The Democrats’ Road to Hell

The ruling political class in Washington D.C. is always making matters worse through what appear to be appropriate solutions for serious problems facing the country. Then when they don’t work out as advertised many years after they’ve been implemented, they tell us that they’ve got the solutions for the newer, more serious problems that to the unsuspecting and unknowing public seem as if they came out of nowhere, and who are clueless as to how they began in the first place.

Two good examples of the long reach of history and major problems originating with Washington are one, how a permanent underclass that exists today was created during the 60s by Lyndon Johnson’s Great Society programs and the other, the Great Recession that began in 2008 when the country’s financial system melted down and in turn created the worst financial collapse since the Great Depression that began in 1929. 

It was Daniel Patrick Moynihan, one of the last great Democrats before the party became unmoored from any roots it had in traditional constitutional principles, sounded the alarm as Assistant Secretary of Labor in the Johnson administration that the new welfare state was creating an abundance of unintended consequences that were destructive to blacks, the primary demographic whom it was supposed to help. He came out with his “controversial” Moynihan Report in 1965 officially titled “The Negro Family: The Case for National Action,” that described those destructive consequences and how they started, the most significant one being the breakdown of the black family because of the perverse incentives created by welfare that was actually making poverty worse and creating a permanent underclass.  

The origins of the financial crisis of 2007/2008 can be traced back to Jimmy Carter’s administration (another well-intentioned but misguided Democrat president) with the passage of the Community Reinvestment Act (CRA) of 1977. Like Johnson’s welfare programs, the CRA was supposed to benefit primarily low-income blacks, it turned out to be the big bang event that led to wickedly destructive financial consequences for everyone many decades later. The original purpose of the CRA was to loosen lending standards by banks so that more blacks could participate in the American Dream by being able to buy a house and to overcome what at the time was called “redlining,” an allegedly discriminatory practice by banks making it difficult for blacks to buy a home in non-urban neighborhoods.

Fast-forward to 1999, the last year Bill Clinton was in office as president, when on a bipartisan basis you had the wall between commercial and investment banking torn down with the repeal of the Glass-Steagall Act of 1933. This allowed all the high-powered investment banks to bundle and securitize all of the mortgage loans from across the country into asset-back securities called Collateralized Debt Obligations (CDO). With the low interest rates down to almost zero following 9/11 by the Bush Administration, the housing market took off like a rocket for the next six years helped along with a great deal more loosening and degradation of mortgage loan standards by banks as required by Congress that began in 1977 with the passage of the Community Reinvestment Act.

Unfortunately, a trillion-dollar market for specialized investments turned out to be a house of cards built on sand constructed out of the housing boom’s easy-to-get home mortgages. Many were extremely risky loans (called subprime mortgages) and were doomed to foreclosure. And all the new CDOs with exotic names such as synthetic CDOMortgage-backed Securities and Credit Default Swaps crashed within weeks, bringing down the world economy with them.

The moral of these two stories is that government should stay out of the social engineering business, as history has proven time and time again that it has a terrible track record and usually makes matters worse either in the short term or the long term or both. The rhetoric rarely matches up with the intended reality of social policy objectives and instead policy prescriptions most often end up being weaponized to bludgeon the Republicans for being cruel and heartless for not always going along with the Democrats.              

Government assistance has morphed from safety net to entitlement where there is no accountability for the failures of the ruling political class that perpetually creates problems, as well as government incentives to “right social wrongs” that do the same by distorting the marketplace in ways that are not good for anyone.

So as the sun always comes up in the morning, the ruling political class will always present itself as the savior to all those unknowingly and adversely affected by problems it created in the first place. The road to hell is indeed paved with good intentions, but in America, that’s okay with many, since the perpetrators will always be rewarded with re-election again and again in an endless and hellish vicious cycle.

Tim Jones, American Thinker

White Racism as the Mother of All Evils

Since the 1960s the federal government has initiated countless programs to close racial gaps. All have failed, some have even exacerbated these gaps, but failure aside, all posited logical connections between the program and the intended beneficial outcome. Head Start, for example, rested on the plausible idea that blacks disproportionately suffered early childhood deprivations, and this limited their future accomplishments, so enrich early childhood. The Empowerment Zones of the early 1990s offered tax incentive to entice urban businesses to hire unemployed blacks. Yes, these and countless other nostrums came up short, but they were logical and fact-based and did not, by themselves, aim to transform American society.

Matters have drastically changed with the emergence of the White Racism theory of the crime. It is now no longer necessary to link cures and the intended outcomes; whites by their very existence are now responsible for all black tribulations. Why even try to prescribe one ameliorative fix after the next to target a particular ill when eliminating whiteness is the Mother of All Cures? Nor is it necessary for blacks to take any responsibility for their misfortune—whites must do the job. How simple and seductive for social justice warriors exhausted by plain-Jane incremental politics and having to change their own behavior.

This “white racism did it” theory can be understood as a form of mental illness, specifically magical thinking, “ a disorder of thought…[that] denotes the false belief that one’s thoughts, actions, or words will cause or prevent a specific consequence in some way that defies commonly understood laws of causality.” In other words, every black problem, no matter how miniscule or gigantic can be traced back to toxic whiteness. Even more bizarre, the logic of this “theory” of evil exclusively stresses thoughts, even unconscious thinking, as opposed to overt behavior. An odd parallel exists with some religions where “bad thoughts” themselves are a sin, so thinking about discriminating against African Americans its tantamount to actually discriminating against them. This is a transformation that not only awards immense magical power to brain waves but contrives America’s legal tradition that criminalizes behavior not (with miniscule exceptions) “bad thinking.”

Since whites and their legacy are everywhere, and their toxicity resembles inescapable background radiation, blacks must energetically stamp out this evil wherever they find it. Nothing is too small in this crusade. The picture on Uncle Ben’s box of rice is tantamount to a physical assault. Why else would removing Robert E. Lee’s name from a largely black school become so urgent? What’s the concrete benefit? Did black students fail because they daily observed General Lee’s name cut in stone and this damaged their self-esteem? Logic doesn’t matter—Lee’s name just somehow radiates whiteness, even if students don’t know who he is, and like gravity, his very whiteness invisibly pulls blacks down.

The opportunity costs of embracing this faith are huge. The supply of crackpot solutions to any problem are infinite, and provided ample funding is available, foolishness can persist forever and thus there is never any need to align solutions to tangible tribulations let alone admit that the problem is intractable. Ridding society of white racism is the equivalent of a full-time job with an unlimited budget for inventing an anti-gravity automobile engine, and rest assured, success will be just over the hill, around the corner, at the end of the tunnel, awaiting one adjustment to the devise, tweaking the fuel etc. etc. Just obverse how many blacks at college campuses devote their existence to overcoming omnipresent white racism versus actual learning.

Consider how this escape from a difficult reality plays out in the “diversity industry.” Thanks to the Faith, why ask embarrassing question about why blacks cannot move up the corporate ladder despite putting the screws on whites to promote diversity and huge investments in education? Far easier to cleanse the workplace to toxic whiteness by hiring black experts to spend thousands of hours eradicating hidden bias, structural racism and countless other sins afflicting whites. The website compiled by SHRM lists some 83 such diversity consultants happy to toil long hours to exorcise evils debilitating African Americans. The firm OutSolve, for example, “… gives companies the advantage of effective affirmative action solutions that are comprehensive, customizable, and budgetable.” OutSolve, moreover, offers “… experienced consultants are ready to help, with the most comprehensive affirmative action planning services and consulting programs available” and services range from developing affirmative plans, devising bias-free compensation standards and navigating government rules and regulations. Keep in mind that these 83 firms are in addition to the hundreds of in-house departments in larger firms and especially universities, that likewise provide professional exorcisms. Now, thanks to the availability of all these exorcists, discussion can focus entirely on details of detoxification, so why bother with black IQ, work habits and similar awkward question?

Quackery also attracts those eager to accept endless failure provided the pay is decent. White racism is a pesky pathogen, so there can never be a “Mission Accomplished,” and a lifetime can be spent pushing the rock up the hill and, after a point, rock pushing is all the rock pushers know. Think all the Deans of Diversity and Inclusion spending careers seeking out racism in undergraduate admissions, choice of majors, grade point averages, faculty hiring and retention, research funding, and every other university function. And who knows what persistent digging will eventually uncover? Gaps in student participation in class discussions? Access to local stores selling black personal grooming supplies? Perhaps holistic admissions are insufficiently holistic or STEM textbooks ignore scientists of color but whatever the alleged defect, rest assured it will be scrutinized, assigned to some committee’s agenda, a report written and discussed, a few cosmetic changes suggested and when that, too, fails, onward to the next putative time-wasting panacea.

Most importantly, embracing the centrality of whiteness as the all-encompassing evil virtually guarantees totalitarian creep. Or to use the Soviet vocabulary, you have to break ever more eggs to make the omelet.

To understand this progression, suppose that white racism can be calibrated on a 0 to 1.0 scale, with 1.0 being totally racist society, e.g., apartheid-era South African. Further suppose that by daily mandatory anti-racism seminars, school textbook propaganda, fantasy interracial TV commercials, speech codes, de-platforming heretics, hate crime laws and lots more, racism among non-blacks is reduced from, say, .6 to .1, a seemingly momentous accomplishment. Is this reduction sufficient to eliminate racial gaps and all other inequalities? Can victory be declared? The answer is, sad to say, indeterminant since the theory of white toxicity fails to specify a numerical relationship between the causal agent (white racism) and any specific outcome. This is social engineering sans any benchmarks. Everything is just fighting white racism.

Conceivably, white racism resembles plutonium and an infinitesimal amount in the city’s water supply can kill the entire population. Or lethality depends on huge levels of whiteness. Of course, nobody can specify levels of lethality and, tellingly, this murkiness is hardly a problem for those insisting on the evil of whiteness. Toxic whiteness is toxic whiteness is toxic whiteness. The result of this scientific muddle-brained thinking is that the white-racism-is- culprit- theory is beyond falsification.

Actually, to be fair, theory confirmation can occur when the levels of Racist evil fall to 0.0 on the Racism Scale but how do we empirically establish this “0” point? Not easy given the belief that society might only appear free of white racism, especially since blacks can unknowingly internalize it despite their blackness (think black teachers in all-black Detroit to explain bad test scores). And whites can be asymptomatic or guilty of imperceptible dog whistle racism.

Here’s the answer to establishing zero white racism: it will be zero only when blacks and whites have identical average SAT scores, bar exam pass rates, out of wedlock births rates, murder rates, home ownership levels, infant mortality rates, drug abuse levels, identical life expectancies and incomes, proportional Nobel Prize awards and lots, lots more. Any remaining gap, regardless of where found and size, would be proof of lingering white racism since, after all, that is the source, and only source, of all gaps. Put formally, the independent variable (white racism) is thus measured by values of the dependent variable (gaps). The new frontier of statistical analysis.

A further fly in the ointment is that since the existence of toxic racism is often necessarily subjective, the likelihood of everybody agreeing on the extinction of racism is nil. Surely the Theory does not permit confirming the Utopian 0.0 level of venomousness by majority vote. Now, since there will always be white racism, and since any (unspecified) level of this toxicity drives black misery, de-toxification must necessarily be ongoing, if not perpetual, and with every greater coercion as past failure mount.

A racial version of Zeno’s Paradox is inevitable—America can go from .5 racism to .25 to .125 and even .00078125 on and on, but it will never be free of racism since the effects of racism will always be evident, somewhere, in unequal outcomes or beliefs about unequal outcomes. To paraphrase George Wallace, White racism today, white racism tomorrow, white racism forever.

Needless to say, assuming that zero racism, like zero degrees Kelvin, is reachable, the cost of attaining zero white racism would, in all likelihood, be exponential given past experience with narrowing gaps. What would it take, for example, to cut the black/white homicide gap by a factor of eight? Or asset differences by a factor of ten? And on and on across multiple substantial and enduring race-related gaps?

Chasing this unreachable fantasy of total de-toxification necessarily requires enormous coercion since not even spending the entire GNP would suffice. Only draconian laws and administrative dictates could ensure that blacks and whites were educationally identical, earned the same salaries, were equally incarcerated, suffered equal drug addiction rates and on and on. Remember, any gap “demonstrates” the persistence of white racism and thus achieving racial justice requires harsher and harsher exorcisms.

Can fervent racial egalitarians ever be convinced to abandon this fantasy? Reasoned discussions are pointless. Forget arguing about financial constraints—money from white taxpayers is never a restraint, especially among the innumerate. Ditto for demonstrating the unscientific nature of this “theory” of Great Evil–too complicated and would probably be interpreted as a white ruse (”white science”) to subjugate blacks. What about empirically demonstrating that whites are not especially racist or that racism has seriously declined? Irrelevant since, as per theory of toxicity, a racism score of .25 or even .05 is just as debilitating as a score of .5 (and who can disagree given zero data or, for that matter, no efforts to collect these data). Nor will the failure of this “white racism did it” theory-of-the-crime vanish simply because anti-racism efforts fail. If anything, shifting the blame entirely to whites will reduce “agency” among blacks and probably only widen racial gaps, but this irony hardly disturbs the faithful. Actually, increasing pathology will be a boon for the close-the-gap anti-racism industry.

Extinction will arrive politically. Whites will eventually realize that putting the onus on whites for all black woes is but extortion and, as for all similar tactics, it has its political limits. There are inescapable budgetary constraints, legal barriers governing racial preferences and norms regarding fairness. More important, American politics is Newtonian–pushes and counter-pushes, and African American activists are not the only players in the game. The pay-me-for-my-victimization game is highly permeable, and those dispensing the goodies regularly confront cries of sexism, homophobia, ageism, Islamophobia and countless other claims on the public trough. In all likelihood The Great White Racism theory of the crime will eventually gradually loose its allure, just as religious fervor wilts with time, and today’s believer will move on to some new, more exhilarating dogma.

Robert Weissberg

COVID Relief Bill Is the Latest Loss of Liberty for Americans

American Consequences

Earlier this week, right before Christmas, Congress passed a 5,600-page COVID-19 relief bill that no one could have the time to read in its entirety.

The bill, which the Senate Historical Office said appears to be the longest bill ever approved, was handed to Congress only a few short hours before a vote was scheduled to be held, forcing representatives to quickly scan the document and make a decision without knowing the ins and outs of the bill.

Some members of Congress even took to social media, calling the document a disservice to the American people and noting how their teams were going through the PDF using the “CTRL + F” function to find important information – ridiculous!

And let’s not forget that American citizens are supposed to be able to review the proposed bill as well, giving them time to go to their local representatives to share their thoughts.

Yet by the time it got released for review, we had less than four hours. I certainly can’t read almost 6,000 pages that quickly… Can you?

This is a clear loss of American civil liberties. I had the pleasure of talking with former congressman Dr. Ron Paul this week on the American Consequences podcast. We spoke about how this isn’t the first time Americans have lost their liberties due to the coronavirus, and it won’t be the last…

So far, we’ve lost the freedom to choose to go out when we want to, and the simple freedom to choose if we want to eat somewhere for dinner… We’ve lost the ability to see our friends and family for the holidays, risking potential repercussions for gathering in our own homes. Now, we’ve lost the right to read a bill before it passes.

How can American citizens stand up for their rights with a government that acts this way?

As the virus becomes more and more politicized, lawmakers can push through bills and demand regulation that actively hurts American citizens.

American citizens are being forced to close their businesses, sometimes permanently, while the very people passing these laws have not missed a paycheck since the quarantine began.

But at least $600 to every American citizen should help…

Oh, and let’s not forget $600 to non-American citizens in America as well. Because this new bill, unlike the first relief bill, allows for mixed-status households to also receive the stimulus checks. That’s just one of the many small changes that were pushed through in this fast-vote bill.



President Trump ripped apart the relief package, arguing the legislation includes measures that have nothing to do with COVID-19 and the stimulus checks are far too small to actually help struggling Americans.

Now that the bill has been voted on and the people have had a chance to really dissect it, a few other important pieces of information have come to light.

Victor Davis Hanson, senior fellow at the Hoover Institute, also joined me on my podcast this week to discuss the interesting, and somewhat frightening, laws that have made their way into this bill. Here are just a few highlights:

  • $1.3 billion for the Egyptian military, which will fund the purchase of Russian military equipment.
  • A block of President Trump’s plan to merge functions of the Office of Personnel into the General Services Administration.
  • $40 million to the Kennedy Center in Washington, D.C. (which is currently closed!).
  • Illegal streaming is now a federal crime instead of a misdemeanor.
  • $33 million to Democracy efforts in Venezuela.

I am the first person to agree with aid toward Venezuela after all that country has been through as it’s moving toward democracy. But is right now the best time to be spending $33 million of taxpayer money?

Victor and I both agree – now is the time to focus on assisting our own citizens… The stability of our national economy depends on it.

Victor even outlined the potentially disastrous effects of moving forward with so much fiscal stimulus.

“We can’t lower interest any more,” he says, commenting on the fact that it’s hard to borrow any more money while we’re already approaching an enormous amount of national debt.

Instead of locking down businesses and taking away our civil liberties, now is the time to open up the economy. And rather than send so much money to foreign efforts, we should be focusing on reinvesting in the American economy.

But at least now, thanks to the impending stimulus checks, people living in the U.S. can afford to pay for Netflix to avoid federal jail time…

Trish Regan, American Consequences


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How Progressives Are Dismantling America’s Foundation

Undergirding the Declaration of Independence and the U.S. Constitution is a set of philosophical principles that are under assault by Progressives.  These founding principles, derived mostly from the Federalist Papers, provide the lens through which we read and understand the Constitution.  Without this lens, the meaning of the Constitution and American law becomes putty in the hands of every special interest group.

Progressivism seeks to replace the founding principles with a new set of doctrines based on the tenets of social justice — a system which elevate the rights of “protected classes” (non-whites, LGBTQ, women, etc.) by subordinating  the rest of society.  This so-called “just society” is not the kinder, gentler America that Progressives promise, but a dystopia where the rights of the many are trampled, dissenters are punished, and government has nearly unlimited power and scope.  The examples that follow are selected from my recent eBook, The War on America’s Founding Principles: How Progressives Are Dismantling America One Plank at a Time.

Inalienable Rights.  The assault on America’s Founding Principles begins by dismantling the inalienable rights upon which our nation is built.  An attack on these rights, which are endowed by God rather than the state, is an attack on our entire constitutional system.  The first inalienable right, according to the Declaration of Independence, is the right to life — the right to exist.  Legalized abortion on demand, which Progressives promote with fanatical zeal, is a complete rejection of this inalienable right.  Progressives have further embraced this rejection by elevating abortion access to a fundamental human right and insisting that the government fund abortions.  Ironically, this renders government, which is charged with protecting inalienable rights, complicit in violating the inalienable rights of the most powerless members of our society. 

Abortion is the first logical step in demolishing the American system of rights in order to construct a Progressive society with new rights, focused almost exclusively on protected classes.  A philosophy draconian enough to seize the most fundamental right from the innocent without due process will not hesitate to curtail or confiscate other rights, even if they are guaranteed under the Constitution.https://lockerdome.com/lad/9371484590420070?pubid=ld-8832-1542&pubo=https%3A%2F%2Fwww.americanthinker.com&rid=www.americanthinker.com&width=692

Liberty.  American liberties include freedom of religion; freedom of speech (and, yes, that includes hate speech); freedom of the press; and the right to bear arms.  The principle of liberty restrains government power, preventing it from unduly interfering with or denying our divinely endowed freedoms.  Except where authorized by citizens through the Constitution, government does not have the authority to limit these freedoms (Fifth and Fourteenth Amendments).  Accordingly, every action of government should strive to protect liberty and should be weighed by this principle.

But we find an opposing inertia at work on the left.  Progressivism commences with an authoritarian, regulatory-minded impulse that restrains the freedom of citizens.  Government power is used reflexively to limit personal freedoms by regulating businesses, markets, consumption, education, speech, religious conscience, etc.  All of this is necessary, according to Progressives, to create a “just society.” 

Examples of this authoritarian impulse include the House-approved Equality Act (which severely limits religious freedoms in order to accommodate LGBTQ “rights”); the Affordable Care Act (which attempted to force religious ministries and schools to cover the insurance cost of abortion-inducing birth control drugs); federal zoning laws (which are intended to destroy the suburbs by merging them with large cities); onerous gun control legislation; and the relentless attempts on social media, in corporations, and on college campuses to limit or deny the free speech of conservative speakers.  

In all of these examples, forced conformity to achieve a “just society” is valued by Progressivism above free thinking, individual liberty, conscience, and self-determination.  This stands in stark opposition to the goal of the Founders, which was to minimize government interference in our daily lives — the right to be left alone — allowing us to pursue our own happiness. 

Private Property.  “Government is instituted to protect property of every sort,” said James Madison, including conscience, “the most sacred of all property.”  The founding principle of private property is not limited to real estate.  It encompasses the natural rights of all individuals to create, obtain, and control their possessions, beliefs, faculties, and opinions, as well as the fruits of their labor (Fourth and Fifth Amendments). 

Progressivism subordinates the protection of private property to the goals of social and economic equality and environmental justice.  Equal outcomes, or “equity,” as it is often called, can be achieved only by reallocating wealth through centralized planning and control, government coercion, confiscation of private property, and limiting individual economic freedom.

One of the primary vehicles for achieving these goals is excessive taxation, which is used to redistribute wealth through massive federal programs.*  Though Progressives are not seeking to abolish private property outright, they believe that their vision of a just society warrants government confiscation of private wealth and property to whatever degree is necessary to implement “economic justice.”  Effectively, the purpose of government is to appropriate private property rather than to protect it.

Not only do these policies violate the natural right of private property, but, as history has shown, attempts to heavily regulate and control businesses and markets, and to redistribute wealth through taxation, end in widespread poverty, shortages, and even starvation (e.g., the Soviet Union, Cuba, China, Venezuela, etc.).

Limited Government.  The principle of limited government maintains that citizens are best able to pursue happiness when government is confined to those powers that protect their life, liberty, and property.  History is littered with innumerable examples of “absolute Despotism,” to use the words of the Declaration of Independence.  The lesson is clear: tyranny grows in proportion to power, threatening individual liberty.  The Founders had a realistic understanding of the human condition and its tendency toward corruption and control.  “It will not be denied,” warned James Madison, “that power is of an encroaching nature and that it ought to be effectually restrained from passing the limits assigned to it” (Federalist 48). 

Progressivism, on the other hand, originates from an entirely different set of assumptions regarding government power.  Progressives, as evidenced by their compulsive dependency on government, maintain that government should be as large and as powerful as necessary to implement social, economic, and environmental justice.  The government, especially at the federal level, is viewed as the first resort in resolving social and economic problems such as health care, education, unemployment, housing, poverty, and the environment.  

The Green New Deal, which will cost trillions of dollars, is the largest, most expensive proposed government expansion in history.  It would use federal control to restructure utilities, transportation, infrastructure, agriculture, society, and the economy.  Similar proposals include taxpayer-funded health care, taxpayer-funded childcare, taxpayer-funded college education (at state colleges), a minimum guaranteed income, slavery reparations, and even taxpayer-funded internet service.  These programs promote an uncontrollable dependency on government that is diametrically opposed to the Founders’ vision of America.

The fatal flaw in the Progressive project is not just the expansion of government with its 430-plus federal  agencies, but the failure to connect this growing government power with increasing tyranny.  Progressivism has no limiting principle to restrain the growth of government because government is regarded as a benign agent of the people.  But this is a naïve delusion.  As we have already seen, a number of our constitutional rights are in jeopardy as government inches toward authoritarianism.  Innumerable examples across the globe, especially from socialist and former socialist countries, also give proof to the Founders’ belief that tyranny and corruption always grow in proportion to power.  

Though Progressives, like most Americans, believe they are defending and preserving our democracy, they are actually undermining and replacing American democracy with something radically and dangerously different.  The threat extends far beyond the principles of limited government, private property, liberty, and inalienable rights.  Progressivism, in its relentless attempt to delegitimize our historical foundations, also endangers the rule of law, due process, consent of the governed, and federalism, among other principles, as explained in my book.  This sweeping demolition of our founding principles renders Progressivism the most dangerous existential threat America has faced since the Civil War.

William DiPuccio, Ph.D., is author of The War on America’s Founding Principles: How Progressives Are Dismantling America One Plank at a Time, a free eBook.   His articles, books, and videos can be found on his blog, Science Et Cetera.

*Though citizens have a moral and civic duty to help those in need and improve society, it is not the prerogative of the federal government to coerce philanthropy.  State governments, which are closer to the people and whose powers are more general, may, as the Founders believed, undertake such relief as a last resort (e.g., to help children, the disabled, the destitute, etc.).  Thomas Jefferson, for example, co-authored the Virginia “Bill for Support of the Poor” in 1779.

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Overstretch: The Long Story of Staggering U.S. Debt

If the past year was dominated by the huge human costs of COVID-19, the next few years will be about its economic aftermath, including the alarming rise of US debt. What’s needed is multilateral cooperation – a new ‘Grand Alliance.’

On Friday, Congressional leaders failed to secure a bipartisan deal on a $900 billion pandemic relief package. A government shutdown was avoided only with a 2-day extension.

A protracted shutdown would amplify the risks for pandemic escalation and economic crisis, amid the long-awaited vaccine rollout. Bipartisan tensions are compounded by the impending Georgia Senate runoff races in January that will determine control of the chamber in the Congress.

In 2019, the Congress suspended the debt ceiling until after the 2020 presidential election. While it sought to avoid a repeat of the 2011 and 2013 debt crises during an election year, new spending contributed to Trump’s new military rearmament drive.

The new Congress must decide the future of the debt ceiling by summer 2021.

Q3 2020 hedge fund letters, conferences and more

High US Debt Burden

By the year-end, COVID-19 cases worldwide will be close to 80 million. As a result of utter mismanagement, US figure will be close to 20 million.

While the pandemic continues to spread and the health system is overwhelmed, the Trump White House has taken record amounts of debt in record pace.

During his campaign, Trump pledged to eliminate US national debt in 8 years. At the time, total public debt was $19.6 trillion. In the past 4 years, it has soared to more than $27 trillion, by almost $8 trillion. It was an achievement of sorts. What former President Obama achieved in 8 years, Trump did in just 4 years.

Of course, all major Western economies have taken record amounts of debt during the global pandemic. But United States is not like other economies. First, it has more COVID-19 cases relative to all other major economies. Second, US remains a world anchor economy. Third, US dollar dominates international transactions. As a result, excessive US debt will have disproportionate global spillovers.

How will the Democrats cope with the debt burden?

Instead of focusing on the size of US debt, says Jason Furman, Obama’s former head of the Council of Economic Advisers, “policymakers should assess fiscal capacity in terms of real interest payments, ensuring they remain comfortably below 2 percent of GDP.” That, Furman believes, would ensure adequate fiscal support and needed public investments, while maintaining a sustainable public debt.

Here’s the logic of the argument: As a share of GDP, the cost of servicing US debt has fallen since 2000, even as federal debt has increased. An environment of low interest rates makes it easier to pay off debts.

So, Furman argues, the Biden administration can manage primary deficits (noninterest spending minus revenue) without “an unlimited explosion of debt.”

Short-Term Gains, Long-Term Challenges

That’s likely to be the stance of the Biden administration’s proposed economic team, which will stress both growth and equity.

The team includes former Fed chief Janet Yellen as the new Secretary of Treasury, her former right-hand man Jerome Powell as current Fed chair, and labor economist Cecilia Rouse as chair of the Council of Economic Advisers (CEA). CEA members feature Jared Bernstein, Biden’s chief economist in the Obama era, and Heather Boushey, the cofounder of the Washington Center for Equitable Growth.

Nevertheless, the likely policy stance, whether implicit or explicit, is predicated on unsustainable debt-taking in the future.

According to the recent projections by the nonpartisan Congressional Budget Office, federal debt held by the public will surpass its historical high of 106% of GDP in 2023 and will continue to climb in most years thereafter. By 2050, debt as a percentage of GDP will amount close to 200% of the GDP. Despite peaceful conditions, it is already at the level of World War II; by 2050, it could be twice as high (Figure 1).

Figure 1 – US Debt Held by the Public, 1900 to 2050 (as % of GDP)

US Debt

Source: Data from CBO (Sept 2020)

Worse, US debt is likely to increase faster than anticipated. Current projections do not include the full costs of the pandemic stimulus packages, or the “needed public investments” that the Biden administration will seek to promote.

What will be good to the US economy and global prospects in the short-term could prove highly detrimental to both in the long-run.

Here’s why: Deficits will more than double from an average of 4.8% of GDP from 2010-19 to 10.9% percent 2041-50 driving up debt. As a result, net spending for interest will account for much of the increase in total deficits in the last two decades of the projection period.

Markets plan on quarterly basis. Presidential terms have barely a 4-year perspective. As a net effect, long-term perspective is lost in the translation. In CBO’s projections, growth in outlays will continue and accelerate to outpace growth in revenues, resulting in larger budget deficits over the long run (Figure 2).

Figure 2 – Percentage of GDP: Outlays Vs Revenues

US Debt

Source: Data from CBO (Sept 2020)

So, what about those “sustainable” real interest rates? Measured as a share of GDP, net spending for interest could nearly quadruple over the last two decades of the projection period.

From overreach to new ‘Grand Alliance’

In addition to US banks and investors, the Fed, state and local governments, mutual funds and pension funds, foreign governments hold a third of the US public debt. The largest holders include Japan ($1.3 trillion), China ($1.1 trillion), and UK ($430 million). To cope with its soaring debt, US will depend on these contributions.

However, Japan is the world’s most indebted major economy (government debt to GDP exceeds 238%). Due to maturing, aging and population decline, its burden will continue to increase, while the Brexit costs will penalize UK economy for years.

Biden administration has promised to be tough on China, Russia and several other countries, which could translate to rising defense and security allocations – which, in turn, would further amplify soaring debt, twin deficits and real interest rates.

When great powers fail to balance wealth and their economic base with their military power and strategic commitments, they risk overextension, as historian Paul Kennedy warned in the late ‘80s. In the coming decades, that will be a key US risk.

Nothing is inevitable in life, however. There is a great opportunity amid the rising threats. That’s multilateral cooperation across all political differences among the world’s largest economies. It has been achieved before, and it could be achieved again, as evidenced by F.D. Roosevelt’s ‘Grand Alliance’ during World War II.

In the 1940s, war threatened to result in excessive debt. Today, excessive debt risks wars that will have no winners.


About the Author

Dan Steinbock is the founder of Difference Group and internationally recognized expert of the multipolar world economy. He has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup.net/

On Truth

Western World’s concept of objective truth was challenged by Karl Marx, who declared truth to be class truth. The capitalists had their truth, and the workers had their truth. The workers’ truth had more validity, because they were oppressed, whereas the capitalists’ truth was self-serving.

This assault on objective truth did not succeed except on a limited basis for a short time in the Soviet Union where Lysenko damaged Soviet biology and agriculture at the expense of a number of lives.

The assault on objective truth in the 21st century is race based and gender based. The races and genders have their own truths. The truths that have validity are those of the oppressed—people of color, feminists, transgendered, and sexual deviants. The truths without validity are those of the oppressors—white heterosexual males.

Objective truth based on facts and evidence is an alien concept to the young whose experiences of truth are learned emotional responses. The media know that they are lying in terms of objective truth, but as objective truth is a white construct that serves white interest it is an oppressor truth without validity.

Today in the media and in education the concept of a lie as a statement in conflict with objective truth is dying out. A lie is something that denies the race and gender truths of the oppressed.

In this kind of truth system evidence in the traditional sense hasn’t a place. In an emotion based system, evidence is the offense given by a statue, a word, a phrase, a historical reference, a painting. Consequently, it is impossible for a person who has an objective concept of truth to have a rational discussion with a person who has a race/gender concept of truth.

Aside from the problem of swearing in such a person to tell the whole truth and nothing but the truth, it becomes impossible for a society, part of which has a scientific concept of truth and part of which has an emotional concept of truth, to talk to one another.

A society in which people cannot talk to each other is a society that falls apart.

A society in which objective truth is banished is a society without science.

You can see the dark ages on the horizon.

Paul Craig Roberts, UNZ Review

“Great Spirits” versus “Useful Idiots”By NORA DIMITROVA CLINTON

How was I to resolve the irreconcilable dilemma between my passionate love for scholarship and my gut-wrenching disappointment with those American intellectuals who condoned communist crimes?

Excerpted from the author’s book, Quarantine Reflections across Two Worlds.

“Without freedom of thought, there can be no such thing as wisdom; and no such thing as public liberty, without freedom of speech; which is the right of every man, as far as by it, he does not hurt or control the right of another: and this is the only check it ought to suffer, and the only bounds it ought to know.” – Benjamin Franklin, “Silence Dogood, No. 8, 9 July 1722”

I got my Ph.D. and then my first job as a classics research associate. It was a golden time: I got married, my son was born, and I had an attractive job writing scholarly books and articles and teaching classical languages. I was even fortunate to co-establish a charitable foundation with my husband and provide a modicum of help to my beloved country of birth.

After the completion of my research appointment, whose bliss had endured for seven years, I started applying for professorial positions. I sent but a handful of applications, only for opportunities that truly interested me. Although classics departments had been somewhat spared from turning into ideological conveyor belts promoting modernized Marxist dogmas and penalizing dissenters, a growing contingent of classicists taught unproven subjective theories at the expense of good old-fashioned training in facts, documents, and languages. I had no passion for disseminating such theories, having published extensively in the field of ancient documents on stone.

Finally, a dream job opened up at Berkeley for a tenure-track professorship of epigraphy—the study of writing on hard surfaces. I was invited for an interview and then to deliver a lecture—a delightful experience in a breathtaking paradise on Earth, which beckoned, sun-kissed, luscious, and laid-back, even in January. I ended up being a runner-up for the job, which in retrospect was a blessing in disguise.

While my academic hosts wined and dined me as a promising job candidate, for which I felt most obliged, they invariably took me to the Freedom of Speech Café, where I received a powerful dose of anti-American sentiment. I love and admire America, and this made my blood boil. I politely underscored that freedom of speech was a privilege this country had continually enjoyed; if socialist intellectuals wanted to experience its real absence, they should relocate to a communist country.

How was I to resolve the irreconcilable dilemma between my passionate love for scholarship and my gut-wrenching disappointment with those American intellectuals who condoned communist crimes? My parents had been academics, and I had dreamed of becoming one myself since the age of six. At that age, I wrote my first “dissertation,” which consisted of a title page; ten pages with educational illustrations

I meticulously drew and redrew, accompanied by detailed captions; and a judicious conclusion. The impetus had come from my beloved mother’s Ph.D. dissertation, which she defended at that time. Her example inspired me to produce a dissertation of my own, a term I childishly assumed derived from the word for dessert, since it served as the crowning achievement, the cherry on top of someone’s doctorate. I grew up with a profound sense of admiration for all those “great spirits,” who, according to Einstein’s prophetic adage, “always encountered violent opposition from mediocre minds.” I felt incredibly blessed, at all academic institutions I attended, to have learned from such great spirits, who regarded facts as sacrosanct, while encouraging free thought and curiosity. To them I owe eternal thanks.

How different these honorable scholars and scientists were from the cookie-cutter proponents of pro-communist dogma and anti-American platitudes, who had replaced objective knowledge with ignorant propaganda. While constructive criticism of one’s government stimulates democracy, the Marxist intellectuals at Western universities engage in a destructive rewriting of history that defies the principles of scholarship.

Were these the same duty-bound Americans in whom millions of Eastern Europeans placed their hope of deliverance— that they will “tear down this wall” one day, gallop in on white horses, and rescue us from Big Brother? In 1986, Ivailo Petrov published Wolf Hunt, a profound and intrepid portrayal of the communist persecution of Bulgarian peasants, who lost their land, livestock, livelihood, and often lives. One of the novel’s main characters utters the wishful prophesy that the Americans will come: “If they don’t come in our time, then they’ll come in our children’s or our grandchildren’s time. This world wasn’t created yesterday, it has its way of doing things. What was again will be.” [1] Among Bulgarian dissidents, these words assumed a life of their own, repeated from mouth to mouth—whispered at first, then timidly voiced, and at last boldly proclaimed. My disillusionment with mainstream intelligentsia continued to intensify. One professor I knew, who earned a six-figure salary, was an unabashed self-proclaimed communist, who enjoyed a luxurious house with acres of majestic pines and an emerald pond. He incessantly directed invectives at the United States and sang “The Internationale” at his bon-vivant soirees, after distributing gaudy pink brochures with this dreadful anthem’s lyrics to his unfortunate guests.

The French have fittingly labeled this phenomenon “left caviar” or “champagne socialism.” Just think of George Bernard Shaw, who shamelessly propagated eugenics and genocide, offered to assist Hitler and Mussolini, and lauded Stalin’s extermination camps as though they were a quaint holiday arrangement of voluntary duration. Even more eloquent is the term “useful idiots,” allegedly coined by Lenin to describe Western intellectuals and journalists who were sympathetic to the communist regime, yet despised by its leadership for their naiveté, while being ruthlessly used by it to manipulate free-world media and impressionable young minds. I kept arguing with useful idiots, to the point of painful exasperation, and finally relinquished a successful academic career, appalled by their hypocrisy and ingratitude.

My education and the noble minds who sought to impart their wisdom to me will always be a part of my soul. I never regretted my decision to bid farewell to academia, or rather, what has become of it, and set sail on uncharted seas that guided me to a new vocational harbor I now treasure every day—but let this be the subject of another book.

Read Quarantine Reflections across Two Worlds by Nora Clinton.

Catholic League: ‘The Left Always Screws the Poor’

Catholic League president Bill Donohue has noted history’s great irony that “no segment of society punishes the poor more than those who champion their cause.”

In a scathing essay Tuesday, Dr. Donohue insists that the latest Marxist to “screw the poor” is New York City Mayor Bill de Blasio, who is undermining the cause of the lower classes by alienating those who generate wealth and create jobs.

De Blasio’s scheme to raise taxes on the rich in order to “redistribute wealth” and to close the “COVID achievement gap” is senseless, Donohue observes, since “the rich are leaving New York in droves” because of the city’s absurdly high taxes and taxing them at a higher rate “will only encourage more to leave.”

“They are taking their tax contributions and their jobs with them,” he adds.

Despite de Blasio’s claims, “fleecing the rich will do absolutely nothing to enhance academic achievement,” Donohue observes. “We have known for decades that there is no correlation between spending on students per capita and academic achievement.”

While de Blasio focuses on race, he turns a blind eye to the real causes of poverty and underachievement, Donohue asserts, noting that Asians are “people of color,” yet they have no problem succeeding in school.

“That’s because, unlike African Americans, the typical Asian family has a father and a mother at home,” he adds.

“So the ‘color’ argument that de Blasio favors — structural racism is holding blacks back — is completely false,” he continues. “Black kids from two-parent families are not failing in school. The real issue is the family, not race.”

Like others on the left, de Blasio cares more about upholding the public school monopoly and protecting the teachers’ union than helping kids.

If he really wanted poor kids to succeed in school, “he would spend money on charter schools, provide scholarships to private schools, endorse school choice, and allow the poor to enroll in Catholic schools,” Donohue observes. “Instead, he fights every initiative that works.”

While pretending to be a champion of the poor, de Blasio’s actions harm those he claims to defend.

Thus, he “drives the rich out of New York, shrinks the tax base, and does nothing to help the poor succeed in school,” Donohue notes.

Thomas D. Williams, Catholic League, Breitbart

Walter Williams: Suffer No Fools – Full Video

Professor Walter E. Williams passed away some two weeks ago. Among other things, he was called “The People’s Economist.” He spent his life trying to enlighten us on our Founding principles, individualism, and the morality of free-market capitalism. One of his last contributions to liberty is the attached YouTube video “Suffer No Fools.”

Its message is universal and transcendent.

The Artful Dilettante

Government, not COVID, is Killing Small Businesses

A video of a confrontation between Ventura County, California health officials and restaurant owner Anton Van Happen has gone viral. The health officials were ordering Mr. Van Happen to close his business because he allegedly violated California’s ban on outdoor dining. Mr. Van Happen asked the health officials if the government will pay his employees and his rent while his business is indefinitely closed.

Mr. Van Happen is hardly the only small business owner worried about how to pay bills during the lockdowns. Many small businesses operate on a narrow profit margin, so being forced to “temporarily” shut down or limit the number of customers they can serve is a virtual death sentence.

The lockdowns have already caused as many as 200,000 small businesses to permanently close. Lockdowns, by shrinking the number of employers, lead to long-term unemployment or lower wages for many workers.

While governments have terrorized small businesses, they have typically deemed the big chain stores “essential businesses” so they can remain open. The lockdowns are thus another government policy that gives big businesses a competitive advantage over their smaller competitors.

The benefits big businesses get from the lockdowns — including fewer competitors, more customers, and a job market with more workers competing for fewer jobs — may explain why many big businesses are not fighting the lockdowns. Instead, most big retail chains are requiring their workers and customers to wear masks. Many big businesses may soon deny service to those who refuse to receive a Covid vaccine.

One would think that progressives who claim to oppose policies that benefit big corporations like WalMart, Target, and Amazon would oppose the lockdowns. Sadly, even many progressives are unquestioningly parroting the Covid propaganda and demonizing those who dissent.

By slowing down the development of herd immunity among the population, the lockdowns could put those truly at risk in greater danger. Lockdowns have also had negative effects such as increases in drug and alcohol abuse and increases in domestic violence. Meanwhile, many schoolchildren are deprived of the opportunity to interact with their teachers and their peers. Instead, these children are subjected to the fraud of “virtual learning.”

Resistance to Covid tyranny is growing as more people figure out that lockdowns and mandates are both unnecessary and harmful. This resistance was largely started by small business owners faced with a choice between obeying the government or making sure they, and their employees, can feed their families. Small business owners have been leaders in recent anti-lockdown protests across America.

Eventually the resistance will grow to the point where the politicians will be forced to either double down on authoritarianism or admit the lockdowns were a mistake. Either way, those of us who know the truth must resist the Covid tyranny until government officials no longer terrorize small businesses for the crime of serving willing consumers.

Ron Paul, Ron Paul Institute