With so many other Venues to Gamble in Gambling Revenue is down in Atlantic City

Posted by PITHOCRATES - February 3rd, 2013

Week in Review

Once upon a time if you wanted to gamble you had to travel to Las Vegas.  Or break the law.  Now there’s gambling everywhere.  There’s horseracing.  Greyhound racing.  They’re building casinos in cities.  And putting them on riverboats.  Native Americans are opening casinos on their reservations.  And there’s gambling on the Internet.  Even the state has gotten into running numbers.  With their lotteries.  Today you can’t turn around without something to gamble on.  Which is putting a crimp into the old gambling venues (see Christie Failing on Atlantic City Revival: Muni Credit by Terrence Dopp & Michelle Kaske posted 1/30/2013 on Bloomberg).

Atlantic City, the seaside casino resort that Governor Chris Christie says is key to New Jersey’s recovery, is floundering after six straight years of declining gambling revenue…

Two years after Christie created a state-controlled casino district to help revive the city, it’s still losing business to neighbors. Pennsylvania, which expanded gambling, passed New Jersey in 2012 to become the second-largest U.S. betting market after Nevada. Casino-tax revenue is 26 percent below Christie’s budget target midway into the fiscal year, and Hurricane Sandy, which shut the city for five days, is only partly to blame…

Atlantic City’s 12 casinos generated $3.05 billion of revenue last year, down from a 2006 peak of $5.2 billion. The decline will continue, even with the new $2.4 billion Revel casino, unless New Jersey adds a source of gambling income, said state Senator Ray Lesniak. The Democrat is urging Christie to sign a bill to let casinos run online wagering operations…

“This is one of the last chances the governor has to provide a lifeline to Atlantic City casinos,” Farrell said in a Jan. 24 report. “Online gaming sites operated by state casino operators will lead to job creation and drive visitation to Atlantic City…”

The governor, who took office in January 2010, gave Revel Entertainment Group LLC a $261 million tax break to help restart construction of Atlantic City’s first new casino in nine years. Gambling revenue from Revel, which opened last year, has been “well below” expectations, S&P said in a November report…

Casinos comprise more than two-thirds of the tax base in Atlantic City, where more than a quarter of its 40,000 people live in poverty. ..

Christie said Revel would be a catalyst for Atlantic City’s transition from day-trip to luxury resort destination. Some lawmakers are now trying to lure back some of those day-trippers with a measure that would exempt casino-bound tourist buses from paying tolls on state highways.

Cities and states all want to add casino gambling as they see it as a cash cow.  Instead of saving for their retirement or their children’s college education gamblers just give their money to casinos.  Who give a share of it to the cities and states.  It works great.  As long as there isn’t a whole lot of competition.  And people from outside of the city or state travel there to gamble.  Because if it’s only locals gambling that just takes money away from other local businesses.  So if you’re not a resort destination you’re never going to realize big tax revenue from gambling.  Which is the problem Atlantic City is having.

Internet gambling?  Yeah, giving people a way to gamble without going to Atlantic City will bring more people to Atlantic City.  Not.  To be a resort destination they need something more than gambling.  For people can do that in Pennsylvania.  Or on the Internet.  They need something else to make them go to Atlantic City.  Like people go to Las Vegas.  For there are other things to do in Vegas.  Because Vegas is a resort destination.

Tax breaks and toll exemptions?  Yet further proof that we are overtaxed.  For it’s always the go-to idea to improve economic activity.  Lowering the cost of doing things.  By lower taxes.  Or cutting fees like tolls.  For the less you nickel and dime people the more likely they’ll come to spend money in your fair city.  The federal government needs to learn this lesson from our cities and states.  You generate economic activity with lower taxes.  Not higher taxes.

Gambling is big money.  But does it really help a city?  Despite the huge tax revenue they bring into Atlantic City the poverty rate is greater than 25%.  So, no, it doesn’t seem to help.  They would probably be better off lowering taxes and fees and making the city more business friendly.  To create jobs.  And give those people a way out of poverty.

www.PITHOCRATES.com

Share

Tags: , , , , , , , ,

Superstorm Sandy Recovery Slower in Less Affluent Areas where People Feel Abandoned

Posted by PITHOCRATES - November 4th, 2012

Week in Review

After George W. Bush used his special secret powers to steer Hurricane Katrina into New Orleans and then blew up the levees protecting the city because he hated poor minorities (that’s what some on the Left believe), the media attacked him for the federal response.  Nothing was done fast enough.  Or good enough.  And the reason was because George W. Bush hasted poor minorities.  But many have placed a lot of blame on the mayor and governor.  For not following New Orleans’ evacuation plan.  Especially the mayor for waiting so long to give the evacuation order.  Probably few will ever be satisfied with placing the blame for the aftermath of Katrina.  For they could have done a lot of things better.

Katrina is past history.  A tragedy.  But a learning opportunity.  After that experience all levels of government should be able to operate as a finely oiled machine to bring quick relief to anyone suffering a Katrina-like event.  And now we’ve had one.  Hurricane Sandy (or Superstorm Sandy).  So how is the Sandy aftermath going?  Well, if you read some reports, you’d think you were reading about Katrina again (see ‘This is our Katrina’: Misery for 2.5 million STILL without power after six days as lawlessness and fear take over New York’s outer boroughs by Rachel Rickard Straus and Snejana Farberov posted 11/3/2012 on the Daily Mail).

Almost one week after superstorm Sandy struck the East Coast with its ferocious force, power was still out to some 2.5 million customers due to damages, down from 3.5 million on Friday, the U.S. Department of Energy’s Office of Electricity Delivery & Energy Reliability claimed.

The state with the largest number of outages by far is still New Jersey with 32 percent of customers without power, it said it a report.

And as the lights begin to flicker on in Lower Manhattan, nine percent of customers across the state of New York still do not have power, followed by seven percent in Connecticut.

This comes as residents of the Rockaways in Queens continued to struggle without power, heat or food for a sixth day as their neighborhood slowly descended into chaos.

‘It’s chaos; it’s pandemonium out here,’ said Chris Damon, who had been waiting for 3.5 hours at the site and had circled the block five times. “It seems like nobody has any answers.”

Added Damon: ‘I feel like a victim of Hurricane Katrina. I never thought it could happen here in New York, but it’s happened.’

With little police presence on the storm-ravaged streets, many residents of the peninsula have been forced to take their protection into their own hands, arming themselves with guns, baseball bats and even bows and arrows to ward off thugs seeking to loot their homes…

City Councilman James Sanders said he fears that things are going to get even worse.

‘We have an explosive mix here,’ he said. ‘People will take matters into their own hands.’

Sanders has directed much of his anger and frustration at LIPA, calling on the City Council to investigate the utility for ignoring the Rockaways for so long.

‘LIPA has failed the people of the Rockaways,’ he said. ‘It’s a question of class… serving the richer areas of Long Island and ignoring the Rockaways…’

Stranded neighbors largely have been relying on volunteers delivering food, water and other basic necessities while the Red Cross and FEMA were still nowhere in sight…

In a Coney Island apartment block, where tenants huddle together in one room and human waste spills out of the toilet, tenant Jeffery Francis despairs that help is not getting to Brooklyn faster.

We are scavenging for food like animals,’ he told the New York Daily News. ‘We are in a crisis and no one will help us. Look at us. We are misery. Everyone cares about Manhattan. No one is looking out for us. Nothing…’

While power is likely to be returned to Manhattan’s East and West Villages, Financial District, Chelsea, Chinatown and the Lower East Side by the weekend, according to the power company Con Edison outages in Brooklyn, Queens and Staten Island are not expected to be repaired for another week.

Across Staten Island residents are also increasingly frustrated they are being passed over while other parts of New York and New Jersey receive aid and attention…

For power companies, the scale of the destruction was unmatched – more widespread than any blizzard or ice storm and worse than the aftermath of Hurricane Katrina.

‘It’s unprecedented: fallen trees, debris, the roads, water, snow. It’s a little bit of everything,’ said Brian Wolff, senior vice president of the Edison Electric Institute, a group that lobbies for utilities.

Initially, about 60 million people were without power in 8.2 million homes and businesses.

By Wednesday night, that number had fallen to roughly 44 million people in 6 million households and businesses and today around 3.6 million are without power.

Manhattan and Long Island getting power before the less affluent areas hit by the storm?  That sounds like what the Left claimed the Bush administration was doing in New Orleans.  Now either President Obama hates poor minorities, too.  Or neither he nor George W. Bush hate poor minorities.  More likely the Democrat-friendly media reported every New Orleans failing because they hated George W. Bush.  While they will make no such claims in the Sandy aftermath because they love President Obama.

It would probably be better to have a Republican in the White House during the Sandy recovery.  Because the media would be relentless attacking the administration for every misstep.  While a lesser federal effort under a Democrat administration will get a more positive treatment in the media.  So there would be more urgency under a Republican administration to help people than there would be under a Democrat administration.  Especially poor people and minorities.  Who the Left says Republicans hate.  Especially when this is happening a week before an election.

Had Sandy happened with George W. Bush in office running for reelection they would have excoriated him for hitting the campaign trail.  For not expending every last effort in the recovery process.  It would have been just like Katrina.  But President Obama can hit the campaign trail.  For he walked New Jersey with Governor Christie.  And that was enough.  Of course the people in Brooklyn, Queens, Staten Island, New Jersey and in the other areas struggling to recover from Sandy probably want more.  Especially when they see the lights coming on in Manhattan when they have no power, food or heat.  And have to defend themselves from roving mobs of looters.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , ,

Treason, Benjamin Franklin, William Franklin, Reconciliation, Hutchinson Letters, Boston Tea Party, The Cockpit, Patriot and Loyalist

Posted by PITHOCRATES - May 10th, 2012

Politics 101

The Hutchinson Letters and the Tea Act put the Americans firmly on the Path to Independence

There’s a fine line between treason and loyalty.  Some people cross that line.  Some people don’t.  Some people wait to see which side of the line their best interests lay.  Some like to straddle the line.  Either unable to commit.  Unwilling to commit.  Or unwilling to give up profiting from both sides of that line.  Such it was during the American Revolutionary War.  A very unique conflict.  That pitted colony against mother country.  New World against Old World.  American against Brit.  Brit against Brit.  And American against American.

The American Revolutionary War was a smorgasbord of antagonism.  What started out as a dispute over taxation escalated into world war.  And into civil war.  To settle old scores.  And to settle new ones.  Upon the signing of the Declaration of Independence the American colonies were in open rebellion against their sovereign.  The ultimate act of treason.  Yet they committed this act of treason to live a more British life.  For Britain’s constitutional monarchy gave unprecedented rights to British subjects.  And the highest standard of living then known to a middle class.  Most knew what the rest of the world was like.  And they wouldn’t trade their British way of life for any other.  So rebellion undoubtedly made a great many nervous.  For many were happy and comfortable living under the British sovereign.  Benjamin Franklin, for one.

Franklin was a Loyalist.  At first.  He knew how to work the system.  And did.  Even achieving the post of American postmaster.  And he made it profitable.  Very profitable.  Even his son, William Franklin, was governor general in New Jersey.  So he was very connected to the British Empire.  And saw it as the best system of government ever developed.  Which is why he sought reconciliation.  He was in England when tensions were increasing between the colonies and the mother country.  He then came into the possession of some private correspondence that he passed along to his contacts in Massachusetts.  The Hutchinson letters.  As in governor general of Massachusetts Thomas Hutchinson.  Which basically said that the way to subdue the unrest over recent Parliament actions (i.e., taxation without representation) was to deprive the colonists of some of their English liberties.  Franklin asked that they not publish these letters.  His intent was to calm the more radical in America.  Proving that these misguided policies were the result of some bad advice from a few people.  There was no general animosity towards the American colonies in Great Britain.  And that reconciliation was possible.  Which is what Franklin wanted.  But they published the Hutchinson letters.  And the Americans were not pleased.  Then one thing led to another.  After Parliament passed the Tea Act Franklin was anxious of the American response.  Hoping for calm.  But the response was anything but calm.  And did nothing to aid reconciliation. 

The Humiliation in the Cockpit helped Push Franklin from Reconciliation to Independence

When the first tea arrived following the Tea Act the Patriots threw it in Boston Harbor.  Forever known thereafter as the Boston Tea Party (1763).  This destruction of private property shocked Franklin.  For this was not an act against Parliament.  But an act against a private company.  The East India Company.  This did not go over well in England.  Which was pretty agitated over the publication of those private Hutchinson letters.  People accused each other of being the source of the leak.  It got so bad that two men dueled in Hyde Park.  Each blaming the other for the dishonorable act of leaking those private letters.  Not being a very good duel both men survived.  When they were going to have at it again Franklin publically stated that he was the leak.  Explaining his intentions. 

Though Franklin sought reconciliation he had his enemies in England.  Who thought he was more of rabble rouser on the other side of the pond.  And pounced on this opportunity to disgrace him.   They summoned him to appear before the Privy Council.  On the pretense to hear testimony on the petition from the Massachusetts Assembly to remove Hutchinson as governor general.  But when Franklin arrived in the ‘Cockpit’ he found that he was on trial.  For leaking the Hutchinson letters.  News of the Boston Tea Party had by then reached England.  And the newspapers attacked Franklin without mercy.  All of England was turning against the man who wanted reconciliation more than any American.  It even looked like Franklin could end up in an English jail. 

It was an all out assault on Franklin in the Cockpit.  Where his enemies packed the room.  While few of his friends sat in.  Such as Edmund Burke.  Lord Le Despencer.  And Joseph Priestly.  One after another his enemies took their turn lambasting Franklin.  Blaming him for the agitation in the American colonies against British rule.  They attacked him personally.  And besmirched his honor.  Humiliated him.  During it all Franklin stood silent.  Refusing to partake in this farce.  When Wedderburn called Franklin as a witness his counsel stated that his client declined to subject himself to examination.  In the end they rejected the Massachusetts petition.  And his friend Lord Le Despencer had no choice but to relieve Franklin from his post as American postmaster.  He wrote his son William and urged him to quit his post as governor general of New Jersey in order to pursue more honorable work.  He would not, though.  And thus began the breach between father and son.

Franklin and William were no longer Father and Son but Patriot and Loyalist

William would stay loyal to the crown.  While Franklin was moving closer to the side of the Patriots.  In response to the Boston Tea Party Britain planned a blockade of Boston Harbor.  In response the colonies united behind Boston and formed the First Continental Congress.  Which William said was a mistake.  And that Boston should make good on the tea they destroyed.  Which would be the best way to calm the situation.  And reopen Boston Harbor.  Exactly what Franklin had earlier suggested.  But after the Cockpit and the loss of his post as postmaster Franklin was losing his love for the British Empire.  But he still tried while he remained in England with no official duties.  He even played chess with Caroline Howe.  Sister of Admiral Richard Howe and General William Howe.  Who would later command the British naval and military forces in the opening of the Revolutionary War.  But at the time they were both sympathetic to the American cause.  Despite of his shameful treatment in the Cockpit she and other friends urged him to put pen to paper.  And try to mediate a peaceful solution to the breach between the American colonies and Great Britain.  He tried. 

But all efforts came to naught.  He worked on a bill with Lord Chatham.  Which Lord Sandwich attacked with a fury when introduced into the House of Lords.  And they publicly attacked Franklin again.  They rejected the bill.  And Franklin booked passage home.  He met with Edmund Burke before leaving.  Discussed with him one last plea for reconciliation.  He spent his last day in London with his friend Joseph Priestly.  And discussed the future.  The coming war.  Reading the papers.  Priestly later wrote that the thought of that dismal future brought Franklin to tears.  After Franklin was on a ship sailing west Burke rose in Parliament and gave his famous speech On Conciliation with America. Where he said, “A great empire and little minds go ill together.”

The move to independence accelerated after arriving home.  Thomas Paine, who Franklin helped to bring to America, wrote Common Sense.  Which Franklin read before it was published.  Even offered a few revisions.  As he would offer later to Thomas Jefferson’s Declaration of Independence.  Then the Continental Congress scheduled a vote for independence.  General Washington was preparing to fight General William Howe on Long Island.  Supported by his brother Admiral Lord Richard Howe.  Who made one last attempt at conciliation with Franklin.  But things had already progressed too far.  Franklin had crossed that fine line.  The time for peace had passed.  On June 15, 1776, the new American provincial government in New Jersey ordered the arrest of William Franklin.  On the day of his trial Benjamin Franklin wrote General Washington.  He did not mention William.  Nor did he say anything when the Continental Congress voted to imprison him in Connecticut.  The breach between father and son was complete.  No longer father and son.  But Patriot and Loyalist.  As families throughout the colonies similarly tore asunder.  Setting the stage for the civil war within the world war that was the American Revolution.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Invasion of Canada, Benedict Arnold, Thomas Paine, Trenton, Princeton, General Howe, Invasion of Pennsylvania, General Burgoyne and Saratoga

Posted by PITHOCRATES - March 22nd, 2012

Politics 101

After a Long Retreat that started on Long Island Washington crossed the Delaware on Christmas to attack Trenton and restore Morale

The Patriot spirit was high in 1775.  The Americans voted for independence.  They signed the Declaration of Independence.  Delegates to the Continental Congress returned to their states to write new constitutions.  After the Battles of Lexington and Concord they forced the British back into their Boston garrison.  Made the British victory at the Battle of Bunker Hill a costly one.  Ethan Allen and Benedict Arnold captured Fort Ticonderoga in upstate New York on Lake Champlain.  In January of 1776 Henry Knox took the fort’s heavy cannon and dragged them to Dorchester Heights overlooking Boston.  Where General Washington used them to get the British to finally evacuate Boston after an 11 month siege.  Not a bad way to start a war with a ragtag army against the mightiest military power in the world.  But would these victories continue?

No.  It would be awhile before the Americans would score another victory.  The invasion of Canada was a disaster.  The retreating forces were decimated by small pox.  And chased by the British.  They would have advanced down the Hudson River cutting off New England from the rest of the colonies had it not been for Benedict Arnold’s stubborn retreat.  Meanwhile Washington was on Long Island waiting for the British invasion.  Which came.  And overwhelmed Washington’s forces.  Who retreated up through Manhattan, across the Hudson, through New Jersey and didn’t stop until he crossed the Delaware River into Pennsylvania.  Morale in the army was plummeting.  Enlistments were up and few were reenlisting.  Thomas Paine, author of Common Sense, was in Washington’s army during this retreat.  He wrote in December, 1776, “These are the times that try men’s souls.  The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now deserves the love and thanks of man and woman.”  The fate of America now rested with the few who remained in the army.  These true Patriots.  Who were all in.  To the bitter end.  However soon, or quick, that may be.

The British stopped their pursuit of the Americans in New Jersey and took winter quarters.  Britain’s Hessian mercenaries garrisoned the town of Trenton.  And settled in for a quiet winter.  Not impressed with their enemy on the far side of the Delaware.  Lieutenant Colonel Rall, Commander, Hessian garrison in Trenton, said Washington’s army was “almost naked, dying of cold, without blankets, and very ill supplied with provisions.”  Which they were.  The morale of the army was at a dangerous low.  Threatening the very existing of the army.  Whose existence was the only thing preventing a British win.  For the Americans didn’t have to win.  They just had to keep from losing.  Which meant keeping the army in the field.  Washington needed a victory.  And fast.  To boost morale.  So on Christmas he crossed the ice-filled Delaware River.  And marched through snow and hail storms.  Many of the soldiers barefoot.  Whose feet stained the snow with blood.  Two soldiers even froze to death on the march.  Their objective?  The Hessian garrison in Trenton.

Washington’s Losses in Pennsylvania kept General Howe from Supporting General Burgoyne’s Campaign

The Americans attacked on December 26, 1776, and took the Hessians completely by surprise.  And won the battle with only three wounded.  One of which was America’s 4th president.  And the youngest and last of the Founding Fathers.  Lieutenant James Monroe.  After the victory Washington retired back across the Delaware.  But then crossed again in a couple of days.  This time heading to Princeton.  Took the city.  Then retired back across the Delaware after learning Lord Cornwallis was arriving with reinforcements.  Who a young captain of artillery engaged in battle.  Alexander Hamilton.  America’s first treasury secretary.  Who Washington promoted to lieutenant colonel as he made Hamilton his aide-de-camp.  A very influential position working in the Army’s headquarters alongside the commanding general of the Army.  He would serve in Washington’s headquarters until the Battle of Yorktown where Washington granted him his wish.  A combat command.  Where he would lead some of the early assaults that led to Lord Cornwallis’ surrender at Yorktown.  Washington looked on Hamilton as a son.  And this relationship would shape the future of the new nation.

But Yorktown would be a long 5 years away.  And that battle would be the next battle Washington could put in the ‘win’ column.  For most of 1777 included no American victories.  British General Howe invaded Pennsylvania.  And Washington met him in battle.  And didn’t win.  Though there were close battles.   Brandywine.  And Germantown.  But eventually Howe took the capital city.  Philadelphia.  And control of the Delaware River.  Forcing Washington to retreat across the Schuylkill River.  Into winter quarters.  At a place called Valley Forge.  But it was not all for naught.  Because of Washington’s stubborn defense he did keep Howe in Pennsylvania.  Where he was unable to provide the third prong in the grand attack on New York.  The campaign to sever New England from the other American colonies.  And ultimately changed the course of the war.

While Washington was engaging Howe in Pennsylvania, another British general was advancing down from Canada.  General John Burgoyne.  Who had overall command of the other two prongs.  A force of mostly loyalists and Indians under Colonel Barry St. Leger advancing east along the Mohawk River valley.  And a force of British, Hessian mercenaries, Indians, Canadians and Loyalists under Burgoyne advancing south down Lake Champlain and the upper Hudson River.  Howe was to come up the Hudson River from New York.  The three prongs coming together in Albany.  Thus severing New England from the other American colonies.  But without Howe coming up from the south the Americans were free to meet Burgoyne’s forces from the west and north and take advantage of their long lines of communications.  With Benedict Arnold helping to stall the Mohawk prong.  And routing St. Leger.  Arnold then joined the battle against Burgoyne.  Who was struggling deep in enemy territory and running low on supplies.  Then came Saratoga.  Where Arnold anticipated Burgoyne’s plan.  Argued with General Horatio Gates (who had just relieved General Schuler when he was so close to victory.  Politics.)  Gates finally relented and dispatched Morgan’s riflemen and Dearborn’s light infantry to reinforce the American left.  While Arnold attacked the center.  The Americans carried the day.  And Burgoyne, deep in enemy territory with Patriots in his rear and the winter approaching, surrendered his army following the Battle of Saratoga.  And with it any hope for British victory in America’s Revolutionary War.

The Defeat of a British Army at Saratoga gave the Americans Respect and Legitimacy

Washington didn’t win a lot of battles.  But he won some of the most important ones.  Including the most important battle of them all.  Keeping the Continental Army in the field.  After retiring from Princeton in January he didn’t win another battle in 1777.  But he did provide a stubborn resistance for General Howe.  Keeping him in Pennsylvania.  And prevented him from providing that third prong that may have made all the difference between an American win and an American defeat.  That and the actions of the great and future traitor Benedict Arnold in the north won the Battle of Saratoga.  Defeating a British army.  Something few European nations have done.  Including the French.  So this was a very big deal.  For this changed everything.

This ragtag army was only some 25,000 strong at its height.  This out of a population of 2 million.  Or about 1.25% of the population.  A sign that perhaps most Americans were more talk than action when it came to this Revolution.  Yet it was this unprofessional army.  This army whose own government treated them poorly.  Who could barley clothe or feed them.  This is what defeated the most powerful army in the world.  This victory just gave them a whole lot of respect.  And legitimacy.  And made the French take notice.  Who saw that the Americans could actually win this war against France’s long-time foe.  And joining them in their cause would give them a chance to be on the winning side against the British.  And perhaps win back some of their North American colonies they lost on the Plains of Abraham back in 1759.  When French Canada became British.

This civil war in British America was about to become a world war.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

LESSONS LEARNED #13: “If you were to live under the socialist maxim ‘from each according to his ability to each according to his need’ you would find yourself surrounded by needy people with no ability.” -Old Pithy

Posted by PITHOCRATES - May 13th, 2010

KEY TO CIVILIZATION growth is the food supply.  Food surpluses in particular.  Before dependable food surpluses, life was short, harsh and miserable.  Especially for women.  When they weren’t working in the fields they were giving birth and raising children.  High infant mortality rates, though, inhibited population growth.  Most of the children women gave birth to didn’t survive to adulthood.  So there was a constant state of child rearing.  But few children survived to help with the business of family life.

Malnutrition and famine were common.  Feudalism provided a precarious balance between life and death.  For centuries the common people (i.e., peasants) eked out survival on their landlord’s manor.  The lord owned the land.  The peasants worked it.  Most of the bounty went to their lord.  But they kept what they grew on a small strip of land for themselves.  Just enough for subsistence.

But England changed all that.  By 1750, her agricultural output was second to none.  Private property.  Free market economy.  Capitalism.  Increased productivity.  Specialization.  These all combined to provide incentive.  Incentive produced food surpluses.  Food surpluses produced profits.  Reinvested profits improved farm yields.  This produced more profit.  And the cycle continued.  In less than a century feudalism would disappear from England.  There, you either worked land you owned or were paid wages to work land owned by others.  People began to live longer and healthier lives. 

The British Empire ruled the civilized world in the 19th century.  Representative government.  Abolition of slavery.  Free trade.  The Industrial Revolution.  These things, and others, gave them wealth, power and moral authority.  A lot of good came from this island kingdom.  Including the United States.  They weren’t perfect.  There was a learning curve.  But the modern capitalistic economy which they gave us liberated the masses.  It let us do what we wanted to do, not just what we had to do.  In particular, women, who could do more than just raise families and work in the fields.  One day, she could even become prime minister of Great Britain.

FOOD SURPLUSES BEGET industrialization.  Food surpluses beget everything, really.  Food surpluses release human capital to do everything else we do besides farming.  England was at the van of this modernization.  Others followed.  In time. 

Russia abolished serfdom (i.e., feudalism) in 1861.  Industrially backwards at the time, this liberty awakened a dormant human capital.  They followed the English model.  In time, with the advent of steamship and rail transportation, Russian grain competed with other European producers.

Joseph Stalin, looking to jump ahead in the industrialization process, implemented collective farming in the late 1920s.  He turned away from the English model.  The government became land owners.  It was feudalism on a grand scale.  Large collective farms would produce vast food surpluses that could feed industrial cities.  And there would still be surpluses left over to export to raise capital to build these industrial cities.  At least, that was the plan.

With less incentive came less productivity.  What land the former serfs had come to own was lost to the state.  The state took so much of the harvest that there was little food left for those who labored to grow it.  And the price the state paid for their crops was less than it was before collectivization.  The ‘free’ serfs were earning less and working more.  They didn’t like it.  And chose not to participate.  Collectivization became forced collectivization. 

Deportations, terror, murder and famine followed.  Perhaps more than 5 million starved to death during the famine of 1931 and 1932.  Others were to follow.

Forced collective farming produced famines elsewhere.  In China, during Mao Zedong’s Great Leap Forward, forced collectivization produced even greater famine deaths.  Historians estimate that 20-30 million, maybe more, starved to death in the famine of 1959–62.  Though hard numbers aren’t available, North Korea suffered a devastating famine in the late 1990s that claimed millions.  But in the West, in the 20th century, famine was unheard of.  When the United States suffered during the great Dust Bowl of the 1930s, there was no corresponding famine despite the loss of productive farmland.

WITH INDIVIDUAL LIBERTY comes incentive.  With incentive comes productivity.  A small island nation of free land owners could produce grain to feed themselves with surplus left over for export.  Nations with great fertile tracts farmed by forced collectivization led to famine.  Slaves have little incentive other than to subsist.  The collective good means little to them when they are starving.  They continue to sacrifice.  And continue to suffer.  Even if they do produce a few more bushels of grain.  So if the suffering is the same, what is the incentive to work harder?

As individual liberty declines, those in power tend to exploit those they rule.  In the name of the state.  Or the common good.  This is easy to see when it results in famine or revolution.  Not easy to hide those things.  But it is a little more difficult to see when the results are more benign.  Longer unemployment benefits, for example.  I mean, those are pretty nice.  Hard to see the downside in them.  As it is in other benefits these rulers give us.  So we are seduced as they whisper these sweet nothings in our ears.  And soon we willingly cede our liberty.  A little at a time.

WITH THE RISE of individual liberty, there was a corresponding decline in the ruling elite thanks to representative government.  Great Britain gave this gift to us and the United States took it to incredible heights.  The oppressed everywhere immigrated to the United States to feed a growing industrial demand.  Being new, we did not know all the affects of industrialization.  When the bad things came to light, we addressed them.  Great Britain, for example, was one of the first to protect women and children from the worse of industrial society.  Still, working conditions could be harsh.  As could life in the industrial cities.  Poverty.  Filth.  Disease.  And it was the wretched state of life in these slums that gave birth to a new school of thought on industrialization. 

In 1844 Friedrich Engels wrote The Condition of the English Working-Class to expose life in these slums.  He would collaborate 4 years later with Karl Marx on a treatise called The Communist Manifesto.  And from this Marxism, Communism, socialism, collectivism, etc., would follow.  As economic systems go, these would all prove to be failures.  But the essence of them lives on.  State planning.

You see, it was capitalism that gave us the industrial slums.  And that was good propaganda for a ruling elite looking to rule again.  So they whispered sweet nothings into our ears.  They talked about a Social Utopia.  From each according to his ability to each according to his need.  Fair taxation (i.e., only the ‘rich’ pay taxes).  Social safety nets (paid for by taxes of the rich).  Shorter workdays.  Longer paid vacations.  More government benefits.  A burgeoning welfare state.  Free stuff for everyone.  Again, paid for by taxing the rich who have exploited the working class.

What evolved was the elimination of the middle class.  You had the evil rich (and the middle class were, for all intents and purposes, rich because they didn’t need government help) whose wealth the government taxed away.  And the poor.  The poor who the government would now take care of.  If elected.  And they were.  They seduced a great many people with their utopian vision.  Even in the West. 

Great Britain and the United States would fall to this seductress, too, thanks to the Great Depression.  It was capitalism that gave us the Great Depression, after all.  The greed of the money people.  And so these great nations declined from greatness.  They became welfare states, too.  They had short respites during the 1980s.  Margaret Thatcher helped rejuvenate Great Britain.  Ronald Reagan, the United States.  But the ruling elite whispered more sweet nothings in our ears and the decline continues.

In 2010, our appetite for state benefits appears to be insatiable.  And we may have run out of wealth to tax away to pay for it.  California is on the brink of bankruptcy.  New Jersey elected a governor who proposed draconian spending cuts to stave off bankruptcy.  Other ‘blue’ states (i.e., states who vote Democrat) are also in trouble.  Underfunded pension obligations.  Demands of teacher unions.  Of government worker unions.  Everyone is there with their hand out.  None of them are willing to sacrifice for the common good.  No, they expect others to do the sacrificing.

THE OBAMA ADMINISTRATION has increased federal spending to such record levels that Communist China is concerned about our fiscal/monetary policies.  As they should be; they hold a lot of our debt.  The federal government has ‘bailed out’ private industry and taken de facto control.  They have created a healthcare entitlement that will cost more than a trillion dollars.  More spending is coming.  And it is all for the greater good.  They are vilifying those who are not poor, taxing away what wealth they can from them and giving it to the poor.  When about half the electorate doesn’t pay any income taxes, there is little opposition to raising taxes on those who do.  For if the ‘rich’ complain, the government vilifies them.

Where will it all end?  It is difficult to say.  How will it end?  Badly.  We can look at Europe who we seem to be emulating.  They’re further down The Road to Serfdom than we are.  With the excessive government spending, there will have to be greater government revenue (i.e., taxes).  Previous methods of taxation may prove insufficient.  Hello value added tax (VAT).  It’s all the rage in Europe.  It’s a multiple tax.  At every stage of production, government is there.  Taxing.  From the raw materials to the final assembly, government is there at every stage.  Taxing.  VATs will increase government revenue.  But they will also make every day life more expensive.  VATs increase the sales price of everything you buy.  And you pay it again at checkout.  It’s everywhere.  Everything will cost more.  From manicures to lattes to toilet paper to tampons.  And this is a tax everyone pays.  Even the poor.  It is a regressive tax.  The rich will pay more, but the poor will feel it more.  This hidden tax will take a larger portion of what little the poor has.

But how bad can it really get?  In 2010, I guess the answer would be to look at Greece to see what happens when a country can no longer sustain her welfare state.  And the people aren’t all that keen on losing the government benefits they’ve grown accustomed to.  It isn’t pretty.  But when you start down that road (from each according to his ability to each according to his need), the taking and giving always get bigger.  It never gets smaller.  And when you reach a critical point, government just can’t sustain it any longer.  And it crashes.  Like in Greece.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,