Tag: economic growth

Trump’s Economy and 2020

The Portly Politico3 Comments

There’s been a spate of good economic news lately, largely thanks to President Trump’s economic policies.  US GPD grew 3.2% for the first quarter of 2019, blowing away economists’ projected 2.5% growth.  Of the 231 companies in the S&P 500 to report their Q1 earnings so far, 77.5% of them have exceeded analysts’ expectations.  US consumer spending increased 0.9% (0.7% when adjusted for inflation) during a quarter that is usually slower after the Christmastime rush.  All of that growth has occurred without a substantial increase in inflation.

That economic news is good for President Trump, but it might not be enough in and of itself.  In better times, any president with those economic numbers would breeze into a second term, but the perception among Democrats (no surprise) and some independents (more troubling) is that the economic growth we’re witnessing isn’t benefiting everyone, but instead favors the rich and powerful.

To be clear, Trump is in a strong position at the moment.  Having emerged battered but unbeaten from the Mueller investigation, he’s bested the greatest existential threat to his presidency.  Construction on the border wall has begun, and even progressive economist Thomas Friedman endorsing a “high wall” on the border.  And loony freshman Congress members like Ilhan Omar and Alexandria Ocasio-Cortez continue to commit bone-headed, unforced errors.

That said, the scuttlebutt on the Dissident Right is that economic success alone won’t secure Trump’s reelection, and that excessive focus on it might actually alienate the blue-collar workers that delivered Trump victory in 2016.  The general argument is that, unless Trump doesn’t come down hard on immigration, even economic growth won’t save him.

I don’t fully buy this argument, but there might be some truth to it.  When the economy is already good, voters begin looking at other issues more closely.  If a worker loses his job to an illegal immigrant, or if the plant moves to Mexico, it doesn’t matter how good the economy as a whole is doing.

One alarming sign of trouble:  former Vice President Joe Biden and Texan weirdo Robert Francis “Beto” O’Rourke both are competitive against Trump—in Texas!  Granted, it’s very early in this process—the 2020 election is an eternity away, politically speaking—and the media loves to trumpet Democratic victories in historically deep-red States.  But the situation in Texas, like other border and high-growth States, illustrates the importance of the immigration issue.

A quick summary:  ultra-progressive California taxes and regulates its most productive citizens out of the State, while importing cheap labor illegally (supporting it with sanctuary cities, etc.) so the uber-wealthy Silicon Valley tech titans have gardeners and nannies at slave wages.  Enough Lefties bleed out into Arizona, Texas, and other reddish States with low taxes and good law enforcement.  Those States also struggle with illegal immigration, and are demonized for trying to protect their borders.  The result:  the purpling of Texas.

To clarify:  I think President Trump is well-positioned to win in 2020, especially if the Democrats nominate a wacko or a blatant race-baiter (like Kamala Harris).  He’s got a tougher fight against a perceived moderate like Biden or Pete Buttigieg, but momentum and incumbency are on his side.

Regardless, it is vital that President Trump return to his key campaign promise from 2016:  securing the border.  Not only is that crucial for tapping into the populist discontent that catapulted him into the Oval Office, it’s the only way to preserve the United States we know and love.

TBT: Mark Sanford’s Ideology

The Portly Politico1 Comment

Today’s #TBT mines the depths of my 2009 scribblings, during the “TPP 1.0” era of the blog.  Yesterday’s post about the “The State of the Right” got me thinking about how much the state of play has changed in the last decade, particularly since the Trump Ascendancy in 2015-2016.

One example of that change is former Congressman and South Carolina Mark Sanford.  Sanford was the first Republican I ever voted for in a general SC gubernatorial race, and I loved his fiscal conservative grandstanding (he once walked into the General Assembly carrying two piglets under his arms to oppose “pork barrel spending”; he allegedly barbecued the two oinkers later on).

He always took largely principled stands.  He refused to expand Medicare during the worst part of the Great Recession, knowing that once federal dollars were withdrawn, South Carolinians would pick up the tab.  He opposed the seatbelt law (you can now be pulled over specifically for not wearing a seatbelt in South Carolina, whereas before it was only ticketable if you were pulled over for some other infraction), arguing that adults can make their own decisions about their safety, and that traffic officers have enough to deal with already (it has to be difficult to spot through a window).

So, in my youthful naivete, I wrote a letter to my hometown paper, The Aiken Standard, showing my support for Mark Sanford.  He was under intense pressure to accept federal “stimulus” dollars, and when he relented, the opponents who argued he should take the money gleefully noted his inconsistency (a rule here:  the Left will never be satisfied).  Governor Sanford sent me a letter thanking me for the op-ed, which I still have somewhere on my bookshelf.

Then, less than a month or so later, Sanford was caught in a major sexual scandal (and I learned an important lesson about not overly-idealizing political figures).  After disappearing from the State, an aide told the press the governor was “hiking the Appalachian Trail” to clear his head.  A reporter with The State newspaper happened to see Sanford at the Atlanta airport at the time, and within days the whole sleazy story came out:  Governor Sanford had been in Argentina with his mistress (now wife), and his cloyingly sentimental love e-mails to her were blasted all over the news.

Sanford refused to step down as governor—a good call, as snake-in-the-grass, power-hungry, loafer-lightener Lieutenant Governor Andre Bauer would have taken over—and finished out his term.  Everyone was sure he was done with politics… until he ran for US Congress for SC-1, his old district during his tenure in the 1990s.

He won against incredible odds.  His opponent, Elizabeth Colbert-Busch (the sister of Comedy Central hack Stephen Colbert), received huge fundraising donations from Democrats all over the country, including from the national party.  Sanford—deprived of his wealthy ex-wife, Jenny Sanford—urged supporters to make homemade yard signs out of plywood, cardboard, or whatever they had around the house.

Outspent 4:1, Sanford won.  He successfully painted his opponent as a hollow stand-in for Chuck Schumer and Nancy Pelosi, and his grassroots, DIY campaigning worked.  Of course, as one of my former students put it, “Jesus could run as a Democrat in that district and lose.”

Sanford returned to Congress for a few terms, then lost in a primary battle against Trumpist Katie Arrington.  Sanford always had one foot firmly planted in the Never Trumper wing of the GOP, and Arrington gobbled up his support in the primary.  She would, unfortunately, end up temporarily wheelchair bound due to a bad car wreck, and lost a very tight race to her Democratic opponent in 2018, a loss that still stings.

That’s enough history lesson for today.  Here is 2009’s “Mark Sanford’s Ideology“:

There has been much discussion lately about Governor Mark Sanford’s resistance to accepting federal stimulus money.  In the face of enormous public and political pressure, the governor has accepted these funds but will exercise considerable authority in determining who gets it.  For the purposes of this letter, I am not interested in whether or not this was the right thing to do.

I am more concerned with how the governor’s opponents have characterized his decisions.  Sanford’s rivals have accused him of political posturing.  Ignoring the vehement protestation against the governor’s actions, I find this interpretation lacking.  While the cynic in me is willing to acknowledge that there might have been an element of posturing to Sanford’s resistance, it seems highly unlikely that this was his only, or even a major, motivator.

His month-long battle against the federal stimulus, however, is much more readily explained by taking a look at his ideology and his record both as governor and as a congressional representative.  Sanford is perhaps the most ideologically consistent politician in contemporary American politics.  Since entering the political arena in 1994, Sanford has been the quintessential Republican; at least, he has been what the quintessential Republican should be.  By this I mean Sanford has sustained an unwavering faith in free enterprise and the free market while also endorsing socially conservative measures.  He is not quite a libertarian, but he has the general ideological bent of Ron Paul when it comes to the economy without the gold standard baggage.

A cursory glance at a website like ontheissues.org demonstrates how consistent Sanford’s ideology is.  In fact, the only inconsistency in his voting over the past 15 years is on affirmative action in college admissions.  While in Congress in 1998, Sanford voted against ending preferential treatment by race in college admissions, but in 2002 he said that affirmative action was acceptable in state contracts but not in colleges.  A closer examination of his voting history in Congress might reveal a few more inconsistencies, but I would wager any additional irregularities would still be far less than the typical congressman.

Regardless, Sanford’s commitment to fiscal conservatism and government accountability is astounding.  Sanford has repeatedly supported term limits (for example, he imposed one on himself while a representative to Congress), a balanced budget, and lower taxes, as well as pushing for choices for citizens in education.  Therefore, if we view Sanford’s struggle against the federal stimulus through the lens of his voting record and his statements as a congressman and governor, it is clear that his position derives from his sincere belief in his ideals.

Whether or not the governor is right is another matter.  That is not the point I want to make.  Agree or disagree, Governor Sanford is not taking a stand for political attention.  He is taking a stand because he believes it is right.  And, after all, isn’t that the important thing?

Symbolism and Trumpism

The Portly Politico6 Comments

Blogger photog at Orion’s Cold Fire often links to noteworthy pieces on American Greatness, the premiere blog for the Trumpist Right.  American Greatness does real yeoman’s work to articulate what Trumpian conservatism is.

His American Greatness Post of the Day for this foggy Monday morning is Robin Burk’s “What Trump Understands that Kevin Williamson Doesn’t.”

Kevin Williamson, you’ll recall, is the house globalist/libertarian for National Review (despite a brief, one-article stint at The Atlantic).  In 2016, he infamously wrote that “dysfunctional, downscale communities… deserve to die.”  He argued that communities like Garbutt, New York—a gypsum boomtown in the nineteenth century that ran its course when the gypsum was gone—have outlived their economic usefulness, and its inhabitants should move elsewhere for opportunity.

There is something to this perspective, but, as Tucker Carlson eloquently noted in an exchange with Ben Shapiro, the neoliberal order and its notions of economic mobility are hugely disruptive to communities.  Families are told, essentially, to leave behind their grandparents’ graves, their Little League teams, their memories, in order to work in service to the gaping maw of some efficiency-maximizing corporate conglomerate.

What Trumpism understands is that, while economies are dynamic, they require strong communities and stable families to maintain.  So it is that Robin Burk argues that Williamson’s libertarian approach lacks any sense of a narrative or symbols.  Williamson is testy because Trump is planning a big military parade (and, presumably, because Trump has been a far more effective advocate for conservatism than Williamson’s angry brand of libertarian orthodoxy).  It seems like wasteful agitprop to him.

What Burk explains in her piece, however, is that a common people need some unifying symbols.  That’s why the NFL National Anthem controversy revealed such deep splits in our culture.  It’s why Americans don’t particularly like it when protesters burn the American Flag.  Yes, it’s constitutional, but that doesn’t mean it’s good—and it’s the literal destruction of one of the most unifying national symbols.

Burk’s focus is more on the local, though, and it’s what makes her piece so interesting.  Communities are built between friends and neighbors.  Yes, the mills shutdown, and some people have to move to look for opportunity.  The mills shutting down also mean some people lose their way, and resort to opiates to numb the pain.

But not everyone can or wants to become economic mercenaries, shifting about rootlessly in search of the highest bidder—or just a job, for that matter.  Some folks want to build a life and a community where their ancestors did.

The implication from neoliberal and libertarian types is that, at best, that desire is unrealistic; at worst, it’s bad:  your loyalty should only be to efficiency!  Efficiency is morality!  While I love efficiency as much as the next cog, efficiency-for-its-own-sake is not and should not be our god.

As Carlson puts it (to paraphrase), we shouldn’t work for capitalism; capitalism should work for us.  Burk adds that we need symbols, formed from and interpreted by our individual experiences and memories, to create a society that fosters the good life.

April Fool’s Day: A Retrospective

The Portly Politico14 Comments

Today is April 1, 2019, popularly known as April Fool’s Day.  It’s a day for good-natured pranking and mirthful fun, a bit like a poor man’s Halloween.

This April Fool’s Day holds a particular resonance for me, however.  It was ten years ago today that, in the midst of the Great Recession, I lost my job.

Technically, my teaching contract was not renewed.  I still had an obligation to finish out the year, which I did as best I could, but I would not be coming back.

I remember it vividly:  my school’s former headmaster told me he wanted to speak with me.  I went into his office, and he told me a few things:  the school was consolidating my classes into fewer sections; the school desperately needed money (the enrollment was around ninety-five kids, and things were so tight they needed the $28,000 going towards my salary); and the economy was not conducive to private school fundraising and tuition.

He told me that, as I’d studied history (he, too, was a history teacher), I knew how these kinds of economic downturns went.  I thought he was mentioning this as a bit of cold comfort, a sort of, “don’t worry, it won’t last long, as you’ll be okay.”  Instead, he continued, saying, “this thing could last an entire decade!”  Yikes!  Way to kick a man when he’s down.

I knew (or, at least, I hoped—the day isn’t over yet!) that I’d never have the opportunity, grim as it was, again, so I said, “Wait a minute—this isn’t just some elaborate April Fool’s joke, is it?”  He said, stone-faced, “I wish it were.”

So, there I was, facing imminent unemployment in the worst job market since the Great Depression, with only one year of teaching under my belt and a Master’s degree in United States Trivia.

We forget, living in the wonderful Trump economy, how hard it was back then.  Jobs were not to be found.  Remember going to gas stations, and people would start polishing your hubcaps against your will so they could sell you the cleaner?  That’s how bad it was—people were hawking hubcap polisher at rural gas stations to try to make ends meet.  “Entry level” jobs required two years of experience, at minimum, which no one fresh out of college plausibly had (unless they’d wisely done some kind of internship or work study).

Fortunately, with some help and coaching from my dad, I landed a job at the City of Sumter, after only three months of formal joblessness.  I was quite fortunate.  I managed the Sumter Opera House, where I learned to run live lights and sound.  I also met some interesting people, including the comedian Gallagher (that used to be an impressive anecdote, but now few people under thirty know who Gallagher is; it’s a shame).  He was an odd bird, which isn’t that surprising, given he made a career out of smashing fruits with a sledgehammer.

That job turned into a grind—remember, if you had a job, you had to do pretty much anything your employer demanded, lest you face termination—but I learned a great deal, and it landed me back at my old teaching gig, under a new headmaster, in 2011.

That experience—being jobless in the Great Recession—left an enduring mark on me.  My first year teaching, I definitely phoned it in.  I worked hard on lectures, of course, but beyond a little club for musicians, I didn’t do much extra.

My first year back in the classroom, in 2011, was completely different.  I was teaching World History, Government, Economics, History of American Popular Music (a course I created), and AP US History.  I had to do prep for all of them.

I was astonished how much American history I’d forgotten since high school and college (a pro-tip:  studying American history in graduate school is more about reading overly-detailed monographs about obscure bits of the story of America; when I took my exams to finish my Master’s, I essentially used information I learned in my eleventh-grade AP US History class).  I would spend hours on Sunday afternoons at the Thomas Cooper Library at the University of South Carolina writing up lesson plans.

Then, I became the de facto sound guy for school events after a talented tech kid graduated (I named an award after him, which I give to students who assist with our concerts and plays on the tech end).  It’s the ultimate in job security—no one else knows how to do it—but it’s also a major obligation—no one else knows how to do it.

Since then, I’ve grown a decent side hustle teaching private music lessons.  I also teach courses at a local technical college, mostly online, but some face-to-face.  In 2014, I taught Monday-Wednesday evenings, first from 6-7:15, then from 9-10:15 PM.  I’d come home, exhausted, and fall asleep in my recliner.  Thursdays felt like Saturdays because, even though I still had two days at the high school, it was the longest possible point before a grueling sixteen hour Monday rolled around.

I save constantly for retirement—I make the legal annual maximum contributions to my IRA, 403(b), and HSA—and spend very little money.  I still drive the same Dodge Caravan that I’ve had since 2006.  I will occasionally splurge and buy digital piano, but my saxophones are falling apart (literally—my pawn shop alto sax has a key falling off).  I occasionally worry that, on that glorious day when I do retire, I won’t know what to do with myself if I’m not working.

All that said, I have done everything possible to position myself against another recession, bad labor market, etc.  April 1, 2009, seems now like a distant memory, but it could all come back.  I’m reminded of The Simpsons episode where some repo men are repossessing property from a failed Dot Com start-up.  One of them says, “It’s a golden age for the repo business—one which will never end!” as he lights a cigar with a $100 bill.

It’s easy to fall into that mindset.  I’m optimistic for the future, but I’ll never take prosperity or security for granted again.  Constant hustling—booking new gigs, picking up more students, getting more classes, working maintenance on the weekends, leading summer camps, collecting songwriter and publishing royalties—is what it takes.

No foolin’.

More Good News: Tom Rice on the State of the Economy

The Portly Politico3 Comments

My Congressman, Tom Rice of SC US House District 7, laid out the incredible impact President Trump and the Republican tax cuts have had on the American economy.  It’s worth taking five minutes to watch his testimony to the Ways and Means Committee of Congress, in which he discusses how dramatically the economy has improved in two years—after ten years of moribund “recovery”:

Congressman Rice gives a shout-out to Florence-Darlington Technical College and its diesel mechanics program, as well as Horry-Georgetown Technical College.  Our education system is a complete mess, but if we can get over our fixation on sending everyone to college, we’re poised to train skilled workers for high-tech manufacturing jobs, which are exploding in demand for qualified employees.

Most notably, he points out that Marion County—the poorest county in South Carolina—has seen its unemployment rate fall from ~9% to a little over 4% in two years.  Marion County is ~56% black, so that directly benefits the quality of life of black Americans in the county.

It’s little wonder that a recent Rasmussen poll put President Trump at a 52% approval rating.  President Trump’s reforms—passing tax cuts, fighting for better trade deals, and slashing regulations—have energized the American economy dramatically.

America’s Entrepreneurial Spirit

The Portly Politico3 Comments

Scott Rasmussen, writing for Ballotpedia, reports that 62% of American adults say their dream job is owning their own company.  That’s encouraging news, as it suggests that, despite decades of welfare state decadence, Americans still possess our entrepreneurial spirit.

That spirit has been with Americans going back to the colonial period.  Textbooks tend to focus on the Puritan planting of the Plymouth colony, which was certainly important, but the first permanent settlement in colonial British North America was Jamestown.  That settlement, and the entire colony of Virginia, was founded as a commercial enterprise, the efforts of joint-stock company in England.

French aristocrat and political theorist Alexis de Tocqueville, writing in Democracy in America (1840) over two centuries later (during the height of the Jacksonian Era), noted Americans’ keen interest in commercial matters, and the pulsing energy and enthusiasm of always hustling.  He also noted the positive effect of trade upon liberty:

Trade is the natural enemy of all violent passions. Trade loves moderation, delights in compromise, and is most careful to avoid anger. It is patient, supple, and insinuating, only resorting to extreme measures in cases of absolute necessity. Trade makes men independent of one another and gives them a high idea of their personal importance: it leads them to want to manage their own affairs and teaches them to succeed therein. Hence it makes them inclined to liberty but disinclined to revolution.

Despite enthusiasm about the idea of starting a business, Rasmussen’s findings show that only 5% of Americans are “very likely to start their own business” in 2019, while 11% are somewhat likely.

Nevertheless, it’s refreshing to see that the desire to hustle is prominent among Americans.  The economic mojo of the Trump economy no-doubt improves Americans’ optimism (although I should note that many Americans started businesses during the Obama stagcovery, albeit for a different reason—they couldn’t find work).  That optimism likely fuels some desire to get in on the action.

On a personal note, I will say that even I, a high school teacher—teaching being a job uniquely suited to the risk-averse in general—have caught this bug (don’t worry, loyal readers—I’m not going to try to sell you massage oils with untested healing properties).  I’m excited to expand some of my side-hustles in 2019, including writing, performing live music, and teaching private lessons.

Regardless of how those pan out, the thrill of applying effort towards ones passions is exhilarating.  What could be more American?

Global Poverty in Decline

The Portly Politico3 Comments

Regular readers know that I frequently cite pollster Scott Rasmussen’s #Number of the Day series from Ballotpedia.  I do so because a.) his numbers often reveal some interesting truths about our world and b.) blogging is, at bottom, the art of making secondary or tertiary commentary on what other, smarter, harder-working people have thought, written, and done.

Yesterday’s #Number of the Day dealt with global poverty; specifically, Americans’ ignorance to the fact that global poverty has declined substantially over the last twenty years.  Indeed, global poverty has been reduced by half in that time.

I’ll confess I was ignorant of the extent of this decline, too, although it makes sense that poverty has decreased, especially when you consider the rise of post-Soviet market economies in Eastern Europe and China’s meteoric rise since the 1980s.

I suspect that the perennial culprit of the Mainstream Media is to blame, in part, for this ignorance, coupled as it is with progressive politicians.  The rise of “democratic socialist” candidates—as well as the lingering effects of the Great Recession—would have Americans believe that the global economy is in terrible shape, and that “underprivileged” parts of the world labor in ever-worsening poverty (so, let’s just move them all here—that’ll solve poverty!).

It’s refreshing to see that capitalism is working its economic magic, and people all over the globe are lifting themselves out of poverty.  If representative republicanism and strong civil societies can take root and flourish in more places, the ingredients will be in place for continued economic and cultural growth.

HSAs are A-Okay

The Portly Politico7 Comments

My Congressman, Tom Rice, sends out little e-mail updates on a regular basis.  In his latest newsletter, the South Carolina US-7 representative included a link to a video (below) of his statements before Congress about expanding Health Savings Accounts, or HSAs.

The gist of the proposal is to expand health-savings accounts to allow account holders to contribute more to them.  The current legal annual contribution (in FY2018) for a single individual is $3450, up from $3400 last year and $3350 the year before.  That comes out to $287.50 a month, which can be contributed pre-tax directly from an account holder’s paycheck.

The way the law is currently written, HSAs are excellent both to cover medical expenses before reaching your deductible (and, naturally, most HSA-compliant plans are high deductible ones) and to save and invest for retirement.  You can accrue a qualified medical expense today—say, a visit to the emergency room—and you can submit that receipt in a decade (or longer—there’s no apparent time-limit) to take out that amount.

To give a hypothetical:  let’s say you have a medical bill for $3000.  Yes, your annual contribution to your HSA could cover that.  But, let’s say you’ve built up a good emergency fund, and elect to pay the bill out-of-pocket through that fund.  In, say, five years, you need to tap your HSA funds for some reason.  If you’ve kept the receipt (and credit card statements help, too), you can file that with your HSA and withdraw the $3000.

Why go through the trouble?  Because many HSA administrators—including my own, HealthSavings Administrators—allow you to invest in mutual funds with your HSA contributions.  If you’re making an 8% annual return on those contributions, that $3000 today will be worth around $4100 in five years (investment math folks, please check my numbers; regardless, you get the point—money grows).

Alternatively, if you don’t tap that money for decades—and keep contributing—you’ll have a very nice retirement account growing tax-free for all those years.

My current health insurance carries a $6550 deductible—which I didn’t even come close to hitting in 2017 when I broke my left wrist, although it was still expensive—but I’ve accrued enough of an emergency fund that I could meet that expense should the need arise (I pray it doesn’t).  If my emergency fund were sunk into something else—say, a new car, or a less flood-prone house—then I could tap into my HSA contributions from the past few years.

And here is the other benefit of HSAs, the one that I’m sure Congressman Rice as in mind:  they help you reach your deductible, and bring some market forces to bear on healthcare costs.

I suspect that one of the culprits of high healthcare costs is the lack of transparency—no one knows how much anything costs, and everything is fungible.  When I broke my wrist, I received a hefty ER bill (about $3000) about four months after the fall (I don’t understand the delay on that; it seems like they could just tally it all up and print it out at the time of the accident).  I called the hospital, and they told they were “running a special”—if I paid in full that day, they’d knock HALF of the cost off the bill.  Because I’m an extreme budgeter and have an emergency fund, I could do it, and leaped at the “special.”

Most people don’t have enough money saved up to even meet a $500 emergency, but an HSA makes it more doable.  Even without an emergency fund, if an account holder were making monthly contributions, he’d be able to take advantage of such price reductions.

HSAs aren’t a magic bullet to bringing down healthcare costs, but they would go a long way to addressing the problem.  If we lived in a pre-Obamacare age, you’d be able to get a high-deductible, HSA-compliant plan for probably $50-100 a month, depending on age and health.  Even if you didn’t want to manage the money in various investments, the incentives to save—namely, the pre-tax benefit—are enough that many Americans would likely take contribute to their HSA.

When Secretary of Housing and Urban Development Ben Carson was running for president in 2015-2016, he proposed transferable, minimally-funded ($5000 at birth, I believe) HSAs be issued for all Americans.  The ability to transfer funds between family members and to grow that wealth over time would be huge.

Similarly, President George W. Bush proposed giving Americans the option to contribute their Social Security contributions into personally-managed investment accounts.  That would reduce the astronomical costs of that federal boondoggle and give Americans much greater returns on their investments.  Naturally, Democrats rejected that plan out of hand, and accused Bush of hating old people.  Yeesh.

The takeaway is this:  whether it’s in healthcare or retirement savings, the American people know best.  Yes, we’d need some additional financial education—which we desperately need anyway—but, c’mon, are you going to continue running the same inefficient, wasteful systems just because a small percentage of people won’t adequately manage their money?

Liberty works in nearly every arena, and it would work in healthcare and health insurance, too.  HSAs are the wave of the future, and I’m glad to see Tom Rice is championing them.

Trump’s Economic Growth Isn’t Due to Farm Exports

The Portly Politico4 Comments

President Trump has enjoyed massive economic growth since his election, much less his actual inauguration.  The latest economic growth numbers for Q2 put the annualized rate of growth at a whopping 4.1%.

Naturally, the progressive Leftists are grasping about for any explanation they can to account for this growth, or to downplay it.  One of the more novel proposals is that the only reason growth is so high is because farmers are rushing out their exports to other nations ahead of planned tariffs—and the retaliatory measures they will garner.

While I’m willing to concede these premature exports may account for some of the growth rate in Q2, I doubt very seriously that there are enough additional soybean exports to China in a three-month period to bump the entire economic growth rate by more than a fraction of a percent.

Consider all the factors at play here:  the 2017 tax cut, specifically to the corporate tax rate, created a yuge incentive to companies to repatriate dollars held overseas, and made American companies internationally competitive again (prior to the cuts, our corporate tax rate of 35% was one of the highest in the developed world).  The easing of pressure on corporate rates and individual income tax rates have boosted business and consumer confidence, and wages have increased as unemployment continues to fall.

Even before the passage of the tax cut, deregulation within the executive branch began stimulating the economy.  In his famous Gettysburg campaign speech, in which then-candidate Trump put forth his reform agenda for the United States, he promised an executive order requiring the removal of two regulations for every one new regulation written.  In classic Trumpian fashion, the President delivered—and then some:  in 2017, the Trump administration cut a whopping twenty-two regulations for every one regulation passed.

The one-two punch of deregulation and tax cuts has juiced the engine of the economy with rocket fuel, but the media loves to run with the narrative that it’s all smoke-and-mirrors, and we’re only enjoying this growth because a bunch of farmers rushed out exports early.

They push that story for two reasons:

1.) They can’t give Trump credit for anything positive

2.) It draws attention to the downsides of tariffs, and the cloying sentimentality of the farmer struggling under Trump

I have a great deal of respect for farming and the rural life, but these aren’t Nebraska homesteaders or Jeffersonian yeoman farmers we’re talking about.  Not that that matters—big corporate farms shouldn’t be punished for being big; I’m merely cautioning readers to take such rhetoric with a massive dose of soy (actually, pick something else; we don’t need anymore soy boys).  The mainstream media is going to spin this story in the most maudlin fashion possible.

Tariffs historically have hurt farmers, who often pay the price of tariffs both ways:  they pay more imported goods, and they struggle to access foreign markets competitively when they export their products.  And, as I wrote recently, I don’t think tariffs are without their costs.

That said, there’s no way Q2 GDP growth can be driven solely, or even mostly, by farm exports.  Further, it seems that such robust growth makes tariffs more affordable, in the sense that the United States can spare a few decimals of growth in exchange for greater protections of worker.

Finally, tariffs-as-bargaining-chip seems to be working.  China’s economy is in free-fall, and the Chinese have to eat.  Even with tariffs on US soybeans and other farm products, China needs what we’re growing more than we need what they’re churning out.

In short, stay the course, President Trump.  Rebalance our trade agreements, make the income tax cuts permanent, and keep regulations light.

TBT: Capitalism Needs Social Conservatism

The Portly Politico20 Comments

On Tuesday, I wrote about the “Human Toll of Globalization“—the dire consequences, both economic and moral, that befall a community when its primary economic engine is gutted through a naïve faith in unbridled free trade and globalization.  Another title for that piece might be almost a mirror of this essay’s from 2016:  “Civil Society Needs Cash.”

I don’t want to take that argument too far, though.  In the case of Danville, Virginia—and countless other American towns that have seen their prosperity flee abroad, or to bicoastal urban cloisters—a decaying economy wrought decaying morality, civil society, and civic pride.  That would suggest that prosperity, in and itself, cannot sustain true morality and virtue.

Indeed, as I argue in the essay below, “Capitalism Needs Social Conservatism,” excessive prosperity and material comfort breed a kind of moral complacency, what Kenneth Minogue likened to widespread Epicureanism (an excellent essay, and well worth reading if you don’t mind subscribing to The New Criterion, which is also worth the price).  Richard Weaver—one of my intellectual heroes—compared the material comfort of the then-mid-twentieth-century West to a drunk who, having grown addicted to alcohol, and requiring ever-greater quantities of it, no longer has the capacity to obtain the very substance he craves.

Milton Friedman famously argued that economic liberty is a necessary precursor to political liberty.  Similarly, I would argue that morality and virtue are necessary pillars to sustaining economic liberty for any length of time.  Indeed, George Washington argued that religion and public morality were “indispensable” to a self-governing republic.

In my mind, the orthodox libertarian (in the political sense, not the “free-will” libertarianism of the free-will-versus-determinism debate in modern philosophy) commits the same error as the orthodox Marxist in relying too much on economic analysis of behavior.  The idea of the “rational man” or “man as a rational animal” is a uniquely modern concept, and while Westerners have tried hard to shoe-horn themselves into that mold, the inner, teeming depths of our souls are still pre-rationalist.  We need God, and we still live according to symbols, rituals, and virtues.

As I wrote in 2016, “Without moral common ground and shared values that stress self-control, liberty rapidly turns to libertinism.  Libertinism without a great deal of wealth leads to shattered lives, which in turn wreck families and communities.”  I’ll explore these ideas further in my upcoming eBook, Values Have Consequences.

***

For the past week, I’ve written about the decline of the nuclear family, with follow-up posts about divorce and sex education, and about the negative impact of the of the welfare state on family formation.  These post have generated some wonderful discussions and input from followers, and I’ve been surprised by their popularity.

As I wrote in “Values Have Consequences,” I’m devoting Friday posts to discussions of social conservatism.  Social conservatism is increasingly the red-headed stepchild of the traditional Republican “tripod” coalition that also includes national security and economic conservatives (with the rise of Trump, populist nationalism could count as a fourth leg).  Politically, this marginalization makes some sense, as it’s not likely that fifty or sixty years of cultural attitudes and values will be changed at the ballot box.

Nevertheless, social conservatism is an important leg of the tripod.  Indeed, I would argue that the three coalitions are not at odds, but create logical synergies that allow each leg to stand.  The stool is much more stable when the three legs work together.

Economic conservatism–by which I mean the belief that freer markets, fewer and lighter regulations, and lower taxes, or what is more properly called neoliberalism (after the classical liberalism of the 18th-century thinkers like Adam Smith)–is wonderful and hugely important.  It’s led to massive gains domestically and globally, lifting untold millions off people out of poverty.  It allows people to enjoy a greater variety of goods and labor-saving devices, and provides more leisure time (and plenty of things to do during that time).

But free markets unmoored from guiding principles, strong and stable institutions, and the rule of law can morph into mindless Mammon worship.  Without a shared sense of trust and belief in human dignity, capitalism becomes cold and abstract.

Further, full-fledged economic liberalization without the limiting principles applied by constitutionalism and a morality supported by strong families and a robust civil society can lead to socially-destructive disruptions and behaviors.

As I’ve argued many times, making mistakes or bad choices is the necessary price of liberty.  But for self-government to work effectively–and to avoid social instability–a healthy dose of social conservatism is the best medicine.

Former Arkansas Governor Mike Huckabee wears the most socially conservative outfit ever; later, he played bass on Fox News.
(Image Source:  https://en.wikipedia.org/wiki/File:Huckabeemike.JPG; photo by Craig Michaud)

To offer an illustration from recent history, contrast the post-Soviet experiences of Poland (and most of Eastern Europe) with that of Russia.  Despite decades under Communism–an ideology that was aggressively atheistic, stressing loyalty to the state and Communist Party over all else–Poland roared back into the West.  It adopted neoliberal (modern conservative) economic policies, and was one of the few European nations not to suffer severely during the Great Recession.

Russia similarly adopted “shock therapy” after the Soviet Union collapsed for good in 1991.  Rather than experiencing a huge economic boom, however, well-connected former Communists and others close to the old regime made off like bandits, leaving most Russians left holding the bag.

What’s the difference?  For one, the Russians lived under Communism for nearly a generation longer than the Poles, meaning there were several generations of downtrodden, state-dependent Russians by the time the USSR collapsed.  Many of these Russians were unable to adjust to a free-market system after living in a closed economy for so long.

Another key difference–and one that I think is extremely significant–is that Russians lost any scrap of civil society they might have possessed prior to the Bolshevik takeover in late 1917.  Civil society–the institutions between the basic family unit and the government, like churches, schools, clubs, civic organizations, etc.–was automatically preempted when every club, organization, or activity became part of the Soviet government.  The severely crippled (and, as I understand it, collaborationist) Russian Orthodox Church was unable or unwilling to push back against Soviet rule, providing little in the way of a spiritual alternative to the totalizing influence of Communism.

“[F]ree markets unmoored from guiding principles, strong and stable institutions, and the rule of law can morph into mindless Mammon worship.”

Poland, on the other hand, managed to maintain its deep Catholic faith.  The Catholic Church as an international organization (and with powerful, influential popes, most notably the Polish anti-Communist John Paul II) could never be wiped out completely by Soviet Communism.  Further, the Poles formed the Solidarity trades union movement, which offered an alternative to official Communist organizations.

Thus, after the dissolution of the Soviet Union, Poland emerged with a strong civil society anchored in a richly Christian worldview and ethic.  The shared sense of morality–one that stresses mutual respect, the dignity of human life, and the importance of honesty–allowed the complex deals and uptempo economic exchanges of capitalism to occur smoothly and rapidly.  From these civil and religious values came a firmer grasp of and respect for the rule of law, making predictable economic activity and long-term planning possible.

Russia, on the other hand, devolved into a fast-paced, nationwide run on the national cupboard.  Those with good connections grabbed whatever public funds and goodies they could.  Normal Russians couldn’t figure out why their government checks and free lunches stopped coming, and couldn’t understand why (or how) to pay taxes.  With the collapse of the Soviet Union, all civic organizations ceased to exist, because they were all part of the Soviet government.  Without any civil society or other enduring institutions to model good behavior and to stress and enforce moral values, Russia struggled–and continues to do so–to adapt to global capitalism and democracy.  Not surprisingly, they’ve turned to a dictatorial strongman for guidance.

***

What of the American context?  As I’ve written before, I’m skeptical of full-fledged libertarianism–what I would broadly define as the marriage of economically conservative and socially liberal views–because it fails to acknowledge the need for strong moral values to uphold its own economic assumptions.  Liberty and self-government can only really work when coupled with self-imposed order and restraint.  Without moral common ground and shared values that stress self-control, liberty rapidly turns to libertinism.  Libertinism without a great deal of wealth leads to shattered lives, which in turn wreck families and communities.

Eventually, unbridled, unchecked lasciviousness–even among (formerly) responsible adults–results in social chaos, requiring a dwindling number of hardworking, honest, and thrifty individuals to pay for the ramifications of poor moral choices that have been magnified many times over.

“[L]ibertarianism… fails to acknowledge the need for strong moral values to uphold its own economic assumptions.  Liberty and self-government can only really work when coupled with self-imposed order and restraint.”

Capitalism’s blessing of unparalleled abundance is also a potential curse.  Without a strong civil society that stresses good moral values–and without proper historical perspective–it becomes easy to take that abundance for granted.

That abundance also allows, for a time, more and more individuals to pay for the price of bad decisions.  Prior to the modern era, few people were wealthy enough to risk the negative consequences of immorality.  Now, Americans and Westerners enjoy a level of material comfort and well-being that can absorb at least some of the unpleasantness of questionable choices.  Over time, however, that security breaks down.

Richard Weaver likened the situation to an alcoholic who is so addicted to his drink, he’s unable to do the work necessary to pay for his addiction.  The more he needs the alcohol, the less capable he becomes of obtaining it.  Likewise, the more individuals become addicted to luxuries, the less able they are to work hard to maintain them.

To avoid the fate of Weaver’s drunk, we must recognize the importance of social conservatism.  While we should maximize individual liberty as much as possible, and within the bounds of the Constitution, we should also stress the moral and religious underpinnings that make that liberty both possible and responsible.