Control in the Name of Compassion

Spindletop, Texas.  January 10, 1901.  Dusty, for sure, and about to get downright dirty.

It was on that day that the modern oil industry was born as Anthony Lucas, drilling on behalf of Patillo Higgins’s Gladys City Oil, Gas, and Manufacturing Company, struck the mother lode, when the well that he had burrowed began gushing oil at the rate of approximately 100,000 barrels per day. Until that point, Pennsylvania had been the most productive oil-producing region in the United States, in addition to the fact that most people considered the future importance of oil to be silly nonsense. Nearly overnight, the price of oil dropped from about $3 per barrel to approximately three cents. In short, it became just as plentiful and accessible, if not more so, than water.

It was supply and demand at its most pure, with equilibrium being beneficial for all involved.  It was a free market, until it wasn’t anymore.  Shortly after that time, the Progressive left began to take hold.  Commodities became power.  The name of the game was control in the name of compassion.

Lucas struck oil, but it did not take long for some to figure out that power was held by the person who had his hands on the tap.  Fast forward more than a century, and oil prices are hovering at approximately $100 per barrel.  It was a free market, until it wasn’t anymore.

Here’s my question: why would you shackle something like this? Naturally, I’m all for the sufficient safety regulations to be put into place so as to prevent harm to anyone working in the field, but beyond that, what’s the deal? Is it a crime for people who work to earn it to have affordable energy? Affordable anything? From my point-of-view, there’s only one reason to limit the supply of anything : to make it harder to come by, thereby driving its value up.

What am I missing in that statement?

Does health care reform ring a bell?  It should, as the legislation was designed to drive up costs for insurer and insured alike, leaving strapped and struggling Americans no choice but to run to the government for help down the road.  It was a back-door, progressive attempt at bringing about single-payer (or something close to it) without proposing a “public option” on its face.

Does Cap & Trade ring a bell, for that matter?  It should.

Of course, if you’re a wealthy individual with quite a bit of stake in the game, common sense would seem to dictate that having ownership of a commodity that’s very much in demand selling at bottom dollar isn’t really good business sense. To forcibly limit the supply would understandably be viewed as really nasty; therefore, one would have to convince others that what you’re doing is ultimately, for the greater good.

Can’t use too much oil, now can we? We’re destroying the planet, after all.   After a century of regulations, it’s now nearly impossible to drill for oil in our own country, and even when all of the necessary permits are established, the government takes the lion’s share of the profits. Consequently, with our access to our own natural resource essentially taken away from us, we’ve become dependent on the Middle East for oil, the merchants from which now control the supply and drive up the price as a result of demand.

Now, don’t get me wrong – I fully understand that big business has played a part in all of this as well, since investors in the Middle Eastern oil companies have also helped to drive prices up; however, if the oil, oil shale, and coal reserves sitting right under our feet were made more easily accessible, would those investors be forced to go overseas in the first place? Even aside from the holes being poked almost daily in so-called climate science, the liberal party line that this is all being done to protect the environment is curious, since it seems as though all businesses and politicians are making a pretty penny off the games that are being played with what is arguably the single most important resource on the planet.

To me, the picture is pretty simple: big business on the political right wants to play God by controlling access to the wealth of the planet (see “Robber Barons”), and the people on the political Left want to play God by virtue of their presumed superior intellect. Each side seemingly vehemently disagrees with the other, but each has something that the other needs. I think the word for which we’re looking here is fascism, but this “marriage” – as currently embodied in the Obama administration – can only last so much longer, because such bitter adversaries will eventually tear each other to pieces.

The really interesting part of this point is that when two adversaries join forces, one of the common adages that is often applied to such a relationship is, “the enemy of my enemy is my friend.”   Naturally, that begs the question — exactly who is their common enemy?

Surprisingly enough, it would appear to be middle-class America, the collection of people who have the temerity to expect to control their own lives and to be left alone.  As Barack Obama said on the campaign trail, we cannot all drive around in our SUVs and set our thermostats at 72 degrees and expect the rest of the world to be okay with it.

Truth be told, in all of the research and reading that I’ve done over the course of the past two to three years, the one historical fact that has fascinated me – I use the term loosely – is one to which I also referred in my previous article, that being Franklin Delano Roosevelt’s decision to pay the major food producers of the nation to plow under their own crops during a time of unmitigated economic depression, poverty, and starvation.

If a common sense individual scratches his head at that prospect, I’ve got news for him: he’s right to do so. If the Democrats are as benevolent as they have the vast majority of their followers believing them to be, then why didn’t they merely harvest all the food that was produced and give it freely to the starving masses? In fact, I can go one further: up here in little Rhode Island, to mention the angelic three initials “FDR” is to practically have the breath of God emanate from one’s lips, because according to many of the citizens of this travesty of a state (especially the older ones), “he put food on the table.”

Excuse me?  Um, no, he didn’t; he took food off the table. Of course, I don’t fault the people of that generation who are still with us today for feeling that way, simply because they had never been through anything like that – before or since – and they more than likely had no understanding of basic economics. If FDR said he was going to put food on the table, then by golly that’s what he did. It is, obviously, the younger generation of our people who need to be set straight about what transpired during that time.  When it comes to war and politics, however, it’s never the losers who write the history books.

This all brings me back to the basic question: why does a person do something like this? Well, let’s play Devil’s advocate. I suppose, if one were to look at mere numbers, limiting the supply of food during a time when people were very hungry would certainly keep demand up and would therefore keep prices at a level at which money would still be pumped into the economy. Admittedly, I’m looking at that as less than an economic expert, but couple this curious decision-making with two facts: first, in 1938 one of FDR’s economic advisors, Raymond Moley, told him to stop the spending because the economy not only hadn’t improved but was getting worse; and, second, while there will always be vociferous debate on the larger scope of the New Deal, it seems with each passing decade that more and more economists come out of the woodwork and shake their heads at what was, seemingly, an embarrassment of an economic panel.

So, why do something like this? Even further, if liberal Democrats are all about emotion and “taking care” of people, why would you start by limiting the food supply?

Can you imagine what revisionist history would look like today if a really evil conservative had opted for such a course of action?

The answer to the question – at least to me – can probably be found somewhere in the stew of control, forced dependency, and the “enlightened despotism” of clearly superior academics from the likes of Columbia, Yale, and Princeton. You know – people with a lot of practical application in the real world.

For a moment, widen the general scope of the time period and examine what took place from a mathematical standpoint (common sense math) as it impacted an individual’s access to his own right to protect himself financially during such an extreme time. During FDR’s reign (which might be an apt term, since he was the only President in our history to seek a third term), the Social Security Act was passed, which carried along with it the provisions for unemployment insurance. I’m a fair-minded person; if we are indeed the Christian nation that we espouse to be, then I’m all for programs that offer a “hand up” but am most decidedly against programs that de-evolve into “hand outs”. I’m all for helping out people who are experiencing difficult times but not at the expense of personal motivation. In short, then, we have here the beginnings of big government, tax-and-spend liberal policies aimed at “priming the pump” and ostensibly providing for people so that they could survive.

So, federal dollars are pumped into the system in an effort to keep the wheels of the economy moving. Apparently, however, the prevailing logic of the time was that in order to pay back all of this borrowing and spending, taxes would by necessity have to be raised. Indeed, if one checks his history, between the years 1925-1945, the highest marginal income tax rates peaked at 79%. With more dollars having been thrust into the system, the economy is more than likely initially going to receive a jolt, and with the unemployed dollars circulating through the system, demand for goods would stabilize and might even increase for a short while. That would be, I think, a primary tenet of a Kenseyian thinker. Raising taxes, however, has a number of longer-term effects, each demonstrated by the Laffer Curve:  first, while it does indeed provide revenue to the government,  it also makes it more difficult for individuals to live their lives and run their households. Beyond this, the even more problematic issue is that it makes running a small business much more difficult. Hiring new people (who would contribute to the economy) becomes a non-starter, and laying people off becomes more and more the economic reality. Consequently, we now have fewer people contributing tax dollars to the government, necessitating more federal dollars be injected into the system. Eventually, those dollars become worthless paper and inflation begins.

Here’s where I’d begin to tilt my head like a confused dog while having a conversation with a Kenseyian thinker. If, in fact, “priming the pump” is meant to “create demand”, the people who own the resource that is ostensibly in demand would eventually be raking in dollars that are worthless. I would think that this would then lead a sensible person to look at the fact that the FDR administration not only took us off the gold standard but also made it illegal for a private citizen to own gold, a commodity that would be extremely valuable during a time of serious inflation. In a very interesting written piece on the FDR administration by Ralph Raico entitled FDR: The Man, The Leader, The Legacy, detailed discussion turns to FDR’s decision to take us off the gold standard.  One illuminating passage reads as follows:

In May, the Thomas Amendment to the Agricultural Adjustment Act (AAA) was passed, giving the president the authority to increase the money supply by $3 billion in unbacked bills and to reduce the value of the gold dollar by up to half. In June, a supine Congress delivered to FDR the joint resolution he had requested, forbidding private debtors to fulfill their obligations in gold and relieving the government of its own sworn obligations. One of the last holdouts was another “reactionary,” Thomas P. Gore, Democrat of Oklahoma, who, though blind, was one of the most learned men in the U.S. Senate. When FDR asked him what he thought of the new policy, Gore replied: “Well, that’s just plain stealing, isn’t it, Mr. President?”

In fact, if you want to really put this into perspective, be sure to note that one of the first things the Nazis did as they began to take control of Western Europe was to confiscate as much gold as they could from private citizens. They simply took it.  Think maybe the Nazis and the people in the FDR administration knew that socialist policies don’t work?   Historical facts sure can be difficult to face.

As to those who deny the Laffer Curve, people need to wake up to the reality that the Era of Immediate Gratification needs to come to an end. Not only do we as a people need to take a step back and realize that the wealth that we acquire over the course of our lives should not, by right, come to us the moment that we desire it, but we also need to come to grips with the idea that sometimes slow, steady, hard work is the name of the game. Likewise, during both the depression and the recent near-collapse of the economy, the only thing that was truly, truly needed to recover was drastically-reduced tax rates across-the-board in order to motivate people to work and facilitate the growth necessary to sustain an augmented workforce. The recovery would be slow, but it would happen.

During times like that, people need more money in their pockets that is working capital, not worthless paper that has been handed to them; heck, once inflation really begins to kick in, the government may as well be handing out IOU’s.   If a federal decision-maker wants to augment lower tax rates with minimal and targeted spending, so much the better. What the FDR and Obama administrations did was to use a sledgehammer when only a scalpel was necessary. Funny — didn’t I hear then-Senator Obama say, in a televised debate with John McCain, that such an approach would be at the heart of his economic philosophy?

In short, pumping federal dollars into the system in a show of compassion for people who needed help is (was) nothing short of buying off the lower classes and keeping them quiet and differed little in point from paying off the farmers for their loss of crops.

But, of course, FDR “put food on the table”.  Wrong.  Actually, he helped to lock the lower and middle classes out of access to their own potential economic prosperity, either consciously or unconsciously.

Stop for a moment, step back, and look at what has been taking place over just the course of the last five years or so. Our liberal Democrats (and politicians generally, but I name the far-Left here merely because they’re the group that has been largely in power during that time) are not only attempting to limit the supply of certain vital resources in order to increase demand (Cap & Trade) but are also in the process of attempting to increase access to desirable resources to which people who are not as successful as others would not ordinarily have; in a way, this turns the “survival” instinct for resources into a relative free-for-all, turns us against one another, and turns all of it into a game of economic musical chairs.

Let’s take a look at some of the resources that are being made more difficult to obtain for the American people – particularly the middle class – as a result of either limiting or increasing access to the product (not in any order of importance):

  • Energy. Oil, natural gas
  • Housing. Ensuring that unqualified people have easy access to unaffordable homes.
  • Medicine. Thanks to ObamaCare, 30 million more people are on the rolls without a corresponding increase in physicians.
  • Food. The Food Safety Act of 2010 places restrictions on those who wish to grow their own food.
  • Efficiency. Regulation of the Internet stifles free speech, a commodity in any system of government.
  • Employment. With fewer jobs out there, they’re paying less.

Over the course of roughly the past century, this seems to be the pattern with what would be called liberal Democrats – from the Depression, to LBJ’s Great Society, to Jimmy Carter, and now Obama.  Control in the name of compassion.

People on the “liberal” Left most decidedly need to wake up –  the people that you so stridently follow are anything but compassionate.  The historical evidence is overwhelming.  As you’re all so fond of saying:

The Debate is Over.

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Comments

  1. Anonymous says:

    Compassion does not come from giving somebody, somebody else’s money.
    Nothing in the world is easier to do, than give away another persons money.

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