May 5, 2021 at 4:11 p.m.

Slouching toward Socialism

Slouching toward Socialism
Slouching toward Socialism

America is in full-fledged crisis these days - actually there are two crises - but in truth one is given all the attention while the one most dangerous to our national well-being isn't being fully reported.

The first is the woke culture that is the siren call of the mainstream media. The problem with "wokeness" is that, by definition, being woke means your consciousness has been raised to a higher understanding that is always conveniently rooted in liberal or leftist ideology.

If you're on the right, you ain't woke, and that is the key to understanding the massive trend toward censorship today. Only the woke deserve to speak.

Wokeness as a totalitarian character flaw deserves analysis all its own, but the other and more important crisis to talk about now is economic in nature - the growing labor shortage that could soon cripple daily life far more so than a riot born out of cancel culture, bad as the latter is.

Most immediately on the horizon is the specter of Main Street collapse across the United States. Small businesses were pummeled by economic lockdowns last year, and now they face a double whammy - they can open this year, and there is plenty of demand, but they find their returning opportunities hobbled by a lack of workers.

And make no mistake: The wreckage of Main Street that is fast approaching is being replaced by the smoothly paved avenues of welfare dependency, housed in the collective we call Big Government. These days government itself is the principal driver of the socioeconomic rerouting going on.

The carnage that will be the economy if small business collapses - and most of the job creation those businesses provide with it - is but the tip of the iceberg. For example, our article today reports about very real concerns that a shortage of truck drivers could lead to a lack of gasoline this summer - and to long lines at the pump.

But if the labor shortage continues, gas is not the only shortage coming. There could be food shortages, for example, and that can, as we have seen in the past, quickly lead to civil frustration, if not unrest. These shortages, mind you, won't just be transportation derived but could come about if facilities can't find enough workers to ramp up production to meet demand.

Indeed, grocery shoppers have already been treated to emptier grocery shelves during last year's lockdowns. Most, except for absolute shortages in toilet paper and paper towels and the like, weren't really shortages as much as they were brand reductions. Retailers scaled back brand choices by limiting options to two or three.

But supply chain shortages driven by a lack of labor could produce real shortages in critical goods and services. Canned soup and corn, yeast, flour, meat and poultry - all are areas where shortages are major concerns, and that's just in the food sector.

Of course with shortages come not just the disruption of our quality of life but the threat of even more long-term damage caused by inflation. Inflationary indicators are everywhere, and any number of companies across a broad spectrum of industries are warning that supply and labor shortages are likely to lead to higher prices. The inelasticity of current inventory is apparent in lumber and steel and cotton, and consumer demand is rising in all those sectors.

All this means higher prices, and the question is where the peak mark is. This week Bloomberg is reporting that its Commodity Spot Index has risen to its highest level in almost a decade, pushing global manufacturing prices to their highest levels since 2009, and U.S. producer prices to levels not seen since 2008.

JPMorgan analysts also estimate non-food and energy import prices in the biggest economies rose almost 4 percent in the first quarter, the most in three years, Bloomberg reports.

Some believe the price increases are temporary, but no one knows for sure, and the wide open spigot of government spending could cause interest rates to rise, and prices even more with them. What's worse, many businesses aren't betting that higher prices for raw materials are temporary and are already passing costs on to consumers.

All of this tracks back, in part, to a massive outpouring of federal cash that, in various forms of "free stuff," is slowly putting more and more Americans on the dole. With little incentive for workers to return to work, the government-driven economy will keep demand high, labor supply low, and inflation in the clouds. It is imperative not to understate the impact of transformative welfare programs now being implemented and/or proposed.

Add to that government efforts to recoup some of its "investments" through higher taxes on the wealthy, which will boomerang with less investment in the economy and even higher prices for consumers.

So just how much is the government spending, exactly? The blueprints haven't been finalized, but here's what the Biden administration wants to do: In addition to the $1.9 trillion dollar Covid relief already enacted, the president wants to spend $2 trillion more on infrastructure and then $1.8 trillion more in "transformational investments" in his American Families Plan - in other words almost $6 trillion in the first 100 days of his administration.

The intent, as The Wall Street Journal put it this past week, is to create a cradle-to-grave government.

It sounds good, except for the grave part, except for one thing: Such systems do not work.

One example is Venezuela, the poster child for socialist failure. President Hugo Chavez engineered an aggressive government takeover of the economy centered around nationalization and wild welfare spending, and promptly drove the nation into the ground.

A better comparison might be Israel of the 1970s and 1980s, which was founded on the collective principle that market forces would be corralled by the government for the good of the people. Socialism, in other words.

In its early decades, companies were state-run, collective farms known as kibbutzim produced the nation's agriculture, there was almost universal union membership. For a while after World War II, the country was one of the most prosperous in the world.

Of course, the globe's post-war economic boom and international aid was camouflaging a system that wasn't really sustainable, and the 1967 Mideast war further propped up an unworkable system. Beginning in the late 1960s, though, the socialist dream turned into a nightmare as growth flatlined, unemployment soared, and inflation aimed for the stars.

As a Heritage Foundation analysis by historian Lee Edwards points out, things had become untenable by the late 1970s. The government, which controlled 76 percent of the economy, kept borrowing and spending, and inflation went along for the ride, averaging 77 percent for 1978-79 and reached a peak of 450 percent in 1984-85.

Put into contemporary context, say hello to the Biden blueprint for America.

Ultimately, Ronald Reagan and the U.S. bailed Israel out, in exchange for abandoning socialism for free markets, Edwards observes. Within a year, he wrote, inflation tumbled from 450 percent to just 20 percent, a budget deficit of 15 percent of GDP shrank to zero, labor's economic and business empire disappeared along with its political domination, and the Israeli economy was opened to imports.

Put into contemporary context, that might also be known as the Trump blueprint for America.

Unfortunately, the U.S., despite all the history lessons it could possibly want, is headed in the direction of socialist Venezuela and socialist Israel and not in the direction of the Trump economy.

And also unfortunately, there isn't going to be a U.S. to bail the U.S. out, as we did with Israel, though China might be willing to deal if we agree to give up the U.S. Constitution. Uncle Joe doesn't like it anyway.

Fortunately, though, there is still time to avert disaster. That would mean abandoning cradle-to-grave policies in favor of a free-market economy that was strong under Trump until the politics of Covid-19 undermined him. The way back to prosperity is none other than the path we traveled before the surreal past year - less government, less taxation, less regulations, not neoliberalism, not leftist command control, and certainly not a cradle-to-grave system that suffocates individual enterprise.

If there are to be government incentives, they should be incentives to work, not to not work.

Perhaps the best incentive the government could provide would be just to get out of the way. The short-term sugar cane Biden wants to provide cannot provide for long-term prosperity, but it can and will sap us of our ambition and energy.

Let's not slouch toward socialism, but march again on the path we were taking in 2019, when the nation was prosperous, when people were better off than they had been in years, and America was becoming great again.

Comments:

You must login to comment.

Sign in
RHINELANDER

WEATHER SPONSORED BY

Latest News

Events

July

SU
MO
TU
WE
TH
FR
SA
29
30
1
2
3
4
5
6
7
8
9
10
11
12
27
28
29
30
31
1
2
SUN
MON
TUE
WED
THU
FRI
SAT
SUN MON TUE WED THU FRI SAT
29 30 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31 1 2

To Submit an Event Sign in first

Today's Events

No calendar events have been scheduled for today.