Principled Perspectives: September 2021

Wednesday, September 29, 2021

No, Covid Relief Spending Didn’t Lift ‘millions of Americans out of poverty last year.’

The word is circulating that the massive COVID relief spending of the past year and a half has pulled the poverty rate down, lifting millions out of poverty. Ricardo Alonso-Zaldivar reports for the Associated Press:

Massive government relief passed in response to the COVID-19 pandemic moved millions of Americans out of poverty last year, even as the official poverty rate increased slightly, the Census Bureau reported Tuesday.

The official poverty measure rose 1 percentage point in 2020, with 11.4% of Americans living in poverty, or more than 37 million people. It was the first increase in poverty after five consecutive annual declines.

But the Census Bureau’s supplemental measure of poverty, which takes into account government benefit programs and stimulus payments, showed that the share of people in poverty dropped significantly after the aid was factored in.

The supplemental poverty measure was 2.6 percentage points lower than its pre-pandemic level in 2019. Stimulus payments moved 11.7 million people out of poverty, while expanded unemployment benefits kept 5.5 million from falling into poverty. Social Security continued to be the nation’s most effective anti-poverty program.

And it is being cited by the Democrats as justification for its drive to massively increase and expand the welfare dependency state. The New York Times front page headlines U.S. Poverty Rate Falls To a Record Low as Aid Helps Offset Job Losses. Success of Pandemic Relief Could Bolster Democrats’ Bid for an Expansion.

But how does one define “success?” If it means giving people a temporary financial lifeline after the mostly government-imposed shutdowns crushed their livelihoods, then I guess in that sense one can call that successful. But actually lifting people out of poverty?

True, forced government wealth transfers from people who earned it to people who didn't can create a statistical illusion of alleviating poverty. But so can any common looter.

And since these transfer programs are funded by seizing earnings from productive people, all they do is pull more people down into poverty, properly defined. As Ayn Rand, in her eloquently understandable way, foresaw in the onset of the welfare state 5 decades ago:

Morally and economically, the welfare state creates an ever accelerating downward pull. Morally, the chance to satisfy demands by force spreads the demands wider and wider, with less and less pretense at justification. Economically, the forced demands of one group create hardships for all others, thus producing an inextricable mixture of actual victims and plain parasites. Since need, not achievement, is held as the criterion of rewards, the government necessarily keeps sacrificing the more productive groups to the less productive, gradually chaining the top level of the economy, then the next level, then the next. (How else are unachieved rewards to be provided?).5

My emphasis. The failed history of the 1960s Great Society "War on Poverty" is proof of that. Even by proponents own standards, the welfare state—aka, “social safety net”— has failed. Said Andre Perry, senior fellow in the Metropolitan Policy Program at the Left-leaning Brookings Institution,

“We haven’t seen a shift like this [Democrats Covid relief bill] since FDR. It’s saying families are too big to fail, children are too big to fail, the elderly are too big to fail. It’s a recognition that the social safety net is not working and was not working prior to the pandemic.”

My emphasis. If it hasn’t failed, then why, after more than half a century and untold $trillions in welfare spending, is poverty still near the top of the political agenda, especially of the Left. Worse, why do Democrats’ welfare schemes keep climbing the economic ladder, cutting ever deeper into what we once called “the middle class?” If it has failed, then what’s the logic of doubling down on a 55-year failure?

Why, indeed?

Properly defined, in my view, poverty is the state of not earning enough to provide for one's basic necessities and well-being. The only true way to alleviate poverty is to work your way out of it. Those millions may have been "moved" out of poverty, statistically. But they didn't work their way out. Without continued dependence on those who still produce, they are right back to where they started—poor—because poverty is a state that they never really left.

The greatest champions of the poor are business entrepreneurs and innovators who make the investments in machines and work processes that raise worker productivity. They are the heroes—if I can use that overused word accurately—creating opportunities for people to rise out of poverty with honor and dignity.

The welfare statists are not interested in alleviating poverty, of course -- if they ever were. If they were, they would expand the opportunities for such innovation by reducing the regulatory burden on business and entrepreneurship and the tax burden on all workers at every income level—including the indirect tax on workers and consumers that is the corporate income tax—thus minimizing the “need” for transfer payments.*

They won't, because their aim is to expand the permanent welfare poverty class to as many as possible, and keep doing so until dependence poverty swallows up the middle class. As Ayn Rand has observed, “The politicians who implement the welfare state and the intellectuals who advise them are the crucial invisible profiteers on this system, because of the power over others it gives them.

Universal poverty is the only societal state that can result from steadily disincentivizing productive work and expanding parasitism. This, of course, is the economic history of socialism.

* [“Minimizing” from the welfare state perspective. In fact, forced government wealth transfer, sometimes called “redistribution,” is immoral and never justified by need.]

Sunday, September 26, 2021

The Star-Ledger’s Medicare/Prescription Drug Misinformation Campaign

The New Jersey Star-Ledger ran an editorial titled No, Andy Kim is not coming for your Medicare.

A dark money group is running a scaremongering ad campaign against N.J. Congressman Andy Kim, suggesting that he wants to cut Medicare to pay for the $3.5 trillion Democratic spending plan.

Sign a petition to oppose this, it blares – “Lives depend on you today.”

Be aware: This is a scam. The claim is pure nonsense. The $3.5 trillion plan doesn’t cut Medicare, it enhances it by adding coverage for dental, hearing and vision. And it covers the cost of this by negotiating lower prices for prescriptions.

Political ads can be misleading. But the issue here is empowering Medicare to “negotiate” prices with pharmaceutical companies for prescription drugs the government agency buys. The Star-Ledger goes on to support that proposal.

But the editors ignore crucial context.

First, Medicare is not just another prescription drug buyer, like private insurance companies. Medicare has a government-enforced monopsony over the senior prescription drug market, stemming from its monopoly over most of the 65+-years-old healthcare market for seniors.

Second, Medicare is part of an institution, the federal government, that has life-and-death control over which drugs get approved, and the companies that produce them. Theoretically, Medicare is independent from the FDA, which has that power. But what’s to stop FDA bureaucrats from communicating with Medicare officials? What’s to stop implicit threats by Medicare negotiators regarding approval of unrelated experimental drugs under FDA review from entering into negotiations with pharmaceutical companies? Then there is the IRS and the antitrust powers of the federal government.

The idea that there can be fair and just negotiations between a private company and the federal government, an institution with so much coercive powers over private business, is a joke. Such
“negotiations” would be akin to a speakeasy “negotiating” protection money fees with the Al Capone organization during Prohibition.

There is also the double-talk about high prescription drug prices. The Star-Ledger ignores the role of the FDA itself in making drug approvals so expensive. If COVID-19 has given us lessons, there is no more consequential lesson to be learned than that the costly drug approval process can be dramatically cut. Rather than give the Medicare monopsony the power to “negotiate” drug prices -- which is really just another term for price controls -- the Star-Ledger should urge major reforms to the Food and Drug Administration.

The Star-Ledger ridicules the idea that Medicare “negotiating” power would hamper and disincentivize cutting edge drug research. But the FDA already does that. Empowering Medicare to effectively force drug prices down after the FDA forced them up to begin with would just further cripple drug development.

The Star-Ledger writes, “because the government has no power to negotiate, it must pay whatever drug price the industry charges, a cost that gets passed down to consumers.” Well, it shouldn’t have that power. That power stems from Medicare’s monopoly power, in which government officials muscle their way in between drugmakers and their consumers. This cuts out the best regulator of drug prices, the interaction between producers and consumers. That’s fundamental economics. Free markets are missing in the senior prescription drug industry.

There are very good reasons why, more than half a century after the formation of Medicare, Medicare still can’t negotiate prices. And it’s not the Star-Ledger’s childish blaming of “Pharma fearmongering.” There are real risks to freedom and health in Rep. Kim’s scheme.

Pharma Can’t ‘Bargain’ With a Medicare Monopsony

Pharmaphobia: How the conflict of interest myth undermines American medical innovation—Thomas P. Stossel

The Cure in the Code: How 20th Century Law is Undermining 21st Century Medicine—Peter W. Huber

New NJ Reg Would Cut Doctors Off From Information and Curb Commerce

Drug Advertising: New Zealand and the USA are Right, and the Rest of the World is Wrong

Merck- Villain or Victim?

Huber on the Personalized Medicine Revolution—and the Government Roadblocks

How the FDA Violates Rights and Hinders Health—Stella Daily Zawistowski

Close the FDA’s “Loopholes” of Statism, not Freedom

On Mylan’s EpiPen Pricing Controversy

Thursday, September 23, 2021

QUORA: ‘Why do Democrats contend that Republicans benefit from low voter turnout? Where is the evidence for that?’

I posted this answer:

For as long as I can remember -- and that’s a long time -- so-called conventional wisdom has held that high voter turnout is bad for Republicans. It turns out, the evidence refutes that myth. The 2020 election exploded that conventional wisdom convincingly.

As the New York Times’s David Leonard reported on 12/23/21, On the Myth that High Turnout Benefits Dems,

In 2020, turnout soared, yet Democrats did worse than expected. Yes, they defeated Trump, but they failed to retake the Senate (for now) and lost ground in the House and in state legislatures.*

The Associated Press made the point that lower turnout may even hurt the Republicans as much as, or more than, the Democrats, noting:

In Iowa, 76% of eligible voters cast ballots last November, among the highest rates in the nation, as Republicans swept races up and down the ballot. Trump easily won the state in what had been expected to be a close race, Republican Joni Ernst won reelection to the U.S. Senate, and Republicans flipped two U.S. House seats with no major problems or fraud reported.

In an article for Commentary, Republicans, Stop Believing Your Own Election Myth, Chris Stirewalt observes that high turnout does not favor Democrats, and provides several examples to back up the claim:

Both sides attribute President Biden’s victory to this increased turnout, but this is probably false. In their book The Turnout Myth, political scientists Daron Shaw and John Petrocik put to rest the old saws about the subject. In 2006, Democrats swept in a low-turnout vote, but they got crushed in the midterms four years later when turnout increased dramatically. Turnout climbed from 2000 to 2004—but Republicans performed better at every level. Like those cycles, 2020 offered no evidence that bigger is bluer. Even as Biden was winning, Republicans defied expectations, gaining House seats and keeping a lock on statehouses across the country. It was not a blue wave that swept Trump from office. Rather, it was the nudge from moderate voters in the suburbs of big cities in swing states. Nor was it mail-in voting that made the difference. A study from Stanford’s Institute for Economic Policy research presents very strong evidence that mail-in voting itself did not drive the turnout surge, nor did it constitute any significant partisan advantage.

Jon Ward makes the same point for Yahoo News, adding:

And this gets to the second major implication of the turnout myth: Republican fears [that] a more diverse country [favors Democrats] appear to have been largely unfounded.

The 2020 election was a perfect example of this. The GOP lost the presidency but won most of the competitive U.S. Senate races and gained seats in the House. It also did much better in state legislative races than expected.

And while we’re at it, let’s take a look at another myth that got tarnished in 2020 -- that the Democrats have a lock on the urban vote. As The Washington Post reported, Trump wasn’t just a rural phenomenon. Most of his supporters come from cities and suburbs:

Folks who talk about President Trump’s rural base are missing something.

Are rural Americans Trump voters? Yes, many of them. Trump voters outnumber voters who supported Joe Biden 2 to 1 in rural counties.

But are all Trump voters rural? Absolutely not. Voters in rural America accounted for less than a fifth of all votes cast for him.

Biden won a bit more than half of the urban vote, but it wasn’t a blowout victory — Trump had urban majorities in 21 states.

For the record, I do not have a political ax to grind here. I am an Independent not just as a registered voter but also philosophically.

* The Democrats eventually won two Georgia’s two senate seats in a January runoff, giving them a tie in the Senate and effective control. But I believe it highly likely that Donald Trump’s voter fraud conspiracy rantings against Georgia’s election process discouraged enough GOP voters from voting that he swung that election to the Democrats.

Monday, September 20, 2021

When Private Media ‘Colludes’ With Government, Blame the Government, Not Media: The Dollar is No Match for a Bullet.

There is a line of thought developing that holds that if social media companies restrict content that the government wants restricted, there is fascist collusion going on. Consequently, private social media companies should be subject to civil or criminal sanctions for anti-First Amendment violations.

As Lori Roman and Naomi Wolf write in Left and Right Should Unite to Stop Censorship for The Epoch Times

We, a former advisor to President Bill Clinton’s campaign and a former member of the George W. Bush Administration, may not agree on many public policy issues. Figuratively speaking, we wear different colored hats. But we have joined together to sound the alarm against censorship.

Viewpoint censorship threatens to destroy the country as it was intended to be—a beacon of freedom of speech, religion, and assembly. The First Amendment protects citizens from the government controlling speech, and the principle of free speech permeates our founding principles.

Just last week, the White House press secretary bragged that the Biden Administration is working with social media companies to flag speech they find unacceptable. They label it “misinformation” while a better description would be “inconvenient information.”

Corporations may think they are free to censor speech because the First Amendment was written to constrain government, but when they conspire and collude with the government to censor, they have crossed the line and left themselves open to litigation that could destroy their companies.

But this is very dangerous thinking. It assumes that Facebook et al are on equal footing with the government. That is entirely false. The government has a legal monopoly on the use of physical force -- the power of the gun. Facebook has no such power. It only has the market power of voluntarism -- the power of the dollar.

To equivocate Facebook with the Biden Administration is a grave injustice. The New York Times reports how Joe Biden “has assembled the most aggressive antitrust team in decades,

stacking his administration with three legal crusaders as it prepares to take on corporate consolidation and market power with efforts that could include blocking mergers and breaking up big companies.

Antitrust not only empowers the government to block mergers and dismantle private companies, but also to levy ruiness fines and even jail executives. What chance does Facebook have against that kind of power? Yes, it can fight in court. But there is no realistic defense against undefined accusations, like “intent to monopolize.” Ultimately, government wins because it has, through antitrust, arbitrary, undefined, unlimited powers -- not to mention unlimited resources.

Let’s take a look at a recent example of how this mismatch between private companies and the government. President Biden has pressured social media to take down so-called “misinformation” about the COVID-19 vaccines. As Jacob Sullum writes in Joe Biden Is Trying to Impose Online Censorship by Proxy for Reason, “The administration’s public pressure campaign against COVID-19 ‘misinformation’ cannot be reconciled with its avowed respect for freedom of expression.”

President Joe Biden wants to suppress speech that discourages Americans from being vaccinated against COVID-19. Because the First Amendment does not allow him to do that, he is asking Facebook and other social media companies to do it for him.

Or at least that's the way White House Press Secretary Jen Psaki, who calls the Biden administration's demands for speech restrictions "our asks," describes the situation. But given the federal government's power to make life difficult for Facebook et al., the line between a request and a command is hazy, and so is the line between private content moderation and government censorship.

Psaki's assurances are hard to take seriously given the public pressure that the Biden administration is applying, its ability to launch litigation and support legislation that hurts social media companies, and its threat of "legal and regulatory measures." If those companies do what the president wants by cracking down on speech he does not like, they will be acting as the government's agents.

Emphasis is mine. Of course, a private company has a right to its political opinion. If it wants to help the Biden Administration advance a particular viewpoint about vaccines, it has as much right to take a political position as you or I have. It has as much right to ban what it considers “misinformation” on its platform as a lecture hall owner has to ban it in their venues or, for that matter, you or I have to ban it in our homes (although that would violate their stated purpose of fostering free expression and likely be commercially harmful over time).

But that’s not what’s going on with the alleged “collusion” charges levied by the likes of Lori Roman and Naomi Wolf. These private companies literally have a governmental gun to their heads. New Jersey Representative Tom Malinowski captured the essence of this fact when, in support of his proposed Protecting Americans from Dangerous Algorithms Act, which is intended to force companies to reign in “extreme left-wing”--and right-wing--“ideas,” he warned, “And if they don’t do it voluntarily, we’re going to have to regulate them to death.” If a sitting congressman can get away with such overt public threats, we can only imagine what's going on behind the scenes.

I've been warning about censorship-by-proxy for a long time. The politicians can't directly censor, because of the First Amendment. But they have a powerful backdoor weapon, the regulatory state. Politicians can "arm twist" companies into submission by threatening regulation, in particular antitrust enforcement. The antitrust "laws" are particularly powerful. They're not really laws. They are unAmerican statutes that grant government arbitrary power, the tool of authoritarianism. Antitrust gives politicians power to prosecute any business for anything, at any time, at will. And it's a powerful tool for politicians to pressure private entities to do its bidding. Antitrust is Al Capone "politics," not law. Given that politicians of both parties are already threatening social media companies with antitrust, how much choice do they have to resist the political demand to censor their users? After all, the only power companies have is voluntary market, or economic, power. The government has the coercive power of law. Facebook’s dollar is no match for the government’s bullet.

This demonstrates the integral nature of rights, in which intellectual freedom depends on economic freedom, and vice-versa—and both depend on political freedom. It also shows how individual rights depend on grasping the crucial distinction between economic and political power, or what philosopher Harry Binswanger symbolizes as The Dollar and the Gun. This case shows how economic controls are used to crush other freedoms, like free speech. Intellectual freedom is not possible without economic freedom. Roman and Wolf call this “collusion” “indicative of America’s freefall into fascism.” Yes, it is fascism. But don't blame the social media companies. They are victims of the government’s fascist attack. Blame the government, which holds the power of the gun—a power that neither Facebook nor Twitter nor any private company possesses. The Italian government of Benito Mussolini, the original fascist, explains in “the ninth declaration of the Charter of Labor,

The intervention of the state in economic production takes place only when private initiative is lacking or is insufficient or when political interests of the state are involved. Such intervention may assume the form of control, assistance, or direct management.

Fascism can only be initiated by the state. Private entities, in and of themselves, by definition cannot initiate fascism under a proper, individual rights-securing constitution. We need to understand this distinction. Our freedom depends on it.

Friday, September 17, 2021

On This Constitution Day, Remember the Declaration of Independence

234 years ago, on September 17, 1787, the Constitutional Convention ended and the Constitution of the United States of America was signed. This day is officially known as Constitution Day.

It was also an occasion for one columnist to declare that the US Constitution is "broken." The New Jersey Star-Ledger's Tom Moran wrote five years ago:

Kids in America are taught to venerate the Constitution, almost as if it were the word of God.

And that’s exactly what Thomas Jefferson feared. He believed it was flawed, that experience would teach each generation new lessons and that it should be redone every 19 years.

But Jefferson lost the argument. And so the Founders signed a Constitution 225 [230] years ago tomorrow that is an impregnable fortress, firmly set against the forces of change that Jefferson welcomed and almost impossible to amend.

Does that make sense? Haven’t we learned valuable lessons over the past few centuries about how democracies thrive, and how they stagnate? In a day when our federal government is so dysfunctional, shouldn't we at least consider fundamental changes?

University of Texas Professor Sanford Levinson is advocating a series of such fundamental changes to the US Constitution, which Moran discusses in his column. Levinson's proposals include instituting a direct popular vote for president and measures to greatly weaken the checks and balances that limit the power of any one branch of government. In essence, Levinson's purpose, according to Moran, is to expand the power of majority rule and break Washington's political "gridlock," which has made our federal government "dysfunctional."

Moran approvingly cites Thomas Jefferson who, as Moran strongly implies, would welcome these constitutional changes, or any changes suited to any generation.

Before we discuss ways to expand the power of electoral majority rule so as to enable the government to get more "done", we need to have a conversation about what the government's proper job it is to do.

The American constitution's basic function is to limit the government's power to the protection of individual rights. This is spelled out in the Declaration of Independence, the philosophical blueprint for the constitution. Any discussion about the constitution has to begin with the Declaration--which, incidentally, was written by Thomas Jefferson:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. . .

In its essentials, this 55 word statement of proper government says:

Rights are held equally and at all times by all people.
Rights belong inextricably to the individual by virtue of his nature as a human being.
Rights are guarantees to freedom of action; to the pursuit of happiness, not to happiness guaranteed by the labor or wealth of others.
Rights precede government.
Government is created exclusively to “secure”—i.e., protect—rights, not to grant them by legislative decree.
Government’s “just powers” being authorized by the people, through a popular vote.
“Just powers” being those powers, and only those powers, required for the government to fulfill the purpose for which it was created to begin with—to legally protect the people’s unalienable individual rights to life, liberty, and pursuit of happiness.

First come rights. Then comes government. Then comes the right to vote. Of course, this is not the "Word of God," to be accepted uncritically. Each of these points requires extensive philosophical backup. None of these "truths" are in fact "self-evident." They must be learned and validated scientifically; i.e., morally and philosophically, as determined by the observable facts of reality concerning man and his requirements for survival and flourishing. And they were—by the Founding revolutionaries. But these are the essentials, as I see it.

The Founders did not intend to create a democracy, despite Moran's devious attempt to smuggle in that premise. They created a constitutionally limited republic protective of the liberty and rights of the individual, under which the constitution "carefully limits the power of the majority by drawing a legal boundary around it" (P. 113)—a boundary that stops majority and elected officials' power where individual rights begin. The Founders understood that the government presupposes individual rights. So the constitutional discussion must begin with the questions: What are rights, and what is the proper function of government?

As the Declaration states, every individual is "endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness." Since productive work is the only means of sustaining one's life and achieving happiness, it's obvious that the Founders understood--including in Jefferson's own words--that property rights are among those rights. The Declaration then states "That to secure these rights, Governments are instituted among Men." Rights—which in fact are not endowments by either nature or God but moral principles derived from observations and facts about human nature—are sanctions to freedom of action in a social context, not a claim on the lives and property of others or a government guarantee of material well-being and happiness. Notice that the constitution does not authorize the government to redistribute private wealth.

Moran is wrong. America hasn't stagnated. It has "progressed" from what was a largely free country a century ago to a burgeoning regulatory welfare state—a dangerous regressionary trend unsupported by constitutional authority. Why? Because the fundamental principles upon which the constitution rests have been largely abandoned, opening the door to the piecemeal progression toward unlimited majoritarian rule, a manifestation of totalitarianism. Consequently, our best short-term protection against further encroachments on individual rights--and it's a weak protection--is political gridlock. I can't think of anything more dangerous to America's future than to begin tampering with the basics of the constitution in today's cultural environment. Before we consider unshackling majority rule, we must rediscover our Founding principles, roll back the regulatory welfare state, and provide ironclad guarantees that no one's rights be alienated by majority vote; i.e., respect the original intent of the constitution.

The Founders did not intend to replace absolute monarchy with absolute majority rule unconstrained by the principle of individual rights. As Benjamin Martin (Mel Gibson) asked during a debate over the propriety of the Revolutionary War in the movie "The Patriot", "Why should I trade one tyrant 3000 miles away for 3000 tyrants one mile away? An elected legislature can trample a man's rights as easily as a king can."

The answer: We shouldn't. As Jefferson said, "the majority, oppressing an individual, is guilty of a crime, abuses its strength, and by acting on the law of the strongest breaks up the foundations of society." The Founders were not primarily concerned with giving the people the right to vote. They intended to liberate the people from predatory government, whether monarchistic, theocratic, socialist, or democratic.

There are those who would invert the original concept of Americanism—that the individual is sovereign and his life belongs to him—and replace it with the idea that the collective—i.e., the state—is sovereign over the individual. It is an attempted transition from republican constitutionalism to democracy; from individualism to collectivism. We cannot let the counter-revolutionary reactionaries succeed. The fight to defeat the reactionaries and restore and renew Americanism can start with this: As we celebrate Constitution Day, remember what I call the Constitution’s philosophic blueprint, or what has also been called the Conscience of the Constitution—the Declaration of Independence.