Tweets, Taxes, and the Pursuit of Happiness

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By Mike Cronin

Socialists of all stripes decry capitalism, but cannot achieve their vision of a classless, egalitarian society without first stealing the wealth created by capitalists! Case in point:

Mayte Lara, an illegal immigrant, created a brouhaha on Twitter by describing how she bragged during her Valedictory speech about being “undocumented” and yet still achieved a “full ride” scholarship to the University of Texas.  Why?  Federal law does not prohibit states from providing in-state tuition to “undocumented students.”  Why should there be an uproar?  I mean, it’s not as if Texas taxpayers will have their hard-earned money taken from them via the coercive power of government in order to pay for Ms. Lara’s college education at the expense of whatever they might do with it themselves, is it?  It couldn’t be that the price of a UT education is going up in part because there is no such thing as “free” tuition, could it?

This isn’t about race or hatred of illegal immigrants.  We could change our laws to reform the immigration system to make it easier to be in this country legally.  It’s the dysfunction, the absurdity, the gall of having laws on the books that are enforced at virtual gun point (i.e. tax compliance) while facilitating the wholesale abandonment of other laws (immigration) in order to expand the welfare state and the vast pool of voters dependent on government.

As a human being, Mayte Lara has as much right as anyone to seek out the best life she can find for herself.  We might even refer to such a right as “the pursuit of happiness.” Doesn’t that phrase have a familiar ring?  You might have read it before in a modest historical document.  But the right to pursue happiness is not the same thing as being given the privilege to be made happy at other’s expense.  Ms. Lara has no right to the wealth, time, or property others have produced.  Yet (perhaps without realizing it), she flaunted the fact that she was given a license from government to dispose of the wealth, time, and property of others (in the form of her tax-payer funded education).

Taking wealth from the citizens you are supposed to protect, and giving it to illegal immigrants you are supposed to deport.  Absurd!

In a related note, the Democratic National Committee is putting a wall around its convention site.  A Secret Service agent said the wall was for security purposes. Really? You mean it’s not meant to be a canvas for taggers?  It’s for security? From what, Bernie Sanders supporters? Thanks for the enlightenment, Agent Obvious!

Aren’t the Democrats supposed to be the party of inclusion and multiculturalism? They are certainly against the idea of putting a wall along our border with Mexico. If there were such a wall, future Democratic voters like Ms. Lara would have a much harder time getting into the US!

(I am also against a border wall, by the way, but for a different reason.  I think the best way to fix immigration is to make it easier to be here legally under a variety statuses and in a way that doesn’t automatically confer a voter pool to one party and a tax burden to everyone.)

A Capital Idea: an “-ism” for Freedom

By Mike Cronin

Last week, I offered the view that adopting socialism is a recipe for disaster. Most of the political “-isms” (socialism, communism, fascism, imperialism, etc.)  “-chies” and “-cracies” (monarchy, anarchy, theocracy, democracy, plutocracy, oligarchy, etc.) sound different on paper, but they all have two things in common: the rule of one human or few humans over the rest, and the absence of individual freedom.

There is an alternative.  Our founders gave us a Constitutional republic which enshrined the rule of law and individual liberty.  The essential element of freedom is property rights, including self-ownership.  The political-economic system that arises where freedom reigns is called capitalism.  It has never been fully embraced by any country.  Our own country perhaps came the closest, which greatly contributed to the vast economic achievements and ever-increasing prosperity we came to expect as Americans.

Yet our failure to fully adopt it has had a profound effect on our history. The institution of slavery was a direct affront to the concept of freedom, and it convulsed our country from its beginnings through the Civil War and beyond. I’ve written elsewhere of slavery and unjust war as two of the four major dysfunctions that have afflicted our country.

Want some examples of how capitalism is better than socialism?

The Ukraine is a geographic bread basket, similar in productive potential to the US Midwest; yet the Union of Soviet Socialist Republics (of which Ukraine was once one of the socialist republics) had to import grain from us during the height of the cold war. Why couldn’t they produce and distribute enough to feed themselves?

Virtually every labor saving and communications device and other technological advancement since the Dark Ages was invented or perfected in the US or another semi-capitalistic country. (E.g. the electric light bulb, the car, the airplane, the microwave oven, the TV, VCR, and DVD, the laser, vaccines, etc.). Have you ever considered buying a car designed and manufactured by an Iranian or North Korean company?  Does such a thing even exist? Why aren’t such things invented in dictatorships and socialist utopias?

In most cases, landlocked nations are doomed to economic mediocrity or worse. (Examples: Afghanistan, Mongolia, and Bolivia). But a few, such as Switzerland and Lichtenstein, are incredibly well off.  What separates them? The ones that are well off have a much higher degree of individual freedom and capitalism than the others.

China was once every bit the communist leviathan that the Soviet Union was.  Why didn’t China go the same way the USSR did? Conversely, why is the US going through a decline?

China is ascending to the same degree it has adopted limited capitalistic market reforms. Our country is declining to the same degree we adopt the socialist dysfunctions that destroyed the Soviets and continues to hamper the Chinese. Imagine the productive energy that could be unleashed if 1.4 billion people enjoyed a fully free existence!

Despite the vast body of historical evidence that capitalism works and socialism doesn’t, capitalism has been given a bad name.  Individual freedom requires individual responsibility for one’s own actions and living with the consequences of one’s choices.  For that reason, capitalism will always be a hard sell compared to the free goodies and cradle-to-grave care promised by the heralds of the other “-isms.” On top of that, where capitalism has some influence, prosperity follows. Prosperous people are easy for envy-baiters to blame in order to gain an audience…and power. In virtually every human system of organization other than capitalism, anyone with wealth could only attain it by taking a bigger share of “the pie” than everyone else. Capitalism is unprecedented – it allows the productive to enlarge the pie!  But the envy mongers can’t or won’t see that.  They say capitalism fosters greed.  There’s no denying that greedy people exist,  and some of them advance quite far under semi-capitalistic economies, but socialism is absolutely powered by greed and envy!

It is easy for the prophets of utopia to blame capitalism for the sins of the other systems. The latest example is the appellation “crony” capitalism.  The proper term for companies using influence, connections, and campaign donations to get laws passed that stifle their competition is “corporatism.”  Using the coercive power of government to stifle your competition when you can’t win competitively through offering better value is not capitalism at all, though it has some capitalistic trappings (namely the privately-owned nature of the corporation).

The really ironic thing about the other “-isms?”  They need the productivity of capitalism.  A greedy socialist can’t “redistribute” wealth from the productive to the parasitic if there isn’t any wealth to start with.  He must decry capitalism even as he robs the capitalistic in order to buy votes from those he has bamboozled.

Your Income: Earned or Distributed?

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By Mike Cronin

When you received your pay check, was it because you earned it by trading your time and skill for money, or because it was just “distributed” to you?  I suspect you answered that you earned it. Most of us do. That’s why talk about the vast “income inequality” in our country can be very misleading.

When a statistician talks about income distribution, he or she is referring to how income brackets fit in a bell curve, like in the chart above.  When a politician or a pundit talks about income or wealth distribution, we are supposed to just act as if our money has been unfairly distributed and not earned, and  certain adjustments are necessary to make things “fair.”  These adjustments take the form of taxes, if you “received” too much, or hand outs and benefits, if you “received” too little.

The statisticians’ usage of the term distribution is neither bad nor good, it’s just math. The politicians’ and pundits’ usage of the term distribution is insidious, because it sounds so fair, but it drops contexts in at least two ways.  Every dollar that is “given” by the politicians to those who didn’t have “enough” income “distributed” to them, either:

  1. Had to be taken away from those who had produced it, then “redistributed” to the “have nots;”
  2. or, it had to be minted, printed, or digitally conjured up out of thin air and “pumped” or “quantitatively eased” into the economy.

The first is literal and direct theft (though we call it income taxes) and the latter is indirect theft, because it steals value from our existing money. (Full disclosure: I work for the government, so almost my entire income during my working life has come from your taxes – and my own. The part of the government I work for is clearly derived from the enumerated powers in the Constitution, and I favor The Fair Tax vice the confiscatory taxation system we have today. Decide for yourself whether I am a hypocrite. The thought has given me pause from time-to-time.)

So, statistically speaking, we have a vast disparity between the highest income earners and the lowest. That does not mean income distribution is unfair, because it does not mean that the “haves” with huge incomes somehow just got lucky and received an unfairly large distribution of money. Maybe they earned it, maybe they inherited it, maybe they embezzled it. The fact that they have It is not proof that they got it unfairly. Likewise, the fact that “have nots” at the low end of the income bell curve don’t have more doesn’t mean that they have somehow been cheated. Perhaps it means that they can work hard, gain skills, and climb into higher income brackets.