Income Equality: The Middle Classes Aren't Much Better Off than the "Poor"

Income Equality: The Middle Classes Aren't Much Better Off than the "Poor"

07/11/2018Ryan McMaken

It's easy to find income inequality in the United States when we compared the super-rich with the middle class. But when we compare the middle class to the "poor" there's a surprising amount of income equality.

But how can the middle class have incomes similar to the poor? Isn't that logically impossible?

Well, this sort of income equality is made possible by the existence of government social benefit programs. When we account for income transfers to low-wage workers — or to people who don't work at all — we find that the incomes of middle class people — in spite of often working far longer hours — are similar to the poor.

The political implications of this are significant.

This is explored in a fascinating new article by Robert Ekelund and Phil Gramm, "How Income Equality Helped Trump," at the Wall Street Journal last month.

The authors note:

The most surprising finding is the astonishing degree of equality among the bottom 60% of American earners, generated in part by the explosion of social-welfare spending and the economic and wage stagnation during the Obama era. Hardworking middle-income and lower-middle-income families must have recognized that their efforts left them little better off than the growing number of recipients of government transfers. The perceived injustice of this equality helped drive the political shift among blue-collar workers, many of whom supported the pro-growth candidacy of Donald Trump in 2016 despite having voted for Mr. Obama in the two previous presidential elections.

The bottom quintile earned 2.2% of all earned income in 2013, but after adjusting for taxes and transfer payments, its share of spendable income rose to 12.9%—six times its proportion of earnings. The second quintile’s share more than doubled, rising from 7% of earned income to 13.9% of spendable income. For the third quintile, middle-income Americans, the increase was much smaller, from 12.6% to 15.4%.

Not surprisingly, high earners lost a considerable share of their earnings after taxes and transfers are taken into account. The fourth quintile’s share fell from 20.5% to 18.6%, while the top quintile dropped from 57.7% of earnings to 39.3% of consumable income. In other words, the top quintile’s share of earnings was 26 times that of the bottom quintile, but after taxes and transfer payments its share of spendable income was only three times as much.

Even more startling is the near equality among the bottom three quintiles. The bottom quintile, which earned only 2.2% of all earned income, had virtually the same share of spendable income as the second quintile, lower-middle-income Americans. This equality is despite the fact that lower-middle-income workers earned more than three times the share of income and worked 21/2 times as much, measured by comparing each group’s number of full-time workers relative to its working-age population. Middle-income workers earned almost six times the share of income and worked almost four times as much compared with the bottom quintile, but they enjoyed only about 20% more spendable income.

This equality in income endured in spite of the fact that many middle-income families worked far harder for what income they did have:

And even these numbers understate the huge difference in work effort. Compared with the bottom quintile, the lower-middle-income quintile had almost four times as many working-age families whose members worked two or more jobs, and the middle-income quintile had more than seven times as many families with members working two or more jobs.

As Gramm and Ekelund explain, middle class people know that the wealthy make a lot more than the middle class does. But the middle classes can also see they've benefited from the goods and services brought to the market by the wealthy. 

Meanwhile, a  middle-class worker who has two jobs, or a 55-per hour work week looks around and sees relatives or neighbors who never seem to work, but who also have a similar standard of living. They might know perpetually unemployed acquaintances who rely on CHIP or Medicaid, free school lunches, food stamps, and a myriad of other programs, all available to  many. Meanwhile, the middle class worker is putting in long hours to obtain the same amount of food and health care. 

The middle class workers then realizes he's working to pay for his own needs, and also those of the neighbor.

It's easy to see why this might breed resentment. 

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Big Tech has Big Problems, but More Regulation Will Only Hurt Consumers

12/06/2018Zachary Yost

Big Tech has long faced calls for more regulation, and as their companies have grown, so has the pressure. Now those demands are coming from within Silicon Valley itself. Apple CEO Tim Cook recently told Axios that, though he supports the free market, it’s only a matter of time before Big Tech is restricted. “We have to admit when the free market is not working. And it hasn’t worked here,” Cook said. “I think it’s inevitable that there will be some level of regulation.” Indeed, a newly released Axios poll found that 55 percent of Americans “fear the federal government won’t do enough to regulate big tech companies.” That figure is up 15 points over last year.

The problem is that, if implemented, such regulations would only entrench existing firms and hurt consumers.

As Axios notes, Big Tech regulation has become “a rare topic uniting Republicans, Democrats and Independents.” In August, Representative Steve King, Republican of Iowa, floated the idea of turning tech giants into public utilities. On the Left, writer Richard Eskow went even further by calling for companies like Amazon and Google to be nationalized. The young right-wing firebrand Charlie Kirk recently advocated that Google be classified as a monopoly and anti-trust law be brought to bear against it.

It’s understandable why so many across the political spectrum have an uneasiness about Big Tech. After all, it has an immense amount of power, especially in regard to stored information.

But increased regulation will only empower Big Tech and leave it less accountable than before. The “revolving door,” through which officials move between government and the private sector, allows businesses to heavily influence regulation. Sometimes they’ll even advocate that regulation be increased as a means of ensuring that the new regulations work to their advantage. When groups like Business for a Fair Minimum Wage, whose members already pay employees “well over the minimum wage,” advocate for an increase in the minimum wage, it’s not out of benevolence toward workers. They want to force their competitors to pay more in the hope of driving them out of business. In economics, this is known as regulatory capture, an idea developed by Nobel laureate George Stigler.  

Another tactic is making the regulatory hurdle so high that it ensures new competition and smothers startups in the cradle. A startup in someone’s basement can’t afford an army of lawyers to navigate through reams of regulations like Google and Facebook can.

Historically, Big Tech has been hands-off when it comes to lobbying, but that’s starting to change and the numbers show it. In 2017, Google, Amazon, Facebook, and Apple spent over $50 million on lobbying, a 32 percent increase for Facebook and a 51 percent increase for Apple. In fairness, that’s much less than other industries spend on lobbying—but as talk of regulation increases, expect to see Big Tech kick up its lobbying even further and for its competition to get squelched.

In a free market, companies only have the power that consumers give them when they make their consumption choices. Google, Facebook, and Amazon are huge and powerful because so many choose to utilize their services. Economist Ludwig von Mises called this “consumer sovereignty,” writing, “The captain is the consumer. Neither the entrepreneurs nor the farmers nor the capitalists determine what has to be produced. The consumers do that.” No matter how large a business is, if it doesn’t give consumers what they want, it will eventually falter. Just look at Nokia. In 2007, the company controlled almost 50 percent of the world’s smartphone market. By 2013, that number had fallen to less than 5 percent. Such a drastic change in fortunes occurred because consumers chose to make it happen—and because other companies innovated more to attract them.

But if Big Tech becomes entrenched and protected from competition through regulation, the consumer’s power over them is diminished. It’s a recipe for decreased innovation and customer service. Big Tech is kept on its toes by the fear of becoming the next Nokia, which is why they spend tens of billions of dollars every year on research and development. There will be far less incentive to do so if they know that they’re safe from potential upstarts supplanting them.

Big Tech has big problems, but increased regulation will only lead to more lobbying, less competition, and less innovation. Consumers have given Big Tech its power, and as long as there are competition and alternatives, they also have the power to take it away. Let’s hang on to that control rather than demanding that the government exercise it for us.

Republished with permission from the author.
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The Obvious Contradictions of Politicians on Trade

12/05/2018Per Bylund

The trade policies of both the USA and the EU seem to be based on the contradictory philosophy that unrestricted trade is beneficial within its borders, even if across internal borders, but not with parties outside those borders.

But this makes no sense. From the point of view of trade, the voluntary exchange of goods, why are the borders between USA and Mexico, and Greece and Turkey, different from the borders between Missouri and Kansas, and France and Germany?

The difference is political and arbitrary.

If protectionism works, which is the policy applied on the USA's and the EU's 'external' borders, then it should work for other borders at well. But instead the 'internal' policy is free trade, and it's considered as obvious for the latter as restricted trade for the former.

Protectionists may produce an argument that 'within USA' is different, since it is within a country. While likely based on a romantic fiction of the (federal) nation, there is significant coordination of policy that facilitate trade between states. That's exactly the core of the European Union as a trade union between countries with different languages, cultures, and political traditions. Countries within the EU are at least as similar and dissimilar as the USA and Canada. Or as the USA and the EU. The differences that can be identified are differences that are caused by policy, which makes them highly suspect as possible rationales or reasons for (specific and different) policy. The question remains, why is protectionism good for some borders, and free trade for others?

It really comes down only to this: politics is able to produce emotionally compelling reasons, based on simplistic identity claims and 'us vs. them', for completely contradictory policies for different instances of the same phenomenon (political borders).

No politician in his right mind would claim that Washington, DC, should adopt a protectionist trade policy with respect to the 50 states. He would be laughed at. But saying the same about, say, the US and Canada is considered very different. And this is the case also for the EU, where it would be political suicide (although not as much [because EU is younger and not yet as politically integrated?]) to state there should be protectionism between Germany and France or between Sweden and Denmark. But it's the 'obvious' and correct policy for the waters between Greece (EU) and Turkey (not EU).

But think about it: if a trade policy is beneficial across some (political) borders, shouldn't it be beneficial across all such borders? The answer is rather obviously 'yes'.

Except in politics, where 'yes' and 'no' are irrelevant--what matters is that a story can be told that, for the time being, may gather support from the electorate. Often by pointing to a threat--always by some 'them'. Canadians are not us; Turks are not us. But Midwesterners and Manhattanites are the same, just like Germans and French are the same?

Originally posted on Twitter @PerBylund
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Trump Foreign Policy: Doing the Same Thing and Expecting a Different Result

12/05/2018Ron Paul

After a week of insisting that a meeting with Putin on the sidelines of the G20 meeting in Argentina was going to happen, President Trump at the last minute sent out a Tweet explaining that due to a Russia/Ukraine dispute in the Sea of Azov he would no longer be willing to meet his Russian counterpart.

According to Trump, the meeting had to be canceled because the Russians seized three Ukrainian naval vessels in Russian waters that refused to follow instructions from the Russian military. But as Pat Buchanan wrote in a recent column: how is this little dispute thousands of miles away any of our business?

Unfortunately it is “our business” because of President Obama’s foolish idea to overthrow a democratically-elected, pro-Russia government in Ukraine in favor of what his Administration believed would be a “pro-Western” and “pro-NATO” replacement. In short, the Obama Administration did openly to Ukraine what his Democratic Party claims without proof the Russians did to the United States: meddled in a vote.

US interventionism in Ukraine led to the 2014 coup and many dead Ukrainians. Crimea’s majority-Russian population held a referendum and decided to re-join Russia rather than remain in a “pro-West” Ukraine that immediately began discriminating against them. Why would anyone object to people opting out of abusive relationships?

What is most disappointing about President Trump’s foreign policy is that it didn’t have to be this way. He ran on a platform of America first, ending foreign wars, NATO skepticism, and better relations with Russia. Americans voted for this policy. He had a mandate, a rejection of Obama’s destructive interventionism.

But he lost his nerve.

Instead of being the president who ships lethal weapons to the Ukrainian regime, instead of being the president who insists that Crimea remain in Ukraine, instead of being the president who continues policies the American people clearly rejected at the ballot box, Trump could have blamed the Ukraine/Russia mess on the failed Obama foreign policy and charted a very different course. What flag flies over Crimea is none of our business. We are not the policemen of the world and candidate Trump seemed to have understood that.

But now Trump’s in a trap. He was foolish enough to believe that Beltway foreign policy “experts” have a clue about what really is American national interest. Just this week he told the Washington Post, in response to three US soldiers being killed by a roadside bomb in Afghanistan, that he has to keep US troops fighting in the longest war in US history because the “experts” tell him there is no alternative.

He said, “virtually every expert that I have and speak to say if we don’t go there, they’re going to be fighting over here. And I’ve heard it over and over again.”

That is the same bunkum the neocons sold us as they lied us into Iraq! We’ve got to fight Saddam over there or he’d soon be in our streets. These “experts” are worthless, yet for some reason President Trump cannot break free of them.

Well here’s some unsolicited advice to the president: Listen to the people who elected you, who are tired of the US as the world’s police force. Let Ukraine and Russia work out their own problems. Give all your “experts” a pink slip and start over with a real pro-American foreign policy: non-interventionism.

Reprinted with permission.

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For Climate Interventionists, New Taxes are Only the Beginning

[Editors Note: After days of rioting in the streets of Paris, French President Emmanuel Macron was forced to backtrack today on proposed gas taxes. While this episode demonstrated the unpopularity of trying to raise taxes in the name of fighting climate change, Mises Institute Senior Fellow Robert Murphy recently noted at IER that this is only the start for "climate interventionists."]

Say what you will about the climate policy discussions at Vox, but they don’t mince words. They come right out and tell you how much they want to micromanage every last detail of your life. Vox’s resident expert, David Roberts, recently interviewed policy wonk and author Hal Harvey, to discuss which areas of society government should regulate in the name of slowing climate change. Everything was on the table—ranging from building codes to auto fuel efficiency to diet to family size—with the only debate being over the relative results from the various interventions.

Among other results, this peek into the interventionist mentality should serve as a wake-up call for the few writers who keep charmingly calling on libertarians and conservatives to strike a carbon tax deal with progressive leftists. As the Roberts/Harvey discussion says quite plainly, a carbon tax is just one arrow in the quiver of those championing aggressive government intervention to slow climate change.

A Carbon Tax Is Not Enough

Let me validate the carbon tax claim first. Here’s the key exchange from the Vox interview:

David Roberts: These days, people across the political spectrum are talking about carbon pricing. How does it fit into the larger effort?

Hal Harvey: The thing about carbon pricing is, it’s helpful, but it’s not dispositive. There are a number of sectors that are impervious to a carbon price, or close to impervious.

A carbon price works when it’s part of a package that includes R&D and performance standards. It does not work in isolation. It helps, but it doesn’t do nearly as much as is required.

Harvey elsewhere in the interview explicitly criticizes the standard “market solution” rhetoric behind a carbon tax when he says:

[Government-mandated performance standards] have a bad rep from an age-old and completely upside-down debate about “command-and-control” policy. But we use performance standards all the time, and they work really well. Our buildings don’t burn down very much; they used to burn down all the time. Our meat’s not poisoned; it used to be poisoned, or you couldn’t tell. And so forth. If you just tell somebody, this is the minimum performance required, guess what? Engineers are really good at meeting it cost-effectively.

In addition to their (naïve) promises of revenue neutrality, those pushing for a carbon tax swap deal also promise conservatives and libertarians that a “price on carbon” would allow for the dismantling of the existing top-down regulations. Yet we now have several lines of evidence to show just how naïve this hope is: (1) Harvey in the quotation above throws them under the bus. (2) The recent Curbelo carbon tax bill contained no *meaningful* regulatory relief. (3) Economist Paul Krugman is fine with outright bans on new (and existing?) coal-fired power plants, and (4) the people at Vox have said for yearsthat a carbon tax would only work in conjunction with other anti-emission government policies. Notice that I am not scouring obscure subreddit threads to find Marxists posting from a hipster café, I am quoting from quite mainstream sources who are openly declaring that putting “a price on carbon” will not do enough to reduce emissions.

The Interventionist Mentality

The reader should also realize that Roberts and Harvey don’t merely consider fuel economy standards and building efficiency codes when it comes to “command and control” regulations. Everything is on the table, and the only reason to refrain from pursuing certain strategies is the dilution of political capital. The following excerpt illustrates:

David Roberts: The book also has nothing about behavior change — no turning off lights or going vegetarian. Do you find that lever unrealistic? 

Hal Harvey: It’s a policy design book, and there aren’t many policies that have people change their diet. Michael Bloomberg taxed sugar, so there’s one. But we’re not gonna have the tons-of-barbecue-per-capita tax in North Carolina…

We have limited political bandwidth. If you’re serious about change, you have to identify the decision makers that can innovate the most tons the fastest….There are 7.5 billion decision makers on diet. There are 250 utility commissioners in America — and utility commissioners control half the carbon in America.

Trying to invoke behavior change on something as personal as eating en masse is morally sound, it’s ecologically a good idea, but as a carbon strategy, it doesn’t scratch the surface.

Indeed, even when they give a nod to basic human rights, Roberts and Harvey sound creepy. Consider this exchange:

David Roberts: Paul Hawken’s Drawdown Project looked at options for reducing greenhouse gases and found that educating girls and family planning were the two most potent. 

Hal Harvey: When I was at the Hewlett Foundation, we sponsored a study by the National Center for Atmospheric Research that asked the question: Globally, if you met unmet need for contraceptives — that is to say, no coercion whatsoever — what would it cost and what would the carbon impact be?

We found large-scale abatement at less than a dollar a ton. So I’m completely in favor of that. [Bold added.]

It’s the part in bold that is chilling. For starters, I point out that this is the one area of life—the decision on how many children to have—where Harvey apparently feels that the government should not be using coercion to alter people’s behavior; coercive interventions in every other arena—from building design to diet to urban transit—were only tempered by pragmatic considerations.

Beyond that, the reason Harvey had to stress that his approach would be voluntary is that historically, this wasn’t taken for granted. There is a long and sordid history of wiser-than-thou social planners forcibly restricting how many children others could have, all in the name of some higher social good.

Indeed, Vox’s founder—Ezra Klein—recently got himself into an awkward spot when the website originally promoted his discussion with Bill Gates using the following tweet:

vox_bm_0.png

Vox quickly deleted the tweet after outrage and advertised the interview in a more sensitive manner, but the whole episode offered another peek into the interventionist mindset.

Conclusion

On these pages I have tirelessly pushed back against the small but vocal group of pundits and scholars who call on conservatives and libertarians to accept a carbon “tax swap deal” with leftist progressives. Beyond their failure to appreciate some of the technical nuances in the tax literature, these pleas overlook the simple fact that the mainstream thought leaders among the wonkish progressives have long since moved beyond the idea of a simple “price on carbon.” Every aspect of our lives, from our cars to our meals to our family sizes, affects global emissions—and therefore the interventionists want every tool at their disposal to control others.

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"We Find Ourselves Back with Deja Vu" Jeff Deist on the US Housing Market

12/03/2018Jeff Deist

Today Jeff Deist joined Natasha Sweatte of RT to discuss the state of the US housing market.

Experts Predict US Housing Crisis As New Home Sales Plunge

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About Civility...

11/30/2018Jeff Deist

The foundation of any and every civilization, including our own, is private ownership of the means of production. Whoever wishes to criticize modern civilization, therefore, begins with private property.
Ludwig von Mises.

Civility is the word of the moment.

New stories lament the breakdown of civility in American society, while reports of Antifa street violence in cities like Portland raise uncomfortable memories for older Americans of 1960s riots. Editorial after editorial decries the loss of social cohesion and friendliness across the country, even within families. Pundits and politicians insist we must restore civility in politics. Otherwise we face a bleak and intensifying cold civil war: progressive vs. conservative, urban vs. rural, #metoo vs. Brett Kavanaugh, elites vs. populists, and Never Trumpers vs. Deplorables.

Yet how do they propose to accomplish this? More politics, more elections, and more top-down edicts from Congress and the Supreme Court.

Hillary Clinton, for instance, suggests civility will be restored only following successful midterm elections that places Democrats in control of Congress. And why not? The political world is all she knows, and the political world yields winners and losers, victors and vanquished. In her utterly politicized worldview, things will settle down only when the right people—her people—control US politics. Hers is a zero-sum world, always ruled by the political gang in power.

We hardly should expect an America so wracked by politics to remain civil.

But Ludwig von Mises understood a different world, one organized around property and trade rather than the state. To him, private property was the basis of any civilized society. Without that foundation, without property and a concomitant system of mutual exchange, he knew humans were destined to devolve into poverty, war, and anti-intellectual savagery. Property gives us prosperity, and therefore material abundance to live civilized lives beyond mere the subsistence that marked most of human history. Property rights give us the ability to accumulate capital, to invest in higher productivity, and to have a greater degree of certainty regarding the future.

Civility cannot be sheared from the broader concept of civilization itself. Both words share the same Latin root civilis, which means relating to citizenship or public life. But it also means relating to others with courtesy, manners, and affability. If civilization is the sum total of a society and its culture, civility—or the lack thereof—is its building block, the positive or negative social traits exhibited by people in that society.

Lew Rockwell, our Founder and Chairman, has a long career fighting for both civilization and civility. Along the way he met some of the brightest lights of our time or any time: Neil McCaffrey, Henry Hazlitt, Leonard Read, Percy and Bettina Greaves, Ayn Rand, Ludwig and Margit Mises, Ron and Carol Paul, and Murray and Joey Rothbard among them.

So I'm sure you'll enjoy my recent interview with him. With the help of Mrs. Mises, whom Murray Rothbard called a “one-woman Mises industry,” Lew Rockwell set about saving the work and name of the 20th century’s greatest economist from obscurity. Today Mises is known around the world, and cited even by his harshest critics as a champion of laissez-faire who fearlessly challenged the supposedly scientific case for socialism.

Don’t miss David Gordon’s review of Kirkpatrick Sale’s remarkable book Human Scale Revisited: A New Look at the Classic Case for a Decentralized Future. Sale is no libertarian, and even an anti-materialist, but he understands the risks posed by consolidated political power. Thus he thinks the 20th century’s trend toward larger and larger centralized states, prevalent both in once-confederated Europe and America, has been harmful to community, peace, and human flourishing.

To Sale’s credit, he is one of many thinkers from around the political spectrum challenging the accepted wisdom that political globalism and political universalism are per se beneficial. Just as Mises elevated self-determination to a defining principle of liberalism, progressives, conservatives, and libertarians increasingly see subsidiarity and decentralization as defining characteristics for a peaceful future.

Speaking of peace, on behalf of everyone at the Mises Institute let me wish each of you a very Merry Christmas, a Happy Hanukkah, and a peaceful, happy New Year. All of us want peace and prosperity for the world; all of us share a (true)liberal worldview, and all of us understand how non-interventionism in both the economy and world affairs is key to a better future. Let us all commit to making the world a better place next year through our own contributions.

We have big plans at the Mises Institute for 2019—unique, outside-the-box speakers at events, new podcasts, a new entrepreneurs platform, and new opportunities to earn academic credentials from the Institute—and we hope you’ll be part of them.

This article first appeared in the November/December issue of The Austrian.

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Fewer Guns, Less Crime? Not in Europe

11/28/2018Ryan McMaken

As an addendum to last week's article on the prominence of civilian-owned guns versus homicide rates, it may be interesting to look at the diversity in gun prominence across European countries.

Contrary to the broad generalizations and over-simplifications spread by US gun-control advocates about European gun control, there is actually quite a diverse range in gun prominence and gun control laws across Europe.

Returning to the Small Arms Survey data, released earlier this year, we see that gun prominence in Europe ranges from 2 per 100 people in Hungary to 39 per 100 in Serbia:

gunsrateeuro.PNG

Comparing these numbers to homicide rates, however, we clearly don't find much of a relationship at all.

gunsrate.PNG

Homicide rates in nearly all cases are below 2 per 100,000 which is a very low rate by any global or historical standard.

But, as we can see, civilian guns in Austria, for instance, are six times more numerous what they are in the UK. But the homicide rate is lower in Austria. Similarly, there are twelve times more civilian guns in Switzerland than in the Netherlands. Yet both countries have about the same homicide rates.

Attempts at proving causality here then especially starts to go off the rails when we look at Russia. In Russia, there is a modest 12 guns per 100 people — which is about half the Swiss rate. And yet the country's homicide rate is 10.8 per 100,000.

What can explain these large differences?

In the case of Russia, at least, we certainly can't blame things on lax gun control laws. Gun ownership requires registration and licensing. Handguns and rifles with shorter barrels are tightly controlled.

By contrast, guns are easier to acquire in Switzerland, Finland, Serbia, and Austria — although we find registration and licensing requirements in most cases. Especially notable is the Czech Republic which, by European standards, has very lax gun laws. In fact, it is remarkably easy to acquire a conceal-carry permit in the country, and more than 200,000 such permits (in a country of fewer than 11,000,000 people) have been issued.

The Czech republic has also made headlines in recent years by additional legislative efforts to further ease gun restrictions in certain cases.

The Czech Republic, by the way, has one of the lowest homicide rates in Europe, at less than one per 100,000.

Household Gun Ownership vs. Gun Prevalence

It is helpful to remember, though, that even in cases where gun prevalence is high, gun ownership rates (on a household basis) might still be low. That is, it's entirely possible in some cases that only a small number of people own most of the civilian guns that the Small Arms Survey says exist. This could lead to a situation in which few people have guns in spite of there being a large number of guns overall. However, while this is theoretically possible, it has not been demonstrated to be a common occurrence. Moreover, this lopsided situation is more likely in poorer countries where the high cost of firearms, combined with government-mandated licenses, is prohibitive for much of the population, leaving ownership a realistic option open to only a relatively few wealthy residents.

International comparisons in gun ownership rates, however, are hard to find. Most articles that purport to make these comparisons are usually using the Small Arms Survey data, and are thus just comparing gun prevalence.

(At the very least, considering both high gun prevalence and relative ease of purchase in countries like Switzerland, Austria, and Serbia, we have good reason to believe that both gun ownership rates and prevalence are comparatively high in some areas of Europe.)

Few gun control advocates trouble themselves with these details, however. For many, it apparently remains good enough to simply conclude "more guns=more crime," even when the numbers fail to show much connection at all.

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Intergenerational Conflict Will Get Worse

11/28/2018Jeff Deist

The excellent British online magazine Spiked recently published this article warning about deteriorating attitudes toward elderly people in the UK.  As the article points out, there is more to the problem than logistical and financial concerns about providing socialist medical care to an aging population. Nor do increasing lifespans in the West, with attendant increases in loneliness and age-related morbidity, account for this unhappy state of affairs. No, the root of the problem is simply a lack of caring and empathy, made worse by fewer intact multi-generational families and alienation between taxpayers and pensioners:

These are not just technical questions for the social-care sector to grapple with. They are far bigger than that, touching upon the issue of what kind of society we want to live in, and what we expect of each other. At root, there is the issue of what we regard as individual and collective responsibilities; and what the duties of the young are to the old; and the question of how elderly people come to decide for themselves how they should be cared for later in life.

More than that, the problems facing the social-care system need to be understood in the context of a wider generational hostility that is compounding, if not driving, a longstanding official neglect of older people’s care. 

Sad, yes, but entirely predictable. Britain, perhaps faster and more vigorously than most western countries, has fallen prey to the doctrine of "presentism": an ahistorical narrative in which the past is always bad and repressive, feelings and "lived experiences" (generally quite lacking among the young, yes?) prevail over facts, and group identity dictates ideology. If the past is all wrong, the people who lived in it and even prospered during it surely are not to be admired or cared for:

‘Negativity about ageing and older people is pervasive in our society’, says Caroline Abrahams at Age UK. Whether it’s the nasty sentiment that Brexit voters are a bunch of selfish old bigots whose demise can’t come too soon, or that Baby Boomers have been piling up problems for moaning millennials, or that old people are just getting in the way with their ‘bed-blocking’ and their unreasonable expectation that younger folk should subsidise their state pensions, free bus passes, TV licences and winter fuel allowances – again and again, we see generational disdain for older people. 

Democracy, as usual, doesn't help. Brexit voters in the Leave camp skew older, more rural, and more "English." Remainers skew younger, urban, and more "European." In their 2014 independence referendum, younger Scottish voters overwhelmingly chose to leave Britain and fully embrace the European Union; older Scots chose the perceived safety of London pensions over counting on Holyrood and Brussels State pensions and state-provided healthcare, even more sacrosanct in the UK than Social Security and Medicare are here, will never be reduced or addressed by voting. Yet just as the American entitlement system faces a $200 trillion shortfall—the likely cost of future promised benefits minus likely future tax receipts— Britain's younger taxpayers will struggle mightily in coming decades to pay ever-expanding old-age pensions.

America is in the same boat, with the population above age 65 set to double over the next thirty years. Republicans and Trump voters are older, whiter, more rural or suburban, and more likely to see America in far rosier terms than the average Ocasio-Cortez supporter. Social Security, which in 1940 boasted more than 100 paying workers to one beneficiary, today struggles with a ratio of less than 3 to 1. And those three workers in many cases are decidedly younger, more left-liberal, less white, and less affluent than the one beneficiary. Unskilled workers, recent immigrants, and teenagers often work at low-wage hourly jobs, but still pay full Social Security taxes on their meager earnings. 

All of this is a recipe for intergenerational strife. 

The baby boomer mantra—never trust anyone over 30— is now bequeathed to millennials, but for very different reasons. In many senses millennials are more conservative than their grandparents were at the same age, particularly when it comes to sex, recreational drugs, education, and a carefree live-for-today attitude toward life. There is no millennial version of Easy Rider or American Graffiti; slacker paeans like Superbad show teenagers with low aspirations and no interest in eclipsing boomer noncomformity. But millennial distrust for older Americans is based on the strong perception that today's economic and social horizons are far less robust for them than previous generations, generations that are happy to ride out the clock until entitlements run out.

It will get worse. Cultural, economic, fiscal, and political fault lines in America today all bode ill for harmony between younger and older generations. But what should we expect in a country where politics and government dominate? Where transfer payments dominate old age and government schools dominate youthhood?

Family, religion, and civil society don't play nearly the same role for young people today as for Baby Boomers, who rebelled against all three. What we're left with, in the view of many Americans, is a society where government is the only thing we all belong to. Many scoff at the notion of any natural order, without recognizing that government simply substitutes an unnatural political order run by those in power.

Sensible societies harness the energy, optimism, and beauty of youth in productive ways: their talents are unleashed in art, athletics, business, and technology (not war). But apart from standout exceptions young people are not the leaders of sensible societies, because we recognize that what one believes at 16 or 20 or 25 will change, and often change radically. So sensible societies venerate the wisdom of older people, wisdom that is separate and distinct from mere information. Unlike data on a smartphone, this wisdom passes down naturally—albeit not without friction—because everyone recognizes the healthy and mutually beneficial connection between generations. Over time bad ideas, traditions, and modes fall away, replaced by new and better ones. 

Decaying, dysfunctional societies, by contrast, pit generations against each other at the ballot box and otherwise. Politics and government become powerful weapons in an intergenerational cold war. Aging western populations skew the demographic political balance in favor of older people, especially active older voters. Brexit, Trump, and the Scottish independence referendum have now exposed this growing reality. 

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As Housing Prices Fall on West Coast, Even Red Zones Turn Against Trump

11/28/2018Doug French

Donald Trump continues to claim victory, but the blue wave was undeniable on the left coast. You might say, California was already a bunch of lefties. Yeah, except Orange County has always been a Republican stronghold since the days of R.C. Hoiles. In a review of Brian Doherty’s “ Radicals for Capitalism ,” I wrote,

One of the genuine heroes of the movement who the book enlightened me to is R.C. Hoiles. It should have occurred to me sooner that a courageous man was behind a very libertarian daily newspaper being published from the middle of liberal California: the Orange County Register. As Doherty describes, "Orange County became known, to a large degree thanks to Hoiles himself, as 'nut country,' the hotbed of the rightest of the right wing."

"Any time a man has to pay for something he does not want because of the initiating of force by the government, he is, to that degree, a slave," Hoiles wrote. Now that's my kind of guy, and the fact that he owned a newspaper with all the pressures of making advertisers happy to keep the presses running is heroic.

"Hoiles was an earthy and simple man and a notorious union-busting anarchist cuss," writes Doherty, "who'd thrust himself into picket lines surrounding his property to tell the union boys why they were all wet." Just learning about the late Mr. Hoiles is worth the price of the book.

Orange County “nut country” went bluer than blue on election night. Was it Trump’s fault, or maybe the Trump Bump has turned into Trump Dump in west coast housing with voters voting their falling property values.

In the seemingly always red-hot Bay area and Silicon Valley homeowners are rushing to put their homes on the market. Wolf Richter writes ,

So it’s time to unload. Sellers are putting their homes on the market, and active listings in those three counties combined – San Francisco, San Mateo, and Santa Clara, which cover the area from San Jose to San Francisco – surged by 76% in October compared to October last year, to 4,149 listings, according to the National Association of Realtors.

The chart below dramatically illustrates the Bay Area price cutting.

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The market is no better in Southern California. KTLA 5 News reported at the end of October,

A chill is settling over the once white-hot Southern California housing market.Listings are up. Sales are falling. Price reductions are becoming more common.

The Seattle market also hit the ditch this summer. The number of listings doubled in October, from a year ago, with the number of listings matching the lows of 2012. Price cuts in King County (Seattle and Bellevue) have tripled according to Wolfe Street .

Mr. Richter makes the point that Seattle and San Francisco voters didn’t side with Trump in 2016, “But when it comes to home prices in these liberal bastions, the ‘Trump effect’ made property owners a ton of money – if they’re able to get out in time.”

If they are not out by now, they may have waited too long.

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The Coming Bankruptcy of the American Empire

11/21/2018Hunter DeRensis

The chickens are coming home to roost. It’s only a question of when.

Herbert Stein was chair of the Council of Economic Advisors under Presidents Richard Nixon and Gerald Ford and is the father of the more well known Ben Stein. In 1976, he propounded what he called “Stein’s Law”: if something cannot go on forever, it will stop. Stein was referring to economic trends, but the same law applies just as much to foreign policy and the concept of empire.

Stein’s Law at first glance might seem like a banal platitude. But we should be fully cognizant of its implications: an unsustainable system must have an end. The American empire is internally flawed, a fact that anti-imperialists both left and right should appreciate.

The United States’ national debt is approaching $22 trillion with a current federal budget deficit of over $800 billion. As Senator Rand Paul often points out, bankruptcy is the Sword of Damocles hanging perilously close to Uncle Sam’s neck. Outside of a handful of libertarian gadflies in Congress such as Paul, there is no serious political movement to curb the country’s wayward spending. It would take some upset of multiple times greater magnitude than Donald Trump’s 2016 victory to alter this course.

The United States holds the most debt of any country in the history of the world. In fairness, when our debt-to-GDP ratio is factored in, there are many countries in far more perilous economic situations than the U.S. But there will come a tipping point. How much debt can the system hold? When will the cracks grow too big to hide? When will the foundation crumble? There’s a great deal of ruin in a nation, said Adam Smith, and our ruin must ultimately come.

Is bankruptcy possible? As some Beltway economists remind us, no. Technically the government has the power to artificially create as many dollars as it needs to pay its debts. But this kind of hyper-inflation would deprive the U.S. dollar of any value and tank the global economy that trades with it. Simple failure to pay back our debt might even be a better scenario than such an inflationary hellscape.

When the world loses confidence in the American government’s ability to pay its debt, or the interest rate on our debt becomes unsustainably high, choices will have to be made. No more kicking the can down the road, no more 10-year projections to balance the budget. Congress, in a state of emergency, will have to take a buzzsaw to appropriations. And the empire will be the first thing to go.

Just like its warfare state, the government’s welfare state has plenty of internal calamities. But while it might be the preference of some megalomaniacal globalists to let the proles starve while preserving overseas holdings, it’s not going to happen. What would transpire if Social Security checks stopped showing up in mailboxes and Medicare benefits got cut off? When presented with that choice, will the average American choose his social safety net or continued funding for far-flung bases in Stuttgart, Okinawa, and Djibouti? Even the most militaristic congressperson will know which way to vote, lest they find a mob waiting outside their D.C. castles.

Neoconservatives constantly harp on the danger of vacuums. Without a U.S. presence, the logic goes, more sinister forces will take over. What happens when American troops must be evacuated from all over the world because we can’t afford to keep them there anymore? There’s no debate, no weighing of options, and no choice. If the money isn’t there, the money isn’t there. Nothing could tie the hands of America’s military more than a debt crisis. And if one happens, it will be in part because those same neoconservative intellectuals preached a multi-trillion-dollar global war to remake humanity in our image. Hubris leads to downfall.

This is the kind of danger that Rand Paul and others warn about. Not only are our undeclared wars illegal, counterintuitive, and destabilizing to foreign regions, they’re financially destabilizing for us as well.

A radical reexamination of America’s overseas assets and obligations must take place. Ideologically motivated wars have led us to the precipice of financial disaster. American foreign policy must adopt a limited, highly strategic view of its national interest and use its remaining wealth sparingly and only when necessary. Realism can stave off national ruin. Close bases in Germany and bring the money home, instead of forcing the troops to evacuate in the dead of night after it’s too late. Enter negotiations with the Taliban and have a planned withdrawal from Afghanistan, lest it end with helicopters fleeing Kabul like they did Saigon. Make the hard choices before circumstances make them for you.

Our leaders ignore Stein’s Law at their own peril. No matter what, U.S. troops are coming home. Better it be our decision than our debt collectors.

This article appeared earlier at The American Conservative.

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