Wednesday, September 17, 2008

The Effects of Human Nature on Global Social Systems

There are several economic facts that are ignored and not even taught in many of our schools.

First, when taxes are raised the economy slows; when taxes are lowered the economy grows. When the economy grows the government’s tax revenue increases.

Second, as long as there are greedy and/or corrupt people, any centrally planned economy, whether it is socialism, nationalized redistributive programs, etc., will never work.

Our founding fathers were brilliant when they wrote our constitution. It and capitalism take human nature; greed, corruption and the human spirit and put it to work for the good of everyone. It and a free people are two of the reasons the United States has become one of the most successful and powerful countries today, the center of the financial world, the dollar being the standard of currency, the most charitable country, etc. Socialist type systems work against human nature, dampen the human spirit and encourage corruption, which makes their failure inevitable. It takes away the human desire to be a productive member of society. History shows that some of the first settlers that came over from Europe learned this lesson the hard way. Socialist type governments have to take away freedoms and oppress their citizens in order to prolong their demise. Basically, socialism and redistribution schemes push everyone down to the “lower class”. We would all be equal at zero or close to zero, except the ruling elite and the “super rich”, empowering them to oppress the “lower class”. This can be learned by studying history, our mistakes, governments, nations, states and communities around the world. Examples of oppressive and slowing socialist type economies are everywhere. The state of Vermont is an example right here in the United States. One example of an economy growing after lowering taxes would be Ireland. They recently lowered their corporate tax rate to 12.5% and businesses are growing and flowing there from all over. The US corporate tax rate is 35%, one of the highest. This is just one of many examples.

A lot of people in this country look to Europe as the example they want to emulate. But why would you want 50% and higher taxes, 17-20 % unemployment, redundant government bureaucratic waste, no common sense in government, governments that are literally almost bankrupt, governments that do all they can to keep businesses from surviving, lower charitable giving and loss of freedoms?

The bigger the organization the more corrupt it is. Governments, unions, school systems, nationalized programs, etc., are all perfect examples, our government, particularly the current democrat run congress, being the worst in history. Our judicial system is catching up with the corrupt congress. Many judges go against the will of the people by favoring the convicted offender instead of the victim or they make unconstitutional rulings. Since no one wants to do anything about it, the only thing left to do is keep government small. Everyone is eager to go after big business but they are willing to ignore the even more corrupt federal government and many state and local governments. They are the largest single factor in slowing our economy. The more they take, the less we get in return and the more corrupt they become. The government spends twice as much money to do the same thing that can be done in the private sector. Another way to put it, as soon as the government has your money half of it disappears. Everyone makes less and many lose jobs.

The latest example is the Fannie Mae, Freddie Mac financial scandal. These were pseudo government entities that were rife with corruption. Basically congress caused this melt-down and then has the audacity to blame it on the free market. During the ‘90s the government encouraged mortgage lending to people who could not afford it, under the guise of affordable housing for all. Fannie Mae and Freddie Mac bought all these bad loans, loans that would never be paid back, from banks and mortgage companies. This is one of many examples of what happens when government gets involved instead of letting the free market regulate itself. In reality, there are laws and regulations already on the books that if enforced would provide sufficient regulation. If the government was not involved these bad loans would never have been made. There was no accountability because the federal government was backing and encouraging these bad loans. The fall-out was inevitable. Many republicans in congress including John McCain warned many times of this outcome. They and the president tried several times to pass legislation to change oversight, but it was always blocked and filibustered by Chris Dodd, who is the head of the congressional finance oversight committee, Barney Frank and many other democrats. If you follow the money you will find that many democrats and liberal organizations received the bulk of the many generous contributions doled out by Fannie Mae and Freddie Mac. These companies were turned into political fund-raising machines for politicians. Chris Dodd is at the top of the list receiving the most contributions; Barack Obama received the second highest amount for his political campaign. Frank Raines, the CEO of Fannie Mae and a Clinton appointee, stepped down because of an ethical accounting scandal. He left after running the company into the ground while taking multi-millions of dollars from the company. Now he and another Fannie Mae executive, Jim Johnson, have advised Senator Obama on economic matters in his campaign for the presidency. This is probably the largest government scandal in history yet no one is demanding an investigation. While Obama and fellow democrats are blaming the free market and republicans for this scandal, democrats in congress are not crying for an investigation the way they usually do. A lot of democrats, some republicans and many companies would be implicated if they did. The very people these bad loans were supposed to help are even worse off now. Many have lost everything. This is the classic example of big government helping its citizens. While it was necessary for the federal government to step in and take over Fannie Mae and Freddie Mac in order to avoid a run on the banks and a major collapse, the very people who caused this problem are now directly in control. Even after all this, many of the corrupt executives of these companies are still receiving multi-million dollar severance packages. This will happen again unless they split up the companies and completely privatize them. Why is it that we need oversight committees to oversee the congressional oversight committees that oversee these government programs? The American people should demand that these members of congress resign and that an investigation be done. If they don’t resign they should be voted out of office. This is major news; the media should be demanding this as well. These scandals and crisis will happen more and more as socialism and its nationalized programs creep into government. The collapse of the Social Security and Medicare systems is inevitable as well, unless we fix or end them. It’s just a matter of when. How can we expect government to “fix” health care when they refuse to fix or end social security, especially in light of the recent financial scandal. If they nationalize health care, they would just be creating another time bomb for future generations. England is now trying to privatize their nationalized health care system after years of failure.

These are complex systems so solutions have to be well thought out. There are so many things that affect each other. It’s just too easy and common for a solution to have unintended consequences. Linear thinking is all too common in every single aspect of society, which would explain why so many “solutions” today have the opposite effect and actually make things worse. Instead of learning from these mistakes we blame everything and everyone else but the “solution”. The same “solutions” are tried over and over and because people are being misled by the proponents of the “solution”, things continually get worse.

Politicians, the media and professors today make big government and nationalized redistributive type programs that spread the wealth around sound good, this is even taught in our schools and universities, but they have the opposite effect than what is intended. They hurt those they profess to help. Socialism and nationalized programs like welfare, health care and social security bring out the worst in society. High taxes, high unemployment, people make less, the economy slows into a recession with generations of people saddled with hopelessness. In extreme cases there is only a rich, ruling elite and their corrupt friends in various industries. Everyone else has nothing.

These centrally planned economies seem to make sense in theory, but in practice they do not work. They have been and are tried over and over again and they do not work. Global evidence proves this. How many times will we ignore history and destroy peoples’ lives.

Our constitution with its bill of rights ensures our individual liberty, freedom and prosperity while protecting us from the corrupting effects of government. These socialist type programs circumvent these protections giving government too much oppressive power. Individuals crushed by the weight of government. Our government is already too big and corrupt now. Do we really want to give them even more power while at the same time removing the mechanism that protects our individual freedoms? There are those that believe the constitution is a fluid document open to interpretation. There are those in congress that seek to add a second bill of rights. There are those that wish to use judges and the Supreme Court to circumvent our constitution. We must recognize those that wish to do this and stand up to them. Education and the privilege to vote is the best way to keep them from taking away our freedoms and destroying our great country.

People from around the world still see the United States as a beacon of hope and many still believe that if they could just make it here they will succeed despite the negative propaganda from politicians and hollywood. In fact, many from other countries come here with nothing at all, some who are forced to flee their own countries. They know there are no limits to their success. This hope and opportunity for all is in danger.

If we keep government small, cut spending and cut taxes then the economy will boom, everyone will make more, more people will have jobs and unemployment will be even lower than it is now. Then we will be able to help those that really need help. Citizens will be free to give even more money to charities than they do now. When citizens have liberty and freedom of every kind including economic and the human spirit is allowed to soar, people can achieve extraordinary things which translates into a strong, robust economy.

Government is not there to give us a handout it is there to ensure that each and every citizen is free and has every opportunity to be all they can be.

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