George Rebane

Two major factors are now in the forefront of impending social upheavals in America – the growing economic destruction wrought by Obamacare and the accelerating surge of systemic unemployment.  And there is little help on the way because the polarized sides have no middle ground in which to search for solutions.  To even define a middle ground, each side would have to visibly give up their much publicized and long held principles and tenets which found their worldview.  And so we proceed apace to the precipice.

The collectivist contingents know well that large scale civil unrest is more likely with each announced executive order and bureaucratic regulatory diktat.  Preparations for such disorder have been well documented in these pages (more here and here).  To this we add today’s announcement that the idyllic mountain community of South Lake Tahoe has just received its war machine for the purpose of “saving lives”.  NPR (KXJZ) announced this morning the delivery of an almost new $600,000 MRAP fighting vehicle sporting a heavy weapons turret that is a gift to the community from DHS.  With one of these on their side, the authorities expect to snuff out any nascent popular uprising or resistance.  It’s your guess as to which lives will be ‘saved’ in such an encounter.

But that’s not the main point I want to cover here.  The continuing conundrum is the cognitive dissonance in the minds of collectivists when it comes to economics and human nature.  The collectivist believes that attendant costs do not affect the behavior of humans and businesses; that members of each category will behave unchanged as costs – be they taxes or wages – go up or down.  Therefore those considerations go by the board as the central planners fashion and implement public policies.

The latest CBO revelations about Obamacare’s shrinking the jobs market by 2.5M as its processes are implemented are totally rejected by collectivists who see such shrinkage simply as the expression of “choice” by people whether to work or not.  Not even a smidgeon of middle ground is visible with such an interpretation that to most on the right looks like rank cynicism spewed out to a vast sea of constituent sheeple (e.g. those for whom placing the Atlantic Ocean on a globe is a challenge).

Breaking news for some is that today millions are trapped in a healthcare coverage gap with Obamacare (here).  The short of it is that those trapped ‘earn too little for Obamacare’s subsidies but are still ineligible for benefits under existing Medicaid programs.’ – another emergent property of the solutions that issue from powerful little minds charged with solving big problems.  Almost five million of the poor and struggling classes will suffer under this latest hiccup.

With job growth hobbled and government policies adding to the misery, the planner’s solution is to raise the height of the first rung on the economic ladder and once more raise the minimum wage.  That old saw has yet to demonstrate that it has promoted the creation of a single job; the opposite is visible everywhere you look, again among the young, the poor, and the minorities.  (Robert Strayton in the 10feb14 WSJ makes a radical proposal to reduce the minimum wage to $5 in order to create jobs, especially for the chronically unemployed, unskilled, and even unemployable.)

What appears beyond the cognitive pale of the planners and their public can be explained to others with a simple example.  If a person is getting, say, $30K per year of government benefits that stop if s/he takes a job paying $30K, then would that be a reasonable expectation over the aggregate of such welfare recipients?  Most unimpaired observers would say no, and quickly add that there are also opportunity costs involved to the welfare recipient who will demand significantly more than $30K before giving up a lifestyle that garners that amount for no effort.  Yet the obvious is opaque to the planners, who instead will install an additional barrier to employment of the unskilled by increasing the minimum wage that a potential employer would have to absorb in his business costs.

And therein lies the second conundrum.  The collectivists and their sheeple have no idea how a business runs and manages its cashflow.  Profits are seen as excessive reward for greed that can be reduced if not relinquished by correctly thinking enterprises.  And if the result is that the business falters and has to close; well then, it’s time to see if the business is worthy of additional government subsidies that may be collected from the ‘rich’ and surviving businesses.  You see, the planners know what the proper levels of profit, wages, and risks are for any and every enterprise in our fair land.  And these will be assiduously emplaced and rigorously enforced once the appropriately compliant legislatures are elected.  Toward that the planners are making progress every day.

But somewhere in their heart of hearts even the planners have begun to understand that this is not the same world that Lenin, Trotsky, Mao, and Castro faced.  Stuff is being developed and put into service that totally replaces human labor, and that is happening more and more every day.  The notion of systemic unemployment in even semi-free markets is now beginning to be recognized by economists who offer their belated insights in such publications as the WSJ and The Economist (here the NYT’s myopia is terminal).

With such revelations the thought must cross planners’ minds that job creation may actually be impeded if you don’t commensurately reward risk and instead increase wages by mandated fiat.  Hence precautions must be put in place to assure that a transition to a state controlled economy will not be impeded by the remaining believers in market based capitalism, free enterprise, and individual liberties.  Hence we must prepare and equip all possible agencies of the state with arms, ammunition, equipment, and training to handle the recalcitrant.  And the more astute planners take great comfort in that the same technologies that displace workers can also be used to effectively monitor and control large populations.  All that need be done is to continue educating the youth on a strong environmental ethic, a weak and evil America, and the need to suppress terror, especially the homegrown kind that can challenge the state.

You see, from the planners’ perspective, the objectives of how mankind will live in concert with the environment and a healthy earth all come together in one coordinated whole that is overseen by the all-seeing, all-knowing benevolent state.  That Founders like Madison (Federalist 51) warned us about government overreach when one ‘department’ of the state becomes pre-dominant makes no never mind in today’s government education industry or the now lame Fourth Estate.  Jeffrey H. Anderson (banker, venture capitalist who writes for Bloomberg, Washington Times, Weekly Standard, etc) summarizes Madison’s warning –

A well-informed, sober citizenry must ultimately hold our government officials in check.  But especially in the absence of an attentive press corps, the citizenry relies upon members of Congress, governors, and leaders of all stripes to call attention to dangerous ambitions and encroachments by the president that jeopardize our constitutional forms.

In the large, such a citizenry no longer exists, and the remnants are being identified as domestic enemies of the state and dealt with accordingly.

[11feb14 update]  Systemic and structural unemployment are joined at the hip.  Both have been extensively covered in these pages over the years.  Yesterday the Fed’s Yellen debuted in congressional testimony and pointed out to the legislators that all of the unemployment we are witnessing is not due to cyclical factors like the Great Recession.  Some of it is actually structural and involves the decline in workforce participation (now under 63%) due to many factors.  She did not go on to point out the impact of accelerating technology, let alone our living in the pre-Singularity years, and thereby allowed the congressionals (I reject ‘congresspersons’) to continue their slumbering dreams of a world in which nothing new is happening. (more here)

A contrary view was reported in an interview (here) with Dr Ray Kurzweil (q.v.) who is currently also serving as Google’s Director of Engineering.  Kurzweil is directing projects involving the augmentation and expansion of human cognition, and which give unqualified lie to the expressed beliefs at all government levels where heads remain firmly stuck in the sand or a more odoriferous place foreign to sunshine.  Kurzweil’s remains firm in his most recent assessment that the Singularity will occur before 2029, and sees its advent as the start of a beneficent age for all mankind.