Saturday, August 8, 2009

Let Them Eat Healthcare

I believe we are rapidly approaching America's "Let them eat cake" moment. The government is running trillion dollar deficits. GDP is contracting. The FED is monetizing new debt, surreptitiously according to some reports. Unemployment is rising, though the statisticians are lying about it. Tax revenues are falling. Interest rates will soon be rising on treasury debt, cutting even further into revenues. What is our response to these problems? Here are men destroying perfectly good cars for the "Cash for Clunkers" economic abomination: This is not a clunker. This is a perfectly fine vehicle being destroyed. It will never be driven again. Its parts will not be available for repair of other cars. Tax money, or rather, deficit spending, is being used to buy middle-class people brand new cars and destroying perfectly good used cars that might have been put to good use by those who could afford to buy them. People are being payed by the government to do this. The Obama administration is proposing universal healthcare, draconian and economically debilitating global warming legislation, and green energy initiatives. People are having trouble staying in their own homes, finding jobs, paying their bills, and putting food on the table, but they are being asked to pay for vast, expensive new programs and willfully destroying capital while their hands are tied behind their backs by "green legislation." This is a disgrace, and it will have dire consequences. Lessons From the French Revolution: "Let Them Eat Cake" Marie Antoinette is famously known for supposedly having callously said "let them eat cake" in response to famine and food riots. But few know the true story. Jonah Goldberg explains:

Let's start from the top. First, "Qu'ils mangent de la brioche" doesn't mean, "Let them eat cake." It means, "Let them eat some fancy egg-based bread" — i.e. a brioche. Second, Marie Antoinette never said it. The story comes from Rousseau's Confessions and, according to historians, he couldn't have been talking about Marie Antoinette, because she was only 10 years old when the book was written and still living in Austria. Some believe that perhaps Marie Therese, another queen, had said, "Let them eat brioche," 100 years before the French Revolution.

Other historians think Rousseau just made it all up. Whatever.

What's far more bogus is the moral behind the story. You see, back then France had a law on the books that required bakeries to sell expensive breads — including brioche — at the same price as cheap bread if the baker ran out of cheap bread. So, saying, "Let them eat brioche" is actually pretty rational. It's like saying, "Let them enforce minimum wage laws" or "the government should do something about those profiteering bakers who aren't selling their fancy bread at an affordable price!"

And here is where we get to the heart of things. The rule about selling expensive bread at a loss if necessary to feed the poor was just one of a whole tangle of crazy regulations established by bleeding-heart French nobles to do "right" by the lower classes. From medieval times until the 1980s, the price of a baguette had been fixed to a specific formula. And, even today, bread prices, baking techniques and bread sizes are regulated in minute detail in France.

The intention behind these laws was largely goody-goody, nice-nice. In fact, Marie Antoinette was something of a limousine liberal (gilded carriage liberal?) who offended her fellow nobles by disdaining royal excess.

The problem was that since French bakers were denied the ability to make cheap bread at a profit, and forced to sell expensive bread at a loss, they did the only rational thing possible: They made very little bread at all. That's how we got bread riots and maybe even the French Revolution.

America's response is similar. Do the people suffer? Has government become such a burden that their economic backs are breaking?

Let them eat healthcare, windmills, the chill wind, and broken cars.

A Turning Point

American civilization, and indeed global civilization, appears to be reaching a turning point.

Participation in the labor market is making a half-century reversal. I believe this is permanent. The division of labor is contracting. As government depredations increase, it will pay ever more to work for one's own family despite losses to productivity, as this avoids cash transactions and therefore taxation and the erosion in purchasing power of paper assets. Mothers will begin staying home again. In the future, fathers may, too. It is already beginning.

Government borrowing is eating into private markets, not just here, but across the globe. Japan is in dire straights. Some are predicting radical changes. Click that last link. Do not read further until you click that link. Watch the whole video. European politics have recently taken on a disquieting nationalist bent. China has deep, fundamental economic problems, and old ethnic grudges are boiling to the surface. Russia faces an uncertain future as it returns to unhealthy levels of deficit spending. Fascism is on the rise. Protectionism soon will be. Do not be fooled by the rising stock market. Do not be fooled by talk of "green shoots." Do not be fooled by the monetary shenanigans of the market manipulators. Remember that that which is consumed must be produced, by somebody, somewhere. Remember that capital accumulation is necessary for increases in productivity and requires the increase of the division of labor. Where you see these activities being eroded and hamstrung by government policy and poor ethics, expect poverty to follow. No manner of shell game or deceit or any quantity of lies can bend this ironclad law in the slightest. This is what is going on today. Prepare for the worst.

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