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Now with B16!The Curt Jester ^ 4/21/05 Jeff Miller
Posted on 04/21/2005 1:43:23 PM PDT by Atheist2Theist
You might have been told in the past that Humanae Vitaemins were not good for you or that if your conscience decided you didn't need Humanae Vitaemins you could safely ignore them. Latest cultural medical studies have proven the link between lack of Humanae Vitaemins and the lack of children. These studies show the extreme cultural malnutrition from not getting their *RDA of required spiritual nutrition.
Now with B16, Ut Unum Sintrum, has all the required nutrients you have relied on in the past and more. B16 works well with and expands with needed intake daily intake such as VII and JP2 (Beta-Karoltene) and will not interfere in any way them. In fact the synergetic effect will only enhance your spiritual metabolism.
The B16 caplets have a special smooth coating allowing you to swallow them without any water. Yet it is true with B16 you do not have to water it down in any way. Our B16 is doctrinally pure with no heretical impurities such as those found in anti-Humanae Vitaemins.
Studies have conclusively proven that people taking B16 daily will continue to have smooth running and orthodox metabolism for years to come. B16 in trials has proven not to be harsh or difficult as had been initially reported.
We are also introducing Ut Unum Sintrum for children since your children our never too young to start off with proper spiritual growth. Parents will be pleased to know that our Humanae Vitaemins are not sugar coated, just like everything else we offer with B16 in it. Guaranteed not to cause truth decay or any form of spiritual rot. The children's tablets come in fun shapes like German Shepherds and Rottweilers.
*Ratzinger Daily Allowance
Disclaimer: B16 is not a miracle drug and will not remove any crosses you might bear. Though clinical trials have shown that a steady diet of truth supplemented with B16 will enable you better to embrace your cross and to carry it daily. For best results please use B16 with plenty of prayer and thanks be to God.
Caution: B16 has been known to cause allergies, shrill behavior, and coughing fits to some theologians, clergy, religious, and laity. Especially those who have had Spirit of Vatican Flu in the past.
Tell your health care provider if you are dissident and they can help you overcome your deficient diet and prepare you for true health with full dosages of B16. Or contact your local Orthodoxpedic surgeon for further information.
TOPICS: Humor; ReligionKEYWORDS:
1 posted on 04/21/2005 1:43:24 PM PDT by Atheist2Theist
[ Post Reply Private Reply View Replies ]
To: Atheist2Theist
Please, Mister, please - don't play B17...
2 posted on 04/21/2005 2:03:42 PM PDT by Hegemony Cricket (I have learned to deal with change. Any possibility of letting me try some currency?)
[ Post Reply Private Reply To 1 View Replies ]
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George Bush
La tercera revolución americana
Álvaro Martín
Recomiéndenos Volver
“ Siempre se ha dicho que George W. Bush emula a Ronald Reagan. Es mucho más claro para mí que un vínculo más profundo aún le une a Abraham Lincoln ”
El día había amanecido como los anteriores en Washington. Gris, lluvioso y gélido. El Presidente había despachado algunos asuntos antes de dirigirse al Congreso, donde también mantuvo contactos con senadores de ambos partidos. Después se encaminó a la balconada del ala Este del Capitolio donde juraría su cargo con la misma fórmula utilizada por George Washington el 30 de abril de 1789. El Presidente tomó asiento en la tribuna de oradores junto a su esposa. Continuaba lloviendo. Mary vio como su marido erguía sus 190 centímetros de estatura para aproximarse al podio desde donde se dirigiría al pueblo americano aquel 4 de marzo de 1865. En ese momento, el sol desgarró el velo de nubes y explotó en un paroxismo de luz sobre Abraham Lincoln. Lo que siguió fue la oración política más dramática y trascendental de la historia, cuarenta y un días antes de que el 16º Presidente abandonara ésta para alojarse por siempre en el corazón de los americanos por y para quienes él había salvado la Unión.
En 1861 el único contacto de un ciudadano americano con el Gobierno federal era el servicio postal. El dólar no existió hasta 1863. El ferrocarril transcontinental se ultimó en esa época. La expansión de la enseñanza superior data de entonces. EEUU fue creado por los Padres Fundadores, pero Abraham Lincoln alumbró la nación americana en una lucha titánica por la libertad, para que aquel país “concebido en libertad y dedicado a la proposición de que todos los hombres son creados iguales” “no pereciera de la faz de la tierra”. EEUU se conjugaba en plural hasta 1863. Hasta que Lincoln en Gettysburg conjuró los primeros vagidos de “un renacimiento de la libertad” para su nación.
¿Cuál era la última ratio de la Segunda Revolución Americana operada por Abraham Lincoln? En sus propias palabras de nuevo: “Al dar la libertad al esclavo, aseguramos la libertad del libre, igualmente honorables en aquello que concedemos y en aquello que preservamos”. 140 años después tenía que ser George W. Bush quien, en la alocución más emocionante y significativa de los últimos cuarenta años, fuera a afirmar lo mismo en medio de una guerra donde se dirime también “si esa nación, o cualquier nación, así concebida (en libertad) y así dedicada (a la igualdad)” puede sobrevivir.
Siempre se ha dicho que George W. Bush emula a Ronald Reagan. Es mucho más claro para mí que un vínculo más profundo aún le une a Abraham Lincoln. En agosto pasado publiqué un artículo en el diario ABC donde comparaba la situación electoral de Bush en esos días con la de Lincoln en el verano de 1864. La realidad es que los paralelismos van mucho más allá. George W. Bush inició el 20 de enero, con su Segundo Discurso Inaugural, la Tercera Revolución Americana, como Lincoln iniciara la Segunda el 1 de enero de 1863 con el Decreto de Emancipación”. EE UU es ahora, de nuevo, una potencia revolucionaria.
George W. Bush proclamó: "la supervivencia de la libertad en esta tierra depende de la supervivencia de la libertad en otras. La mejor esperanza de paz en nuestro mundo es la expansión de la libertad en todo el mundo"; es decir, la misma idea de Lincoln sobre la lucha por la libertad de los que no la tienen como forma de garantizar la nuestra. Y añadió: "Es la política de EEUU apoyar la aparición de movimientos democráticos en toda nación y cultura, con el fin último de terminar con la tiranía en el mundo". Esta idea, la destrucción de la tiranía, es tan manuifiestamente lincolniana que el Presidente Bush la citó explícitamente en su discurso: "Aquellos que niegan la libertad a otros no la merecen para sí; y, en la ley de un Dios justo, no pueden retenerla".
George W. Bush no empezó esta guerra, pero aceptó el desafío de defender la libertad (de nuevo Lincoln: "...un bando haría la guerra antes que dejar que la nación sobreviviera; el otro aceptaría la guerra antes que dejarla perecer"). Lincoln no empezó la Guerra Civil pero la aceptó para defender a la nación. Lincoln no se proponía abolir la esclavitud, sino restablecer el statu quo ante. Pero en 1862 la Guerra se convirtió en una Guerra revolucionaria de emancipación, cuando la fuerza del principio moral intersectó con la necesidad militar de quebrar las bases económicas de la potencia esclavista.
El 20 de enero de 2005, el Presidente Bush convirtió la Guerra contra el Terror, una guerra empezada por la seguridad, en una Guerra Revolucionaria de Liberación ("EEUU no fingirá que los disidentes encarcelados prefieren sus cadenas o que las mujeres desean su humillación y servidumbre...Aquellos que viven bajo la tiranía sabrán que EEUU no ignorará vuestra opresión ni excusará a vuestros opresores"). Y por la misma razón que Lincoln: la esclavitud de uno amenaza la libertad de todos.
El día había amanecido gris, con ráfagas de viento y nieve en Washington. Pero para cuando hubo abandonado la tribuna del ala este del Congreso, George W. Bush había completado una transformación lincolniana que quienes tenemos fe en la dignidad y la decencia del 43 Presidente siempre supimos que daría. Él es ahora the last, best hope of earth.
La tercera revolución americana
Álvaro Martín
Recomiéndenos Volver
“ Siempre se ha dicho que George W. Bush emula a Ronald Reagan. Es mucho más claro para mí que un vínculo más profundo aún le une a Abraham Lincoln ”
El día había amanecido como los anteriores en Washington. Gris, lluvioso y gélido. El Presidente había despachado algunos asuntos antes de dirigirse al Congreso, donde también mantuvo contactos con senadores de ambos partidos. Después se encaminó a la balconada del ala Este del Capitolio donde juraría su cargo con la misma fórmula utilizada por George Washington el 30 de abril de 1789. El Presidente tomó asiento en la tribuna de oradores junto a su esposa. Continuaba lloviendo. Mary vio como su marido erguía sus 190 centímetros de estatura para aproximarse al podio desde donde se dirigiría al pueblo americano aquel 4 de marzo de 1865. En ese momento, el sol desgarró el velo de nubes y explotó en un paroxismo de luz sobre Abraham Lincoln. Lo que siguió fue la oración política más dramática y trascendental de la historia, cuarenta y un días antes de que el 16º Presidente abandonara ésta para alojarse por siempre en el corazón de los americanos por y para quienes él había salvado la Unión.
En 1861 el único contacto de un ciudadano americano con el Gobierno federal era el servicio postal. El dólar no existió hasta 1863. El ferrocarril transcontinental se ultimó en esa época. La expansión de la enseñanza superior data de entonces. EEUU fue creado por los Padres Fundadores, pero Abraham Lincoln alumbró la nación americana en una lucha titánica por la libertad, para que aquel país “concebido en libertad y dedicado a la proposición de que todos los hombres son creados iguales” “no pereciera de la faz de la tierra”. EEUU se conjugaba en plural hasta 1863. Hasta que Lincoln en Gettysburg conjuró los primeros vagidos de “un renacimiento de la libertad” para su nación.
¿Cuál era la última ratio de la Segunda Revolución Americana operada por Abraham Lincoln? En sus propias palabras de nuevo: “Al dar la libertad al esclavo, aseguramos la libertad del libre, igualmente honorables en aquello que concedemos y en aquello que preservamos”. 140 años después tenía que ser George W. Bush quien, en la alocución más emocionante y significativa de los últimos cuarenta años, fuera a afirmar lo mismo en medio de una guerra donde se dirime también “si esa nación, o cualquier nación, así concebida (en libertad) y así dedicada (a la igualdad)” puede sobrevivir.
Siempre se ha dicho que George W. Bush emula a Ronald Reagan. Es mucho más claro para mí que un vínculo más profundo aún le une a Abraham Lincoln. En agosto pasado publiqué un artículo en el diario ABC donde comparaba la situación electoral de Bush en esos días con la de Lincoln en el verano de 1864. La realidad es que los paralelismos van mucho más allá. George W. Bush inició el 20 de enero, con su Segundo Discurso Inaugural, la Tercera Revolución Americana, como Lincoln iniciara la Segunda el 1 de enero de 1863 con el Decreto de Emancipación”. EE UU es ahora, de nuevo, una potencia revolucionaria.
George W. Bush proclamó: "la supervivencia de la libertad en esta tierra depende de la supervivencia de la libertad en otras. La mejor esperanza de paz en nuestro mundo es la expansión de la libertad en todo el mundo"; es decir, la misma idea de Lincoln sobre la lucha por la libertad de los que no la tienen como forma de garantizar la nuestra. Y añadió: "Es la política de EEUU apoyar la aparición de movimientos democráticos en toda nación y cultura, con el fin último de terminar con la tiranía en el mundo". Esta idea, la destrucción de la tiranía, es tan manuifiestamente lincolniana que el Presidente Bush la citó explícitamente en su discurso: "Aquellos que niegan la libertad a otros no la merecen para sí; y, en la ley de un Dios justo, no pueden retenerla".
George W. Bush no empezó esta guerra, pero aceptó el desafío de defender la libertad (de nuevo Lincoln: "...un bando haría la guerra antes que dejar que la nación sobreviviera; el otro aceptaría la guerra antes que dejarla perecer"). Lincoln no empezó la Guerra Civil pero la aceptó para defender a la nación. Lincoln no se proponía abolir la esclavitud, sino restablecer el statu quo ante. Pero en 1862 la Guerra se convirtió en una Guerra revolucionaria de emancipación, cuando la fuerza del principio moral intersectó con la necesidad militar de quebrar las bases económicas de la potencia esclavista.
El 20 de enero de 2005, el Presidente Bush convirtió la Guerra contra el Terror, una guerra empezada por la seguridad, en una Guerra Revolucionaria de Liberación ("EEUU no fingirá que los disidentes encarcelados prefieren sus cadenas o que las mujeres desean su humillación y servidumbre...Aquellos que viven bajo la tiranía sabrán que EEUU no ignorará vuestra opresión ni excusará a vuestros opresores"). Y por la misma razón que Lincoln: la esclavitud de uno amenaza la libertad de todos.
El día había amanecido gris, con ráfagas de viento y nieve en Washington. Pero para cuando hubo abandonado la tribuna del ala este del Congreso, George W. Bush había completado una transformación lincolniana que quienes tenemos fe en la dignidad y la decencia del 43 Presidente siempre supimos que daría. Él es ahora the last, best hope of earth.
Tuesday, December 21, 2004
The Monetary Economics of Thurston Howell III
by B.K. Marcus
[Posted August 31, 2004]
Gilligan's Island is now out on DVD, reawakening the unanswered questions of childhood: why does the Skipper let Gilligan help with anything when he knows he'll just screw it up? Why did the movie star take a day cruise in an evening gown? Why did two of the richest people in the world board a dinky boat with the hoi polloi instead of leasing a private yacht? And why do any of the other stranded castaways treat the millionaire's government money as valuable while stuck on an island where no such government can enforce its value?
Because it's just a dumb TV show.
But that last question stuck with me. Would fiat dollars be treated as valuable without the government around to enforce its fiat? My impression in childhood was that money belonged to the government, was inextricably bound to the government, and we, the citizens of the government, were just using the money "on loan" so to speak. This impression came not only from the look of the money itself, but from American history, as children's cartoons had communicated it to me. (One Scooby Doo episode ends with the hidden "treasure" turning out to be a case full of hoarded and now worthless Confederate dollars.)
A Brief Monetary History of Gilligan's Island
In early episodes, we see Mr. Howell hiring various services from other castaways. We eventually learn he's been writing checks on a mainland (and therefore inaccessible) bank. This works while the group consider their condition temporary, but the checks are quickly devalued and eliminated when the castaways begin to prepare for the possibility of an indefinite stay on the island.
In Episode 9, "The Big Gold Strike," Gilligan and Mr. Howell find a gold mine on the island, which Howell convinces Gilligan to keep secret from the others. By the time everyone learns about the mine, Howell has already taken the lion's share of the most easily accessible gold. He'd like to hoard it for himself, but the other castaways begin charging him for their goods and services. Soon everyone has a small fortune in gold, which they all try to smuggle aboard a tiny escape raft. Their collected wealth, of course, ends up at the bottom of the lagoon.
In later episodes, monetary exchange takes place in US paper currency. Was it impossible to recover the gold from the lagoon? Perhaps the writers found it more convenient to deal in the money the television viewers themselves were most familiar with. We might dismiss this as economic naivete on the part of the writers, but recent history provides evidence that fiat paper can, in fact, outlive its government. Not only that, but post-fiat money -- dead government currency -- can out-compete American greenbacks!
Undead Money
After the invasion of Iraq, there was no more central bank printing dinars and no more Iraqi government to put the fiat behind its fiat currency. The American military started handing out US$20 bills and expected the Dinar to fade from existence. Instead, to the chagrin of the occupation force, the Dinar's value doubled against the Dollar in two weeks. Statues of Saddam Hussein were being toppled, but his face was still on the preferred currency, and gaining in popularity. Some saw this as patriotism: a silent protest by the occupied population against the invading force. But we need only look further north, to the Kurd-controlled areas, to find a more economic explanation.
After the first Gulf War, Iraq changed its currency from the so-called Swiss Dinar to the more recent Saddam Dinar. When a government changes its fiat currency, it announces a transition period during which the old bills can be brought in and exchanged for the new. After the window closes, the old notes are declared worthless.
To no one's surprise, the rebel Kurds did not visit the Iraqi government to make such an exchange. They just kept using the old money. It was familiar, hard to counterfeit, and in its post-fiat status, it was no longer inflationary: that is to say, the relatively fixed supply of notes made the currency a better store of value than the new Saddam dinars being printed (and printed and printed) further south.
The Swiss Dinar may have been the first successful post-fiat money.
For a brief period after the invasion -- the time it took the Occupation Authority to reestablish an Iraqi central bank and start printing new dinars -- the old Saddam dinars joined the older Swiss dinars in their post-fiat status. And lo and behold, Saddam's dead dinars rose in value compared to the inflationary dollars of the occupation force.
But how can this be? A money backed only by the force of the State is backed by literally nothing in the absence of that state. And yet the dinars continued to change hands.
By the end of the year, however, the occupation government was printing new dinars, at first with Saddam still on them (for familiarity), then transitioning into something that resembled the Swiss Dinar (to promote confidence). The brief, unplanned experiment in post-fiat monetary theory was over, but the results were unambiguous: a stable money, even a completely unbacked currency, beats out inflationary government paper in both value and marketability.
While it may seem that Gilligan's fellow castaways would reject Howell's dollars as worthless, the case of the Saddam Dinar (and the Swiss Dinar before it) offers evidence in favor of "worthless paper."
For an understanding of the afterlife of government currency, we need briefly to review the history and theory of money itself.
Direct & Indirect Exchange
Money arises naturally out of barter. This isn't just a historical fact but was theoretically proven by Ludwig von Mises in his Theory of Money and Credit: money can only have developed from barter.
Imagine Gilligan's Island without the Howells and their paper dollars. Without money, commodities exchange directly: coconuts for fish, fish for bamboo, etc. But even with barter, some commodities are more "marketable" than others. Perhaps one of the castaways might eventually buy one of the Professor's books, but they will more often purchase Mary Ann's coconut cream pies -- or the coconuts themselves. Coconuts are more marketable than books.
Over time, the commodity that is most marketable becomes popular for indirect exchange: the Skipper trades his fish for Ginger's decorative shells, not because he wants shells, but because he knows he can trade them for Gilligan's coconuts. The price of a commodity is its exchange ratio for the most marketable good, e.g., 12 shells per coconut. The value of the shell money is based on the goods it traded for yesterday -- since we can't know what prices will be today. Right now, the Skipper is willing to trade one of his fish for two coconuts, and he knows that Gilligan was recently willing to trade his coconuts for a dozen shells each, therefore the Skipper wants to price his fish at two-dozen shells each: enough to buy two coconuts. Prices can change from day to day, but today's new prices will be based on the prices of other things yesterday.
Government Paper
Exchanges that started in barter evolve toward a common money currency -- decorative shells, in this example (and also in the more historical examples of trade among coastal Africans and North American Indians). Now suppose the Professor found the use of shells to be primitive and irrational -- "a barbarous relic!"
The Professor, having successfully invented many new tools, decides to invent a more rational money. He finds a way to preserve palm leaves and mark them with denominations. The denominations do not represent a claim for a certain number of shells. The numbers refer only to each other and to nothing else, no other commodity. If they have value, it is only because the Professor says they have value.
Would anyone use the Professor's new money?
Any new commodity can come onto the market, but its price will be newly negotiable and its marketability (how many people will trade their goods for it) will be as-yet undetermined. This would be the status of the Professor's new "currency." Its marketability, and therefore its value (as money), would be unknown. Money is, by definition, the most marketable good: that thing which people will most readily accept in trade will also be that thing that fosters indirect exchange. Even if the others wanted to acquire preserved palm leaves, the leaves could not possibly become the most marketable commodity overnight and could therefore not start out as money. If the Professor's leaves become money, it will be through the same barter-based process that made the decorative shells into money. (Notice, however, that if this were to happen, the unit of value would be the physical leaf and not the arbitrary denomination marked on the leaf. There's no reason a bartered leaf marked "1,000" should trade for ten times as much as a bartered leaf marked "100.")
Does this make fiat money impossible? Obviously not, or we wouldn't be using it now, but it does mean that it has to evolve slowly and in discrete stages. Murray Rothbard recounts the process in his book, What Has Government Done to Our Money? At each stage in the transition, from barter to pure commodity money to monopoly coinage to demand deposits to fractionally-backed bank notes to completely unbacked government fiat, the earliest value of the new incarnation is based on the latest value of the older form of money. Today's new money requires yesterday's prices.
Over centuries, governments have taken over money from the market, and in the 20th century, most currencies became unbacked by anything other than the force of the State. But, as we see in the case of post-war Iraq, the fiat history of a currency can serve as the starting point for its post-fiat valuations. The Saddam Dinar doubled its value (measured against the Dollar) in only two weeks, but it couldn't have gotten started without its previous, albeit inflationary and unstable, exchange value. At that point, astonishing as it may seem, no government was necessary to maintain the value of the money. The market can reclaim money from government.
Why did the unbacked paper do better than the US Dollar? Because the quantity of dinars was relatively fixed, while the supply of dollars grew. The law of supply and demand tells us that, all else being equal, a rise in the supply of a thing will lower the price of that thing. The thing, in this case, is the Dollar itself; its "price" is its buying power, which the Iraqis watched erode drastically within days.
This is why the castaways value Thurston Howell's paper dollars: because whatever absurd amount he may have brought with him for "a three-hour tour," that amount is now fixed. Dollars are the most stable currency available on Gilligan's Island, and the government has nothing to do with it. Or rather: the absence of government has everything to do with it. If people are allowed to pick their own preferred money, they will pick whatever holds its value most reliably.
What About Gold?
It would be tempting to see the post-fiat currencies as second-best options, valuable only in the absence of true commodity money, such as gold. But we have to avoid the fallacy of inherent value: gold became the universal money not just through its inherent "money-like virtues" but because, over the centuries, its supply became fairly stable. Platinum, for instance, has all the apparent virtues of gold (and may well exceed gold in at least one virtue: the transportable value-per-unit-weight) but because it is being actively and productively mined, its supply (and therefore its exchange value) is unstable -- for now. Someday, however, if the platinum supply levels off, we gold bugs might jump ship for the higher-valued metal.
So would hard money -- "real money" -- be better for the island economy than the paper dollars Thurston Howell brought with him? Should the castaways have recovered the gold from the lagoon and used it instead of Howell's paper?
Actually, there is reason to believe that the post-fiat dollars of Thurston Howell III would make better money than island gold.
Remember that Howell has already extracted the easiest gold before the other castaways learn of the mine. So what do the others do? They begin charging Howell higher prices for their goods and services. He's free to decline such exchanges, of course, but the pampered millionaire can't live comfortably without help from those around him -- and their help is now very expensive.
Yes, it's just a dumb TV show, but in this case we see the laws of economics accurately portrayed: once the castaways realize they're marooned indefinitely, their economic thinking focuses on the limited resources of the island. As Mises claimed, any fixed amount of money is the correct amount of money for a given economy. Prices will adjust. If the supply of gold money is high, and the available goods and services are few, then prices will be very high in terms of gold. And in this context, the gold money supply isn't fixed: the mine is still there, with who knows how much more gold yet to be extracted. Under an island gold standard, the supply of money might increase at any time, and anticipation of that fact will drive current prices still higher. The money ends up heavier than the goods it trades for.
The government paper in Howell's suitcases, on the other hand, is easy to transport, hard to counterfeit, lighter than gold, and whatever amount of it the millionaire managed to bring with him is the amount there's going to be for a while.
On this isolated island, and in this isolated context, paper beats gold.
Conclusion
None of this is to suggest economic sophistication on the part of the show's creators or writing staff. But Gilligan's Island Economics can provide useful thought experiments for the same reasons Robinson Crusoe Economics has served as a staple of classical and Austrian School economics texts.
One thing Gilligan has, which Crusoe doesn't, is a shared culture with the others on the island. If Robinson Crusoe had been shipwrecked with a chest full of British banknotes, they wouldn't have done him any good. Friday would be more likely to trade for shells or gold than he would for the strange paper.
But on Gilligan's Island (and in the Kurdish rebel territories, and briefly in Baghdad), people who are already used to making their exchanges in slips of unbacked paper can continue to do so profitably without the hand of government. The invisible hand of the market serves them better -- even when dealing in government paper.
------
B.K. Marcus is a freelance writer in Charlottesville, Virginia. His website is www.bkmarcus.com. goldbug@bkMarcus.com. Comment on the blog.
by B.K. Marcus
[Posted August 31, 2004]
Gilligan's Island is now out on DVD, reawakening the unanswered questions of childhood: why does the Skipper let Gilligan help with anything when he knows he'll just screw it up? Why did the movie star take a day cruise in an evening gown? Why did two of the richest people in the world board a dinky boat with the hoi polloi instead of leasing a private yacht? And why do any of the other stranded castaways treat the millionaire's government money as valuable while stuck on an island where no such government can enforce its value?
Because it's just a dumb TV show.
But that last question stuck with me. Would fiat dollars be treated as valuable without the government around to enforce its fiat? My impression in childhood was that money belonged to the government, was inextricably bound to the government, and we, the citizens of the government, were just using the money "on loan" so to speak. This impression came not only from the look of the money itself, but from American history, as children's cartoons had communicated it to me. (One Scooby Doo episode ends with the hidden "treasure" turning out to be a case full of hoarded and now worthless Confederate dollars.)
A Brief Monetary History of Gilligan's Island
In early episodes, we see Mr. Howell hiring various services from other castaways. We eventually learn he's been writing checks on a mainland (and therefore inaccessible) bank. This works while the group consider their condition temporary, but the checks are quickly devalued and eliminated when the castaways begin to prepare for the possibility of an indefinite stay on the island.
In Episode 9, "The Big Gold Strike," Gilligan and Mr. Howell find a gold mine on the island, which Howell convinces Gilligan to keep secret from the others. By the time everyone learns about the mine, Howell has already taken the lion's share of the most easily accessible gold. He'd like to hoard it for himself, but the other castaways begin charging him for their goods and services. Soon everyone has a small fortune in gold, which they all try to smuggle aboard a tiny escape raft. Their collected wealth, of course, ends up at the bottom of the lagoon.
In later episodes, monetary exchange takes place in US paper currency. Was it impossible to recover the gold from the lagoon? Perhaps the writers found it more convenient to deal in the money the television viewers themselves were most familiar with. We might dismiss this as economic naivete on the part of the writers, but recent history provides evidence that fiat paper can, in fact, outlive its government. Not only that, but post-fiat money -- dead government currency -- can out-compete American greenbacks!
Undead Money
After the invasion of Iraq, there was no more central bank printing dinars and no more Iraqi government to put the fiat behind its fiat currency. The American military started handing out US$20 bills and expected the Dinar to fade from existence. Instead, to the chagrin of the occupation force, the Dinar's value doubled against the Dollar in two weeks. Statues of Saddam Hussein were being toppled, but his face was still on the preferred currency, and gaining in popularity. Some saw this as patriotism: a silent protest by the occupied population against the invading force. But we need only look further north, to the Kurd-controlled areas, to find a more economic explanation.
After the first Gulf War, Iraq changed its currency from the so-called Swiss Dinar to the more recent Saddam Dinar. When a government changes its fiat currency, it announces a transition period during which the old bills can be brought in and exchanged for the new. After the window closes, the old notes are declared worthless.
To no one's surprise, the rebel Kurds did not visit the Iraqi government to make such an exchange. They just kept using the old money. It was familiar, hard to counterfeit, and in its post-fiat status, it was no longer inflationary: that is to say, the relatively fixed supply of notes made the currency a better store of value than the new Saddam dinars being printed (and printed and printed) further south.
The Swiss Dinar may have been the first successful post-fiat money.
For a brief period after the invasion -- the time it took the Occupation Authority to reestablish an Iraqi central bank and start printing new dinars -- the old Saddam dinars joined the older Swiss dinars in their post-fiat status. And lo and behold, Saddam's dead dinars rose in value compared to the inflationary dollars of the occupation force.
But how can this be? A money backed only by the force of the State is backed by literally nothing in the absence of that state. And yet the dinars continued to change hands.
By the end of the year, however, the occupation government was printing new dinars, at first with Saddam still on them (for familiarity), then transitioning into something that resembled the Swiss Dinar (to promote confidence). The brief, unplanned experiment in post-fiat monetary theory was over, but the results were unambiguous: a stable money, even a completely unbacked currency, beats out inflationary government paper in both value and marketability.
While it may seem that Gilligan's fellow castaways would reject Howell's dollars as worthless, the case of the Saddam Dinar (and the Swiss Dinar before it) offers evidence in favor of "worthless paper."
For an understanding of the afterlife of government currency, we need briefly to review the history and theory of money itself.
Direct & Indirect Exchange
Money arises naturally out of barter. This isn't just a historical fact but was theoretically proven by Ludwig von Mises in his Theory of Money and Credit: money can only have developed from barter.
Imagine Gilligan's Island without the Howells and their paper dollars. Without money, commodities exchange directly: coconuts for fish, fish for bamboo, etc. But even with barter, some commodities are more "marketable" than others. Perhaps one of the castaways might eventually buy one of the Professor's books, but they will more often purchase Mary Ann's coconut cream pies -- or the coconuts themselves. Coconuts are more marketable than books.
Over time, the commodity that is most marketable becomes popular for indirect exchange: the Skipper trades his fish for Ginger's decorative shells, not because he wants shells, but because he knows he can trade them for Gilligan's coconuts. The price of a commodity is its exchange ratio for the most marketable good, e.g., 12 shells per coconut. The value of the shell money is based on the goods it traded for yesterday -- since we can't know what prices will be today. Right now, the Skipper is willing to trade one of his fish for two coconuts, and he knows that Gilligan was recently willing to trade his coconuts for a dozen shells each, therefore the Skipper wants to price his fish at two-dozen shells each: enough to buy two coconuts. Prices can change from day to day, but today's new prices will be based on the prices of other things yesterday.
Government Paper
Exchanges that started in barter evolve toward a common money currency -- decorative shells, in this example (and also in the more historical examples of trade among coastal Africans and North American Indians). Now suppose the Professor found the use of shells to be primitive and irrational -- "a barbarous relic!"
The Professor, having successfully invented many new tools, decides to invent a more rational money. He finds a way to preserve palm leaves and mark them with denominations. The denominations do not represent a claim for a certain number of shells. The numbers refer only to each other and to nothing else, no other commodity. If they have value, it is only because the Professor says they have value.
Would anyone use the Professor's new money?
Any new commodity can come onto the market, but its price will be newly negotiable and its marketability (how many people will trade their goods for it) will be as-yet undetermined. This would be the status of the Professor's new "currency." Its marketability, and therefore its value (as money), would be unknown. Money is, by definition, the most marketable good: that thing which people will most readily accept in trade will also be that thing that fosters indirect exchange. Even if the others wanted to acquire preserved palm leaves, the leaves could not possibly become the most marketable commodity overnight and could therefore not start out as money. If the Professor's leaves become money, it will be through the same barter-based process that made the decorative shells into money. (Notice, however, that if this were to happen, the unit of value would be the physical leaf and not the arbitrary denomination marked on the leaf. There's no reason a bartered leaf marked "1,000" should trade for ten times as much as a bartered leaf marked "100.")
Does this make fiat money impossible? Obviously not, or we wouldn't be using it now, but it does mean that it has to evolve slowly and in discrete stages. Murray Rothbard recounts the process in his book, What Has Government Done to Our Money? At each stage in the transition, from barter to pure commodity money to monopoly coinage to demand deposits to fractionally-backed bank notes to completely unbacked government fiat, the earliest value of the new incarnation is based on the latest value of the older form of money. Today's new money requires yesterday's prices.
Over centuries, governments have taken over money from the market, and in the 20th century, most currencies became unbacked by anything other than the force of the State. But, as we see in the case of post-war Iraq, the fiat history of a currency can serve as the starting point for its post-fiat valuations. The Saddam Dinar doubled its value (measured against the Dollar) in only two weeks, but it couldn't have gotten started without its previous, albeit inflationary and unstable, exchange value. At that point, astonishing as it may seem, no government was necessary to maintain the value of the money. The market can reclaim money from government.
Why did the unbacked paper do better than the US Dollar? Because the quantity of dinars was relatively fixed, while the supply of dollars grew. The law of supply and demand tells us that, all else being equal, a rise in the supply of a thing will lower the price of that thing. The thing, in this case, is the Dollar itself; its "price" is its buying power, which the Iraqis watched erode drastically within days.
This is why the castaways value Thurston Howell's paper dollars: because whatever absurd amount he may have brought with him for "a three-hour tour," that amount is now fixed. Dollars are the most stable currency available on Gilligan's Island, and the government has nothing to do with it. Or rather: the absence of government has everything to do with it. If people are allowed to pick their own preferred money, they will pick whatever holds its value most reliably.
What About Gold?
It would be tempting to see the post-fiat currencies as second-best options, valuable only in the absence of true commodity money, such as gold. But we have to avoid the fallacy of inherent value: gold became the universal money not just through its inherent "money-like virtues" but because, over the centuries, its supply became fairly stable. Platinum, for instance, has all the apparent virtues of gold (and may well exceed gold in at least one virtue: the transportable value-per-unit-weight) but because it is being actively and productively mined, its supply (and therefore its exchange value) is unstable -- for now. Someday, however, if the platinum supply levels off, we gold bugs might jump ship for the higher-valued metal.
So would hard money -- "real money" -- be better for the island economy than the paper dollars Thurston Howell brought with him? Should the castaways have recovered the gold from the lagoon and used it instead of Howell's paper?
Actually, there is reason to believe that the post-fiat dollars of Thurston Howell III would make better money than island gold.
Remember that Howell has already extracted the easiest gold before the other castaways learn of the mine. So what do the others do? They begin charging Howell higher prices for their goods and services. He's free to decline such exchanges, of course, but the pampered millionaire can't live comfortably without help from those around him -- and their help is now very expensive.
Yes, it's just a dumb TV show, but in this case we see the laws of economics accurately portrayed: once the castaways realize they're marooned indefinitely, their economic thinking focuses on the limited resources of the island. As Mises claimed, any fixed amount of money is the correct amount of money for a given economy. Prices will adjust. If the supply of gold money is high, and the available goods and services are few, then prices will be very high in terms of gold. And in this context, the gold money supply isn't fixed: the mine is still there, with who knows how much more gold yet to be extracted. Under an island gold standard, the supply of money might increase at any time, and anticipation of that fact will drive current prices still higher. The money ends up heavier than the goods it trades for.
The government paper in Howell's suitcases, on the other hand, is easy to transport, hard to counterfeit, lighter than gold, and whatever amount of it the millionaire managed to bring with him is the amount there's going to be for a while.
On this isolated island, and in this isolated context, paper beats gold.
Conclusion
None of this is to suggest economic sophistication on the part of the show's creators or writing staff. But Gilligan's Island Economics can provide useful thought experiments for the same reasons Robinson Crusoe Economics has served as a staple of classical and Austrian School economics texts.
One thing Gilligan has, which Crusoe doesn't, is a shared culture with the others on the island. If Robinson Crusoe had been shipwrecked with a chest full of British banknotes, they wouldn't have done him any good. Friday would be more likely to trade for shells or gold than he would for the strange paper.
But on Gilligan's Island (and in the Kurdish rebel territories, and briefly in Baghdad), people who are already used to making their exchanges in slips of unbacked paper can continue to do so profitably without the hand of government. The invisible hand of the market serves them better -- even when dealing in government paper.
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B.K. Marcus is a freelance writer in Charlottesville, Virginia. His website is www.bkmarcus.com. goldbug@bkMarcus.com. Comment on the blog.
Wednesday, October 13, 2004
Leading economists have a message for America: “John Kerry favors economic policies that, if implemented, would lead to bigger and more intrusive government and a lower standard of living for the American people.”
That was the conclusion released in a statement Wednesday by 368 economists, including six Nobel laureates: Gary Becker, James Buchanan, Milton Friedman, Robert Lucas, Robert Mundell, and — the winner of this year’s Nobel Prize in Economics — Edward C. Prescott. The economists warned that Sen. Kerry’s policies “would, over time, inhibit capital formation, depress productivity growth, and make the United States less competitive internationally. The end result would be lower U.S. employment and real wage growth.”
Consider Kerry’s spending and tax proposals. Kerry claims he wants to balance the federal budget, but as the Washington Post pointed out last August, “Sen. John F. Kerry’s pledge to reduce record federal budget deficits is colliding with an obstacle that may be growing higher by the week: his own campaign commitments.” In fact, Kerry’s spending proposals would add an estimated $226 billion annually to federal spending. To put this in perspective, $226 billion is roughly equal to the gross domestic products of Greece or Sweden.
Kerry’s oft-repeated budget solution is to raise taxes on “families making over $200,000 on income earned above $200,000 to their levels under President Clinton.” This proposal would generate hundreds-of-billions of dollars over the next decade for the Treasury’s coffers. Kerry’s other proposed tax increases would generate billions more. Yet, these tax increases would offset only a fraction of Kerry’s new spending.
For instance, Senator Kerry’s government-run health insurance spending plan would by itself require a tax increase of more than $1 trillion. Two independent studies, one by the Lewin Group and another by the American Enterprise Institute, concluded that Kerry’s health insurance proposal would cost more than $1 trillion over the next 10 years. And that’s just one of Kerry’s spending proposals. To close the funding gap between all of his spending and tax promises, Kerry would have to raise taxes by an average of $1,431 for everyone who files an income-tax return.
The stark disconnect between Kerry’s spending and tax proposals is what prompted 368 leading economists to conclude, “Kerry’s stated desire to balance the budget and to boost federal spending substantially would almost certainly require far higher and broader tax increases than he has proposed.” And given Kerry’s voting record in the Senate — he has cast 98 votes for tax increases totaling more than $2.3 trillion throughout his legislative career — that is no idle threat.
It is no secret that John Kerry wants America’s foreign policy to be more like that of Germany and France. But perhaps even more disturbing, he has demonstrated that he wants to emulate their failed tax-and-spend economic policies, too. Over time, the consequences could be devastating. Consider the impact those policies have had on Europe. Germany and France once enjoyed standards of living comparable to those of the United States. Today, U.S. per capita GDP is 38 percent higher than that of Germany and 43 percent higher than that of France. Indeed, as economist Bruce Bartlett recently pointed out, “On average, Europeans only live about as well as those in the poorest American state, Mississippi.”
The 368 economists only briefly touched upon Kerry’s trade policies. As it happens, there is not much upon which to comment. Kerry has expressed a general reluctance to reduce trade barriers, and he has promised, if elected, to “review existing trade agreements.” His applause line is that he vows not to “sign any new trade agreements until the review is complete and its recommendations [are] put in place.” According to the 368 economists, “That's a prescription for political gridlock. Given the widespread benefits of unfettered trade, Kerry’s trade policies would harm U.S. producers and consumers alike.”
Finally, we have all heard John Kerry denigrate the present rate of job creation. Yet, according to latest Bureau of Labor Statistics employment report, 1.9 million jobs have been created since August 2003. And at 5.4 percent, the unemployment rate is below the average unemployment rates of the 1970s, 1980s, and 1990s.
We have also heard Kerry’s solemn vow to create 10 million new jobs during his first term as president. But you probably have not heard that the U.S. economy is likely to create about that many jobs over the next four years under current policy.
During the first nine months of 2004 — while Kerry was criticizing the pace of employment growth — payroll employment grew an average of more than 170,000 jobs a month. At that rate, the next administration would preside over the creation of roughly 8.2 million net new jobs. And yet, as Martin Sullivan pointed out in Tax Notes, Kerry has not presented one objective analysis to support his claim that his policies would create 1 million more jobs, much less 10 million more.
John Kerry has adopted the Walter Mondale approach to economics — increase taxes. Even advocates of Keynesian economics would not recommend raising taxes in the early stages of an economic recovery. Unlike Mondale, however, Kerry will wait until after the election to reveal all of the tax increases that will be required to pay for his government spending promises. Three hundred and sixty eight economists hope American voters will heed their warnings before it is too late.
— J. Edward Carter is an economist in Washington, D.C. Cesar V. Conda, formerly assistant for domestic policy to Vice President Dick Cheney, is a senior fellow at FreedomWorks in Washington, D.C.
That was the conclusion released in a statement Wednesday by 368 economists, including six Nobel laureates: Gary Becker, James Buchanan, Milton Friedman, Robert Lucas, Robert Mundell, and — the winner of this year’s Nobel Prize in Economics — Edward C. Prescott. The economists warned that Sen. Kerry’s policies “would, over time, inhibit capital formation, depress productivity growth, and make the United States less competitive internationally. The end result would be lower U.S. employment and real wage growth.”
Consider Kerry’s spending and tax proposals. Kerry claims he wants to balance the federal budget, but as the Washington Post pointed out last August, “Sen. John F. Kerry’s pledge to reduce record federal budget deficits is colliding with an obstacle that may be growing higher by the week: his own campaign commitments.” In fact, Kerry’s spending proposals would add an estimated $226 billion annually to federal spending. To put this in perspective, $226 billion is roughly equal to the gross domestic products of Greece or Sweden.
Kerry’s oft-repeated budget solution is to raise taxes on “families making over $200,000 on income earned above $200,000 to their levels under President Clinton.” This proposal would generate hundreds-of-billions of dollars over the next decade for the Treasury’s coffers. Kerry’s other proposed tax increases would generate billions more. Yet, these tax increases would offset only a fraction of Kerry’s new spending.
For instance, Senator Kerry’s government-run health insurance spending plan would by itself require a tax increase of more than $1 trillion. Two independent studies, one by the Lewin Group and another by the American Enterprise Institute, concluded that Kerry’s health insurance proposal would cost more than $1 trillion over the next 10 years. And that’s just one of Kerry’s spending proposals. To close the funding gap between all of his spending and tax promises, Kerry would have to raise taxes by an average of $1,431 for everyone who files an income-tax return.
The stark disconnect between Kerry’s spending and tax proposals is what prompted 368 leading economists to conclude, “Kerry’s stated desire to balance the budget and to boost federal spending substantially would almost certainly require far higher and broader tax increases than he has proposed.” And given Kerry’s voting record in the Senate — he has cast 98 votes for tax increases totaling more than $2.3 trillion throughout his legislative career — that is no idle threat.
It is no secret that John Kerry wants America’s foreign policy to be more like that of Germany and France. But perhaps even more disturbing, he has demonstrated that he wants to emulate their failed tax-and-spend economic policies, too. Over time, the consequences could be devastating. Consider the impact those policies have had on Europe. Germany and France once enjoyed standards of living comparable to those of the United States. Today, U.S. per capita GDP is 38 percent higher than that of Germany and 43 percent higher than that of France. Indeed, as economist Bruce Bartlett recently pointed out, “On average, Europeans only live about as well as those in the poorest American state, Mississippi.”
The 368 economists only briefly touched upon Kerry’s trade policies. As it happens, there is not much upon which to comment. Kerry has expressed a general reluctance to reduce trade barriers, and he has promised, if elected, to “review existing trade agreements.” His applause line is that he vows not to “sign any new trade agreements until the review is complete and its recommendations [are] put in place.” According to the 368 economists, “That's a prescription for political gridlock. Given the widespread benefits of unfettered trade, Kerry’s trade policies would harm U.S. producers and consumers alike.”
Finally, we have all heard John Kerry denigrate the present rate of job creation. Yet, according to latest Bureau of Labor Statistics employment report, 1.9 million jobs have been created since August 2003. And at 5.4 percent, the unemployment rate is below the average unemployment rates of the 1970s, 1980s, and 1990s.
We have also heard Kerry’s solemn vow to create 10 million new jobs during his first term as president. But you probably have not heard that the U.S. economy is likely to create about that many jobs over the next four years under current policy.
During the first nine months of 2004 — while Kerry was criticizing the pace of employment growth — payroll employment grew an average of more than 170,000 jobs a month. At that rate, the next administration would preside over the creation of roughly 8.2 million net new jobs. And yet, as Martin Sullivan pointed out in Tax Notes, Kerry has not presented one objective analysis to support his claim that his policies would create 1 million more jobs, much less 10 million more.
John Kerry has adopted the Walter Mondale approach to economics — increase taxes. Even advocates of Keynesian economics would not recommend raising taxes in the early stages of an economic recovery. Unlike Mondale, however, Kerry will wait until after the election to reveal all of the tax increases that will be required to pay for his government spending promises. Three hundred and sixty eight economists hope American voters will heed their warnings before it is too late.
— J. Edward Carter is an economist in Washington, D.C. Cesar V. Conda, formerly assistant for domestic policy to Vice President Dick Cheney, is a senior fellow at FreedomWorks in Washington, D.C.
Monday, October 11, 2004
Framing the Economic Debate
by Tim Kane, Ph.D., Rea S. Hederman, and Kirk Johnson, Ph.D.
WebMemo #582
October 7, 2004 | printer-friendly format |
The U.S. economy has displayed a remarkable resilience following the bursting of the Internet bubble and the 9/11 terrorist attacks that struck at the heart of American business. The economy’s strength was such that the 2001 recession is among the weakest on record. Today, business investment continues on an unprecedented expansion and more Americans are working than ever before. Still, myths are rampant. This paper presents a basic statistical overview of the American economy and prosperity that Americans today enjoy.
I. Jobs, Employment, and Income
There are three main indicators that inform the issue of employment in America. First is the overall growth of jobs. Naturally, a net increase in employment is seen as progress, but this statistic really only matters if the population is growing. Economists have long believed that the key measure of employment is the percentage of people who are employed out of the entire population of potential workers. Many citizens simply don’t want to work in the formal labor force, either because they are studying for advanced degrees, retired, or caring for other matters in the home. Thus, the unemployment rate is the best way to assess economic health. And another indicator to watch is labor compensation, which represents the quality of jobs for many observers.
Jobs: Payroll or Household?
The government provides many measures of job creation, but the two best known come from the Bureau of Labor Statistics payroll survey and the Census Bureau household survey. As widely reported, the two surveys are telling opposite stories.
Since January 2001, when President George W. Bush was sworn in, payroll jobs have declined by millions and recovered by millions, but still remain 900,000 jobs below their peak. (Source: Bureau of Labor Statistics)
On the other hand, the household survey reports a record high level of working Americans, with 1.8 million more jobs since January 2001. (Source: Bureau of Labor Statistics)
Ironically, both surveys may be correct because they count jobs differently. The household survey counts all jobs, including a growing but hard to define class of new economy workers such as part-time consultants, eBay entrepreneurs, and even real estate agents—people who are not on payrolls. The payroll survey’s name says it all. What it doesn’t say is that payrolls provide a vast sample size, which some see as a sign of its unmatched accuracy. But the real question is whether its sample quality is clean, and in August, the BLS acknowledged that the survey has sample problems: it counts workers twice when they change jobs, which may account for between 400,000 and one million of the job difference between the two surveys. (See BLS, “Effects of Job Changing on Payroll Survey Employment Trends.”)
Unemployment and the Recession
Unemployment, a lagging indicator, remained mild throughout and after the 2001 recession, peaking at 6.3 percent. In contrast, unemployment peaked at 7.8 percent following the 1990 recession. (Unemployment exceeded 6.3 percent for 40 months following the 1990 recession). And unemployment peaked at 10.8 percent following the 1980 recession. (Source: Bureau of Labor Statistics)
An unemployment rate of 6.3 percent, the peak following the 2001 recession, is lower than the average unemployment rate for the 1980s and less than one point higher than the average unemployment rate for the 1990s. (Source: Bureau of Labor Statistics)
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Dissecting the Unemployment Rate
The unemployment rate is the preeminent measure of the intensity of labor demand. When the rate dips below what economists consider the “full-employment” rate of around 5 or 5.5 percent, then the labor market is likely overheating, driving up inflation.
But some critics contend the current low rate of 5.4 percent is a mirage because it neglects to include all the discouraged workers. The problem with that argument is the fact that BLS counts discouraged workers and even publishes an alternative “underemployment rate” called U-4, which is barely higher than the official rate. There are no more discouraged workers today then there were in the mid-1990s.
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Labor Force Participation
The fallback critique is that labor force participation has declined from a peak of 67.2 percent in January 2001. That’s true, but most of the decline was due to 9/11, not the recession. It was 66.8 percent in October 2001, then 66.0 percent in August 2004. Analysts need to consider the reality that labor supply has changed, not just labor demand. Two other points illuminate:
First, the participation rate of women over 20 is the same as it was in 1997 and higher than every year prior. (Source: Bureau of Labor Statistics)
Second, the decline in total participation rates since 2001 is largely driven by the unprecedented dropoff in teenagers aged 16-19 who are willing to work, from 52 percent in 2000 to 43 percent in 2004. (Source: Bureau of Labor Statistics)
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Unemployment Claims
Initial claims announced this week were at 335,000, and the 4-week moving average is 348,500. (Source: Bureau of Labor Statistics)
The 25-year average of initial claims is 380,520. (Source: Bureau of Labor Statistics)
The Wall Street rule of thumb is that any level of claims below 400,000 signifies labor market strength. (Source: The Wall Street Journal’s Career Journal)
Real Earnings
Worker pay is a sign of job quality. The Labor Department’s measure of real hourly earnings is one of many pay statistics and includes all monetary compensation but not benefits. It only counts earnings for non-executive workers, unlike other measures.
During the 1980 and 1990 recessions, real hourly earnings declined. (Source: Bureau of Labor Statistics)
But even during and after the 2001 recession, real earnings have risen—by 2 percent since the recession began in March 2001. (Source: Bureau of Labor Statistics)
Real earnings are higher now than at the height of the dot-com boom in 2000. (Source: Bureau of Labor Statistics)
Manufacturing
Jobs in manufacturing are on the decline worldwide, due to new technology, increasing productivity, and strong competition. From 1995 to 2002, worldwide manufacturing employment declined 11 percent—which matches the decline of manufacturing employment in the United States over that period. (Source: Alliance Capital Management)
Even in China, employment in the manufacturing sector has fallen—by 15 percent from 1995 to 2002. (Source: Alliance Capital Management)
Regardless, manufacturing in the United States has rebounded strongly of late. Production is rising quickly, and employment reversed its decline in February of this year and is now expanding.
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II. Economic Growth
The economy, as measured by real Gross Domestic Product, grew at a 3.3 percent rate in the second quarter of 2004, following a high 4.5 percent growth rate in the first quarter. (Source: Bureau of Economic Analysis)
Growth in 2003 was similarly charged, coming in at a 4.4 percent annual rate.
The average growth rate during the 1990s was 3.26 percent, just under the last quarter’s rate of growth and well below the growth rate for 2004 so far.
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Tax Cuts and Business Investment
The 2003 tax cuts reduced taxes on business investment. When businesses invest in facilities, equipment, computers, software, and other inputs, they make clear their belief that future growth will be strong and they create the preconditions for economic expansion and job creation.
Business investment contracted at a 1.14 percent annualized rate over the 14 quarters prior to the 2003 tax cuts. (Source: Bureau of Economic Analysis)
Business investment grew at a 13.03 percent rate over the 3 quarters following the 2003 tax cuts. (Source: Bureau of Economic Analysis)
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III. Outsourcing and Insourcing
Forrester Research estimates 3.5 million outsourced jobs between 2000 and 2015. (Forrester Research)
Over the past decade, 7.71 million jobs, on average, are lost every quarter as part of the normal flux of the economy. Forrester’s estimate would account for less than one percent of the jobs lost each quarter, on average. (Source: Department of Labor, Business Employment Dynamics Data Series; Forrester Research)
Today, more than 5.4 million jobs in America are the result of insourcing—that is, they have been outsourced from abroad into the United States. (Source: Organization for International Investment)
Annually, these insourced jobs account for $307 billion in wages and salaries. (Source: Organization for International Investment)
Insourced jobs pay, on average, 19.1 percent more than the average job in the United States. (Source: Organization for International Investment)
In the first quarter of 2004, just 4,633 workers were laid off as a result of offshore outsourcing due to mass layoffs—about 2 percent of total mass job layoffs. (Bureau of Labor Statistics, “Extended Mass Layoffs Associated With Domestic and Overseas Relocations”)
In terms of the industries affected and positions potentially at risk, the use of outsourcing has changed little over the past five years. In other words, this is no rapidly accelerating trend. (Source: Government Accountability Office, “International Trade: Current Government Data Provide Limited Insight into Offshoring of Services”)
The United States exports more business, technical, and professional services than it imports (and offshore outsourcing of service work is synonymous with importing those services). In 2003, the trade surplus for these services was $27.0 billion. (Source: Bureau of Economic Analysis, “Survey of Current Business”)
IV. Health Care
The Uninsured
According to the U.S. Census Bureau, 44.9 million Americans went without health insurance for some part of 2003.
The typical family that loses coverage is uninsured for 5.6 months on average. (Source: U.S. Census Bureau, “Dynamics of Economic Well-being: Health Insurance 1996-1999”)
Only 3.3 percent of all Americans went without some kind of health insurance for four or more years. (Source: U.S. Census Bureau, “Dynamics of Economic Well-being: Health Insurance 1996-1999”)
In 1996, some 8.8 percent were without health insurance for the entire year, a figure that dropped to 8.0 percent by 1999. (Source: U.S. Census Bureau, “Dynamics of Economic Well-being: Health Insurance 1996-1999”)
78.2 percent of all Americans had health insurance for the entire year in 1996, which rose to 80.4 percent by 1999. (Source: U.S. Census Bureau, “Dynamics of Economic Well-being: Health Insurance 1996-1999”)
Medicaid enrollment has grown in recent years but is undercounted by the Census survey of the uninsured. Census counts 18 million fewer enrollees than the Centers for Medicare and Medicaid Services. (Source: U.S. Census Bureau and HHS program data)
Health Savings Accounts
Health Savings Accounts (HSAs) were enacted as part of the Medicare Modernization Act of 2003. They came into effect on January 1, 2004.
The majority of HSA enrollees pay between $51 and $100 a month for coverage, far less than for other types of individual insurance.
Early experience shows major cost-savings for small businesses. Some small businesses have been able to cut their health coverage expenditures by 20 percent using HSAs, while holding employee out-of-pocket expenses steady and actually improving the level of care.
V. Poverty
The 2001 Recession
The poverty rate for 2003 was recently published and stood at 12.5 percent, which is higher than in recent years, but still better than the poverty rate in 1998 of 12.7 percent and the poverty rates of the fifteen years prior. (Source: Census Bureau)
Poverty always rises with recessions, but the increase in poverty stemming from the most recent recession was about half the increase from each of the previous two recessions. (Source: Census Bureau)
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In previous recessions, child poverty increased significantly, but the most recent recession affected child poverty little. The 1980 recession caused a 5.5 percentage point jump in child poverty. The 1990 recession caused a 2.7 percentage point jump in poverty. The 2001 recession, in contrast, caused only a 1.6 percentage point rise in child poverty. (Source: Census Bureau)
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Poverty in America
More than half of all poverty “spells” (time spent in poverty) last less than four months, and about 80 percent last less than a year. (Source: U.S. Census Bureau, “Dynamics of Economic Wellbeing: Poverty 1996-1999”)
Very few people—only about 2 percent of the total population—are chronically poor in America, as defined by living in poverty for four years or more. (Source: U.S. Census Bureau, “Dynamics of Economic Wellbeing: Poverty 1996-1999”)
About 13 percent of poor families and 2.6 percent of poor children experience hunger at some point during the year. In most cases, their hunger is short-term. Eighty-nine percent of the poor report their families have "enough" food to eat, while only 2 percent say they "often" do not have enough to eat. (Source: U.S. Department of Agriculture, "Household Food Security in the United States")
About 38 percent of all households in the lowest income quintile (that is, the bottom 20 percent of earners) rose to a higher quintile within three years. An almost equal percentage (34 percent) of all households in the top quintile fell within three years. (Source: U.S. Census Bureau, “Dynamics of Economic Well-being: Movements in the U.S. Income Distribution 1996-1999”)
Income Inequality
By the uncorrected Census numbers, the top 20 percent of earners, or top quintile, appear to have $14.20 of income for every $1 of income that the bottom 20 percent earn. (Source: Census Bureau, Current Population Survey for 2002)
But the Census figures do not account for benefits—employer- and government-provided—and taxes, differing household sizes between the quintiles, and differing work habits between the quintiles.
Accounting for benefits and taxes, the income ratio between the top and bottom quintiles drops to $8.60 for every $1. (Source: Census Bureau, Current Population Survey for 2002; Center for Data Analysis)
Accounting additionally for household sizes, the income ratio between the top and bottom quintiles drops to $4.21 for every $1. (Source: Census Bureau, Current Population Survey for 2002; Center for Data Analysis)
Finally, accounting additionally for hours worked (that is, making the assumption that all non-elderly adults work equal amounts), the income ratio between the top and bottom quintiles drops to $2.91 for every $1. (Source: Census Bureau, Current Population Survey for 2002; Center for Data Analysis)
(click image to expand)
Poverty and Taxation
Households in the top income quintile provide one-third of all labor in the economy. (Source: Census Bureau, Current Population Survey for 2002)
Households in the top income quintile pay 82.5 percent of total federal income taxes and two-thirds of federal taxes overall. (Source: Congressional Budget Office, “Effective Tax Rates Under Current Law”)
Households in the bottom income quintile pay 1.1 percent of total federal taxes. (Source: Congressional Budget Office, “Effective Tax Rates Under Current Law”)
Nearly forty million tax filers, about one-third of the total, pay no income taxes. Nearly all of these zero-tax filers are low-income individuals and families. Many of them actually receive money for filing taxes, through the child tax credit or the earned income tax credit. (Source: The Tax Foundation)
VI. The Tax Cuts
The expanded child tax credit, which was recently extended by Congress and the President, benefits the parents of over 47 million children. (Source: Center for Data Analysis)
In 2001 and 2003, Congress and the President cut taxes on married couples to reduce the “marriage penalty”—the premium that married couples paid in taxes above what the couple would have paid had they filed separately.
Congress and the President extended the marriage penalty fix in 2004, benefiting 33 million joint-filing couples—mostly couples in which both spouses work and the second earner contributes at least 30 percent of total income. (Source: Center for Data Analysis)
In 2001, Congress and the President created a new 10-percent tax bracket for low-income workers, reducing their marginal tax rate from 15 percent. In 2003, Congress and the President expanded the 10-percent bracket, and in 2004 Congress and the President extended the 2003 expansion, which was due to expire. That extension will benefit 80 million taxpayers. (Source: Center for Data Analysis)
The Bush tax cuts, even if made permanent, return the tax burden to its historical level as a proportion of the economy. (Source: Congressional Budget Office)
(click image to expand)
Allowing the Bush tax cuts expire would raise the tax burden to historically unprecedented levels. (Source: Congressional Budget Office)
(click image to expand)
VII. Conclusion
The economy has added more than 1.5 million payroll jobs over the past year and nearly 2 million jobs on the household survey. Most indicators point towards continued growth. Output is booming, the manufacturing outlook is positive, business confidence is high, and productivity continues to set records. Even such favorites among economic pessimists like data on long-term unemployment, manufacturing employment, and worker discouragement are showing marked improvement. Unfortunately for the pessimists, these are the facts that frame the debate on the economy today.
Tim Kane, Ph.D., is Research Fellow, Rea S. Hederman is Senior Policy Analyst, and Kirk Johnson, Ph.D., is Senior Policy Analyst, in the Center for Data Analysis at The Heritage Foundation.
by Tim Kane, Ph.D., Rea S. Hederman, and Kirk Johnson, Ph.D.
WebMemo #582
October 7, 2004 | printer-friendly format |
The U.S. economy has displayed a remarkable resilience following the bursting of the Internet bubble and the 9/11 terrorist attacks that struck at the heart of American business. The economy’s strength was such that the 2001 recession is among the weakest on record. Today, business investment continues on an unprecedented expansion and more Americans are working than ever before. Still, myths are rampant. This paper presents a basic statistical overview of the American economy and prosperity that Americans today enjoy.
I. Jobs, Employment, and Income
There are three main indicators that inform the issue of employment in America. First is the overall growth of jobs. Naturally, a net increase in employment is seen as progress, but this statistic really only matters if the population is growing. Economists have long believed that the key measure of employment is the percentage of people who are employed out of the entire population of potential workers. Many citizens simply don’t want to work in the formal labor force, either because they are studying for advanced degrees, retired, or caring for other matters in the home. Thus, the unemployment rate is the best way to assess economic health. And another indicator to watch is labor compensation, which represents the quality of jobs for many observers.
Jobs: Payroll or Household?
The government provides many measures of job creation, but the two best known come from the Bureau of Labor Statistics payroll survey and the Census Bureau household survey. As widely reported, the two surveys are telling opposite stories.
Since January 2001, when President George W. Bush was sworn in, payroll jobs have declined by millions and recovered by millions, but still remain 900,000 jobs below their peak. (Source: Bureau of Labor Statistics)
On the other hand, the household survey reports a record high level of working Americans, with 1.8 million more jobs since January 2001. (Source: Bureau of Labor Statistics)
Ironically, both surveys may be correct because they count jobs differently. The household survey counts all jobs, including a growing but hard to define class of new economy workers such as part-time consultants, eBay entrepreneurs, and even real estate agents—people who are not on payrolls. The payroll survey’s name says it all. What it doesn’t say is that payrolls provide a vast sample size, which some see as a sign of its unmatched accuracy. But the real question is whether its sample quality is clean, and in August, the BLS acknowledged that the survey has sample problems: it counts workers twice when they change jobs, which may account for between 400,000 and one million of the job difference between the two surveys. (See BLS, “Effects of Job Changing on Payroll Survey Employment Trends.”)
Unemployment and the Recession
Unemployment, a lagging indicator, remained mild throughout and after the 2001 recession, peaking at 6.3 percent. In contrast, unemployment peaked at 7.8 percent following the 1990 recession. (Unemployment exceeded 6.3 percent for 40 months following the 1990 recession). And unemployment peaked at 10.8 percent following the 1980 recession. (Source: Bureau of Labor Statistics)
An unemployment rate of 6.3 percent, the peak following the 2001 recession, is lower than the average unemployment rate for the 1980s and less than one point higher than the average unemployment rate for the 1990s. (Source: Bureau of Labor Statistics)
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Dissecting the Unemployment Rate
The unemployment rate is the preeminent measure of the intensity of labor demand. When the rate dips below what economists consider the “full-employment” rate of around 5 or 5.5 percent, then the labor market is likely overheating, driving up inflation.
But some critics contend the current low rate of 5.4 percent is a mirage because it neglects to include all the discouraged workers. The problem with that argument is the fact that BLS counts discouraged workers and even publishes an alternative “underemployment rate” called U-4, which is barely higher than the official rate. There are no more discouraged workers today then there were in the mid-1990s.
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Labor Force Participation
The fallback critique is that labor force participation has declined from a peak of 67.2 percent in January 2001. That’s true, but most of the decline was due to 9/11, not the recession. It was 66.8 percent in October 2001, then 66.0 percent in August 2004. Analysts need to consider the reality that labor supply has changed, not just labor demand. Two other points illuminate:
First, the participation rate of women over 20 is the same as it was in 1997 and higher than every year prior. (Source: Bureau of Labor Statistics)
Second, the decline in total participation rates since 2001 is largely driven by the unprecedented dropoff in teenagers aged 16-19 who are willing to work, from 52 percent in 2000 to 43 percent in 2004. (Source: Bureau of Labor Statistics)
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Unemployment Claims
Initial claims announced this week were at 335,000, and the 4-week moving average is 348,500. (Source: Bureau of Labor Statistics)
The 25-year average of initial claims is 380,520. (Source: Bureau of Labor Statistics)
The Wall Street rule of thumb is that any level of claims below 400,000 signifies labor market strength. (Source: The Wall Street Journal’s Career Journal)
Real Earnings
Worker pay is a sign of job quality. The Labor Department’s measure of real hourly earnings is one of many pay statistics and includes all monetary compensation but not benefits. It only counts earnings for non-executive workers, unlike other measures.
During the 1980 and 1990 recessions, real hourly earnings declined. (Source: Bureau of Labor Statistics)
But even during and after the 2001 recession, real earnings have risen—by 2 percent since the recession began in March 2001. (Source: Bureau of Labor Statistics)
Real earnings are higher now than at the height of the dot-com boom in 2000. (Source: Bureau of Labor Statistics)
Manufacturing
Jobs in manufacturing are on the decline worldwide, due to new technology, increasing productivity, and strong competition. From 1995 to 2002, worldwide manufacturing employment declined 11 percent—which matches the decline of manufacturing employment in the United States over that period. (Source: Alliance Capital Management)
Even in China, employment in the manufacturing sector has fallen—by 15 percent from 1995 to 2002. (Source: Alliance Capital Management)
Regardless, manufacturing in the United States has rebounded strongly of late. Production is rising quickly, and employment reversed its decline in February of this year and is now expanding.
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II. Economic Growth
The economy, as measured by real Gross Domestic Product, grew at a 3.3 percent rate in the second quarter of 2004, following a high 4.5 percent growth rate in the first quarter. (Source: Bureau of Economic Analysis)
Growth in 2003 was similarly charged, coming in at a 4.4 percent annual rate.
The average growth rate during the 1990s was 3.26 percent, just under the last quarter’s rate of growth and well below the growth rate for 2004 so far.
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Tax Cuts and Business Investment
The 2003 tax cuts reduced taxes on business investment. When businesses invest in facilities, equipment, computers, software, and other inputs, they make clear their belief that future growth will be strong and they create the preconditions for economic expansion and job creation.
Business investment contracted at a 1.14 percent annualized rate over the 14 quarters prior to the 2003 tax cuts. (Source: Bureau of Economic Analysis)
Business investment grew at a 13.03 percent rate over the 3 quarters following the 2003 tax cuts. (Source: Bureau of Economic Analysis)
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III. Outsourcing and Insourcing
Forrester Research estimates 3.5 million outsourced jobs between 2000 and 2015. (Forrester Research)
Over the past decade, 7.71 million jobs, on average, are lost every quarter as part of the normal flux of the economy. Forrester’s estimate would account for less than one percent of the jobs lost each quarter, on average. (Source: Department of Labor, Business Employment Dynamics Data Series; Forrester Research)
Today, more than 5.4 million jobs in America are the result of insourcing—that is, they have been outsourced from abroad into the United States. (Source: Organization for International Investment)
Annually, these insourced jobs account for $307 billion in wages and salaries. (Source: Organization for International Investment)
Insourced jobs pay, on average, 19.1 percent more than the average job in the United States. (Source: Organization for International Investment)
In the first quarter of 2004, just 4,633 workers were laid off as a result of offshore outsourcing due to mass layoffs—about 2 percent of total mass job layoffs. (Bureau of Labor Statistics, “Extended Mass Layoffs Associated With Domestic and Overseas Relocations”)
In terms of the industries affected and positions potentially at risk, the use of outsourcing has changed little over the past five years. In other words, this is no rapidly accelerating trend. (Source: Government Accountability Office, “International Trade: Current Government Data Provide Limited Insight into Offshoring of Services”)
The United States exports more business, technical, and professional services than it imports (and offshore outsourcing of service work is synonymous with importing those services). In 2003, the trade surplus for these services was $27.0 billion. (Source: Bureau of Economic Analysis, “Survey of Current Business”)
IV. Health Care
The Uninsured
According to the U.S. Census Bureau, 44.9 million Americans went without health insurance for some part of 2003.
The typical family that loses coverage is uninsured for 5.6 months on average. (Source: U.S. Census Bureau, “Dynamics of Economic Well-being: Health Insurance 1996-1999”)
Only 3.3 percent of all Americans went without some kind of health insurance for four or more years. (Source: U.S. Census Bureau, “Dynamics of Economic Well-being: Health Insurance 1996-1999”)
In 1996, some 8.8 percent were without health insurance for the entire year, a figure that dropped to 8.0 percent by 1999. (Source: U.S. Census Bureau, “Dynamics of Economic Well-being: Health Insurance 1996-1999”)
78.2 percent of all Americans had health insurance for the entire year in 1996, which rose to 80.4 percent by 1999. (Source: U.S. Census Bureau, “Dynamics of Economic Well-being: Health Insurance 1996-1999”)
Medicaid enrollment has grown in recent years but is undercounted by the Census survey of the uninsured. Census counts 18 million fewer enrollees than the Centers for Medicare and Medicaid Services. (Source: U.S. Census Bureau and HHS program data)
Health Savings Accounts
Health Savings Accounts (HSAs) were enacted as part of the Medicare Modernization Act of 2003. They came into effect on January 1, 2004.
The majority of HSA enrollees pay between $51 and $100 a month for coverage, far less than for other types of individual insurance.
Early experience shows major cost-savings for small businesses. Some small businesses have been able to cut their health coverage expenditures by 20 percent using HSAs, while holding employee out-of-pocket expenses steady and actually improving the level of care.
V. Poverty
The 2001 Recession
The poverty rate for 2003 was recently published and stood at 12.5 percent, which is higher than in recent years, but still better than the poverty rate in 1998 of 12.7 percent and the poverty rates of the fifteen years prior. (Source: Census Bureau)
Poverty always rises with recessions, but the increase in poverty stemming from the most recent recession was about half the increase from each of the previous two recessions. (Source: Census Bureau)
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In previous recessions, child poverty increased significantly, but the most recent recession affected child poverty little. The 1980 recession caused a 5.5 percentage point jump in child poverty. The 1990 recession caused a 2.7 percentage point jump in poverty. The 2001 recession, in contrast, caused only a 1.6 percentage point rise in child poverty. (Source: Census Bureau)
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Poverty in America
More than half of all poverty “spells” (time spent in poverty) last less than four months, and about 80 percent last less than a year. (Source: U.S. Census Bureau, “Dynamics of Economic Wellbeing: Poverty 1996-1999”)
Very few people—only about 2 percent of the total population—are chronically poor in America, as defined by living in poverty for four years or more. (Source: U.S. Census Bureau, “Dynamics of Economic Wellbeing: Poverty 1996-1999”)
About 13 percent of poor families and 2.6 percent of poor children experience hunger at some point during the year. In most cases, their hunger is short-term. Eighty-nine percent of the poor report their families have "enough" food to eat, while only 2 percent say they "often" do not have enough to eat. (Source: U.S. Department of Agriculture, "Household Food Security in the United States")
About 38 percent of all households in the lowest income quintile (that is, the bottom 20 percent of earners) rose to a higher quintile within three years. An almost equal percentage (34 percent) of all households in the top quintile fell within three years. (Source: U.S. Census Bureau, “Dynamics of Economic Well-being: Movements in the U.S. Income Distribution 1996-1999”)
Income Inequality
By the uncorrected Census numbers, the top 20 percent of earners, or top quintile, appear to have $14.20 of income for every $1 of income that the bottom 20 percent earn. (Source: Census Bureau, Current Population Survey for 2002)
But the Census figures do not account for benefits—employer- and government-provided—and taxes, differing household sizes between the quintiles, and differing work habits between the quintiles.
Accounting for benefits and taxes, the income ratio between the top and bottom quintiles drops to $8.60 for every $1. (Source: Census Bureau, Current Population Survey for 2002; Center for Data Analysis)
Accounting additionally for household sizes, the income ratio between the top and bottom quintiles drops to $4.21 for every $1. (Source: Census Bureau, Current Population Survey for 2002; Center for Data Analysis)
Finally, accounting additionally for hours worked (that is, making the assumption that all non-elderly adults work equal amounts), the income ratio between the top and bottom quintiles drops to $2.91 for every $1. (Source: Census Bureau, Current Population Survey for 2002; Center for Data Analysis)
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Poverty and Taxation
Households in the top income quintile provide one-third of all labor in the economy. (Source: Census Bureau, Current Population Survey for 2002)
Households in the top income quintile pay 82.5 percent of total federal income taxes and two-thirds of federal taxes overall. (Source: Congressional Budget Office, “Effective Tax Rates Under Current Law”)
Households in the bottom income quintile pay 1.1 percent of total federal taxes. (Source: Congressional Budget Office, “Effective Tax Rates Under Current Law”)
Nearly forty million tax filers, about one-third of the total, pay no income taxes. Nearly all of these zero-tax filers are low-income individuals and families. Many of them actually receive money for filing taxes, through the child tax credit or the earned income tax credit. (Source: The Tax Foundation)
VI. The Tax Cuts
The expanded child tax credit, which was recently extended by Congress and the President, benefits the parents of over 47 million children. (Source: Center for Data Analysis)
In 2001 and 2003, Congress and the President cut taxes on married couples to reduce the “marriage penalty”—the premium that married couples paid in taxes above what the couple would have paid had they filed separately.
Congress and the President extended the marriage penalty fix in 2004, benefiting 33 million joint-filing couples—mostly couples in which both spouses work and the second earner contributes at least 30 percent of total income. (Source: Center for Data Analysis)
In 2001, Congress and the President created a new 10-percent tax bracket for low-income workers, reducing their marginal tax rate from 15 percent. In 2003, Congress and the President expanded the 10-percent bracket, and in 2004 Congress and the President extended the 2003 expansion, which was due to expire. That extension will benefit 80 million taxpayers. (Source: Center for Data Analysis)
The Bush tax cuts, even if made permanent, return the tax burden to its historical level as a proportion of the economy. (Source: Congressional Budget Office)
(click image to expand)
Allowing the Bush tax cuts expire would raise the tax burden to historically unprecedented levels. (Source: Congressional Budget Office)
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VII. Conclusion
The economy has added more than 1.5 million payroll jobs over the past year and nearly 2 million jobs on the household survey. Most indicators point towards continued growth. Output is booming, the manufacturing outlook is positive, business confidence is high, and productivity continues to set records. Even such favorites among economic pessimists like data on long-term unemployment, manufacturing employment, and worker discouragement are showing marked improvement. Unfortunately for the pessimists, these are the facts that frame the debate on the economy today.
Tim Kane, Ph.D., is Research Fellow, Rea S. Hederman is Senior Policy Analyst, and Kirk Johnson, Ph.D., is Senior Policy Analyst, in the Center for Data Analysis at The Heritage Foundation.
Sunday, September 26, 2004
Friday, September 24, 2004
Hot Flash
By Mario Loyola
Echoes of Austerlitz
Previous Columns
09/21 - Kerrynomics and small business
09/20 - Diana Kerry's warning
09/17 - Typically French films
09/16 - Kelly Jane Torrance on books
Click here to access the archives.
One book John Kerry clearly has not read is The Campaigns of Napoleon. Of course, reading a single book can’t turn anyone into a political genius--or a military one, for that matter. But Kerry might have avoided making the same blunders that led Napoleon’s enemies into one drubbing after another. Alas, John Kerry is their very type: Predictable in strategy and clumsy in tactics when on the offensive, Kerry is prone to indecision and panic on defense. Such qualities make winning elections needlessly difficult. But for commanders-in-chief fighting real wars, they spell calamity.
In the months after the Battle of Austerlitz in 1805, there was a lot of head-scratching among the generals of Austria and Russia. They had been defeated by a general from the future, and never really understood what hit them. But they could draw some important lessons from their own mistakes, lessons as valuable on the campaign trail of today as they were on the battlefields of Europe two centuries ago:
Don't waste time debating your strategy. Debate is the enemy of strategy.
On the eve of the Battle Austerlitz, Napoleon knew that he was badly outnumbered and even more badly outgunned. He had been unable to destroy the Austrian army before it linked up with a huge Russian force. Now, from atop the Pratzen Heights near the town of Austerlitz, the enemy generals looked down upon the bedraggled, exhausted French with contempt, confident that the next day would bring victory. They convened a grand council of war to discuss the broad outlines of their attack. The meeting resembled nothing so much as a dinner-party, and until three o' clock in the morning, the generals debated.
Meanwhile, in Napoleon's campaign tent, there was no debate. The newly-crowned Emperor of France was on his hands and knees on a huge map of the battlefield, quietly shifting small-unit figurines back and forth, devising the trap that was to become the historical masterpiece of his career. As night fell, 193 tactical movement orders issued from Napoleon's headquarters. When the Austrians and Russians awoke the next morning, they thought they were looking at the same battlefield. But unbeknownst to them, the battlefield had become Napoleon's deadly spider web.
Kerry has taken a key page out of the Austro-Russian playbook. According to Democratic strategists, the Kerry campaign has been paralyzed for weeks by a high-level debate over the candidate's message. Even now, at three o' clock in the morning on the day of the battle, they are still debating their strategy. And if that were not bad enough, Kerry recently enlarged the dinner-party by brining several Clinton operatives on board—opinionated and forceful debaters all. The Democrat has had great difficulty coming up with any strategy, and has reacted only by compounding the problem.
Avoid the doing the obvious. What is obvious to you is also obvious to your enemy.
The trap Napoleon had devised rested on a single lure: his poorly defended right flank. He had strung a few weak infantry regiments along the marshes down the gentle slope that extends south from the Pratzen Heights. Exactly as he hoped, that was where the enemy attacked. When the lead elements of the assault force made contact, Napoleon at first let his position there fall back, inviting the Austro-Russian force to roll up the flank. They accepted the invitation, and for several hours, the French observed regiment after regiment of the enemy, in column formation, rolling to the right across the crest of the Pratzen Heights, headed for what looked to be an easy victory. But the enemy had done the one thing they could not afford to do: the obvious.
Kerry invariably does the same. When the time came to choose a Vice Presidential candidate, after endless debate and careful consideration of the most outlandish options, Kerry did . . . the obvious. He picked the trial lawyer-backed Senator John Edwards: his closest competitor in the primary, and the clear favorite of both the party leadership and the liberal media. Months later, voters have seen little of the young, photogenic Edwards, leaving Kerry without a substantial running-mate on an already weak ticket. Instead of pitching the Bush campaign a nasty curve-ball, Kerry chose the one pitch they were sure to be expecting—and sure to be prepared for.
Tactical execution is king. Napoleon was fond of saying: “I may lose a battle, but I shall never lose a minute.”
When the Austrians and Russians decided to attack Napoleon's exposed flank, exactly as he hoped, they committed the key strategic mistake of the battle. Next, Napoleon needed his enemy to make a major tactical blunder--almost any would do. They did not take long to oblige.
The Austro-Russian force was performing a complex series of evolutions: The successive columns had to approach the crest of the Pratzen from reserve positions and then hinge south towards Napoleon's "collapsing" flank. At about 11 in the morning, one Russian column got delayed in its evolution, and became "unhinged" from the one in front of it, exposing a gap of about 200 yards at the Prazten's highest point--the very center of the front.
Napoleon reacted instantly. "How long will it take you take you to reach the top of the Pratzen?" he asked the commanders of his two central divisions. "20 minutes, sire," they responded. "Attack," said Napoleon.
The Russians and Austrians were stunned as they watched two huge columns of French infantry scaling the steepest part of the Pratzen Heights. Why was Napoleon attacking with two divisions against 20, up a steep hill at the very center of the front, when his own right flank was collapsing? Confusion led to indecision, and during the small window they had for an effective counter-attack, they fatally did nothing.
Tactical inefficiency--and the mistakes that inevitably follow--have been a problem at Kerry campaign headquarters. Here, too, the problem is profound. As some on his own staff privately admit, the campaign's internal operations are simply not focused enough. They have a singular inability to stay "on message," and have only reinforced the Bush campaign's charge that Kerry is a flip-flopper. Even Kerry's rapid-response team is bafflingly slow. They spend valuable time and energy on complex and ultimately pointless maneuvers, such as that farcical chart showing a "connection" between Bush and the Swift-Boat Veterans for Truth. And the last-minute recruitment of Clinton operatives is likely to further blur chains of command, allocations of responsibility, and clarity of message. Look for more time and energy wasted--and more tactical blunders.
Respond to the unexpected deliberately and quickly--and never, ever panic.
As Napoleon's sprint up the Pratzen developed into a major assault, the Austro-Russian force, half of which was oriented to the right--away from the point of attack--became paralyzed as it tried to adjust its formations and reorient itself. As Napoleon's cavalry and reserve followed the attackers, pouring through center of the front, the 200-yard gap the enemy had created for Napoleon widened dramatically. When he then succeeded in pushing one half of the enemy force back onto a frozen lake on his extreme right flank, the jaws of the trap slammed shut.
Using a few thousand men to pin down the rest of the enemy, Napoleon took advantage of his local (and fleeting) superiority of force to overwhelm the trapped divisions from three sides.
In the enemy camp, indecision turned to panic. The trapped half of the Austro-Russian force began to flee across the frozen lake, every man for himself. Napoleon watched for a few minutes from atop his horse, and then ordered several batteries of cannon to bombard the ice--until further notice. He then turned to the scene of the other battle with the bulk of his forces, leaving thousands upon thousands of Austrians and Russians to drown in the frigid waters. The Austro-Russians' easy victory had turned into a fearsome slaughter.
Kerry's reactions to the unexpected are almost always pitifully slow—except when he panics. For example, by the time Kerry responded personally to the Swift Boat Veterans for Truth, it was two weeks too late. Just as the media was starting to lose interest in the story, Kerry's defense put the entire controversy right back on the front page. Even worse, by accusing the President of backing the Swift Boat Vets, Kerry gave Bush an opportunity to laud his opponent's Vietnam record and come off like a class act. Kerry compounded the disaster after the Democratic convention by attacking strongly-defended positions. A few weeks later, by the time of his midnight "offensive" after Bush's convention speech, Kerry was becoming visibly desperate.
Desperation has unfortunately been John Kerry's most visible trait throughout this whole campaign. He won the Iowa caucus by firing his campaign manager, mortgaging his house, and sinking $7 million into a last-minute grass-roots effort. It was a political Hail Mary pass for the history books. More recently, polls putting him well behind Bush for the first time instantly led to an embarrassingly public search for yet another team of advisors. Bad news is not necessarily embarrassing, but panicking in public is.
* * *
The depth of the Kerry campaign’s incompetence mesmerizes even Republican strategists. A front page New York Times article on Bill Clinton's recent hospital-bed chat with Kerry ("Kerry Enlisting Clinton Aides in Effort to Refocus Campaign") almost defied all rational explanation. Clinton's advice was bland enough: Focus on the economy, health-care, and other bread-and-butter issues. The fascinating thing about the story was that it was on the front page of the New York Times at all. There were no indications of a leak. The writers appear to have been officially briefed. Now, why would the Kerry campaign intentionally begin the week's news cycle with a story about how incompetent they are? Republicans were as baffled as they were delighted.
The New York Times story sounds an early warning of the dangers of a Kerry Presidency: His news coverage is rarely the product of his own strategy--and when it is, it hurts him anyway.
Democrats who are worried about this performance should consider that John Kerry would almost certainly run the White House exactly as he has run this campaign. That would be a disaster for all of us, but for Democrats most of all. They're still struggling to repair the damage Jimmy Carter inflicted on their party. And they had early warnings of Carter's weaknesses. Gerald Ford left the GOP Convention of 1976 fatally weakened by the Nixon pardon and the nearly successful primary challenge of Ronald Reagan. Carter nonetheless took only two months to blow a 30-point lead, and barely squeaked into the White House. The bizarre mistakes Carter made during that campaign (such as a Playboy interview that scandalized his Southern conservative base) and his inability to answer simple questions were clear omens of a Presidency most Democrats would rather forget.
In the middle of the War on Terror, making John Kerry commander-in-chief could well prove calamitous. Will there be a strategy, or endless debate? Will his tactics be deft and imaginative enough to keep the enemy on the run, or will he keep to his pattern of predictable and clumsy execution? Will America start to give off the same smell of fear, indecision, and desperation that John Kerry has exuded for months? Kerry's management of his own campaign contains many warnings about the kind of President he would make. Recent polls suggest that Americans are beginning to take heed.
Kerry likes to present himself as a good "campaign closer," most effective when he is behind. That might have been a virtue against someone other than Bush. But Bush has an abundance of the one quality Napoleon thought most valuable in a commander: l'audace, toujours l'audace. In the face of defeat, nothing matters more. Sadly for John Kerry, desperation is not the same thing.
Mario Loyola is a writer in Washington, D.C.
By Mario Loyola
Echoes of Austerlitz
Previous Columns
09/21 - Kerrynomics and small business
09/20 - Diana Kerry's warning
09/17 - Typically French films
09/16 - Kelly Jane Torrance on books
Click here to access the archives.
One book John Kerry clearly has not read is The Campaigns of Napoleon. Of course, reading a single book can’t turn anyone into a political genius--or a military one, for that matter. But Kerry might have avoided making the same blunders that led Napoleon’s enemies into one drubbing after another. Alas, John Kerry is their very type: Predictable in strategy and clumsy in tactics when on the offensive, Kerry is prone to indecision and panic on defense. Such qualities make winning elections needlessly difficult. But for commanders-in-chief fighting real wars, they spell calamity.
In the months after the Battle of Austerlitz in 1805, there was a lot of head-scratching among the generals of Austria and Russia. They had been defeated by a general from the future, and never really understood what hit them. But they could draw some important lessons from their own mistakes, lessons as valuable on the campaign trail of today as they were on the battlefields of Europe two centuries ago:
Don't waste time debating your strategy. Debate is the enemy of strategy.
On the eve of the Battle Austerlitz, Napoleon knew that he was badly outnumbered and even more badly outgunned. He had been unable to destroy the Austrian army before it linked up with a huge Russian force. Now, from atop the Pratzen Heights near the town of Austerlitz, the enemy generals looked down upon the bedraggled, exhausted French with contempt, confident that the next day would bring victory. They convened a grand council of war to discuss the broad outlines of their attack. The meeting resembled nothing so much as a dinner-party, and until three o' clock in the morning, the generals debated.
Meanwhile, in Napoleon's campaign tent, there was no debate. The newly-crowned Emperor of France was on his hands and knees on a huge map of the battlefield, quietly shifting small-unit figurines back and forth, devising the trap that was to become the historical masterpiece of his career. As night fell, 193 tactical movement orders issued from Napoleon's headquarters. When the Austrians and Russians awoke the next morning, they thought they were looking at the same battlefield. But unbeknownst to them, the battlefield had become Napoleon's deadly spider web.
Kerry has taken a key page out of the Austro-Russian playbook. According to Democratic strategists, the Kerry campaign has been paralyzed for weeks by a high-level debate over the candidate's message. Even now, at three o' clock in the morning on the day of the battle, they are still debating their strategy. And if that were not bad enough, Kerry recently enlarged the dinner-party by brining several Clinton operatives on board—opinionated and forceful debaters all. The Democrat has had great difficulty coming up with any strategy, and has reacted only by compounding the problem.
Avoid the doing the obvious. What is obvious to you is also obvious to your enemy.
The trap Napoleon had devised rested on a single lure: his poorly defended right flank. He had strung a few weak infantry regiments along the marshes down the gentle slope that extends south from the Pratzen Heights. Exactly as he hoped, that was where the enemy attacked. When the lead elements of the assault force made contact, Napoleon at first let his position there fall back, inviting the Austro-Russian force to roll up the flank. They accepted the invitation, and for several hours, the French observed regiment after regiment of the enemy, in column formation, rolling to the right across the crest of the Pratzen Heights, headed for what looked to be an easy victory. But the enemy had done the one thing they could not afford to do: the obvious.
Kerry invariably does the same. When the time came to choose a Vice Presidential candidate, after endless debate and careful consideration of the most outlandish options, Kerry did . . . the obvious. He picked the trial lawyer-backed Senator John Edwards: his closest competitor in the primary, and the clear favorite of both the party leadership and the liberal media. Months later, voters have seen little of the young, photogenic Edwards, leaving Kerry without a substantial running-mate on an already weak ticket. Instead of pitching the Bush campaign a nasty curve-ball, Kerry chose the one pitch they were sure to be expecting—and sure to be prepared for.
Tactical execution is king. Napoleon was fond of saying: “I may lose a battle, but I shall never lose a minute.”
When the Austrians and Russians decided to attack Napoleon's exposed flank, exactly as he hoped, they committed the key strategic mistake of the battle. Next, Napoleon needed his enemy to make a major tactical blunder--almost any would do. They did not take long to oblige.
The Austro-Russian force was performing a complex series of evolutions: The successive columns had to approach the crest of the Pratzen from reserve positions and then hinge south towards Napoleon's "collapsing" flank. At about 11 in the morning, one Russian column got delayed in its evolution, and became "unhinged" from the one in front of it, exposing a gap of about 200 yards at the Prazten's highest point--the very center of the front.
Napoleon reacted instantly. "How long will it take you take you to reach the top of the Pratzen?" he asked the commanders of his two central divisions. "20 minutes, sire," they responded. "Attack," said Napoleon.
The Russians and Austrians were stunned as they watched two huge columns of French infantry scaling the steepest part of the Pratzen Heights. Why was Napoleon attacking with two divisions against 20, up a steep hill at the very center of the front, when his own right flank was collapsing? Confusion led to indecision, and during the small window they had for an effective counter-attack, they fatally did nothing.
Tactical inefficiency--and the mistakes that inevitably follow--have been a problem at Kerry campaign headquarters. Here, too, the problem is profound. As some on his own staff privately admit, the campaign's internal operations are simply not focused enough. They have a singular inability to stay "on message," and have only reinforced the Bush campaign's charge that Kerry is a flip-flopper. Even Kerry's rapid-response team is bafflingly slow. They spend valuable time and energy on complex and ultimately pointless maneuvers, such as that farcical chart showing a "connection" between Bush and the Swift-Boat Veterans for Truth. And the last-minute recruitment of Clinton operatives is likely to further blur chains of command, allocations of responsibility, and clarity of message. Look for more time and energy wasted--and more tactical blunders.
Respond to the unexpected deliberately and quickly--and never, ever panic.
As Napoleon's sprint up the Pratzen developed into a major assault, the Austro-Russian force, half of which was oriented to the right--away from the point of attack--became paralyzed as it tried to adjust its formations and reorient itself. As Napoleon's cavalry and reserve followed the attackers, pouring through center of the front, the 200-yard gap the enemy had created for Napoleon widened dramatically. When he then succeeded in pushing one half of the enemy force back onto a frozen lake on his extreme right flank, the jaws of the trap slammed shut.
Using a few thousand men to pin down the rest of the enemy, Napoleon took advantage of his local (and fleeting) superiority of force to overwhelm the trapped divisions from three sides.
In the enemy camp, indecision turned to panic. The trapped half of the Austro-Russian force began to flee across the frozen lake, every man for himself. Napoleon watched for a few minutes from atop his horse, and then ordered several batteries of cannon to bombard the ice--until further notice. He then turned to the scene of the other battle with the bulk of his forces, leaving thousands upon thousands of Austrians and Russians to drown in the frigid waters. The Austro-Russians' easy victory had turned into a fearsome slaughter.
Kerry's reactions to the unexpected are almost always pitifully slow—except when he panics. For example, by the time Kerry responded personally to the Swift Boat Veterans for Truth, it was two weeks too late. Just as the media was starting to lose interest in the story, Kerry's defense put the entire controversy right back on the front page. Even worse, by accusing the President of backing the Swift Boat Vets, Kerry gave Bush an opportunity to laud his opponent's Vietnam record and come off like a class act. Kerry compounded the disaster after the Democratic convention by attacking strongly-defended positions. A few weeks later, by the time of his midnight "offensive" after Bush's convention speech, Kerry was becoming visibly desperate.
Desperation has unfortunately been John Kerry's most visible trait throughout this whole campaign. He won the Iowa caucus by firing his campaign manager, mortgaging his house, and sinking $7 million into a last-minute grass-roots effort. It was a political Hail Mary pass for the history books. More recently, polls putting him well behind Bush for the first time instantly led to an embarrassingly public search for yet another team of advisors. Bad news is not necessarily embarrassing, but panicking in public is.
* * *
The depth of the Kerry campaign’s incompetence mesmerizes even Republican strategists. A front page New York Times article on Bill Clinton's recent hospital-bed chat with Kerry ("Kerry Enlisting Clinton Aides in Effort to Refocus Campaign") almost defied all rational explanation. Clinton's advice was bland enough: Focus on the economy, health-care, and other bread-and-butter issues. The fascinating thing about the story was that it was on the front page of the New York Times at all. There were no indications of a leak. The writers appear to have been officially briefed. Now, why would the Kerry campaign intentionally begin the week's news cycle with a story about how incompetent they are? Republicans were as baffled as they were delighted.
The New York Times story sounds an early warning of the dangers of a Kerry Presidency: His news coverage is rarely the product of his own strategy--and when it is, it hurts him anyway.
Democrats who are worried about this performance should consider that John Kerry would almost certainly run the White House exactly as he has run this campaign. That would be a disaster for all of us, but for Democrats most of all. They're still struggling to repair the damage Jimmy Carter inflicted on their party. And they had early warnings of Carter's weaknesses. Gerald Ford left the GOP Convention of 1976 fatally weakened by the Nixon pardon and the nearly successful primary challenge of Ronald Reagan. Carter nonetheless took only two months to blow a 30-point lead, and barely squeaked into the White House. The bizarre mistakes Carter made during that campaign (such as a Playboy interview that scandalized his Southern conservative base) and his inability to answer simple questions were clear omens of a Presidency most Democrats would rather forget.
In the middle of the War on Terror, making John Kerry commander-in-chief could well prove calamitous. Will there be a strategy, or endless debate? Will his tactics be deft and imaginative enough to keep the enemy on the run, or will he keep to his pattern of predictable and clumsy execution? Will America start to give off the same smell of fear, indecision, and desperation that John Kerry has exuded for months? Kerry's management of his own campaign contains many warnings about the kind of President he would make. Recent polls suggest that Americans are beginning to take heed.
Kerry likes to present himself as a good "campaign closer," most effective when he is behind. That might have been a virtue against someone other than Bush. But Bush has an abundance of the one quality Napoleon thought most valuable in a commander: l'audace, toujours l'audace. In the face of defeat, nothing matters more. Sadly for John Kerry, desperation is not the same thing.
Mario Loyola is a writer in Washington, D.C.
Saturday, September 11, 2004
Call The Enemy By Its Name “Allahu akhbar!” the disease of radical Islam speads…
CaliforniaRepublic.org ^ | 9/10/04 | Bruce Thornton
Posted on 09/11/2004 1:48:19 AM PDT by ParsifalCA
The brutal slaughter of children in Russia is yet another wake-up call we are not heeding. We keep hearing that we are at war, but no one wants to identify the real enemy--an Islamic civilization that sanctions such murder as the justified means for establishing the religious and political dominance of Islam in fulfillment of the will of God.
Nor are those actively killing in the service of this vision some sort of neurotic deformers of Islam created by conditions peculiar to the 20th century. From its birth in the seventh century Islam spread by fire and sword, creating converts as a byproduct of conquest. Remember how much of the modern Middle East had for centuries been Greco-Roman and Judeo-Christian, that is, Western, before the rise of Islam: Turkey, Lebanon, Israel, western Syria, northern Egypt, northern Africa, western Iraq-- all were transformed into the "House of Allah" by violent conquest.
Remember too that Moslems occupied half of Spain for seven centuries and that as late as the 17th century the Turks were at the gates of Vienna. The current propaganda about Islam as the "religion of peace" belies fourteen centuries of aggressive war against those considered "infidels" to be brought under submission to Islam.
The difference today is that the political and cultural dysfunctions of Islam, laid bare by modernity, mean that this traditional imperative to dominate the infidel cannot be realized by military means. The cultural dynamism of the West--created by science, free market capitalism, individual rights and freedom, and the separation of religion and state--shifted the advantage to the West and ultimately led to the destruction of the Ottoman Empire and the imposition of Europe's political will on a civilization that for centuries had looked down on Europeans as barbarian infidels. This dismemberment of the Islamic empire after WWI-not the creation of Israel-- is the true "catastrophe" Bin Laden has referred to and that his terrorism seeks to reverse.
Now that military conquest of the West is out of the question--as tiny Israel has proven on three occasions--terrorism has emerged as the tactic that will exploit what the Islamists see as the West's weaknesses: its addiction to material comfort and pleasure as the highest goods, and its lack of passionate belief in any values worth dying and killing for. And for decades we in the West seemed bent on proving this estimation correct: the response of Europe and at times America as well to first Palestinian terrorism and then other terrorist attacks on our citizens was marked by appeasement and indifference. The smoke-screen of Palestinian nationalism and postcolonial grievances was eagerly accepted by those in the West who either needed an excuse for avoiding unpleasant, costly action, or were indifferent to the spectacle of Jews dying--the latter phenomenon, after all, one that Europe was all too familiar with anyway.
This interpretation is vehemently rejected by many, including some of the strongest supporters of the administration's policies. They respond that the foregoing analysis is true only of a minority who are misinterpreting Islam and attempting to undo history because they have been shut out of the boons of modernity--economic development or political freedom. Evidence suggests, however, that it is not just a minority but rather a critical mass, even perhaps a majority, of Moslems who, even if they would never themselves kill, sanction and rationalize terrorism and thus give it moral and frequently material support. The popularity of Bin Laden throughout the Moslem world, the frequent public celebrations of terrorist attacks, Iran's continuing support of terrorism, the lack of unequivocal condemnations of terrorist murder from Islamic governments, the Nazi-style anti-Semitic drivel published in the state-run presses of many Middle East nations, all suggest that Islamism is not so much of a fringe movement as we are led to believe.
And who are we to say that an interpretation of Islam endorsed by millions is a deformation of its true nature? I'm inclined to believe that those millions cheering on Bin Laden are better judges of the true character of Islam than are Western apologists. As well as being patronizing, this dismissal of many Moslems' understanding of their own religion is ethnocentric to boot, reducing all motives to the material causes the West has privileged, and brushing away spiritual motives as evidence of mere psychological dysfunction. We seem incapable of believing that people will murder others to serve a vision of ultimate reality rather than to acquire material prosperity or political freedom or to vent their neuroses.
Accepting that we are indeed engaged in a struggle of competing fundamental values rather than a battle against a fringe minority means recognizing a grim, sad reality. For history shows that all such struggles are resolved through violence. Deeply held principles and visions of spiritual reality and ultimate value are not bargained or negotiated away. They are given up only when the price of maintaining them is shown to be horrific. In fact, to the true believer his opponent's willingness to negotiate, bargain, or show respectful tolerance is deemed a sign of weak belief in core principles, and so is an encouragement to press on with the fight.
Does anyone really believe, for example, that America's "respect" for the Shrine of Ali in Najaf-- a presumably holy space the Madi Army desecrated by using it as an arms depot and launch pad for mortars--cut any ice with those opposed to the Iraqis and Americans who are trying to create a functioning modern society?
Or is this "restraint" interpreted as a sign of weakness, an indication that we will not pay the price to do what we know is right? Yes, the shrine was evacuated, but who knows how many insurgents escaped with their weapons, and who knows how many Iraqis and American soldiers will die later because those insurgents are still around. No wonder Sadr is trumpeting the evacuation as a victory.
Recognizing the true nature of the struggle against Islamism would have several consequences. First, we would drop the propaganda that asserts there is some widespread "moderate" Moslem constituency eager to usher their societies into the modern world and accept the core cargo of successful modernity-liberal democracy and free-market economies. We would tell those presumed moderates to put up or shut up: we will no longer credit their crocodile tears after a terrorist attack but demand concrete action against the terrorists in their midst. For example, Syria would be put on notice that the offices of Hamas and Hesbollah in Damascus will be shut down, either by the Syrian government or American cruise missiles. Enough with wrist-slapping sanctions and blustering orations before a corrupt and indifferent U.N.
Wouldn't this mean civil war in Islamic nations? Exactly. If those nations truly want to become modern and lift their societies out of the backwardness, illiteracy, and poverty in which they stagnate, then they must solve the problem of Islamist extremism, and that means civil wars. We must stop our enabling the inaction of so-called moderates, which we do by crediting the excuses of Israel or globalization or post-colonial grievances. We must make it clear that the old smokescreens--nationalist aspirations, for example--no longer will fly. After all, the battle cry of the bearded and veiled terrorists who murdered Russian schoolchildren was not "Long live Chechnya" but "Allahu akhbar."
No, all such issues are off the table until terrorism stops. No more of our Western therapeutic excuses and two-bit psychologizing, as though we were dealing with wayward teenagers "acting out" because of low self-esteem. Give our enemies credit for having their own values and motives that cause them to act, rather than reducing all their behavior to mere reactions to what we do. We don't create terrorists, they and their beliefs create themselves no matter what we do. It didn't matter in the least that we rescued Kuwaitis and Bosnians and Iraqis from genocidal maniacs and so kept hundreds of thousands of Moslems alive who otherwise would've been dead. The only action of ours that can make a difference in their behavior is overwhelming destructive force.
The starkest way we could signal our new resolve would be to change our approach to the Israeli-Palestinian war. This would require sweeping from the table all the camouflaging grievances of checkpoints and walls and "Palestinian homeland" and "right of return." We would indicate that we now know the War on Terror began not on 9/11 but when the first Jew returning to Israel was murdered simply because he was a Jew returning to his ancestral homeland. That is, Israel is what Virginia was in the Civil War-- the "cockpit of war," the space where the centuries-old clash is being fought most intensely and brutally.
This change in approach would make it clear that now we know Israel's fight has always been our fight. It is a damning indictment of Western moral corruption that so many in the West ignored or rationalized or even abetted what has been an assault on the West and its values. For that is Israel's greatest sin--being free and dynamic and materially prosperous--that is, Western-- while its Arab neighbors, flush with oil wealth, are mired in backwardness and poverty and political oppression. Israel is a stark reminder of just how superior the West now is, and only Israel's destruction can prove otherwise, just as the destruction of the medieval Crusader kingdoms reasserted Islamic superiority.
For those who think such an approach would be "simplistic" or incite more violence, remember that we already have tried for decades the road of "nuance," moral equivalency, appeasement and negotiation, and we have gotten nowhere. Israeli children are still being blown up, and Palestinians are farther from a state than ever. It's time to recognize that based on their actions rather than their words, a significant number of Palestinians don't want a state as much as they want Israel to disappear. If this were not so, Arafat would've been kicked out of office when he turned down the best chance at a state the Palestinians are likely to get. Instead there was the second intifada. Once more, we must be blunt: get rid of the terrorists who hide among and so endanger your women and children in order to kill Jews. Make up your minds which way you want your society to go: the road to political freedom and economic prosperity, or the road to some fantasy of Islamic dominance that leads in the end only to further suffering and stagnation.
If we fail to see accurately the nature of this struggle, we won't collapse overnight or be overrun. The stakes are not as immediately grim as they were for the Viennese who met the Turks or for the Franks at Poitiers. Rather, the destruction will be slow and insidious, fueled as much by demography as violence. But violence there will be, as eventually terrorists acquire weapons of mass destruction and there will perhaps be a catastrophe that makes 9/11 look like a bad traffic accident. We will evolve into a garrison state, with consequences for our civil liberties and way of life we can only imagine. And there will be backlashes, fueled by xenophobia and nationalism, that very well may return us to the savagery of fascism, especially in Europe.
But these effects will take place over decades, while the cost of preventing them will have to be borne today. That's why it is seductive to pretend the struggle is otherwise, to put the cost off for future generations, to make the mistake Europe made in the thirties. But whether now or later, the bill will have to be paid. CRO
copyright 2004 Bruce S. Thornton Bruce Thornton is a professor of Classics at Cal State Fresno and co-author of Bonfire of the Humanities: Rescuing the Classics in an Impoverished Age and author of Greek Ways: How the Greeks Created Western Civilization (Encounter Books). His most recent book is Searching for Joaquin: Myth, Murieta, and History in California (Encounter Books).
________________________________________
CaliforniaRepublic.org ^ | 9/10/04 | Bruce Thornton
Posted on 09/11/2004 1:48:19 AM PDT by ParsifalCA
The brutal slaughter of children in Russia is yet another wake-up call we are not heeding. We keep hearing that we are at war, but no one wants to identify the real enemy--an Islamic civilization that sanctions such murder as the justified means for establishing the religious and political dominance of Islam in fulfillment of the will of God.
Nor are those actively killing in the service of this vision some sort of neurotic deformers of Islam created by conditions peculiar to the 20th century. From its birth in the seventh century Islam spread by fire and sword, creating converts as a byproduct of conquest. Remember how much of the modern Middle East had for centuries been Greco-Roman and Judeo-Christian, that is, Western, before the rise of Islam: Turkey, Lebanon, Israel, western Syria, northern Egypt, northern Africa, western Iraq-- all were transformed into the "House of Allah" by violent conquest.
Remember too that Moslems occupied half of Spain for seven centuries and that as late as the 17th century the Turks were at the gates of Vienna. The current propaganda about Islam as the "religion of peace" belies fourteen centuries of aggressive war against those considered "infidels" to be brought under submission to Islam.
The difference today is that the political and cultural dysfunctions of Islam, laid bare by modernity, mean that this traditional imperative to dominate the infidel cannot be realized by military means. The cultural dynamism of the West--created by science, free market capitalism, individual rights and freedom, and the separation of religion and state--shifted the advantage to the West and ultimately led to the destruction of the Ottoman Empire and the imposition of Europe's political will on a civilization that for centuries had looked down on Europeans as barbarian infidels. This dismemberment of the Islamic empire after WWI-not the creation of Israel-- is the true "catastrophe" Bin Laden has referred to and that his terrorism seeks to reverse.
Now that military conquest of the West is out of the question--as tiny Israel has proven on three occasions--terrorism has emerged as the tactic that will exploit what the Islamists see as the West's weaknesses: its addiction to material comfort and pleasure as the highest goods, and its lack of passionate belief in any values worth dying and killing for. And for decades we in the West seemed bent on proving this estimation correct: the response of Europe and at times America as well to first Palestinian terrorism and then other terrorist attacks on our citizens was marked by appeasement and indifference. The smoke-screen of Palestinian nationalism and postcolonial grievances was eagerly accepted by those in the West who either needed an excuse for avoiding unpleasant, costly action, or were indifferent to the spectacle of Jews dying--the latter phenomenon, after all, one that Europe was all too familiar with anyway.
This interpretation is vehemently rejected by many, including some of the strongest supporters of the administration's policies. They respond that the foregoing analysis is true only of a minority who are misinterpreting Islam and attempting to undo history because they have been shut out of the boons of modernity--economic development or political freedom. Evidence suggests, however, that it is not just a minority but rather a critical mass, even perhaps a majority, of Moslems who, even if they would never themselves kill, sanction and rationalize terrorism and thus give it moral and frequently material support. The popularity of Bin Laden throughout the Moslem world, the frequent public celebrations of terrorist attacks, Iran's continuing support of terrorism, the lack of unequivocal condemnations of terrorist murder from Islamic governments, the Nazi-style anti-Semitic drivel published in the state-run presses of many Middle East nations, all suggest that Islamism is not so much of a fringe movement as we are led to believe.
And who are we to say that an interpretation of Islam endorsed by millions is a deformation of its true nature? I'm inclined to believe that those millions cheering on Bin Laden are better judges of the true character of Islam than are Western apologists. As well as being patronizing, this dismissal of many Moslems' understanding of their own religion is ethnocentric to boot, reducing all motives to the material causes the West has privileged, and brushing away spiritual motives as evidence of mere psychological dysfunction. We seem incapable of believing that people will murder others to serve a vision of ultimate reality rather than to acquire material prosperity or political freedom or to vent their neuroses.
Accepting that we are indeed engaged in a struggle of competing fundamental values rather than a battle against a fringe minority means recognizing a grim, sad reality. For history shows that all such struggles are resolved through violence. Deeply held principles and visions of spiritual reality and ultimate value are not bargained or negotiated away. They are given up only when the price of maintaining them is shown to be horrific. In fact, to the true believer his opponent's willingness to negotiate, bargain, or show respectful tolerance is deemed a sign of weak belief in core principles, and so is an encouragement to press on with the fight.
Does anyone really believe, for example, that America's "respect" for the Shrine of Ali in Najaf-- a presumably holy space the Madi Army desecrated by using it as an arms depot and launch pad for mortars--cut any ice with those opposed to the Iraqis and Americans who are trying to create a functioning modern society?
Or is this "restraint" interpreted as a sign of weakness, an indication that we will not pay the price to do what we know is right? Yes, the shrine was evacuated, but who knows how many insurgents escaped with their weapons, and who knows how many Iraqis and American soldiers will die later because those insurgents are still around. No wonder Sadr is trumpeting the evacuation as a victory.
Recognizing the true nature of the struggle against Islamism would have several consequences. First, we would drop the propaganda that asserts there is some widespread "moderate" Moslem constituency eager to usher their societies into the modern world and accept the core cargo of successful modernity-liberal democracy and free-market economies. We would tell those presumed moderates to put up or shut up: we will no longer credit their crocodile tears after a terrorist attack but demand concrete action against the terrorists in their midst. For example, Syria would be put on notice that the offices of Hamas and Hesbollah in Damascus will be shut down, either by the Syrian government or American cruise missiles. Enough with wrist-slapping sanctions and blustering orations before a corrupt and indifferent U.N.
Wouldn't this mean civil war in Islamic nations? Exactly. If those nations truly want to become modern and lift their societies out of the backwardness, illiteracy, and poverty in which they stagnate, then they must solve the problem of Islamist extremism, and that means civil wars. We must stop our enabling the inaction of so-called moderates, which we do by crediting the excuses of Israel or globalization or post-colonial grievances. We must make it clear that the old smokescreens--nationalist aspirations, for example--no longer will fly. After all, the battle cry of the bearded and veiled terrorists who murdered Russian schoolchildren was not "Long live Chechnya" but "Allahu akhbar."
No, all such issues are off the table until terrorism stops. No more of our Western therapeutic excuses and two-bit psychologizing, as though we were dealing with wayward teenagers "acting out" because of low self-esteem. Give our enemies credit for having their own values and motives that cause them to act, rather than reducing all their behavior to mere reactions to what we do. We don't create terrorists, they and their beliefs create themselves no matter what we do. It didn't matter in the least that we rescued Kuwaitis and Bosnians and Iraqis from genocidal maniacs and so kept hundreds of thousands of Moslems alive who otherwise would've been dead. The only action of ours that can make a difference in their behavior is overwhelming destructive force.
The starkest way we could signal our new resolve would be to change our approach to the Israeli-Palestinian war. This would require sweeping from the table all the camouflaging grievances of checkpoints and walls and "Palestinian homeland" and "right of return." We would indicate that we now know the War on Terror began not on 9/11 but when the first Jew returning to Israel was murdered simply because he was a Jew returning to his ancestral homeland. That is, Israel is what Virginia was in the Civil War-- the "cockpit of war," the space where the centuries-old clash is being fought most intensely and brutally.
This change in approach would make it clear that now we know Israel's fight has always been our fight. It is a damning indictment of Western moral corruption that so many in the West ignored or rationalized or even abetted what has been an assault on the West and its values. For that is Israel's greatest sin--being free and dynamic and materially prosperous--that is, Western-- while its Arab neighbors, flush with oil wealth, are mired in backwardness and poverty and political oppression. Israel is a stark reminder of just how superior the West now is, and only Israel's destruction can prove otherwise, just as the destruction of the medieval Crusader kingdoms reasserted Islamic superiority.
For those who think such an approach would be "simplistic" or incite more violence, remember that we already have tried for decades the road of "nuance," moral equivalency, appeasement and negotiation, and we have gotten nowhere. Israeli children are still being blown up, and Palestinians are farther from a state than ever. It's time to recognize that based on their actions rather than their words, a significant number of Palestinians don't want a state as much as they want Israel to disappear. If this were not so, Arafat would've been kicked out of office when he turned down the best chance at a state the Palestinians are likely to get. Instead there was the second intifada. Once more, we must be blunt: get rid of the terrorists who hide among and so endanger your women and children in order to kill Jews. Make up your minds which way you want your society to go: the road to political freedom and economic prosperity, or the road to some fantasy of Islamic dominance that leads in the end only to further suffering and stagnation.
If we fail to see accurately the nature of this struggle, we won't collapse overnight or be overrun. The stakes are not as immediately grim as they were for the Viennese who met the Turks or for the Franks at Poitiers. Rather, the destruction will be slow and insidious, fueled as much by demography as violence. But violence there will be, as eventually terrorists acquire weapons of mass destruction and there will perhaps be a catastrophe that makes 9/11 look like a bad traffic accident. We will evolve into a garrison state, with consequences for our civil liberties and way of life we can only imagine. And there will be backlashes, fueled by xenophobia and nationalism, that very well may return us to the savagery of fascism, especially in Europe.
But these effects will take place over decades, while the cost of preventing them will have to be borne today. That's why it is seductive to pretend the struggle is otherwise, to put the cost off for future generations, to make the mistake Europe made in the thirties. But whether now or later, the bill will have to be paid. CRO
copyright 2004 Bruce S. Thornton Bruce Thornton is a professor of Classics at Cal State Fresno and co-author of Bonfire of the Humanities: Rescuing the Classics in an Impoverished Age and author of Greek Ways: How the Greeks Created Western Civilization (Encounter Books). His most recent book is Searching for Joaquin: Myth, Murieta, and History in California (Encounter Books).
________________________________________
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