America’s Entrepreneurial Spirit

Scott Rasmussen, writing for Ballotpedia, reports that 62% of American adults say their dream job is owning their own company.  That’s encouraging news, as it suggests that, despite decades of welfare state decadence, Americans still possess our entrepreneurial spirit.

That spirit has been with Americans going back to the colonial period.  Textbooks tend to focus on the Puritan planting of the Plymouth colony, which was certainly important, but the first permanent settlement in colonial British North America was Jamestown.  That settlement, and the entire colony of Virginia, was founded as a commercial enterprise, the efforts of joint-stock company in England.

French aristocrat and political theorist Alexis de Tocqueville, writing in Democracy in America (1840) over two centuries later (during the height of the Jacksonian Era), noted Americans’ keen interest in commercial matters, and the pulsing energy and enthusiasm of always hustling.  He also noted the positive effect of trade upon liberty:

Trade is the natural enemy of all violent passions. Trade loves moderation, delights in compromise, and is most careful to avoid anger. It is patient, supple, and insinuating, only resorting to extreme measures in cases of absolute necessity. Trade makes men independent of one another and gives them a high idea of their personal importance: it leads them to want to manage their own affairs and teaches them to succeed therein. Hence it makes them inclined to liberty but disinclined to revolution.

Despite enthusiasm about the idea of starting a business, Rasmussen’s findings show that only 5% of Americans are “very likely to start their own business” in 2019, while 11% are somewhat likely.

Nevertheless, it’s refreshing to see that the desire to hustle is prominent among Americans.  The economic mojo of the Trump economy no-doubt improves Americans’ optimism (although I should note that many Americans started businesses during the Obama stagcovery, albeit for a different reason—they couldn’t find work).  That optimism likely fuels some desire to get in on the action.

On a personal note, I will say that even I, a high school teacher—teaching being a job uniquely suited to the risk-averse in general—have caught this bug (don’t worry, loyal readers—I’m not going to try to sell you massage oils with untested healing properties).  I’m excited to expand some of my side-hustles in 2019, including writing, performing live music, and teaching private lessons.

Regardless of how those pan out, the thrill of applying effort towards ones passions is exhilarating.  What could be more American?

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Global Poverty in Decline

Regular readers know that I frequently cite pollster Scott Rasmussen’s #Number of the Day series from Ballotpedia.  I do so because a.) his numbers often reveal some interesting truths about our world and b.) blogging is, at bottom, the art of making secondary or tertiary commentary on what other, smarter, harder-working people have thought, written, and done.

Yesterday’s #Number of the Day dealt with global poverty; specifically, Americans’ ignorance to the fact that global poverty has declined substantially over the last twenty years.  Indeed, global poverty has been reduced by half in that time.

I’ll confess I was ignorant of the extent of this decline, too, although it makes sense that poverty has decreased, especially when you consider the rise of post-Soviet market economies in Eastern Europe and China’s meteoric rise since the 1980s.

I suspect that the perennial culprit of the Mainstream Media is to blame, in part, for this ignorance, coupled as it is with progressive politicians.  The rise of “democratic socialist” candidates—as well as the lingering effects of the Great Recession—would have Americans believe that the global economy is in terrible shape, and that “underprivileged” parts of the world labor in ever-worsening poverty (so, let’s just move them all here—that’ll solve poverty!).

It’s refreshing to see that capitalism is working its economic magic, and people all over the globe are lifting themselves out of poverty.  If representative republicanism and strong civil societies can take root and flourish in more places, the ingredients will be in place for continued economic and cultural growth.

HSAs are A-Okay

My Congressman, Tom Rice, sends out little e-mail updates on a regular basis.  In his latest newsletter, the South Carolina US-7 representative included a link to a video (below) of his statements before Congress about expanding Health Savings Accounts, or HSAs.

The gist of the proposal is to expand health-savings accounts to allow account holders to contribute more to them.  The current legal annual contribution (in FY2018) for a single individual is $3450, up from $3400 last year and $3350 the year before.  That comes out to $287.50 a month, which can be contributed pre-tax directly from an account holder’s paycheck.

The way the law is currently written, HSAs are excellent both to cover medical expenses before reaching your deductible (and, naturally, most HSA-compliant plans are high deductible ones) and to save and invest for retirement.  You can accrue a qualified medical expense today—say, a visit to the emergency room—and you can submit that receipt in a decade (or longer—there’s no apparent time-limit) to take out that amount.

To give a hypothetical:  let’s say you have a medical bill for $3000.  Yes, your annual contribution to your HSA could cover that.  But, let’s say you’ve built up a good emergency fund, and elect to pay the bill out-of-pocket through that fund.  In, say, five years, you need to tap your HSA funds for some reason.  If you’ve kept the receipt (and credit card statements help, too), you can file that with your HSA and withdraw the $3000.

Why go through the trouble?  Because many HSA administrators—including my own, HealthSavings Administrators—allow you to invest in mutual funds with your HSA contributions.  If you’re making an 8% annual return on those contributions, that $3000 today will be worth around $4100 in five years (investment math folks, please check my numbers; regardless, you get the point—money grows).

Alternatively, if you don’t tap that money for decades—and keep contributing—you’ll have a very nice retirement account growing tax-free for all those years.

My current health insurance carries a $6550 deductible—which I didn’t even come close to hitting in 2017 when I broke my left wrist, although it was still expensive—but I’ve accrued enough of an emergency fund that I could meet that expense should the need arise (I pray it doesn’t).  If my emergency fund were sunk into something else—say, a new car, or a less flood-prone house—then I could tap into my HSA contributions from the past few years.

And here is the other benefit of HSAs, the one that I’m sure Congressman Rice as in mind:  they help you reach your deductible, and bring some market forces to bear on healthcare costs.

I suspect that one of the culprits of high healthcare costs is the lack of transparency—no one knows how much anything costs, and everything is fungible.  When I broke my wrist, I received a hefty ER bill (about $3000) about four months after the fall (I don’t understand the delay on that; it seems like they could just tally it all up and print it out at the time of the accident).  I called the hospital, and they told they were “running a special”—if I paid in full that day, they’d knock HALF of the cost off the bill.  Because I’m an extreme budgeter and have an emergency fund, I could do it, and leaped at the “special.”

Most people don’t have enough money saved up to even meet a $500 emergency, but an HSA makes it more doable.  Even without an emergency fund, if an account holder were making monthly contributions, he’d be able to take advantage of such price reductions.

HSAs aren’t a magic bullet to bringing down healthcare costs, but they would go a long way to addressing the problem.  If we lived in a pre-Obamacare age, you’d be able to get a high-deductible, HSA-compliant plan for probably $50-100 a month, depending on age and health.  Even if you didn’t want to manage the money in various investments, the incentives to save—namely, the pre-tax benefit—are enough that many Americans would likely take contribute to their HSA.

When Secretary of Housing and Urban Development Ben Carson was running for president in 2015-2016, he proposed transferable, minimally-funded ($5000 at birth, I believe) HSAs be issued for all Americans.  The ability to transfer funds between family members and to grow that wealth over time would be huge.

Similarly, President George W. Bush proposed giving Americans the option to contribute their Social Security contributions into personally-managed investment accounts.  That would reduce the astronomical costs of that federal boondoggle and give Americans much greater returns on their investments.  Naturally, Democrats rejected that plan out of hand, and accused Bush of hating old people.  Yeesh.

The takeaway is this:  whether it’s in healthcare or retirement savings, the American people know best.  Yes, we’d need some additional financial education—which we desperately need anyway—but, c’mon, are you going to continue running the same inefficient, wasteful systems just because a small percentage of people won’t adequately manage their money?

Liberty works in nearly every arena, and it would work in healthcare and health insurance, too.  HSAs are the wave of the future, and I’m glad to see Tom Rice is championing them.

TBT: Capitalism Needs Social Conservatism

On Tuesday, I wrote about the “Human Toll of Globalization“—the dire consequences, both economic and moral, that befall a community when its primary economic engine is gutted through a naïve faith in unbridled free trade and globalization.  Another title for that piece might be almost a mirror of this essay’s from 2016:  “Civil Society Needs Cash.”

I don’t want to take that argument too far, though.  In the case of Danville, Virginia—and countless other American towns that have seen their prosperity flee abroad, or to bicoastal urban cloisters—a decaying economy wrought decaying morality, civil society, and civic pride.  That would suggest that prosperity, in and itself, cannot sustain true morality and virtue.

Indeed, as I argue in the essay below, “Capitalism Needs Social Conservatism,” excessive prosperity and material comfort breed a kind of moral complacency, what Kenneth Minogue likened to widespread Epicureanism (an excellent essay, and well worth reading if you don’t mind subscribing to The New Criterion, which is also worth the price).  Richard Weaver—one of my intellectual heroes—compared the material comfort of the then-mid-twentieth-century West to a drunk who, having grown addicted to alcohol, and requiring ever-greater quantities of it, no longer has the capacity to obtain the very substance he craves.

Milton Friedman famously argued that economic liberty is a necessary precursor to political liberty.  Similarly, I would argue that morality and virtue are necessary pillars to sustaining economic liberty for any length of time.  Indeed, George Washington argued that religion and public morality were “indispensable” to a self-governing republic.

In my mind, the orthodox libertarian (in the political sense, not the “free-will” libertarianism of the free-will-versus-determinism debate in modern philosophy) commits the same error as the orthodox Marxist in relying too much on economic analysis of behavior.  The idea of the “rational man” or “man as a rational animal” is a uniquely modern concept, and while Westerners have tried hard to shoe-horn themselves into that mold, the inner, teeming depths of our souls are still pre-rationalist.  We need God, and we still live according to symbols, rituals, and virtues.

As I wrote in 2016, “Without moral common ground and shared values that stress self-control, liberty rapidly turns to libertinism.  Libertinism without a great deal of wealth leads to shattered lives, which in turn wreck families and communities.”  I’ll explore these ideas further in my upcoming eBook, Values Have Consequences.

***

For the past week, I’ve written about the decline of the nuclear family, with follow-up posts about divorce and sex education, and about the negative impact of the of the welfare state on family formation.  These post have generated some wonderful discussions and input from followers, and I’ve been surprised by their popularity.

As I wrote in “Values Have Consequences,” I’m devoting Friday posts to discussions of social conservatism.  Social conservatism is increasingly the red-headed stepchild of the traditional Republican “tripod” coalition that also includes national security and economic conservatives (with the rise of Trump, populist nationalism could count as a fourth leg).  Politically, this marginalization makes some sense, as it’s not likely that fifty or sixty years of cultural attitudes and values will be changed at the ballot box.

Nevertheless, social conservatism is an important leg of the tripod.  Indeed, I would argue that the three coalitions are not at odds, but create logical synergies that allow each leg to stand.  The stool is much more stable when the three legs work together.

Economic conservatism–by which I mean the belief that freer markets, fewer and lighter regulations, and lower taxes, or what is more properly called neoliberalism (after the classical liberalism of the 18th-century thinkers like Adam Smith)–is wonderful and hugely important.  It’s led to massive gains domestically and globally, lifting untold millions off people out of poverty.  It allows people to enjoy a greater variety of goods and labor-saving devices, and provides more leisure time (and plenty of things to do during that time).

But free markets unmoored from guiding principles, strong and stable institutions, and the rule of law can morph into mindless Mammon worship.  Without a shared sense of trust and belief in human dignity, capitalism becomes cold and abstract.

Further, full-fledged economic liberalization without the limiting principles applied by constitutionalism and a morality supported by strong families and a robust civil society can lead to socially-destructive disruptions and behaviors.

As I’ve argued many times, making mistakes or bad choices is the necessary price of liberty.  But for self-government to work effectively–and to avoid social instability–a healthy dose of social conservatism is the best medicine.

Former Arkansas Governor Mike Huckabee wears the most socially conservative outfit ever; later, he played bass on Fox News.
(Image Sourcehttps://en.wikipedia.org/wiki/File:Huckabeemike.JPG; photo by Craig Michaud)

To offer an illustration from recent history, contrast the post-Soviet experiences of Poland (and most of Eastern Europe) with that of Russia.  Despite decades under Communism–an ideology that was aggressively atheistic, stressing loyalty to the state and Communist Party over all else–Poland roared back into the West.  It adopted neoliberal (modern conservative) economic policies, and was one of the few European nations not to suffer severely during the Great Recession.

Russia similarly adopted “shock therapy” after the Soviet Union collapsed for good in 1991.  Rather than experiencing a huge economic boom, however, well-connected former Communists and others close to the old regime made off like bandits, leaving most Russians left holding the bag.

What’s the difference?  For one, the Russians lived under Communism for nearly a generation longer than the Poles, meaning there were several generations of downtrodden, state-dependent Russians by the time the USSR collapsed.  Many of these Russians were unable to adjust to a free-market system after living in a closed economy for so long.

Another key difference–and one that I think is extremely significant–is that Russians lost any scrap of civil society they might have possessed prior to the Bolshevik takeover in late 1917.  Civil society–the institutions between the basic family unit and the government, like churches, schools, clubs, civic organizations, etc.–was automatically preempted when every club, organization, or activity became part of the Soviet government.  The severely crippled (and, as I understand it, collaborationist) Russian Orthodox Church was unable or unwilling to push back against Soviet rule, providing little in the way of a spiritual alternative to the totalizing influence of Communism.

“[F]ree markets unmoored from guiding principles, strong and stable institutions, and the rule of law can morph into mindless Mammon worship.”

Poland, on the other hand, managed to maintain its deep Catholic faith.  The Catholic Church as an international organization (and with powerful, influential popes, most notably the Polish anti-Communist John Paul II) could never be wiped out completely by Soviet Communism.  Further, the Poles formed the Solidarity trades union movement, which offered an alternative to official Communist organizations.

Thus, after the dissolution of the Soviet Union, Poland emerged with a strong civil society anchored in a richly Christian worldview and ethic.  The shared sense of morality–one that stresses mutual respect, the dignity of human life, and the importance of honesty–allowed the complex deals and uptempo economic exchanges of capitalism to occur smoothly and rapidly.  From these civil and religious values came a firmer grasp of and respect for the rule of law, making predictable economic activity and long-term planning possible.

Russia, on the other hand, devolved into a fast-paced, nationwide run on the national cupboard.  Those with good connections grabbed whatever public funds and goodies they could.  Normal Russians couldn’t figure out why their government checks and free lunches stopped coming, and couldn’t understand why (or how) to pay taxes.  With the collapse of the Soviet Union, all civic organizations ceased to exist, because they were all part of the Soviet government.  Without any civil society or other enduring institutions to model good behavior and to stress and enforce moral values, Russia struggled–and continues to do so–to adapt to global capitalism and democracy.  Not surprisingly, they’ve turned to a dictatorial strongman for guidance.

***

What of the American context?  As I’ve written before, I’m skeptical of full-fledged libertarianism–what I would broadly define as the marriage of economically conservative and socially liberal views–because it fails to acknowledge the need for strong moral values to uphold its own economic assumptionsLiberty and self-government can only really work when coupled with self-imposed order and restraint.  Without moral common ground and shared values that stress self-control, liberty rapidly turns to libertinism.  Libertinism without a great deal of wealth leads to shattered lives, which in turn wreck families and communities.

Eventually, unbridled, unchecked lasciviousness–even among (formerly) responsible adults–results in social chaos, requiring a dwindling number of hardworking, honest, and thrifty individuals to pay for the ramifications of poor moral choices that have been magnified many times over.

“[L]ibertarianism… fails to acknowledge the need for strong moral values to uphold its own economic assumptions.  Liberty and self-government can only really work when coupled with self-imposed order and restraint.”

Capitalism’s blessing of unparalleled abundance is also a potential curse.  Without a strong civil society that stresses good moral values–and without proper historical perspective–it becomes easy to take that abundance for granted.

That abundance also allows, for a time, more and more individuals to pay for the price of bad decisions.  Prior to the modern era, few people were wealthy enough to risk the negative consequences of immorality.  Now, Americans and Westerners enjoy a level of material comfort and well-being that can absorb at least some of the unpleasantness of questionable choices.  Over time, however, that security breaks down.

Richard Weaver likened the situation to an alcoholic who is so addicted to his drink, he’s unable to do the work necessary to pay for his addiction.  The more he needs the alcohol, the less capable he becomes of obtaining it.  Likewise, the more individuals become addicted to luxuries, the less able they are to work hard to maintain them.

To avoid the fate of Weaver’s drunk, we must recognize the importance of social conservatism.  While we should maximize individual liberty as much as possible, and within the bounds of the Constitution, we should also stress the moral and religious underpinnings that make that liberty both possible and responsible.

TBT: Economics: A Human Science

The unofficial, unintentional theme of this week’s posts have been about economics in general (other than Tuesday’s SCOTUS piece)—the power of tax cuts, the potential upsides to tariffs, etc.  In that spirit, I thought for week’s post about diving back into a piece that reflects my gradually evolving thinking about economics.

The summer before my sophomore year of college, I read the second edition of Milton Friedman’s Capitalism and Freedom, a work that completely revolutionized how I thought about the world and economics.  Free-market principles became my lodestar, and colored my ideology for a decade.  Indeed, I still adhere to these principles when it comes to economic questions.

However, as I grew older and (hopefully) more experienced, I began to realize that neoliberal economic theory, while elegant, is not always hard-and-fast, and that there are many more wrinkles to economic issues than appear at first glance.  I don’t believe in overcomplicating things—again, cutting taxes tends to stimulate economic growth—but most issues contain a frisson of nuance that is easy to miss.

I’d long held to the idea that free trade is a largely unalloyed good, and that the short-term costs of lost jobs or reduced wages in some industries domestically would be made up for by increased efficiency of production and the rise of new, better industries.  Sure, there’d be some friction in the duration, but people will manage, and we can always throw some funds for reeducation their way.

While I think such disruption is inevitable, I don’t think we should embrace it so blindly that we forget about the people who find themselves out of work, or in a position that they can’t modify their skillsets to find a new job.  I live in the rural South, and there are hundreds of little towns that dried up once the mill the left, the railroad shut down, or the big family farms sold off.  Part of that story is the onward march of Time and economic progress—and the drama of human history.  But part of it is the story of globalist elites selling out Middle America.

This situation is not one merely of tariffs, taxes, and the like, but also of a radical ideology that would see national borders dissolved and massive immigration—even illegal immigration—encouraged.  I am libertarian on many issues, but the pitfall of modern economic libertarianism—and there are many—is that it only conceives of issues in terms of economic efficiency (and, if you get right down to it, it’s inverted Marxism, to the extent that, for Marxists, everything is about economics—or, more properly, materialism).  And, yes, generally greater efficiency means greater quality of life, but economics is not always the clean, elegant science that its proponents claim it to be.

To that end, I argue that economics, properly considered, should be considered part of the humanities, as it deals in a direct, visceral way with the people’s lives.

I don’t know the precise balancing act, or what should be achieved.  I highly recommend reading Patrick J. Buchanan’s The Death of the West for a more complete treatment of how to revive wages for workers while maintaining a high degree of quality and efficiency.  I don’t agree with all of Buchanan’s proposals, which are heavily influenced by Catholic social teachings, but there is an appeal to the idea that, if the government is going to interfere in the economy (and it is, and does), then it should be in favor of workers and families, not at their expense.

Finally, I wrote this essay in the context of the Brexit vote—which I intend to write an eBook on soon—and the arguments I was hearing about the economic catastrophe Brexit would be (that hasn’t been the case yet).  I argued, essentially, that the liberty and national sovereignty are more important than sweet European Union bennies and transfer-of-wealth payments.  The EU is a despicable organization as it currently operates, and as a lover of liberty, I’m thrilled to see nationalist-populist movements rising in major European countries.  I don’t agree with all of these groups or their policies (many of which are socialistic in nature), but the impulse towards greater national sovereignty is, in general, a healthy one in our age of excessive globalization and unelected supranational tyrants.

With that lengthy introduction, I give you 24 June 2016’s “Economics: A Human Science“:

If you’ve read my blog the past couple of weeks, you know that I am strongly in favor of Brexit, or Great Britain voting to “Leave” the European Union.  I’ve laid out my reasons here and here.  As I write this post, results are trickling in on that historic vote, and I am intermittently checking them with great interest–and not a small bit of trepidation.  Right now (about 10:30 PM EST/-5 GMT), “Leave” has a slight edge, but the outcome is too close to call.

Already, though, the British pound and the euro have taken a beating in value, as gold prices soar (this blog is conservative in viewpoint, so I probably should start urging you to buy gold, guns, and freeze-dried food reserves; sourcehttp://www.bloomberg.com/news/articles/2016-06-23/pound-surge-builds-as-polls-show-u-k-to-remain-in-eu-yen-slips).  One of the major bogeymen of the “Remain” side in the referendum was the threat of economic downturn.  As I conceded in both of my previous posts on Brexit, there will no doubt be major economic disruption should Britain vote to “Leave.”  However, a (likely temporary) drop in the value of the pound sterling is a price well paid for restored national sovereignty.

God Save the Queen… and Great Britain from the clutches of Eurozone bureaucrats

As conservatives, we’re accustomed to viewing economics–or, at least, economic growth–as a positive good.  After all, we believe in the power of free markets to satisfy human needs and desires, and to innovate new ideas and products that alleviate human suffering, drudgery, and toil.  Conservative politicians tend to focus on job growth and prudent deregulation–often coupled with tax and spending cuts–as perennial, bread-and-butter issues that directly affect voters’ pocketbooks for the better.

 “…these [fiscal] policies are not about making gobs of cash… but about what those gobs can do to improve lives.”

But economics, like much else, is not a means unto itself.  The reason conservatives like economic growth–besides, well, making money–is that it demonstrably improves people’s lives.  Deregulation, similarly, can work beneficially (if you doubt me, just ask anyone who has ever dealt with the Affordable Care Act and the Department of Health and Human Services).  In essence, these policies are not about making gobs of cash–although that is certainly nice–but about what those gobs can do to improve lives.

Thus, we have a stark contrast between the organic, healthy, occasionally unpredictable economic growth of a free market and the regimented, inequitable, limited economic growth of progressive corporatism.  Our current economic environment, I fear, is far closer to the latter than the former.  Complex, heavy regulations benefit larger firms and discourage the formation of smaller, newer firms by raising the upfront costs of entry.  Perverse incentives raise the costs of healthcare for young, fit Americans, while making it unrealistically cheaper for older, sicker, chubbier patients.  Overly-generous social safety benefits (some of which, like the food stamp program SNAP, the government actively advertises and encourages people to use) discourage able-bodied Americans from pursuing work.

I could go on (and on… and on).  In short, conservatives are used to being correct on principle and on economic outcomes.  Typically, conservative fiscal policies align with, rather than try to manipulate, economic realities, so the outcomes of those policies tend to be both principled and positive.

“As fiscal conservatives… let us never lose sight of the human side of economics.”

In the case of Brexit, however, the quest for restored sovereignty–a stand on an important first principle–will result in some negative economic outcomes.  A major argument of the “Remain” side is that staying in the European Union will preserve Britain’s economic stability and ensure it a place in a European common market.

Such an argument is seductive, but it leads to a gilded cage.  Nobel Prize-winning economist Milton Friedman famously said that economic freedom is a necessary precursor to, though not a guarantor of, political freedom.  With Brexit, the axiom is almost reversed–by reclaiming its political freedom, Britain will then be able to pursue renewed economic freedom.

As fiscal conservatives–or those that support free markets, freer trade, and light regulations–let us never lose sight of the human side of economics.  We too often treat economics as a science.  Instead, it should find a home alongside the humanities.

Our chief aim should be to unleash human potential.  So liberated, its creativity and ingenuity can lift human life to greater heights.

We already have a model:  we’ve been doing it in the United States for over 200 years.