Todd Weber's Random Thoughts

November 25, 2010

Thanksgiving Day Thought

It is Thanksgiving Day, 2010, and as I consider this nation which I am bless to call my own, I am once again awed by its greatness and wonder. It is truly unique as the freest, safest, most prosperous and benevolent nation in the history of mankind.

Yet, there is also a twinge of apprehension and uncertainty as to how long it may endure. Forces of fundamental change have pushed us to the edge of a precipice from which, once overstepped, there may be no return. To avoid this will require the attention, self-discipline and thoughtful participation of a majority of citizens.

It is time for Americans to put aside trivial, meaningless pursuits, entertainments, idleness and apathy, and engage in rational thought and debate of the complex and weighty matters presently facing our nation. We must turn off the frivolous “reality” shows, sitcoms, and celebrity worship and exercise our minds toward dealing with substantive issues that truly matter. Let us cease thinking only of ourselves and our immediate comfort and gratification, and focus on what is best for the nation as a whole, both now and in the future. Such a focus will likely require a willingness to make sacrifices. As our forefathers sacrificed their fortunes and their lives to create this great nation, let us muster the same readiness to preserve it.

I urge you to take time to educate yourself regarding the pressing issues of the day, and also to learn about the origins of our nation. Read the writings of the founders of America, such as George Washington, John Adams, Thomas Jefferson, James Madison and others. Study also those who influenced them, such as Adam Smith, John Locke, Henry Blackstone, Cicero, and Montesquieu.

The United States of America has not survived and prospered by luck or accident. It has done so because of the wise and prudent principles upon which it was founded, among which are the right to life, liberty and the pursuit of happiness; limited government; free-market capitalism; the rule of law; freedom of religion; and equal rights for all.

Freedom is not free and the cost of citizenship in a free society is active participation in order to keep it free, safe and prosperous for all. Too many have either forgotten or never learned of this duty. As fellow citizens, we owe it to one another and to future generations to take seriously the responsibility of self-government – a rare opportunity in human history.

Have a happy Thanksgiving Day!

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October 31, 2010

No Shame in Being the Party of No

Filed under: Politics — Tags: , , , , , , , — tkweber @ 3:22 pm

Change is not always a good thing. Democrats often call Republicans “the Party of No” and accuse them of having no vision for the future of America because they oppose the progressive agenda. However, Republicans – or more accurately, Conservatives – do in fact have a vision for America and are equally passionate about it as the liberal progressives are about theirs. The Conservative vision for America does not involve changing the nation into something new, but rather changing it back to what it once was. The Conservative vision involves returning our nation to the principles upon which it was founded, and includes reducing the size and power of government and realigning it with the limited powers enumerated in the Constitution.

While some may argue that looking back is no way to lead the country into the future, the facts suggest otherwise. America is great because of the wise principles upon which it was founded. It is the strongest, wealthiest, and most free nation in the history of humanity because of its emphasis on individual liberty and limited government. The American system of government was designed to serve the people, not vice versa, and this has resulted in unprecedented freedom and prosperity for its citizens, as well as the spread of freedom and prosperity around the world.

However, the forces of progressive liberalism (proto-socialism) have been eating away at the American system for most of the last 100-years. Those who hold and espouse such views desire to change America into something it has never been, nor was ever intended to be, but which has existed and failed in many other parts of the world.  Liberal progressives want to turn America into a European-style socialist/communist state where the citizens serve the government and the government reigns supreme.

Conservatives are passionately opposed to this vision and will continue to vigorously oppose it. “No!” should be the continual refrain when it comes to progressive/socialist policies and laws, not because we lack vision or concern for the good of the nation, but because we believe in the wisdom of the Constitution of the United States of America and trust it to ensure the continued success of the nation for ourselves and for posterity.

October 12, 2010

No State Income Tax for Washington! No on I-1098!

Here is the  letter I sent today to the editor of my union’s newspaper in response to a letter from a supporter of the pro-income tax initiative in the state of Washington. In respect of his privacy, I have withheld the name of the person to whom I am responding.

Dear Editor,

I am writing in response to Mr. X’s letter in the October 2010 issue of the News Review titled “Shell Game” in which he made several bold, yet unsubstantiated statements to support his argument in favor of I-1098, which would create a state income tax in Washington.

He suggested that millionaires are to blame for the sorry state of the economy, and said, “No matter how much the local millionaires try to lie about it, it is an inescapable fact that the more money one has, the more they owe the society…”

I am certainly not a millionaire, nor do I know any. However, I am a firm believer and supporter of the right and freedom of individuals to pursue profit and prosperity through any and all legal means available, and to keep and use the fruit of their labor as they choose. As one who hopes to one day achieve such prosperity myself, I respect and admire those who have already done so.

Wealth is not a zero-sum game in which we all draw from a limited pool of resources and those who get ahead do so at the expense of those who do not. To say that “Wages in the private sector are falling because CEO wages are rising” is unfounded and preposterous.

Instead of inciting discontent, class envy, and trying to pull successful people down to a common level of mediocrity and misery, we ought to celebrate the freedom and opportunities that make success and prosperity possible and find ways to encourage and inspire the rest of us to better ourselves through hard work, creativity and thrift.

A state income tax is not the answer to Washington’s economic woes. Currently, forty-one states tax personal incomes. California is one of several states which have both retail sales taxes and income tax, and both are among the highest in the nation. How well is that working for California? Can you say, “bankrupt”? The point is that implementing an income tax in Washington will not solve the state’s problems any better than it has for California. The problem is not too little revenue, but too much spending.

Mr. X believes millionaires owe more to society than the rest of us and that taxation is the proper means of obtaining such “contributions” (read: compulsory redistribution). I whole-heartedly disagree. Many high-wealth individuals already give back to society of their own free will – the way it should be. For example, Jack Benaroya donated over $15.8M to build a home for the Seattle Symphony, now known as Benaroya Hall, for the benefit of citizens of Seattle.

Paul Allen plans to leave the majority of his $13-billion estate to fund scientific research, and his charitable giving already totals over $1-billion. Moreover, The Allen Family Foundation recently announced $3.9M in new funding for 41 non-profit organizations in the Pacific Northwest (Seattle Times, 7/15/10).

The Seattle Times (5/24/10) notes that numerous “Microsoft alumni have founded and supported more than 150 non-profit organizations and social ventures working around the world…Employee giving and company matching funds totaled almost $90M last year…”

The Bill and Melinda Gates Foundation gave $27M to help the urban poor in Africa (Seattle Times, 9/30/10). As part of their “Giving Pledge,” Bill Gates, Warren Buffet and many other super-rich have voluntarily pledged to give substantial portions of their wealth to charity.

These are only a few examples of the countless individuals and corporations who, every year, voluntarily give back to, as Mr. X said, “the society that provided them with the situations and opportunities to accumulate that wealth in the first place.”  All this is beside the well-known fact that wealthy Americans already pay “a higher overall tax rate than any other group,” while “about 10 percent of households pay no net federal taxes” (New York Times, 4/13/10).

I believe the solutions to our economic challenges include: 1) reducing the size and cost of government; 2) relieving businesses and individuals of onerous tax and regulatory burdens; and 3) encouraging personal responsibility and industry rather than a sense of entitlement.

The real “shell game” is in the continual surrender of our wealth and freedom for the promise of ever-more governmental care and provision. Let’s stop whining and confiscating the success of others, and start taking responsibility for ourselves.

March 25, 2009

Why Socialism is Bad for America

Socialism is a socioeconomic philosophy which has failed everywhere it has been tried, yet for decades has been slowly and steadily creeping into American society.  Many contemporary Americans, including some prominent and high-level politicians, hold socialist views and continually press for the implementation of socialist principals and programs in the United States.  Socialism is bad for America because it results in large, intrusive and controlling government that diminishes the role and value of individual citizens; it is largely based on “false compassion” that promotes victimhood and big government solutions; and it offers a false hope of utopian brotherhood and equality, resulting in the loss of freedom and the rise of governmental tyranny.

To begin, we must first define socialism.  The New Encyclopedia Britannica (2007) states: “Socialism refers to both a set of doctrines and the political movements that aspire to put these doctrines into practice…there is no precise canon on which the various adherents of contemporary socialist movements agree…the most that can be said is that socialism is, in the words of Anthony Crosland, a British socialist, ‘a set of values, or aspirations, which socialists wish to see embodied in the organization of society.’” (393)

There is a wide variety of socialists in America today, ranging from the neo-Nazi, anti-Semitic National Socialist Movement on one end of the spectrum to the Socialist Party U.S.A. on the other end.  Other socialist groups include the Democratic Socialists of America, National Alliance, Young Democrat Socialist, and the Democratic Progressive Party (Socialism in America, 3).  While there is a wide range of beliefs and goals among these groups, some elements are common to all of them.

According to British scholar and socialist Alec Nove (1987), “a society may be seen to be a socialist one if the major part of the means of production of goods and services are not in private hands, but are in some sense socially owned and operated by state, socialized, or cooperative enterprises” (Buchanan, 1).  Professor Heinz W. Arndt of Sydney University (Australia), a former socialist, listed the main planks of the socialist platform as: nationalization of industry, central planning and direct controls (Kasper, 1).   

Gerard Radnitzky, Professor Emeritus in Philosophy of Science at the University of Trier, Germany, describes the evolution of modern socialism as a transformation from the 1920s-version of “hard socialism with coercive central planning and state capitalism” to the “milder form of creeping socialism, which comes gradually and softly, masked by the sweet poison of the welfare state” of the 1960s (45-46).  This is the insidious, incremental socialism which intrudes upon us today.

Michael Novak, the George Frederick Jewett Scholar in Religion, Philosophy and Public Policy at the American Enterprise Institute, describes modern socialists, whom he calls “economic reds,” as being different from fundamental socialists in some ways, but characteristically “gripped by three seductive fascinations – the views that 1) government is motherly and warm, 2) a halo attaches to the ‘leveling’ of economic differences, and 3) there exists in corporations and in those who profit from commerce a residual stench of evil.” (1)

Since the history and philosophy of socialism and all its effects and ramifications is far too large a subject for this discussion, we will address only three broad reasons why socialism is bad for America.

First, socialism results in large, intrusive and controlling government that diminishes the role and value of individual citizens.  It is a form of statism, which sees the state as all-powerful, all-wise, and more capable of determining and supplying the needs of its citizens than the citizens themselves.  Socialism empowers government, through its bureaucrats, to act as a great benevolent mother caring for her people by appropriating and redistributing the fruits of the people’s labor, as it sees fit, through high taxation and generous social welfare programs. 

Socialists believe that all the ills and inequities of society can be remedied by government programs that require ever more tax dollars to fund them.  Professor Arndt stated that the belief that government intervention was needed to correct “market failure” and protect the weak resulted in “big government, widespread government failures, excessive bureaucratic regulation of business and the lives of citizens, and a ‘political market’ which dispenses protection, subsidies and welfare expenditures in response to organized lobbying.” He contended that such ambitious spending and redistribution triggered inflation, increased unemployment and enlarged the government. (Kasper, 25)

Ever-increasing levels of taxation, social welfare programs, and restrictions on business result in numerous unsustainable consequences, such as deep national debt, unfunded liabilities, wasted capital and loss of productivity, creativity, innovation and consumer choices. F.A. Hayek, author of The Road to Serfdom (1944), showed that “soft socialism–social democratism-will in the long run produce the same results as hard, fundamentalist socialism, namely the bankruptcy of government and enormous opportunity costs: the prosperity that society misses out on as compared to a genuine free market order.” (Radnitzky, 46)

Radnitzky noted that redistributing wealth from the productive segments of society (industry, commerce, etc.) to the non-productive (the political class, bureaucracy, social welfare recipients, etc.) “reduces the rewards for enterprise and production and cuts innovation and employment.” (46)  Austrian economist Ludwig von Mises explained that the slowing of capital accumulation due to redistribution halts economic improvement, technological progress, and the rise of average standards of living. (63)  In other words, soaking the rich doesn’t only hurt the rich, it hurts everyone.  The best way to raise average standards of living, foster technological innovation, and decrease unemployment is to lower taxes (removing the success penalty), which will allow producers to keep the rewards of their labor and encourage further investment.

Another reason why socialism is bad for America is that socialism is largely based on false compassion, which results in a host of serious, though unintended, consequences. The term “false compassion” is used for two reasons.  First, because socialism takes the care of those in need out of the willing hearts and hands of truly compassionate individuals, and places it in the hands of the impersonal bureaucracy of government, which then takes by force from those who have, via taxation, and redistributes it, often with great inefficiency and waste, to others who have not, the recipients have no connection to the source of such benefits (the taxpayer).  Secondly, this involuntary benevolence often results, not in good will, gratitude, and a sense of community, but rather resentment among those who are taxed, and a sense of entitlement and continuing dependency among those who benefit. This false compassion is seen in the socialist obsession with equality and fairness accompanied by the conviction that capitalism and those who espouse it are inherently unfair, insensitive and cruel.

Joshua Muravchik noted that the French innovation with regard to democracy was to include equality among the mandatory pursuits of government, to which was then added the objective of brotherhood, “so that the enduring slogan of the [French] Revolution became ‘liberty, equality, brotherhood.” (1)

Expressing the same ideal, Theodore White (1953) wrote that, “Socialism is the belief and the hope that by proper use of government power, men can be rescued from their helplessness in the wild cycling cruelty of depression and boom.” (Socialism in America, 1).  According to Novak, this is why modern socialists “strive mightily to instill victimhood in fellow citizens, and to picture them as helplessly in need of government’s assistance.” (2)

Socialists believe that by heavily taxing the rich and productive of society, whom they believe have achieved their wealth and prosperity by exploiting the less fortunate, and redistributing it to the poor and disenfranchised, they will bring about social equality for the betterment of mankind.  This sounds nice in theory, but it doesn’t work in the real world.

Socialists consider inequality in wealth and incomes as injustice; and the greater the disparity, the greater the injustice. Mises observed that this view then justifies the confiscation of wealth from the rich in order to provide for the poor, presumably resulting in a more equitable situation. (1)  However, this always proves to be a slippery slope of never-ending redistribution.  Mises noted:

The history of the taxation of profits, incomes, and estates in all countries clearly shows that once the principle of equalization is adopted, there is no point at which the further progress of the policy of equalization can be checked…As long as any degree of inequality is left, there will always be people whom envy impels to press for a continuation of the equalization policy. (1-2)

In the end, socialist efforts toward economic equalization result in universal poverty, except perhaps among the ruling class. Rather than achieving a higher quality of life for all, the forces of socialism invariably push everyone down to equal impoverishment and misery. This has been demonstrated everywhere that all-out socialism has been practiced, most notably in the former Soviet Union, North Korea, and China, among many others.  Muravchik astutely observed, “There is no escape from inequality, except through uniform poverty.” (5) 

The final reason we will note as to why socialism is bad for America is that it offers false and empty hope in an idealistic fantasy that has never succeeded in practice, and which has repeatedly resulted in tyranny and terrible human suffering.  Those who would implement socialist or quasi-socialist policies in the United States of America are either unaware of the bleak history of socialism and have not considered the long-term consequences of their aims, or they are so enamored of their ideology that they don’t care.  Ludwig von Mises wrote that politicians who recommend socialist policies while claiming that they want to preserve the market economy and economic freedom are “either hypocrites who want to bring about socialism by deceiving the people about their real intentions, or they are ignoramuses who do not know what they are talking about.” (63)

Clive Hamilton, author of Growth Fetish and Affluenza, and executive director of the Australia Institute, a green socialist think tank, admitted, “It was not socialism that broke down the barriers of poverty and class, it was capitalism.” (Saunders, 6)

According to Muravchik, socialism has “proved to be mankind’s greatest mistake since the serpent beguiled Eve.” (5)  “After World War Two, new varieties of socialism were created in…Africa, Arabia and elsewhere,” including Cuba and Vietnam which adopted more standard Communist systems. By the late 1970s, socialism had come to dominate over sixty percent of the world. (3) Recounting the history of scores of socialist experiments, he reports that all of them have failed, utterly and disastrously. (2) 

Many countries that have tried socialism and found that it didn’t work are turning toward capitalism, to one degree or another, even as the United States seems intent on pursuing socialism.  China, Britain, France and Tanzania are a few such examples.

In 1978, China’s Deng Xiaoping announced a “second revolution,” which was to move away from hard communism toward “socialism with Chinese characteristics.” Many of the ensuing changes “bore greater resemblance to capitalism.” (Muravchik, 4)

Within a year of China’s move away from communism, Britain’s Margaret Thatcher “set out to ‘kill’ socialism, which she believed was the true cause of the so-called ‘British disease’ that others saw as a mysterious and irremediable decline of national culture.” (ibid)

A year after France’s Socialist Party, led by Francois Mitterand, took power (1981) and began to “implement measures creating new public sector jobs, nationalizing industries, and mandating increases in wages, pensions, and welfare…the economy was in such a tailspin that Mitterand ordered an abrupt reversal.” (ibid)

Tanzania’s Julius Nyerere, “once the avatar of African socialism, confessed: ‘If I call back the British to look at their old plantations, they will laugh at us because we ruined them.” (ibid)

Besides the economic costs and consequences of socialism, there is also the inevitable loss of freedom and the concurrent rise of governmental tyranny which are its natural products.  Muravchik noted that “the totalitarian impulse” in socialism is not an aberration, but has been present from the earliest days of socialist philosophy. (ibid)

While the term “fascist” is regularly used by liberals as a derisive epithet against conservatives, it is actually a beast which arises from the waters of socialism. In Liberal Fascism, Jonah Goldberg argues that “In reality, international fascism drew from the same intellectual wellsprings as American Progressivism.” (Hayward, 1)  According to Goldberg, fascism should be understood as supercharged nationalistic statism. He noted the bold incursion of fascism under President Woodrow Wilson who “disparaged ‘individualism’ and the market economy, and advocated ever more powerful government and economic planning.” (ibid 2)  This path was trod further by Hoover and then by Franklin D. Roosevelt and company who authored the New Deal and:

understood their project as wholly congruent with what they saw approvingly in Italy and Germany. Waldo Frank declared in 1934 that Roosevelt’s National Recovery Administration “is the beginning of American Fascism” and the Nazis expressed their admiration and enthusiasm for FDR’s program…The New York Times reported in 1933: “There is at least one official voice in Europe that expresses understanding of the method and motives of President Roosevelt. This voice is that of Germany, as represented by Chancellor Adolf Hitler.” (ibid) 

Goldberg also noted that the liberal penchant for regulating people’s lives for their own good (smoking bans, healthy eating mantras, etc.) or “for the children” represents “the still-vibrant residue of the last wave of fascist enthusiasm.” (ibid) He documents in copious detail many disturbing parallels between European fascism and modern liberalism, which is consonant with socialism.

Thus, socialism poses not only a threat to the economic principles and practices which have led America to a level of prosperity and power unprecedented in human history, it also threatens the very freedom that is both the incubator and protector of that prosperity.

In conclusion, I have shown that while socialism seems to have run its course in virtually every other nation in which it has been tried, it still represents a clear and present danger to life, liberty and the pursuit of happiness in America.  Socialism is bad for America because it leads to large, intrusive and controlling government that diminishes the role and value of individual citizens; it is largely based on false compassion that promotes victimhood and big government; and it offers false hope of utopian brotherhood and equality, resulting in the loss of freedom and the rise of governmental tyranny.

 

References

Buchanan, James. Socialism is Dead But Leviathan Lives On. (1990, March 27). Center for Independent Studies. Retrieved February 9, 2009, from http://www.cis.org.au.

Flynn, Daniel. (2008). A Conservative History of the American Left. New York: Crown Forum.

Goldberg, Jonah. (2007). Liberal Fascism. New York: Doubleday.

Hayward, Steven. Who’s Fascist Now? (2008, Jan. 22). American Enterprise Institute for Public Policy Research. Retrieved February 9, 2009, from http://www.aei.org.

Kasper, Wolfgang. The Art of the Economy: Stability Growth and Philosophy. Interview with Heinz W. Arndt. (2000, Spring) Policy. Center for Independent Studies. Retrieved February 9, 2009, from http://www.cis.org.au.

Mises, Ludwig von. Inequality of Wealth and Incomes. (2000, Spring) Policy. Center for Independent Studies. Retrieved February, 9, 2009, from http://www.cis.org.au.

Muravchik, Joshua. The Rise and Fall of Socialism. (2000, Jan. 1) American Enterprise Institute for Public Policy Research. Retrieved February 9, 2009, from http://www.aei.org.

New Encyclopedia Britannica, Macropaedia, The. 15th Edition, Volume 27. (2007) Chicago.

Novak, Michael. Economic Reds: A Diagnosis. (2007, June 25) American Enterprise Institute for Public Policy Research. Retrieved February 9, 2009, from http://www.aei.org.

Radnitzky, Gerard. Ludwig von Mises on His 120th Birthday.  (2001, Spring) Policy. Center for Independent Studies. Retrieved February 9, 2009, from http://www.cis.org.au.

Socialism in America. Retrieved February 5, 2009, from http://www.u-s-history.com.

Saunders, Paul. Why Capitalism is Good for the Soul. (2007, Summer) Policy. Center for Independent Studies. Retrieved February 9, 2009, from http://www.cis.org.au.

Waldron, Arthur. China’s Disguised Failure. (2002, July 1) American Enterprise Institute for Public Policy Research. Retrieved February 9, 2009, from http://www.aei.org.

 

 

© copyright Todd K. Weber, 2009. No part of this may be used or reproduced without permission from the author.

November 5, 2008

The End of America

Filed under: Politics — Tags: , , , , , — tkweber @ 11:15 am

 

The elections of November, 2008, represent, in my opinion, the end of America: not that the United States will cease to exist, or even that it will fall from preeminence among the nations of the world (in the short term, that is), but rather that it is the end of America as we have known it.  The American nation, as it has existed for the last two-hundred-thirty years, will soon be, and perhaps is already, no more.

 

This transformation is not a recent phenomenon, but is the culmination of countless changes, small and large, which began most obviously in the early twentieth-century when fascistic and socialistic forces began their subtle yet steady incursion into American government and public life.  Like the proverbial frog-in-the-pot, unsuspecting Americans have been slowly cooking in the ever-increasing heat and pressure of modern liberalism, anesthetized by a growing addiction to careless leisure that is nurtured by Hollywood and Madison Avenue, and by a federal educational system that seems designed to churn out millions of ignorant automatons lacking any sense of pride in their own country or knowledge of it’s true history, or the ability and desire for critical thought and reasoned discourse.

 

It may be impossible to identify the tipping point, but it is evident that we have already gone over the edge.  The citizens of the United States of America have elected the most liberal, leftist President in its history: a man who has stated publicly that he believes the Constitution, upon which this nation was founded and which he will swear to uphold and defend, is fundamentally flawed; a man who has a long history of willing association with unapologetic terrorists, communists, racists and anti-America activists; a man who is more concerned with our nation’s reputation in the world than with its security and sovereignty.

 

In addition to this, we have ignored the dismal failure, impotence and negligence of the Democrat-controlled Congress of the last two years, which not only has the lowest public approval rating of any Congress in the history of the nation, but which also is indisputably responsible for the recent sub-prime mortgage fiasco that has devastated the national economy.  What’s worse is that Americans, now drunk on government give-aways and eager for the promise of more, have strengthened Democrat control of both houses of Congress, in conjunction with the election of a far-left Democrat President, so that there is now little, if any, restriction on liberals and their socialist/fascist agenda. 

 

That anyone as radically leftist as Obama even made it through the political primary, let alone to win the Presidency; or that someone as dishonest and unethical as former comedian Al Franken can be in a close race for the Senate (Minnesota), is clear evidence of America’s philosophical transformation and decline.  

 

I am deeply grieved at the loss of the fundamental principles of our great and divinely blessed nation, and mourn the likelihood that our greatest days are behind us.  I have no confidence that this condition will be reversed (even if McCain were our next President).  We’ve gone too far.  Sadly, it is probably only a matter of time before our liberty and prosperity and preeminence in the world fade away completely, and America joins the ranks of other once-great nations on history’s list of has-beens.

 

Todd K. Weber

November 5, 2008

May 20, 2008

Investment Industry’s Suicidal Self-Interest

The May 2008 issue of Money magazine contained a one-page interview with New School university economist, Teresa Ghilarducci, titled: The Plan to Save Early Retirement, in which the economist contends that the U.S. government should scrap 401(k)s and IRAs and replace them with a government funded, mandatory, universal savings plan.  Under her plan, the government would contribute $600 a year and require people to deposit 5% of salary to their “guaranteed retirement account.”

 

What is her reasoning for this?  People are living longer and saving less, she says, and “a rich nation ought to be able to ensure a secure old age.”  How would this system work?  The government would have to “negotiate with the money-management industry.”  I was more than a little miffed by the socialist overtones of the article, so I emailed a letter-to-the-editor.  It didn’t get printed in the June issue.

 

In the June 2008 issue of Kiplinger’s Personal Finance (I subscribe to both magazines), a similar one-page interview appears titled, Savings Accounts From Day One, featuring Professor Michael Sherraden, director of the Center for Social Development at Washington University in St. Louis.  Professor Sherradan argues for “a lifelong system of accounts for everybody to save for important life goals – post-secondary education, homeownership, additional job training…retirement security.”  He points to “One bill in Congress [that] calls for $500 for all children and an additional $500 for the poorest.”  Who would manage such a plan?  “The major asset managers.  Good plan features would be simple investment options and low costs.”   

 

Then, it all became clear.  Two investment magazines run nearly identical articles in successive months promoting a government mandated, government funded, investment system for every citizen (and presumably non-citizens, too) operated by the investment management industry, for fees, of course.  I sent a letter to the editors of Kiplinger’s, too; but I don’t expect it to be printed there, either.

 

There is nothing “new school” about Ms. Ghilarducci’s plan to save early retirement.  It’s just more European-style, nanny-state, big-government.  Professor Sherraden should re-name his department at Washington University: The Center for Socialist Development.

 

Why do people who are supposed to be so much smarter than the average bear continue to look to Europe as the shining example of modern civilization?  Do they not see that Europe is crumbling under the weight of big-government socialism?  They have an aging population that is entirely dependent upon government welfare, which is entirely dependent upon high levels of taxation, which is entirely dependent upon taxable wage-earners – a pool that is rapidly shrinking due to Europe’s unsustainably low birth rate.  When there are no more people to tax, there will be no more government-supplied benefits, and then what?  It is a wholly unsustainable system.

 

Here in the United States, we have the likes of Barack Obama, Hillary Clinton, and the entire Democrat party who want to implement similar European-style socialism, and the financial services industry is cheering them on.  Why?  Follow the money.

 

The financial services industry is apparently licking its chops at the prospect of three-hundred-million-plus mandated retirement accounts from which they will collect management fees.  And, don’t think for a minute that such fees would be along the lines of the 1%-or-less that Vanguard charges on many of its accounts.  As with all government programs, it may start out small, but the case would soon, and continually, be made for higher and higher fees as the burden of managing such a monstrosity would put a tremendous strain on the ranks of selfless, public-serving asset managers.  Yeah, right.

 

Of course, we would then see an explosion of asset management professionals emerging from universities to get their piece of the action, just as the number of lawyers has increased like a population of rabbits to take advantage of the increasingly litigious nature of our society in the last thirty years.  At the same time, the lobbying efforts of this increasingly powerful sector would result in ever-higher government “contributions” to the mandated retirement accounts, as well as the fees paid to asset managers, which in turn would result in ever-higher taxes (enforced “contributions” to the government).  This, of course, will result in diminished economic investment and growth nationwide, less technological innovation, fewer jobs, more unemployment, a greater burden on the already terminal social security system, and so forth.  It would take only a few years, perhaps a decade or two, for the U.S. to end up in the same sorry condition as the nations of Europe.  Indeed, we are already, in many ways, headed in that direction.

 

This is the certain result of the investment industry’s apparent suicidal self-interest.  By promoting such a socialistic, mandated, tax-funded, universal retirement plan by which they hope to enrich themselves, they are also building the gallows on which they – and us all – will hang.  No doubt, they would be hugely enriched by such a plan – perhaps an entire generation of money-managers.  But, eventually the well will run dry, and the richest, most prosperous and free nation in human history will join the rest of the has-beens.  Prosperity will turn to poverty, not only monetary, but also in terms of will, creativity, liberty and spirit.  

 

Rather than supporting a plan for financial and societal suicide, it would serve the financial services industry and the entire nation much better to promote the virtues of self-reliance, personal responsibility, self-discipline, delayed gratification and thrift.  The investment industry ought to be pressing for parents and schools to teach basic financial management to children to encourage saving and investing on their own for a lifetime of financial security and prosperity, from which the industry and society would benefit not just for a generation, but forever.

 

Let’s stop listening to elitist academics who believe they have the answers for all of us knuckle-dragging ignoramuses who can’t think or act for ourselves – we who have built the greatest nation on earth.

 

Todd Weber

 May 20, 2008

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