THE GLOBAL FINANCIAL
DEATH SPIRAL?
PART 7
By
Kristie Pelletier and Michael S. Coffman, Ph.D
October 22, 2013
NewsWithViews.com
Part VII—The Root of What’s Wrong – Progressivism
There is a “contagion” of thought—almost hypnotic—whereby the contagion is so strong “that an individual readily sacrifices his personal interest to the collective interest” to the point where the person “is no longer himself, but has become an automaton who has ceased to be guided by his will.” They exhibit “impulsiveness, irritability, incapacity to reason, the absence of judgment and of the critical spirit [critical thinking], the exaggeration of the sentiments [emotions]…” “They most often have only a very distant relation with the observed fact.” — Psychiatrist Gustave Le Bon; The Group, 1895.
Conservative analysts have known since early in Obama’s first term his progressive Keynesian policy was not working and would not end well for America. However, most Americans were so enamored with the president’s apparent mesmerizing charisma, slick Washington-speak and blame-shifting to President Bush or Republicans, that they never saw through Obama’s glaring duplicity. Incredibly, most Americans happily reelected the one person most responsible for systematically destroying the U.S. economy; and their lives.
That’s beginning to change, as a Gallup poll found a major slide in Obama’s economic approval rating from 42 percent in June, 2013 to 35 percent in August. Sixty-two percent strongly disapproved. Although not quite as bad, a similar drop in approval occurred for his tax and budget deficit approval. That is encouraging, but the raw facts should put his approval rating down near the bottom. The reason why Obama’s poll numbers remain high, however, is because Americans have been educated not to respond to facts, but to emotion. Obama is handsome and he emits a seemingly caring attitude. Although very few jobs have been created, he wants to create more jobs. Emotion is at the heart of progressive ideology. Facts and reality are irrelevant.
Progressivism
As explained in the book Plundered, How Progressive Ideology is Destroying America, progressive ideology controls much of our political, economic, judicial, educational and media institutions. America’s public education system churns out liberals with progressive dogma so deeply ingrained that most of the younger-than-50 crowd is imprinted with progressive ideology that forms their world view. Although liberals are not true progressives, they are programmed to think like progressives and literally can’t understand why progressivism is so dangerous.
The Social Contract, written by Jean Jacques Rousseau in 1762, provides the basis for modern day progressivism, socialism, fascism and even communism. President Obama actually referred to Rousseau’s social contract (he called it the social compact) in describing his vision for America during the week of March 14, 2011:
This vision is less about reducing the deficit than it is about changing the basic social compact in America. And I don't think there is anything courageous about asking for sacrifice from those who can least afford it and don't have any clout on Capitol Hill. That's not a vision of the America I know.
The murderous French Revolution, fascism and communism can all be traced back to Rousseau. Europe was under attack by Rousseau-bred socialists in the late 1800s when a French psychiatrist by the name Gustave Le Bon described their highly dysfunctional ideology in his 1895 book The Crowd; A Study of the Popular Mind.
Le Bon found that the ideas and “opinions” of those we now call progressives “take one and the same direction, and their conscious personality vanishes. A collective mind is formed.” (p 13) Le Bon notes that there is a sense “of invincible power” to do things one would never do alone. There is also a “contagion” of thought—almost hypnotic—whereby “an individual readily sacrifices his personal interest to the collective interest.” The person “is no longer himself, but has become an automaton who has ceased to be guided by his will.” (p 18-19) A simplistic idea or thought unjustified by reality, yet introduced to progressives by its leaders will spread like wildfire. Finally, there is an immediate acceptance of an idea or action to commit “acts in utter contradiction with his character and habits,” not unlike a “hypnotic” state. (p 17)
These characteristics, while disturbing, are not Le Bon’s primary concern. What concerned him the most was that they exhibit “impulsiveness, irritability, incapacity to reason, the absence of judgment and of [critical thinking], the exaggeration of the sentiments [emotions]…” (p 20) Therefore, “they most often have only a very distant relation with the observed fact.” (p 24) Their “imagination…is very powerful, very active and very susceptible of being”strongly manipulated. “The images evoked in their mind by a personage, an event, an accident, are almost as lifelike [to them] as the reality.” In other words, what they imagine or think in their minds is reality to them. (p 40)That explains why they “exaggerate, affirm, resort to repetitions, and never attempt to prove anything by reasoning.” Yet, it is usually based in emotions, likes and dislikes, not reality. That is why, for instance, they ignore overwhelming evidence that green energy doesn’t work and is failing disastrously in Europe.
As today, the socialists in Le Bon’s day were angry and often violent, leading him to say, “Without the restraining presence of the representatives of authority the contradictor [the one that disagrees with the socialist mob], indeed, would often be done to death.” (Emphasis added, p 31) History shows that the socialist ideology eventually prevailed in Europe – creating a false belief in big government, twisted reality and in some cases, brute force. In the case of fascism and communism, it evolved into socialist tyranny. People are subjects of the government, rather than the government subject to the people.
Progressivism in America
True progressives likely make up less than ten percent of the population, but they are in powerful positions. The control the curriculum in public education, the federal and most political bodies, most major media and a high percentage of federal and state judgeships. Most Americans under the age of 50 today were publically educated with curricula increasingly corrupted by socialist/progressive ideology. Therefore, their world view (their understanding of reality) is heavily influenced by socialist/progressive ideology. However, unlike true progressives, most Americans have the ability to reason and can eventually see the deficiencies and inconsistencies of socialism/progressivism. Generally, for the purpose of this discussion, these individuals are called liberals.
According to modern day psychiatrist Dr. Lyle Rossiter, true progressives cannot see their deficiencies except under extreme conditions. With 40 years of experience Rossiter warned in his book The Liberal Mind, The Psychological Causes of Political Madness: “…under careful scrutiny, [progressive] liberalism’s distortions of the normal ability to reason can only be understood as a product of psychopathology… The modern [progressive] mind, its distorted perceptions and its destructive agenda are the product of disturbed personalities…” His book details the same psychotic observations outlined by Gustave Le Bon in 1895. Nothing has changed in over 100 years.
John Hawkins, a frequent columnist for numerous media outlets, has identified twelve unspoken rules of progressives which are well worth reading. They center on their utter belief that progressive ideas and solutions are absolutely correct, and that big government – under their absolute control – can solve any problem. They also believe their failure is always someone else’s fault. Profit and success in the marketplace (i.e. capitalism) is evil and that personal failure is an example of victimization by white racism or the rich – not bad decisions. To progressives, progressivism itself is the goal, not whether what it achieves is good or bad. Progressivism itself is the measuring rod for all truth, rather than what it produces. Anyone or any fact that disagrees with progressive ideology is evil and therefore must be demonized or destroyed. Lest you think that this is an exaggeration, Rossiter warns that “Progressivism is in fact a form of madness.”
Americans who were around in the 1970s and 80s probably remember a common saying was “if it ‘feels’ right, do it!” That’s progressive thinking and we are reaping the consequences today. No doubt many of their “feel right” ideas like welfare, income redistribution, social justice and more are all based in noble intent. However, they are all rooted in three underlying false beliefs: 1) given the chance, every person will do the right thing; 2) there is no such thing as sin or God; and 3) that government can fix every problem.
Progressives apparently don’t believe in the existence of human nature(or sin nature) because they deny the existence of God. Human nature is real, however. Given the opportunity, most people usually don’t do the right thing. Some people will knowingly take advantage of others. There is such a thing as sin. Although sin often feels good, and may be desirable to the person doing it, the long-term consequences to the individual or society are negative – even catastrophic. God has laid down principles of right and wrong, and violation of what is right is sin and carries with it unintended consequences. Finally, government simply cannot solve every problem. Every solution of government creates additional problems. Government is made up of imperfect people with imperfect and very limited knowledge .These will be addressed in a future article.
The classic example of these false foundational beliefs resulting in disaster is the government welfare system. President Johnson’s War on Poverty has not resulted in getting people out of poverty. There is a higher percentage of people facing poverty today than at any time since the 1960s. Instead, it has created a class of citizens totally dependent on the federal government for their day to day lives. The more the government tries to help the poor, the worse off the poor become. That has proven to be especially true for many in the black community.
This disintegration of the family has become an unparalleled crisis nationwide and has decimated black families. Black children are often taught by progressives to believe they are perpetually victims of racism and class warfare. This belief provides fertile ground for hatred and an entitlement mentality. To these children, the belief they are victims is a fact. But is it?
Although there will always be racism, a Gallup Poll just after Obama was elected president showed that 70 percent of all Americans (including blacks) believed race relations were improving. Two years later another Gallup Poll revealed that hope was being shattered: Only 48 percent of blacks and 32 percent of whites said relations had positively progressed. Is this enormous drop because there has been a huge jump in actual racism, or have this president and his progressive supporters, especially in the media, exploited blacks and the poor with race baiting and class warfare? Solid evidence suggests exploitation.
The fatherless birth rate for blacks has skyrocketed from about 24 percent prior to Johnson’s War on Poverty in the 1960s to 73 percent today. It has destroyed the family unit with devastating consequences. Although blacks make up only 13 percent of the U.S. population, the FBI reports that blacks were arrested for 49 percent of the homicides in 2012, 32 percent of the rapes, 34 percent of aggravated assault and 55 percent of all arrests for robbery. Even assuming there are more blacks wrongfully arrested than whites, the statistics would still show crime rates largely skewed towards blacks. What cannot be contested is the fact that nearly half of all murder victims are black – over three times the percentage found in the general population.
In the final analysis, the focus on racism against blacks is a waste of energy. The fact is, 93% of murder victims in black communities are murdered by other blacks. Racism isn’t causing this. It’s the result of a destructive culture entirely created by noble, but horribly misguided government social welfare programs – brought to us by, guess who, progressives. The answer is not more government programs. Those communities need to focus inward. Their hope lies with the God who made them and with getting out of the government created and maintained, poverty ridden, crime infested neighborhoods they have accepted for generations now.
Progressives, while proposing ineffectual solutions, can’t look to God, because they have rejected the idea that God even exists. Therefore, their solutions usually end in disaster because they absolutely do not believe every person has a sin nature (human nature); including themselves. They insist that they don’t have a sin nature, so their own ideas become their god. Yet progressives, socialists and communists have created an unbelievable social and economic mess. This reveals the truth in Psalms 14:1-2: “The fool says in his heart, ‘There is no God.’They are corrupt, their deeds are vile; there is no one who does good,” and Proverb (14:12): “There is a way that seems right to a man, but its end is the way of death.” Tragically, we are perhaps mere months away from an economic collapse thereby proving these proclamations of God.
Progressive Keynesian Economics
The same progressive disconnect from reality is found in every area, including economics. To understand Keynesian economics, it is critical to understand that John Maynard Keynes was a socialist bordering on Marxist to the core. Keynes himself denied this, as do socialists and progressives today, but his dependence on big government to control the economy of nations is a dead giveaway.
Government control of the economy forms Keynes’ foundation for Keynesian economics. The “small government” economic miracles of President Harding, Coolidge and Regan are either disregarded or denounced. Keynesian economists always strive for bigger and bigger government so that progressive economists can fix what is wrong. They are certain they can bring about the utopia that they have lusted after for over 100 years. It is always the evil capitalists that keep them from succeeding. Of course, the fact that they get rich themselves along the way while exploiting others is acceptable. After all, while born into a more modest economic state, President Obama is now a multimillionaire.
There is another major obstacle that is always getting in progressives’ way to creating their utopian world. Progressive ideology is diametrically opposed to the intent of the U.S. Constitution. There is no way progressives can succeed without destroying the U.S. Constitution. That is why progressives claim that the constitution is outdated and was written for a horse and buggy society. Therefore, they believe it should be a “living” document that changes as societal needs change.
However, the Founding Fathers had firsthand knowledge of the failings of centralized government. Therefore, while the constitution outlines how the government should be structured, the foundation upon which it rests is to provide checks and balances to prevent the government from becoming too big with too much power. They knew an unconstrained government would not only destroy liberty, but in the process destroy the economy and middle class – just like what is happening now.
Because society is dumbed down by progressive education, few people today recognize the destructive forces dividing and tearing America apart. The public gives Congress very low approval ratings because they can never get anything done. It doesn’t occur to the average American the reason nothing gets done is because the progressives are trying to take total control of the government through socialist legislation, while more traditional legislators are trying to stop them and preserve our liberties and save our economy.
Add to that battle an increasing percentage of citizens who are trapped by an entitlement mentality, and you have an electorate who vote for more and more socialist benefits even while those expensive benefits are destroying the foundation of our economy. Government is rapidly becomes America’s “god” and the people eschew any politician who threatens their entitlements. Consequently, the size and cost of government has exploded in the past 30 to 40 years, especially during the Obama administration. Keynesian economics is playing a large role in the destruction.
Progressive/Keynesian Regulations
It seems that no regulation is too severe or goes too far for a progressive. On November 15, 2011, Senate Majority Leader Harry Reid, a progressive, proclaimed on the U.S. Senate Floor:
Republicans would have you believe that the common-sense rules that check the greed of Wall Street banks, keep huge corporations honest and stop Big Oil’s unnecessary risk taking are also causing small businesses great harm. Indeed, that would be a terrible thing – that is, if it were true... My Republican friends have yet to produce a single shred of evidence that the regulations they hate so much do the broad economic harms they claim. That’s because there is none. (Italics added)
Pause for a moment and catch your breath. Reid claims there is not a single shred of evidence regulations do economic harm. That’s a profoundly absurd statement. Hundreds of detailed studies have been conducted showing hard evidence that feel-good,progressive regulations that do not fulfill their stated purpose cause serious damage to our economy.
For example, it is estimated by the House Committee on Ways and Means that the implementation of Obamacare alone will require 80 million man-hours per year! At $25 per hour, that’s $2 billion in one year. Don’t think this will create a lot of new jobs. Although Obamacare will add some government jobs (that produce nothing), it shifts employees in the private sector from productive activities to totally unproductive activities. Obamacare is already an enormous net drag to the health of the economy.
Another study done by the highly respected, non-partisan American Legislative Exchange Council (ALEC) analyzed the EPA’s new rules to prevent CO2 emissions. Called the Boiler and Utility MACT Rules, Mercury and Air Toxic's Standards, Cross-State Air Pollution Rule and others, ALEC found that Boiler MACT alone will shut down 753 coal-fired electricity-generating plants with a concurrent potential loss of 827,000 jobs and up to 272 gigawatts of electricity. The U.S. produced a total of 1137.3 gigawatts in 2010. This would cost the U.S. economy up to $33.4 billion annually.
According to ALEC’s analyses, an additional 7.3 million jobs will be threatened by 2020. These will “lead to significant increases in energy costs, with increases of 50 percent for gasoline and residential electricity prices, 75 percent for industrial electricity prices and residential natural gas prices, and 600 percent for electric utility coal prices. These costs come with little to no environmental benefit,” says the report. This, of course, is exactly what has already happened in Europe as explained in Part V of the Financial Death Spiral series.
An August 30, 2001 study at George Mason University’s Mercatus Center showed that the Code of Federal Regulations, where all rules and regulations are detailed, ballooned from 71,224 pages in 1975 to 174,545 pages last year. Businesses have to employ experts to keep up with these additions and changes, and then employ more to figure out how to implement them. That’s another huge drag on the economy. True, some of those regulations can increase competitiveness and improve safety, but the overwhelming majority of new regulations are dreamed up by bureaucrats with no real-world practical experience, which add huge costs for very little gain.
The Competitive Enterprise Institute (CEI), a respected conservative think tank, stated on August 1, 2013: “Growing red tape from Washington is stifling U.S. economic growth and innovation, and the total compliance cost has reached $1.806 trillion [12% of GDP]... So why is the U.S. Senate concocting a bizarre notion of ‘regulatory paralysis’ –[claiming] agencies aren't issuing rules fast enough–in a committee hearing today?” Not issuing rules fast enough!? The economy is being strangled by the flood of new regulations.
Reason magazine reports a stunning study in the Journal of Economic Growth that: "The growth of [mostly unneeded] federal regulations over the past six decades has cut U.S. economic growth by an average of 2 percentage points per year” resulting in a GDP of “$16 trillion instead of $54 trillion” that the U.S. should have today. Even if this number is overestimated, the lower limits "would have yielded a total GDP in 2013 of around $31 trillion…about double the size of our current GDP.” Put another way, without these unneeded regulations we would not have the $17 trillion National Debt, or the $125 trillion unfunded liability of our entitlement programs that threaten to bankrupt the U.S. economy today.
Wayne Crews, vice president for policy and director of technology studies at the CEI and author of CEI's Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, which documents regulatory costs, stated “The Obama administration is using the EPA to circumvent Congress and push massive regulations that will lead to higher energy prices and slow business growth and job creation.” The EPA is indeed, at Obama’s direction, gearing up to launch the biggest assault on the U.S. economy in history by circumventing Congress and creating a title wave of new regulations, allegedly to reduce carbon emissions in a vain effort to stop global warming.
The insane Obama climate change agenda was amplified by progressive Gina McCarthy on July 30, 2013, just a week after she was confirmed by the Senate as the new head of EPA. While giving a speech to the Harvard Law School, McCarthy said contemptuously, “Can we stop talking about environmental regulations killing jobs, please! We need to embrace cutting-edge technology as a way to spark business innovation.” She was referring to the green energy push undertaken by Obama. No one capable of reason can look at all the facts and say that the cutting-edge green technology McCarthy refers to would spark business innovation and a healthy economy. She is basing her statement on the absolute, ideologically driven belief that mankind is causing global warming, even though there is no empirical scientific evidence for that belief – none.
While ludicrous in itself, McCarthy’s comment showed she was as much disconnected from reality as Senate Majority Leader Harry Reid in his claim that regulations don’t harm the economy. Although there are hundreds of examples of this disconnect, there is a huge one that is center-stage in America today – Obamacare.
Obamacare
Volumes have been written about the fatal flaws of Obamacare. That discussion will only be summarized here. Suffice it to say that critics have said from the start it cannot work. Even Senator Max Baucus (D-MT), one of the principle architects of Obamacare has called it a “huge train wreck coming down.” Why? The simplest reason is that it is a mammoth 2,500 page law that no one read based on Keynesian/progressive ideology. That translates into over 15,000 pages of indecipherable regulations. Never let it be said that progressive legislation is simple and straight forward! Sixty percent of the American people strongly opposed its passage, but it was rammed through by liberal progressives because they “knew they were absolutely right” and their critics were wrong.
The liberal progressives exhibited nearly every one of Gustave Le Bon’s description of 19th century socialists discussed above; from their sense of “invincible power,” to being single minded “automatons,” to having “only a very distant relation with the observed fact,” to “exaggeration” and “repetitious,” to angrily attacking and vilifying all opposition. They also followed the formula outlined by Saul Alinsky in his 1971 Rules for Radicals that has become a bible for progressives, especially for Barack Obama and Hillary Clinton. Although beyond the scope of this discussion, many people would not be surprised that Alinsky dedicated Rules to Lucifer – the father of discord and rebellion. Obama has said that Rules was the most important book that heavily influenced his thinking.
One of the key instructions in Rules is “in war the ends justifies almost any means.” The idea that progressives are at “war” with the rest of society is common in progressive literature. To them, the belief they are at war justifies lying of almost any type. Although lying has always been a staple of politics, progressive liberals take it to stratospheric heights. Lyng and disinformation seem to dominate everything they say, especially with Obamacare. Almost all the promises made during the attempt to pass the legislation have proven false; from the promised reduction in medical costs of $150 to $200 billion, to the promise you would be able to keep your own insurance and doctor, to not harming Medicare. Rather than lowering medical costs, the OMB conservatively estimates it will increase costs by $1.76 trillion over ten years, Plus, many, many more lies.
These broken promises weren’t mistakes either. They were deliberately designed to deceive a dumbed-down American people. As progressives always do, they loaded benefits during the first couple of years of the law, while the true costs wouldn’t hit taxpayers or be included in OMB analyses until long after the law was passed. Independent analysis after analysis made before Obamacare was even passed showed that the progressive liberals were lying through their teeth. They were apparently willing to do anything to gain control over 17 percent of the economy.
Another favorite part of progressive strategy comes from Rule 8 of Rules for Radicals: “Keep the pressure on. Never let up.” Keep trying new things to keep the opposition off balance. As the opposition masters one approach, hit them from the flank with something new. (Attack, attack, attack from all sides, never giving the reeling organization a chance to rest, regroup, recover and re-strategize.) This is exactly how the progressive Democrats got Obamacare passed.
Now that Obamacare is about to be implemented, hundreds of “favored” businesses like McDonalds have been given waivers. Obama also allowed members of Congress and their staff to continue getting their generous insurance subsidies – something only big companies had been doing, but are now forced to cut back. Even more amazing, IRS employees – the agency that will oversee Obamacare – petitioned and got an exemption from the very program they oversee. In fact, 93 percent of all federal employees don’t want to be on Obamacare. It must be fun to pass laws that hurt others, while exempting yourself from the pain. That is the very definition of an utterly corrupt government.
As people find out how much their insurance premiums are going up they go into sticker shock. A few states have seen premiums go down, but most have seen them increase 20 to 60 percent or more. Small businesses are not hiring, or hiring less than the 50 people minimum whereby Obamacare kicks in. Seventy percent of all new hires are part time. Many companies are dropping medical coverage entirely for their workers. Companies like UPS are dropping spouses of employees from their medical plans. Delta airlines has determined that Obamacare will cost their company alone an additional $100 million. And President Obama promised Obamacare would be cost neutral to companies.
The number one concern of 50 percent of small businesses is Obamacare, closely followed by over-regulation. That’s critically important because small businesses provide some 70 percent of all jobs. Over two-thirds of small businesses are not prepared for Obamacare. It got so bad that president Obama just pushed the implementation of the employer mandate part of Obama back by a year – something he had no legal authority to do.
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An April 2013 Chamber of Commerce poll showed that 77 percent of all small businesses say that Obamacare will force them to cut back on coverage for their employees and makes it harder to hire new employees. By mid-August, a Gallup poll showed more than 40 percent of small businesses have frozen hiring, specifically because of Obamacare. As is typical for progressives, Obama denies this hard reality – essentially calling these small businessmen and women liars. Even big unions, who pushed hard for the legislation, now believe it is bad and wants an exemption. The negatives go on and on.
The Obama administration claims they are focused on creating jobs while punishing business – exactly the opposite of what is necessary to actually create millions of jobs. Can President Obama and progressive liberals be such ideologues that they literally are blind to what they are doing, or are they deliberately trying to destroy the U.S. Does it matter? They must be voted out of office.
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