Category Archives: Fiscal Policy

Donald Trump: Corporatist Bully (Re-post)

I originally wrote the following post in the very early days of the 2012 presidential campaign. At the time, Donald Trump was threatening to enter the race but decided not to do so. A little over four years later, Trump has decided to run in an already very crowded 2016 Republican primary. I have friends and family members who are intrigued (who ought to know better) with the Donald. The reason I decided to re-publish this post is to remind readers why a President Donald Trump would be no friend of limited government or liberty.

I do not like Donald Trump. I don’t dislike him because of his wealth; he probably earned most of his wealth honestly. Some dislike Trump because he is a self promoter. I don’t dislike Trump for this reason either. Many successful individuals are great at self promotion and developing a successful brand (a very good attribute to have to have a successful political campaign).

No, the reason I really dislike Donald Trump – even putting aside his becoming the new face of the Birther movement in recent weeks, his support of the auto bailouts, raising taxes, his anti-free trade proposal that would place a 25% tariff on all Chinese products, and his support for single payer universal healthcare – is quite simply that he is a corporatist bully.

For those who don’t quite understand the difference between a capitalist and a corporatist, I highly encourage you to read Brad’s post “Mercantilism, Fascism, Corporatism — And Capitalism.” This distinction is an important one. Donald Trump is the poster child for what many on the Left as a greedy capitalist; a caricature of everything that is wrong with capitalism as preached by the Ralph Naders and Michael Moores of the world.

But those of us who know better know that Donald Trump isn’t a capitalist at all but a corporatist. Trump doesn’t try to work within a framework of a free market as a true capitalist would, but like far too many businessmen, he uses his wealth and influence to encourage the government to work on his behalf to his advantage (and at the expense of anyone else who would dare get in his way).

In the early 1990’s, an elderly widow by the name of Vera Coking was in the way. Coking’s home that she had lived in for 30 years was on a plot of land that the Donald coveted. The Donald wanted the property so he could add a limousine parking area to one of his Atlantic City casinos. When Coking turned down his $1 million offer to buy the property, the Donald decided to enlist the help of his goons on the New Jersey Casino Reinvestment Authority. In 1994, these government thugs filed a lawsuit to take Coking’s property for $251,000 and gave her 90 days to leave her property (if she were to stay beyond the 90 days, men in uniforms with guns would forcibly remove her from her home).

Fortunately, Coking’s case gained enough media publicity to gain the attention and help of The Institute for Justice (think a more libertarian ACLU with a focus on property rights). With the IJ’s help, Coking was able to keep her property. In 1998, a judge made a decision that turned out to be final finding that the Donald’s limousine parking area was not a “public use.”

John Stossel confronted the Donald about his failed attempts to take the widow’s home away; he reprinted this exchange in his book Give Me A Break on pages 152 and 153:

Donald Trump: Do you want to live in a city where you can’t build roads or highways or have access to hospitals? Condemnation is a necessary evil.

John Stossel: But we’re not talking about a hospital. This is a building a rich guy finds ugly.

Donald Trump: You’re talking about at the tip of this city, lies a little group of terrible, terrible tenements – just terrible stuff, tenement housing.

John Stossel: So what!

Donald Trump: So what?…Atlantic City does a lot less business, and senior citizens get a lot less money and a lot less taxes and a lot less this and that.

Earlier in the book (page 25) Stossel gives his impressions of this confrontational interview:

Donald Trump was offended when I called him a bully for trying to force an old lady out of her house to make more room for his Atlantic City casino. After the interview, the producer stayed behind to pack up our equipment. Trump came back into the room, puffed himself up, and started blustering, “Nobody talks to me that way!”

Well, someone should.

Had this case taken place after Kelo, the Donald may well have prevailed. In the wake of the Kelo decision, Neil Cavuto interviewed the Donald on Fox News (7/19/05) to get his reaction.

Trump:

I happen to agree with [the Kelo decision] 100 percent, not that I would want to use it. But the fact is, if you have a person living in an area that’s not even necessarily a good area, and government, whether it’s local or whatever, government wants to build a tremendous economic development, where a lot of people are going to be put to work and make area that’s not good into a good area, and move the person that’s living there into a better place — now, I know it might not be their choice — but move the person to a better place and yet create thousands upon thousands of jobs and beautification and lots of other things, I think it happens to be good.

Donald Trump is not one who respects property rights (other than his own). “Tremendous economic development” and “jobs” are great reasons to employ the full police power of government to take away someone’s property in the Donald’s world view.

I shudder to think of what a Donald Trump presidency would look like. Imagine the Donald with control of our CIA and our military. The Donald doesn’t have any problem using force to get what the Donald wants.

Now consider President Trump with a vacancy on the U.S. Supreme Court. What sort of Justice would he appoint? Most likely one who would view Kelo quite favorably.

This bully, Donald Trump is the guy who is polling second place in some early Republican primary polls? Wake the hell up Republicans!

Today’s Nasdaq Illustrates the Phenomenon of Creative Destruction

Those of you who are old enough to remember the dot com bubble bursting some 15 years ago might also remember the handwringing about how Microsoft was becoming a monopoly. Microsoft was the juggernaut that could only be taken down with antitrust suits by the federal government. Other companies simply could not compete with such a well-established corporation; the free market was inadequate.

Fast forward to where Microsoft stands today. The once seemingly invincible company has succumbed to the realities of competition and now finds itself in third place on the Nasdaq index.

James B. Stewart writing for The New York Times explains:

The Nasdaq composite that peaked at 5,048.62 on March 10, 2000, in what turned out to be the height of the technology bubble, bears little resemblance to today’s Nasdaq index. Of the top 20 Nasdaq companies by market capitalization in 2000, only four — Microsoft, Cisco Systems, Intel and Qualcomm — remain in the top 20 today. Eight no longer exist as independent companies, most as a result of bankruptcy or acquisition, and several are shadows of their former selves. The current Nasdaq composite index has only about half as many companies as it did in 2000.

“Joseph Schumpeter was spot on when he said capitalism is all about creative destruction,” said Richard Sylla, an economics professor at New York University’s Stern School of Business and a specialist in the history of markets, referring to the Austrian-American economist who described the phenomenon in 1942 in “Capitalism, Socialism and Democracy.”

In the intervening 15 years, a new generation of entrepreneurs, newly public companies and entire industries have emerged and seized the dominant positions in the Nasdaq index even as their predecessors faltered. Apple, now the world’s largest company by market capitalization, barely registered in 2000, and the first iPhone was not announced until 2007. Over a billion smartphones were shipped in 2014.

The chart below which accompanies the article illustrates this creative destruction of the past decade and a half quite clearly.
Capture

What this tells me is that no matter how large these corporations get, they cannot rest on their laurels. They cannot assume that just because consumers like their product(s) more than the competition today that the same will be true tomorrow. How many people use Myspace today as opposed to Facebook?

It’s the creative destruction of the free market – not additional regulations which ultimately allow consumers to have more choices.

Sympathy for Paranoia

cat in the tin foil hat

The moon landing was faked by the U.S. government for propaganda purposes to win the Cold War. The terrorist attacks of 9/11 was actually an inside job as a pretext to go to war. Space aliens landed in Roswell, NM but the government has been covering it up. The Sandy Hook massacre was faked to increase support for new gun control laws; the “victims” were actually actors who are all alive and well today. The Illuminati is the secret entity which actually governs the whole world…

The natural response to these statements is to say “these people are mad barking moonbats” and to keep ourselves as distant as possible from the people making them. Those of us in the liberty movement who want to be taken seriously are very quick to renounce anyone who is within six degrees of Alex Jones or anyone else who states any of the above. It’s difficult enough to be taken seriously about legalizing drugs, the non-aggression principle, free markets, and freedom of association; the last thing we need is to be lumped in with “those people.”

While it is very important to defend the “brand” of the liberty movement, it’s also important to recognize the reasons why people believe some rather nutty things.

[W]hen I say virtually everyone is capable of paranoid thinking, I really do mean virtually everyone, including you, me, and the founding fathers. As the sixties scare about the radical Right demonstrates, it is even possible to be paranoid about paranoids. – Jesse Walker, The United States of Paranoia: A Conspiracy Theory, (p. 24) (Read my book review here)

Once one learns about some of the activities governments been proven to have been involved in, some conspiracy theories no longer seem as outlandish. I used to refer to conspiracy theories and wacky beliefs as “black helicopter” stories and I’m fairly certain that others used the same terminology. Once I learned that black unmarked helicopters were used in the assault by the FBI on the Branch Davidians in Waco, TX,(Napolitano, p.110) I stopped calling such ideas “black helicopter.”

Not everything that sounds crazy is.
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The Minimum Wage Lie

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When “progressives” say “the minimum wage hasn’t kept up with inflation”, they’re lying.

Not shading, the truth, exaggerating, or interpreting things differently… they are flat out lying.

… And what’s more, the ones who made up the lie in the first place, know they’re lying (the rest mostly just parrot what they’ve been told).

What exactly would “keeping up with inflation” mean?

The minimum wage has been $7.25 an hour since 2009.

In 1938, when the federal minimum wage was established, it was $0.25 an hour. In constant dollars (adjusted for inflation) that’s $4.19 as of 2014.

So, not only has the minimum wage kept up with inflation, it’s nearly doubled it.

Ok.. well what about more recently?

Minimum wage 15 years ago in 2000: $5.15, or $7.06 in constant dollars

Minimum wage 20 years ago in 1995: $4.25, or $6.59 in constant dollars.

Minimum wage 25 years ago in 1990: $3.80, or $6.87 in constant dollars.

Minimum wage 30 years ago in 1985: $3.30, or $7.25 in constant dollars.

Funny… that’s exactly what it is today… How shocking.

So, for 30 years, the minimum wage has not only kept up with inflation, for most of that time it’s been ahead of it.

So, how are they lying?

The way “progressives” claim minimum wage hasn’t been “keeping up with inflation”, is by comparing today, with the highest level it has ever been; almost 50 years ago, in 1968, when the minimum wage went to $1.60 an hour ($10.86 in constant dollars).

This was a statistical anomaly.

There’s a long and loathsome tradition of lying with statistical anomalies.

At $1.60 an hour, the minimum wage in 1968 was a huge 20% spike from what it had been just 3 years before in ’65, more than 40% above what it had been in 1960, and nearly double what it had been 12 years before in 1956 when politicians started throwing minimum wage increases faster and bigger (again, all in constant dollar terms. The minimum wage at the beginning of 1956 was about $6.30 in constant dollars)

In constant dollar terms, the minimum wage today, is about the same as it was in 1962 (and as I showed above, 1985).

It just so happens that from 1948 to 1968 we had the single largest wealth expansion over 20 years, seen in the history of the nation (about 5-8% annual growth)… Which then crashed hard starting at the end of ’68.

From 1968 to 1984, the U.S. had 16 years of the worst inflation we ever saw, and the purchasing power of ALL wages fell significantly, as wages failed to come even close to keeping up with inflation (we saw 13.5% inflation in 1980 alone, which is about what we see every 4 years today).

It took until 1988 for real wages to climb back to their 1968 constant dollar level, because we were in a 20 year long inflationary recession, complicated by two oil shocks and a stock market crash (actually a couple, but ’87 was the biggest one since ’29).

However, the minimum wage was boosted significantly in that time period, far more than other wages rose, and stayed above the 1962 water mark until the end of that high inflationary period in 1984, declining slightly until 1992, then spiking and declining again until 1997 etc… etc…

By the by… household income in 1968? appx. $7,700, which is about the same as today in constant dollar terms… About $51,0000 (about 8% more than it was in 1967, at $47k). Which is almost exactly what it was in 1988 as well. Household income peaked in 1999 and 2007 at around $55,000, and troughed in 1975 at around $45,000

Of course, income was on a massive upswing from 1948 to 1968 (and in fact had been on a massive upswing overall since 1896 with the exception of 1929 through 1936). In 1941 household income was about $1500 ($24,000 constant), in 1948 $3,800 ($37,000 constant).

Like I said, it was the single greatest expansion in real income and wealth over a 20 year period, in American history.

1968 was a ridiculous historical anomaly… Not a baseline expectation.

So, From 1964 to 1984, the minimum wage was jacked artificially high (proportionally far above median wage levels), and “progressives” chose to cherry pick the absolute peak in 1968 from that part of the dataset, in order to sell the lie.

A living wage?

As to the minimum wage not being a living wage… No, of course its not. It never was, its not supposed to be, and it never should be.

The minimum wage is intended to be for part time, seasonal workers, entry level workers, and working students.

Only about 4% of all workers earn the minimum wage, and less than 2% of full time workers earn the minimum wage.

Minimum wage is what you pay people whose labor isn’t worth more than that. Otherwise everyone would make minimum wage. But since 98% of full time workers can get more than minimum wage, they do so.

What should the minimum wage be?

Zero.

Wait, won’t everyone become poor suddenly?

No, of course not. Literally 98% of full time workers already get more than minimum wage. If we abolished the minimum wage, most of them wouldn’t suddenly be paid nothing.

Wages should be whatever someone is willing to work for. If you’re willing to work for $1, and someone else isn’t, you get the job. On the other hand, if an employer is offering $10 and no-one is willing to take the job for that, they need to offer $11, or $12, or whatever minimum wage someone is willing to take.

If you don’t want to work for $7.25 an hour, don’t take the job. If nobody offers you more than that, too bad, but that’s all your labor is worth.

If you are willing to work for someone for $7.00, and they’re willing to pay you $7.00, what right does some “progressive” have to tell either of you, that you can’t work for that much?

No-one is “exploiting the workers”, if those workers took the jobs voluntarily, and show up for work voluntarily… If all you can find is a job for less than what you want to work for, you’re not being exploited, THAT’S ALL YOUR LABOR IS WORTH TO THOSE EMPLOYERS.

You may think your labor worth more, but things aren’t worth what you want them to be worth, they’re only worth what someone else is willing to pay for them.

But let’s be generous…

All that said, I don’t think we’ll be able to eliminate the minimum wage any time soon.

So, to those “progressives” who would say “let’s make the minimum wage keep up with inflation”, I agree wholeheartedly… Let’s make it $4.19.

Oh and if you don’t believe me on these numbers, they come from the department of labor, the department of commerce, and the census. If I’m lying to you, it’s with the governments own numbers… the same ones “progressives” are lying to you with. 

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Normalizing Relations with Cuba is Long Overdue

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Today, the White House announced that they were looking to thaw relations with Cuba for the first time since President John F. Kennedy severed diplomatic relations with Cuba in January of 1961, which preceded the disastrous Bay of Pigs invasion that following April. In their statement, the White House noted that fifty years of sanctions and other actions against Cuba have failed to achieve their stated means. This seems to be inarguable; ever since those severed ties, the relationship between the United States and Cuba has been highly antagonistic, with America using its financial and political clout to install strict financial sanctions against them, largely punishing them for adopting a communist government and aligning with the Soviet Union until the latter’s dissolution.

Under the terms laid out simultaneously by the White House and Cuban President Raul Castro, US residents could travel to Cuba for tourism, and Cuba would be allowed to accept United States credit cards. President Obama has also requested Secretary of State John Kerry to begin a review of Cuba’s standing on the list State Sponsor(s) of Terrorism, and some prisoners – most notably American Alan Gross – have been exchanged.

Of course, everything is not as cut and dried as Obama simply waiving his hands and saying “make it so”. For one, most Cuban sanctions are codified in American law, per Doug Mataconis. The number one opponent is going to be Senator Marco Rubio (R-FL), whose views echo those of many Cuban exiles and their family members who refuse to deal with Cuba so long as the Castro brothers are in power. Combined with Congress’s total inability to get anything done of note, there is going to be resistance before relations can be formally normalized.1 Naturally, when diplomacy is on the table, there is also a contingent of Americans – the hawks – that are not satisfied unless we’re blowing someone up.

Frankly, it’s well past time for us to normalize relations with Cuba. We had better relations with Russia – the number one antagonist in the Cold War – for a time than we did with Cuba, and all because of… what? The Cuban Missile Crisis, which we instigated with the Bay of Pigs invasion? Punishment for dealing with the Soviet Union back in the early 60s? Some assassination attempts against Presidents, by a country that we invaded? That stupid picture of noted murderer and tyrant Che Guevara being printed on T-shirts and postcards? Actually, that might be a really good reason after all…

Don’t mistake this for altruism. The intention here is definitely to line the pockets of private industry as the mandate’s stated goals of increasing internet penetration and American tourism start to take seed. There’s also the view that ending the embargo will hurt Raul and Fidel Castro as people start to realize the magic of capitalism, a view that seems to be shared by Hillary Clinton. Lastly, our request for Cuba to improve their human rights record is pretty funny, contextually speaking. But even if it’s bad for Cuba’s leaders, opening up relations with Cuba is not only the best thing for Cuba’s people, it’s the best thing for America, as well. We not only get a fertile ground for business dealings – a problem only for hard-core communists and socialists – but we look much better to the United Nations, now that it’s not just us and Israel holding out.

Ultimately, the end of the embargo, and the surety of the overall improvement to both the Cuban economy and the quality of life of its people, will prove one key point: America, and capitalism, won the Cold War, and it was a rout. The Soviet Union’s been dead for over twenty years, replaced by a plutocracy. Cuba will fundamentally change after holding out for decades purely out of spite. And other countries such as China are communist in name only. If the Cold War was a fight between American capitalism and communism, it’s over, and it was a slaughter.

1 – I would not be surprised if a Republican controlled Congress put the brakes on this for at least two years so as not to give Obama credit.

Christopher Bowen covered the video games industry for eight years before moving onto politics and general interest. He is the Editor in Chief of Gaming Bus, and has worked for Diehard GameFan, Daily Games News, TalkingAboutGames.com and has freelanced elsewhere. He is a “liberaltarian” – a liberal libertarian. A network engineer by trade, he lives in Derby CT.
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