Thursday, September 26, 2013

Crossroads by Wm. Paul Young

Since I really enjoyed The Shack by Wm. Paul Young, I was very interested in his next book, Crossroads

Unfortunately, Crossroads is just a different version of the Shack. We still have a man who meets the tri-partite God in three actual persons and his life is changed. The biggest difference is that the mega story is not as compelling and the idea has been done before, by Young.

That being said, the parts I liked about The Shack and the parts I liked about Crossroads were the parts that brought God to us in a fresh way. He sticks to the theology we find in the Bible, but in the mouth of a character in a novel, the novelty makes the words that much more compelling.

Tuesday, September 24, 2013

Wealth and Poverty by George Gilder

I am on a George Gilder kick, so I had to read his most well-known book, Wealth and Poverty. He does not disappoint. Gilder makes the MORAL argument for capitalism. He states in the very beginning, “No nation can grow and adapt to change except to the extent that it is capitalistic, except to the extent, in other words, that its productive wealth is diversely controlled and can be freely risked in new causes, flexibly applied to new purposes, steadily transformed into new shapes and systems.”

He starts with the axiom that another’s fortune is ultimately everyone’s fortune. This idea does not arise naturally in man, but his book sets out to prove it. Because capitalism depends on a mutually beneficial transaction, one cannot benefit without another benefitting as well. Therefore, the success of capitalism begins with the desire to please another. It begins with giving. A man gives his time, his sweat, his ingenuity, his resources, hoping his risk will lead to another finding the resultant product desirable and therefore, he himself will ultimately benefit as well. The man invests in the future and the unknown for future gains. The collectivist remains mired in the past and “certainty.”

The nature of wealth is largely misunderstood. Wealth is not dollars or money, but is “assets that promise a future stream of income.” Money can be and is squandered with nothing to show for it. Wealth accumulates and promises future returns. This is why, usually in America, the rich themselves do not get richer. Rather someone willing to take a risk and bet on the future will pass the already rich in wealth. This leads to the false illusion that the already rich getting richer. Rather, those with ingenuity and the ability to create wealth surpass the already rich. True wealth resides in an adaptable, compelling, and flexible mind. But a capable and innovative mind often needs money invested in his ideas. This is the role of the already rich, who can only consume so much. They invest in the up-and-comers.

The nature of poverty is also misunderstood. Gilder states, “every successful ethnic group in our history rose up by working harder than other classes, in low-paid jobs, with a vanguard of men in entrepreneurial roles. But the current poor, so it is supposed, can leapfrog drudgery by education and credentials, or be led as a group from poverty, perhaps by welfare mothers trained for government jobs. These views depict the current poor as a race so alien to the entire American experience, so radically different in motive and character from whites, that one can speak in terms of a new form of bigotry.” Although he pulls back from actually calling liberals racist, he points out that they do have a different set of rules for how they see non-whites. But the truth is, whether white or black, “the ONLY dependable route from poverty is always work, family, and faith.”

In fact, what we often perceive as racism is actually a class clash. Many upper class people are reluctant to expose their children to lower-classes and their values. Because it is values that are the only way out of poverty, it is harmful to the poor to accept and pander to them, thus assigning “them to permanent poverty.” In pursuing egalitarianism programs like welfare, we promote the very things that destroy the work ethic, family connections, and faith necessary to escape poverty. Yet, some prefer keep alive the myth of racism as an explanation for poverty in order to stay in power.

Gilder believes, “There is something, evidently, in the human mind, even when carefully honed at Oxford or the Sorbonne, that hesitates to believe in capitalism: in the enriching mysteries of inequality, the inexhaustible mines of the division of labor, the multiplying miracles of market economics, the compounding gains from trade and property. It is far easier to see the masters of these works as evil, to hunt them as witches, favored by occult powers or Faustian links.” And this is why there is a never-ending, sometimes bloody, war on wealth. 

This war leads to liberal policies that hurt far more than they help. They create “moral hazard” which encourages the opposite behavior of what is desired. Unemployment insurance promotes unemployment, AFDC promotes fatherless families, Social Security discourages concern for the elderly and breaks generational links. In depriving poor families of the incentives necessary to promote wealth, we create people whose “response to this reality is that very combination of resignation and rage, escapism and violence, short horizons and promiscuous sexuality that characterizes everywhere the life of the poor.” The are not reflecting their economic conditions, but rather responding to liberal policies and incentives in a rational manner. Men in these circumstances have no reason to delay children and family until after they have faithfully gained the work ethic to support them. They have every financial incentive not to. Until we make work, family, and faith more rewarding than the dole, welfare and poverty will continue to explode.

Other pernicious idea also continue to keep lower classes from rising. We have focused too much on “discrimination” as a cause and have resorted to credentialing to combat it. Credentialing keeps competitors out of the labor market and therefore hurts the most vulnerable. We raise the minimum wage and keep huge segments of the labor market from finding a job. The high unemployment rate of young, black males bears out this truth. We task the government with “creating jobs” with make work programs that are often demoralizing and counter productive.

Often, we hear, “Tax the rich” as a way to take care of the poor. Here we see an especially negative effect. Taxing the rich will not affect their consumption. The truly rich actually consume very little of their wealth. Most invest the vast majority of it. Taxes come out of their investments, not their consumption. In fact, high taxes actually encourage consumption. After all, if the government is going to take it anyways, why not enjoy it and blow it on luxuries instead? In addition, the Laffer curve has shown that high taxes result in less monies collected overall. So the “Tax the rich” mantra is another liberal policy doing the opposite of what it purports to do.

To achieve a prosperous society, we must have a forward-looking economy of faith. “Socialist and totalitarian governments are doomed to support the past. Because creativity is unpredictable, it is also uncontrollable. If the politicians want to have central planning and command, they cannot have dynamism and life.” Creative dynamism, necessary to the health and wealth of a society, frightens those with a fear of the unknown. Risk cannot be negated in ever-changing growing economy. Government regulation agencies can only live in the past. Every new, unknown, unproven idea is discarded and unworkable when the rules of the past are applied to it. It’s why we don’t have the long-promised hovercrafts! How can that kind of innovation escape the myriad rules governing transportation?

“Liberals want wealth without the rich. Yet most real wealth originates in individual minds in unpredictable and uncontrollable ways. A successful economy depends on the proliferation of the rich, on creating a large class of risk-taking men who are willing to shun the easy channels of a comfortable life in order to create new enterprise, win huge profits, and invest them again.” Danger and uncertainty, risk, waste and inefficiency are the engines of prosperity and success. These very necessary elements to the human condition are what the liberals want to deny, suppress and plan away. They operate with jealousy and covetousness and want to take the wealth from the rich for their own purposes. 

He ends with, “At any time in human history, a rational calculus of our possibilities would lead to a prediction of doom. But over the millennia, the race has flourished. It has thrived, however, chiefly on one condition, on a cluster of conditions, combining faith and freedom with risk and work. It is chiefly when we give up on chance and providence, when we attempt to calculate and control our own destinies through ever greater regulation by a demiurgic state, that disaster occurs.”

Human creativity, unleashed, and in relationship with God, promoting the Biblical values of Charity, Faith, and Hope, is the greatest resource we have to achieve true prosperity for all. 

Wednesday, September 11, 2013

Left Turn by Tim Groseclose

The mainstream media is biased to the left. This is not shocking or even an especially new revelation. Yet Professor Tim Groseclose of UCLA has gone even further and done an extensive, peer-reviewed and verified study proving the extent of the bias and more importantly, the effect. His book Left Turn is a must read for anyone who doubts the veracity of the claim.

The first part of the book details his credentials and methodology. He make a compelling case for his research and five years in, has yet to sustain a serious critique. His particular study gave politicians a Political Quotient, PQ, which rates them from 0 - 100 with 100 being the most liberal. They range from Jim DeMint with a 4.8 to Nancy Pelosi with a 100. Some even extend beyond in either direction. Then he rates media outlets based on how often they cite conservative or liberal think tanks for their experts and facts and gives them a Slant Quotient (SQ). In this way, the New York Times (74) can be directly compared to the liberal slant of Joe Lieberman (74.7). After surveying 20 news outlets, he found an average bias of over 58. 

He compared his study to another that used a different methodology. That study compared certain phrases which tended to be used by conservatives to phrases which are associated with liberal groups. The two studies complemented and reinforced each other. 

Finally, at the behest of some coworkers, he decided to try a much narrower study. He found that in the debate over the Bush tax cuts, some of the facts supported the liberal position and some the conservative. He studied news outlets for which set of facts they emphasized. Just as in the other two studies, he found a strong liberal bias.

However, he was stuck with the question of Does it matter? Does the bias actually change political behavior? He began with the opinion that it did not. He believed enough people knew their source of news carried a liberal bias and discounted it.

Yet some studies piqued his interest. One involved studying markets into which Fox News entered and comparing before and after political behavior. The study found Republicans experienced a .43 percent uptick. The other study involved dividing 600 people into two random groups and sending one The Washington Times and the other The Post. After being exposed to the liberal and conservative leaning papers, the authors found a 3.8 percent impact. Finally one study on game theory showed that even when the subject KNEW they were being manipulated, they still failed to figure out the truth and offered an opinion closer to the one desired. 

These, combined with anecdotal evidence suggested that media bias did indeed have an effect. But how much? Again, after going deep into his methodology, he arrives at what he believes is a low estimate of 70%. In other words, our political opinions are guided 30% by what we would naturally believe and 70% based on the news bias. 

This is HUGE. In fact, he convincingly postulates that without media bias, if Americans were left to make up their own minds, the nation would have a PQ of approximately 25! We would rate between Ron Paul (31) and Jack Kemp (20) as a nation. Unbelievable. The whole country would look like Kansas (24) or Texas (27). Republicans would add 8 - 10 points in national elections. 

I can’t get into all the specifics of his methodology. Suffice it to say it is clear and convincing and frustrating. To know that our country could rise like a Phoenix and regain our exceptionalism if only people were not manipulated by the media is such a tantalizing possibility. Yet, we are manipulated. Daily. 

He ends with a plea for journalists (whom he lost respect for in the course of the study) to become more like politicians (whom he gained respect for). He begs journalists to spend time in a city or area with a PQ of 25. Get to know those religious people who own guns and cry at the Star Spangled Banner. We exist. We are not the stuff of mythology and backwater hell holes. In addition, the media should discover their own personal PQs and advertise it. We know where every politician stands on the issues when they declare their positions and party affiliations. We should expect no less of those that give us the facts we need to be an informed citizenry. 

Sigh. I wish. They never will. Why would they? Their carefully preserved and created mythologies would crumble and liberalism would die on the vine. 

Tuesday, September 3, 2013

Coolidge by Amity Shlaes

I have been waiting for Coolidge by Amity Shlaes since I first heard she was writing it. She came to my attention when I read the definitive history of the New Deal in The Forgotten Man. She states that in researching for that book, she realized she was missing the part of the story that involved Coolidge. She has single-handedly resurrected him from a forgotten president to the highly respected place he so deserves. 

She begins with this pithy synopsis of the life of Calvin Coolidge, “... to an improbable extent, the chapters of Coolidge’s life after childhood are chapters of near failure upon near failure. Coolidge almost didn’t leave the village, almost didn’t make it at college, almost didn’t get a job, almost didn’t find a wife, almost disappointed as a state senator, almost stumbled as Massachusetts governor, almost failed to win a place on the Republican presidential ticket in 1920, and almost failed in Washington once he arrived there as vice president in 1921. As president, Coolidge almost failed to win the backing of his party, almost gave into grief after the sudden death of his sixteen-year-old son, Calvin, Jr. Almost capitulated to a recalcitrant Congress and unruly foreign leaders.” But he did not fail. He succeeded by continuously heeding the call of service and delivering more than was expected. 

In the same staccato style, Shlaes details Coolidge’s many successes, “Under Coolidge, the federal debt fell, Under Coolidge the top income tax rate came down by half... Under Coolidge the federal budget was always in surplus. Under Coolidge, unemployment was 5 percent or even 3 percent. Under Coolidge, Americans wired their home for electricity and bought their first cars or household appliances on credit. Under Coolidge, the economy grew strongly, even as the federal government shrank. Under Coolidge, the rates of patent applications and patents granted increased dramatically... Under Coolidge, a man from a town without a railroad station, Americans moved from the road into the air.” In short, Coolidge kept government out of the way and America blossomed economically.

Coolidge is rightfully known as Silent Cal. After leaving the small isolated village where he grew up for college, he made very little impression. His grades were mediocre, but after being rejected by every fraternity on the campus of Amherst, he came under the sway of a powerful and charismatic Professor Garmin. He made life-long friends at the college, however, and came into his own in a powerful senior speech revealing a side of Calvin his classmates had never seen. They were “impressed by the humor, quiet dignity and penetrating philosophy” he radiated. After college, he skipped law school preferring the old method of “reading law,” literally, as an intern in a law office. Once he passed the bar, even sooner than expected, he struggled as a small-time country lawyer, but was respected for his lack of fee-raising loquaciousness. 

He entered his first political contest right away, following in his father’s footsteps, when he ran for a seat on the Northampton City Council. Shortly thereafter, he accomplished his final goal, to find a wife. He met Grace Goodhue, a teacher at a local school for the deaf who lived just across from him. It was thought that someone who taught the deaf, might be able to conjure Calvin to speak. Their marriage was a perfect partnership of like-minded people.

Coolidge’s political career continued to take off. He won a seat in the lower house of the state legislature in Massachusetts. He was frustrated at being away from his wife and did not enjoy the legislative process, so he next occupied the position of mayor of Northampton. The executive position suited him better. At this time, his staunchly Republican political views began to take on a flavor unique to Calvin. He began to come into his own politically and even counseled his father, a newly elected state senator, “It is much more important to kill bad bills than to pass good ones.” Soon the mayor’s job was no longer big enough and he ran to join his father in the state senate. And, although he considered himself a progressive, he chafed when the most famous Progressive, Teddy Roosevelt, pushed for the Republican nomination over that of the incumbent Republican, Taft. In fact his third-party run led to the subsequent victory of the Democrat, Wilson.

He began to really gain the attention of the Republican party when he led a senate committee to negotiate a strike by the IWW or Wobblies as they came to be known. The Progressives had passed laws designed to help the workers, shorter hours, etc., but which then led to reduced pay. Striking in radical and violent ways to restore their lost wages, Coolidge the Progressive, had to make a choice. He saw how the Progressive policies hurt the workers, yet he saw the same workers being violent and disruptive. He had to choose sides. His law and order sense came through and he successfully negotiated an end to the strike. This success led to the eventual role as president of the state senate, which he followed by running for lieutenant governor and then governor of Massachusetts. 

He gained national attention in his role of Governor when the police of Boston went out on an illegal strike. The city was paralyzed and the mayor, police commissioner and Coolidge jockeyed for position as to who was best to handle the situation. Coolidge poured over the state constitution, eventually finding the authority. In a bold move that took everyone by surprise, he neither capitulated nor compromised. He fired the striking police and made sure they could never return to work as a policeman. His bold law and order stance garnered praise from around the country. He had even upstaged Wilson who had vacillated on the strike. Some began to think of Coolidge in presidential terms. Coolidge seemed to represent the “Silent Majority” of normal, middle-of-the-road folks.

But Coolidge, with his evolving political philosophy did not feel quite ready for the Presidency. He forcefully shut down those who would push for him. Despite this, his backers worked behind the scenes at the next Republican convention to get him nominated as Vice President. He found himself second on a ticket he had not sought out, under Warren Harding. Harding, with his call for a “Return to Normalcy” resonated with Coolidge and they made a good pair. Harding helped solidify Coolidge’s changing beliefs about Progressivism when he stated, “No altered system will work a miracle. Any wild experiment will only add to the confusion. Our best assurance lies in efficient administration of our proven system.” He advocated not the Square Deal of TR nor the constant innovation of Wilson, but a return to the Old Deal.

Harding began reining in the government after the large deficits ran up in the Wilson administration with his programs and WWI. Yet he surrounded himself with crony’s and soon his administration became the subject of various scandals. When Harding died suddenly, Coolidge moved into the top spot determined to finish what Harding had started. Where Harding made moves to cut, Coolidge actually did. His first official act was to notify all departments that their budgets would have to fall. He intended to cut $300 million from the federal budget and began to meet with his budget director General Lord, at least weekly. He also met regularly with his Treasury Secretary, Andrew Mellon, and discussed Mellon’s idea of “scientific taxation.” Mellon believed in the radical notion that high tax rates could actually bring in lower tax revenues than lower tax rates. Finally converted, Coolidge worked on both cutting spending and lowering taxes to increase revenue. But his real passion remained the cutting end of the budget. He feared large increases in revenue would result in more calls for spending and undo all his hard work. The success of his policies led to a successful run for President in his own right in 1924.

All throughout his subsequent term, he battled a congress intent on undoing what he worked hourly to do. After his tax plans passed and revenues began to rise, Coolidge would see the debt fall by a third and the government operate with a surplus. Yet true to his predictions, Congress wanted to spend the extra revenue. Coolidge constantly battled to veto the spending bills they passed, knowing they would only grow the government more and add to the debt he worked so hard to decrease. Despite his popularity and assurance of a second term in 1928, the battles took their toll on both his health and his marriage. In typical Silent Cal style, he notified the press and the Republican party of his intentions with a simple note stating, “I do not choose to run for President in nineteen twenty eight.”

Sadly, Coolidge knew that the Roaring 20s he had helped usher in was due for a correction. Having worked with his apparent successor Herbert Hoover, Coolidge felt certain all that he had accomplished would be swept away when the inevitable downturn came. He told his Secret Service agent, “Well, they’re going to elect that superman Hoover, and he’s going to have some trouble. He’s going to have to spend money. But he won’t spend enough. Then the Democrats will come in and they’ll spend money like water. But they don’t know anything about money.” What a prescient man. He foresaw exactly what was to come and did in fact happen. Had the nation followed his lead of not interfering with the economic downturn and continued to keep spending and taxes low, who knows? We may have avoided the Great Depression altogether. Instead, Hoover began to meddle, and resorted to that old Republican standby, the tariff, thereby ushering in worldwide retaliation. FDR followed and outdid the meddlesome Hoover by orders of magnitude. We are still paying for his experimentation today. 

Coolidge lived to see his prediction come true. Hoover panicked with the crash of 1929, spent more money than he should have, implemented wage and price controls, and still lost to a Democrat. Once again, Coolidge revealed his prophetic powers by believing that despite his rhetoric, Roosevelt would engage in more spending and more experimentation. The country and it’s leaders no longer held to Harding’s admonition against such things. 

Coolidge died of a heart attack in 1932. The WSJ wrote, “in due time, the good fortune of the United States to have had such a man as Calvin Coolidge in just the years he filled that office will be more clearly realized than it has yet been.” Hopefully we are beginning to realize the genius of this misunderstood President. Hopefully we will soon elect another one as committed to getting our financial house in order.