Freedom Line Blog

In our latest Liberty Update we highlight how replacing Joe Biden atop the Democrats’ 2024 ticket wouldn’t substantively change the left’s “Bidenomics” economic agenda that is the main voter concern driving his unpopularity.  In noting Biden’s strange and stubborn habit of whispering into the microphone that “It’s working” when promoting that failing agenda, we noted that poverty just surged at a record rate last year, according to the federal government itself.  From our friend Stephen Moore, here’s a helpful visual placing it in stark relief:

Bidenomics Is “Working?”

Economist Deirdre McCloskey will soon release her new book entitled “Bourgeois Equality:  How Ideas, Not Capital or Institutions, Enriched the World.” It it, she describes the unprecedented transformation  and improvement of human wellbeing through the power of economic freedom, as illustrated by this graph:

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The Power of Free Markets

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As McCloskey summarizes, that’s the result of the free market revolution:

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[I]n the two centuries after 1800, the trade-tested goods and services available to the average person in Sweden or Taiwan rose by a factor of 30 or 100.  Not 100 percent, understand – a mere doubling – but in its highest estimate a factor of 100, nearly 10,000 percent, and at least a factor of 30, or 2,900 percent.  The Great Enrichment of the past two centuries has dwarfed any of the previous and temporary enrichments.  Explaining it is the central scientific task of economics and economic history, and it matters for any other sort of social science or recent history…

The modern world was made by a slow-motion revolution in ethical convictions about virtues and vices, in particular by a much higher level than in earlier times of toleration for trade-tested progress – letting people make mutually advantageous deals, and even admiring them for doing so, and especially admiring them when Steve Jobs-like they imagine betterments.  The change, the Bourgeois Revaluation, was the coming of a business-respecting civilization, an acceptance of the Bourgeois Deal:  ‘Let me make money in the first act, and by the third act I will make you all rich.'”

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It’s something for which we should all remain grateful, and hopefully more readily defend against the eternal onslaught of statism.

An interesting new bit of original research by The Spectator’s Fraser Nelson entitled “Why Britain Is Poorer Than Any US State, Other Than Mississippi” helps reconfirm the concept of American Exceptionalism even amid the Obama Malaise. First, Mr. Nelson takes a welcome swipe against the all-too-common habit of American self-criticism:

No one beats up America better than Americans.  They openly debate their inequality, conduct rigorous studies about it, argue about economics versus culture as causes.  Their universities study it, with a calibre of analysis not found in Britain.  Americans get so angry about educational inequality that they make films like “Waiting for Superman.”  And the debate is so fierce that the rest of the world looks on, and joins in lamenting America’s problems.  A shame:  we’d do better to get a little angrier at our own.”

Nelson then gets to the heart of the matter:

If Britain were to somehow leave the EU and join the US, we’d be the 2nd-poorest state in the union.  Poorer than Missouri.  Poorer than much-maligned Kansas and Alabama.  Poorer than any state other than Mississippi, and if you take out the south east we’d be poorer than that, too.”

He also addresses the cliche of horrific American inequality along the way:

It’s not surprising that America’s best-paid 10 per cent are wealthier than our top 10 percent.  That fits our general idea of America:  a country where the richest do best while the poorest are left to hang.  The figures just don’t support this.  As the below chart shows, middle-earning Americans are better off than Brits.  Even lower-income Americans, those at the bottom 20 percent, are better-off than their British counterparts.  The only group actually worse-off are the bottom 5 per cent.”

Obama may not believe that American Exceptionalism is of any greater merit than British Exceptionalism, but the facts and some Britons contradict that notion.

Conservatives typically – and correctly – fault the regulatory state for increasing the cost of doing business and impeding job creation. But what about the argument that businesses don’t pay taxes (or regulatory fees), people do?

Rep. Paul Ryan (R-WI) is making a powerful case that the two go together in a way that could reduce the government’s footprint and decrease poverty.

“The regulatory part of Ryan’s anti-poverty plan goes after ‘regressive’ federal rules – those that have an outsize economic impact on low-income households,” reports The Hill. “Supporters of his plan say regulations are ultimately borne by ordinary consumers and households who pay extra when new restrictions are piled on to the products and services they use. The poor end up spending a greater share of their income to cover the added expense.”

The argument that regulations are regressive – that they take a bigger bite out of a poor family’s budget than anyone else’s – is an especially attractive one to liberals such as Cass Sunstein, the former chief of the Office of Information and Regulatory Affairs in the Obama White House.

In a recent column, Sunstein said Ryan’s regulatory reforms “point in helpful directions, and they suggest the possibility of bipartisan cooperation on some important questions.” Among these is taking into consideration the human cost of regulations on a segment of society that can least afford it.

To be sure, neither Ryan nor Sunstein advocate eliminating all regulations, and how they would implement such reforms would likely differ substantially. Still, the fact that a well-known, serious conservative and his liberal counterpart see common ground on pulling back government and lifting up the poor is a development worth watching.

“Is something less true if a white person says it about black people?”

That was the question liberal comedian Bill Maher asked on his show in relation to Paul Ryan’s recent comments about the link between poverty and culture.

Just prior Maher read a quote which he attributed to Ryan “about how lazy kids are these days and how they need to aspire to be more than ‘ballers’ and ‘rappers,’” reports Mediaite. But then Maher revealed he was quoting Michelle Obama – not Ryan.

The point Maher made was that black political figures get a pass for speaking hard truths on certain issues while their white counterparts do not.

Rich Lowry gives even more examples of this double-standard by quoting then-Senator Barack Obama.

Imagine the reaction from liberals if Ryan had said the following instead of the current president: “We know that more than half of all black children live in single-parent households… We know the statistics – that children who grow up without a father are five times more likely to live in poverty and commit crime; nine times more likely to drop out of school and twenty times more likely to end up in prison.”

Anyone who follows politics knows that had Ryan said this, the statement and the (completely unmerited) backlash that would greet it would likely define and limit the rest of his career. Aside from Barack Obama’s speechwriter at the time, no one else probably remembered he ever made these remarks until Lowry unearthed them.

The irony of the identity politics double-standard is that neither Barack Obama nor Paul Ryan has been able to speak truth to power and get results. Instead, Obama is ignored while Ryan gets flayed for motives he doesn’t have. The only way to break the logjam is for the president to defend Ryan’s diagnosis, even if he doesn’t agree with the House Budget chairman’s remedy.

Certainly then America would sit up and listen.

Get ready for more presidential overreach.

Today, Barack Obama convened his first Cabinet meeting of the year. Unwilling to negotiate with Republicans in Congress, the President threatened to bypass the legislative process in order to impose his preferred policies through executive orders.

“I’ve got a pen and I’ve got a phone,” CBS’ DC affiliate quotes the President telling Cabinet members. “And I can use that pen to sign executive orders and administrative actions that move the ball forward in helping to make sure our kids are getting the best education possible, making sure that our businesses are getting the kind of support and help they need to grow and advance, to make sure that people are getting the skills that they need to get those jobs that our businesses are creating.”

Quick, grab the pen and unplug the phone!

What Obama is promising is to intervene in every stage of an American worker’s lifecycle, without any input from the 535 people elected to represent their diverse interests in Congress. Instead, he will rely on the accumulated wisdom of the bureaucratic and trade association elites to impose change in a centralized, top-down fashion.

It’s as if after five years of running annual trillion dollar deficits, destabilizing the health insurance market, destroying the coal industry and presiding over the largest increase in food stamp use in history the President thinks he needs to increase his influence over the nation’s economy.

It would be better if instead of rushing to issue a flurry of short-lived orders President Obama instead took the remainder of his lame duck tenure for what it is: An opportunity to see the big picture and exercise some humility.

Republicans are interested in talking about poverty reduction. Obama – whose upcoming State of the Union speech is rumored to include a section on income inequality – should meet them half way. Have a real conversation. In private and in public. Elevate thoughtful opponents like Paul Ryan so that the American people see two powerful intellects engaging a serious issue in a respectful way. In short, dabble in statesmanship.

Obama’s executive orders will expire the moment he leaves office. They will also incite partisan opposition, and rightly so since each will represent an end-run around the lawmaking process.

Mr. President, you can do a lot better than your so-called “pen-and-phone” strategy. America deserves it.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez. 

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Byron York says when it comes to talking about America’s historically high poverty rate, “Barack Obama ignores the issue when it comes time to campaign. A sky-high poverty rate doesn’t fit his theme that things are getting better. So he doesn’t talk about it.”

“But the problem is still there. According to the Census Bureau, the poverty rate has gone from 12.5 percent in 2007 to 13.2 percent in 2008 to 14.3 percent in 2009 to 15.1 percent in 2010 to 15.0 percent in 2011. The last time it was higher than 15.1 percent was in 1965, when the nation’s anti-poverty programs were just taking effect.”

For all his pretensions about being the next FDR, it looks like President Obama’s tenure could signal the death knell for LBJ’s expensive and failed Great Society.

Well, never let it be said that Obama hasn’t achieved anything other than a record number of golf outings and fundraisers.  He has dismantled LBJ’s “Great Society,” as poverty approaches levels not seen since 1965:

The official poverty rate will rise from 15.1 percent in 2010, climbing as high as 15.7 percent. Several predicted a more modest gain, but even a 0.1 percentage point increase would put poverty at the highest level since 1965.”

We recall Obama promising to cut the deficit in half by the end of his “first term,” to close the Guantanamo Bay detention center, to adhere to public campaign finance limits, to not raise taxes on anyone earning under $250,000 “by one dime” and that unemployment would never reach 8% under his “stimulus,” but never this.

Here in the developed world, Greenpeace’s brand of environmentalism provides a convenient way for sheltered liberals to become saints on the cheap.  But Greenpeace’s impact in the developing world isn’t so cheap.  In fact, it can be deadly.

A new introductory video from “DarkPeace” illustrates that destructive impact in very stark terms.  From sabotage against agricultural production research centers, to pressuring apparel companies like Adidas to stop manufacturing textiles in developing nations, to targeting energy projects, Greenpeace’s tactics have the effect of reducing availability of food in nations like Somalia where starvation is very real.  Its tactics also kill jobs, eliminate avenues to better wages and exacerbate miserable poverty.  Even The New York Times has admitted that Greenpeace’s shadier activities threaten “to completely marginalize” it and “undercut its credibility on other issues.”  Greenpeace co-founder Dr. Patrick Moore agrees:

To a considerable extent the environmental movement was hijacked by political and social activists who learned to use green language to cloak agendas that had more to do with anti-capitalism and anti-globalization than with science or ecology. I remember visiting our Toronto office in 1985 and being surprised at how many of the new recruits were sporting army fatigues and red berets in support of the Sandinistas…  Their propaganda campaign is aimed at promoting an ideology that I believe would be extremely damaging to both civilization and the environment.”

Even here in America, Greenpeace’s activities threaten tens of thousands of potential jobs.  But with groups like “DarkPeace” and people like Dr. Moore exposing them, perhaps not much longer.

Two federal government reports released within the past week again refute the toxic, persistent myth that poverty is the root cause of crime.

Last week, the Census Bureau announced that the nation’s poverty level jumped from 14.3% in 2009 to 15.1% for 2010, the highest rate since we emerged from the Jimmy Carter hangover in 1983.  The overall number of poor Americans rose to 46.2 million, the highest total since poverty estimates began 52 years ago.  Those numbers justify Newt Gingrich’s observation that Barack Obama is the “Food Stamp President.”

Now this week, the Federal Bureau of Investigation (FBI) announced that crime rates continued to plummet last year.  Violent crime rates declined for the fourth consecutive year, while property crimes declined for the eighth consecutive year, even as the nation’s economic malaise deepened.  Moreover, the lower crime rates occurred amid local budget reductions that have affected police departments.

These statistics confirm the timeless reality that criminality is not some sort of involuntary act to which helpless souls are driven by economic adversity.  Rather, criminality is a voluntary choice on the part of the culpable criminal.  The latest data won’t stop the political left from repeating their discredited dogma, but the facts as usual refute them.

Courtesy of a story from UK Reuters:

President Hugo Chavez blamed “criminal” capitalism on Sunday for global climate phenomena including incessant rains that have brought chaos to Venezuela, killing 32 people and leaving 70,000 homeless.

Worst hit is the coastal area of the South American OPEC member nation where millions live in precarious hillside shantytowns and mudslides have been toppling rickety houses.

Hmmm, an oil-rich nation with millions living in shantytowns? How often do you think that happens in capitalist societies, Senor Chavez?

As the lame duck Congress prepares to take up the issue of what to do about the expiring Bush tax cuts, liberal pundits are busy proving to the American people that no journalism school in America provides economics education. A few points to make with your liberal friends as you argue economics the next time you join them for a non-fat soy latte made from fair trade ingredients:

• Extending the Bush Tax Cuts Won’t “Cost” Anything — Liberals can’t stop carping about the $700 billion “cost” of extending tax cuts for Americans making over $250,000 a year. This is preposterous. The absence of tax increases isn’t a cost to the federal government. If it was, then every dollar kept in private hands instead of transferred to Washington would be a cost. Private businesses don’t account for imaginary revenues as costs, and there’s no reason for government to either. This is just an excuse for not bringing expenditures into line with “revenues” (i.e. money confiscated from you).

• A Shortage of Tax Revenue Isn’t the Root of America’s Fiscal Problems — The class warfare rhetoric at the heart of the tax fight is a red herring for the real issue at hand. Virtually all taxes kill economic activity. Of course, some tax revenue will always be necessary to finance the basic functions of government, but beyond that baseline taxes are actively destructive. Thus the real choice when it comes to upper-level earners’ tax rates isn’t whether they should be soaked or not. It’s whether you think the federal government is doing too little (in which case taxes need to increase and more private economic activity should be killed) or too much (in which case spending needs to decrease).

• Income Inequality is a Meaningless Metric — Proponents of aggressively progressive taxation who are prone to ideological rather than practical justifications of their beliefs have increasingly been leaning on an argument that America suffers from growing income inequality. This is specious for two reasons. First, it presumes that there is an ideal distribution of wealth that exists free of merit. The more free an economy is, however, the more income is a function of how much value one creates in the marketplace. So do we want a nation of C students (socialized mediocrity) or a nation where the highest achievers get A’s and the lowest ones are held back a year (with generous welfare benefits, we should add)? Also, these numbers are absolutely useless from a statistical perspective. Samples of income tiers measure groups, not individuals. So when we say that the rich are richer and the poor are poorer than 20 years ago, we ignore the dynamism of the American economy — and the resulting fact that many individuals who were on the lower rungs of the economic ladder two decades ago have moved up, and many at the top have moved down. This interpretation also ignores the fact that the gap is less important than the actual numbers. If you have $200 and I have $100, are incomes are closer to parity than if you have $1 billion and I have $1 million. But in the latter scenario, we’re both better off individually and society (if it consists of just you and I) is better off as a whole. Now imagine extrapolating that analysis to an entire nation

• Virtually Every Number You See About Poverty in America is a Lie — For one simple reason: government calculations of poverty do NOT factor in benefits conveyed by government. To prove the point using an unrealistic example, a family of four making $40,000 a year but receiving $60,000 in government assistance, would still be captured in government statistics as making $40,000 a year, even though their actual income would be $100,000.

• Unemployment Benefits are NOT a Form of Economic Stimulus — From Nancy Pelosi to Nicolas Kristof, every empty head on the left seems to have the idea that unemployment benefits are a form of economic stimulus rattling around inside it. The idea is that because the poor have the greatest need for liquidity (and will thus spend the cash the quickest) unemployment greases the wheels of commerce. This is a basic Keynesian fallacy: thinking of the economy only in terms of consumption. But if this is true, why wouldn’t the road to recovery be paved with every American emptying out their bank account for a trip to Nordstrom’s? Maximum economic efficiency is achieved by putting money to the use that provides the greatest benefit relative to the cost to the individual. In some cases, this will be consumption. But in others it will be investment or savings. Unemployment benefits can be justified on humanitarian grounds, but not on mechanical economic ones (indeed, excess unemployment benefits drive up unemployment — not a surprise if you remember that you always get more of what you subsidize). Paychecks generally provide the basis for a sounder economy than food stamps.