The Seen Versus the Unseen

What we see is frequently far less important than what we don’t see. This is true
particularly for economic growth, international trade, climate change and poverty.
The Seen Versus the Unseen
By: George Noga – October 23, 2016

       Election issues, both real and fake, are viewed through the prism of what is readily seen and are juxtaposed against what is opaque or occult to most Americans. The seen versus the unseen is singularly germane for economic growth. The data Americans readily see are many years of positive economic growth and unemployment rates approaching historic lows. Looking only at what is seen, many people conclude the US economy is performing satisfactorily. But let’s look at the unseen.

     The US, in its eighth year of economic recovery, is averaging 2.0% growth in real GDP. Real economic growth since 1945 averages 3.3% and is 4.3% for the years following the prior 10 recessions. Had the US grown at the 4.3% post-recession average from 2009 onward, today real GDP would be $10,300 higher for every man, woman and child in America. The unseen 900-pound gorilla of economic growth is the $26,700 that is missing from every American household each and every year – forever. Had Obama simply achieved average results, we would be infinitely better off.

For foreign trade deals, what we can see are job losses, harm to affected industries and deleterious effects on communities impacted. The pain is visible, immediate, and concentrated, whereas the benefits are unseen, long term, opaque and diffuse. Every American household benefits $2,500 per year just from China – even if they manipulate their currency, subsidize exports and use cheap labor. The unseen benefits to Americans from foreign trade vastly outweigh short-term job losses and other impacts.

     For climate change, we see media reports of warming, melting glaciers, polar bears on ice flows, extreme weather events and receding arctic icecaps. The largely unseen is: (1) no warming for 20 years; (2) glaciers receding for the past 150 years; (3) record polar bear populations; (4) no increase globally in insurance claims for weather events; and (5) an increasing antarctic icecap which is 10 times the size of the arctic icecap. Completely unseen are the immediate benefits to humanity that could be realized if the trillions now being totally wasted on infinitesimal reductions in temperature were diverted to human needs such as disease eradication, clean water supply and nutrition.

     We are bombarded by media reports and images of poverty, homelessness and hunger although none of these conditions exist per se in America today. What we don’t see is that these conditions (which do still exist) result nearly exclusively from untreated mental illness and from a small cohort of Americans of low ability, i.e. those who struggle to fill out a simple form. These conditions, and their attendant social pathologies, are what result in poverty, hunger and homelessness. Political correctness prevents us from identifying and addressing the real underlying problems.

     We see gun violence whenever there is a shooting; we don’t see the 2.5 million times each year guns are used lawfully to prevent or to stop crime. We see that more Americans have health insurance; we don’t see the armies of under employed 29ers and 49ers and the high premiums, deductibles and co-pays. We see the spending but the debt and deficits go largely unseen. We see what is reported by the media; we don’t see many stories covered that run counter to the progressive narrative. We see what we recycle; we don’t see it going into the same landfill as all our other garbage.

What we see is often vapid and illusory and intended to beguile us into accepting progressive shibboleths and dogma. The unseen is frequently much more important.

The next post in our 2016 election series is scheduled for October 30.

Uber and Gay Marriage

The hypocrisy runs deep. Liberals want anyone to be able to share a marriage but oppose consenting adults sharing a ride (Uber) or sharing an apartment (Airbnb).

Uber and Gay Marriage
By: George Noga – October 16, 2016

       The poster child for the sharing economy is Uber Technologies, Inc. but there are many others including Airbnb, Lyft and TaskRabbit. Sharing increases productivity via leveraging underused resources and labor; it has become wildly popular by providing platforms for people to exchange goods and services. Customers save big bucks while Uber drivers make $15 to $30 an hour and Airbnb hosts up to $30,000 a year.

     Customers log on to Uber; instantly their location and profile (name, photo, rating) are sent to nearby Uber drivers. The assigned driver transmits location, automobile, name, photo, rating and fare to the customer, who can track the Uber car in real time. In minutes the customer is in a spotless recent model car with complimentary bottled water. Payment via preestablished credit card is 50% to 65% less than a taxi. Drivers and customers rate each other; every incentive is in place for a favorable experience.

     Compare this to many taxi experiences. You call a harried dispatcher who can’t tell you when a cab will arrive or the fare. The cab arrives 25 minutes later and the driver is unkempt, speaks poor English, speeds and drives aggressively. The taxi has a musty odor and the radio is blaring obscene music in a strange language. You pay triple the Uber fare in cash without rating the driver. Forget about bottled water. Complaining is futile because taxis are a local monopoly and customer service is an oxymoron.

     Uber is incredibly popular with customers and drivers. Customers save big money and enjoy a safe, pleasant experience. Drivers work only when and where they wish at prices they voluntarily accept. Often, Uber drivers already were enroute to near where their customers wanted to go. The shared ride also saved fuel and reduced emissions.

     Given the contrast between taxis and Uber, why would any sane person wish to ban Uber and force the taxi monopoly on the public? Yet, that is precisely the liberal position. Every progressive group and politician that stridently insists any two people can share a marriage are adamantly opposed to any two people sharing a ride or an apartment. Liberal opposition groups include trial attorneys, labor unions, government rent-seekers, regulatory agencies, race-baiters, taxi cartels and, of course, politicians.

     Bill de Blasio wants to cap the number of Uber drivers; he said, “Uber skirts vital protections and oversight.” (Translation: He can’t collect taxes and enforce union wages.) Hillary Clinton said, “The gig economy raises hard questions about workplace protections and what a good job looks like.” (Translation: government intervention and regulation are needed.) Bernie Sanders, “I have serious problems with unregulated businesses like Uber.” Mayors of many liberal cities have tried to stop Airbnb. Other opponents include, inter alia, Elizabeth Warren, Diane Feinstein and Nancy Pelosi.

     The sharing economy has helped more people, especially poor, young, seniors and minorities, than any government program. It empowers more people to be their own boss and benefits the entire economy by increasing productivity and cutting costs. Liberals fear these new opportunities make people less dependent on government; they always choose government force over voluntary cooperation, i.e. markets.

     More so than any other benefit, liberal opposition to Uber and the sharing economy exposes raw hypocrisy like progressives’ ersatz claim to support “choice”. They are unwavering about a woman’s right to choose (Translation: to choose abortion) but oppose the same woman’s right to choose where to school her children, to own a gun, not to join a union or not to buy health insurance. Now they oppose the same woman’s right to share her car or to share her apartment. The hypocrisy runs very deep indeed!

Political Correctness in America

Political correctness is cultural Marxism; its ultimate objective is to criminalize speech  liberals find objectionable. Freedom of speech ends where political correctness begins.

Political Correctness in America
By: George Noga – October 9, 2016

       The term political correctness or “PC” was coined by French philosopher Foucault in the 1960s as criticism of unscientific dogma. Its antecedents go back at least as far as Marx. In this post we explain what PC is, what it is not and how it can be defeated.

     PC is an election issue thanks to Ben Carson and Donald Trump. Resentment of PC (and green-washing) has been building for decades like pressure inside a pressure cooker. It has metastasized far beyond politics with hospitals now calling deaths negative patient outcomes. Many believed it would be with us forever until Carson and Trump blew the lid off and triggered a revolt of the politically incorrect.

      PC is not what you may think. It is not about politeness, good manners, social sensitivity, cultural awareness, inclusiveness, respect, caring, etiquette, deference, courtesy, civility, being nice or avoiding hurt feelings or slurs. So, what is PC?

     The best definition I have seen was by economist Jeff Deist: “PC is the conscious, designed manipulation of language intended to change the way people speak, write, think, feel and act, in furtherance of an agenda.” Deist goes on to assert that PC is propaganda and, like all propaganda, a lie. It abnegates the underlying reality such as by Obama calling Fort Hood workplace violence instead of Islamic terrorism. PC is about coercion, intimidation, control, totalitarianism, Marxism and Maoism.

     Thought police have existed for as long as demagogues have sought to control people. It may be different this time only in terms of how long it has persisted and the sheer lunacy of it all – as in triggering and microaggressions. Carson and Trump exposed the massive resentment festering among the non elites who are as mad as hell and aren’t going to take it any more. So, what can be done to kill the PC virus?

     The first step, as always, is to recognize the truth; hopefully this post helps accomplish that. Second, understand that the stakes in this struggle are high; PC is a long-term war for your heart and mind with the ultimate goal of eviscerating the first amendment and criminalizing speech distasteful to progressives. Third, fight back!

     In the battle against PC, humor, scorn and ridicule are effective; PC is such sheer madness that, deep down, even  liberals know it. Around Christmas whenever I see a store sign that says “holiday“, I make a point of asking a store manager which holiday it is; the reactions are priceless. Finally, please remember that our PC opponents are not idiots, they just have taken a long detour off the information superhighway.

The next post is entitled “Uber and Gay Marriage”. You won’t want to miss it.

Fake Solutions to Fake Problems

America is facing economic stagnation, failed schools, a nuclear Iran and is fighting global Islamic terrorism. Progressives are fighting for men to use the ladies’ restroom.

Fake Solutions to Fake Problems
By: George Noga – October 2, 2016

      As we approach the election, we are bombarded from the progressive side with a panoply of phony issues to which they proffer equally phony solutions. They don’t have real solutions to real problems; all they can offer is maskirovka and rope-a-dope.

     The most serious issues America faces are: weak economic growth with income stagnation, radical Islamic terrorism, Iran as a nuclear threshold state, chronic debt and deficits approaching critical mass, and failed government schools. Progressives don’t want to discuss any of these issues; instead, they talk of climate change, gun control, a war on women, transgender restrooms, and environmentalism – all phantom issues.

     Climate change is fake because it is man-made in only an inconsequential way, if at all, as well documented in prior posts. It is a classic Baptists-bootleggers political coalition of true believers (environmentalists) and their fellow travelers (government) who stand to benefit. The latest fake solution is the climate deal signed earlier this year in Paris where politicians from 175 countries agreed to keep doing whatever they intended to do anyway and with no consequences for non compliance. In an ultimate irony, the fake climate deal to fight a fake enemy was signed in the same city where just a short while earlier a real enemy, Islamic terrorism, slaughtered 130 real people.

     Gun control is progressives’ go-to issue. We published a series, Guns in America, available at http:\\ which proves to any scient person there is no positive correlation between guns and crime and there likely is a negative correlation, i.e. more guns equals less crime. We followed that up with a Harvard study showing social, cultural and economic factors (and not guns) are the determinants of violent crime.

     Gun control is a phony issue for which progressives have proposed a long train of phony solutions. Not one proposed measure would have prevented any mass gun violence in America. Their most recent phony solution is the “no fly, no buy”  proposal to ban gun sales to anyone on the no-fly watch list. This is a small and notoriously inaccurate list that excludes all recent terrorists; it would have no effect on terrorism.

     A war on women and the campus rape culture likewise are imaginary issues. Duke, UVA and Harvard (The Hunting Ground) have been debunked. College campuses actually are safer for women than elsewhere. Women’s pay is equal to or higher than men’s when making proper adjustments for education, experience, danger, etc. Liberal solutions also are imaginary such as constant ongoing affirmative consent for sex. Progressives refuse to criticize the real war on women in Moslem countries, replete with, inter alia, genital mutilation, no driving, burkas and Sharia law. Go figure!

     Transgenders constitute .00006 of the population, making this issue a tempest in a teapot. Progressives insist anyone who self identifies as any gender can use any public facility at anytime. They demand young girls accept showering with men and that they simply get over any discomfort. Yet, they dictate transgenders not be required to use facilities conforming to their biological gender because it may cause them discomfort.

     Environmentalism is a totally ersatz issue. Every metric (100 of them) shows both human and environmental well being to be the best they have been in the past 50-75 years and getting better all the time. Their fake solution is to spend ever more and more money to eke out ever less and less imperceptible benefit and to elevate a tiny fish (delta smelt) over the well being of hundreds of thousands of real human beings.

     Take the real issues identified in this post and contrast them with the phantom issues and solutions put forth by progressives. They use misdirection, smoke, mirrors, and rope-a-dope for emotional appeals to low information voters. They never address serious issues with serious solutions. They choose instead to fight for transgenders against young girls but not for all Americans against radical Islam and a nuclear Iran.

The next post in our 2016 election series addresses political correctness.

Crisis of Confidence in Police

Confidence in police has cratered among Americans of all ages, education levels,
incomes, races and particularly the young and minorities. What went so wrong?
Crisis of Confidence in Police
By: George Noga – September 25, 2016

     Everyone is familiar with highly publicized and racially charged police shootings in Baton Rouge, St. Paul, New York, Milwaukee and Ferguson. As a result, policing in America is a hot-button issue in the 2016 election. However, the loss of confidence in police began decades ago and has myriad causes. In this post, we identify the top ten reasons (in rough order of importance) underlying the crisis of confidence in police. The changes have been gradual but the end result is plainly and painfully manifest.

1. Police have transmogrified from avuncular figures to threatening ones; their attitude from helpful to intimidating. They form tight cliques, becoming insular and walling themselves off from the communities they serve. They have an us-versus-them attitude and protect each other at all costs and even when they are plainly in the wrong.

2. Policing is nowhere near the most dangerous job in America; it ranks 15th behind loggers, fishermen, pilots, roofers, refuse collectors, farmers, iron/steel workers, truck drivers, electricians, taxi drivers, construction, landscape, maintenance and miners. The homicide rate for police is 30% less than for an average male. We appreciate that police put themselves in harm’s way for us, but perspective about the danger is needed.

3. Routine use of SWAT teams (50,000 raids per year), military equipment and tasers is out of control. A SWAT team is not needed to serve a subpoena. The police have become too militarized and treat civilians more like enemy combatants.

4. Unionization and threats of strikes and other tactics are against public policy. Police compensation and benefits (often boosted by outlandish overtime spiking) create enormous resentment with private sector workers, of whom only 6% are unionized.

5. Police gorge themselves on civil asset forfeitures. They seize property from hapless victims even when there is no crime or arrest and use the proceeds to buy fancy toys.

6. Testilying (police perjury under oath) is commonplace as can be attested to by any lawyer who routinely practices in criminal court – so routine it has its own name.

7. Telephone solicitations (often aggressive) on behalf of police benevolent groups are ubiquitous but net police only pennies on the dollar. This grates on the public inasmuch as other professions don’t engage in such activity, policing is 15th on the dangerous jobs list and police already are well compensated via public sector unionization.

8. Policing is about money and arrests. Advancement is linked to the amount of money generated and the number of arrests made. Massive police ticketing operations are organized solely for the convenience of police to raise money; the public be damned.

9. The atmospherics have become gaudy. High ranking officers, even of small town police departments, are bedecked as 5-star generals with garish decorations befitting the potentate of a banana republic. Chiefs should wear civilian clothes as in the past.

10. Press conferences after police events have become love-fests for law enforcement. Following the Orlando tragedy, city police, county police, state police, FBI, state attorney, DOJ and ATF spent an eternity heaping praise on one another for cooperation and professionalism before they answered a single question. More modesty is needed.

     Loss of confidence in police has been gradual and has many antecedents. There are however private alternatives to unionized, militarized, asset-seizing and testilying police. There is a strong negative correlation between crime and economic freedom as free markets enable people to put their passions into business. Restrictions on freedom, such as minimum wage laws, that keep minorities from work are particularly harmful.

     A big part of the solution therefore lies in more liberty and less government. More liberty for poor, minority, inner city youth and more free markets. Less government as in fewer police, an end to the failed war on drugs and more private policing. Finally, each community should have an independent citizen police review board with ample powers to oversee the police and to ensure policing reflects their community’s values.

The next post in our election series is titled “Fake Solutions to Fake Problems”.

Les Deplorables – Special Posting

The 2016 election will be decided by les deplorables – good-hearted, hard-working
Americans branded as racist, sexist, homophobic, xenophobic and Islamophobic.
Les Deplorables – Special Posting

By: George Noga – September 20, 2016

       I tuned out election prattle all summer, knowing nothing much matters until after Labor Day. Back in the loop and with fresh eyes and ears, I now sense a denouement to the election coinciding with Hillary’s “basket of deplorables” comment. I don’t purport to know who will win the election, but I now know how it will be decided.

     The 2016 election will be decided by les deplorables, i.e. those who are fed up with political correctness, which is really about coercion, intimidation and control with the ultimate objective of criminalizing speech distasteful to elites. It will be decided by the  basket of deplorables in rust belt America whose jobs and income have stagnated for a decade but are patronizingly scolded that all is well. It will be decided by coal miners and energy workers victimized by elitist environmental zealots. Les deplorables even have a theme song, “Do you hear the people sing?” from Les Miserables.


“Do you hear the people sing?
Singing the song of angry men?
It is the music of a people
Who will not be slaves again!
When the beating of your heart
Echoes the beating of the drums
There is a life about to start
When tomorrow comes!”

     The election will be decided by les deplorables, good-hearted, hard-working Americans branded as racist, sexist, homophobic, xenophobic and Islamophobic. That remark was no slip of the tongue; it was an insight directly into the dark soul of progressives and their loathing of fly-over America. It will be decided by legions of 29ers, 49ers and victims of Obamacare’s high premiums, deductibles and co-pays.

     The election will be decided by les deplorables revulsed at the latte-left’s perversion of American history and its role in the world and by repugnance over campus idiocies such as trigger warnings, microaggressions and safe rooms. It will be decided by deplorables’ disgust at legalized theft by public sector unionism and particularly by teachers unions standing in the schoolhouse door blocking poor children from leaving.

     The election will be decided by les deplorables‘ outrage about being lied to ad nauseam. Elites lie congenitally about terrorism; they always opt for lies over truth.  Hillary lies so often it is hard to keep track; there was Whitewater, cattle futures, White House travel office, sniper fire in Bosnia, emails, Benghazi and now pneumonia-gate.

     Les deplorables will decide the November election; the only questions remaining are how many of them turn out and will it be enough. I can hear the people singing; it is the music of a people who will not be slaves again – slaves to political correctness, slaves to name calling, slaves to a moribund economy and slaves to progressive lunacy and lies. Could there be a new life about to start – when November comes?

International Trade – Part II

Americans would be better off if the United States unilaterally abolished all tariffs
and trade barriers – even if no other country ever reciprocated – Milton Friedman
International Trade – Part II 
By: George Noga – September 19, 2016

       The economics of international trade is one of the few things about which all economists – liberal and conservative – are in agreement. By expanding the size of the market to the fullest extent possible (global), free trade enables greater specialization, economies of scale, comparative advantage and generates more wealth for everyone than any system that restricts cross-border exchange via tariffs or trade barriers.

     Most thinking about trade is upside down. What makes us well off is imports; exports are merely the cost of obtaining the imports. As usual, Milton Friedman said it best: “What we export we cannot eat, wear or use. It is imports that provide us TVs, cars and shoes. The gain from foreign trade is what we import. What we export is the cost of getting those imports. The proper objective for a nation (first propounded by Adam Smith) is to get the most imports possible for the least exports.” Tariffs and trade barriers raise costs and reduce the amount of imports bought with a unit of exports.

      Trade does not occur between countries but between people. It is a non-coercive voluntary action where both parties benefit. America did not buy those athletic shoes made in China – you did. In our households we know we are better off getting more in and sending less out. Our standard of living both as a nation and as a family is highest when we maximize imports and minimize exports. This is the dead opposite of the rhetoric we hear from the media and from both political parties and candidates.

     When countries go to war, they blockade their enemy to keep them from trading. Protective tariffs are the means nations use to prevent their own citizens from trading. We do to ourselves in time of peace what our enemies do to us in time of war.

     Trade agreements are managed trade rather than free trade; however, they create trade that is freer than before, even with incrementalism and lengthy phase in periods. Trade is not an us versus them proposition and domestic tariffs and trade barriers are not chits to be given up only if reciprocated in roughly equal measure by the other side. Even a poorly negotiated trade deal is beneficial to no deal. Finally, most job losses blamed on trade really are due to technology – to the tune of 80% or more.

     The last issue is trade deficits. Our family runs a  huge trade deficit with Costco and Duke Energy. Fortunately, we run a corresponding surplus with Vanguard and Fidelity. We do not have to be in balance with each entity we do business with. Yes, the US runs a trade deficit but it is matched by an investment surplus. The US has 41 straight years with a trade deficit and it has had no adverse impact on our economy.

     The rise of man did not occur in rugged mountain chains, burning desserts or beside great oceans. It occurred by harbors, navigable waterways and crossroads. The rise of humanity and the creation of wealth inexorably are tied to free trade and so it remains.

     Adam Smith and Milton Friedman got it exactly right. Americans would be better off if the United States unilaterally abolished all tariffs and trade barriers even if no other country ever reciprocated. If China indeed manipulates its currency, subsidizes exports and employs cheap labor, it is an unleavened blessing for American families to the tune of $2,450 each and every year – and we don’t even have to say “thank you“.

The next post presents MLLG’s take on policing in America.

Are International Trade Agreements Bad for America? Part 1

Trade between nations always is an unalloyed benefit even when workers are displaced
and trading partners manipulate their currency, subsidize exports and use cheap labor.
International Trade – Part 1
By: George Noga – September 12, 2016

        This post and the next one address international trade, including trade agreements such as NAFTA and TPP, which has become an issue in the 2016 election. There are so many myths about foreign trade it requires two posts to debunk them all. Upcoming posts between now and November address several hot-button presidential election issues including: (1) policing in America; (2) political correctness; (3) real versus phony issues; (4) Uber and gay marriage; and (5) economic growth. Stay tuned!

     Both parties and candidates are demonizing international trade making it their bete noire. They have leveled numerous charges and criticisms including, inter alia, the following list. This post and the following one next week will address each of them.

    • Trade agreements are not really free trade but managed trade
    • Trade deals are poorly negotiated and unfair to the US
    • American companies are harmed and workers displaced
    • Trade is competition as in the US versus foreign trading partners
    • Foreign countries subsidize goods being exported
    • Currencies are manipulated and undervalued by other countries
    • Tariffs and barriers are needed to support vital domestic industries
    • Cheap labor is being used to gain unfair advantage
    • The US incurs harmful large and perennial trade deficits

     Tariffs and trade agreements are asymmetrical in terms of perception about those harmed relative to those benefited. Take the sugar tariff; it benefits a handful of big US sugar producers (mainly in Florida) enriching some by $100 million per year. The tariff costs each American (all 320 million of us) $100 per year but is opaque because it is buried in the cost of products – a few cents here, a penny there. Because the benefits are so concentrated and the costs so diffuse, the sugar growers spend a small fortune lobbying Congress for the tariff while there is no broad based popular opposition.

       Trade agreements are the reverse of tariffs; harm to the industry affected is visible, concentrated and immediate whereas the benefits diffused among all 320 million Americans and realized over a longer period of time. Therefore, opposition to trade agreements is populist and political with the industries affected, and of course labor unions, spending a small fortune on lobbying while there is no natural constituency to support the agreements. It is ripe for media and political demagoguery.

      In all cases – tariffs, barriers and trade deals – a small but highly concentrated cohort forces its will on the American people because of politics fueled by money and abetted by media economic illiteracy. In all cases, Americans would be far, far better off without domestic tariffs or barriers and with all trade agreements – even flawed ones. Best of all would be unfettered free trade without any government involvement.

Consider an example – US imports from China – currently $500 billion per year. Let’s say, a arguendo, China cheats by undervaluing its currency and subsidizing exports; moreover, they employ low cost labor. Let’s further stipulate China’s cheating amounts to 33%, i.e. they are dumping $750 billion worth of goods for $500 billion. This is an unmitigated godsend to America which receives a $250 billion gift each year from China – equal to $780 per American or $2,450 per family. The benefits ($2,450 per family annually) far outweigh the costs of some temporarily displaced workers.

     Take the case of Carrier Corp, excoriated by Trump for moving its manufacturing to Mexico from Indiana. It made the move to stave off Asian competition and it enabled Carrier to retain higher paid US jobs in R&D, marketing and high end components.

      In a personal anecdote, I once wanted a Traeger BBQ smoker but never bought one because they were too expensive. Traeger shifted manufacturing to China and the cost plunged so much that I bought one. Sales skyrocketed and Traeger created hundreds more (and better) US jobs than before they shifted manufacturing to China. The new US jobs are in sales, wood pellets, customer service, BBQ supplies and delivery.

The next post is the final part of our analysis of international trade and tariffs.

Public Sector Unions are Bankrupting America

Only in the fetid parallel universe of government is unionization expanding.
Unions exact uncompensated value politically that cannot be earned on merit.
Public Sector Unions are Bankrupting America

$4 Million a Year for a Bureaucrat

By: George Noga – September 5, 2016

    US private sector union membership was nearly 50% after WWII; today it is 6% and declining as private sector workers conclude the costs of union membership are not worth the putative benefits. Public sector union membership, non-existent in 1945, is 40% and growing, as union workers average twice the compensation of the private sector for comparable jobs. In short, they use politics to extort from the rest of us.

    In the private sector, market forces serve as a counterbalance to unions; if pay and benefits get too far out of line, companies lose money and go out of business. This causes unions’ interests to be closely aligned with the private companies they organize. Private sector unions become fierce advocates for private enterprise and lower taxes. This flip-flops with public sector unions; they become pro-government and anti-market agitating for higher taxes at all levels. They literally are bankrupting America.

    Public sector unions have many horrors but two stand out. First is teachers unions. The NEA and other public unions are primarily to blame for our failing schools. They stand in the schoolhouse door blocking inner city kids from leaving, trapping them in failed schools. They have turned education into a jobs program for adults. They suck up more and more resources for ever declining performance. School choice is the civil rights issue of our time and the NEA is the 21st century Bull Conner, fire hoses and all.

    Second, public sector unions are bankrupting America with enormous pressure for higher taxes to fund unsustainable public pensions and benefits for workers earning double free market compensation. Many jurisdictions are facing bankruptcy; others must jeopardize public safety and cut vital services to fund the aforementioned pensions and benefits. As shown in the following section, the situation is so extreme that it can cost up to $4 million per year to fund one low level civil service job.

$4 Million a Year for an Entry Level Bureaucrat

      This animadversion is stranger than fiction. Assume a man begins working after high school as a unionized clerk in the Department of Motor Vehicles. He works for 30 years, eventually becoming a mid-level bureaucrat. He then retires receiving 90% of his final year pay; this is  based on 3% per year for 30 years – a common arrangement. He and his spouse (who also is entitled to benefits) collect the indexed pension for the rest of their joint lives. Of course, they also receive lifetime health care benefits.

       Our civil servant had a son at age 20 who followed precisely in his footsteps as did his grandson and great-grandson – each, in turn, working for the DMV in similar jobs. Fast forward many years; the original civil servant, his son and grandson are all alive, retired and collecting pensions and benefits. Taxpayers are paying four generations of the same family for only one active worker (great-grandson) who just began work.

      The cost, albeit well into the future, is $3-$4 million/year depending on overtime spiking, health care costs, disability status and inflation. Bottom line: taxpayers are paying up to $4 million for only one active employee, who just began work. In the private sector, the comparable amount would be under $300,000. This means the government, thanks to public sector unions and politicians, is paying up to 13.3 times (1,330%) the private sector for a low skill job. Perhaps now you can better understand how public sector unions are bankrupting cities, counties and states across America.

The next post about international trade begins our fall series addressing election issues.

Let’s Celebrate Capitalism

Capital Day – a new American holiday – should be on the Sunday before Labor Day
Let’s Celebrate Capitalism
By: George Noga – August 28, 2016

    Even in the Stone Age, capital made labor more productive. A paleolithic fisherman worked all day to spear enough fish to survive. He intuited that a net could make him much more productive but he had no capital. He slept less, working extra hours each day, until he accumulated enough fish (his capital) to survive the many days required to build the net. Our newbie capitalist then generated a surplus of fish to trade for other goods or to make more nets. His capital investment enhanced the well-being of his entire band. In the 21st century this still holds true – capital enhances labor.

     Poor countries today are underdeveloped due to insufficient capital investment for a variety of reasons. Many are impoverished by obeisance to anti-capitalist ideologies. Others are destitute because they repel capital by not respecting property rights and the rule of law. Some lack educated work forces needed to properly operate capital equipment. Yet others remain poor because of confiscatory taxation and mind-numbing regulation. Many poor nations suffer from many or all of the above conditions. Even Europe and the USA could be far better off by lowering taxes, reducing regulations, eliminating uncertainty, ending creeping socialism and fully embracing capitalism.

    Capitalists, like our paleolithic fisherman, are responsible for the rise of humanity from isolated hunter-gatherer-fishermen up to and including modern man. They enhanced the IQ of the human race by increasing human interaction and cross cultural contacts in early trading centers – where intrepid traders (mostly from the deepest end of the gene pool) left far more behind than their trading goods. There was however one dark side to this. Seeing the wealth created by early entrepreneurs, early politicians created various means to destroy wealth – a pattern that also still holds true today.

    Traders, entrepreneurs, creators, innovators – capitalists all – have spawned enormous wealth, reduced poverty, increased life expectancy and boosted IQ. They are truly the heroes of the world. Who has done more to benefit the common man – Henry Ford, Thomas Edison, Steve Jobs, Sam Walton or any king, president or commissar?

    If you doubt for a moment capitalists are the heroes of the world, look around you. Ponder with amazement the monuments they have bestowed on you. Gape in awe at the medical breakthroughs, consumer electronics, software, technology and the veritable cornucopia of everyday marvels. Average folks today live better than monarchs mere decades ago. World poverty has been halved in the past generation. Luxuries a short time ago are selling today at Wal-Mart or Costco for ridiculously low prices. Not a single one of these miracles was created by government.

    Not uncoincidentally, capitalists are the antithesis of all socialist and utopian schemes. Without entrepreneurs we would be like the former USSR, Cuba, Venezuela and all the other hell holes that elevate the state over people. The greatest metric to measure the progress of a civilization is the rate at which it creates new wealth. The more new millionaires, the better that society is innovating, creating jobs, efficiently allocating its resources and responding to the needs and wants of all its members.

    Labor Day is appropriate to honor work which is a noble activity. However, it must be expanded to honor capitalists who make labor more productive via their risk and investment. America is humanity’s ultimate capitalist bastion; let’s celebrate capitalism and the capitalists who had a dream and the will to see it through. The horn-of-plenty that is America today results from labor and capital – let’s honor them both!

The next post, scheduled for Labor Day, addresses public sector unions.