Wisconsin Takes a Step Forward, the UK Takes a Step Back

Posted by PITHOCRATES - March 9th, 2011

 A Foul Stench Wafts across the Rheine

Empires come and go.  But one truly transformed the world.  And still is today.  The British Empire.  Their representative government, property rights and economic policies unleashed unimaginable growth and prosperity.  They gave us the Industrial Revolution.  And we’ve never looked back.  Great nations started as British seedlings.  Canada.  Australia.  India.  New Zealand.  To name a few.  And, of course, the United States.

Sadly, the UK strayed in the 20th century.  As many nations did.  Including the US.  Thanks to a foul stench that wafted across the Rheine.  Karl MarxFriedrich Engels.  They wrote a book.  The Communist Manifesto.  And their goal was to replace capitalism with socialism.  And then replace socialism with communism.  The ultimate welfare state.

The British government exploded in the 20th century.  They nationalized industries.  Raised taxes.  And empowered unions to the point that the nation was at their mercy.  If they didn’t get the pay raise they wanted you didn’t have any electricity.  Their strikes were notorious.  People called them the British Disease in the Seventies.  But help was on its way.

Thatcher and Reagan cut Taxes to Economic Prosperity

Margaret Thatcher was prime minister during the Eighties.  And she started turning the UK around.  Like her counterpart did in the US.  Ronald Reagan.  Both cut taxes.  And nearly doubled their tax receipts (see High income tax will cost the country dear by Telegraph View posted 3/9/2011 on the UK’s Telegraph).

Between 1979 and 2009, UK corporation tax rates fell by half, even as the revenue from the tax rose by half – hard evidence that lower taxes encourage economic activity and boost Treasury receipts.

People deride ‘trickle-down’ Reaganomics in the US but it worked.  And it worked in the UK, too.  Because jobs are everything.  If you don’t have jobs your economy goes into the toilet.  If you have jobs your economy soars.  It just doesn’t get simpler than that.  And how do you create jobs?  You give people a reason to be brilliant.  Give entrepreneurs an incentive to create something.  Let businesses be profitable and they will take every opportunity to grow their businesses.  To be even more profitable.  All the while creating jobs.  Every step of the way.  The more they grow the more jobs they create.  And the better life gets for everyone.

Of course, remove that incentive and it’s the opposite.  If you raise taxes you reduce profits.  And that removes incentive.  Well, they are raising taxes again in the UK.  And what will the genius entrepreneurs do?  Well, what would you do?

Behavioural changes prompted by the higher rate – with entrepreneurs departing for more benign tax regimes or devising ways of avoiding the new tax – are set to flatten economic growth and lead to a collapse in tax revenues. The think tank estimates that the cost to the Treasury over a decade could be as much as £350 billion… Why should wealth-creators stay here when almost two thirds of their income is taken from them? The answer is that they won’t.

History has shown that higher tax rates rarely bring in the money the government expects.  While lower tax rates bring in more money than any of the naysayers ever dreamed.  So why, then, do they keep raising taxes?  Politics.

The Deed is Done in Wisconsin

Big Government needs supporters.  With the wane of private sector unionization, it’s getting harder and harder to get people to support Big Government.  Because people who work and enjoy life have no need for government help.  So they need to find people who do.  Or create them.

Enter the public sector unions.  These people beg for high taxes.  Because they are paid with tax dollars.  So the more people in the public sector, the more people there are to support big government spending.  It’s a little of the old you scratch my back and I’ll scratch yours.  And to sweeten the deal, public sector workers not only get pretty decent pay, they get outrageous benefits.  All paid for courtesy of the taxpayer.

And this is what is at issue in Wisconsin.  The union was ready to cave on everything but the collective bargaining.  Because that’s how they pass the full cost of their benefits onto the taxpayer.  Without the taxpayer having any say in the matter.  Until now, that is (see G.O.P. Tactic Ends Stalemate in Wisconsin Union Fight by Monica Davey posted 3/9/2011 on The New York Times).

The bill makes significant changes to most public sector unions, limiting collective bargaining to matters of wages only and limiting raises to the Consumer Price Index unless the public approves higher raises in a referendum. It requires most unions to hold votes annually to determine whether most workers still wish to be members. And it ends the state’s collection of union dues from paychecks.

So now if they want a raise larger than the Consumer Price Index (as a lot of raises are determined in the private sector for COLA raises), they have to ask the taxpayer to approve the raise.  And you can see why they are against this.  They want to keep getting big raises without the people paying them having any say in the manner.

And the whole choice thing about staying in the union?  And making people write checks for their union dues?  Why, if people do that, some are not going to stay in the union.  Not all union members vote Democrat.  But nearly all union dues go to Democrat candidates.  So, of course, the unions don’t want any of these changes to come to pass.  Or government.  Because the little arrangement they had was a nice way to dump bushels of taxpayers’ money into Democrat pockets.  Often against their will.  Or without their knowledge.

Public Sector Union – A Vehicle to Steal Money from the Private Sector

Everyone knows what we need for economic prosperity.  Thatcher and Reagan showed how to do it in the Eighties.  And they turned around nations that were in a pretty sorry state.  Tax cuts spurred that economic activity.  And filled government coffers.  However, Thatcher cured the British Disease.  And Reagan fired the air traffic controllers.  They stood up to the unions.  And that choked off a lot of money funneled (i.e., laundered) to the opposition parties.

And this is what the Left fears in Wisconsin.  That responsible government beholden to the taxpayer may waft out from Wisconsin and infect other states.  Thus turning off the great spigot of coerced political contributions.

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Save the Planet? Or Save the People?

Posted by PITHOCRATES - November 10th, 2010

Margaret Thatcher, Ronald Reagan and Pope John Paul II Defeated Communism

John Bull once ruled the world.  The British Empire circled the globe.  Literally.  The sun never set on the British Empire.  She was feared and respected.  And envied.  Her representative government set the standard for other liberty-seeking people.  She was an economic powerhouse and a military superpower.  Which she used to give us great things.  The Industrial Revolution.  And the Pax Britannica.  Nearly a century of peace.  John Bull was invincible in the 19th century.  Then a foul wind wafted across the Rhine.  And Great Britain would never be the same again.

Of course, it was Marxism that broke wind across Western Europe and Great Britain.  And it changed Great Britain.  Instead of continuing greatness there was class struggle.   Capitalism was under attack.  Government grew big.  To protect the industrial proletariat from the bourgeoisie.  Unionism grew and their recurring strikes were called the British disease.  Soon the industrial proletariat was living like rich capitalists while the masses went without.  They had no choice.  Big Government was taxing them to death to pay British labor.  Then along came Margaret Thatcher who brought back some sense to the nation.

 Thatcher turned Great Britain around.  Then she and Ronald Reagan took on the Soviet Union with an able assist from Pope John Paul II.  The Polish pontiff helped to cause quite a bit of trouble in Poland.  Soon Poland would be free.  And within the same decade, the Berlin Wall would fall.  As did the Soviet Union.  Margaret Thatcher, Ronald Reagan and Pope John Paul II defeated communism.  John Bull was back.  Standing beside Uncle Sam.  But now a new foul stench is in the air.  This time coming from East Anglia.

University of East Anglia will Trade People for the Planet

Big Government does not give up easily.  It wants to tell us how best to live our lives.  And at the University of East Anglia, they’re telling us that we, mankind, are killing the planet.  They had a lot of facts and figures.  Leaked emails, though, showed that their data was ‘massaged’ to support their theory on global warming. 

They insist man is destroying the environment.  They point to receding glaciers as evidence.  Of course, those glaciers once nearly reached the equator.  And when they moved some 2,000 miles, man wasn’t using fossil fuels.  So it makes one believe the leaked emails more than their theory on global warming.  But it doesn’t stop them from trying to tell us what’s best for us.  Or, rather, what’s best for the planet.  Which is an important distinction.  Because, in their world, it’s one or the other. 

Town halls and city councils across Great Britain are turning off their street lights.  A couple of reasons are given.  One, their Big Government spending is bankrupting them.  Another is to save the planet (see New dark age on our streets: Up to 75 per cent of councils are dimming the lights to save money by Laura Caroe and David Derbyshire posted on the Daily Mail).

Up to three-quarters of councils are planning to turn off street lamps or dim the lights in an attempt to save money and meet climate change targets, a poll has found.

Well, that’s sensible, isn’t it?  Cut government spending.  And save the environment.

But police fear that darkened streets will act as a haven for burglars, muggers and vandals – and motoring experts warn that there may be more accidents on the roads.

And this apparently is a trade environmentalists are willing to make.  People for the planet.  After all, it’s the people that are destroying the planet in the first place.  So what if we lose some of them along the way to save the planet?  It’s only fair.  At least that’s what they no doubt think at the University of East Anglia.

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LESSONS LEARNED #5: “When it comes to regretting past choices, liberals lead conservatives when it comes to their vote.” -Old Pithy

Posted by PITHOCRATES - March 18th, 2010

BEFORE THE SS death camps, before the Einsatzgruppen (action groups tasked to mass murder civilians in Poland and the Soviet Union), before the policy of conquest for Lebensraum (living space) for the ‘master race’, before eugenics and selective breeding policies were enacted to produce a ‘master race’, before the Munich Agreement (the Nazi annexation of Czechoslovakia’s Sudetenland), before Kristallnacht (a coordinated Nazi assault on Jewish people and their property in Germany and Austria), before the Nuremberg Laws (anti-Semitic laws), before the Anschluss (the Nazi annexation of Austria), before the Enabling Act gave Hitler full dictatorial powers, before The Reichstag Fire Decree suspended habeas corpus and most of the Weimar Republic’s constitutional civil liberties, before these despotic actions there were free elections.  And the National Socialist German Workers’ (Nazi) Party rose to power by the ballot, not by arms. 

The Treaty of Versailles treated Germany poorly.  It blamed her solely for World War I.  And to the victors went the spoils.  From Germany.  Economically destroyed by the war, the peace was little better.  Runaway inflation and rampant unemployment of the Great Depression.  Humiliation.  People were looking for something.  They didn’t know what.  But Hitler did.

The National Socialist German Workers’ Party was the party for German workers, not the capitalists.   In fact, the Nazis were anti-capitalists.  This was good because the people blamed capitalists for the Great Depression.  Socialism put people before profits.  Nationalism would restore Germany’s pride.  There was a lot about the Nazi party to like in 1930s Germany.

The Nazis put people back to work.  Building public works and building for war.  They printed money to pay for what the confiscated wealth of the ‘undesirables’ didn’t.  They ‘enslaved’ workers by prohibiting strikes, labor unions and the voicing of workers’ complaints.  Hitler paid them less than they were in the Weimar (i.e., capitalist) days.  Then they turned on the business owners.  They once supported Hitler because they thought he would remove the grip of labor on business and allow unfettered capitalism.  But the state’s grip just replaced labor’s grip.

War followed the war economy.  And conscription.  And another generation of German dead.  The devastation of World War II dwarfed that of World War I.  World War I didn’t have carpet bombing.  And the Soviets never reached Berlin in World War I.  But it had all sounded so good back in the 30s.  A nation so eager for government to do something.  And government did.  But few Germans liked the result.  If they could all do it over again they would probably have supported the Weimar Republic, not the National Socialist German Workers’ Party.

THE CONSERVATIVE government of Winston Churchill won the war but the Labour Party won the peace that followed.  They, too, blamed capitalism for the Great Depression.  It wasn’t going to be business as usual now that the war was over.  So they nationalized Big Industry (coal, steel, rail, etc.).  There would be no more abject poverty or squalor.  They created a nanny state.  From the cradle to the grave.  And they created the National Health Service.  Health care for everyone.  Courtesy of the taxpayer.

Of course, to pay for such huge government spending you need taxes.  A lot of them.  And when you can’t tax anymore, you depreciate your currency (i.e., print money).  Like every other nation in the world has ever done when their government spent more than it could afford to spend. 

With monopolies came inefficiencies.  Shortages.  A shortage of coal required scheduled electrical blackouts.  Also with monopolies came power.  Union power.  Whenever they wanted more pay they just had a strike until the bosses caved.  It became the way of doing things.  The strikes were epidemic and crippling.  People outside of Great Britain called them the ‘British Disease’.

Excessive government spending to pay for the national industries, the unions, the nanny state and the National Health Service was turning Great Britain back to the discontent of a Dickens novel.  Only instead of the business owners, the oppressors were Big Labor and their unions.  The common people were tired of going without and sitting in the dark.  Especially when they were paying enormous taxes (the Beatles left Great Britain to escape the confiscatory taxes).   Economically, life was becoming more similar to that like in the Soviet Union.  The difference was that the Soviet people didn’t know what life under capitalism could be like.  The British, of course, did.  And they could vote.

And they did.  Labour was out.  The conservatives were in.  Margaret Thatcher took on the unions and privatized industry.  These moves were not popular at the time because poorly ran businesses lost government subsidies and failed.  Unemployment grew.  In the short term.  Things did get better in time, though.  You see, propping up bad businesses with government subsidies forced consumers to pay more for inferior goods.  This was in addition to already paying high taxes to subsidize the businesses in the first place.  It just couldn’t go on.  And didn’t.  They controlled costs.  The people kept more of their earnings.   They spent and stimulated.  The economy grew.  As did the living standards of the common Briton.

THE MORAL OF this lesson is to be careful what you wish for.  Whenever anyone talks about putting the people first, warning flags should go up.  History is full of people who have said this.  And just about every one of them was a liar.  They want something.   Anyone who read Mein Kampf would have known Hitler’s plans.  Some did but chose not to believe.  They just wanted to believe the lie.  They wanted what Hitler was offering.  It was just too good to be true.  And, as it turned out, it was. 

When they nationalized British industry the goal was not to repeat what had happened during the Great Depression.  For anyone who had lived through the Great Depression didn’t want to live through another.  So there was popular support.  But nationalization didn’t improve life for the common Briton.    Instead, the life of organized labor got VERY good at the expense of the common Briton.  Until it couldn’t be sustained anymore by the common Briton.

So be careful what you wish for.  You might just get it.  And all the unintended consequences that come along with it.

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