MLLG

Twelve Inconvenient Truths

Twelve Inconvenient Truths

Top 12 Truths about Climate Change

GEORGE NOGA

Feb 11, 2024

Climate change is one of my signature issues; I have written about it more than any other topic. Recently, I updated my prior work and ranked the inconvenient (for climate alarmists) truths in ascending order, with #1 being the most profound.

polar bear on snow covered ground during daytime

#12 Polar Bears are Thriving

Far from being threatened, polar bears are thriving. Climate alarmists predicted 67% of them would disappear due to warming. Instead, the polar bear population is now over 30,000, up 600% from the 1950s and up 400% from 1960-1980 period.

#11 Voters are Balking

Voters in Europe and the US are pumping the brakes on climate spending and mandates which have doubled their energy bills and degraded their quality of life with no measurable climate benefit. EVs are stacking up on dealer lots in the US. The political consensus necessary for climate spending and mandates is evaporating.

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#10 There is No Existential Threat

There is not now and there never was an existential threat from climate change. Neither the UN-IPCC nor any other recognized authority has ever asserted the threat from warming rises to the level of being existential. The worst possible outcome for humanity does not come even close to threatening mankind’s existence.

#9 Population Collapse Will Solve the Problem

The global population collapse, already underway, will lower CO2 emissions below today’s level and realize climate alarmists’ fondest dreams and without spending any money. Population in 100 years will be less and collapsing rapidly. World population will peak in the 2060s and could be as low as 6.3 billion by 2100. Demographics is destiny. A population collapse, once underway, is nearly impossible to reverse.

#8 China, India, Africa and Developing Countries Dissent

Without buy-in from the countries named above, any actions taken to reduce CO2 are doomed. Not only are developing nations not going along with the climate change narrative, they are aggressively pushing back. Whatever the US and Europe may do is irrelevant. The energy minister of India, Raj Singh, called net zero “pie-in-the-sky” and said, “You can’t stop developing countries from using more and more fossil fuel.”

#7 Moderate Warming is a Net Benefit to Humanity

Twenty times more deaths are caused by cold as opposed to heat; consequently, higher temperatures save far more people than are harmed. Also, warmer temperatures are a boon to agriculture and help feed humanity.

#6 Trillions Are Wasted While Potential Solutions Are Ignored

If the US achieved net zero emissions tomorrow, there would be no discernable temperature impact. Nor would there be any impact on future GDP. A CBO report revealed future GDP would be infinitesimally less in many years if there was a 2 degree rise in temperature. While we waste trillions on feel-good solutions, we ignore those that could have a positive impact such as a carbon tax or atmospheric seeding.

#5 There Has Been No Extreme Weather

Weather,, including hurricanes, is no more extreme, severe or frequent; floods have not increased; Greenland’s ice sheet is not shrinking more rapidly; heat waves are not more common and wildfires actually decreased – all compared to past periods.

#4 Climate Activism Causes More Harm Than Climate Change

Utopian green energy fiascos are causing great damage to our economy and to our national security. We are wasting trillions on programs that, even if successful, have no measurable climate benefit. Such spending has made electricity less reliable, jacked up energy prices, created shortages and empowered dictators.

#3 Correlation is Not Causation

Inevitably, it always comes down to climate alarmists brandishing a graph showing temperature moving up in lockstep with CO2 – with the starting point cherry picked to achieve maximum impact. Different plot points such as during the dust bowl years, when temperatures were high and CO2 emissions low, would make the graph show the opposite. I could replace CO2 on the graph with women’s hemlines to definitively “prove” hemlines caused warming. That one graph is all climate alarmists have.

#2 Science Tells us Little About Climate Change

The earth is warming and mankind exerts a warming influence. That’s all science can tell us; anything beyond those ten words is not science – it’s climate religion. Earth has been warming for 160 years. Although humans exert a warming influence, it is impossible to know how much is attributable to mankind. Observed warming throughout our solar system closely parallels warming on Earth leading to the conclusion that very little, if any, of Earth’s warming is anthropogenic.

#1 It’s Not About the Climate; it Never Was

Communists, socialists, progressives and the media – along with their acolytes who guzzle the cool aid – have hijacked the climate change movement to achieve their unrelated goals. They are following the same playbook they used when they hijacked the environmental movement, and now the transgender movement. They cloak their anti-capitalist agenda in green language; truth is irrelevant because the ends justify the means. They know their ideas are politically toxic, so they search for another way. It’s not about the climate; it never was!

© 2024 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Watch For The Minsky Moment

Watch For The Minsky Moment

Has the great American spending crisis already begun?

GEORGE NOGA

Feb 4, 2024

I have been writing frequently about the spending crisis because it is inevitable and fundamentally will transform these United States in ways difficult to imagine. It will be like the Great Depression in that Americans will forever date everything from before or after the crisis. This post addresses whether or not the crisis has begun.

concrete statues near wall

The crisis could begin suddenly when the market for Treasury securities evaporates and buyers no longer are willing to buy government debt under acceptable terms. It could be triggered by an unexpected downgrade of US government debt by one of the rating agencies. Or it may be triggered by a seemingly innocuous event such as a Bloomberg article that goes viral and results in panic selling of Treasury bonds.

Alternatively, the crisis could begin slowly and gradually. Although there would be abundant signs, they would be ignored or lost in mountains of data. Inevitably, there also would be conflicting signs. No bell will ring when the crisis begins.

The Minsky Moment

The Minsky Moment, named for economist Hyman Minsky, is that precise tipping point when unsustainable activity results in a sudden decline in market sentiment and leads to panic selling and to a rapid and unpreventable market collapse. It is an abrupt bursting of a bubble. It is an unmistakable demarcation such that nothing is the same after the Minsky Moment as it was before. A recent example of a Minsky Moment is the 2008 bankruptcy of Lehman Brothers which burst the housing bubble.

Whether the spending crisis begins suddenly or gradually, there will come a Minsky Moment. Once it occurs, it will be too late to protect your assets.

Has the Spending Crisis Begun?

Although the Minsky Moment for the spending crisis has not yet occurred, that does not mean the crisis has not begun. As noted supra, the crisis could begin gradually, with the Minsky Moment coming later. Following are some indicia that suggest the crisis already may have started.

  • Moody’s, a major credit rating agency, recently put US Treasury securities on “negative credit watch”, which means a downgrade may be imminent. Recall that Treasury debt already has been downgraded once before.
  • Demand at recent auctions of Treasury debt has been tepid; in November, the Treasury was unable to sell all the bonds it offered due to insufficient demand.
  • A recent headline in the WSJ blared “Foreigners Lose Interest in Buying US Treasury Debt”. Foreign ownership of Treasuries is down 35% in recent years.
  • Demand for longer-dated Treasuries (the most risky) has been so weak that Treasury was forced to shift to offering more shorter-duration debt instead.
  • Interest on the debt last FY was 16% of revenue; this FY it will balloon to 22% of revenue on its way to oblivion. What happens when 25%, 33% or 50% of all government revenue must be used to pay interest on the debt?
  • There has been a geometric increase in the number of news reports about the debt spiral in recent months. Search “Minsky Moment” online.

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What is the Key Takeaway?

The key takeaway from all this is that the time will come (sooner rather than later) when America will be forced to cut spending by at least $1 trillion in today’s dollars. If we don’t drastically cut spending voluntarily, the market will do it for us. The most likely scenario is as follows:

  • The US will continue present spending levels. There will be occasional sops to cut spending but they will be inconsequential political window dressing.
  • Both the debt ratio and the share of revenue required to service debt will continue to skyrocket, reaching obscene levels.
  • The Minsky Moment likely will come when either: (1) the market for government debt implodes; (2) Treasuries are downgraded to near junk levels; or (3) some highly credible person or organization says the jig is up.
  • At first, the Fed will print money to sustain the obscene spending, but that will result in hyperinflation.
  • With absolutely no other choices remaining, spending will be slashed, including cuts of 30% to Social Security, Medicare, Medicaid and all other government programs. Also new taxes such as a VAT and/or carbon tax will be enacted.
  • America will be forever transformed and we will experience a lost generation.

Who will be the last person on Earth to buy US government debt? Watch for the Minsky Moment and remember that if something cannot go on forever, it won’t!

Thanks for reading More Liberty – Less Government! Subscribe for free to receive new posts and support my work.

© 2024 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

The Trillion Dollar Question

The Trillion Dollar Question 

– It’s readers’ turn to decide how to reduce the deficit

GEORGE NOGA

Jan 28, 2024

Over the years, I have presented many different and (hopefully) compelling ways to put the US spending crisis into proper perspective. Now it is your turn. Following is the government spending for the fiscal year ended September 30, 2023. These are real numbers – actual dollars out the door – not projections or estimates.

calendar
  • Health care programs¹ . . . . . . . . . . . . . . $1.6 trillion
  • Social Security . . . . . . . . . . . . . . . . . . . . . $1.5 trillion
  • Discretionary non-defense . . . . . . . . . . $1.0 trillion
  • Defense . . . . . . . . . . . . . . . . . . . . . . . . . . $0.8 trillion
  • Interest on the national debt . . . . . . . . $0.7 trillion
  • Other mandatory spending² . . . . . . . . $0.5 trillion
  • Total federal government spending . . $6.1 trillion

Other relevant numbers are GDP $26.2 trillion, government debt $33.7 trillion and the debt to GDP ratio 129%. Let’s stipulate the goal is to freeze the debt ratio at its present level of 129%. This is the dead minimum necessary to prevent a death spiral.

If GDP grows this FY by 3% to $27.0 trillion, the maximum debt must be no more than $34.8 trillion (34.8/27.0=129%). This means the total debt cannot increase by more than $1.1 trillion (33.7+1.1=34.8). Since the annual deficit is running at $1.7 trillion, that means $0.6 trillion of spending must be cut (1.7-1.1=0.6). We aren’t finished.

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Interest on the debt will increase this year by $0.2 trillion due to higher rates and more borrowing. Social Security and health care expenses are ballooning due to adverse demographics. To cut to the chase, immediate spending cuts of one trillion dollars ($1,000,000,000,000.00) are needed simply to freeze the ratio at 129%. Moreover, this does not solve our debt problem, it merely keeps it from getting worse.

It’s Your Turn; Where Would You Cut $1 Trillion?

So, where would you cut $1 trillion? You can’t cut interest on the debt; that would result in default. Do you cut defense spending given the dangerous geopolitical situation? Do you cut pensions and the VA? If you don’t cut Social Security or Medicare (political suicide), that leaves only discretionary non defense spending (cost of running the government) which coincidentally was $1 trillion last fiscal year.

So, it is up to you. Where do you cut one trillion dollars immediately? The old canard of cutting waste, fraud and abuse won’t fly – it is endemic and impossible to cut due to the nature of government. Raising taxes is a possibility and plausibly could be one (small) part of the solution. However, higher taxes stifle economic growth, which reduces tax collections, which increases the deficit, which leads to more tax hikes and results in a vicious circle. The problem is not low taxes, it is out of control spending.

If We Don’t Cut Voluntarily, Markets Will Do It For Us

If we do not make the spending cuts needed to freeze the debt ratio, the markets will do it for us by blowing up the market for US Treasury securities, i.e. buyers no longer would be willing to finance America’s deficit because they believe (correctly) that they would not be repaid in full.³ There are only three possibilities.

  1. The Fed prints money (most likely scenario) which leads to hyperinflation
  2. Draconian tax increases (carbon, VAT) which make the US economy a basket case
  3. The US defaults on its debt

Foreign holdings of US debt have plunged by 35% from ten years ago, In November, there were not enough buyers and Treasury was unable to sell all the debt it wanted. Who will be the last person on Earth to buy US government bonds?

One way or another, the spending cuts are inevitable and America will be forever changed. Imagine the political and societal chaos that would result from drastic cuts to Social Security, Medicare and all other government programs. America will suffer a lost generation and become a European style no-growth welfare state where people lead lives of quiet desperation.

If something cannot go on forever, it won’t!

1. Includes Medicare, Medicaid, CHIP (Children’s Health) and ACA (Obamacare)
2. Includes government pensions, VA and veterans benefits
3. This already has begun. Some buyers are refusing to buy 30-year bonds and have forced the Treasury to shorten the duration of the bonds it issues.
© 2024 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com
MLLG

American Exceptionalism

American Exceptionalism

Was America exceptional; is it still exceptional?

GEORGE NOGA

DEC 31, 2023


Much has been written about American exceptionalism (or the lack thereof) since Barack Obama’s turgid assertion that America was no more exceptional than Greece or, by implication, any other country. The fact of Obama being a two-term president of these United States, a nation only 13% African-American, gives lie to that statement. Can you imagine, even for one brief moment, a Caucasian being elected president of South Africa, a nation that coincidentally is only 13% white?

America Was Exceptional Because Its People Were Exceptional

Several years ago, I completed a three-volume 425,000 word family history that took years of research and encompassed nearly 400 people. It included my ancestors and their progeny (of which there are many) who immigrated to or were were born in America. It also included many of my ancestors and their progeny who remained in Europe – Slovakia on my father’s side and Hungary on my mother’s side.

I hired genealogists in both Slovakia and Hungary to research my ancestry and to identify living relatives in those countries. I travelled there twice, once with genealogists accompanying me as guides and translators. I met many relatives who never knew I existed. This provided me a rare perspective to compare the descendants of my ancestors who remained in Europe to those who immigrated to America.

My ancestors who emigrated from Slovakia and Hungary were the smartest, most ambitious, hardest working and most open to risk. Try to imagine leaving behind family and friends to take a long ocean voyage to an unknown place without money, education or speaking the language. Such people must have been imbued with an intense desire for liberty and to better themselves at great risk. There can be no mistake about the outcome; my ancestors who emigrated and their descendants are infinitely better off in every possible metric than those who remained in Europe.

If my family saga, admittedly anecdotal, proves anything, it is that those who immigrated to America were truly exceptional. Thus, America was seeded with exceptional people who did not follow the path of least resistance. America was exceptional because it was populated with exceptional people!

Other Indicia of American Exceptionalism

  • Many Europeans (Tocqueville, Trollope, Dickens and thousands of other lesser luminaries) marveled at and wrote extensively about America’s exceptionalism
  • America’s setting between two oceans and with a seemingly boundless frontier
  • Its founding documents defining the relationship between man and the state
  • The idea that men had natural rights not derived from the state
  • A pervasive sense of egalitarianism not found elsewhere

Historian Bernard Bailyn wrote the following description of early America.

Faith ran high that a better world than any that ever had been known could be built where authority was distrusted and held in constant scrutiny; where the status of men flowed from their achievements and from their personal qualities, not from distinctions ascribed to their birth; and where the use of power over the lives of men was jealously guarded and severely restricted. It was only where there was this defiance, this refusal to truckle, this distrust of all authority that institutions could express human aspirations, not crush them.”

Is America Exceptional Today?

I have no doubt whatsoever that America was exceptional at its founding, during the early years of the republic, during its march toward manifest destiny and well into the twentieth century. But things began to change in the second half of the 20th century.

I also have no doubt American exceptionalism has significantly eroded. All the indicia of our exceptionalism listed supra have been degraded. The oceans no longer isolate us; there is no frontier; egalitarianism has morphed into a more rigid class structure; our politics have become vulgar; and our liberties are under constant assault.

Bailyn’s description of early America no longer applies. The exceptionalism of our people, particularly their love of liberty, has been diluted by many subsequent generations where the qualities of early Americans have not been reinforced. As Ronald Reagan often said: “Freedom is never more than one generation away from extinction. We didn’t pass it to our children. It must be fought for and protected.

America in 2024 is like a priceless jewel whose setting has become badly tarnished. Yet quite unmistakably, significant vestiges of American exceptionalism remain. America continues to be a beacon of liberty and hope for millions of people in countries all over the world – a shining city on the hill.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Election 2024 Update

Election 2024 Update

Will Biden and Trump be the nominees?

GEORGE NOGA

DEC 10, 2023


Readers have asked for my take on the 2024 election. For the many new readers of my blog on the Substack platform, I have been involved as a participant and keen observer of politics for nearly 60 years. I have gotten it right (including Trump in 2016) far more than I have whiffed. Read my political bonafides on Substack.

A young African American woman casting her ballot in 1964

Democratic Party Nomination

Joe Biden will not be the Democratic Party nominee. One of my favorite aphorisms is that if something cannot go on forever, it won’t. Biden cannot go on forever in his present physical and cognitive state. His deterioration is visible to all and is getting worse. Moreover, the Biden family corruption scandal is closing in on him from all sides. Biden will be forced to drop out of the race for the following reasons:

  • His physical condition, already highly problematic, will deteriorate and he will experience more public episodes of falling, stumbling and fragility.
  • He will continue to degrade cognitively, again with highly public episodes of confusion, mumbling, silence, misspeaking and spinning tall tales.
  • Evidence, already quite abundant, of the Biden family business of corruption, influence peddling, money laundering, tax evasion and bribery will reach such a critical mass that it no longer can be plausibly denied. Evidence of Biden corruption is mounting on a weekly basis and will only get worse.
  • Polling shows Biden losing nationally to Trump and to the other Republican candidates and in nearly all the swing states – by wide and increasing margins.
  • Biden’s support among independents, Hispanics, Arab-Americans, the young, Black males and suburbanites is tanking by double digits and plummeting.
  • Democratic politicians and media are publicly challenging Biden’s fitness. It is only a matter of time until one or more top Democrats (Obama?) speaks out.
  • Biden’s fund raising is anemic; many big donors are holding back.
  • Kamala Harris is a monumental liability; Biden can’t ditch her – but another nominee could. Moreover, there is a good chance she would become president in a Biden second term and would be a electoral disaster for Democrats in 2028.

Biden will hold out as long as possible because he is stubborn; Jill wants to continue being first lady; and (critically) he wants to retain the power to issue pardons for himself, family members and others involved in promoting the Biden brand.

If Not Biden, Who?

The nominee will be Gavin Newsom; there really aren’t other viable choices. Kamala Harris would be a disaster. Also, invoking Occam’s Razor, Newsom is the most logical choice and he is chomping at the bit to enter the race.

I would not rule out Michelle Obama stepping in at the last minute in a brokered convention. That would have two benefits. First, it would solve the Kamala Harris problem. Second, it would leave little time for Michelle to self destruct. I understand Michelle is popular, but that doesn’t translate into an electoral mandate.

Republican Party Nomination

Trump has such a commanding lead, it is difficult to imagine anyone overtaking him. At the date of this post, the only person with even a long shot is Nikki Haley. Ron DeSantis had a shot but blew it. He made four critical errors, all preventable. Note: I like DeSantis, believe he is a great governor and would make a good president.

  1. His campaign misfired at the very beginning due to mismanagement. He hired the wrong political consultants and managers – since replaced.
  2. He ran on social issues. This was unnecessary as he already had established his anti-wokeness bonafides. He should have left Disney alone; there was no upside from piling on. Instead, he should have focused on bread and butter issues.
  3. DeSantis fails to come across as a personable campaigner.
  4. The Florida six-week abortion ban was a gashing, self-inflicted wound.

General Election

Who will win, Trump or Newsom? The plethora of independent and third party candidates muddies the waters. As of now, the following candidates are likely:

  • Independent: Robert F. Kennedy, Jr.
  • Independent: Cornel West
  • No Labels: Nominee unknown – possibly a Manchin/Romney ticket
  • Green Party: Jill Stein is the likely nominee
  • Libertarian Party: Nominee not yet determined

All the independent and third party movements, except the Libertarian Party, favor Trump as they would draw far more votes from Biden.

The election is over 300 days away and it is far too early for me to opine. But stay tuned to my blog for more about election 2024 and my fearless forecast.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Dreaming of a Woke Christmas

Dreaming of a Woke Christmas

Warning: candy canes resemble a shepherd’s crook

GEORGE NOGA

NOV 26, 2023

Santa Claus (please, no fat shaming) has been cancelled because he (preferred pronoun) is a phallocentric, cisgender, heteronormative, oppressive white male existing solely within an ageist authoritarian hierarchy. He is misogynistic and fraught with mansplaining, bropriation, toxic masculinity and white fragility.

Only unwoke children adhering to bourgeois capitalistic values and to moral absolutism (by not being naughty) receive gifts during the Celebration of Winter (formerly known as Christmas). Such children are brainwashed and seduced into a lifelong exploitative and metastasizing addiction to conspicuous consumption.

santa claus with red background
What? Me cancelled!

Santa’s bribes to gift-addled children are made by degendered, height-challenged, marginalized elves at the North Pole, a hostile post-colonial, non-union, right-to-work setting. The oppressed elves and reindeer must avoid stepping off the shrinking polar ice cap. At least ze (preferred plural pronoun for elves) no longer need to watch out for polar bears on passing ice floes due to their rapidly shrinking population.

Woke Christmas Shopping and Decorating

Scrooge-like robber barons such as Wal-Mart lure unsuspecting shoppers with elaborate decorations, holiday music and even (horrors) low prices. Some stores stoop so low as to provide ersatz Santas to lure, confuse and coax young children into an anti-proletarian lifestyle. If you should feel overwhelmed by microaggressions while shopping, seek a safe room with elevator music, teddy bears, images of frolickingly puppies, Play-Doh, warm milk and cookies. Should you need a rest room, make sure there is one available that comports with your gender identity at that moment.

Décor for the Celebration of Winter must exclude trees and anything intended to hang on trees. Also offensive are images of Santa, reindeer and anything red or green. Most offensive are nativity scenes. Avoid snowflakes and snow globes; however, making snow people is acceptable. Avoid holiday lights unless the power comes from solar or windmills as the energy wasted will lead to more fracking and pipelines. Be on high alert to avoid candy canes which resemble a shepherd’s crook – bummer.

Gift Guidelines for a Woke Christmas

Eschew toys made in China with slave labor; however, it is just fine to buy EVs that use child labor in Africa. Buy locally to avoid leaving a humongous carbon footprint. Take care to avoid cultural appropriation and non-intersectionality. Don’t use wrapping paper or cards as the environmental impact of paper products requires clear cutting of old growth forests and sacrificing spotted owls on the altar of unbridled consumerism. Moreover, disposing of all the waste requires countless new landfills. Lengthy after Christmas lines to return gifts attest to their utter depravity; obviously, people neither needed nor wanted the gifts. This is not gaslighting.

Avoid gender specific gifts; above all, this means NRA-inspired toy guns for the deplorable and irredeemably racist, sexist, homophobic, Islamophobic and xenophobic boys in flyover land. They will cling to their new guns along with their religion. Avoid gifts from companies guilty of greenwashing.

Certain woke gifts are acceptable, such as birth control pills for birthing people on rape-infested college campuses. Personalized N-95 masks are a good choice. If all else fails, a Che Guevara sweatshirt always is sure to please your woke friends.

Vacations to socialist utopias such as North Korea, Gaza, and nearby Venezuela are popular with progressives; however, remind your recipient to bring zer (preferred pronoun) own toilet paper. If you can’t afford foreign travel, California, New York or Illinois are good substitutes. If you want to impress your favorite liberal, give zem (preferred pronoun) a U-Haul to Florida. For a really big splurge, you could provide private security to your blue state BFF in a sanctuary state where crime and looting are rampant, guns are banned, police have been defunded and cash bail eliminated.

Woke Christmas Dinner

Once all the unwanted gifts and materials are properly recycled with zero waste, avoid binge eating f/k/a Christmas dinner – an affront to those with food insecurities. Avoid grace or even a moment of silence as this is but a veiled attempt at prayer. Eat only organic, non-GMO, sustainable, local and fair-traded foods. Consider a vegan, PETA approved menu; tofu is a great alternative. Avoid turkey which is not free range and is loaded with growth hormones, mutagens, carcinogens and antibiotics. Bon Appetit.

TRIGGER WARNING: Merry Christmas to all our readers from MLLG!


© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Socialism and Bottled Water

Socialism and Bottled Water

A simple bottle of water explains socialism’s failure

GEORGE NOGA

Water began to be sold in single serve bottles in the USA during the 1970s. There always had been a small market for sparkling water and for bottled water in parts of the world where tap water was unsafe or of poor quality. But who would have fathomed that Americans would shell out good money for bottled water when safe, good quality water runs scot-free out of faucets, fountains and coolers?

bottled water

I am educated in economics and would like to believe I would make the best possible decisions to serve my fellow man. However, if I were a 1970s era socialist government planner, I would not have allowed our economy’s scarce resources to be used to produce and to distribute bottled water. After all, no one would buy it; right?

I would have been dead wrong; consumption now is 1 million bottles per minute.

Today, bottled water is the second largest beverage sold – ahead of both milk and beer. In 2022 Americans spent over $30 billion to buy 16 billion gallons. That pales in comparison to China which consumes nearly 100 billion bottles annually. The world market is over $300 billion and is forecast to hit $500 billion by 2030. Every day, people across the globe consume 1.3 billion plastic bottles, or about 1 million per minute. A Harris poll showed that 94% of Americans buy bottled water. Worldwide, 600 million households (about 2 billion people) drink bottled water. Whew!

All of my economic training, smarts, logic and pristine intentions would have failed dismally in discerning the preferences of my fellow man. I would have completely misjudged the creativity and ambition of entrepreneurs and the behavior of consumers armed with a free choice. Had I been the chief central planner for a socialist government in the 1970s, there would be no bottled water today.

One million bottles of water are consumed every minute!

However, as dead wrong I would have been about bottled water, no one would ever have known of my mistake because it would have been impossible to know what would have happened with free people in free markets.

Of course, it isn’t just about bottled water. There would be no copy machines, personal computers, smart phones, internet or a host of other products we take for granted today. IBM originally estimated the world market for copy machines at 5,000 and for personal computers at 100. The cognoscenti of the time believed the internet would be used only by government and universities.

No socialist government would have produced copy machines or personal computers or facilitated the internet. If perchance they had produced copiers or PCs they would have been shoddy – just like their cars (the Trabant comes to mind) that had less horsepower than today’s riding lawn mowers.

The humble bottle of water, available in any store for around one dollar, shatters the myth, arrogance and fatal conceit underlying socialism and all command economies.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Public Sector Economics

Public Sector Economics

Special interests, rent-seekers and public employee unions

GEORGE NOGA
NOV 12, 2023

My blog frequently refers to public sector economics and it is time for a full post on that topic. There is a branch of economics dedicated to the public sector and Nobel Prizes have been won for pithy analysis of public choice economies.

Many people, particularly the young and progressives, have an infatuation with government. They view elected officials as benevolent, dispassionate actors seeking the best possible social outcomes. In contrast, they view private sector actors as self-interested and greedy. They are half right: private sector decision makers do indeed pursue self interest; however, public sector workers just as shamelessly pursue self interest even when that means throwing the public under the bus.

white concrete building under cloudy sky during daytime

Public sector economics at work

  • The goal of politicians, to the exclusion of all else, is winning the next election. They focus single-mindedly on that goal – no other objective comes close.
  • Their focus is very short term, i.e. the next election. They make disastrous decisions knowing full well they harm the public in the long run. That explains deficits in 57 of the last 62 years. They enact immediate unfunded pensions and other benefits while pushing off the costs as far into the future as possible.
  • Special interest groups, rent-seekers and unions seek to extract value from government without giving value in return. Unionized public sector workers get 25% more than their private sector peers for comparable work. In exchange, unions donate money, campaign workers and votes and the process repeats.
  • Politicians understand they can significantly benefit special interests even when clearly contrary to the public because the benefits are huge in relation to the costs when spread over 330 million taxpayers. For example, sugar subsidies, to a very small number of growers, cost taxpayers $4 billion per year, but that is only $50 per American family – not enough for them to strenuously object.
  • Central planning leads to bad decisions. It ignores real world preferences of real people, creates perverse incentives and results in unintended consequences.
  • The private sector is quick to recognize and to cut losses; for the public sector the incentive is to deny anything is wrong and continue to throw money at it.
  • The incentives and disincentives in government are horribly misaligned such that they reward behavior that is not in the public interest.
  • Politicians get feedback only infrequently during election years. Even then, that feedback is bundled with numerous other issues making it difficult to isolate issues individually. Moreover, in many jurisdictions elections are decided based on identity politics and voting blocks with the issues being an afterthought.
  • Politicians always choose borrowing over raising taxes and go to extreme lengths to make taxes as opaque as possible. In the words of one solon, the goal is to get the most feathers off the goose with the least amount of hissing.
  • In recent years, with interest rates near zero, politicians borrowed short-term instead of locking in historically low long-term rates. They committed this malpractice purely for political reasons so deficits would appear less. Both political parties were culpable as public sector economics applies universally.

Why government fails

Public sector economics demonstrates why government failure is systemic, structural, deeply rooted and incapable of reform. Waste, fraud, abuse and corruption are ingrained and rampant. Government is not based on markets; it is top-down, highly coercive, ignores consumer preferences and artificially creates winners and losers.

Government cannot be fixed and it is futile to try because basic human nature, which is highly responsive to risks, rewards and incentives, is unchanging. Business succeeds, where government fails, precisely because it properly aligns personal rewards and incentives with the goals of the business. Hence, the value proposition offered by the public sector does not attract talented hard working people.

How to reduce public sector pathologies

There is one way – and only one way – to reduce the pathologies inherent in the public sector – they cannot be eliminated – only reduced. The answer is to drastically shrink the size and scope of government. Even then, the public sector will fail, but it will be less of a failure; absolutely nothing else will work.

Americans do not need more government, better government, wiser government or even more frugal government. America needs less government!

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Balanced Budget Amendment

Balanced Budget Amendment

BBAs are doomed to fail – far too little – far too late

GEORGE NOGA
NOV 5, 2023

In recent months, highlighted by the hi-jinks in Congress, there have been renewed calls for a balanced budget amendment, or BBA. Over 80% of Americans say they favor a BBA to the Constitution. Is a BBA good medicine that would help get us on the right fiscal path; or, is it smoke, mirrors and maskirovka that would beguile Americans into falsely believing government is making progress toward solving the spending crisis? This post resoundingly answers that question.

a pile of twenty dollar bills sitting on top of each other

The threshold issue about a BBA, is the definition of budget. Does it apply to total government spending, to the so-called primary budget (which excludes interest on the debt) or only to non-defense discretionary spending? Any BBA excluding interest is worthless. That is akin to a family with ginormous debt claiming its budget is balanced excluding interest on its mortgage, auto loans and credit cards. Interest on the debt soon will balloon to $1.5 trillion, as rapidly maturing low-rate debt is being replaced by significantly higher-rate debt. A BBA that addresses only the primary budget would result in a $1.5 trillion – and rapidly increasing – annual deficit.

Ten Biggest Flaws Of a BBA

There are many questions and flaws with a BBA; following are only the top ten.

  1. How is budget defined; what does balanced mean?
  2. Do we balance annually or over an entire economic cycle?
  3. Are wars and natural disasters excluded and how are they defined?
  4. How do we deal with off-budget entities like Fannie, Freddie and USPS?
  5. How about supplemental funding legislation?
  6. How are loan guarantees handled; do they constitute spending?
  7. Can regulations be used instead of taxes to shift spending to the private sector?
  8. Are there any restraints on imposing new user fees?
  9. What about using the tax code to fund expenditures and incentives?
  10. Are mandates (such as Obamacare) permitted?

It is clear from the above that there are myriad paths around, through, over and under a BBA to eviscerate it. There would be untold unintended consequences such as imposing tax increases instead of cutting spending to comply with a BBA. It is impossible to take the politics out of politics.

Hard Truths About Balancing the Budget

  1. Politicians could define a BBA to include only non-defense discretionary spending. They could allow for many years of transition and backend load the spending cuts – many of which will never happen. Even this very limited objective (it excludes, entitlements, interest and defense) is an impossibility as it would require spending cuts approaching 100% of the remaining budget.
  2. Politicians could seek to balance only the primary budget. However, even that is impossible. In FY 2022-23 the US had a deficit of $2 trillion which includes interest of $900 billion. Balancing the primary budget would entail cuts of $1.1 trillion – equal to 20% of all spending including Social Security, Medicare, pensions and other mandatory spending. If cuts to Social Security and Medicare are excluded, the remaining budget would have to be slashed by 60%.
  3. Balancing the total budget – except for defense and interest – would require an immediate and permanent cut in everything else, including Social Security, Medicare and pensions, of over 40%. This also is an impossibility.

The ultimate hard truth is America is past the time when even drastic spending cuts can prevent a crisis. A BBA would buy us only a few more months of spending madness.

The ineluctable truth is that nothing will work no matter how the budget is defined because we have dug the debt hole too deep and we still are furiously digging it even deeper. If a meaningless BBA were to pass, politicians would spare no hyperbole congratulating themselves and Americans would be beguiled into believing something positive had happened when, in reality, it was a giant nothingburger.

It Really Is Not a Spending Crisis

Calling it a spending crisis is a misnomer. At its heart it is a moral crisis that cannot be addressed until Americans understand its gravity and are prepared to make some incredibly difficult and painful choices. The ultimate hard truth however is that we are well beyond the time even for difficult spending choices to make a difference. We can delay the crisis, but cannot prevent it. A balanced budget amendment would be nothing but a mirage to buy America a few more months of spending madness.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Slavery Contextualized

Slavery Contextualized

There are more slaves today than at any point in history

GEORGE NOGA
OCT 29, 2023

The astounding and unexpected success of the powerful fact-based movie The Sound of Freedom has focused attention on modern slavery, which today is lumped together as human trafficking. Operation Underground Railroad (“OUR”), the organization behind the movie, leads the global fight against trafficking. OUR estimates there are 50 million people being trafficked today – the most at any point in history. Moreover, this number does not include the tens of millions held in peonage, or debt slavery.

Children constitute 35% of the victims. In the US today there are over 5 million slaves found in all 50 states of which sex trafficking constitutes 70%. Other common forms of twenty-first century slavery are forced labor, forced marriage, child soldiering and forced begging. Chattel slavery, the type common in the 19th century, also exists in many countries including Mauritania, South Sudan, Ghana and Libya. In some of these places there are open slave markets – just like hundreds of years ago.

girl in white crew neck shirt
Photo by Nathan Bingle on Unsplash

Slavery as Taught in Government Schools

There is much controversy about how slavery is taught in government (public) schools, with many teaching CRT and the 1619 project. Slavery, in all its myriad forms, is evil always and everywhere and it is right and proper for schools to teach children about its history and evils. The problem is lack of context.

Progressives, who have an ironclad grip on government schools, teach only about slavery in América. They divorce it from all contexts and fail to inform students about mitigating factors. As a result, students believe slavery occurred only in America and are ignorant of the often-heroic efforts to abolish it. Following is some much needed contextualization – some of which likely will surprise or even shock you.

Slavery in Historical Context

Slavery always has been a tragic, but inseparable, part of the human condition. It is thriving today and is even more profitable to the criminal cartels than illicit drugs. However, I am focusing on the period after the discovery of America.

From the 16th to the 19th century, 10 million slaves were shipped from Africa to the West. However, during that same time period, a far greater number (15 million) was sent east to the Ottoman Empire. Today there are many millions of descendants of those slaves in the west but virtually none in the east. Why is that? The slaves sent east were castrated and then killed when their usefulness ended. Thus eastern countries, which imported 50% more slaves than the West, do not have a legacy of slavery because there are few surviving progeny – due to castration.

Relatively few slaves were forcibly captured by European slavers. Most were sold by other Africans, even by their own families, making them complicit in the slave trade. The slave trade could not have succeeded without the active support of African elites.

“Selling one’s neighbors, and even one’s own children, into slavery is more condemnable than buying them.” Voltaire

Slaves were not limited to Africans. As recently as the 19th century, Barbary pirates captured and enslaved over one million Europeans. In America, emancipated slaves, who could afford it, also became slave owners.

The West Africa Squadron

There were many heroic actions taken by the West to end slavery. I will describe one of them – a massive, but largely forgotten by history, effort by Britain that spanned over half a century. Slavery was abolished in Britain in 1807 and they used the Royal Navy to wipe out the slave trade throughout much of the world.

Britain established a naval squadron to patrol the coast of West Africa; the squadron grew to include 20% of its fleet. From 1808 to 1860, the West Africa Squadron captured 1,600 slave ships and freed 150,000 slaves – at a cost to the Royal Navy of over 1,500 men. Some historians have declared Britain’s West Africa Squadron the most expensive international moral action in modern history.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com