Rarely do I subject myself to liberal editorials, but occasionally I glance at Alan Binder’s column since he is one of the few liberals to grace the venerable opinion pages of the Wall Street Journal.  The Princeton professor is the quintessential, arrogant, ruling class elite, with a venomous dislike of all things private and a blind love of all things public. Binder’s never met a redistribution program he did not endorse, nor a spending cut he did not mock.

Binder’s latest hit piece attacks the GOP for wanting to reduce government spending. In particular, he argues that the evil GOP perpetuates a false notion that government overspending is bad for jobs. First of all, Binder makes the laughably unprovable assumption that the Obama “stimulus” created “1.3 million net new jobs”.  Even if we take the professor at his word (I know that’s a stretch but bear with me), these 1.3 million fantasy jobs come at a cost of $600 billion (his figure). THAT’S $460K PER JOB. And what types of jobs did the “stimulus” net us? Brain Surgeons? Captains of industry? Think municipal workers or SEIU jobs where they get paid to protest against the GOP Governors we elect. Sounds like a good ROI to me, professor.

Binder makes no distinction between public and private sector jobs, as if the Federal Government could solve our economic ills merely by employing 20 million Americans to dig holes in their backyards and refill them. Does the professor really believe that government jobs are on par with value creating private sector jobs?  In fact, the entire notion of value creation seems missing from Binder’s repertoire. Value—or wealth—is created when production and trade take place voluntarily so both parties gain.

(more…)

Michael Spence, Nobel Laureate and former Dean of the Stanford Business School, has just published a rigorous economic analysis called: “The Evolving Structure of the American Economy and the Employment Challenge.” The report illuminates how the unbridled growth of government consumption spending has destroyed America’s productivity leadership, driven entrepreneurs to off-shore production, and destroyed middle class wage rates.

Adam Smith, 18th Century English economist, pioneered the concept of the “invisible hand” to describe how capitalism through self-interest, competition, and supply and demand, more effectively allocated resources than the “dead hand” of the state; it levied punitive taxes, adopted restrictive regulations, and enforced monopolies to favor their crony allies. Smith described how English entrepreneurs flourished after their King’s feudal dominance of the economy was liberated by adopting the laissez-faire economics that allowed transactions between private parties to be free from the state’s coercion. Smith described how new wealth was rapidly created and compounded over time form the productivity gains of the Industrial Revolution that leveraged the value of workers and led to higher wages.

The Spence report illuminates that from 1988 to 2008, America’s productivity dominance collapsed by 70%; shrinking from 2.5% gain per year to only .7% per year. This crash in American leadership was the result of 98% of the 27.3 million new jobs created during the period coming from the lower productivity, and thus lower wage, “consumption” sector of the economy. Higher productivity, and thus higher wage, “goods-producing” sector grew by only 620,000 jobs. The root cause of this substitution for lower productivity jobs was a 23% growth in government, to 22.5 million workers, and a 63% growth in government dominated healthcare, to 16.3 million workers. Productivity for the American goods-producing sector continued to grow by a healthy 2.3% per year, but productivity of government workers sunk by 4% and productivity of healthcare workers plummeted by 9%.

In 1988 the average value added for American workers was $75,000. Over the last twenty years, America’s revolution in information-technologies helped drive up the valued added of a goods-producing American worker to $115,200 per year. But the productivity value of government and healthcare worker tumbled to $72,000 per worker; dragging down the average value added of American workers to only $90,750. That $24,450 loss of productivity explains allot about why the American middle class wages have been shrinking in the United States.

(more…)

Several weeks ago, I watched my son play a high school baseball game on “Jackie Robinson Field” in Cairo, Georgia (Robinson’s hometown).  As I watched, I pondered a provocative question raised by Economic Episodes in American History, a fascinating new supplemental curriculum that ought to be used in every high school social studies department:

Did Adam Smith Have an “Invisible Hand” in the Desegregation of Major League Baseball?

This question is one of 32 raised in Economic Episodes in American History, which seeks to deepen students’ understanding of American life by desegregating the study of economics and history.  Written by Mark Schug and William Wood, this imaginative new curriculum uses illustrations from American history to teach students basic economic principles.

In the case of major league baseball’s desegregation, Schug and Wood invite students to learn about how labor markets function – and, specifically, how the competition for top talent made it impossible, eventually, for Major League Baseball owners to sustain an agreement to deny opportunities to African-American ballplayers.

While heralding the “courage and determination” of Jackie Robinson and of Branch Rickey (the white baseball executive who signed Robinson), Schug and Wood suggest that larger economic forces were at work in baseball’s desegregation – a fact which can help deepen our understanding of this historical episode without diminishing our admiration for the central players in this grand drama.

(more…)

Big Government would not exist were it not given sanction by the people.  Those who continue to support it have been duped in large part as a direct or indirect result of the ideological subversion of our academic institutions.  The leaders in all fields of our society were raised in the politically correct, militantly liberal academy, and so it is only natural that the influence of socialist ideas has infected every aspect of our culture.  In so doing, academia has produced leaders that undermine our society rather than helping it to flourish.

It is evident that educational institutions are turning society on its head when we see the kinds of leaders they herald as the shining examples for our students to follow.  On May 17th of this year, the graduating students of Columbia University will spend their morning listening to their Class Day speaker, Benjamin Jealous.  Readers may recall that Mr. Jealous penned a piece for the Huffington Post in which he ardently defended and praised Van Jones, calling him “an American treasure.”  He is being called on to speak because he is a star in the social justice movement.

For as Columbia’s Dean puts it, “Columbia’s undergraduate experience is built on the idea that our college must not only help students develop their capacities for critical thinking, but also nurture in them the responsibilities of citizenship in a democratic society. Benjamin Todd Jealous wonderfully personifies the value that Columbians have long placed on active engagement in the world and in finding the solutions to society’s challenges.”  Jealous does so by leading what he refers to as “a volunteer army for social change” in the NAACP.  That he would describe the organization in such a light should come as no surprise as Jealous is a former New York community organizer and AFL-CIO spokesman.

Mr. Jealous’ address to my class will mark a fitting end to my four years at Columbia in which I witnessed the attack on members of the Minutemen, the speech of Mahmoud Ahmadinejad, a professor pushing for students to join the peace corps in the middle of his science class and Israeli Apartheid Week amongst innumerable other travesties.

(more…)

Every once in a while one gets an insight into the sad state of higher education in the United States.

Back in 2008, when my agent was attempting to market the manuscript of what recently appeared in two companion volumes under the titles Montesquieu and the Logic of Liberty: War, Religion, Commerce, Climate, Terrain, Technology, Uneasiness of Mind, the Spirit of Political Vigilance, and the Foundations of the Modern Republic and Soft Despotism, Democracy’s Drift: Montesquieu, Rousseau, Tocqueville, and the Modern Prospect, he ran into an unexpected snag.

None of the editors at the trade presses he approached had ever even heard of Charles-Louis de Secondat, baron de La Brède et de Montesquieu.

That came as a shock to me; and when I repeated the story to other students of the eighteenth century, they expressed amazement and dread.

(more…)

As President Obama concludes his first jobs summit, almost a year into his presidency, the nature of the guest list hints at a deliberate initiative that’s been underway for over 15 years – and it’s not one of the obvious presumptions that most would make.  Notice that of the list of leaders invited, the majority are labor union leaders, leaders of businesses with government contracts, or leaders of businesses that operate on partial public funding.  There is a common element across most of the businesses represented:  in one capacity or another, even if they are private sector businesses, most on the list benefit from some form of public money.

There is a legal precedent over 15 years old that is the pervasive push behind such a premise, one that was the product of ACORN and labor union coalitions.  And judging by Change to Win / SEIU’s Anna Burger’s plan for today’s jobs summit, it’s evident that this precedent is in play as we speak.

It’s no coincidence that in the wake of America’s economic crisis, some lawmakers have been pushing for infusions of public funds into the private sector.  No, we’re not just talking bank and insurance company bailouts. We’re talking about tax credit and incentive programs, health care reform proposals, green jobs programs, energy efficiency initiatives,  and even real estate development companies.  As the conservative accusations of socialism have begun to sink in with progressive leaders -especially with union leaders, who are especially sensitive to being perceived as public spenders – the language has been changing.  Adam Smith’s “Invisible Hand” doesn’t sound so scary when it’s wrapped in the glove of words like “co-ops” and “public-private partnerships” and “national service”, which are now quickly being mainstreamed into the rhetoric.

(more…)