Darwinism Is Needed

April 6th, 2012

By Dan Miller

Charles DarwinWe need social Darwinism. Without it, we are likely to become extinct like the do-do bird.

According to President Obama, the Ryan budget passed last week by the House of Representatives 228 to 191 with no Democrats supporting it is

nothing but thinly veiled social Darwinism,” Mr. Obama said. “By gutting the very thing we need to grow an economy that’s built to last — education and training, research and development — it’s a prescription for decline.” …

A separate vote on a bipartisan plan blessed by Erskine Bowles and Alan Simpson, who led a deficit commission in 2010, failed dramatically, earning just 38 votes of support.

Meanwhile, a budget outline offered by President Obama failed of passage in the House on March 28th by a unanimous vote of 414 to zero.  In the Senate, the Parliamentarian ruled on April 4th that “last summer’s deal on the debt ceiling and spending caps does not preclude the Senate from taking up other budget resolutions this year….” This

essentially means any senator can place a budget proposal on the Senate calendar. Reid still controls the floor and could choose not to bring them to a vote, though the political optics of such a move could be damaging.

The Parliamentarian’s ruling is “expected to bring unwanted election-year pressure on the Nevada Democrat to act on politically dicey budget bills.” And,

a version of President Barack Obama’s own $3.6 trillion budget proposal, which the House unanimously rejected last week, also could come to the Senate floor, ensuring an embarrassing replay of last year when not a single senator voted for the president’s budget.

What is “social Darwinism?” In the present context, but not as President Obama used the term, it should include less political game playing by those who control Federal spending and the passage of responsible annual budgets.

The Democrat controlled Senate has not passed a budget for nearly three years.  The one thousandth day with no budget passage came on January 24th.  That omission has not diminished Federal spending, nor does it seem as though that was the intention. Spending continues to grow, like Topsy, and governmental “investment” that retards the economy continues to flourish.

U.S. Federal Spending

Here’s how much and where it has gone.

‘Tis better to be fit than to not.

Dodo BirdSince fit nations generally survive and unfit nations generally don’t, we would be better off in the “fit” category.  For years, we as a nation have been moving toward unfitness and continuing increases in spending suggest that until we realize that the fit survive and that the unfit don’t our deterioration will continue.  We don’t even seem to make the connection. Instead, we favor those sectors of the economy which have bad records for producing goods and services, at the expense of those which have done well and paid taxes accordingly. Touted economic gains have not been forthcoming. In March, the national economy gained only 120,000 jobs, far fewer than the widely anticipated 205,000. President Obama’s economic stimulus has been largely misdirected and ineffectual. Here is one small example, an advanced battery principally for the electric vehicles touted by our ever “green” (in at least two senses of the word) President to wean us from the poisoned milk of the deadly carbon monster.

Great public relations for the President and his “green” friends in 2010, but

A123 Systems, which opened its lithium-ion battery manufacturing plant in Livonia in September 2010, saw its stock plummet to the lowest price ever at 82 cents this week. The previous high was nearly $26.

A class action lawsuit was filed against A123 Systems this week on behalf of shareholders alleging a violation of federal security laws. According to Business Week, the lawsuit claims A123 Systems withheld information about defective batteries from shareholders who bought stock between Feb. 28 and March 23, 2012. The company estimated last month that the cost of replacing the defective batteries would be $55 million.

Last month, the company reported losing $90 million in 2011. It also laid off 125 of its reported 1,000 Michigan employees last year.

Solyndra was another brilliant green idea that failed, disastrously, because competent business investment is not something that government often does well; any private business that behaved in similar fashion would cease to exist. But be not alarmed. The Department of Energy announced on April 5th that

it expects to begin tentatively approving new taxpayer-backed loans for renewable energy projects in the coming months.

The announcement comes about seven months after Solyndra, the California solar firm that received a $535 million loan guarantee from the administration in 2009, went bankrupt, setting off a firestorm in Washington.

As “easy as 1, 2, 3?” These loans, it is said, will be based on “a rigorous internal and external review of each application” and “subject to a robust monitoring effort to ensure that taxpayers’ investments are protected.” Not that that wasn’t done before, of course, and besides, “by any measure, the Energy Department’s loan programs have helped the United States keep pace in the fierce global race for clean energy technologies.”

As incompetent waste of tax revenue continues, and the seemingly endless flow of tax revenues to replace those wasted continues at the expense of the economic sectors that best produce desired goods and services, those will become our newly “unfit” and will diminish in number. So will the revenues that their taxes yield for governmental subsidization of the earlier unfit and to pay interest on government debt incurred for that purpose. Many of the earlier unfit will manage to crawl along through the lush green Federal “plantation” meadows for a while despite diminishing governmental bounties.  Unless involuntary transfers from sectors willing and able to work to sectors unwilling and unable to work decline substantially, only the latter will survive, for a while, until our nation can no longer provide the financial support they require.  Then, we as a nation will cease to survive; that sort of thing simply can’t continue indefinitely.

Nations like Greece have put themselves into the dodo category by taking on excessive debt.

Over the last decade, Greece went on a debt binge that came crashing to an end in late 2009, provoking an economic crisis that has decimated the country’s economy, brought down a government, unleashed increasing social unrest and threatened both Europe’s recovery and the future of the euro.

The Greek government has been kept afloat by its fellow eurozone countries, but at a steep price: the austerity measures demanded by  France and Germany in return for two massive bailout packages have ripped holes in the Greek safety net and plunged the country into a recession of near-Great Depression dimensions.

Greece may have been given the green light to escape its financial woes.

Greek President Obama Prime Minister Lucas Papademos vowed to accelerate a 20-billion euro ($27 billion) solar-power project that would help the European Union’s most-indebted nation spur growth and export clean energy.

Investment in renewable energy is a “national priority” for Greece, which agreed to deep spending cuts to fend off a possible financial collapse, Papademos told a conference in Athens today. The Helios project, named after the ancient god of the sun, would install as many as 10 gigawatts of solar panels by 2050, increasing use of Greece’s natural energy.

“In the last few years, talk has centered on Greece’s fiscal discipline,” Papademos said. “But fiscal harmonization isn’t enough for development. The energy sector gives Greece an opportunity to become a hub for the European Union and third countries.”

Albert EinsteinOh well. What, one might ponder, could this sort of economic crisis lead to in the United States? Perhaps those planning to vacation in sunny Greece could stay at home and experience similar excitement.

Greece has, to some extent and temporarily, been bailed out by other European nations.  The results for the people of Greece have not been as pleasant as many had hoped and many there seem less than sanguine about their present situations and future prospects.  Could the United States — far bigger than Greece and with much farther to fall — count on being bailed out by the more or less friendly European and Asian nations the United States greatly assisted in the past? Or would “friends” like China be our only resort? What would China require as security and inducements from a nation on the verge of bankruptcy? Hu may know, I can only guess.

Treasury Secretary Timothy Geithner seems to recognize the problem, sort of.

“Our fiscal commitments are unsustainable over the long run, but we cannot put our long-run fiscal challenges above all others,” Geithner told the Economic Club of Chicago on Wednesday. “We have to be willing to do things, not just cut things.”

However, he contends that long term fiscal problems must take the back seat to giving the government flexibility to “do things.” He stated that President Obama

believes that while our long-term fiscal problems are formidable, we can address them over time with a balanced package of reforms that preserve room for investments that will help us grow,” he said.

However, President Obama has produced no such plan, and his most recent budget does not include anything similar to what Geithner described. In fact, Geithner himself has admitted that the administration does not have a definitive plan, telling Congress in February that the administration had no “definitive solution” to the nation’s long-term debt crisis.

“We’re not coming before you to say we have a definitive solution to our long-term problem,” Geithner told House Budget Committee Chairman Paul Ryan (R-Wis.). “What we do know is we don’t like yours.”

The problem comes from not recognizing how high is too high, and how much is too much, before it becomes too late — as  sooner or later it must.

It has to be recognized, eventually, that “investment,” as the term is currently used in Librul* circles, means continuing to spend more and more tax revenues and borrowed funds to finance more and more governmentally favored — often politically favored — social policies. Investment of this sort displaces private investment in goods and services by soaking up the funds needed for it. There can often be loud echos.

At some point, perhaps, we will come to realize that tax increases are bad, not good, and that higher taxes ultimately reduce tax revenues.  Many voters seem to realize this on at least some level.

The Democrats just spent 2010 losing control of the House of Representatives, and losing six races for Senate, six for governor, and 711 for state legislator in reaction to their higher levels of government spending.

Scott Rasmussen, co-founder of ESPN and now president of Rasmussen Reports, has been polling these issues for 18 years and recently published The People’s Money, a book on how Americans view government spending and taxation. His data suggest the Democrats have chosen “unwisely.”

In April 2011, Rasmussen found that 64 percent of Americans believed the U.S. was “overtaxed.” Gallup and Harris polling from 1996 to 2006 asked Americans if their own federal tax payment was too high, about right, or too low. An average of more than 60 percent said “too high.” Usually just 1 or 2 percent said “too low,” though that figure spiked in 2004 to all of 3 percent.

So, there’s an optimistic note upon which to end this article. I wish there were more and that this scenario were only a remote possibility.

*I use “liberal” to mean one with an open mind but not an empty head.  Neither is true of Libruls.

(This article was also posted at Dan Miller’s Blog.)

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