Why Inequality is Not Necessarily Bad

In this video Law Professor Richard Epstein explains why inequality is good. While his argument is solid, I wouldn't have stated it that way. I would have said liberty is good and you can't have liberty without allowing for economic inequality as a possible outcome. However, when those with economic power extract economic rent from government through bailouts and other special rights then it is bad. But the solution is not to give government more power as many of the OWS crowd want but to limit the scope of government so it is not economically beneficial to lobby for corporate and union handouts. We need to end privatized profits and socialized loses. If a company or a union (GM, Chrysler, UAW, NEA, Bank of America, and so forth) makes bad decisions then they need to pay the price, not taxpayers. Corporatism, not capitalism, is what people should be upset against.

Watch Does U.S. Economic Inequality Have a Good Side? on PBS. See more from PBS NewsHour.

Is the US a Democracy or a Constitutional Republic?

When I was a young boy a visiting relative asked me if the US was a democracy or a republic.  I said democracy.  The led to a 30 minute lecture on why we are a constitutional republic.  She was correct, of course.  The founders never intended for the US to be a democracy.  They feared democracy because a true democracy does not have safeguards to protect liberty.  Here is a well done video from the Bill of Rights Institute.

Atlas Shrugged Movie Part 1 DVD Release

With Atlas Shrugged Part I set for release on November 8, I thought I would share this YouTube review by BookofNick.  He does a really good job.  

Lyrics to Wilson Getchell's You're Gonna Pay

You’re Gonna Pay

Old people government funded medication

Subsidized housing in the capital of the nation

3 trillion dollar deficit on top of a 15 trillion dollar debt

Bullet trains, windmills and monkeys on cocaine . . . monkeys on cocaine

Chorus:

You’re gonna pay!

You’re gonna pay!

You’re gonna pay!

. . . cause someone’s got to . . . pay

For Federally funded cowboy poetry

For Federally funded condoms for pre-teens

For Federally funded books and magazines

And Federally funded air to breathe

(Chorus)

For the 21 Century entitlement state

Where there are crickets in the coffers and pensions to pay

We need less military presence throughout  Continental Europe

For more fiscally responsible punk rock music now

(Chorus)

(Repeat Chorus)

For 70 million baby boomers'

Social Security, Social Security

70 million baby boomers'

Social Security, Social Security

(Chorus)

For Federally funded cowboy poetry

For Federally funded condoms for pre-teens

For Federally funded books and magazines

For Federally funded air to breathe

You're Gonna Pay . . . Someone's Got To

This music video is by Wilson Getchell.  The sound reminds me of Greenday or The Ramones but with a conservative fiscally-sound message.  I have always been surprised that many young people don't realize that they are the ones who will have to pay for all the government they support and their parents demanded.  They will pay through higher taxes and lower living standards.  Wake up grasshopper generation!  Regardless of what your helicopter mom told you there ain't no such thing as a free lunch.

My only criticism of the video is, how can you not include the cost of the two (or is it three?) wars the US is waging?  If you want to appeal to an idealistic younger generation, you have to include these misguided and prolonged wars when you talk about wasteful government spending otherwise you look like a shill for the neo-cons.  Which is more expensive to the billion millions, monkeys on coke or the kokane guns of Jamdown Town?

The Grasshopper Generation

As a follow up to my post on Professor Rowley's claim that FDR turned a free people into a "people excessively dependent upon government" and "sowed the seeds for a  redistributive, rather than an entrepreneurial society."  I present the following statistics from The Economic Collapse Blog as evidence of our dependence on government.

-Over 44 million Americans are on food stamps.

-Over 50 million Americans are now on Medicaid which is one out of every six Americans.

-53 million Americans received $703 billion in Social Security benefits in 2010.

-Right now the U.S. government is either writing or guaranteeing well over 90 percent of all mortgages in the United States.

-Entitlement programs such as Social Security and Medicare now account for 58% of all U.S. government spending.

- Some experts estimate that the unfunded liabilities of the U.S. government for programs such as Social Security and Medicare are in the neighborhood of 60 trillion dollars.  Other experts claim that the total for federal government unfunded liabilities could be well over $100 trillion. 

 - U.S. households are now actually receiving more money from the U.S. government than they are paying to the government in taxes. 

Also from The Economic Collapse Blog,

"It really is hard to find the words to describe the true horror of the national debt.  The U.S. government has been on the greatest debt binge in all of human history, and a day of reckoning is coming that is going to be so painful that it is going to shock America to the core.  We have lived so far above our means for so long that none of us really has any concept of what "normal" is like anymore.  The United States has enjoyed the greatest party in the history of the world, but now this decades-old party is ending and the bills are coming due.  It was Dick Cheney who famously said that "deficits don't matter".  Well, try telling that to the nation of Greece right about now.  The horror that Greece is just beginning to experience is a preview of what is going to happen to us as well.  Only when it happens to us it is going to be so much worse, because when we go down we are going to bring the entire global financial system down with us. 

"What we have done to future generations is beyond sickening.  Previous generations entrusted to us the greatest economic machine in the history of the world and we destroyed it.  Now we are leaving to our children and our grandchildren an economic future that has been totally wiped out and a national debt of more than 14 trillion dollars that we expect them to repay."

Best Paragraph on FDR I Ever Read

Most (all?) elementary and secondary school history books present FDR as America's savior who led us out of the Great Depression.  Most historians consider him one of the greatest presidents.  Charles Rowley - a former economics professor of mine - has managed to set the record straight in only one paragraph.

“Despite the existence of a financial panic, Franklin Delano Roosevelt was elected into office by Americans who retained a remarkable independence of spirit and  willingness to make their own way in life that had been the great legacy of the Founders and of all those freedom-seeking immigrants who had abandoned all they had to seek opportunity in the New World. By his actions while in extended office, FDR transformed a minor Panic into a Great Depression, and sowed the seeds of a  progressive socialism that slowly would throttle all enterprise out of  the capitalist system. By his pandering to the fears of the weakest remnants, and by his specious use of words of insincere comfort to those who had no desire to flourish as free individuals, FDR weakened the constitution of the People, made  the People excessively dependent upon governmment, and sowed the seeds for a  redistributive, rather than an entrepreneurial society. FDR was not only a traitor to his class. He was a singularly ill-informed and vacuous traitor to his nation.” Charles K. Rowley, June 25, 2011