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Friday, November 2, 2012

A return to an old economic policy - letter by Bruce Gouley to Rowena Duncan

Bruce Gourley wrote this letter to the editor. Our comments in bold
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In response to a writer’s contention (Oct. 24) that “faith in God” would “fix” America’s economy, we should remember that marrying God and government has always led to oppression, violence, and wars in the name of the divine. America in the late 18th century rejected theocracy and established the world’s first secular nation, realizing that separating religion and government would bring out the best in both. Our rejection of state religion was wise: many of today’s Middle Eastern nations are Islamic theocracies governed by Sharia Law (based on biblical Old Testament Law). (The writer provides us with several spectacular bald assertions, none of which accurately portray the situation. His first statement about marrying God and government overlooks the fact that governments have always inflicted oppression, violence, and wars, with or without religious influence. The common denominator is government, not religion. Our American experiment, however, is unique in that it was the first to claim that government exists only with the consent of the governed, and that rights descend not from that government, but the Creator. These two concepts were radical departures from the way governments had manifested in the past. 

As such, America was not established as a secular nation, it was established with a limited, constitutionally defined government that was forbidden from meddling in the private, legal activities of the people. This included religion. The First Amendment is quite clearly written about what Congress shall not do. In other words, the constitution was written not to protect government from religious influence, but to protect the people from government influence.

Lastly, the Sharia law comment is simply vapid. Clearly the author understands neither the Old Testament or Sharia law. I will not delve into this issue, because even a cursory examination of the two will show the stark difference between the two.)

But there is a fix for America’s economy. His name is Adam Smith (1723-1790), the father of modern economic theory and capitalism. Most Americans have forgotten about Smith, while corporate America has forsaken him in favor of irresponsible capitalism. (Adam Smith indeed is the father of modern economic theory. However, Smith was Scottish, not American. His ideas are not a system that can be adopted or forsaken, and our economic system is not an homage to him as if we had to follow his dictates. It is interesting to note, however, that Smith was in favor of economic self interest. He postulated that a person following their interests and adding to their wealth would benefit others, even though they were not specifically trying to help others.)

Studying world history, Smith realized that nations fall when there is too much wealth disparity between rich and poor. To prevent nations from self-destructing at the hands of greedy bankers (financial sector) and merchants (corporations) who exploit laborers and hoard wealth, Smith proposed an economic system built upon progressive taxation (higher taxes on higher income), government regulation of banks and markets, worker protections, living wages, and government-funded public education. (We could find nothing beyond the leftist websites that established these things. But even granting that Adam Smith believed all these things, what relevance is that? If I preferred the concepts of, say, John Locke, should Mr. Gourley simply accede to my preferences? Adam Smith is simply a historical character who was born, raised, and died in a foreign country. He may have had influence even to this day, but to suggest that his or any other person's ideas ought to be implemented needs more than the assertion itself. )

Smith thus argued that healthy and moral economies , and hence successful nations, keep human greed in check and protect workers by taxing progressively, regulating business, and investing in public education. (Suffice to say, in a 5 volume work like "The Wealth of Nations," Smith had a lot more to say than a couple of cherry-picked statements. I have never read him, and I doubt that Mr. Gourley has either. I think that we would both be surprised by the contents of his writings.)


Based on Smith’s economic theory, today’s America is a nation intent on selfdestruction: Our wealth gap is the equivalent of a third-world nation. (This is nonsense. Mr. Gourley seems to think that because there are rich and poor people that there is something wrong with our economic system. Our poorest people are vastly richer than people in third world nations. They're even richer than typical middle class Europeans. 

Further, if poverty is defined by being in the lowest economic quintile, there will by definition always be the lowest economic quintile.)

Our tax policies redistribute wealth from the poor and middle classes to the wealthy. (This is factually incorrect. As Mitt Romney famously (and correctly) observed, 43% of the country's wage earners pay no tax at all. 86% of all income taxes are paid by the top 25% of wage earners, and the top 1% pay 39% of all income taxes. 

Mr. Gourley's assertion doesn't even pass the smell test. If the poor are poor, what wealth is being redistributed? How is it possible that the wealthy get all this money from people who don't have money? And what about the $7 trillion that has been transferred from the earners to the poor in the form of welfare, foodstamps, and other subsidies?)

Large corporations resist regulation while paying poverty wages to tens of millions of workers. (One might wonder what constitutes poverty wages. According to the Department of Labor, there are "...3.8 million workers with wages at or below the Federal minimum... 5.2 percent of all hourly-paid workers." 50% of those workers are under age 25. So clearly there are not "tens of millions of workers" being paid poverty wages. That also does not pass even the smell test. 

But more to the point, people agree to work for the pay offered. And some people just don't have skills that make them deserving of more pay. Other people should be paid a boatload of money. The guy cutting into my gut on the operating table should be paid substantially more than the waiter at my favorite restaurant. 

Wages are a function of the value of the service to be provided, no more, no less. Ditch digging is a common skill, throwing a 94 mph fastball is not. People are paid based on the value they bring to their employer. To suggest otherwise is to unbalance the economic equation and bring disarray to the marketplace.)

Today’s America, where greed and economic immorality is rampant, desperately needs to return to the capitalism of Adam Smith. (There is no such thing as economic immorality, unless someone is breaking a law. Theft, cheating, and misrepresentation are all illegal, and as such, are not a part of capitalism, they are violations of it. 

Also, is Mr. Gourley suggesting that we should now legislate morality? I thought the Left was against that idea. Whose morality should it be? Christian? Atheist? Hindu? Should we also legislate against envy? Sloth? 

Mr. Gourley creates a caricature of Adam Smith, forces his ideology into Smith's writings, and then insists that we must adopt this frankenstein in the name of some unnamed morality. 

But we need to remember that the original premise of his letter was to dispute the idea proposed by a previous letter writer that we need to get back to God. Here's that letter: 

A thermometer shows the fever in a sick body; our economic crisis indicates the condition of our nation. The economy is the symptom of our crisis, but not the cause. We must take action to reverse our decline.

Those who framed our Constitution established our nation on their agreed acknowledgement that God is our creator, and they recognized him as being the source of our inalienable rights (not the government). They fashioned the laws of our land in agreement with his laws. His Ten Commandments are engraved into public buildings and courts in Washington, D.C., and throughout this nation. Our leaders have repeatedly and publicly thanked him for his providence, guidance and blessings. America has always acknowledged the sovereignty and moral authority of God. The world views us as a Christian nation — and we also see ourselves as such. The recent statement, that “America is no longer a Christian nation,” confirms this point.

But, forces in America today are throwing God out of our interpersonal lives, our homes, our schools, our churches, the very laws of our land and even our Supreme Court. Laws have been enacted and regulations forced upon us that directly oppose the laws and moral principles of God, upon which our America was founded. His laws are being replaced with secular humanism. This leaves us with relativism, empty and at sea as a nation, with no moral rudder.

To restore our economy and our nation, we must humbly return to our God. We must hold to the separations and limitations of powers in our Constitution. We must repeal our immoral laws and burdensome regulations. Only then can our nation’s problems be resolved — and once again, God can bless America.

Rowena Duncan

Now re-read Mr. Gourley's letter. Does it seem that he was responding to something other than Ms. Duncan's letter? Do you wonder what Adam Smith has to do with it? Did Ms. Duncan advocate theocracy or the marrying of church and government? Of course not. Ms. Duncan very pointedly advocates that we return to our foundational understanding of the role of government, including its clear constitutional limits. 

But beyond that, Ms. Duncan eloquently calls us back to God. I see in her letter a call to repentance, that we restore the crumbling foundations of our country. She clearly recognizes that it is God, not government, who is the answer to our problems. She's quite right.

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