—

European Fiscal Policy Week, Part I: Italy’s Looming Fiscal Crisis

I’m in Europe to give a couple of speeches about fiscal policy, so I’m going to spend all week commenting on the continent’s (mostly miserable) fiscal policy.

Let’s start with comments about Italy, the nation most likely to suffer a crisis.

Normally, I tell people to focus on government spending rather than red ink. After all, the economy is hurt whether spending is financed by taxes or borrowing (or printing money).

But I’ve also noted that governments sometimes spend so much money and incur so much debt that investors decide it is very risky to buy or hold debt from those governments. In other words, they begin to fear default.

When investors (sometimes known as “bond vigilantes”) reach that stage, they probably try to get rid of their holdings and definitely refuse to buy more debt. The net result is that profligate governments have to offer much higher interest rates to compensate for the risk of a possible default.

That happened earlier this century in Greece.

And if peruse this data from the OECD, you find that Italian government debt has jumped to levels that may be unsustainable.

So why has Italy avoided a crisis?

As noted in this article by Desmond Lachman, published by Inside Sources, the nation is being propped up by the European Central Bank.

In Europe, when the European Central Bank (ECB) soon dials back its bond-buying program, we are likely to find out that it is the Italian economy that has been swimming naked. This should be of deep concern for the Eurozone and world economies. While the Italian economy might be too large for its Eurozone partners to allow it to fail, it also might prove to be too large for them to bail it out.…The main factor that has allowed the Italian government to finance its ballooning budget deficit on favorable terms has been the ECB’s massive government bond-buying…the ECB used its emergency bond-buying program to more than fully finance the Italian government’s borrowing needs. …it must be only a matter of time before we have another round of the Italian sovereign debt crisis. …no longer being able to count on ECB bond-buying, the Italian government will have to increasingly finance itself in the market. It will have to do so with its public finances in a worse state than they were in during the 2012 debt crisis.

In the article, Lachman thinks a crisis is all but inevitable because the ECB is unwinding its pandemic-era money creation.

I agree about the ECB’s harmful role, but I fear the central bankers in Frankfurt will continue to do the wrong thing.

P.S. I mentioned demographics at the start of the video. Here’s some more information about how aging populations are contributing to fiscal meltdown.

P.P.S. Italy can solve its problems, but I doubt it will choose the only effective solution.

New Competitiveness Rankings: Biden Wants to Copy the Wrong Nations

One of the my favorite publications from the Tax Foundation is the annual International Tax Competitiveness Index (here’s what I wrote in 2020 and 2019).

The 2021 Index, authored by Daniel Bunn and Elke Asen, has now been released, and you can see that Estonia has the most sensible policy.

Other Baltic nations also are highly ranked, as are Switzerlandand New Zealand.

It’s probably no surprise to see nations such as France and Italyscore so poorly, but Poland is a bit of a surprise.

Since most readers are from the United States, let’s specifically look at America’s rankings.

The U.S. does very will on consumption taxes (ranked #5), largely because we haven’t made the mistake of adding a value-added tax to our system.

By contrast, the U.S. is near the bottom (ranked #32) with regard to cross-border tax rules, though at least America is no longer in last place in that category, as was the case back in 2014.

Here are some additional details for the folks who like to get in the weeds.

The Tax Foundation also released a companion article looking at which nations have enjoyed the biggest improvements or suffered the biggest declines since the Index first began back in 2014.

The United States has been a big winner thanks to the 2017 tax reform, but Israel wins the prize by jumping all the way from #28 to #14.

Colombia has the dubious honor of suffering the biggest decline.

Makes me wonder whether joining the pro-tax OECD (a process that began in 2013) played a role in the country’s shift in the wrong direction.

I’ll close with the sad observation that America’s progress will be reversed if Biden’s class-warfare tax plan is enacted. Earlier this year, the Tax Foundation estimated that the President’s plan would cause the United States to drop eight spots.

Call me crazy, but I don’t understand why folks on the left want the U.S. tax system to be more like Italy’s.

P.S. I would like to see the aggregate tax burden added as one of the variables in the Index, and it also would be interesting if more jurisdictions were included (zero-tax jurisdictions such as Bermuda and the Cayman Islands presumably would beat out Estonia, and it also would be interesting to see where anti-market nations such as China got ranked).

The Economics of Redistributionism

Back in 2016, I created a 2×2 matrix to illustrate the difference between redistributionism (tax Person A and give to Person B) and state planning (politicians and bureaucrats trying to steer the economy, either through direct ownership or industrial policy).

The main point of that column was to show that countries should try to be in the top-left section, where there is less redistribution and less government control.

But I also wanted to help people understand that redistributionism and socialism are not the same thing.

For instance, Sweden (in the bottom-left box) is a capitalist economy with a big welfare state, whereas China (in the top-right box) doesn’t have much redistribution but government has substantial control over economic activity.

From an American perspective, the good news is that the U.S. currently is in the top-left box.

The bad news is that President Biden wants the country in the bottom-left box. So, if we want to be technically accurate, we should not accuse him of socialism.

Instead, as Antony Davies and James Harrigan explained in a column for the Foundation for Economic Education, the real threat to the nation is “transferism.”

Socialism is state control of the means of production. …By contrast, capitalism is simply private ownership of the means of production. …more than four in ten Americans think “some form of socialism” is a good thing. But what is “some form of socialism?” A society is either socialist or it isn’t.The state either owns the means of production or it doesn’t. There is no middle ground. …It appears that what Americans really have in mind when they think about socialism is not an economic system but particular economic outcomes. …they are advocating what we should really call “transferism.” Transferism is a system in which one group of people forces a second group to pay for things that the people believe they, or some third group, should have. Transferism isn’t about controlling the means of production. It is about the forced redistribution of what’s produced.

Davies and Harrigan are correct.

Moreover, they deserve credit for predicting the future since they wrote the column in 2019!

Now let’s consider whether redistributionism (or transferism) is a good idea.

I’ve previously explained that a big welfare state causes economic damage, even if a nation otherwise is very pro-capitalist.

Consider, for instance, the remarkable data showing how Swedish-Americans and Danish-Americans generate much more prosperity than Swedes and Danes who still live in Scandinavia.

Or consider the income data showing how average Americans enjoy much higher living standards than their European counterparts (either in Nordic nations or elsewhere).

What’s worrisome is that Biden wants a much bigger welfare state and he doesn’t seem to understand that European-sized government means anemic European-style economic performance.

This is the message that Bret Stephens shared in one of his recent columns for the New York Times.

He starts by describing Biden’s agenda.

President Biden charts a course toward the largest expansion of government since Lyndon Johnson’s Great Society. After signing a $1.9 trillion Covid-19 relief bill in March and proposing a $1.5 trillion discretionary budget in April (a 16 percent increase from this year, on top of what’s likely to be at least $3 trillion in mandatory spending on programs like Medicare and Medicaid), the president wants $2.3 trillion more for infrastructure and $1.8 trillion for new social programs. That’s $7.5 trillion in discretionary spending. To put the number in perspective, we spent $4.1 trillion in inflation-adjusted dollars over nearly four years to wage and win the Second World War. What will America get for the money?

He then points out the potential consequences.

…before the U.S. takes this leap into a full-blown American social-welfare state, moderates in Congress like Senator Joe Manchin or Representative Jim Costa ought to ask: What’s the catch? …The real catch is that massive government spending has hidden costs that are difficult to capture in numbers alone. Take another look at Europe. Why does R&D spending in the European Union persistently lag that in the U.S. …Why does Europe’s tech start-up scene…so notably lag its competitors…? Perhaps…social safety nets typically come at the expense of risk-taking and economic dynamism. And why is France, which, according to the Organization for Economic Cooperation and Development, spends more on social welfare than any other nation in the developed world, such an unhappy place, with chronically high unemployment, endless labor unrest, a decades-old brain drain, rising political extremism, a wealth tax that failed and a medical system that was on the brink of collapse long before Covid struck? …Beyond the gargantuan cost, Congress should think very hard about the real catch: transforming America into a kinder, gentler place of permanent decline.

Amen.

Biden’s agenda inevitably will erode societal capital, leading to less work (because of lavish freebies such as per-child handouts) and lower levels of entrepreneurship (because of tax penalties on investment and risk-taking).

And this can lead to a tipping point, which is illustrated by my Theorem of Societal Collapse.

By Historical Standards, Today’s Americans Are Fantastically Wealthy

I’ve spent several decades trying to convince people that we should have free markets and small government in order to increase national prosperity.

Indeed, I’ve even pointed out how very small increases in annual growth can lead to big improvements in living standards over just a couple of decades.

But some folks on the left are not very receptive to this argument. They genuinely (but incorrectly) seem to think the economy is a fixed pie (which also explains, at least in part, why they are so focused on redistribution).

So let’s share some hard data in hopes of getting them to understand that more prosperity is possible.

We’ll start will this chart of inflation-adjusted per-capita economic output in the United States, which comes from Oxford University’s Our World in Data.

The obvious takeaway from this data is that Americans are much richer today than they were after World War II. Adjusted for inflation, we’re now about four times richer than our grandparents.

Some of our friends on the left may be thinking these numbers are distorted, that average output has only increased because the rich have gotten so much richer.

Well, it is true that the rich have gotten richer. But it’s also true that the rest of us have become richer as well.

Which is why I shared data earlier this year showing median living standards rather than mean (average) living standards.

Folks on the left may also suspect that the post-1950 data is an anomaly. In other words, maybe I’m guilty of cherry-picking data.

That’s a common practice in the world of policy, so I don’t blame people for being suspicious.

So take a look at this chart, which I also first shared earlier this year. It shows that the increase in living standards has been even more dramatic if you look at changes since 1820.

By the way, none of these observations are new. Back in 1997, Micahel Cox and Richard Alm wrote a must-read article for the Dallas Federal Reserve Bank’s Annual Report.

Here are some of their findings.

What really matters…isn’t what something costs in money; it’s what it costs in time. Making money takes time, so when we shop, we’re really spending time. The real cost of living isn’t measured in dollars and cents but in the hours and minutes we must work to live. …A pair of stockings cost just 25¢ a century ago. This sounds wonderful until we learn that a worker of the era earned only 14.8¢ an hour.So paying for the stockings took 1 hour 41 minutes of work. Today a better pair requires only about 18 minutes of work. …In calculating our cost of living, a good place to start is with the basics—food, shelter and clothing. In terms of time on the job, the cost of a half-gallon of milk fell from 39 minutes in 1919 to 16 minutes in 1950, 10 minutes in 1975 and 7 minutes in 1997. A pound of ground beef steadily declined from 30 minutes in 1919 to 23 minutes in 1950, 11 minutes in 1975 and 6 minutes in 1997. Paying for a dozen oranges required 1 hour 8 minutes of work in 1919. Now it takes less than 10 minutes, half what it did in 1950.

These two visuals from the article are very informative.

First, look at how consumer products went from rare luxuries early in the 20th century to everyday products by the end of the century.

Equally important, these products have become cheaper and cheaper over time.

As illustrated by this second visual from the article.

All the data in the Cox-Alm article is more than 20 years old, so the numbers would be even more impressive today.

Indeed, you can see some more up-to-date data from Mark Perry, Steve Horwitz, and James Pethokoukis.

Professor Don Boudreaux put these numbers in context a few years ago in a column for the Foundation for Economic Education. Here’s some of what he wrote.

What is the minimum amount of money that you would demand in exchange for your going back to live even as John D. Rockefeller lived in 1916? …Think about it. …If you were a 1916 American billionaire you could, of course, afford prime real-estate.  You could afford a home on 5th Avenue or one overlooking the Pacific Ocean…  But when you traveled from your Manhattan digs to your west-coast palace, it would take a few days, and if you made that trip during the summer months, you’d likely not have air-conditioning in your private railroad car.…You could neither listen to radio (the first commercial radio broadcast occurred in 1920) nor watch television. …Obviously, you could not download music. …Your telephone was attached to a wall.  You could not use it to Skype. …Even the best medical care back then was horrid by today’s standards: it was much more painful and much less effective. …Antibiotics weren’t available. …Dental care wasn’t any better. …You were completely cut off from the cultural richness that globalization has spawned over the past century. …I wouldn’t be remotely tempted to quit the 2016 me so that I could be a one-billion-dollar-richer me in 1916.  This fact means that, by 1916 standards, I am today more than a billionaire.  It means, at least given my preferences, I am today materially richer than was John D. Rockefeller.

The bottom line is that we have become richer and we can continue to become richer.

But how fast things improve is partly a function of government policy. If we can impose some restraints on the size and scope of government, that will give the private sector some breathing room to grow and prosper.

In other words, we don’t need perfect policy, but it is important to at least have good policy.

Will Biden Resuscitate Obama’s Reprehensible “Operation Choke Point”?

Some policies will improve with Biden in the White House, most notably trade, but also government spending (not because Biden is good, but rather because Republicans will go back to pretending to be fiscally conservative).

But some policies will move in the wrong direction. Biden is awful on tax policy, for instance, though I expect Republicans in the Senate will block his class-warfare agenda.

Biden is also very bad on regulatory issues. Unfortunately, this is an area where the new President (and his appointees) will have plenty of authority to shift policy in the wrong direction.

I’m especially worried that Biden will resuscitate an Obama-era policy of strong-arming banks so they won’t do business with unpopular industries. This video, which I first shared back in 2016, explains this reprehensible policy

Norbert Michel of the Heritage Foundation, in a column for Forbes, provides some additional background on the policy.

Choke Point consisted of bureaucrats in several independent federal agencies taking it upon themselves to shut legal businesses – such as payday lenders and firearms dealers – out of the banking system. Given the nature of the U.S. regulatory framework, this operation was easy to pull off.Officials at the Federal Deposit Insurance Corporation (FDIC), for instance, simply had to inform the banks they were overseeing that the government considered certain types of their customers “high risk.” The mere implication of a threat was enough to pressure banks into closing accounts, because no U.S. bank wants anything to do with extra audits or investigations from their regulator, much less additional operating restrictions or civil and criminal charges. Banks are incredibly sensitive to any type of pressure from federal regulators, and they know that the regulators have enormous discretion.

In a column for the Wall Street Journal earlier this year, Phil Gramm and Mike Solon elaborated on the left’s campaign to politicize the banking system.

Banking was used as a weapon against legal, solvent businesses by the Obama administration during Operation Choke Point, a program to deny the disfavored access to banking services. The Federal Deposit Insurance Corp. labeled certain businesses “high risk,” including firearms and ammunition dealers, check-cashers, payday lenders and fireworks vendors. Unelected regulators, not Congress or courts, marked these industries as “dirty business” and made it “unacceptable for an insured depository institution” to offer them banking services. …With Democrats unable to ban guns legislatively, Rep. Carolyn Maloney admonished banks at a recent hearing to not “finance gun slaughter.” When she urged JPMorgan to deny credit for legal firearm sales as other banks had done, the CEO responded, “We can certainly consider that. Yes.” At the same hearing, Rep. Rashida Tlaib challenged bank CEOs: “Will any of your banks make a commitment to phase out your investments in fossil fuels and dirty energy?” The CEOs declined to defend fossil fuels… Letting political intimidation dictate the availability of private credit endangers freedom and stifles productivity growth and job creation. …The use of political intimidation to allocate capital is an assault on economic efficiency and freedom.

There is, however, a bit of good news.

The Trump Administration ended Operation Choke Point back in 2017.

And, although it is happening at the last minute, the Trump Administration is now trying to strengthen the rule of law so banks won’t feel pressured to discriminate against certain industries in the future.

In a column published yesterday by the Wall Street Journal, Brian Brooks and Charles Calomiris of the Office of the Comptroller of the Currency (OCC) explain the new rule that their agency has unveiled.

…there have been too many allegations of banks cutting off vital services, credit and capital that legal businesses rely on to create jobs, meet community needs and support the economy. The Office of the Comptroller of the Currency, where we serve as acting comptroller and chief economist, respectively, on Friday proposed a rule to prevent banks from discriminating against legal businesses and individuals.The rule would require bankers to do what they do best: assess risk and underwrite credit decisions. …politically driven discrimination against particular industries has threatened fairness in banking. Under the Obama administration, Operation Choke Point, in which the OCC did not take part, involved regulators discouraging banks from serving legal and constitutionally protected businesses such as payday lenders and gun and ammunition sellers. …the Dodd-Frank Act of 2010 added to the OCC’s traditional mission of safety and soundness the obligation to ensure fair access to financial services… Banks may not exclude entire parts of the economy for reasons unrelated to objective, quantifiable risks specific to an individual customer.

Sadly, if Biden has the same attitude as Obama about the rule of law, a future OCC can reverse anything Trump’s people adopt.

I’ll close with a libertarian-minded observation.

Because I believe in freedom of association, I think banks should have the liberty to discriminate against specific businesses, or even entire industries.

But there’s a big difference between banks choosing to discriminate and being coerced into such behavior by government regulators.

So it was disgusting that Obama’s regulators went after industries they didn’t like, such as gun dealers.

But it would be equally reprehensible if a Republican Administration went after an industry it didn’t like, such as legal marijuana.

P.S. The broader lesson to learn from Operation Choke Point is that regulatory power for governments is a vehicle for corruptionand malfeasance.

——

The Case Against Biden’s Class-Warfare Tax Policy, Part II

In Part I of this series, I expressed some optimism that Joe Biden would not aggressively push his class-warfare tax plan, particularly since Republicans almost certainly will wind up controlling the Senate.

But the main goal of that column was to explain that the internal revenue code already is heavily weighted against investors, entrepreneurs, business owners and other upper-income taxpayers.

And to underscore that point, I shared two charts from Brian Riedl’s chartbook to show that the “rich” are now paying a much larger share of the tax burden – notwithstanding the Reagan tax cuts, Bush tax cuts, and Trump tax cuts – than they were 40 years ago.

Not only that, but the United States has a tax system that is more “progressive” than all other developed nations (all of whom also impose heavy tax burdens on upper-income taxpayers, but differ from the United States in that they also pillage lower-income and middle-class residents).

In other words, Biden’s class-warfare tax plan is bad policy.

Today’s column, by contrast, will point out that his tax increases are impractical. Simply stated, they won’t collect much revenue because people change their behavior when incentives to earn and report income are altered.

This is especially true when looking at upper-income taxpayers who – compared to the rest of us – have much greater ability to change the timing, level, and composition of their income.

This helps to explain why rich people paid five times as much tax to the IRS during the 1980s when Reagan slashed the top tax rate from 70 percent to 28 percent.

When writing about this topic, I normally use the Laffer Curve to help people understand why simplistic assumptions about tax policy are wrong (that you can double tax revenue by doubling tax rates, for instance). And I point out that even folks way on the left, such as Paul Krugman, agree with this common-sense view (though it’s also worth noting that some people on the right discredit the concept by making silly assertions that “all tax cuts pay for themselves”).

But instead of showing the curve again, I want to go back to Brian Riedl’s chartbook and review his data on of revenue changes during the eight years of the Obama Administration.

It shows that Obama technically cut taxes by $822 billion (as further explained in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the Obamacare legislation).

If we do the math, that means Obama imposed a cumulative net tax increase of about $510 billion during his eight years in office

But, if you look at the red bar on the chart, you’ll see that the government didn’t wind up with more money because of what the number crunchers refer to as “economic and technical reestimates.”

Indeed, those reestimates resulted in more than $3.1 trillion of lost revenue during the Obama years.

I don’t want the politicians and bureaucrats in Washington to have more tax revenue, but I obviously don’t like it when tax revenues shrink simply because the economy is stagnant and people have less taxable income.

Yet that’s precisely what we got during the Obama years.

To be sure, it would be inaccurate to assert that revenues declined solely because of Obama’s tax increase. There were many other bad policies that also contributed to taxable income falling short of projections.

Heck, maybe there was simply some bad luck as well.

But even if we add lots of caveats, the inescapable conclusion is that it’s not a good idea to adopt policies – such as class-warfare tax rates – that discourage people from earning and reporting taxable income.

The bottom line is that we should hope Biden’s proposed tax increases die a quick death.

P.S. The “fiscal cliff” was the term used to describe the scheduled expiration of the 2001 and 2003 Bush tax cuts. According to the way budget data is measured in Washington, extending some of those provisions counted as a tax cut even though the practical impact was to protect people from a tax increase.

P.P.S. Even though Biden absurdly asserted that paying higher taxes is “patriotic,” it’s worth pointing out that he engaged in very aggressive tax avoidance to protect his family’s money.

President Joe Biden Will Be Bad, but a President Kamala Harris Would Be Worse

Joe Biden has a very misguided economic agenda. I’m especially disturbed by his class-warfare tax agenda, which will be bad news for American workers and American competitiveness.

The good news, as I wrote earlier this year, is that he probably isn’t serious about some of his worst ideas.

Biden is a statist, but not overly ideological. His support for bigger government is largely a strategy of catering to the various interest groups that dominate the Democratic Party. The good news is that he’s an incrementalist and won’t aggressively push for a horrifying FDR-style agenda if he gets to the White House.

But what if Joe Biden’s health deteriorates and Kamala Harris – sooner or later – winds up in charge?

That’s rather troubling since her agenda was far to the left of Biden’s when they were competing for the Democratic nomination.

And it doesn’t appear that being Biden’s choice for Vice President has led her to moderate her views. Consider this campaign ad, where she openly asserted that “equitable treatment means we all end up at the same place.”

The notion that we should strive for equality of outcomes rather than equality of opportunity is horrifying.

For all intents and purposes,Harris has embraced a harsh version of redistributionism where everyone above average is punished and everyone below average is rewarded.

This goes way beyond a safety net and it’s definitely a recipe for economic misery since people on both sides of the equationhave less incentive to be productive.

I’m not the only one to be taken aback by Harris’ dogmatic leftism.

Robby Soave, writing for Reason, is very critical of her radical outlook.

Harris gives voice to a leftist-progressive narrative about the importance of equity—equal outcomes—rather than mere equality before the law. …Harris contrasted equal treatment—all people getting the same thing—with equitable treatment,which means “we all end up at the same place.” …This may seem like a trivial difference, but when it comes to public policy, the difference matters. A government shouldbe obligated to treat all citizens equally, giving them the same access to civil rights and liberties like voting, marriage, religious freedom, and gun ownership. …A mandate to foster equity, though, would give the government power to violate these rights in order to achieve identical social results for all people. 

And, in a column for National Review, Brad Polumbo expresses similar reservations about her views.

Whether she embraces the label “socialist” or not, Harris’s stated agenda and Senate record both reveal her to be positioned a long way to the left on matters of economic policy. From health care to the environment to housing, Harris thinks the answer to almost every problem we face is simply more government and more taxpayer money — raising taxes and further indebting future generations in the process.…Harris…supports an astounding $40 trillion in new spending over the next decade. In a sign of just how far left the Democratic Party has shifted on economics, Harris backs more than 20 times as much spending as Hillary Clinton proposed in 2016. …And this is not just a matter of spending. During her failed presidential campaign, Harris supported a federal-government takeover of health care… The senator jumped on the “Green New Deal” bandwagon as well. She co-sponsored the Green New Deal resolution in the Senate that called for a “new national, social, industrial, and economic mobilization on a scale not seen since World War II and the New Deal era.” …she supports enacting price controls on housing across the country. …The left-wing group Progressive Punch analyzed Harris’s voting record and found that she is the fourth-most liberal senator, more liberal even than Massachusetts senator Elizabeth Warren. Similarly, the nonpartisan organization GovTrack.us deemed Harris the furthest-left member of the Senate for the 2019 legislative year. (Spoiler alert: If your voting record is to the left of Bernie Sanders, you might be a socialist.)

To be fair, Harris is simply a politician, so we have no idea what she really believes. Her hard-left agenda might simply be her way of appealing to Democratic voters, much as Republicans who run for president suddenly decide they support big tax cuts and sweeping tax reform.

But whether she’s sincere or insincere, it’s troubling that she actually says it’s the role of government to make sure we all “end up at the same place.”

Let’s close with a video clip from Milton Friedman. At the risk of understatement, he has a different perspective than Ms. Harris.

Since we highlighted Harris’ key quote, let’s also highlight the key quote from Friedman.

Amen.

P.S. It appears Republicans will hold the Senate, which presumably (hopefully?) means that any radical proposals would be dead on arrival, regardless of whether they’re proposed by Biden or Harris.

P.P.S. Harris may win the prize for the most economically illiterate proposal of the 2020 campaign.

——

Will Biden’s Class-Warfare Tax Plan Lead to an Exodus of Job Creators?

After Barack Obama took office (and especially after he was reelected), there was a big uptick in the number of rich people who chose to emigrate from the United States. 

There are many reasons wealthy people choose to move from one nation to another, but Obama’s embrace of class-warfare tax policy (including FATCA) was seen as a big factor.

Joe Biden’s tax agenda is significantly more punitive than Obama’s, so we may see something similar happen if he wins the 2020 election.

Given the economic importance of innovators, entrepreneurs, and inventors, this would be not be good news for the American economy.

The New York Times reported late last year that the United States could be shooting itself in the foot by discouraging wealthy residents.

…a different group of Americans say they are considering leaving — people of both parties who would be hit by the wealth tax… Wealthy Americans often leave high-tax states like New York and California for lower-tax ones like Florida and Texas. But renouncing citizenship is a far more permanent, costly and complicated proposition. …“America’s the most attractive destination for capital, entrepreneurs and people wanting to get a great education,” said Reaz H. Jafri, a partner and head of the immigration practice at Withers, an international law firm. “But in today’s world, when you have other economic centers of excellence — like Singapore, Switzerland and London — people don’t view the U.S. as the only place to be.” …now, the price may be right to leave. While the cost of expatriating varies depending on a person’s assets, the wealthiest are betting that if a Democrat wins…, leaving now means a lower exit tax. …The wealthy who are considering renouncing their citizenship fear a wealth tax less than the possibility that the tax on capital gains could be raised to the ordinary income tax rate, effectively doubling what a wealthy person would pay… When Eduardo Saverin, a founder of Facebook…renounced his United States citizenship shortly before the social network went public, …several estimates said that renouncing his citizenship…saved him $700 million in taxes.

The migratory habits of rich people make a difference in the global economy.

Here are some excerpts from a 2017 Bloomberg story.

Australia is luring increasing numbers of global millionaires, helping make it one of the fastest growing wealthy nations in the world… Over the past decade, total wealth held in Australia has risen by 85 percent compared to 30 percent in the U.S. and 28 percent in the U.K… As a result, the average Australian is now significantly wealthier than the average American or Briton. …Given its relatively small population, Australia also makes an appearance on a list of average wealth per person. This one is, however, dominated by small tax havens.

Here’s one of the charts from the story.

As you can see, Australia is doing very well, though the small tax havens like Monaco are world leaders.

I’m mystified, however, that the Cayman Islands isn’t listed.

But I’m digressing.

Let’s get back to our main topic. It’s worth noting that even Greece is seeking to attract rich foreigners.

The new tax law is aimed at attracting fresh revenues into the country’s state coffers – mainly from foreigners as well as Greeks who are taxed abroad – by relocating their tax domicile to Greece, as it tries to woo “high-net-worth individuals” to the Greek tax register.The non-dom model provides for revenues obtained abroad to be taxed at a flat amount… Having these foreigners stay in Greece for at least 183 days a year, as the law requires, will also entail expenditure on accommodation and everyday costs that will be added to the Greek economy. …most eligible foreigners will be able to considerably lighten their tax burden if they relocate to Greece…nevertheless, the amount of 500,000 euros’ worth of investment in Greece required of foreigners and the annual flat tax of 100,000 euros demanded (plus 20,000 euros per family member) may keep many of them away.

The system is too restrictive, but it will make the beleaguered nation an attractive destination for some rich people. After all, they don’t even have to pay a flat tax, just a flat fee.

Italy has enjoyed some success with a similar regime to entice millionaires.

Last but not least, an article published last year has some fascinating details on the where rich people move and why they move.

The world’s wealthiest people are also the most mobile. High net worth individuals (HNWIs) – persons with wealth over US$1 million – may decide to pick up and move for a number of reasons. In some cases they are attracted by jurisdictions with more favorable tax laws… Unlike the middle class, wealthy citizens have the means to pick up and leave when things start to sideways in their home country. An uptick in HNWI migration from a country can often be a signal of negative economic or societal factors influencing a country. …Time-honored locations – such as Switzerland and the Cayman Islands – continue to attract the world’s wealthy, but no country is experiencing HNWI inflows quite like Australia. …The country has a robust economy, and is perceived as being a safe place to raise a family. Even better, Australia has no inheritance tax

Here’s a map from the article.

The good news is that the United States is attracting more millionaires than it’s losing (perhaps because of the EB-5 program).

The bad news is that this ratio could flip after the election. Indeed, it may already be happening even though recent data on expatriation paints a rosy picture.

The bottom line is that the United States should be competing to attract millionaires, not repel them. Assuming, of course, politicians care about jobs and prosperity for the rest of the population.

P.S. American politicians, copying laws normally imposed by the world’s most loathsome regimes, have imposed an “exit tax” so they can grab extra cash from rich people who choose to become citizens elsewhere.

P.P.S. I’ve argued that Australia is a good place to emigrate even for those of us who aren’t rich.

—-

Question of the Week: Which Department of the Federal Government Should Be the First to Be Abolished?

I was asked last week which entitlement program is most deserving of reform.

While acknowledging that Social Security and Medicare also are in desperate need of modernization, I wrote that Medicaid reformshould be the first priority.

But I’d be happy if we made progress on any type of entitlement reform, so I don’t think there are right or wrong answers to this kind of question.

We have the same type of question this week. A reader sent an email to ask “Which federal department should be abolished first?”

I guess this is what is meant when people talk about a target-rich environment. We have an abundance of candidates:

• Department of Education
• Department of Agriculture
• Department of Energy
• Department of Veterans Affairs
• Department of Transportation

But if I have to choose, I think the Department of Housing and Urban Development should be first on the chopping block.

Raze the building and put a layer of salt over the earth to make sure it can never spring back to life

I’ve already argued that there should be no federal government involvement in the housing sector and made the same argument on TV. And I’ve also shared some horror stories about HUD waste and incompetence.

• HUD engages in racism and social engineering.
• Urban renewal projects destroy neighborhoods and foment corruption.
• HUD subsidies are grotesquely wasteful.
• There are epidemic levels of waste, fraud, and abuse at HUD.

Heck, I even made HUD the background image for my video on the bloated and overpaid bureaucracy in Washington.

It’s also worth noting that there’s nothing about housing in Article I, Section VIII, of the Constitution. For those of us who have old-fashioned values about playing by the rules, that means much of what takes place in Washington – including housing handouts – is unconstitutional.

Simply stated, there is no legitimate argument for HUD. And I think there would be the least political resistance.

As with the answer to the question about entitlements, this is a judgment call. I’d be happy to be proven wrong if it meant that politicians were aggressively going after another department. Anything that reduces the burden of government spending is a step in the right direction

Milton Friedman on Spending

October 3, 2020 by Dan Mitchell

I identified four heroes from the “Battle of Ideas” video I shared in late August – Friedrich Hayek, Milton Friedman, Ronald Reagan, and Margaret Thatcher. Here’s one of those heroes, Milton Friedman, explaining what’s needed to control big government.

—

https://www.youtube.com/watch?v=yx6-PHKzHvMu0026t=1024s

Why Milton Friedman Saw School Choice as a First Step, Not a Final One

On his birthday, let’s celebrate Milton Friedman’s vision of enabling parents, not government, to be in control of a child’s education.

Wednesday, July 31, 2019

Kerry McDonald

EducationMilton FriedmanSchool ChoiceSchooling

Libertarians and others are often torn about school choice. They may wish to see the government schooling monopoly weakened, but they may resist supporting choice mechanisms, like vouchers and education savings accounts, because they don’t go far enough. Indeed, most current choice programs continue to rely on taxpayer funding of education and don’t address the underlying compulsory nature of elementary and secondary schooling.

Skeptics may also have legitimate fears that taxpayer-funded education choice programs will lead to over-regulation of previously independent and parochial schooling options, making all schooling mirror compulsory mass schooling, with no substantive variation.

Friedman Challenged Compulsory Schooling Laws

Milton Friedman had these same concerns. The Nobel prize-winning economist is widely considered to be the one to popularize the idea of vouchers and school choice beginning with his 1955 paper, “The Role of Government in Education.” His vision continues to be realized through the important work of EdChoice, formerly the Friedman Foundation for Education Choice, that Friedman and his economist wife, Rose, founded in 1996.

July 31 is Milton Friedman’s birthday. He died in 2006 at the age of 94, but his ideas continue to have an impact, particularly in education policy.

Friedman saw vouchers and other choice programs as half-measures. He recognized the larger problems of taxpayer funding and compulsion, but saw vouchers as an important starting point in allowing parents to regain control of their children’s education. In their popular book, Free To Choose, first published in 1980, the Friedmans wrote:

We regard the voucher plan as a partial solution because it affects neither the financing of schooling nor the compulsory attendance laws. We favor going much farther. (p.161)

They continued:

The compulsory attendance laws are the justification for government control over the standards of private schools. But it is far from clear that there is any justification for the compulsory attendance laws themselves. (p. 162)

The Friedmans admitted that their “own views on this have changed over time,” as they realized that “compulsory attendance at schools is not necessary to achieve that minimum standard of literacy and knowledge,” and that “schooling was well-nigh universal in the United States before either compulsory attendance or government financing of schooling existed. Like most laws, compulsory attendance laws have costs as well as benefits. We no longer believe the benefits justify the costs.” (pp. 162-3)

Still, they felt that vouchers would be the essential starting point toward chipping away at monopoly mass schooling by putting parents back in charge. School choice, in other words, would be a necessary but not sufficient policy approach toward addressing the underlying issue of government control of education.

Vouchers as a First Step

In their book, the Friedmans presented the potential outcomes of their proposed voucher plan, which would give parents access to some or all of the average per-pupil expenditures of a child enrolled in public school. They believed that vouchers would help create a more competitive education market, encouraging education entrepreneurship. They felt that parents would be more empowered with greater control over their children’s education and have a stronger desire to contribute some of their own money toward education. They asserted that in many places “the public school has fostered residential stratification, by tying the kind and cost of schooling to residential location” and suggested that voucher programs would lead to increased integration and heterogeneity. (pp. 166-7)

To the critics who said, and still say, that school choice programs would destroy the public schools, the Friedmans replied that these critics fail to

explain why, if the public school system is doing such a splendid job, it needs to fear competition from nongovernmental, competitive schools or, if it isn’t, why anyone should object to its “destruction.” (p. 170)

What I appreciate most about the Friedmans discussion of vouchers and the promise of school choice is their unrelenting support of parents. They believed that parents, not government bureaucrats and intellectuals, know what is best for their children’s education and well-being and are fully capable of choosing wisely for their children—when they have the opportunity to do so.

They wrote:

Parents generally have both greater interest in their children’s schooling and more intimate knowledge of their capacities and needs than anyone else. Social reformers, and educational reformers in particular, often self-righteously take for granted that parents, especially those who are poor and have little education themselves, have little interest in their children’s education and no competence to choose for them. That is a gratuitous insult. Such parents have frequently had limited opportunity to choose. However, U.S. history has demonstrated that, given the opportunity, they have often been willing to sacrifice a great deal, and have done so wisely, for their children’s welfare. (p. 160).

Sign-Up: Receive Kerry’s Weekly Parenting and Education Newsletter!

Voucher Programs Today

Today, school voucher programs exist in 15 states plus the District of Columbia. These programs have consistently shown that when parents are given the choice to opt-out of an assigned district school, many will take advantage of the opportunity. In Washington, D.C., low-income parents who win a voucher lottery send their children to private schools.

The most recent three-year federal evaluationof voucher program participants found that while student academic achievement was comparable to achievement for non-voucher students remaining in public schools, there were statistically significant improvements in other important areas. For instance, voucher participants had lower rates of chronic absenteeism than the control groups, as well as higher student satisfaction scores. There were also tremendous cost-savings.

In Wisconsin, the Milwaukee Parental Choice Program has served over 28,000 low-income students attending 129 participating private schools.

According to Corey DeAngelis, Director of School Choice at the Reason Foundation and a prolific researcher on the topic, the recent analysis of the D.C. voucher program “reveals that private schools produce the same academic outcomes for only a third of the cost of the public schools. In other words, school choice is a great investment.”

In Wisconsin, the Milwaukee Parental Choice Program was created in 1990 and is the nation’s oldest voucher program. It currently serves over 28,000 low-income students attending 129 participating private schools. Like the D.C. voucher program, data on test scores of Milwaukee voucher students show similar results to public school students, but non-academic results are promising.

Increased Access and Decreased Crime

Recent research found voucher recipients had lower crime rates and lower incidences of unplanned pregnancies in young adulthood. On his birthday, let’s celebrate Milton Friedman’s vision of enabling parents, not government, to be in control of a child’s education.

According to Howard Fuller, an education professor at Marquette University, founder of the Black Alliance for Educational Options, and one of the developers of the Milwaukee voucher program, the key is parent empowerment—particularly for low-income minority families.

In an interview with NPR, Fuller said: “What I’m saying to you is that there are thousands of black children whose lives are much better today because of the Milwaukee parental choice program,” he says. 
“They were able to access better schools than they would have without a voucher.”

Putting parents back in charge of their child’s education through school choice measures was Milton Friedman’s goal. It was not his ultimate goal, as it would not fully address the funding and compulsion components of government schooling; but it was, and remains, an important first step. As the Friedmans wrote in Free To Choose:

The strong American tradition of voluntary action has provided many excellent examples that demonstrate what can be done when parents have greater choice. (p. 159).

On his birthday, let’s celebrate Milton Friedman’s vision of enabling parents, not government, to be in control of a child’s education.

Related posts:

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 7 of 7)

March 16, 2012 – 12:25 am

  Michael Harrington:  If you don’t have the expertise, the knowledge technology today, you’re out of the debate. And I think that we have to democratize information and government as well as the economy and society. FRIEDMAN: I am sorry to say Michael Harrington’s solution is not a solution to it. He wants minority rule, I […] By Everette Hatcher III | Posted in Current Events, Milton Friedman | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 6 of 7)

March 9, 2012 – 12:29 am

PETERSON: Well, let me ask you how you would cope with this problem, Dr. Friedman. The people decided that they wanted cool air, and there was tremendous need, and so we built a huge industry, the air conditioning industry, hundreds of thousands of jobs, tremendous earnings opportunities and nearly all of us now have air […] By Everette Hatcher III | Posted in Current Events, Milton Friedman | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 5 of 7)

March 2, 2012 – 12:26 am

Part 5 Milton Friedman: I do not believe it’s proper to put the situation in terms of industrialist versus government. On the contrary, one of the reasons why I am in favor of less government is because when you have more government industrialists take it over, and the two together form a coalition against the ordinary […] By Everette Hatcher III | Posted in Current Events, Milton Friedman | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 4 of 7)

February 24, 2012 – 12:21 am

The fundamental principal of the free society is voluntary cooperation. The economic market, buying and selling, is one example. But it’s only one example. Voluntary cooperation is far broader than that. To take an example that at first sight seems about as far away as you can get __ the language we speak; the words […] By Everette Hatcher III | Posted in Current Events, Milton Friedman | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 3 of 7)

February 17, 2012 – 12:12 am

  _________________________   Pt3  Nowadays there’s a considerable amount of traffic at this border. People cross a little more freely than they use to. Many people from Hong Kong trade in China and the market has helped bring the two countries closer together, but the barriers between them are still very real. On this side […] By Everette Hatcher III | Posted in Current Events, Milton Friedman | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 2 of 7)

February 10, 2012 – 12:09 am

  Aside from its harbor, the only other important resource of Hong Kong is people __ over 4_ million of them. Like America a century ago, Hong Kong in the past few decades has been a haven for people who sought the freedom to make the most of their own abilities. Many of them are […] By Everette Hatcher III | Posted in Current Events, Milton Friedman | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 1of 7)

February 3, 2012 – 12:07 am

“FREE TO CHOOSE” 1: The Power of the Market (Milton Friedman) Free to Choose ^ | 1980 | Milton Friedman Posted on Monday, July 17, 2006 4:20:46 PM by Choose Ye This Day FREE TO CHOOSE: The Power of the Market Friedman: Once all of this was a swamp, covered with forest. The Canarce Indians […]

Milton Friedman The Power of the Market 1-5

Debate on Milton Friedman’s cure for inflation

September 29, 2011 – 7:24 am

If you would like to see the first three episodes on inflation in Milton Friedman’s film series “Free to Choose” then go to a previous post I did. Ep. 9 – How to Cure Inflation [4/7]. Milton Friedman’s Free to Choose (1980) Uploaded by investbligurucom on Jun 16, 2010 While many people have a fairly […]

By Everette Hatcher III | Also posted in Current Events | Tagged dr friedman, expansion history, income tax brackets, political courage, www youtube | Edit | Comments (0)

“Friedman Friday” Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

April 19, 2013 – 1:14 am

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […] By Everette Hatcher III | Posted in Milton Friedman | Edit | Comments (0)

What were the main proposals of Milton Friedman?

February 21, 2013 – 1:01 am

Stearns Speaks on House Floor in Support of Balanced Budget Amendment Uploaded by RepCliffStearns on Nov 18, 2011 Speaking on House floor in support of Balanced Budget Resolution, 11/18/2011 ___________ Below are some of the main proposals of Milton Friedman. I highly respected his work. David J. Theroux said this about Milton Friedman’s view concerning […] By Everette Hatcher III | Posted in Milton Friedman | Edit | Comments (0)

“Friedman Friday,” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 1)

December 7, 2012 – 5:55 am

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. We must not head down the path of socialism like Greece has done. Abstract: Ronald Reagan […] By Everette Hatcher III | Posted in Milton Friedman, President Obama | Edit | Comments (1)

Defending Milton Friedman

July 31, 2012 – 6:45 am

What a great defense of Milton Friedman!!!!   Defaming Milton Friedman by Johan Norberg This article appeared in Reason Online on September 26, 2008  PRINT PAGE  CITE THIS      Sans Serif      Serif Share with your friends: ShareThis In the future, if you tell a student or a journalist that you favor free markets and limited government, there is […]

__

–

London calling to the faraway towns
Now war is declared and battle come down
London calling to the underworld
Come out of the cupboard, you boys and girls
London calling, now don’t look to us
Phony Beatlemania has bitten the dust
London calling, see we ain’t got no swing
Except for the ring of that truncheon thingThe ice age is coming, the sun is zooming in
Meltdown expected, the wheat is growin’ thin
Engines stop running, but I have no fear
‘Cause London is drowning, and I, I live by the riverLondon calling to the imitation zone
Forget it, brother, you can go it alone
London calling to the zombies of death
Quit holding out and draw another breath
London calling and I don’t want to shout
But when we were talking I saw you nodding out
London calling,… Source: LyricFind

 4 minutes read

Why the Hell is ‘London Calling’ so Controversial?

December 31, 2011

---

A lot of people confuse punk rockers to only be a green, spiky, mohawked, tattooed, nihilistic bunch of rebels, screaming nonsensically into their mikes, tearing their instruments apart and spitting on people. Well, they should actually be compared to the artsy Bohemians of the Moulin rouge days. Their music is orchestrated and their politically-charged lyrics should be compared to modern-day poetry. What mattered in punk weren’t the clothes or the music, but the DIY attitude behind them.  And, one of the bands who pioneered this attitude was The Clash.

They were one of the earliest  British punk rock bands and have been a major influence for the alternative rock genre for bands such as U2, The Ramones, Green Day, The Hives and even M.I.A of ‘Paper Planes’ fame. Despite their rebellious attitude and their leftist ideologies, they achieved mainstream success and critical acclaim, which was an unheard phenomenon for a punk band at the time.

‘London Calling’ is considered the band’s finest hit even though most mainstream labels received at the post-apocalyptic lyrics with apprehension. The song was the band’s first overseas hit, making it to the top music charts in the US and Australia. The song is reminiscent of the good old disco days. With its swinging rhythms and powerful bass lines, it would make anyone want to dance. But after you are done doing your beer-induced jig, do pay attention to the lyrics.

The Clash manages to critique just about everything under the sun.  The title ‘London Calling’ is with reference to how the BBC radio identified themselves during WWII in British-occupied countries.  The band goes on to talk about how mainstream bands like The Beatles make it difficult for the Punk Movement to thrive.  Frontman Joe Strummer sings about the brutality of the police officers with their ‘truncheon’ (or ‘batons’ as they are better known), about the growing concerns of global warming, starvation, nuclear warfare and even the rising water level of the Thames. At the very end of this song, the Morse code for S-O-S can be heard, reflecting the idea of how Strummer wanted the ‘boys’ and girls’ to come out their ‘closet’ and be a part of their fictional revolution.

So, why is this song so controversial? Maybe it’s because it talks about British misery, injustice and the coldness of London towards the concerns of its citizens. In an interview in 2002, Joe Strummer revealed that the reason why people are terrified of ‘London Calling’ is because it talks about the troubles of the common man and the looming threat of censorship.  It is a song about terrorism but it’s got nothing to do with the kind of terrorism we know today.  However, this did not stop the London police from detaining Harraj Mann, a mobile phone salesman who was humming ‘London Calling’ on the way to the airport. A paranoid taxi driver called the authorities on Harraj after he requested the cabbie to turn up the volume when the song was playing. After being detained for several hours, Harraj missed his flight because of his taste in music.

This wasn’t the first time someone was harassed by the police over a Clash song. In 2004, Mike Devine was questioned by a ‘special task force’ after he texted the lyrics of another song called ‘Tommy Gun’ because they included the words ‘gun’ and jetliner’.  Another one of their songs ‘Rock the Casbah’ was banned from being played on the radio after 9/11. The British did the same during The Gulf War.

Much of The Clash’s ethos can be found in the way the band treated the fans.  It was truly a ‘people’s band’, pricing their tickets and souvenirs at a reasonable fee even at the peak of their popularity. Bono has famously commented that The Clashwrote the rulebook for U2.

What is most ironic about ‘London Calling’ is that, it is now set to be the anthem of the 2012 Olympic Games for their publicity campaign. This is a perfect example of how a song becomes so familiar that its original meaning is lost. The same can be said for Bruce Springsteen’s ‘Born in the USA’ which was originally meant to be an anti-Vietnam ballad but is now misinterpreted to follow patriotic and nationalistic themes.  While the song is meant to be a cry for help for Springsteen because of his loss in national pride, the song was used extensively for Ronald Reagan’s reelection campaign. Sigh. The heights of stupidity never cease to amaze me.

—-

—

__

—-

Francis Schaeffer noted:

I have lots of young people and older ones come to us from the ends of the earth. And as they come to us, they have gone to the end of this logically and they are not living in a romantic setting. They realize what the situation is. They can’t find any meaning to life. It’s the meaning to the black poetry. It’s the meaning of the black plays. It’s the meaning of all this. It’s the meaning of the words “punk rock.”

–

“They are the natural outcome of a change from a Christian World View to a Humanistic one…
The result is a relativistic value system. A lack of a final meaning to life — that’s first. Why does human life have any value at all, if that is all that reality is? Not only are you going to die individually, but the whole human race is going to die, someday. It may not take the falling of the atom bombs, but someday the world will grow too hot, too cold. That’s what we are told on this other final reality, and someday all you people not only will be individually dead, but the whole conscious life on this world will be dead, and nobody will see the birds fly. And there’s no meaning to life.

As you know, I don’t speak academically, shut off in some scholastic cubicle, as it were. I have lots of young people and older ones come to us from the ends of the earth. And as they come to us, they have gone to the end of this logically and they are not living in a romantic setting. They realize what the situation is. They can’t find any meaning to life. It’s the meaning to the black poetry. It’s the meaning of the black plays. It’s the meaning of all this. It’s the meaning of the words “punk rock.” And I must say, that on the basis of what they are being taught in school, that the final reality is only this material thing, they are not wrong. They’re right! On this other basis there is no meaning to life and not only is there no meaning to life, but there is no value system that is fixed, and we find that the law is based then only on a relativistic basis and that law becomes purely arbitrary.

—

OUTLINE OF ECCLESIATES BY SCHAEFFER

_______

William Lane Craig on Man’s predicament if God doesn’t exist

Read Waiting for Godot by Samuel Beckett. During this entire play two men carry on trivial conversation while waiting for a third man to arrive, who never does. Our lives are like that, Beckett is saying; we just kill time waiting—for what, we don’t know.

Thus, if there is no God, then life itself becomes meaningless. Man and the universe are without ultimate significance.

Francis Schaeffer looks at Nihilism of Solomon and the causes of it!!!

Notes on Ecclesiastes by Francis Schaeffer

Solomon is the author of Ecclesiastes and he is truly an universal man like Leonardo da Vinci.

Two men of the Renaissance stand above all others – Michelangelo and Leonardo da Vinci and it is in them that one can perhaps grasp a view of the ultimate conclusion of humanism for man. Michelangelo was unequaled as a sculptor in the Renaissance and arguably no one has ever matched his talents.

The other giant of the Renaissance period was Leonardo da Vinci – the perfect Renaissance Man, the man who could do almost anything and does it better than most anyone else. As an inventor, an engineer, an anatomist, an architect, an artist, a chemist, a mathematician, he was almost without equal. It was perhaps his mathematics that lead da Vinci to come to his understanding of the ultimate meaning of Humanism. Leonardo is generally accepted as the first modern mathematician. He not only knew mathematics abstractly but applied it in his Notebooks to all manner of engineering problems. He was one of the unique geniuses of history, and in his brilliance he perceived that beginning humanistically with mathematics one only had particulars. He understood that man beginning from himself would never be able to come to meaning on the basis of mathematics. And he knew that having only individual things, particulars, one never could come to universals or meaning and thus one only ends with mechanics. In this he saw ahead to where our generation has come: everything, including man, is the machine.

Leonardo da Vinci compares well to Solomon and they  both were universal men searching for the meaning in life. Solomon was searching for a meaning in the midst of the details of life. His struggle was to find the meaning of life. Not just plans in life. Anybody can find plans in life. A child can fill up his time with plans of building tomorrow’s sand castle when today’s has been washed away. There is  a difference between finding plans in life and purpose in life. Humanism since the Renaissance and onward has never found it and it has never found it since. Modern man has not found it and it has always got worse and darker in a very real way.

We have here the declaration of Solomon’s universality:

____________________

There is no doubt in my mind that Solomon had the same experience in his life that I had as a younger man. I remember standing by the sea and the moon arose and it was copper and beauty. Then the moon did not look like a flat dish but a globe or a sphere since it was close to the horizon. One could feel the global shape of the earth too. Then it occurred to me that I could contemplate the interplay of the spheres and I was exalted because I thought I can look upon them with all their power, might, and size, but they could contempt nothing and I felt as man as God. Then came upon me a horror of great darkness because it suddenly occurred to me that although I could contemplate them and they could contemplate nothing yet they would continue to turn in ongoing cycles when I saw no more forever and I was crushed.

THIS IS SOLOMON’S FEELING TOO. The universal man, Solomon, beyond our intelligence with an empire at his disposal with the opportunity of observation so he could recite these words here in Ecclesiastes 6:12, “For who knows what is good for a man during his lifetime, during the few years of his futile life? He will spend them like a shadow. For who can tell a man what will be after him under the sun?”

Lack of Satisfaction in life

In Ecclesiastes 1:8 he drives this home when he states, “All things are wearisome; Man is not able to tell it. The eye is not satisfied with seeing, Nor is the ear filled with hearing.” Solomon is stating here the fact that there is no final satisfaction because you don’t get to the end of the thing. THERE IS NO FINAL SATISFACTION. This is related to Leonardo da Vinci’s similar search for universals and then meaning in life. 

In Ecclesiastes 5:11 Solomon again pursues this theme, “When good things increase, those who consume them increase. So what is the advantage to their owners except to look on?”  Doesn’t that sound modern? It is as modern as this evening. Solomon here is stating the fact there is no reaching completion in anything and this is the reason there is no final satisfaction. There is simply no place to stop. It is impossible when laying up wealth for oneself when to stop. It is impossible to have the satisfaction of completion. 

Pursuing Learning

Now let us look down the details of his searching.

In Ecclesiastes 1: 13a we have the details of the universal man’s procedure. “And I set my mind to seek and explore by wisdom concerning all that has been done under heaven.”

So like any sensible man the instrument that is used is INTELLECT, and RAITIONALITY, and LOGIC. It is to be noted that even men who despise these in their theories begin and use them or they could not speak. There is no other way to begin except in the way they which man is and that is rational and intellectual with movements of that is logical within him. As a Christian I must say gently in passing that is the way God made him.

So we find first of all Solomon turned to WISDOM and logic. Wisdom is not to be confused with knowledge. A man may have great knowledge and no wisdom. Wisdom is the use of rationality and logic. A man can be very wise and have limited knowledge. Here he turns to wisdom in all that implies and the total rationality of man.

Works of Men done Under the Sun

After wisdom Solomon comes to the great WORKS of men. Ecclesiastes 1:14,  ^“I have seen all the works which have been done under the sun, and behold, all is ^[p]vanity and striving after wind.” Solomon is the man with an empire at this disposal that speaks. This is the man who has the copper refineries in Ezion-geber. This is the man who made the stables across his empire. This is the man who built the temple in Jerusalem. This is the man who stands on the world trade routes. He is not a provincial. He knew what was happening on the Phonetician coast and he knew what was happening in Egypt. There is no doubt he already knew something of building. This is Solomon and he pursues the greatness of his own construction and his conclusion is VANITY AND VEXATION OF SPIRIT.

Ecclesiastes 2:18-20

¹⁸ Thus I hated all the fruit of my labor for which I had labored under the sun, for I must leave it to the man who will come after me. ¹⁹ And who knows whether he will be a wise man or a fool? Yet he will have control over all the fruit of my labor for which I have labored by acting wisely under the sun. This too is vanity. ²⁰ Therefore I completely despaired of all the fruit of my labor for which I had labored under the sun.

He looked at the works of his hands, great and multiplied by his wealth and his position and he shrugged his shoulders.

Ecclesiastes 2:22-23

²² For what does a man get in all his labor and in his striving with which he labors under the sun? ²³ Because all his days his task is painful and grievous; even at night his mind does not rest. This too is vanity.

Man can not rest and yet he is never done and yet the things which he builds will out live him. If one wants an ironical three phrases these are they. There is a Dutch saying, “The tailor makes many suits but one day he will make a suit that will outlast the tailor.”

God has put eternity in our hearts but we can not know the beginning or the end of the thing from a vantage point of UNDER THE SUN

Ecclesiastes 1:16-18

¹⁶ I said to myself, “Behold, I have magnified and increased wisdom more than all who were over Jerusalem before me; and my mind has observed a wealth of wisdom and knowledge.” ¹⁷ And I set my mind to know wisdom and to know madness and folly; I realized that this also is striving after wind.¹⁸ Because in much wisdom there is much grief, and increasing knowledge results in increasing pain.

Solomon points out that you can not know the beginnings or what follows:

Ecclesiastes 3:11

¹¹ He has made everything  appropriate in its time. He has also set eternity in their heart, yet so that man will not find out the work which God has done from the beginning even to the end.

Ecclesiastes 1:11

¹¹ There is no remembrance of earlier things; And also of the later things which will occur, There will be for them no remembrance among those who will come later still.

Ecclesiastes 2:16

¹⁶ For there is no lasting remembrance of the wise man as with the fool, inasmuch as in the coming days all will be forgotten. And how the wise man and the fool alike die!

You bring together here the factor of the beginning and you can’t know what immediately follows after your death and of course you can’t know the final ends. What do you do and the answer is to get drunk and this was not thought of in the RUBAIYAT OF OMAR KAHAYYAM:

Ecclesiastes 2:1-3

I said to myself, “Come now, I will test you with pleasure. So enjoy yourself.” And behold, it too was futility. ² I said of laughter, “It is madness,” and of pleasure, “What does it accomplish?” ³ I explored with my mind how to stimulate my body with wine while my mind was guiding me wisely, and how to take hold of folly, until I could see what good there is for the sons of men to do under heaven the few years of their lives.

The Daughter of the Vine:

You know, my Friends, with what a brave Carouse
I made a Second Marriage in my house;
Divorced old barren Reason from my Bed,
And took the Daughter of the Vine to Spouse.

from the Rubaiyat of Omar Khayyam (Translation by Edward Fitzgerald)

A perfectly good philosophy coming out of Islam, but Solomon is not the first man that thought of it nor the last. In light of what has been presented by Solomon is the solution just to get intoxicated and black the think out? So many people have taken to alcohol and the dope which so often follows in our day. This approach is incomplete, temporary and immature. Papa Hemingway can find the champagne of Paris sufficient for a time, but one he left his youth he never found it sufficient again. He had a lifetime spent looking back to Paris and that champagne and never finding it enough. It is no solution and Solomon says so too.

Ecclesiastes 2:4-11

⁴ I enlarged my works: I built houses for myself, I planted vineyards for myself; ⁵ I made gardens and parks for myself and I planted in them all kinds of fruit trees; ⁶ I made ponds of water for myself from which to irrigate a forest of growing trees. ⁷ I bought male and female slaves and I had homeborn slaves. Also I possessed flocks and herds larger than all who preceded me in Jerusalem. ⁸ Also, I collected for myself silver and gold and the treasure of kings and provinces. I provided for myself MALE AND  FEMALE SINGERS AND THE PLEASURES OF MEN–MANY CONCUBINES.

⁹ Then I became great and increased more than all who preceded me in Jerusalem. My wisdom also stood by me. ¹⁰ All that my eyes desired I did not refuse them. I did not withhold my heart from any pleasure, for my heart was pleased because of all my labor and this was my reward for all my labor.¹¹ Thus I considered all my activities which my hands had done and the labor which I had exerted, and behold all was vanity and striving after wind and there was no profit under the sun.

He doesn’t mean there is no temporary profit but there is no real profit. Nothing that lasts. The walls crumble if they are as old as the Pyramids. You only see a shell of the Pyramids and not the glory that they were. This is what Solomon is saying. Look upon Solomon’s wonder and consider the Cedars of Lebanon which were not in his domain but at his disposal.

Ecclesiastes 6:2

² a man to whom God has given riches and wealth and honor so that his soul lacks nothing of all that he desires; yet God has not empowered him to eat from them, for a foreigner enjoys them. This is vanity and a severe affliction.

Can someone stuff himself with food he can’t digest? Solomon came to this place of strife and confusion when he went on in his search for meaning.

 Oppressed have no comforter

Ecclesiastes 4:1

 Then I looked again at all the acts of oppression which were being done under the sun. And behold I saw the tears of the oppressed and that they had no one to comfort them; and on the side of their oppressors was power, but they had no one to comfort them.

Between birth and death power rules. Solomon looked over his kingdom and also around the world and proclaimed that right does not rule but power rules.

Ecclesiastes 7:14-15

¹⁵ I have seen everything during my lifetime of futility; there is a righteous man who perishes in his righteousness and there is a wicked man who prolongs his life in his wickedness.

Ecclesiastes 8:14

¹⁴ There is futility which is done on the earth, that is, there are righteous men to whom it happens according to the deeds of the wicked. On the other hand, there are evil men to whom it happens according to the deeds of the righteous. I say that this too is futility.

We could say it in 20th century language, “The books are not balanced in this life.”

Pursuing Ladies

If one would flee to alcohol, then surely one may choose sexual pursuits to flee to. Solomon looks in this area too.

Ecclesiastes 7:25-28

²⁵ I directed my mind to know, to investigate and to seek wisdom and an explanation, and to know the evil of folly and the foolishness of madness. ²⁶ And I discovered more bitter than death the woman whose heart is snares and nets, whose hands are chains. One who is pleasing to God will escape from her, but the sinner will be captured by her.

²⁷ “Behold, I have discovered this,” says the Preacher, “adding one thing to another to find an explanation, ²⁸ I have looked for other answers but have found none. I found one man in a thousand that I could respect, but not one woman. (Good News Translation on verse 28)

One can understand both Solomon’s expertness in this field and his bitterness.

I Kings 11:1-3 (New American Standard Bible) 

11 Now King Solomon loved many foreign women along with the daughter of Pharaoh: Moabite, Ammonite, Edomite, Sidonian, and Hittite women, ² from the nations concerning which the Lord had said to the sons of Israel, “You shall not associate with them, nor shall they associate with you, for they will surely turn your heart away after their gods.” Solomon held fast to these in love. ³ He had seven hundred wives, princesses, and three hundred concubines, and his wives turned his heart away.

An expert but also the reason for his bitterness. Certainly there have been many men over the centuries who have daydreamed of Solomon’s wealth in this area [of women], but at the end it was sorry, not only sorry but nothing and less than nothing. The simple fact is that one can not know woman in the real sense by pursuing 1000 women. It is not possible. Woman is not found this way. All that is left in this setting if one were to pursue the meaning of life in this direction is this most bitter word found in Ecclesiastes 7:28, “I have looked for other answers but have found none. I found one man in a thousand that I could respect, but not one woman.” (Good News Translation on verse 28) He was searching in the wrong way. He was searching for the answer to life in the limited circle of that which is beautiful in itself but not an answer finally in sexual life. More than that he finally tried to find it in variety and he didn’t even touch one woman at the end.

Relative truth/ Chance and time/ death comes to fool and wiseman/ tried pagan religions

He plunged in such a scientific procedure finally into the thought of final relative truth.

Ecclesiastes 8:6-7

⁶ For there is a time and a way for everything, although man’s trouble lies heavy on him. ⁷ For he does not know what is to be, for who can tell him how it will be?

In such a setting he is led into misery. Relative truth is also expressed in Ecclesiastes 3:1, “For everything there is a season, and a time for every matter under heaven…” He is not saying this in a positive sense, but it is in a negative sense here. Relative truth in light of Ecclesiastes 8:6-7. When you come to the concept of relative truth only one more step remains and that is that chance rules. Chance is king.

__

Ecclesiastes 9:11

¹¹ Again I saw that under the sun the race is not to the swift, nor the battle to the strong, nor bread to the wise, nor riches to the intelligent, nor favor to those with knowledge, but time and chance happen to them all.

Chance rules. If a man starts out only from himself and works outward it must eventually if he is consistent seem so that only chance rules and naturally in such a setting you can not expect him to have anything else but finally a hate of life.

Ecclesiastes 2:17-18a

¹⁷ So I hated life, because what is done under the sun was grievous to me, for all is vanity and a striving after wind. ¹⁸ I hated all my toil in which I toil under the sun…

That first great cry “So I hated life.” Naturally if you hate life you long for death and you find him saying this in Ecclesiastes 4:2-3:

² And I thought the dead who are already dead more fortunate than the living who are still alive. ³ But better than both is he who has not yet been and has not seen the evil deeds that are done under the sun.

He lays down an order. It is best never have to been. It is better to be dead, and worse to be alive. But like all men and one could think of the face of Vincent Van Gogh in his final paintings as he came to hate life and you watch something die in his self portraits, the dilemma is double because as one is consistent and one sees life as a game of chance, one must come in a way to hate life. Yet at the same time men never get beyond the fear to die. Solomon didn’t either. So you find him in saying this.

Ecclesiastes 2:14-15

¹⁴ The wise person has his eyes in his head, but the fool walks in darkness. And yet I perceived that the same event happens to all of them. ¹⁵ Then I said in my heart, “What happens to the fool will happen to me also. Why then have I been so very wise?” And I said in my heart that this also is vanity.

The Hebrew is stronger than this and it says “it happens EVEN TO ME,” Solomon on the throne, Solomon the universal man. EVEN TO ME, even to Solomon.

Ecclesiastes 3:18-21

¹⁸ I said in my heart with regard to the children of man that God is testing them that they may see that they themselves are but beasts. ¹⁹ For what happens to the children of man and what happens to the beasts is the same; as one dies, so dies the other. They all have the same breath, and man has no advantage over the beasts, for all is vanity.^{[n] 20} All go to one place. All are from the dust, and to dust all return.²¹ Who knows whether the spirit of man goes upward and the spirit of the beast goes down into the earth?

What he is saying is as far as the eyes are concerned everything grinds to a stop at death.

Ecclesiastes 4:16

¹⁶ There was no end of all the people, all of whom he led. Yet those who come later will not rejoice in him. Surely this also is vanity and a striving after wind.

That is true. There is no place better to feel this than here in Switzerland. You can walk over these hills and men have walked over these hills for at least 4000 years and when do you know when you have passed their graves or who cares? It doesn’t have to be 4000 years ago. Visit a cemetery and look at the tombstones from 40 years ago. Just feel it. IS THIS ALL THERE IS? You can almost see Solomon shrugging his shoulders.

Ecclesiastes 8:8

⁸ There is no man that hath power over the spirit to retain the spirit; neither hath he power in the day of death: and there is no discharge in that war; neither shall wickedness deliver those that are given to it. (King James Version)

A remarkable two phrase. THERE IS NO DISCHARGE IN THAT WAR or you can translate it “no casting of weapons in that war.” Some wars they come to the end. Even the THIRTY YEARS WAR (1618-1648) finally finished, but this is a war where there is no casting of weapons and putting down the shield because all men fight this battle and one day lose. But more than this he adds, WICKEDNESS WON’T DELIVER YOU FROM THAT FIGHT. Wickedness delivers men from many things, from tedium in a strange city for example. But wickedness won’t deliver you from this war. It isn’t that kind of war. More than this he finally casts death in the world of chance.

Ecclesiastes 9:12

¹² For man does not know his time. Like fish that are taken in an evil net, and like birds that are caught in a snare, so the children of man are snared at an evil time, when it suddenly falls upon them.

Death can come at anytime. Death seen merely by the eye of man between birth and death and UNDER THE SUN. Death too is a thing of chance. Albert Camus speeding in a car with a pretty girl at his side and then Camus dead. Lawrence of Arabia coming up over a crest of a hill 100 miles per hour on his motorcycle and some boys are standing in the road and Lawrence turns aside and dies.

 Surely between birth and death these things are chance. Modern man adds something on top of this and that is the understanding that as the individual man will dies by chance so one day the human race will die by chance!!! It is the death of the human race that lands in the hand of chance and that is why men grew sad when they read Nevil Shute’s book ON THE BEACH. 

————

In 1978 I heard the song “Dust in the Wind” by Kansas when it rose to #6 on the charts. That song told me thatKerry Livgren the writer of that song and a member of Kansas had come to the same conclusion that Solomon had. I remember mentioning to my friends at church that we may soon see some members of Kansas become Christians because their search for the meaning of life had obviously come up empty even though they had risen from being an unknown band to the top of the music business and had all the wealth and fame that came with that. Furthermore, like Solomon and Coldplay, they realized death comes to everyone and “there must be something more.”

Livgren wrote:

“All we do, crumbles to the ground though we refuse to see, Dust in the Wind, All we are is dust in the wind, Don’t hang on, Nothing lasts forever but the Earth and Sky, It slips away, And all your money won’t another minute buy.”

Both Kerry Livgren and Dave Hope of Kansas became Christians eventually. Kerry Livgren first tried Eastern Religions and Dave Hope had to come out of a heavy drug addiction. I was shocked and elated to see their personal testimony on The 700 Club in 1981 and that same  interview can be seen on youtube today. Livgren lives in Topeka, Kansas today where he teaches “Diggers,” a Sunday school class at Topeka Bible Church. Hope is the head of Worship, Evangelism and Outreach at Immanuel Anglican Church in Destin, Florida.

The movie maker Woody Allen has embraced the nihilistic message of the song “Dust in the Wind” by Kansas. David Segal in his article, “Things are Looking Up for the Director Woody Allen. No?” (Washington Post, July 26, 2006), wrote, “Allen is evangelically passionate about a few subjects. None more so than the chilling emptiness of life…The 70-year-old writer and director has been musing about life, sex, work, death and his generally futile search for hope…the world according to Woody is so bereft of meaning, so godless and absurd, that the only proper response is to curl up on a sofa and howl for your mommy.”

The song “Dust in the Wind” recommends, “Don’t hang on.” Allen himself says, “It’s just an awful thing and in that context you’ve got to find an answer to the question: ‘Why go on?’ ”  It is ironic that Chris Martin the leader of Coldplay regards Woody Allen as his favorite director.

Lets sum up the final conclusions of these gentlemen:  Coldplay is still searching for that “something more.” Woody Allen has concluded the search is futile. Livgren and Hope of Kansas have become Christians and are involved in fulltime ministry. Solomon’s experiment was a search for meaning to life “under the sun.” Then in last few words in the Book of Ecclesiastes he looks above the sun and brings God back into the picture: “The conclusion, when all has been heard, is: Fear God and keep His commandments, because this applies to every person. For God will bring every act to judgment, everything which is hidden, whether it is good or evil.”

You can hear Kerry Livgren’s story from this youtube link:

(part 1 ten minutes)

(part 2 ten minutes)

Kansas – Dust In The Wind

Ecclesiastes 1

Published on Sep 4, 2012

_________

__