Socialism vs. Capitalism III
Socialism vs. Capitalism III
By
Ken Eliasberg
Last week we looked at the more lethal consequences resulting from imposing a socialist form of government on a particular country — i.e. Russia, China, and Cambodia. This is not to say that every such governmental exercise ends in violence; in most, it just ends in bankruptcy, reminding us again of Margaret Thatcher’s tongue-in-cheek admonition that the difficulty with socialism is that eventually you run out of other people’s money. Other than fairly tiny, homogenous countries like, say, Finland, I don’t know of too many countries who employ this form of government that are on very sound economic footing, and that certainly includes are allies in “old Europe,” e.g. England, France, and Germany. But let’s look closer to home for any number of examples in which government operations are failing.
And let’s start with the main evidence of governmental failure — almost none of the major programs run by the government are economically sound, let alone coming in under budget — i.e. their actual cost in almost every instance, dramatically — no, geometrically — exceeds the original estimate of their eventual cost. And, as a consequence, most of them are broke. And, here I am giving them the benefit of the doubt as to their usefulness in the first place (and this is no small concession). For example, I believe that both the Energy and Education Departments are completely useless (almost as useless as their creator, Jimmy Carter), and, as a consequence, whatever billions (approximately 80 billion a year) are being spent on their continued existence are a total waste. That said, even the ones for which some sort of justification can be established almost always operate in the red — and not just in the red, but in a sea of red in which our grandchildren will probably drown. Take Medicare and Social Security. They have a combined unfunded liability in excess of 100 trillion (that’s trillion with a “T” — remember the good ‘ol days when Senator Dirksen observed that a billion here, and a billion there, and pretty soon you’re talking real money?). The Post Office (unlike UPS and FedEx) operates at a deficit, having lost some 7 billion dollars in the fiscal year ending on September 30th.
And by the way, have you noticed when government programs fail economically, the answer is always the same — more funding. Government is the only commercial endeavor which rewards failure; private undertakings are just allowed to die (or at least they used to be allowed to die before the current tsunami of bailouts). One is reminded of Ronald Reagan’s astute observation: “Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!”
Now, I appreciate that there may be a more universal need for some of these governmental endeavors, but their creation came with certain economic assurances as to their cost. That said, the punishment for failing to meet those assurances should not be an endless supply of money. Shouldn’t we be asking the fundamental question of why they are failing? Or better yet, why are our original estimates of their ultimate cost was so far removed from the reality of their actual cost?As an aside, I recall observing the estimates — and, in one case, the actual estimating process — during my governmental stay in Washington, and I was nonplussed by the rather sketchy manner in which it was done. I remember commenting to a colleague at the time, that our estimate might have been more reliable if we used a ouija board (and bear in mind, at the time I was a liberal). As someone recently observed re the current effort to keep certain industries afloat, what we do now is privatize reward and socialize risk. The bottom line should be that government operate in an economically responsible manner, and the only way to assure that is to require that their operation be transparent and accountable.
Some of our States and more than a few of our municipalities are on the edge of bankruptcy, and at least one has gone over the edge. The City of Vallejo, California has filed for bankruptcy. One of the causes of their economic woes — although certainly not the only one — was the very hefty amounts that they were paying out in compensation (current and deferred) to city employees. You see the same problem with benefits promised by Auto Companies to their Union employees — they are just unable to meet their promises. Of course, Obama is covering for them by propping up these companies in accordance with the terms of the government takeover — a takeover which was set in motion by Bush bailing them out in the first place (as opposed to just letting them go bankrupt as he should have done).
And closer to home, we have our own State which, for all practical purposes, is bankrupt. True, our incompetent representatives (in both the Executive and Legislative branches) have scotch taped together some form of arrangement which is barely maintaining the State on life support, but, in the long run, it is economically unsustainable. In this regard, it is worth noting that our 10 most economically troubled cities have been governed by Democrats for at least the past 20 years, most for over 40 years, a couple for over 100 years, and 2 have never had a Republican mayor. Where is the money to bail out these troubled governmental entities going to come from? Oh, I almost forgot, lefties don’t worry about money — the good fairy will take care of it. Or, more likely than not, the missing billions will show up by eliminating our defense budget so that we can unilaterally disarm and trust in the good will of a bunch of a backward Islamist barbarians, an attitude reminiscent of Bertrand Russell’s reaction to the Nazi threat; in a 1937 speech, Russell, a dedicated left-winger, declared that “Britain should disarm, and if Hitler marched his troops into this country when we were undefended, they should be welcomed like tourists and greeted in a friendly way.” Watching Obama’s foreign policy unfold, one almost gets the impression that he has taken a page out of Russell’s appeasement book. And the Dems wonder why they can’t be trusted with our national security. In passing, I have to note that Republican governance has not been much better; under Bush, the government spent money almost as rapidly as do the Dems — the major distinguishing virtue seems to be that they’ll bankrupt us on a slower basis.
Getting back to the point of this series of columns — i.e. central planning vs. free enterprise — a situation which puts the fundamental difference in relief (and which received little more than passing reference in the mainstream media, that “little more” coming in the form of a decent column in the June 9, 2008 edition of the Washington Post by Paul Kane, entitled Senate Votes To Privatize Its Failing Restaurants” (emphasize supplied)) came to a head a little over a year ago. What gave rise to the problem was a clear difference in the input and output of the cafeterias that service our Senators and our Representatives in the House. To cut to the chase, the food in the Senate cafeteria was terrible, and, to make matters worse, for many years it operated at a loss, losing 18 million dollars since 1993 and promising to lose another 2 million in the year when matters came to a head (2008). By contrast, the House cafeteria, which was privately operated — i.e. contracted out — served up excellent food at an annual profit. Indeed, Senators and their staff members would frequently lunch in the House cafeteria rather than eat at their own. This resulted in the Senate agreeing to privatize the operation of its food service provider. Diane Feinstein, one of our 2 Democratic Senators, was influential in moving this matter forward. In doing so, after noting that the operation was cratering, she made the following observation: “Candidly, I don’t think the taxpayers should be subsidizing something that doesn’t need to be. There are parts of government that can be run like a business and should be run like a business.”
This prompted Tom Purcell in an August 25, 2009 column at frontpagemag.com entitled Menu for Reform to observe: “For goodness’ sake, a group of elite senators couldn’t oversee a lousy cafeteria operation. What makes them think they can oversee a massive health care system?” What indeed!! And that’s not just my opinion — that’s the way it is; check it out! (to be continued)