At What Point Will We Say Politics Is Out of Control?

It’s no secret people are not excited over President Trump, and tensions are high among supporters and dissidents alike about the current situation in Washington. Debates over the health care bill (in every iteration), social issues and gun rights have lost all logical merit, and we are starting to see similar tendencies in state governments, who are clinging to as much agency as possible in these interesting times.

But now we’ve reached the point of violence; violence that could have been prevented with less partisanship and better discourse. Political gamesmanship has gotten out of control, for both politicians and fervent supporters. This seems to be a known fact, but when we will finally accept it? When will we finally accept politics are out of control?

Politics Over Policy, Party Over Country

How many representatives vote against their own party? Outside of Democrats in more conservative districts and Republicans fearing backlash in districts without a strong base, barely any, and when someone does break ranks, it is for sure-to-pass bills or when the risk of a scandal is just too high. While political parties were formed in part to organize ideas and provide a united front to defend them (much to the chagrin of some of the founding fathers), the fact that representatives have little individual voice is concerning, most of all to constituents from districts that stand to be most affected by legislation.

Is party loyalty not turning into a great cost to America? What bipartisan efforts have we seen coming from Congress? The only things of note this writer could find were a mental health bill passed last year and a budget that’s necessary for the government to run in the first place. Business as usual has become no business at all, and conservative ideas won’t fly if they come from a liberal, and vice versa. Policy has become about the person, not the benefit to society.

Legal Corruption and Rigging the Game

Gerrymandering is doing nothing to improve democracy, both at the state level and federally. It encourages pandering exclusively to a party base, silencing moderate and centrist voices that keep radicals out of office and limit partisanship.

On top of that, the concept of a judge as a political appointment has escalated, with court appointments and resignations playing out like a chess board, and some appointment periods growing far longer than the constitution intended. These types of actions extend beyond terms and are clear efforts to entrench policy and power. It removes the American people’s ability to react to changes and political gestures.

People Are Afraid

People are doing everything they can to stay safe from real and perceived threats, but without organization or an acknowledgment of reality, what can they do? They can stay private from snooping and attempt to make an impact on the local level, but there is an entrenched attitude in Washington that is toxic and is only spreading fear.

Now people are afraid of their own government, with some talking of it as a police state or a country ruled by a tyrant. The narrative being spun by both sides of the media is that we’re headed towards disaster and that every action is taking us one step closer. It seems like we’ve been in a constant state of disaster or emergency for the last 15 years. People have either acclimated and stopped caring, which is bad if there’s a real disaster, or have lived in a state of panic, which makes them easily controlled.

Is it time to say enough’s enough?

There is a growing trend in this country towards the irrational and towards an utter breakdown of political discourse. Some people (likely justifiably) think that politics is completely out of control and that America needs to focus its efforts on finding a new, healthier political norm. Yet that isn’t going to happen until the voting public comes together and makes their voice heard at every level.

What do you plan on doing to raise the standard? Do you think that the current political situation is out of control? Please leave a comment below and tell us your thoughts.

Sandra is a writer and blogger who focuses on political topics and technological issues. Having lived in California for several years, she is seeing more division than ever within the state’s borders.

Remembering Allan Hoffenblum

Allan Hoffenblum 2The sudden death of Allan Hoffenblum was a tear in the fabric of California’s political world. He was an endless source of information to the media and political players who subscribed to the California Target Book which he co-founded and managed amassing much information on California’s political races.

More importantly to many of us in the political world he was a friend and a mentor.

I knew Allan for many years and was pleased to host him a number of times at the public policy class I teach at Pepperdine University. On each occasion he would re-new an old friendship with the public policy school’s then dean, Jim Wilburn, who Allan recruited to work on President Nixon’s re-elect campaign in California in 1972. Allan took pleasure in sharing his knowledge and experiences with students.

Allan managed many political campaigns once he opened his consulting business. But, it was in his role as an independent observer of the political scene that gained him his greatest following as he explained the complex, rough and tumble world of California politics with an unbiased eye. I often heard him express harsh words for the Republican Party that he worked for in the ‘60s and 70s as it slowly lost its competitive edge.

Allan liked to tell me about the time he was directing political efforts for the Republican Party and used the Proposition 13 tax revolt to boost many of his candidates. Here’s how I wrote up his story in my book, The Legend of Proposition 13 that was published a dozen years ago:

Hoffenblum remembered that one of the candidates for Assembly, Dennis Brown, came to see him with some interesting polling information. Brown’s poll consisted of two questions. The first question asked how voters intended to vote in his race. The answers showed that newcomer Brown was substantially behind. The second question asked, if you knew that Dennis Brown supported Proposition 13 and his opponent opposed it how would you vote? The numbers nearly flip-flopped. Hoffenblum decided to poll other districts using similar questions. The results were nearly the same.

Hoffenblum sought out Jarvis and put together letters in sixteen races, including the State Senate, the Assembly and Congress, all tailored to each particular race. Jarvis’s letters stated simply that the Republican newcomer had supported Proposition 13 and that the Democratic incumbent had opposed it. The letters hit just a few days before the election and caught the incumbents off guard.

Fourteen of sixteen incumbents opposed by Jarvis were defeated. Pro-Prop 13 Republicans elected to the legislature for the first time were dubbed “Proposition 13 babies.” Hoffenblum said, “It was the biggest election landslide for California Republicans since the election of Warren Harding.”

Times have changed but Allan’s perceptive analysis of the California political scene was eternal. Many, including me, will miss him.

You may read more about Allan Hoffenblum’s career in the Sacramento Bee here and the Capitol Weekly here.

Originally published by Fox and Hounds Daily

California’s Political Earthquake On Its Way

Photo courtesy Franco Folini, flickr

Photo courtesy Franco Folini, flickr

California is facing an uncertain future – and it’s not an earthquake, despite a current blockbuster movie. There’s a water crisis, an education system declared woeful by a state judge and soaring costs on all levels – water, utilities, energy, housing and taxes. These could all be eclipsed by the huge elephant in the room – unfunded pensions and health care for state and local government employees that could be $1 trillion or more.

What are our public officials doing? As was recently reported, there are no fewer than a dozen proposals in the legislature to increase taxes AND spending, despite the massive underfunding of pensions and health care. The governor crows about a California ‘comeback’ but he almost completely ignores the trillion dollar bomb expected to hit over the next 20 years. This government employee pensions and healthcare bomb only gets worse, as life expectancies expand and investments underperform the rosy scenarios built into their projections.

Take heart, California, there is change coming and it’s not the San Andreas splitting apart. It will be a political earthquake and it’s called the Neighborhood Legislature (NL). It will replace the dysfunctional and practically corrupt (if not actually corrupt in some cases) California legislature. We just received Title and Summary and we have built a professional plus volunteer organization that will soon be circulating through the neighborhood precincts of California to collect signatures and build support for this groundbreaking proposal.

Why is this such a political earthquake? Because it holds real promise that it will return power to actual representatives of the people, citizen legislators, who will be able to explore and implement the important reforms unimpeded by the allure and/or sting from special interest money spent to protect the status quo. These citizen legislators will replace the professional fundraisers and special interest representatives we currently endure.

As a result of population growth, the electoral structure of California’s Legislature is ideal for special interest domination. The sheer size of the districts makes campaign funding and massive campaign operations all encompassing and dominant. That size also turns election campaigns into impersonal media efforts that have effectively turned off voters and choked off voter participation and confidence.

The NL changes this by chopping the current gargantuan districts into about 100 tiny ones. After representatives from these tiny districts are elected, they caucus and send one of their number to Sacramento. Thus, the same number, 120 (40 Senators and 80 Assemblymen) go to Sacramento to hold hearings and pass legislation. The Neighborhood Reps get a ratification vote for accountability.

The key is that in tiny districts, campaigns will be about issues, policy and the character of the candidate – not how much money they raise. Special interest groups won’t be able to win with attacks using independent expenditures. They can try – but in tiny districts, a candidate can effectively respond by going literally door to door, making the case directly to his or her constituents.

We realize this idea is going to disrupt the status quo. Its defenders will muster their resources to fight it. That’s why we are going into the neighborhoods, to build support door to door, person to person. The political class wants to protect its fundraising operation because it makes them a lot of money and secures their power.

California has huge promise – it can be the Golden State again if it can overcome its political dysfunction and leadership void. The Neighborhood Legislature is the key ingredient – an innovative disruptive restructuring worthy of the most innovative state in the U.S.  The state that gave the world the microchip, personal computer, electric car and cloud computing will also give the world a new electoral structure that will launch California into a sustainable position for the 21st century and beyond.

Originally published by Fox and Hounds Daily

California-based Businessman and Former Illinois Republican Official

America: Losing Our Religion

cross“Losing My Religion” is not just a song by R.E.M. It’s also a fact of American life.

That’s the message of a survey of more than 35,000 Americans just released by the Pew Research Center. The key finding: the number of Americans who claim no religious affiliation is growing, from 16 percent in 2007 to 23 percent in 2014. That’s nearly a quarter of the adult population. Meanwhile, the number of Christians in the U.S. is down 8 percent.

Pew estimates that the U.S. now counts about 56 million unaffiliated adults. The unchurched are larger than the number of Catholics and mainline Protestants and nearly equal to the number of evangelicals.

And it’s having a political impact. Look at the backlash last month to the “religious freedom” law passed in Indiana that would have allowed businesses to discriminate against same-sex couples on religious grounds. The huge wave of criticism shocked conservatives who are used to seeing “religious freedom” trump every argument. This time, conservatives were forced to back down.

The rise of the unchurched is partly due to the growing numbers of millennials. Millennials (Americans born after 1980) are the least churched generation — 35 percent are unaffiliated. But the turning away from religion is not confined to them. The Pew survey shows Christians declining and the unchurched increasing in every age group. Even seniors.

The growing number of unchurched matters politically because religiosity is a key marker of political affiliation. Not religion. Religiosity.

Today, if you can ask a voter only one question to identify his or her political leanings (besides “Are you a Democrat or a Republican?”), the best question would be “How often do you go to church?”

Pew reports that, among Americans with no religious affiliation, Democrats and Democratic-leaners outnumber Republicans and Republican-leaners 61 to 25 percent.

In 1992, I held a post as visiting professor of American politics at a leading Jesuit university. One of the perquisites of that position was an invitation to tea with the Cardinal. After we exchanged pleasantries, the Cardinal asked, “Is there anything happening in American politics that I should be aware of?”

“As a matter of fact, your eminence, there is,” I answered. “Since 1980, religious Americans of all faiths — fundamentalist Protestants, observant Catholics, even Orthodox Jews — have been moving toward the Republican Party. At the same time, irreligious Americans have found a home in the Democratic Party.

“This is something new,” I said. Then I went a fateful step further, adding, “I’m a little uncomfortable with the idea of a religious party in this country.”

The Cardinal pounced. “Well,” he said, “I’m a little uncomfortable with an irreligious party in this country.”

“Your eminence,” I responded, “I think I’ll have more tea.”

The unchurched are an important constituency in the Democratic coalition that Barack Obama brought to power. Democrats don’t like to talk about them, however, because they don’t want to be seen as “the godless party.”

The split between the churched and the unchurched goes back to the 1960s, when values became the defining partisan issue in the U.S. Bill Clinton once said, “If you look back on the sixties and, on balance, you think there was more good than harm, you’re probably a Democrat. And if you think there’s more harm than good, you’re probably a Republican.”

The backlash to the sixties among religious Americans helped create the Reagan majority. The growing number of unchurched Americans has undermined it. We’ve seen views on same-sex marriage and marijuana liberalize with astonishing speed.

In the long run, the Pew study is good news for Democrats. The problem is, politics doesn’t just reflect long-term trends, like changing demographics and declining religiosity. In politics, short-term factors typically dominate.

2008, for example, was a good year for Democrats. In the nationwide exit poll on election day, 16 percent of voters said they had no religious affiliation. They voted 67 percent for Democrats in elections for the House of Representatives.

2014 was a bad year for Democrats. In the 2014 midterm, the percentage of voters with no religious affiliation rose to 18 percent, even though the turnout of young voters was down. But enthusiasm for Democrats lagged in 2014, even among the unchurched. Only 60 percent of them voted for House Democrats.

Sure, the demographic trends look good for Democrats. The problem is, demographics is long. Politics is short.

(Bill Schneider is a professor at George Mason University and a contributor to Al Jazeera. This piece was posted most recently at the Huffington Post)

CARTOON: Obama’s Three Branches of Government

Obama government

 

Gary McCoy, Cagle Cartoons

Why Not Let People Vote For Whomever They Want?

What would it take to reverse the trend of voter turnout? The real answers to that question – partisan local elections, a reversal of the top two disaster (and the resulting voter confusion, expensive campaign nastiness, and party weakness), elections on weekends, loosening all the constitutional rules that take issues off the table – are considered politically unrealistic. In part because reformers supported reforms that discourage voting, and being a reformer means never having to say you were wrong.

Since this is California, you’ve probably got to start with a small step. So here it is: Restore to voters the power to vote for whomever they choose.

Didn’t know that that power had been taken away from you? It was – back in 2012 when a law, designed to implement top two, abolished write-in voting on the November ballot for partisan offices (president being the exception). The change didn’t get much attention at the time, but it eliminated one more reason for people to vote. There never were a lot of write-ins, but we’re told that every vote counts. And every vote counts more when so few people are voting.

Scrapping write-ins eliminated a California political tradition. As Richard Winger of Ballot Access News pointed out in an email, Californians elected a write-in candidate to Congress three times in a general election:  1930 (won by the son of a Sacramento Congressman who died in office), 1946 (when William Knowland won the last couple months of Hiram Johnson’s last U.S. Senate term), 1982 (Ron Packard).  In eliminating write-ins, California went against the grain. According to Winger, California is the only state besides Louisiana that ever had write-ins and abolished them.  There are four states that have never had write-ins:  Nevada, South Dakota, Hawaii, and Oklahoma.

Why should we bring write-ins back? For reasons of democracy and engagement. Minor parties that have been shut out of November elections by top two would have an incentive to campaign, and bring voters to the polls, since they’d have the write-in option. Write-ins also provide a way to make sure that voters of a major party aren’t shut out when two candidates of the same party advance in the top two. (Write-ins also could serve as a check on the crazy first-round election results that top two sometimes produces.)

There’s an ongoing legal challenge to the top two alleging that it violates the rights of voters who want to cast ballot for minor party candidates in November (a hearing is currently scheduled for Jan. 15 in the State Court of Appeals in San Francisco). But why wait for the courts? The legislature could act to restore choice on the ballot, and give at least a few more voters a reason to show up.

This article was originally published on Fox and Hounds Daily

Joe Mathews is a Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

Grabbing a Piece of CA

Out of state donors

 

Wolverton, Cagle Cartoons

CA Dems Battle on Key Issues

 

 

Democrats fighting logoAlthough Democrats in California are eager to celebrate major victories next Tuesday, political fault lines lie under their party.

From anti-rape legislation, to education reform, to health costs and beyond, an anticipated left-leaning consensus has failed to materialize in the Golden State. The resulting controversies, disagreements and difficulties in politicking have thrown a suprising degree of doubt on Democrats’ broader election-year routine.

National Democrats had grown accustomed to a clear, reliable dividing line between identity politics and more general issues. The distinction helped strategists protest the status quo for allies with powerful institutional interests — while microtargeting voters based on criteria like race or ethnicity, sex or gender, age, immigrant status and sexual orientation.

But the new cleavages among California liberals have upset that carefully calibrated approach, leading to close scrutiny and, in some cases, close state elections.

Yes means yes

The phenomenon became hard to ignore when the national political media picked up on sharp disagreements over California’s new “yes means yes” legislation, which requires affirmative sexual consent at universities receiving state funding. Initially, the controversial bill seemed poised to become law without incident.

Outside the state, however, commentators influential among establishment liberals and progressives found themselves at loggerheads over the implications of its strict, invasive rules. As the Los Angeles Times observed, the scuffle — which drew in figures at publications ranging from Vox to The Nation to New York magazine — escalated into “a clash between those who believe the law is too intrusive and those who believe intrusiveness is the entire point.”

For Democrats, the political point has become clear: rather than helping cement a consensus among liberal voters about how to advance legislation concerning sex, “yes means yes” has given voters a stark reason to reassess what they want out of Democrats in that regard.

Given the significance Democrats have placed on the women’s vote in recent years, and the hope they have placed in rising generations of younger voters, the news is especially unwelcome.

Teachers unions

California also gave Democrats a preview of even broader and more fundamental divides on the left.

When Judge Rolf Treu handed down the Vergara ruling, which held public teacher tenure protections to unconstitutionally infringe students’ rights, Democrats split immediately. Some, like Gov. Jerry Brown, went to bat for the teachers unions.

Others, like U.S. Secretary of Education Arne Duncan, presented the ruling as a clarion call to improve educational opportunities for all students. Because many underperforming schools and teachers have been found in districts with substantial (or majority) minority populations, some Democrats recognized they could be forced into an uncomfortable choice.

On the one hand, Democrats wished to stand publicly for the interests of minority children and families. On the other, they wanted to defend teachers unions, which have long played a decisive role in Democrats’ political success, especially in California.

These broad political challenges quickly crystallized into a pitched battle over the tenure of one man: California Superintendent of Public Instruction Tom Torlakson, a dedicated ally of the teachers unions. Torlakson’s incumbency has become a referendum on his staunch opposition to the Vergara decision.

His challenger, former charter schools executive Marshall Tuck, also is a Democrat — creating an intra-party race as close and bitter as any in recent memory, even though officially the post is non-partisan.

If Tuck wins, an even bigger confrontation will arise, pitting him against Brown and Attorney General Kamala Harris, his fellow Democrats, assuming both are re-elected. Brown handily is leading Republican challenger Neel Kashkari, who applauded the Vergara decision.

Harris filed the state’s appeal of Vergara on behalf of Brown. Her opponent is Republican Ronald Gold, who urged her not to appeal VergaraHe asked, “Is she with students, particularly inner city and economically disadvantaged ones, or is she with the teachers unions that support her campaign?”

Even after their expected victories next Tuesday, that’s the kind of headache California Democrats can do without.

Health insurance costs

Finally, the remarkable divides among California Democrats on Proposition 45 could establish another pattern of disagreement for liberals nationwide. It would give the California insurance commissioner the power of approval over changes in health-insurance rates — including over Covered California, the state’s implementation of Obamacare.

Prop. 45 is sponsored by the left-leaning Consumer Watchdog organization.

It comes down to this: Will Covered Care rates be set as part of the federal legislation, or by the state insurance commissioner because of Prop. 45?

The official Ballot Pamphlet from the California Secretary of State features the dueling liberal visions.

The Pro side insists: “Proposition 45 will lower healthcare costs by preventing health insurance companies from jacking up rates and passing on unreasonable costs to consumers.”

The Anti side retorts: “Prop. 45 creates even more expensive state bureaucracy, duplicating two other bureaucracies that oversee health insurance rates, causing costly confusion with other regulations and adding more red tape to the health care system.”

These political fault lines are just opening up, and are likely to get even larger.

This article was originally published on CalWatchdog.com

More Solyndra docs, subpoena “rebuffed”

From Hot Air:

Friday is always the designated “take out the trash” day in Washington and this week was no exception. After receiving increasingly heated demands from the Energy and Commerce Committee – not to mention a subpoena – for all documents related to the failed solar panel manufacturer, the White House responded. Of course, “responded” can mean different things to different people.

The White House on Friday rejected House Republicans’ subpoena for all internal communications related to the $535 million Solyndra loan guarantee, instead providing 135 pages of documents that administration officials say meet the “legitimate oversight interests” of congressional investigators.

In a letter to top Republicans on the House Energy and Commerce Committee Friday, White House counsel Kathryn Ruemmler said the documents “do not contain evidence of favoritism to political supporters or any wrongdoing by the White House in connection with the Solyndra loan guarantee.”

So apparently the people being served with subpoenas are now in the best position to be the judge of what meets the “legitimate oversight interests” of those doing the overseeing. It’s comforting to know that when they were deciding which documents to deliver and which to sit on, none of the ones they turned over showed “evidence of favoritism to political supporters or any wrongdoing.”

(Read Full Article)

How the wealth of the “1%” provides the standard of living for the “99%”

The protesters in the Occupy Wall Street Movement and its numerous clones elsewhere in the country and around the world chant that one percent of the population owns all the wealth and lives at the expense of the remaining ninety-nine percent. The obvious solution that they imply is for the ninety-nine percent to seize the wealth of the one percent and use it for their benefit rather than allowing it to continue to be used for the benefit of the one percent, who are allegedly undeserving greedy capitalist exploiters. In other words, the implicit program of the protesters is that of socialism and the redistribution of wealth.

Putting aside the hyperbole in the movement’s claim, it is true that a relatively small minority of people does own the far greater part of the wealth of the country. The figures “one percent” and “ninety-nine” percent, however exaggerated, serve to place that fact in the strongest possible light.

What the protesters do not realize is that the wealth of the one percent provides the standard of living of the ninety-nine percent.

The protesters have no awareness of this, because they see the world through an intellectual lens that is inappropriate to life under capitalism and its market economy. They see a world, still present in some places, and present everywhere a few centuries ago, of self-sufficient farm families, each producing for its own consumption and having no essential connection to markets.

In such a world, if one sees a farmer’s field, or his barn, or plow, or draft animals, and asks who do these means of production serve, the answer is the farmer and his family, and no one else. In such a world, apart from the receipt of occasional charity from the owners, those who are not owners of means of production cannot benefit from means of production unless and until they themselves somehow become owners of means of production. They cannot benefit from other people’s means of production except by inheriting them or by seizing them.

In the world of the protesters, means of production have the same essential status as consumers’ goods, which as a rule are of benefit only to their owners. It is because of this that those who share the mentality of the protesters typically depict capitalists as fat men, whose plates are heaped high with food, while the masses of wage earners must live near starvation. According to this mentality, the redistribution of wealth is a matter merely of taking from the overflowing plates of the capitalists and giving to the starving workers.

Contrary to such beliefs, in the modern world in which we actually live, the wealth of the capitalists is simply not in the form of consumers’ goods to any great extent. Not only is it overwhelmingly in the form of means of production but those means of production are employed in the production of goods and services that are sold in the market. Totally unlike the conditions of self-sufficient farm families, the physical beneficiaries of the capitalists’ means of production are all the members of the general consuming public who buy the capitalists’ products.

For example, without owning so much as a single share of stock in General Motors or Exxon Mobil, everyone in a capitalist economy who buys the products of these firms benefits from their means of production: the buyer of a GM automobile benefits from the GM factory that produced that automobile; the buyer of Exxon’s gasoline benefits from its oil wells, pipelines, and tanker trucks. Furthermore, everyone benefits from their means of production who buys the products of the customers of GM or Exxon, insofar as their means of production indirectly contribute to the products of their customers. For example, the patrons of grocery stores whose goods are delivered in trucks made by GM or fueled by diesel oil produced in Exxon’s refineries are beneficiaries of the existence of GM’s truck factories and Exxon’s refineries. Even everyone who buys the products of the competitors of GM and Exxon, or of the customers of those competitors, benefits from the existence of GM’s and Exxon’s means of production. This is because GM’s and Exxon’s means of production result in a more abundant and thus lower-priced supply of the kind of goods the competitors sell.

In other words, all of us, one hundred percent of us, benefit from the wealth of the hated capitalists. We benefit without ourselves being capitalists, or being capitalists to any great extent. The protesters are literally kept alive on the foundation of the wealth of the capitalists they hate. As just indicated, the oil fields and pipelines of the hated Exxon corporation provide the fuel that powers the tractors and trucks that are essential to the production and delivery of the food the protesters eat. The protesters and all other haters of capitalists hate the foundations of their own existence.

The benefit of the capitalists’ means of production to non-owners of means of production extends not only to the buyers of the products of those means of production but also to the sellers of the labor that is employed to work with those means of production. The wealth of the capitalists, in other words, is the source both of the supply of products that non-owners of the means of production buy and of the demand for the labor that non-owners of the means of production sell. It follows that the larger the number and greater the wealth of the capitalists, the greater is both the supply of products and the demand for labor, and thus the lower are prices and the higher are wages, i.e., the higher is the standard of living of everyone. Nothing is more to the self-interest of the average person than to live in a society that is filled with multi-billionaire capitalists and their corporations, all busy using their vast wealth to produce the products he buys and to compete for the labor he sells.

Nevertheless, the world the protesters yearn for is a world from which the billionaire capitalists and their corporations have been banished, replaced by small, poor producers, who would not be significantly richer than they themselves are, which is to say, impoverished. They expect that in a world of such producers, producers who lack the capital required to produce very much of anything, let alone carry on the mass production of the technologically advanced products of modern capitalism, they will somehow be economically better off than they are now. Obviously, the protesters could not be more deluded.

In addition to not realizing that the wealth of the so-called one percent is the foundation of the standard of living of the so-called ninety-nine percent, what the protesters also do not realize is that the “greed” of those who seek to become part of the one percent, or to enlarge their position within it, is what serves progressively to improve the standard of living of the ninety-nine percent.

Of course, this does not apply to wealth which has been acquired by such means as obtaining government subsidies or preventing competition through protective tariffs and other forms of government intervention. These are methods which are made possible to the extent that the government is permitted to depart from a policy of strict laissez-faire and thereby arbitrarily reward or punish firms.

Apart from such aberrations, the way that business fortunes are accumulated is by means of the high profits generated by the introduction of new and improved products and more efficient, lower-cost methods of production, followed by the heavy saving and reinvestment of those high profits.

For example, the $6 billion fortune of the late Steve Jobs was built on a foundation of Mr. Jobs having made it possible for Apple Computer to introduce such new and improved products as the iPod, the iPhone, and the iPad, and then heavily saving and reinvesting the share of the profits that came to him.

Two closely related points need to be stressed. First, the fortunes that are accumulated in this way generally serve in the larger-scale production of the very sort of products that provided the profits out of which their accumulation took place. Thus, for example, Jobs’ billions serve largely in the production of Apple’s products. Similarly, old Henry Ford’s great personal fortune, earned on the foundation of introducing major improvements in the efficiency of automobile production, which brought down the price of a new automobile from about $10,000 at the beginning of the 20th Century to $300 in the mid 1920s, was used to make possible the production of millions of Ford automobiles.

Second, the high rates of profit earned on new and improved products and methods of production are temporary. As soon as the production of the new product or use of the new method of production becomes the norm in an industry, it no longer provides any exceptional profitability. Indeed, further improvements again and again render earlier improvements downright unprofitable. For example, the first generation of the iPhone, which was highly profitable just a few years ago, is or soon will be unprofitable, because further advances have rendered it obsolete.

As a result, the accumulation of great business fortunes generally requires the introduction of a series of improvements in products or methods of production. This is what is required to maintain a high rate of profit in the face of competition. For example, Intel’s ability to maintain its high rate of profit over the years has depended on its ability to introduce one substantial improvement in its computer chips after another. The net effect has been that computer users have gotten the benefit of improvement after improvement not only at no rise but a drastic decline in the prices of computer chips. Insofar as high profits rest on low costs of production, competition drives prices down to correspond to the lower level of costs, which necessitates the achievement of still further cost reductions to maintain high profits.

The same outcome, of course, applies not only to Intel and microprocessors but also to the rest of the computer industry, where gigabytes of memory and terabytes of hard drive data storage now sell at prices below the prices of megabytes of memory and hard drive data storage just a couple of decades ago. Indeed, if one knows how to look, the principle of ever more and better products for less and less applies throughout the economic system. It is present in the production of food, clothing, and shelter as well as in the high tech industries, and in virtually all industries in between.

It is present in these industries even though the government’s inflation of the money supply has caused the prices of their products to rise sharply over the years. Despite this, when calculated in terms of the amount of labor the average person must expend in order to earn the wages needed to enable him to buy these products, their prices have sharply fallen.

This can be seen in the fact that today, the average worker works 40 hours per week, while a worker of a century or so ago worked 60 hours a week. For the 40 hours he works, the average worker of today receives the goods and services comprising the average standard of living of 2011, which includes such things as an automobile, refrigerator, air conditioner, central heating, more and better living space, more and better food and clothing, modern medicine and dentistry, motion pictures, a computer, cell phone, television set, washer/dryer, microwave oven, and so on. The average worker of 1911 either did not have these things at all or had much less of them and of poorer quality.

If we describe the goods and services received by the average worker of today for his 40 hours of labor as being 10 times as great as those received by the average worker of 1911 for his 60 hours of labor, then it follows that expressed in terms of the amount of labor that needs to be performed today in order to be able to buy goods and services equivalent to the standard of living of 1911, prices have fallen to two-thirds of one-tenth of their level in 1911, i.e., to one-fifteenth of their level in 1911, which is to say, by 93 1/3 percent.

Capitalism—laissez-faire capitalism—is the ideal economic system. It is the embodiment of individual freedom and the pursuit of material self-interest. Its result is the progressive rise in the material well-being of all, manifested in lengthening life spans and ever improving standards of living.

The economic stagnation and decline, the problems of mass unemployment and growing poverty experienced in the United States in recent years, are the result of violations of individual freedom and the pursuit of material self-interest. The government has enmeshed the economic system in a growing web of paralyzing rules and regulations that prohibit the production of goods and services that people want, while compelling the production of goods and services they don’t want, and making the production of virtually everything more and more expensive than it needs to be. For example, prohibitions on the production of atomic power, oil, coal, and natural gas, make the cost of energy higher and in the face of less energy available for use in production, require the performance of more human labor to produce any given quantity of goods. This results in fewer goods being available to remunerate the performance of any given quantity of labor.

Uncontrolled government spending and its accompanying budget deficits and borrowing, along with the income, estate, and capital gains taxes, all levied on funds that otherwise would have been heavily saved and invested, drain capital from the economic system. They thus serve to prevent the increase in both the supply of goods and the demand for labor that more capital in the hands of business would have made possible. They have now gone far enough to have begun actually to reduce the supply of capital in the economic system in comparison with the past.

Capital accumulation is also impaired and can ultimately be turned into capital decumulation, through the effects of additional government regulation in raising the costs of production and thus reducing its efficiency. This applies to practically all of the regulations imposed by the Environmental Protection Agency, the Occupational Safety and Health Administration, the Consumer Product Safety Commission, the National Labor Relations Board, the Food and Drug Administration, and the various other government agencies. The effect of their regulations is that for any given amount of labor performed in the economic system, there is less product than would otherwise be produced.

Now anything that serves to reduce the ability to produce in general, serves also to reduce the ability to produce capital goods in particular. Because of such government interference, any given amount of labor and capital goods devoted to the production of capital goods results in a smaller output of capital goods, just as any given quantity of labor and capital goods devoted to the production of consumers’ goods results in a smaller output of consumers’ goods. At a minimum, the reduced supply of capital goods produced serves to reduce the rate of economic progress. A reduction in the supply of capital goods produced great enough to prevent the addition of any increment to the previously existing supply of capital goods, and thus to put an end to capital accumulation, brings economic progress to a complete halt. A still greater reduction, one that renders the supply of capital goods produced less than the supply being used up in production, constitutes capital decumulation and thus a decline in the economic system’s ability to produce. As indicated, the United States already appears to be at this point.

The problem of capital decumulation has been greatly compounded as the result of massive credit expansion induced by the Federal Reserve System and its policy of easy money and artificially low interest rates. This policy led first to a great stock market bubble and then a vast housing bubble, as large quantities of newly created money poured into the stock market and later the housing market. Between these two bubbles, trillions of dollars of capital were lost. In both instances, vast overconsumption occurred as people raced to buy such things as new automobiles, major appliances, vacations, and all kinds of luxury goods that they would not have believed they could afford in the absence of the effects of credit expansion, often incurring substantial debt in the process.

In the one case, it was the artificial rise in stock prices that misled people into believing that they could afford these things. In the other, it was the artificial rise in home prices that produced this result. The seeming wealth vanished with the fall in stock prices and then again, later, with the fall in housing prices. In the housing bubble, moreover, millions of homes were constructed for people who could not afford to pay for them. All of this represented a huge loss of capital and thus of the ability of business to produce and to employ labor. It is this loss of capital that is responsible for our present problem of mass unemployment.

Despite this loss of capital, unemployment could be eliminated. But given the loss of capital, what would be required to accomplish this is a fall in wage rates. This fall, however, is made virtually illegal as the result of the existence of minimum-wage laws and pro-union legislation. These laws prevent employers from offering the lower wage rates at which the unemployed would be reemployed.

Thus, however ironic it may be, it turns out that virtually all of the problems the Occupy Wall Street protesters complain about are the result of the enactment of policies that they support and in which they fervently believe. It is their mentality, the Marxism that permeates it, and the government policies that are the result, that are responsible for what they complain about. The protesters are, in effect, in the position of being unwitting flagellants. They are beating themselves left and right and as balm for their wounds they demand more whips and chains. They do not see this, because they have not learned to make the connection that in violating the freedom of businessmen and capitalists and seizing and consuming their wealth, i.e., using weapons of pain and suffering against this small hated group, they are destroying the basis of their own well being.

However much the protesters might deserve to suffer as the result of the injury caused by the enactment of their very own ideas, it would be far better, if they woke up to the modern world and came to understand the actual nature of capitalism, and then directed their ire at the targets that deserve it. In that case, they might make some real contribution to economic well being, including their own.

(George Reisman, Ph.D. is Pepperdine University Professor Emeritus of Economics, a Senior Fellow at the Goldwater Institute, and the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996). His website is www.capitalism.net and his blog is georgereismansblog.blogspot.com.)