Thursday

May 25th, 2017

Insight

The Embrace of Socialism --- Despite Its Track Record

Larry Elder

By Larry Elder

Published June 30 2016

The Closing of the American Mouth

One of life's enduring mysteries is why the left — against overwhelming evidence to the contrary — insists on more taxation, more government spending and more government control over the private sector. Europe's socialism has, over the last several decades, generated few private sector jobs and lags in growth when compared to the United States with its comparatively lighter hand of government.

What does it take to show that, good intentions aside, government bureaucrats cannot spend money as efficiently and as effectively as the people who produce the money? The most recent example is Venezuela. Hugo Chavez's handpicked successor now presides over a country with food lines and soaring inflation, all directly attributable to the pursuit of a socialist paradise where a benevolent and enlightened government redistributes wealth from the greedy few to the entitled many. It ... does ... not ... work.

Vin Scully, the Los Angeles Dodgers broadcasting legend now in his 67th and final year, recently offered the following assessment of socialism: "Socialism, failing to work as it always does, this time in Venezuela. You talk about giving everybody something free and all of a sudden there's no food to eat. And who do you think is the richest person in Venezuela? The daughter of Hugo Chavez — hello! Anyway, oh and two."

I recently received the following letters. Scully inspired the first, from the wife of a CPA.

"Given Vin Scully's analysis of socialism, I write to inform you that my husband, Dennis, has several Venezuelan clients. Dennis wrote to one and asked about the situation was down there. Here's the Venezuelan's reply."

It reads: "Dear Dennis: Thanks for your concern. Sadly, the news doesn't show the cruel reality that we are living. However, we (my family and my colleagues) are not surprised, we were expecting this. I have been storing food, first aid and necessity items since two years ago; we are buying medicines from abroad; I did install a power plant at my home.

"We avoid being outside the house anytime — the violence, the kidnaping, the crime, it's at any time, anywhere. I expect to send my oldest boy (17 years old) away, now that he is finishing high school. Like I said, reality always surpasses any precaution that we could have.

"As a lawyer, it is absolutely frustrating: there is not justice at all; the Supreme Court is a joke; the majority of the judges were congressmen from the government party and they don't have any shame to rule always in favor of the government. Sorry for this explosive note. But we feel like we are trapped here, that the world does not believe how serious this situation is.

"Even though I believe that each State must fight its own fights, this battle is unfair, because one side — today, the majority of the country — doesn't have any 'arms' to fight for; we don't have money; we don't have communication networks or press; we don't have support or protection for the public forces; and we are not allowed to use the democratic ways, like protest or revoke action. So it seems there is no peaceful way out. But, yes, I'm well and safe, hoping that we could save the country and recover our democracy."

The second letter was from a tax attorney, who wrote about the real-world effect of Hillary Clinton's plans — echoing Hugo Chavez — to raise taxes on the grounds that "the rich don't pay their fair share" and to give the money to those she deems deserving. He writes this is what happens:

"As a tax lawyer, I can tell you right now that any new revenue expectations the liberals have from raising taxes will be overstated or nonexistent. Here's why: Savvy taxpayers react to tax law changes, and thereby dampen the effects of those changes. I'm a perfect example: If Hillary raises ordinary income and capital gains tax rates for those of us in the 1 percent, I'm moving more of my money into double-exempt, tax-free municipal bonds and out of dividend-paying stocks. Others may increase their use of pension plans and IRA's to defer income taxes.

"Unfortunately, this concept of unintended consequences is lost with Hillary's constituents. Naturally, this is why, when capital gains taxes are lowered and/or ordinary income tax rates are lowered, revenue increases — folks like me will tend to move investments out of municipal bonds and back into dividend-paying (or even non-dividend) stocks, and lower capital gains rates may also make others more likely to sell appreciated assets, thereby accelerating revenue."

Full-blown socialism, as in Venezuela, or income redistributionism, as in America, is an assault on prosperity. The victims are those who can least fend for themselves, the very people the left purports to care the most about.

Vin Scully for president!

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Larry Elder is a best-selling author and radio talk-show host.

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