I’m proud to be an American where at least I know I’m free.
Lee Greenwood’s song God Bless the USA

News flash for Lee Greenwood and his fans: you’re about 80 years behind reality. Open your eyes.

Two simple principles

Americans do not know, or have forgotten, the definition of freedom. But I can straighten that out quickly.

1. Freedom is not a matter of you are or you aren’t. It is a matter of degree. Soviet farmers were free to grow their own crops and livestock and sell them for a profit after Lenin’s New Economic Plan even though profits were absolutely forbidden in Communist Russia. Citizens of Nazi Germany were more free than Americans are today in a number of ways, like being able to eat transfat and having no speed limits on the Autobahn.( Transfats are baked goods like crackers, cookies and cakes and many fried foods like doughnuts and french fries. Shortenings and some margarines can be high in trans fat.)

2. Free men decide. Un-free men comply. With each passing week, Americans decide less and comply more. One of the main decisions is how to spend your money. With each passing year, the government spends a higher percentage of the money made by private sector businesses and their employees.

Back in the Army

I was an Army officer from 1968 to 1972. I hated it. The Army was a Kafkaesque bureaucracy.

I looked forward to getting out and being my own man as an apartment owner. Early on I decided to always install peep holes and smoke detectors in my apartments whenever I bought a building. Note the word “decided.”

I also decided to pay interest to my tenants on their security deposits. Again, that was what I “decided.”

I got out of the apartment business in 1992. Why? One reason was I felt like I was back in the Army. I was having to keep CYA (cover your ass) files like we did in the Army to protect myself from lawsuits. My decisions to install peepholes, smoke detectors, and to pay interest on security deposits were turned into compliance when all of those were made mandatory by state legislators who wanted to suck up to tenant voters.

I have been out of the apartment business for almost 20 years now, but occasionally I come across a trade magazine for apartment owners or hear a lawyer speak to an apartment owners association before I make a speech there. Over and over again, I see or hear the phrase “Starting January first, you must comply with new law XXXX. There are severe penalties for noncompliance.” Then I would read the next article and it would say the same thing about another new law.

Apparently, tenants group presidents meet with legislators every year and say this is what we want and the legislators give it to them. This has gone so far it’s long since been ridiculous. In NJ, back in the 1970s, we had to tell the tenants the name and address and phone number of the mortgage lender. Why? The tenants admitted they put it into a law as something they did not care about but would give away to get what they really wanted. They never had to give it away. And that was in the 1970s—40 years ago!

Government spending as a percentage of GDP

There is a graph of U.S. government spending as a percent of GDP at http://www.usgovernmentspending.com/us_20th_century_chart.html. As you can see, it was only about 7% in 1903—when we were truly free. Now it’s 43% and climbing like a rocket. While Europe adopts austerity programs, we are going the opposite direction with Obamacare. As a consequence, we are on course to turn more of our money over to the government to spend than the European countries we normally think of as quite socialist and less free like France and Scandinavian countries.

Socialism is 100% government spending as a percentage of GDP. As a general rule, no country, not even North Korea, Cuba, or the Soviet Union has ever achieved 100%. In other words, we are charging full speed at the government spending levels of the countries we have long scoffed at as unfree. Yet we are still singing that “where at least I know I’m free” line in God Bless The U.S.A.

Fascism

Furthermore, government taking our money and spending it on what they decide we should have instead of what we decide we should have is not the only way we lose freedom. One of the components of the definition of fascism is,

private economic enterprise under centralized governmental control

Does government spend everyone’s money under fascism? No. They just order business to spend it the way government directs. For example, in the U.S. in the 1960s and before, you could decide whether you wanted a high-mileage car like a Volkswagen bug or a low-mileage car like a Cadillac. But since the gas lines of 1973 and 1978 (caused by government seizing control of the decisions about how to price and distribute gasoline) the federal government has decreed so-called CAFE standards for car manufacturers. Those force car manufacturers to increase the percentage of the cars they make that have high-gas-mileage thereby making low-mileage cars artificially more expensive. Furthermore, these standards have ratcheted up or stayed the same over the years.

Defenders of such fascism would say, “But transfats are bad for you and high-mileage cars are better for the environment!”

Well, transfats have advantages and disadvantages like everything else. Plus, time and again the government has changed its mind about what it good for you and what is not. In some cases, like DDT. It was good, then it was bad, then it was good again.

High-mileage cars are much lighter and therefore more dangerous in crashes. In many cases, while high-mileage cars use less gasoline to operate, they cost more to build or operate. For example, electric cars have no combustion exhaust but the power plants where the electricity is generated have smoke stacks spewing out coal, oil, and gas smoke. Electric cars also have many batteries that are environmental disasters and expensive.

In a free country, people can decide to buy transfats or high-mileage cars or whatever else they want. It is nobody else’s business and it is certainly not the government’s business. And it is outrageous when the government forces us to do stuff that they claim is good for us and turns out to be bad. Virtually everything the government does falls into that category. Social security, for example, started out as a tax that was then given back to the public. They were too dumb to understand that it was their own money less the cost of paying government employees to put the money through its round trip. Now social security has been revealed to be a Ponzi scheme that pays current seniors but will not have enough money to pay current young people.

So the issue is not just who spends the money but who decides how it will be spent. Increasingly in the U.S., government either spends it or orders private citizens and business how to spend it.

Each new law or regulation reduces freedom

Everyone knows that the Code of Federal Regulations and the U.S. Code (federal laws) grow larger every year. Same is true of municipal, county, and state laws and regulations.

But we just shrug it off as normal and the way things are. True, but no one seems to realize that every new law or regulation takes something out of the you-decide (free man) category and moves it into the government-decides (un-free man) category.

Every new law means another piece of your freedom has died. Every new regulation means another piece of your freedom has died.

Lee Greenwood’s God Bless the U.S.A. song has another couple of lines that say:

And I wont forget the men who died,
who gave that right to me.

And I gladly stand up,
next to you and defend her still today.

Yeah, me too in Vietnam, but I would not do it again today. Someone once said that the end to America’s freedom will not come from outside the country, but from within.

We were told in the 1960s and 1970s that we had to fight the North Vietnamese because they wanted to take away our freedom. Well, they won that war and I have seen no evidence that they have tried to take away our freedom since then. Similarly, I doubt the people or Iraq or Afghanistan have a clue about our freedom or any intent to take it away from us. They don’t like us. They would like to kill us. But they are a bit preoccupied with blowing each other up and growing poppies in their barren country.

Greenwood’s song was written in 1984, but it rose greatly in popularity after 9/11.

Mr. Greenwood and his fans and a whole lot of other people are worried about the wrong enemy. The clear and present danger to freedom in the U.S.A. comes not from foreign countries but from those who want to expand the role of government in the U.S.—which by definition shrinks the freedom of the American people to decide how they live their lives and spend their money.

The enemies we need to stand up to to defend freedom are:

• government employees at all levels, especially those that are unionized
• liberals
• ambulance chaser trial lawyers
• the military-industrial complex
• environmentalists (the green movement is just the red movement in disguise)
• tenant movements
• private sector unions that have contracts that give them overgenerous pay and benefits and overly restrictive work rules thereby rendering their companies uncompetitive
• protectionists
• military pensioners who have far more generous retirement pensions and healthcare benefits than the most egregious union contracts
• recipients of government food stamps, grants, unemployment insurance benefits

Fundamentally, these groups are trying to enslave America’s private sector employers and employees so they get free money either for doing nothing or by being overpaid in pay and benefits for “work” that they do or did in the past. They have made great progress toward that end since 1932 and their progress is accelerating in recent years. Yet the private sector people think “at least they know they’re free.”

Boiling frog syndrome

That graph of U.S. government spending as a percentage of GDP that I linked to above shows the boiling frog syndrome that has blinded the American people to the loss of their freedom.

There is also a Martin Niemöller speech about Nazi-era Germany that illustrates it starkly.

When the Nazis came for the communists,
I remained silent;
I was not a communist.

When they locked up the social democrats,
I remained silent;
I was not a social democrat.

When they came for the trade unionists,
I did not speak out;
I was not a trade unionist.

When they came for the Jews,
I remained silent;
I wasn't a Jew.

When they came for me,
there was no one left to speak out.

The U.S. equivalent would list landlords, businessmen, big car drivers, cheeseburger eaters, doctors, etc.

Someone is going to say that the Nazis persecution of trade unionists means anyone who ever opposes unions is a dictator type. Dictators like Lenin and Hitler use the unions to achieve power but the unions are also rivals for power. So when unions put a dictator in power, the dictator destroys the unions to end their threat to his power. Union members are not the brightest bulbs on the tree as a group.

The problem with unions is that they exist to get more than a day’s pay and benefits for a day’s work, plain and simple. That’s immoral. Their pay and benefits reduce the ability of business owners to decide—there’s that word again—as do union work rules like a union plumber cannot fix a light switch.

We non-union people have a curt answer to union grievances: if you don’t like your job, find another one or become self-employed. Most of us non-union people have done that many times in our lives. You union guys can all quit the same day if your aim is to hurt the company. Strikes that exclude non-striking workers, intimidation, and other thuggery, however, are immoral. The union exemption from the antitrust laws should be ended.

Transfat inspectors

There is also a significant cost to all these regulations and laws. To ban transfat, you have to pay lawyers and bureaucrats to draw up the regulations and modify them periodically. More laws mean more lawyers arguing about what the laws mean. Ambulance chasers will sue large companies blaming them for heart attacks suffered by their former customers. That, in turn, means some people will start making a living as consultants on how to comply with the transfat ban and expert witnesses on the subject of transfats. Then of course you have to hire transfat inspectors to trudge around the nation’s restaurants to make sure no one is deciding to eat transfat and everyone is complying with the ban against it.

Before the ban on transfats, there were no transfat inspectors. As the ban spreads wider and wider, more and more will be hired. They will unionize if they have not already—probably SEIU or American Federation of Government Employees or one of those. Then they will get more pay than they deserve, more vacation days, more health care than they are willing to pay for and earlier and more lucrative retirement than we private sector people who pay for all that.

If it were only transfat, it would not be that much of a burden. But it’s one thing after another: sugar, salt, whether it’s really organic, etc. etc. etc. Every law and every regulations cost us billions to write, modify, argue and sue about, and to enforce. Every new government employee makes the government more of the unionized government employees, for the unionized government employees, and by the unionized government employees. They get more powerful politically and we get weaker. You saw than on election day in 2010 when the Nevada unions got Harry Reid reelected in spite of that state having the worst unemployment rate in the nation and in spite of Harry Reid being perhaps the most unpopular man in the U.S. You also saw it in California where government employee unions elected the former governor who gave them the right to strike and organize decades ago—Jerry Brown—in spite of the fact that the state has been bankrupted by those same government employee unions.

Economic impact

The problem goes beyond freedom per se. Maybe most Americans have turned into willing caged birds as long as they get their daily food, water, and the newspaper on the bottom of their cage changed. They can still sing God Bless the U.S.A. but they are all talk.

But there is another huge issue above and beyond how many decisions we get to make as opposed to having to comply.

Compliance with government edicts does not work economically. It is socialism and socialism doesn’t work. It impoverishes the nation that tries it. Lenin governmentized everything. When the people starved because farmers would not work hard enough to feed the nation under socialism, Lenin had to adopt his New Economic Plan which used capitalist incentives to give farmers enough incentive to produce enough food to feed the nation. The Soviet Union abandoned socialism in 1991 after 69 years of trying to make it work. Former Soviet KGB head Vladimir Putin, of all people, recently criticized the U.S. for going down the socialist road. Cuban Communist dictator Fidel Castro recently admitted that the Cuban economic model wasn’t even working for Cuba.

Western Europe and Canada are reeling under the financial weight of their overgenerous pension and health care benefits, yet we are trying to be more like them.

The bigger the government spending share of GDP gets, the small the GDP gets because of Soviet-style destruction of incentives to work hard and improve productivity.

Loss of freedom not only changes us from people who decide to people who comply, it makes us poor and ultimately will starve us. Taking decisions out of the hands of individuals and putting them into the hands of distant bureaucrats is socialism regardless of whether it happens gradually over decades or overnight because of a revolution. Either way, socialism doesn’t work.

Autonomy

There are a number of scientific studies of happiness nowadays. They keep finding that autonomy is one of the main sources of job satisfaction and happiness in general. We need freedom because it is what we have said we wanted and are for 234 years in this country. We need freedom because it is the most efficient economic system. And we need it to be able to have “life, liberty, and the pursuit of happiness.”

That phrase is from our Declaration of Independence which was written in 1776. Americans have forgotten what that document said and meant and why it was declared. The fact is Britain’s King George III did far less to our colonial forebears than the presidents and Congresses of the last 80 years have done to us. Yet we meekly accept ever-more freedom-destroying laws and regulations as if we were domestic animals, not men.

The American people need to wake the hell up before it’s too late.

We need to have a book burning. The only books that need to be burned are the U.S. Code (which includes the Internal Revenue Code) and Code of Federal Regulations and their state and local counterparts. We need to start over from scratch and put the government only into the coercion business: police, fire, and national defense and the avoidance-of-coercion business better known as international diplomacy. The rest of the government’s current functions need to be done by individuals or businesses or charities or the media or not a all.

Someone is going to tell me this article is a rant.

The Declaration of Independence is a rant. It has one substantive sentence: the one that declares the 13 colonies independent from England. The rest is a rant. Read it for yourself.

Here is an email I got from a reader:

John,

You should check out Peter Drucker's book The Unseen Revolution: How Pension Fund Socialism Came to America which he wrote in 1976. Pensions, mutual funds, and index funds are now the largest owners of the American economy. Through these vehicles, the American worker is actually the largest owner of the means of production here in America, though he does not really understand this, nor does he know what to do with his ownership.

This ownership of the means of production by the people is Socialism as Marx originally defined it, and it has been achieved here in the U.S., without us really even trying, to a greater extent than it was or has ever been achieved in a nominally Socialist country. In China for instance, the workers have zero ownership of the means of production (at least not in 1976). Importantly, however, the socialism we achieved here in the U.S. in 1976 was neither statist nor centralized. Instead, the precedent was set by Charlie Wilson of General Motors, and the concept was spread in decentralized fashion by free market mechanisms.

Some of the book is outdated, but it will nevertheless open your eyes to a simple but major misconception the economics community has entirely missed.

In terms of future implications, what's interesting is that over the last decade or so, the American worker has finally begun to awaken to the power he holds, and begun to assert it. However, his only mechanism for doing so is collectively, through the actions of pension trustees or mutual fund managers. The best example is the CalPERS board, which has notably taken up "social investing" where they will refuse to invest in tobacco, or Israel, or gross polluters, or what have you. Should this trend continue, it has the potential to become an entirely new vehicle for public policy, a fourth branch of government, so to speak, created almost accidentally, with none of the limitations and separations of power that our nation's founders carefully designed.

I hope you'll check this book out and recommend it on your page. Thanks as always for the great articles.

Regards,

James Drake
Davis, CA

John T. Reed