it’s ever been implemented, whether in the Soviet Union, Venezuela or here. And we’ve seen a lot of it here, and, not surprisingly, a lot of failures. Education, check. Mortgages, check. Welfare, check. Amtrak, check. We are already seeing the wheels coming off of their most recent foray into state control, Obamacare.

Despite everything we’ve seen, despite the track record of abysmal failure, liberals seem to think that centralization can solve everything. As disheartening as liberalism’s failures are in the social and education spheres, the real tragedy is what they have done in the economic sphere. It’s economic prosperity that gives liberals sufficient benefits that they have the luxury to chase their fantasy of a world filled with lollipops and fairness. And they are killing the golden goose.

The thing that liberals don’t get is that prosperity doesn’t come from some grand master plan. Rather, prosperity is the result of people taking risks, people working hard, and yes, people seeking to win. American prosperity is the result of billions of decisions made by millions of individuals over the course of two centuries. Decisions to risk everything to start a business. Decisions to start again after one or five or ten failures. Decisions to ignore conventional wisdom and take the road less traveled. Decisions to put a road where one didn’t previously exist. Decisions to invent things that seemed impossible. American history is replete with millions of stories of courage, perseverance, industriousness and optimism. Many of those stories you and I will never hear about or know about, but that doesn’t mean we don’t benefit from them. We do, because those entrepreneurs, innovators, inventors are the oxygen that keep the American economy from collapsing in the face of the left’s burdensome regulatory state. The problem is, as the regulations increase fewer and fewer people have the strength to withstand the onslaught of paperwork and fees and the intimidation by a burgeoning regulatory apparatus.

It might be worthwhile for liberals to look at how we got here in the first place.

Why did most of the inventors and entrepreneurs and innovators who created our prosperity take those risks? There are probably as many reasons as there are dreamers, but one thing is for certain, most of the people who helped build the most prosperous nation in the history were driven by a desire to improve their lot in life. Most of them didn’t come from a life of privilege. Most of them didn’t grow up in risk free bubbles where everything was provided to them by some government agency. Indeed most of them came from middle class households (or below) and wanted to create something better for themselves and their families. Not sure that’s true, check out this year’s Forbes 400 list. Of the 400 richest people in the United States, fully 68% of them made the list as a result of their own efforts, not because they were born in a golden bassinette or with a platinum spoon in their mouths.

A better source might be something call Prosperity’s Bible. That’s not the real title, but it’s appropriate. The actual title of the book is They Made America. From Robert Fulton, Samuel Colt and Cyrus McCormick to Juan Trippe, Ted Turner and Steve Jobs, it’s full of two centuries of the most important innovators, inventors and entrepreneurs in American history. These men – and a few women – built things, invented things, but most importantly, changed things. They helped drive a tiny nation of immigrants to become the most prosperous nation in human history. And they brought their fellow man along with them by creating jobs, opportunity and a dramatic improvement in the standard of living around the world. And in many cases, from Carnegie to Rockefeller to Gates, after they created it they gave much of their wealth away for the benefit of others.

But virtually none of these giants did what they did (except perhaps some of the railroad barons) at the behest of the government. Amadeo Giannini didn’t lend money on a handshake after the 1906 San Francisco earthquake because of any government mandates. Garrett Morgan didn’t invent the gas mask and the traffic signal in pursuit of government contracts. Chemist Leo Baekeland didn’t leave Belgium because there was no government support for his research – there was, plenty – no, he came to America to build a business… which he did, and one of the things he invented was plastic. Rockefeller didn’t rationalize the petroleum market to support some government regulation… although he did save the whales in the process.


And that’s the key to why liberalism has always failed, and always will fail.  It seeks to replace individual drive, individual achievement, and individual responsibility with government mandates, government support and most perniciously, government regulations… all enforced by nameless faceless bureaucrats who have no idea what it takes to succeed in the real world most of us live in.  Liberalism seeks to remove the risk of failure from the human condition.  It seeks an equality of outcome separate from an equality of effort. It seeks to restrict anything that might ever have a negative outcome.   It seeks to mold a world made of imperfect people into a perfect Stepford world where everyone is the same, no one has more than their share and everyone is told what they can’t do and what they must do by regulatory busybodies. 

Obamacare is just the latest in a half century long march of mandates, regulations and other aspects of centralization that have gutted American prosperity and in the process created tens of millions of wards of the state who have no desire to, nor understanding of how to pull themselves up by their bootstraps and go out and make something of themselves, create prosperity for their families and their country, to change the world by doing something of consequence.

Americans of all stripes could benefit from picking up a copy of They Made America. It shows in black and white exactly what it takes to create prosperity on an unprecedented scale. If liberals picked it up they might finally recognize that success can’t be mandated but it can be inspired and stop living up to Einstein’s definition of insanity.

My rather lopsided love/hate relationship with Barack Obama…

Some time ago I was talking with a guy I know and the issue of politics came up followed soon thereafter by the mention of Barack Obama. I instantly said “I hate that guy!” Afterward I wondered if that was really an accurate statement… after some introspection I have to admit, it's kinda true.

I know in a world of political correctness I should maybe not say that… but I feel as if I must, if for no other reason that explain why. Although I don’t actually know Barack Obama personally, that is exactly how I feel. On a personal level he might be a great guy. He’s certainly personable, he might be a great guy to have a beer with, he appears to be a good father and he would probably make a great guest on SportsCenter. Nonetheless, the dictionary defines hate thus: “To dislike intensely or passionately; feel extreme aversion for or extreme hostility toward; detest.” That seems about right.

How is it even possible that I might have such a strong feeling towards someone I’ve never met? Charlie Rangel and MSNBC and the rest of the fabulists - about all things conservative and Tea Party related - would suggest it’s because he’s black, obviously. That’s their right, but nothing could be farther from the truth. While I despise Barack Obama, it has nothing to do with his skin color. Frankly I feel exactly the same about Barney Frank and Nancy Pelosi as well… and the last time I checked neither of them was black.

No, I hate Barack Obama because it is his goal is to destroy that thing I hold most dear: the United States. The United States is indeed an imperfect place, but so too is every other place on this planet. It has however created more prosperity and improved the condition of man more than any other nation in human history. And the biggest part of that success was the driven by the free market system – imperfect as it may be – and its companion individual freedoms.

The United States is not just a geographic land mass sitting between two oceans. There are 200 plus other countries around the world that can be defined by lines on a map. None of them is anything like the United States. They may share some traits with us, but America is a different animal altogether. While you may very well hear someone saying they want to move to France or Germany, you don’t hear them saying “I want to become French” or “I want to become German”. They can move to France, they can become a French citizen… but they can’t become “French”. That has never been the case with the United States. For centuries people have dreamed of coming to America and becoming an American. That is because for most of our history the world understood that America was a place where, regardless of where you came from or what you started with, with hard work, they could achieve spectacular success, however they wanted to define it. For outsiders looking in and those born here, the American Dream was something of consequence, something to strive for, something worth sacrificing for. People like Cyrus McCormick, Andrew Carnegie, Levi Strauss and Madam C. J. Walker knew it long ago while people like Sara Blakely, Daymond John, John Schnatter, Cesar Millan and Mark Cuban know it today.

Unfortunately Barack Obama doesn’t understand any of that. While he talks about an American Dream, his American Dream is one where the nanny state of government swaddles the nation, suckles the citizens, gets to decide who wins and who loses in virtually everything, gets to arbitrarily define the rules, and gets to keep its thumb on every scale. At its foundations that is a misunderstanding of what made America more than just a geographic entity in the first place. America is not great because of government, it is great because of its freedom… economic and otherwise. America was not made great by agencies like the ICC or the SEC or the FDA, the IRS, the EPA or even NASA for that matter. No, America was made great by companies like GE and Ford and Carnegie Steel and International Harvester and Standard Oil and Rockwell, and Intel and IBM and Merck and Kelloggs and J.P Morgan and Sears and Delta Airlines and Microsoft and Disney and Turner and millions of other companies started by entrepreneurs and investors who risked much, and sometimes everything to do something worth doing and earn a profit while doing it.

But Barack Obama doesn’t understand that. He fundamentally misunderstands how and why businesses function – and truth be told… so do most liberals. He believes that businesses exist to provide jobs to employees. He believes businesses exist to provide tax revenue to the government. He believes that businesses exist to further his social agenda. He simply doesn’t understand that while businesses may do any or all of those things, in a free market businesses exist to generate profits for entrepreneurs and investors.

It is that disconnect that makes Barack Obama worthy of being hated. Not because he misunderstands the basic element of free market economics, but because he feels it’s his right to use the police power of the United States to wreck the most prosperous and powerful economic ecosystem the world has ever seen. From green energy boondoggles to stultifying regulation to excessive taxes to seemingly boundless spending on social programs, Barack Obama is systematically strangling the goose that has laid the golden eggs for over 200 years.

If you think the word hate is too strong, what else might you call it when you see a man who is leading the charge to push the United States into an economic tailspin from which we might never recover? America becoming an economic basket case the likes of Greece or Detroit would create a worldwide catastrophe, economic and otherwise that would destroy the lives of hundreds of millions of people, both at home and abroad. A man who is working to inflict that level of destruction on a nation is indeed worthy of being hated.

That doesn’t mean that I wish him ill however. On the contrary, I hope he lives another 50 years after he leaves office. If we’re lucky that will be long enough to allow him to observe how his imperious anti capitalist reign caused (hopefully) a reawakening of the American people to the fragility of freedom and prosperity, resulting in a wholesale dismantling of the regulatory leviathan he has championed. Now that would be a great reason to love him.