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Economy

How Venezuelans Can Recover from the Sickness of Socialism

By Guest Post February 8, 2019

by Lawrence W. Reed for Fee.org

And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works

– French economist and statesman Frédéric Bastiat, 1850.

Venezuela’s socialist nightmare is almost over. The questions of when and how it ends—hopefully without more bloodshed—are already giving way to thoughts of what comes next. How does a nation brought low by socialism recover? Answer: Liberty!

Any blueprint for recovery must begin by learning the lessons of the past twenty years. They are legion. Here are the big ones:

Socialism neither is nor has any theory of wealth creation. It is focused purely on consumption. It assumes that somebody, somehow, somewhere will create the stuff its advocates will seize and redistribute. That’s a dead end, as millions of Venezuelans now know.
Socialism concentrates power in the hands of the few. It attracts the easily corrupted and corrupts them further. It appeals to the worst in people: envy, dependency, and deceitfulness.
Socialists are demagogues. They divide society into classes and set them up to wage war against each other, knowing that they (the socialists) will become the center of power, attention and wealth as the rest of society is impoverished.
Socialism is a disaster in both spiritual and material terms. It’s fueled by perpetual anger and victimology. It strips the individual of his dignity and his self-reliance. It boasts that it can plan his life and his economy for him but leaves devastation and misery in its wake.

It’s long past time for Venezuela to toss this evil failure into history’s garbage truck so it can be hauled away. Venezuela can do so much better. It can teach the world a great deal in the process. Venezuelans have suffered much and they must ensure that their suffering is not pointless or in vain.

The painful 20 years of the Chavez/Maduro dictatorship underscore the wisdom of these words of economist Ludwig von Mises:

A man who chooses between drinking a glass of milk and a glass of a solution of potassium cyanide does not choose between two beverages; he chooses between life and death. A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society.

No More Poison. No More Socialism.

To those who say the injuries of Venezuela are simply too severe to expect anything but a long, slow recuperation, I say, nonsense! The right approach can lift the country to its feet and produce amazing progress in the first year. What will be known in a decade as “the Venezuelan Economic Miracle” can begin immediately.

Two models from the 20th Century point the way—Germany and Hong Kong.

Freer trade led to a historic rebound that surprised almost everybody.

After World War II and a generation of socialism, Germany was in utter ruins in the late 1940s: defeated, devastated, occupied and demoralized. But by 1960, it was the economic powerhouse of Europe. Why? Because the free market policies of Ludwig Erhard, as explained here, provided the proper framework.

Socialism was dismantled, people and markets were liberated. Incentives in the form of lower tax rates, abolition of price controls, a sound currency, and freer trade led to a historic rebound that surprised almost everybody.

At the same time half a globe away, similar policies worked wonders in Hong Kong, thanks to the efforts of John James Cowperthwaite, as I detailed here. Cowperthwaite eliminated tariffs, slashed tax rates, opened Hong Kong for private enterprise and the results stunned the world. The colony vaulted from an impoverished backwater to one of the richest corners of Asia. It was liberty that did it, just the opposite of socialism.

Socialism offers no such miracles in its entire sordid history. None. Nothing even remotely close. Call it capitalism, free enterprise, or whatever you want, but it works. It bakes the bigger pie that people need, instead of simply slicing up a shrinking one. It’s really nothing more than unleashing the creative energies of people to invent, invest, employ, create and trade.

The Recipe for a Healthy Venezuela

A new government of Venezuela must restore the political framework of a pluralistic, constitutional republic—respect for the rule of law, the independence of the judiciary, freedoms of speech, press, and assembly, and the integrity of the electoral process.

It must root out corruption not only by removing the corrupt but also by closing the door to the granting of special favors by government itself. And it must restore order by shutting down paramilitary groups who use terror and intimidation.

In terms of the economy, a recovery agenda should include these pillars:

1. A Sound Currency

To bring a quick conclusion to hyperinflation and restore the confidence needed for savings and investment, stop the printing presses. No more paper Bolivars. Allow for choice and competition in the provision of money so people are free to use and make contracts in whatever media they see fit, including foreign and cryptocurrencies.

The government should redeem its own outstanding Bolivars in a new money rooted in real value. Options for achieving monetary stability include tying a new currency to a fixed weight of precious metal; dollarization, as successfully implemented in Ecuador and explained here by Dora de Ampuero, or introducing a currency board as recommended here by economist Steve Hanke.

2. Privatization

Venezuela needs a comprehensive de-nationalization. Businesses and industries owned by the state are corrupt, incompetent money-losers. They drain public funds at the same time they abuse the public. Selling them would bring new revenues to the Treasury and new life to the privatized firms. As Margaret Thatcher did with great success in Britain, give employees first chance at equity in formerly state enterprises before taking them public.

Start with the state-owned oil company, Petróleos de Venezuela (PDVSA). Few measures would send a stronger signal that Venezuela is opened for business than the sale of shares in PDVSA. It would prompt much-needed investment to improve the company’s decrepit infrastructure.

Lots of countries around the world leave the business of oil to the private sector and the ones that don’t are chronically beset with losses and outdated technology.

Don’t be afraid that people from other countries might buy equity in Venezuelan firms. They’re not likely to pack them up and ship them home. They will seek to make them profitable and create jobs and income for Venezuelans as they do so.

3. Property Rights

Seizure of property without compensation or exceptional justification should be outlawed.

A healthy, growing economy is impossible in the absence of property rights. People will not build wealth if it’s not safe from crime or confiscation. Venezuela must take measures to strengthen the individual right of property ownership.

In the International Property Rights Scorecard, the Chavez/Maduro kleptocracy ranked among the worst regimes in the world, as one can see here. The government’s ability to take property without restraint must be formally abolished. Citizens must gain the legal capacity to challenge government takings. Seizure of property without compensation or exceptional justification should be outlawed.

4. Education Reform

The state’s all-but-total monopoly on education must be abolished. Schools will never teach the principles critical to a free society such as personal character, entrepreneurship, respect for property, and democratic values if the state controls curricula or teacher-hiring or anything else. Make it easy for a pluralistic, multiple-option, choice-based educational system to develop.

If Venezuela dismantles socialism in other areas but leaves education socialized, it will undermine its new-found liberties over the long run.

In time, the bad ideas that helped to produce the disaster of the past two decades will take root again. Governments just don’t teach liberty, anywhere. Education is too important to a country’s future to turn it over to government. Put parents in charge.

5. Free Trade

Venezuela should declare itself a free trade zone. No (or very minimal) tariffs or other artificial barriers

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Business

Taxes Are Getting Weaponized for Partisan Purposes

By Guest Post February 5, 2019

by J.D. Tuccille

How willing are you to pay taxes when you know they’re intended to do you harm?

Government agencies and laws have devolved into weapons to be wielded against political opponents in this country. Why wouldn’t taxes follow?

Too many Americans promote taxes as a means of hurting people they dislike, putting the raising of revenue as a secondary consideration—or dropping it entirely.

Given the destructive nature of taxation, it’s a potentially effective strategy, at least for a while. But it may also totally delegitimize the tax system in the eyes of the people who are supposed to pay the bills.

Social Engineering Takes to the Tax Code

With simmering partisan animosity in the U.S. has come a growing willingness to use government to extirpate anything perceived as bad or politically different. Financial regulators, law enforcement, and legislation have already been conscripted to the cause of hurting political enemies. Taxation is the just the latest weapon in the war.

Insisting that “a system that allows billionaires to exist … is wrong,” Rep. Alexandria Ocasio-Cortez (D-NY), a self-identified socialist, wants to slap punitive taxes on the prosperous. Yes, Ocasio-Cortez thinks a 70 percent marginal rate will raise some money for her pet projects, but that seems to take a back seat to using taxes to remake the economic system and eliminate a class of people she believes shouldn’t exist.

Sen. Elizabeth Warren (D-Mass.) warned that “a small group of families has raked in a massive amount of the wealth American workers have produced.” Warren wants to confiscate part of their accumulated assets. “My proposal will help address runaway wealth concentration,” said the likely 2020 presidential candidate.

“I can’t wait to tax Howard Schultz back into the middle class,” tweeted progressive columnist Ian Millhiser, after the former Starbucks CEO had the temerity to float a possible independent presidential run. For Millhiser, revenue isn’t even a consideration—it’s all about harming a partisan foe.

Not that Team Blue has a monopoly on valuing taxation for its power to destroy. The current resident of the White House likes that characteristic, too.

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Children

How ‘Vasectomy Zoning’ Makes Childless Cities

By Guest Post February 4, 2019

By Nolan Gray & Lyman Stone

At the end of last year, the Philadelphia City Planning Commission weighed a proposed zoning change that would effectively ban new day-care centers—along with tire stores and car repair shops—in a large chunk of northwest Philadelphia. The bill swiftly encountered fierce resistance, and it now appears dead. But the effort to block additional child-care facilities with a zoning overlay hints at a broader relationship between city planning and the cost of raising children. A growing body of research indicates that restrictive zoning—which often blocks the services and housing that families need—may help to explain why family sizes are shrinking in the United States.

The U.S. birth rate recently sunk to a 30-year low, a trend that’s been blamed on everything from economic anxieties and climate change to the rise of smartphones and the Millennial “sex recession.” Perhaps we should also lay some of the responsibility at the feet of city planning.

As bizarre as an anti-day-care bill may seem, the fear of more children coming into a community is a mainstay at new housing proposal hearings. Particularly in high-cost suburbs along the coasts, the mere inclusion of three-bedroom apartments—the kind of units young families need—can get a project in hot water with elected officials. While the justifications for blocking this kind of housing vary from preserving rural character to preventing (real or imagined) school overcrowding, the result is that more and more municipalities are adopting policies designed to keep out children and the families who care for them.

In the New York suburb of Garwood, New Jersey, city officials adopted a master plan earlier in 2018 that places a total prohibition on units with three or more bedrooms. In Nutley, New Jersey, another New York suburb, a July zoning fight came with assurances that three-bedroom units—and the children that come with them—weren’t part of the plan. In the Garden State more broadly, municipalities increasingly meet their state-mandated fair-share affordable housing requirements by building only senior housing. Affordable housing proposals that include three-bedroom units are rejected out of hand, leaving working families with few options.

A former Massachusetts state senator coined a term for this phenomenon: vasectomy zoning.

The problem is likely much bigger than even these overtly anti-family measures in Philadelphia and New Jersey would suggest. Insomuch as zoning serves to block smaller, more affordable housing, the way we plan cities may be undermining the desire of young couples to start families. A former Massachusetts state senator coined a term for this phenomenon: vasectomy zoning.

In Massachusetts, as in many parts of the country, suburbs increasingly throw up roadblocks to the construction of types of housing that are affordable to working families. In addition to simply limiting the number of development permits they issue, suburbs often forbid large apartments and townhomes altogether, while forcing detached homes to sit on large, prohibitively expensive lots. This shows up in the national data depicted in the chart below. The combined result is that few new starter homes or family-sized rental units are successfully built. Meanwhile, rents and prices for the existing units sail beyond the means of most working families.

Until recently, most of this discussion was speculative. But we can now reliably say based on data that rising housing costs are preventing more and more women from having children. While jokes about avocado toast would have you believe that Millennials could afford homes if they could only change their spendthrift ways, the reality seems to work in reverse: High housing costs are likely forcing many young couples to make difficult lifestyle changes, such as delaying children.

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Government

America’s Stubborn Left Clings to Nicolas Maduro Despite All Evidence

By Guest Post January 29, 2019

by Jenipher Camino Gonzalez

It’s time to admit that Venezuela’s “21st century socialism” failed.

President Donald Trump’s full-fledged backing of Juan Guaido, who declared himself interim president of Venezuela last week, was met with a bipartisan support among American political leaders. But one stubborn segment of the ideological spectrum is unimpressed and has gone so far as to compare Trump’s move to America’s 20th century transgressions in the region. These protests are being led by Massachusetts Institute of Technology professor Noam Chomsky and other notable cheerleaders of former Venezuelan president Hugo Chavez, who brought socialism to the country two decades ago. The elder statesman of America’s left penned a tone-deaf letter, co-signed by dozens of U.S. intellectuals, rejecting attempts by Venezuela’s opposition to remove Nicolás Maduro from office and insisting that U.S. sanctions are to blame for “worsening” Venezuela’s economic calamities.

Although the Democratic Party establishment has fully embraced Guaido, freshman members of its new House majority have troublingly joined the chorus against Trump’s decision.

Rep. Ro Kahnna (D–Calif.) took a shot at Sen. Dick Durbin (D–Ill.) for embracing the opposition leader, calling Venezuela’s situation an “internal, polarized conflict.” Rep. Ilhan Omar (D–Minn.) took to Twitter to decry “U.S. meddling,” adding that Venezuela’s Supreme Court, stacked with Maduro loyalists, had declared Guaido’s action “unconstitutional.” Never mind that in 2017, that same court allowed Maduro to strip Venezuela’s Congress—the only governing institution he did not then control—of its powers and set up a parallel legislature, essentially giving him dictatorial power.

To be clear, supporting Maduro or downplaying the catastrophe he and Chavez have overseen in Venezuela is a fringe position. The leadership there is responsible for human rights abuses, rampant corruption, and a full-blown humanitarian crisis in the region, with the United Nations putting the number of Venezuelan refugees abroad at a staggering 3 million, or almost 10 percent of the country’s total population.

Last year, Maduro was re-elected in what the U.S. called “a sham election,” which the European Union said was neither free nor fair. Among the abuses, second-place candidate Henri Falcon accused the government of buying votes through food and money giveaways at polling stations.

Internationally, Guaido has the backing of a vast majority of Latin America nations, the U.K., Canada, Australia, and counting. The E.U. has given Maduro eight days to call new, credible elections or it will also back the 35-year-old opposition leader.

With Maduro’s dismal record and a nearly worldwide consensus against him, why are some on America’s left turning their fire on the United States instead?

Venezuela’s Socialist Failure

Hugo Chavez’s experiment was cleverly dubbed “socialism of the 21st century,” in part to lure and charm the international left, which was hungry for another shot at making socialism work somewhere.

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Children

The Moment Nancy Grace Learns Pharma Can’t Be Sued Over Vaccine Injuries

By Guest Post January 28, 2019

Courtesy of Vaxxter

When it comes to vaccine side effects and injuries, suing pharmaceutical companies is simply off the table. The government’s version of “vaccine court,” instead, handles those cases.

For many people, learning this information for the first time can be a bit shocking, to say the least. And that’s exactly what happened to then HLN host, Nancy Grace, back in 2014.

Grace is a lawyer, but it seems the news still came as a surprise to her during her interview with Rebecca Estepp.

Watch for yourself.

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Business

The Seven Matters of Life

By Terence Gillespie January 5, 2017

“Everything should be as simple as it can be, but not simpler.”

— Albert Einstein

I’ve found that life can be optimized with respect to a minimum of seven areas. Delete any one of them from the equations of your awareness and your life will degrade, sooner or later. Since these areas are irreducible I call them the Seven Matters of Life. They are: Personal, Health, Spiritual, Business, Family, Law, & Government.

The Seven Matters exert an inevitable, if not invisible, influence on our lives. As with natural laws describing gravity, time, the speed of light, etc. they persist whether we ignore them or not. We “escape” them only through acknowledgement and mastery.

My writing is an informational vortex swirling around the Seven Matters. Ideally, it serves as a generational boost to reduce the time needed to put your own life on optimal track.

A Portrait of the Seven Matters

To portray the seven matters I’ll use a pattern-type at the core of natural design: Fractals. Before fractals were discovered, Hollywood was unable to reproduce mountain landscapes without using artist renderings or real pictures of mountains. Now, they use triangles, a computer, and a dash of randomness to create breathtaking landscapes.

The point of using a fractal to portray the seven matters of life is this:

Fractals prove that stupefying complexity can emerge from utter simplicity. The reverse is not true.

Also, I want to make a point, graphically, about the nature of optimizing one’s life:

Even when a complex solution is needed it will inevitably be constructed with simple (not simplistic) components.

The Metatron Cube

One of my favorite fractals is the metatron cube, sometimes referred to as “the flower of life”. It’s formed with 13 spheres set in relation to each other, like this:

Within the metatron cube are many other shapes. For example, it contains all five platonic solids.

In this revolving view the cubic relationships of the same fractal are emphasized.

Fractals can represent infinity by putting the same fractal within itself. Here’s what a metatron cube looks like with each sphere filled with its own metatron cube:

Working Portrait

Please don’t mistake the colorful portrait, below, as “New Age” philosophy with its nauseating relativism. To the contrary, it’s a working portrait of the seven matters at the core of each person. Though we’re all unique, and at differing levels of development, our design is specific and persistent.

Notice these aspects of the portrait:

The seven inner-spheres of the core correspond closely to the seven matters of life.
The “matter” at the center is Spirit; a reference to the spirit inside you and to God.
Each sphere is a fractal identical to the others, and to the whole.
The outer spheres represent personal interactions with the external world. They are the natural outward reach stemming from the inner core.
To the extent the inner-core is balanced, so is the person, and so are interactions with the external world.

Everyone has these “matters” in their life, in one formation or another. My choice of their positions is, therefore, a kind of self-portrait. Change the position of the “matters”, especially the one in the core, and the resulting life of the person will be quite different.