The Four Presents of Christmas

George Noga
The story of four Christmas presents is an economics primer. It also applies to government health care and indeed to government spending in general. 
The Four Presents of Christmas
By: George Noga – December 3, 2017
     The process of shopping for Christmas presents contains valuable lessons about economics and government. The four presents fall into three economic categories.
        Present #1  The most felicitous gift is the one you buy for yourself with your own money. Clearly, you know better than anyone precisely what you want as well as how much you will spend. Your priorities are both price and quality; you want the highest possible quality for the lowest possible price. There are numerous trade offs between product features, quality and cost and many places to shop. You are uniquely qualified to evaluate all the permutations and to make the correct choice. Gifts like this are never returned. This is a first party purchase; the person paying is the person using.
       Present #2  Your Great Uncle Warbucks sends you a generous check with the proviso you buy a gift for yourself. Although you remain the best judge about what to buy for yourself, you now are tempted to purchase something you would not have bought with your own money. You still want high quality because you are consuming the product, but now you are not quite as concerned about the price. When someone is buying your dinner, you order the lobster rather than the brisket. When using OPM (other people’s money) the temptation is great to splurge. This is a one example of a second party purchase; the person using is not the person paying.
       Present #3  This is the arch-typical Christmas present – you buy a gift for someone else with your own money. However, you often are reduced to guesses about the needs and wants of others – even those close to you. Because you are spending your own money, you care about cost but are less concerned with quality as you are not using the product. You are not very interested in investing much time comparison shopping. Frequently, you buy something that the recipient would not have bought for him/her self and your gift is very likely to be returned. This is a slightly different example of a second party purchase; the person paying is not the person using.
       Present #4  Now we have the situation where you buy a present for someone else with money supplied by a third party. Say your boss asks you to buy a present for a customer. You buy the present with money that is not your own; therefore, you do not care about the cost. You are not going to consume the present; therefore, you don’t care about the quality – or even the appropriateness of the gift. In any event, you have absolutely no idea about what the person may want or like. Therefore, you don’t waste any time shopping and promptly buy a ten-foot rubber elephant at the store next door. This is by far the worst of all scenarios; it is called a third party purchase.
* * * * * * * * * * * * * * * * * * * * * * * * * *
        All government spending consists of third party purchases. The government takes money from you and distributes it to others based on what government considers best. They are not concerned with either cost or quality. It is even worse; they have priorities of their own that often are directly opposed to the needs or wants of the recipients. Government employees respond to their own personal incentives and disincentives.
     The lessons of the four gifts of Christmas apply with a vengeance to health care. The cost of government funded health care continues to skyrocket while at the same time, the service and quality deteriorate. Compare this to private health care as is the norm in dentistry, ophthalmology and cosmetic surgery. The inflation adjusted cost of all of these is either stable or decreasing while quality and service are good. The difference is easy to explain. Government health care consists entirely of third party transactions while dentistry, plastic surgery and eye surgery are first party transactions.
Our next post previews MLLG’s plans for 2018

The Politics of Harvey, Irma and Maria

George Noga
“Blow, winds, and crack your cheeks! Rage! blow! You cataracts and hurricanes, spout till you have drenched our steeples, drowned the cocks!”  (King Lear)
The Politics of Harvey, Irma and Maria
By: George Noga – November 26, 2017
      The lines above are from King Lear’s famous diatribe against the storm. The once mighty Lear, now powerless, urges nature to bring on another apocalypse. The storm symbolizes Lear’s state of mind. Shakespeare’s words could easily have been spoken by politicians following Harvey, Irma and Maria, ranting about climate change, price gouging and, in Puerto Rico, blaming others for their lack of preparedness.
     Harvey was the first major (cat 3) hurricane to make US landfall since Wilma in 2005, the longest hurricane-free period ever. Irma was the only major hurricane to hit Florida in 12 years, toppling a 165-year record. What happened next was as predictable as it was pathetic. There were climate change diatribes worthy of King Lear about how 12 hurricane-free years somehow proves hurricanes are more (not less) frequent.
       Meanwhile, a 2017 peer-reviewed study (D’Aleo, Wallace, Idso) found man-made adjustments to temperature readings account for all reported warming in the past 75 years. The study’s authors said when numerous adjustments are made, it is reasonable to expect some to have the effect of increasing warming and some of decreasing warming. Instead, nearly all adjustments increased warming; i.e. the data underpinning global warming are based entirely on human adjustments – not on actual data!
       EPA Administrator Pruitt and Energy Secretary Perry have suggested red-blue team exercises (used by military and intelligence services) to expose vulnerabilities in climate science. Climate alarmists went ballistic, arguing it would be a dangerous attempt to elevate minority opinions and to undercut the legitimacy, objectivity and transparency of existing climate science. Why would legitimate scientists be afraid to debate any issue? They should welcome debate. Newton is spinning in his grave.
       Politicians also mimicked King Lear in castigating price gouging. Florida Senator Nelson and AG Bondi were the best Lear impersonators. Bondi vowed to prosecute and to shame gougers and established a hotline for reporting violations. They are economically illiterate; economists universally agree price gouging is beneficial.
       Americans understand prices for the same product fluctuate in different conditions. Hotel rooms in a college town cost more during a big game. Americans openly flaunt anti-scalping laws. A poor ghetto kid risking scarce capital to broker tickets should be honored, not incarcerated. We readily accept Uber’s surge pricing and viscerally grasp it is beneficial. Government engages in price gouging at, inter alia, airports, toll roads, turnpike rest stops and sporting venues – Nelson and Bondi take note.
      Prices in free markets convey accurate, truthful and useful information about the value of a good or service; government prices are lies; consider the following:
  •    Market prices are determined by voluntary cooperation among people. Government prices are coercive and based on the naked police power of the state. Markets enforce themselves; government prices must be enforced by men with guns.
  •   Market prices alleviate shortages by directing resources to where they are most needed; government prices (rent control) lead to rationing and create shortages.
  •   Market prices are logical, non-political, foster civility and encourage honest behavior. Government prices are illogical, political and strain the social fabric by criminalizing laudable and honest behavior. Government prices create black markets, incentives for illegal behavior and breed disrespect for the law as in Venezuela.
  •   Market prices result in more supplies being available during a crisis, storing extra goods beforehand and conservation. Government prices create shortages, rationing and empty shelves. Market prices are better for victims of natural disasters.
       Why should a hurricane somehow be different than a football game when it comes to the price of a hotel room? Market prices are truthful; government prices are lies. In what kind of society would you prefer to live – one based on voluntary cooperation of people in markets or one based on government lies enforced by men with guns?
Our next post describes the four gifts of Christmas

Our First Thanksgiving as Americans

George Noga
Everyone is familiar with the Thanksgiving celebrated by the Pilgrims in 1621. This post reveals the rest of the story and our first Thanksgiving as Americans. 
Our First Thanksgiving as Americans
George Washington’s Thanksgiving Proclamation
By: George Noga – November 19, 2017
        Americans all know the feel-good (but deeply flawed) narrative of the Pilgrim’s thanksgiving in 1621 – the first in the new world. During colonial times, and even throughout the Revolutionary War, the practice continued as the colonies set aside different days for thanksgiving, prayer and fasting – not feasting.
        The first nationwide day of thanksgiving was in response to the American victory at Saratoga in October 1777. The Continental Congress suggested a day be set aside to honor the victory. George Washington, as commander-in-chief of the army, agreed and proclaimed December 18, 1777 as the first national day of thanksgiving. The Continental Congress issued thanksgiving proclamations in each year through 1784. Note: The 1777 proclamation is easily available online and well worth reading.
      Following ratification of the Constitution, the first Congress beseeched President Washington to issue a proclamation of thanksgiving; Washington concurred and issued the proclamation on October 3, 1789 designating Thursday, November 26 as the day; his proclamation is reprinted below. This is the first thanksgiving in what now became the United States of America. However, Washington did not establish a permanent holiday. Presidents Adams and Madison also declared days of thanks but there were no thanksgivings between 1815 and 1863 when President Lincoln initiated an annual observance of thanksgiving in the USA on the fourth Thursday in November.

George Washington’s Thanksgiving Proclamation (edited for length)

“Whereas it is the duty of all nations to acknowledge the providence of Almighty God, to obey His will, to be grateful for His benefits, and humbly to implore His protection and favor; and whereas Congress requested a day of public thanksgiving and prayer, to acknowledge the many and signal favors of Almighty God by affording the people an opportunity peaceably to establish a government for their safety and happiness. 
 
Now therefore, I do assign Thursday, the 26th day of November next, to be devoted by the people of these States to the service of that great and glorious Being who is the beneficent author of all the good that was, that is, or that will be; that we may unite in rendering unto Him our sincere and humble thanks for the signal and manifold mercies and the favorable interpositions of His providence in the course and conclusion of the late war; for the tranquility, union, and plenty which we have since enjoyed; for the civil and religious liberty with which we are blessed and, in general, for all the great and various favors which He has been pleased to confer upon us.
 
And also that we may unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations, and beseech Him to pardon our national and other transgressions; to enable us all, whether in public or private stations, to perform our duties properly; to render our National Government a blessing to all the people by constantly being a Government of wise, just, and constitutional laws, discretely and faithfully executed and obeyed; to protect and guide all sovereigns and nations, and to bless them with good governments, peace and concord; to promote the knowledge and practice of true religion and virtue; and generally, to grant to all mankind such a degree of temporal prosperity as He alone knows to be best.”  (October 3, 1789)
Next up is a retrospective of the past hurricane season

Antifa, Neo-Nazis and the KKK

George Noga
Leftists believe communism was a noble experiment; hence, atrocities by the left were tolerable, even praiseworthy. After all, you must break some eggs to make an omelet.
Antifa, Neo-Nazis and the KKK
By: George Noga – November 12, 2017
       There is much confusion and contradiction about fascism. Antifa (short for anti-fascism) and the hard left assert fascism is vile, despicable and the embodiment of evil in the world. They advocate euphonic ideas like social justice, democratic socialism and economic democracy. They have zero tolerance for anyone who disagrees. Yet, the things Antifa wants you to believe in are all fascist ideas. Hitler and Mussolini were national socialists. In fact, Nazi is short for the National Socialist Party.
      Fascists in Germany, Austria and Italy were all leftist parties. The Austrian Nazis declared, “We are a nationalistic party that fights against reactionary tendencies as well as feudal, clerical, capitalistic and alien influences.” The German Nazi platform stated, “We fight against all reactionary trends, ecclesiastical, aristocratic and capitalist privileges and alien influence.” Mussolini called himself an “International Socialist“, later changed to “National Socialist“. Every prominent German and Italian fascist – from Hitler and Mussolini down – began as and remained a socialist.
      There you have it – the sordid spectacle of Antifa embracing and advocating fascist ideas despite its virulent anti-fascist rhetoric. Chalk it up to rank ignorance and the poisoned fruit of what passes for learning on today’s college campuses. Yet, there is one thing even stranger – the vast asymmetry between condemnation of abominations perpetrated by the far left versus those by what is alleged to be the far right.
      Historical fascists (really socialists) committed atrocities, killing at least 6 million (excluding war) innocents. Communists killed over 100 million innocents mainly in China, the USSR and Cambodia. Everyone on the political right unequivocally condemns the Nazi atrocities. However, there are many leftists, including intellectuals and professors, who refuse to condemn atrocities committed by the left.
       They say communism was a noble experiment and you have to break some eggs to make an omelet. They believe they will get it right the next time. They even call themselves Stalinists or Maoists. Imagine if some on the right called themselves Hitlerists or Mussolinists. Apparently, mass murders by the left are acceptable and even praiseworthy. Contemporary commies like Castro, Chavez, Maduro and their ilk are doing noble things. However, the horrors promulgated by fascists (socialists) were in the past whereas the great danger from the hard left lies in the present and future.
      In contrast to the real threat posed by Antifa, the threat from Neo-Nazis, white supremacists and the KKK is minuscule and laughable; they are buffoons no one takes seriously. The left keeps these groups in the news so they can tar their opponents with associated epithets. Everyone on the right condemns these groups, but those on the left won’t condemn vile leftist groups. The KKK can’t muster 100 people for a rally and if they did, 70% would be paid government informants. The media prefer to write about white supremacists and the KKK rather than the serious issues facing America.
     The left is bankrupt but dangerous. Antifa embraces fascist ideas while condemning fascism. They still adore Stalin, Mao, Castro and Maduro. The left is not about ideas; it is about power. The left stifles debate because they know all the answers to everything. Academics is about validating their beliefs, not seeking truth. Science is politicized and has morphed into a handmaiden for the hard left. The end justifies the means. What we have now is an intolerant illiberal liberalism where hatred has replaced compassion.
The next post is about our first Thanksgiving as Americans

Taxation in America –  Who Pays How Much

George Noga
Americans in the bottom 60% pay around 1% (net of credits) of all income tax. Ipso facto, any tax cut must necessarily benefit only the top 40% of Americans.
Taxation in America –  Who Pays How Much
By: George Noga – November 5, 2017
        This is Part IV of our intermittent series: Taxation in America. The first three parts are on our website: www.mllg.us. The final part likely will be in January once the outcome of tax legislation is known. This post reveals who pays how much in federal income tax. Also, I propose a new intrepid minimum and maximum tax plan.
        IRS data show Americans in the top 1% of income pay 40% of all federal income tax; the top 10% pay over 70%. Converting those data to living, breathing humans means that only 1.7 million people (one-half of one percent) pay that 70%. The bottom 45% of households pay no federal income tax whatsoever, while the bottom 60% pay about 1% (net of credits) of all income taxes. Note: people and income cohorts are not aligned, i.e. the top 10% of income is not derived from the top 10% of taxpayers.
      US corporate tax rates (including states) are 40% – the highest in the developed world. Politicians fool people into believing they will impose taxes on business or property – but not on real people. Economist Walter Williams uses a good example. You are a homeowner and the government imposes a property tax but tells you it is not a tax on you but on your property. You see right through that fraud. But when liberals say they are taxing corporations (and not you) you are suckered in. Corporate and business taxes are passed along to you in the form of higher prices just as property taxes are passed on to the homeowner. Only living, breathing people pay taxes!

MLLG Boldly Proposes New Minimum and Maximum Taxes

      Something is dreadfully wrong when in the richest nation on earth, 60% of its citizens pay virtually no income tax and hence have no skin in the game. They form a brawny advocacy group favoring government spending (since it costs them nothing) and opposing tax cuts because they threaten their government benefits and they will not benefit directly from lower taxes. This is something we must fix.
       MLLG’s minimum tax plan would continue to exempt the bottom quintile (20%) of Americans from income tax. The second lowest quintile would pay a de minimus tax rate of 6% subject to a minimum tax of $1,200 per year. The middle income quintile  (half of which by definition earn above average income) would pay a 12% rate subject to a minimum tax of $2,400. This minimum tax plan would give 80% of Americans a vested interest in reducing spending and taxes along with the, not inconsequential, quiet dignity of being a taxpayer and contributing to the common weal.
      When surveyed, large majorities of Americans consistently respond that no one should pay more than 33% of income in taxes. The MLLG maximum tax plan would cap all taxes at 40% – including federal, state and local income taxes, payroll taxes, property taxes (principal residence only), sales taxes and certain other taxes The maximum tax would be computed on a new one-page form filed along with your income tax. If taxpayers paid more than 40%, they would get a credit or refund from the IRS – which could recover pro-rata from the other taxing jurisdictions.
      MLLG’s minimum/maximum tax plan would make America a much fairer place while preserving a high degree of progressivity. When you hear that the rich do not pay their fair share, recall that one-half of one percent of Americans pay over 70%
      Inscribed directly above the entrance to the IRS Building in Washington is: “Taxes are what we pay for a civilized society“. Stop and think about that one for a while. They got it dead wrong. Taxes are the price we pay for an uncivilized society!
In our next post November 12, we take on Neo-Nazis and Antifa.

Red October – The God That Failed

George Noga
Communism fails because it is opposed to and irreconcilable with human nature.
Red October – The God That Failed
By: George Noga – October 29, 2017
       Humans have sought to create temporal paradises since the Garden of Eden. In literature, dreams of heaven on earth date to Homer’s Odyssey (Elysium) in the 12th century, BC. There have been numerous attempts to create Utopias, including colonists in Jamestown, Pilgrims in Plymouth and the 1789 French Revolution. Communism’s turn came 100 years ago this month when they took over the government of Russia.
      In all human history, attempts to create Utopia have led only to death, destruction and misery; the communists alone killed over 100 million. Never has any communist, socialist or collectivist scheme worked for any group larger than a family, clan or tribe. Despite this grisly record, many – ever in search of  Zion – continue to believe. What can possibly explain the beliefs of such people – including those who feel the Bern?
      Their belief is not based on evidence but on a longing for a moral basis in their lives. They are in search of a religion – but one without God. Politics is their new faith but they are anti-democratic because they already have all the answers. They long for equality but the equality that leads to conformity and despotism. They compare the ideal of communism with the practice of capitalism but never the results of each. They want to be judged by their intentions, never by their actions. They embrace platitudes from cans. They are oblivious to history and believe they will get it right next time.
    Capitalism stands in sharp contrast to communism. Just since 1970, worldwide poverty has fallen 80%. In arguably the greatest achievement in human history, billions of people have escaped poverty. Was this miracle due to the UN, World Bank, IMF, NGOs, government or socialism? No; it was due entirely to capitalism. Yet 70% of people surveyed believe hunger and poverty have gotten worse and only 40% of young Americans have a favorable view of capitalism. Socialism impoverishes people (Venezuela) while capitalism makes them wealthy; yet, people cling to illusions.
       Communism, socialism and collectivism are lies. They promise Xanadu,Valhalla and Elysium; they give you North Korea, the USSR, and Cambodia. They promise comradeship; they give you totalitarianism. They promise progress; they give you stagnation. They promise hope; they give you lives of quiet desperation. They promise Sweden; they give you Venezuela. They promise a new social order; they give you a smorgasbord of social pathologies. They promise truth; they give you Pravda.
     They promise liberty; they give you walls with razor wire and minefields. They promise equality; they give you equal poverty. They promise a clean environment; they give you a toxic wasteland. They promise technology; they give you Chernobyl. They promise a classless society; they give you political elites living in decadent luxury. They promise freedom and justice; they give you Gulags and the Stasi.
       They promise peace; they give you war. They promise Apple, Google and Disney; they give you lines, shortages and shoddy goods. They promise hope; they give you nihilism. They promise Mercedes; they give you Trabant. They promise Eden; they give you hell on earth. They promise Singapore; they give you Cuba. They promise abundance; they give you rationing. They promise Utopia; they give you dystopia.
       The enduring lesson of communism is that it never has worked and never can work because it is opposed to and irreconcilable with human nature. It always fails, not because it is implemented poorly but, because it is done faithfully. Although socialism, progressivism and liberalism may be less virulent forms of communism, the end result always is the same – economic stagnation, human misery and loss of liberty.
     Communism (and all other collectivist schemes) always makes high-minded and exalted promises but delivers nothing but a phantasmagoria of terror, slaughter and poverty. In the end, it is nothing but lies. It is the God that failed!
This concludes our Red October series; our next post is November 5th. 

Red October – Humor Exposes Reality of Communism

George Noga
An emergency meeting of the USSR politburo was called to discuss pantyhose.
Red October – Humor Exposes Reality of Communism
By: George Noga – October 22, 2017
      It is possible to learn as much or more through anecdotes and humor as through rigorous economic analysis. This is especially true of communism. Following is a collection of my favorite commie stories. They reveal all you ever need to know.
      Gorbachev once presided over a special politburo meeting to address a pantyhose crisis. Pantyhose had disappeared from the USSR; even wives of politburo members could not get them and their complaints forced an emergency pantyhose politburo meeting. Imagine a US cabinet meeting devoted solely to underwear production.
     The Soviets had a broken window crisis. The problem was traced to glass factories where production quotas were based on square footage of glass. The glass commissars exceeded their quotas by producing vast quantities of ultra thin glass. To correct this, the head commies changed the quota from square footage to weight. The outcome is as predictable as it is farcical; the glass commissars switched to producing equally unuseable ultra thick glass. This is but a microcosm of what happens when there are no markets. It also proves the capitalist principle that people respond to incentives.
     One day the chief Soviet economist burst into the office of the head commie exclaiming “Congratulations comrade, we have conquered the entire world except for New Zealand.” The General Secretary was happy but perplexed; he asked, “Surely we are more powerful than New Zealand; why have we not conquered it as well?” The economist replied, “We must keep one place in the world where there are real prices.“
     Communist East Germany had the most advanced computer technology in the Soviet block. Their computer scientists were told extreme security was necessary because they were so far ahead of the west. After the Berlin Wall fell, the top commie computer scientist visited West Berlin where he was flabbergasted to find far more advanced computers for sale to the public at ridiculously low prices. The secrecy was imposed not because commie computers were so good, but because they were so bad.
       In the 1980s my friends were visiting Moscow. One day while walking around, they noticed it was lunch time and looked for a place to eat. They found a cafeteria and got in line. Despite waiting forever, the line did not move. My friend went to see what was going on. He found a sign that read: Cafeteria closed for employees’ lunch.
        I conclude with an icon of communism, the Trabant – the best car produced by commies. It had a two-stroke, two-cylinder engine and went from zero to 60 in the same day. It had 26 horsepower and a top speed of 60 mph. The gas gauge was a dipstick and oil had to be mixed in with the gas in precisely the correct proportion. Since it had no fuel pump, the gas tank was located atop the engine for gravity flow. Despite all this, the waiting time from order to delivery was 12-15 years.
      Contrast the East German manufactured Trabant with cars manufactured in West Germany: Mercedes, VW, Audi and BMW. Communism produced Trabants with a 12- year wait; capitalism produced Mercedes and BMWs available immediately and with a stunning array of options. The difference between communism and capitalism really is this obvious – – they promise you a Mercedes-Benz but they give you a Trabant!
     The final posting in our Red October series on October 29th is entitled “The God That Failed“. It is one of the most powerful posts of all time; don’t miss it!

Red October – Socialism, Sweden and Scandinavia

George Noga
Scandinavian countries are not prosperous because of socialism but despite socialism. They tried socialism; it failed; they rejected it and reinstituted free market capitalism.
Red October – Socialism, Sweden and Scandinavia
By: George Noga – October 15, 2017
      Many Americans, especially millennials and progressives, believe Scandinavian countries, particularly Sweden, are veritable socialist Utopias. Bernie Sanders and Hillary Clinton said so during the last election and were unchallenged by the equally clueless media. Whenever I discuss politics or economics with liberal interlocutors, they invariably cite Sweden as proof that socialism works. They are wrong on all counts; Sweden is neither socialist nor especially wealthy. Let’s look at some history.
        Sweden once was so dirt poor it sent waves of immigrants to America. Circa 1875 Swedes embraced free market capitalism and began to prosper. Around 1970, Sweden took a hard left turn; taxes soared, welfare expanded and private enterprise was discouraged. The predictable result was rampant crime and drug addiction, Kafkaesque bureaucracy, welfare dependency and emigration by successful Swedes. By the 1990s Swedes saw socialism as a colossal failure; they cut taxes, restored free markets and economic freedom; they replaced leftist governments with right-leaning ones.
     The stories of the other Scandinavian countries (Norway, Denmark, Finland) are similar. Today, all four enjoy dynamic market economies albeit with robust social insurance programs financed by high middle class taxes. They can afford such benefits only because of successful capitalist economies that produce sufficient wealth. No socialist economy has ever generated enough wealth to fund such benefits. Sweden is not prosperous because of socialism; it is prosperous because it survived socialism.
       Note: The Scandinavian model of social insurance can only work in small, homogeneous populations with deeply shared and ingrained values, social and cultural cohesion and a middle class (there never are enough rich) willing to accept extraordinarily high tax rates.
       Americans incorrectly believe Scandinavian countries are wealthy; however, they compare very unfavorably to the US. The GDP of Houston, Texas is larger than all of Sweden. If Sweden were a US state it would rank among the very poorest in per capita GDP. Moreover, Sweden is 30% more expensive. This means that when considering both purchasing power and GDP, Sweden would be the poorest US state – by far.
       With the lie of Scandinavian socialism outed, consider if communism, socialism or any collectivist economy ever has produced sustained prosperity. The short answer is never. Socialism may produce short-term gains by nationalizing property, debasing currency, seizing assets and borrowing. This is akin to mortgaging your home, selling your patrimony and stealing your neighbors’ property – all to finance a gigantic party. But the party always ends when the other people’s money runs out.  
       Examples of communism/socialism are Cuba, USSR, North Korea and Venezuela. Their horrors are obvious except to diehard progressives. These are the places to observe the reality of destructive collectivist schemes. Liberals and their media running dogs falsely cite Sweden and Scandinavia as socialist success stories when, in fact, they are socialist failures and capitalist successes. It is all a big lie as indeed all of collectivism is a big lie. Commies promise you Sweden but they give you Venezuela!
Red October continues next week with a healthy dose of commie humor.

Red October – A Tale of Six Islands

George Noga
Communism promises Xanadu, Valhalla, Elysium and Zion; it delivers North Korea,
Venezuela, USSR and Cuba. It promises a Garden of Eden but delivers hell on earth.
Red October – A Tale of Six Islands
By: George Noga – October 8, 2017
      Our month-long series chronicling 100 years of communism continues; this week we compare island nations with command economies to ones with market economies. There is something about the self-contained nature of islands that invites comparisons. For good measure, we contrast liberal US cities and states with conservative ones.
       Communist Cuba, a brutal dictatorship, has a failed economy; its GDP ranks 137 and its freedom index 171. Most Cubans’ take home pay is $30/month. It is a nihilistic society where one-third of all pregnancies are terminated. Socialist Greece, constantly being bailed out by its neighbors, is a failed state. Uber-liberal Puerto Rico is bankrupt; it owes $75 billion in bonds and $40 billion in unfunded pension liabilities – equal to $100,000 per household. People are rapidly fleeing this crime-riddled wasteland.
       Singapore is rich; less than 20% of its economy is in the public sector and taxes are half that of the US. It ranks #2 in the world for economic freedom. The #1 place for economic freedom is affluent and capitalist Hong Kong. Taiwan, a vibrant free market democracy, ranks high in both wealth and freedom. A mere few generations ago all six of these places were desperately poor. Today, the ones (Singapore, Hong Kong, Taiwan) that chose freedom and capitalism are all rich. The ones (Cuba, Greece, Puerto Rico) that chose collectivist, anti-market schemes are impoverished hellholes.
       Deep blue states (California, New York, Illinois) are hemorrhaging people with 1,000 each day abandoning them for deep red states (Texas, Florida, Utah). They move to escape blue states’ confiscatory taxation, job killing minimum wages, forced unionization, welfare fraud, choking regulations, green energy mandates and social pathologies. As humans always have done, they gravitate to places with economic freedom where household income is $10,000 higher and people are happier.
        Many cities have been governed by progressive politicians, often for more than a half century; Detroit, Newark, Cleveland, Chicago, and Washington come to mind. The legacy of such liberal stewardship is bankruptcy, shrinking population, failed schools, high taxes and crushing debt. They are dismal, dangerous and dirty places. If liberal policies worked, they should be thriving magnets showcasing progressive ideas and the failure of free market capitalism. Instead, contrast these failed cities with successful ones such as Dallas, Houston or Salt Lake City. Whether it be islands, states or cities, it is clear that more liberty and less government works and that socialism fails.
       As I oft have written, liberalism (and every one of its collectivist cousins) is a lie. They promise Utopia, Xanadu, Nirvana, Elysium, Valhalla and Zion but what they give you is death and desperation as in Venezuela, Cuba, the USSR and North Korea. Economist Ludwig von Mises nailed it nearly 75 years ago when he wrote:
    “The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and a resistance to every kind of improvement. They call themselves liberals, but they are intent on abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want the government to be omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into one gigantic post office with every man but one a subordinate clerk in a bureau.”
Red October continues next Sunday with “Socialism, Sweden and Scandinavia”.

Red October – 100 Years of Communism

George Noga
A brief history of communism (and its socialist cousins) as it turns 100 this month
Red October – 100 Years of Communism
By: George Noga – October 1, 2017
         This month marks the 100 year anniversary of the communist takeover of Russia. Throughout this centenary month MLLG chronicles the century of communism and its close cousins – socialism, utopianism and collectivism – in our series: Red October.
      From time immemorial, quixotic romantics have dreamt of paradise: Utopia, Elysium, Valhalla, Xanadu, Eden, Nirvana. In the end, all they had to show for their fantasies and delusions was a sea of blood and millions of broken lives. Despite its grisly record, collectivism still exerts a powerful emotional appeal on progressives, who remain slaves to Utopia. Our Red October series documents communism’s century of mental poison and human misery to bestir those beguiled by its siren song.
         America’s first settlements began with Utopian dreams. When colonists arrived in Jamestown everything went into a common store, severing all links between work and benefit. Within 6 months most died from starvation. When another 500 settlers arrived, 440 more died. When the Pilgrims arrived at Plymouth, the socialistic Mayflower Compact governed them; soon they were eating rats and most died. Like socialism everywhere (Venezuela today), there was starvation in the midst of plenty. Only when they rejected socialism and embraced property rights did the colonists prosper.
         A hundred years of communism has produced death and destruction on a massive scale. Soviet communism killed 50 million, not counting tens of millions in Gulags. Not to be outdone, Mao and the Chicoms killed 70 million. Pol Pot killed 6 million in tiny Cambodia. Then there is Laos, Cuba and North Korea. The toll in death, torture, misery, destruction and suffering is unparalleled in human history. It must be noted that even the reviled Nazis were socialists as Nazi is shorthand for the National Socialist Party. Fear not, the unreconstructed commies will get it right the next time.
         The evils of collectivism are on full display today in oil rich Venezuela – once the wealthiest country in South America. After 18 years of Chavez/Maduro style socialism people are starving. Medical care is unavailable; operating rooms are filthy; and people die for lack of antibiotics. Infant mortality is higher than in war-ravaged Syria as incubators are broken and there no longer is any baby formula. Shortages, including toilet paper, are endemic. Inflation is nearly 800% and the economy has contracted by one-third. People are dying daily in the streets while others are desperately fleeing.
      The gulf between the words and deeds of communism and all forms of collectivism is an unbridgeable abyss. They speak of comradeship, equality, brotherly love, peace, prosperity, progress and freedom. Their deeds result in brutal dictatorships, Gulags, world wars, police states, totalitarianism, economic stagnation, shortages and a general sense of torpor and malaise. They promise Utopia but deliver Venezuela. They want to be judged by their lofty intentions but they are damned by their actions.
        Communism and its collectivist cousins always fail because they are diametrically and fundamentally opposed to human nature – which is deeply ingrained and cannot be overrode. From each according to his ability; to each according to his needs abrogates human nature. Even people as altruistic, homogenous and devout as the Pilgrims chose to starve rather than to modify their humanity to conform to that deadly mantra.
       Collectivism sometimes may work for a family, clan or tribe where familial bonds (a key part of our human nature) override economic incentives. However, throughout human history, there is no example extant where socialism has worked for a group of more than 25 people. Judge collectivists by their actions – not by their words!
Our Red October series continues next Sunday with “A Tale of Six Islands”.