Why the Left Needs Its Own Tea Party

Glenn Reynolds doesn’t come out and say it, but in his “The Tea Party Dominance Was Inevitable” editorial he skirts the idea, so I will just say it: The American left needs its own Tea Party movement. Ordinary Americans with leftist values need to launch an insurgency against the Democratic establishment just as the Tea Party has launched one against the Republican establishment.

The Founders well knew that the primary political dynamic in any free society was never faction against faction but the people versus the state. We have forgotten this essential insight at the heart of American governance. Distracted by the struggle of left versus right, we have let a political class form that serves no faction but itself. It is The Combine.

The Combine is the primary enemy of all Americans, left, right or orthogonal. Ordinary Americans with leftist values have a duty to fight against The Combine for what they believe is right.

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Sweden – the newest Red State

America, even with Republicans in the House and possibly Senate, runs the risk of becoming the model sclerotic empire, wasting away while other states move toward more freedom. Canada and Sweden, nations we conservatives and libertarians used to scoff at as silly, are starting to beat the US on measures of freedom and competitiveness.
Sweden is one country to watch. First, it does socialism about as well as any state could. (of course, this is easier when your nation is small, homogeneous, and free of the burdens of world leadership). Next, unlike the US, Sweden is moving in the right direction, toward that conservative (in the true meaning of the word) ideal of a 3rd way, where the welfare state, to the extent it exists, is individualized.

Sweden’s Quiet Revolution
Without much fanfare, the Scandinavian country has been moving away from socialism.

There is something about Sweden that provokes a mix of envy, horror, and bewilderment among American observers. Liberals have traditionally celebrated its cradle-to-grave safety net, while conservatives have disparaged its high taxes and centralized health-care regime. Yet both groups have generally agreed that Swedish-style socialism is a far cry from rough-and-tumble U.S. capitalism.

In fact, contemporary Sweden is much less socialist than many Americans realize. Since the early 1990s, when it suffered a painful financial crisis, the Scandinavian country has deregulated key industries (such as airlines, telecommunications, and electricity), lowered its overall tax burden, established universal school vouchers, partially privatized its pension system, abolished certain government monopolies, sold a number of state-owned enterprises (including the parent company of Absolut vodka), and trimmed public spending. Several years ago, it eliminated gift and inheritance taxes. The World Economic Forum now ranks Sweden as the second-most competitive economy on earth, behind only Switzerland. According to the 2010 Index of Economic Freedom (compiled by the Wall Street Journal and the Heritage Foundation), Sweden offers greater business freedom, trade freedom, monetary freedom, investment freedom, financial freedom, freedom from corruption, and property-rights protection than does the United States.

Bolstered by prudent economic stewardship and a relatively conservative financial sector, Sweden entered the global recession on a sound footing. While it endured a nasty spike in unemployment, its export-driven recovery has been so vigorous that the central bank is now concerned about inflation risks. In the second quarter of 2010, Sweden posted a 4.6 percent annual growth rate, prompting the Wall Street Journal to hail it as “the biggest success story in post-recession Europe.” It currently has the lowest deficit-to-GDP ratio in the entire European Union. Before the election, Swedish finance minister Anders Borg announced plans to privatize another $14 billion worth of state assets. “If we get a surplus in place,” Reinfeldt told a Reuters interviewer, “we will deliver on tax cuts for 6.1 million workers and pensioners.” (The total Swedish population is roughly 9.4 million.)

To be sure, Sweden won’t look like Hong Kong or Singapore anytime soon. It still has a lavish welfare state, and its aggregate tax burden is still quite heavy. The top marginal income-tax rate is 57 percent in Sweden, compared with 35 percent (for now) in America. On the other hand, a 2008 OECD study found that household taxes are substantially more progressive in the U.S. than they are in Sweden, even after we control for America’s higher level of income inequality. Sweden has a much lower average statutory corporate-tax rate than the U.S., and also a much lower effective corporate-tax rate on new capital investments (according to University of Calgary economists Duanjie Chen and Jack Mintz). Its tax structure is made even more regressive by a 25 percent value-added tax on consumption of most goods and services.

Which brings us to a common misconception about the Swedish system — that it takes from the rich and gives to the poor. Actually, says Lund University economist Andreas Bergh, “the majority of the taxes you pay are given back to you during your life cycle.” Thus, “if you pay more when you work, you will also get more when you retire.” Even upper-class Swedes enjoy bountiful government largesse.

Another popular myth would have us believe that Sweden’s wealth was somehow created or facilitated by social democracy. In reality, “Sweden’s prosperity is the result of well-functioning capitalist institutions,” says Bergh, author of the new Swedish-language book The Capitalist Welfare State. As Cato Institute scholar Johan Norberg explained in a 2006 National Interest essay, the relative “success” of the country’s social-democratic model “was built on the legacy of an earlier model: the period of economic growth and development preceding the adoption of the socialist system.”

The Limits of Radicalism and Expertise

Rick cites a remark by Senator Christopher Dodd about the financial regulation bill: “No one will know until this is actually in place how it works.” My observation is that Dodd’s remark was actually true, and would have been true to a substantial extent even if the bill had been properly read, debated, and analyzed. A more perceptive man than Dodd might have seen this as a reason to avoid making such overwhelming changes all in one fell swoop.

Several years ago, I posted about the failure of the FAA/IBM project for a new air traffic control system. The new system was known as the Advanced Automation System and was intended to be “as radical a departure from well-worn mores and customs as the overflow of the czars,” in the words of a participant. Another participant described the radical ambitiousness of the project as follows:

“You’re living in a modest house and you notice the refrigerator deteriorating. The ice sometimes melts, and the door isn’t flush, and the repairman comes out, it seems, once a month. Then you notice it’s bulky and doesn’t save energy, and you’ve seen those new ones at Sears. The first thing you do is look into some land a couple of states over, combined with several other houses of similar personality. Then you get I M Pei and some of the other great architects and hold a design run-off…”

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Why the Left Manipulates with a Clear Conscience

Victor Davis Hanson[h/t Instapundit] asks:

In other words, why cannot liberal defenders of Obama simply say, “Government, much more wisely than a selfish private sector, can ensure a vibrant economy. When people are assured of comprehensive government entitlements they use that security as a base for renewed work and investment. Deficits create consumer demands, spread money around to those who need it most, and spur economic prosperity. And when business provides society with over half its profits in income, payroll, and assorted state and local taxes, the resulting redistributive change and spread-the-wealth equality ensure aggregate economic growth”?

Part of the problem is that leftists can’t actually back up the general claim that government makes better economic decisions than the people do acting as individuals. After the collapse of the Great Lakes states, once the industrial heartland of not only America but the free world, they can’t plausibly claim that spreading the same policies to the rest of the country will make everything better. The same is true in regard to the current plight of California and other similar deep blue areas.

However, the real problem is simply that, as elitists, leftists don’t believe they have any obligation to respect the opinions or experiences of any non-elites.

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Why Leftists Are Elitist

Non-leftists spend a lot of time these days telling leftists that the leftists are “elitist.” Leftists usually respond with something like this:

But somehow these born-into-wealth aristocrats get away with calling people who advocate for, say a living wage, or universal health care, or decent public education “elites.”

Translation: We leftists are not elitist because we do things for the economically non-rich that we leftists believe to be in the best interest of the non-rich. Elitists only do things that leftists believe to be in the interest of the rich.

By the leftist definition of elitism, we could live in an absolutist, hereditary aristocracy and still not have an elitist government as long as the aristocrats made decisions that, in the opinion of leftists, benefited the poor.

The leftists are wrong. Elitism isn’t defined by who benefits, elitism is defined by who decides.

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