Almost all the traditions and institutions in which democratic moral genius has found its most characteristic expression, and which in turn have molded the national character and the whole moral climate of England and America , are those which the progress of collectivism and its inherently centralistic  tendencies are progressively destroying. – – -F.A. Hayek[i]

What has made the state a hell on earth has been precisely that man has tried to make it his heaven – Holderlin[ii]

Elizabeth Warren’s Progressive Planks

Elizabeth Warren progressive planks are [iii] are recorded in the Wall Street Journal.  They call for an increase in government and many are socialist policies.   Her real difference with Bernie Sanders, a clearly declared socialist, is that her plan offers more details.  Her plan is to kill the Senate filibuster so that she can force these law changes through with a simple Senate majority.  Here is her plan –

  1. Wealth Tax – Tax net worth over $50 million at 2 % / year.  $3.75 trillion over 10 years. This removes the incentive to build great companies such as Microsoft and Google.
  2. Medicare for All tax – Charge companies with at least 50 employees 98% of their recent medical outlays on health care.  8.8 trillion over 10 years.  
  3. Global corporate tax – Raise rate to 35%.  This is world-wide minimum.  $8.8 trillion over 10 years.  Investors will invest in other countries with less tax. 
  4. Corporate surtax – Tax profits over $100 million at 7% rate. $1.65 trillion over 10 years.   Companies will have an incentive to move overseas and out of this country.
  5. Slower Expensing – Extend depreciation rates from one year to “n” years.  $1.25 trillion over 10 years.  This put the steel industry out of business.  They were forced to depreciate plant at 40 years.  They could not invest to make themselves competitive.
  6. Finance taxes – tax sale of bonds, stocks.  $800 billion over 10 years. Investors will go to other markets to buy and sell such as Hong Kong  or London.
  7. Individual tax increases – reverse tax cuts for wealthy.   $1 trillion over 10 years. This is fundamentally unfair for American Citizens and dumb. They will go elsewhere.
  8. Social Security – Increase benefits by $2,400 / year. Raise them further for disadvantaged families.  Change SS tax from 12.4% on $132,000 to 14.8% on $250,000.   
  9. Lobbying Tax – Tax lobbying over $500,000 per year at 75%.  $10 billion over 10 years.
  10. Medicare for All – Phase out all private plans. Keep the growth spending below 4% per year. Pay doctors at Medicare rates and hospitals at 110% of that.   $20.5 trillion cost over 10 years.  There are not enough doctors or nurses today. This will create massive delays for services. 
  11. Green New Deal – Spend $3 trillion.  By 2030, hit 100% carbon neutral power. Retrofit 4% of houses and buildings every year.   This is a dream not a plan.
  12. An end of fossil fuels – Ban fracking. Halt new drilling on federal lands.  Prohibit future fossil fuel exports.  Kill the Keystone XL and the Dakota access pipeline.  Give working transitioning into a new industry a “guaranteed wage” and “promised pensions” and early retirement.   America is self- sufficient in energy today.  This would force us to import energy again.  Energy costs would rise.  Oil would be transported by truck rather than pipeline making accidents more likely.
  13. K-12 Education – Add $450 billion to Title I, $200 billion for students with disabilities and $100 billion for excellence grants and $50 billion for school upgrades.   End Fed funding for expansion of Charter Schools.   Charter schools are in demand since the government schools do not work.   This is negative for K-12 schooling and pro Unions.
  14. A “right to child care” – Build a federal network of local providers.  Give free care to millions of children whose income is less than $51,500 per family.  Destroys individualism and self reliance to make people dependent on government.
  15. “Free College” – Pay all tuition fees.  Increase Pell Grants by $100 billion and $50 billion for black schools.  Cost $610 billion.
  16. Student Debt Forgiveness –Write off $50,000 when income is less than $100,000. Phase out when income reaches $250,000.  Cost estimated  at $640 billion.  There are $2 trillion of student debt.   Cost is way understated.
  17. Housing – Spend $500 billion on affordable housing.  Have federal law eliminate state law on rent control.  Paid for by lowering death tax exemption from $22 million to $7 million.
  18. Unions – Overturn “right to work laws in 27 states”.   Guaranty unions for public employees. Give National Labor Relations Board more power by allowing imposing compensatory and punitive damages.  This empowers unions over what 27 states and their citizens want.
  19. Corporate governance – Make corporations over $1 billion get new charter and have them give workers 40% of board seats. Put CEOs under a criminal judgment standard. Companies will reincorporate outside of country.
  20. Industrial Policy – Manage the dollar to promote more exports.  This lowers the value of the dollar and reduces investment inflows.  Impose tariff on countries that do not align with U.S. carbon climate policies. This is negative for investment in this country.  A strong dollar encourages investment.
  21. Antitrust – Breakup Amazon, Facebook and Google.  Unwind their mergers with Whole Foods, Instagram and DoubleClick.  Regulate as a platform utility any online market with revenue of $25 billion.  Reverse agricultural consolidation.   Create a supply management program to “guarantee” farmers a price at their cost of production.   If it moves, politicians want to control it and tax it.   A Utility platform for internet companies is probably coming.
  22. Banking pass – Re pass the Glass Steagall Act that breaks up the banks.  Let the US Postal service provide basic checking services to population. This is long overdue.
  23. Gun Control – Create Federal licensing system for all guns. Raise taxes 30% on guns and 50% on ammo.   Ban the sale of assault weapons and make them register under the National Firearms act.  Pass a law to allow the victims hold the manufacturer responsible. Force again.  44 million handguns exist in this country.  Sin taxes such as is on tobacco are unnecessary.  
  24. Centralized Elections – Replace every voting machine in country.   For Federal elections, mandate early voting and same day voting.  If state’s follow, Federal government will pay the costs. Pass a law for photo ID to vote and you would accomplish the desired ends without the expense.
  25. Miscellaneous – $Spend $100 billion to end the opioid crises.  Spend $85 billion to extend the internet.   Spend $25 billion on health professional shortages.  Spend $7 billion for start up capital for people of color.   Double the foreign service and the Peace corps.  This is a wish list.   There is a real shortage of doctors and nurses in this country today.  The number of workers need to be doubled.  The medical institutions doing the training need to be dramatically increased.

Give Congressional staffs competitive salaries. Recruit 10,000 people to a “21st century Civilian Conservation Corps.”   End entry fees at national parks. Buy low income houses at a value that will allow flood prone houses to relocate.  This is a wish list. Full employment exists. There is no need for CCC camps other than to force members to learn reading and writing as they did in the 30s.

The real question posed is whether the democrats want to put forward an agenda that directly attacks what makes England and America different among nations.  This is a centrist agenda with government employees making all the decisions.  It uses government force to impose on 320 million people the ideas of a really small group of radical progressives.  This agenda would require the use of Government force to impose all these ideas. Further, it removes an individual’s freedom of choice from its citizens.  Several of the proposed changes would require new laws and some of which might not be constitutional.  

These are not new ideas. Rather, many are tired old ones that would not pass through Congress under ordinary circumstances.   The imposition of these changes would dramatically change America and its investment climate.  Today, investments into America are coming from all over the world.  Manufacturing is coming back.  This is based on a strong economy, strong dollar, lower taxes and a strong leader.  The proposed Warren changes would change all of that.  The economy would weaken. The dollar would weaken.  The new laws would discourage rather than encourage investments.   These investments are what creates jobs, growth in GDP, bring in taxes and allow the government to function. 

Alternative Democratic Capitalist Path

These proposals would “kill the golden goose”.   People invest to get returns and make money. This creates jobs and growth in the GDP.  America and England have grown over the last two centuries making them world leaders because their philosophy of government has been more “laissez faire” towards business and relying on their citizens to provide “natural” growth by being innovative and entrepreneurial.    The citizens if they followed the above path would be on a “Highway to Serfdom”.  The end result would be government being relied upon to do everything for everyone, to cure all wrongs, to force compliance to the new laws.  This leaves the citizen in a no better position than a Russian serf.  It removes all freedom of action by the citizen.[iv]

The Warren proposal creates a movement whose main promise is the relief of responsibility for the individual and thus cannot but be anti-moral in its effect; however lofty the ideals which it owes its birth.  The virtues that made England and America stand out and be different over the last 200 years are being discarded and thrown away as being useless.  In particular – independence, self-reliance and the willingness to bear risks, the readiness to back one’s own convictions against a majority and the willingness to voluntary cooperation with one’s neighbors – are those on which the working of an individualist society works. Collectivism has nothing to put into its place. Because of this, it has left a void filled by nothing but the demand for obedience and compulsion of the individual to do what is collectively decided to be good.  They use force to fill the void.

America has grown up on a set of 19th century values that permeate its government and institutions as well as its people.  This is what makes America different.  Other nations do not have these morals.  A list includes – liberty and independence, truth and intellectual honesty, peace and democracy and respect for the individual instead of merely as a member of an organized group.  Christianity, whose believers make up 80% of the population, reinforces the view of the individual’s relationship to God and that God’s rules can and should override the state’s rules.  Martin Luther King lived by these tenants.  Under collectivism, there can be no God to overrule the state but this is in direct conflict with the individual’s religious beliefs.  

China is a collectivist Marxist state. It has persecuted the groups of its people that are religious virtually out of existence.  Why?  They think independently and do not agree with some of the state collectivist policies.  The Tibetans were first.  Then came the Muslims in the Uighur group with 1 million in prison camps being “reeducated” today.  Currently, Christian church crosses are being removed, churches are being razed and government cameras are being installed throughout China’s churches.   There are 100 million Christian Chinese in China.   All socialist governments end up in using force to impose the ideas of centralism upon its people.  Why?  The people do not want to do many of the things imposed by a few bureaucrats in capital cities.   As a result they end up being forced to do things or they are killed.  They become serfs with little or no ability to fight back.    When massive numbers rebel against the state, the state uses starvation to enforce its rules.  Stalin did this and killed 10s of millions.  China did this and killed 10s of millions.  Serfdom, means obey or suffer the consequences which is often death. 

Trump is a businessman who instinctively knew that our current government was restrictive of free enterprise.   He loosened the constraints by removing unnecessary regulations and taxes making it easier and more profitable to do business in America.  The results have been dramatic.  Full employment, rising GDP, manufacturing coming back to the America, more investment, more building and more income with rising wages.  All he did was to loosen the constraints placed on free enterprise by dreamer politicians in the last two administrations.  They mean well as Elizabeth Warren does but she does not understand the economic model that makes America stand out among nations.  It is the freedom of the individual to make decisions independent of government, freedom to determine where opportunity lies to make money, create jobs, create growth and add to America’s dreams where the next generation does better than the previous generation.

We in America now have a challenge.  Do we accept the centralist socialist planks of Elizabeth Warren or do we look to our heritage of free democratic capitalism that made this nation and England great?  These are two different opposed ways of life.  Our unwavering faith in those democratic traditions that have made England and America countries of free and upright, tolerant and independent people is the thing that counts.

[i] F.A. Hayek, The Road to Serfdom, The Definitive Edition, University of Chicago Press, Routledge, London, England, 2007., p.219.

[ii] Johann Christian Friederich Holderlin, Hyperion, oder der Eremit in Griechdenland, Samtliche Werke, vol 3, p.3.

[iii] Elizabeth Warren Has a Plan, Oh My, Wall Street Journal, Opinion page A12, December 27 2019.

[iv] F.A. Hayek, The Road to Serfdom, The Definitive Edition, University of Chicago Press, Routledge, London, England, 2007.

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