Niagara Falls Economics

Far-left Democrats scoff at the term “trickle-down economics.” To them, it is simply incomprehensible that capitalism benefits anyone other than rich people at the top. 

The term comes from humorist Will Rogers, not Ronald Reagan. During the Great Depression in 1932, Rogers joked about the failed policies of President Herbert Hoover: “The money was all appropriated for the top in the hopes that it would trickle down to the needy. Hoover was an engineer. He knew that water trickled down. Put it uphill and let it go and it will reach the driest little spot.”  

Critics of President Reagan’s tax cuts in 1981 seized upon the phrase to deride the supply-side economics of his policies which were designed to get the U.S. out of the worst recession since the 1930s, which it did. The phrase has remained a derogatory favorite of liberals ever since. 

If “trickle-down economics” is not the appropriate way to describe how wealth is distributed in a free market economy, what is? Can wealth “trickle up” the economic ladder if there is not a lot of individual wealth at the bottom to begin with? 

No one ever goes to a poor person to ask for a loan to start a business or get a job. No money, no economic formation, no growth. 

How about calling it “trickle-around economics?” “Trickle-out economics,” perhaps? 

One friend suggests “Niagara Falls economics.” He might have a point. 

The waterfall of wealth that cascades from the success of any successful entrepreneur, especially those among the magnitude of Bill Gates starting Microsoft, goes overwhelmingly to employees, shareholders and the consuming public. One hundred percent of the wealth generated does not go solely to the individual with the idea who took the risk to start the business at any level of endeavor. 

Bill Gates is estimated to be worth more than $100 billion according to press reports. However, it is only 10% of the total market value of Microsoft. Microsoft has a stock market value of more than $1 trillion. Of that, $900 billion in Microsoft stock value is owned by millions of shareholders either directly or through mutual funds in their personal IRAs and 401(k) retirement plans.  

It is like a reverse tithe. 90% to others; 10% for me. 

Close to all of Microsoft shareholders had absolutely nothing to do with the success of Microsoft that increased their net worth other than deciding to invest in Microsoft.  

How great is that? Americans can literally get wealthy doing nothing but investing in others who do all the hard work and assume all personal risk. 

Microsoft’s annual revenues are $125 billion with a net income of around $50 billion. During his role as CEO, Gates may have earned $10 million in salary. Every other dollar earned by Microsoft would have gone to pay employee salary and benefits such as health care and retirement plans; vendors for services rendered, lawyers and accountants, distribute profits as dividends to shareholders, and, yes, pay taxes to state and federal governments to fund programs many people depend on such as Medicare, Social Security and Medicaid. 

99.99992% of all annual revenue flowing into Microsoft would have gone out to tens of thousands of people not named Bill Gates. 

How great is that? Had Bill Gates never been born like George Bailey in “It’s a Wonderful Life,” Microsoft might not have been invented in America but rather in India or Japan, and the wealth generated would have flowed through the economy there, not here. 

Successful businesspeople are better than having Michael Jordan, LeBron James or Zion Williamson on your basketball team. Not only do they help you win in life with better products and services, you get to share in the wealth they create — unlike basketball players, who keep all the big salaries to themselves. 

“Niagara Falls economics” works for all of us. Anyone who has run a lemonade stand understands the basic concepts of a lot of people benefiting from one person’s personal dreams and investment. Don’t let the socialists ruin it for everyone. 

(first published in North State Journal 11/6.19)

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Citizens United Saved America from Government Censorship

Ask any group of people what they think of “Citizens United” and 100% will not raise their hands in support of it.

Most people think Citizens United unleashed untold billions of “dirty” dark money into our electoral system, allowed rich people to rig the system and let corrupt corporations spend recklessly to pollute our politics and destroy America.

If you think politics today is nasty, you need to crack open some history books. If alive today, Thomas Jefferson and Alexander Hamilton would just laugh and say “Hold my beer!” while they regaled everyone with stories of the dirty hi-jinks and insults they both employed early in the republic.

The anger aimed at Citizens United is misplaced. We should be thankful the Supreme Court ruled as they did on March 24, 2009.

Citizens United, a nonprofit 501(c)(4) corporation, wanted to run an ad for their film “Hillary: The Movie” during the 2008 presidential campaign. A lower court ruled that such an ad for the movie constituted “electioneering” which was forbidden under the 2002 McCain-Feingold Act, otherwise known as the Bipartisan Campaign Reform Act (BCRA).

During oral arguments before the U.S. Supreme Court in Citizens United v. FEC, Justice Samuel Alito asked U.S. Deputy Solicitor Malcolm Stewart of the Obama Justice Department if government banning the ad or the movie was similar to book-banning in the past.

When Stewart answered “yes,” a loud gasp went through the courtroom. Under McCain-Feingold, he went on to say, if the government determined that a publication or movie was electioneering because it contained even one sentence of candidate advocacy, books could be banned from Amazon’s Kindle; labor unions could not hire an author to write a political book; and corporate publishers could be prevented from selling such books.

Everyone in the room was understandably shocked by his answers. The Supreme Court asked that the case be re-briefed and re-argued whereupon they invalidated part of McCain-Feingold and accepted the argument that corporations and labor unions could exercise their right to free speech in political debates just as any citizen could exercise their freedom.

Citizens United saved us from President Obama’s administration being able to censor political speech they did not like. Citizens United saved us from President Trump’s administration being able to censor political speech they did not like.

Thank God for that freedom from government censorship no matter what your political or religious affiliation is.

Citizens United also opened up a new avenue for first-time candidates to compete in crowded primaries where political parties abstain from any endorsements. An independent expenditure committee (IE) can help that newcomer build name identification and win a primary whereas before, incumbents enjoyed an unfair advantage over all challengers.

Citizens United didn’t “cause” our civil discourse to turn vulgar any more than cars cause automobile accidents. Candidates, consultants and partisans make our civil discourse foul and putrid by their desire to win at all costs, including their loss of personal dignity and character.

Money makes it easier for them to accomplish such personal degradation faster.

In the 2016 presidential cycle, $10.3 billion was spent on all federal political campaigns, including $1.6 billion in independent expenditures.

This Halloween, $9 billion will be spent on candy, costumes and decorations. Every four years, we barely spend more on the most important civic duty we have, voting, than we do on Snickers and Twizzlers. In congressional elections, we spend far more on Halloween.

We don’t spend enough money properly to educate the voting populace in a positive way in America. Maybe when a majority of voters start voting regularly against candidates who engage in character assassination of their opponents and never call out independent expenditure committees who do so, we will see a welcome change in our civil discourse and dialogue.

Done the right way, Citizens United can help our representative democracy flourish through free speech. Not flounder.

(first published in North State Journal 10/30/19)

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HILL: What if China had colonized America?

Ming America

Listening to Democrat candidates for president makes one think America is a terrible place to live. Income inequality, racism, no single-payer health care system, reckless environmental pollution … America must be the worst country in the world to live in today.

Care to guess what would be worse? What if China had colonized the New World from the West Coast first before the Europeans ever landed at Jamestown or Plymouth Rock? What type of government and society would we have today?

We might be Hong Kong trying to establish its independence from communist China. Worse than that, we probably would never have become a free democratic republic in the first place because our Chinese founders would have had no conception of what individual freedom was supposed to look and act like in a free society.

Had the Ming Dynasty wanted to find a short route to Europe, the emperor of China in 1500 might have sent explorers to the east across the Pacific Ocean. By mistake, they would have bumped into the New World and paved the way to set up a new kingdom in the name of the Ming Dynasty. The ruling potentate, colonists and armies would have been loyal subjects to the emperor of China and all aspects of Colonial life would have mirrored life in China.

Not unlike the English Colonies that were set up on the East Coast. Many of the early colonies were sponsored by a king or queen of a European country ostensibly to find gold and silver mines rumored to be all over the New World, including North Carolina. Americans were treated as royal subjects under British army rule until 1775.

Perhaps dissidents would have escaped China and sailed across the gigantic and dangerous Pacific Ocean to leave oppression and misery behind. Again, just like the Puritans, Huguenots and any number of Europeans who wanted to escape religious or ethnic persecution in order to live a free, albeit not very safe, new life across the Atlantic.

Compared to our history, was there ever any chance that Chinese explorers or rebels would have established a free democratic republic on the West Coast?

No. Zero chance in fact.

Where would Chinese colonists have come up with any of the philosophical ideas that would have led to a democratic republic in the first place? Where in Chinese history would any idea of individual freedom have come from?

Chinese rulers have systematically exterminated citizens who exhibited free thought capabilities. As recently as 1966-76, Chairman Mao boasted about burying alive 46,000 Chinese scholars and philosophers during the so-called “Great Leap Forward.”

Freedom of thought is poison to any dictatorial regime. Freethinkers must be eradicated at all costs.

Chinese culture dates back at least 5,000 years. Chinese rulers over five millennia have extirpated the DNA for free thinkers in China thereby rendering the chances of a Chinese equivalent of John Locke emerging to write about the right to own property next to zero. No Chinese philosopher wrote about the Adam Smith “invisible hand” of capitalism that helps everyone as entrepreneurs pursue their dreams. Instead, they extol the virtues of collectivism serving the monarch or communist party.

The structure and very fabric of our American way of life are dependent on our founders’ understanding of the philosophies of Socrates, Aristotle, Plato, Epicurus, Epictetus, Augustine, Aquinas, Mill and Kant. None of which was available to any Chinese citizen over the past 2,000 years and is probably not available today.

The democratic republic of the United States of America may have its faults, faults we all try to correct every day. But we still have freedom, unlike what would have happened had China had its way with the New World half a millennium ago.

We could be Hong Kong. Or far worse, we could be Chinese subjects. Think about that before you vote for more socialism instead of more freedom.

(first published in North State Journal 10/23/19)

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The NBA, China, HB2 and Political Economic Warfare

Forgive many people in North Carolina if they view the current NBA drama in China with a certain sense of schadenfreude.

They deserve it, they say.

The NBA abruptly canceled the 2017 All-Star Game scheduled to be played in Charlotte because of their opposition to H.B. 2, otherwise known as the “bathroom bill.” The NBA played up their reputation as “social warriors” willing to use their prestige, and business, to help the oppressed wherever they saw it be it public accommodations, rebel flags or confederate monuments.

The political economic warfare loss to North Carolina business was estimated to be $100 million. No one in the NBA or advocacy groups supporting genderless bathroom accommodation disagreed with political economic warfare when they did it to North Carolina. It was viewed as “just punishment” for the state of North Carolina for passing terrible unfair discriminatory legislation, even though the boycott wound up hurting thousands of hard-working middle-class folks in Charlotte who would have benefited financially from the All-Star festivities.

Houston Rockets General Manager Daryl Morey recently tweeted the following seemingly innocuous statement regarding Hong Kong and China: “Fight for freedom, stand with Hong Kong.”

Good for him. Another case of the NBA using their prestige and business to help the oppressed, only this time in Hong Kong, right?

Not so fast. The initial reaction of the NBA was to retract all public comments supporting Hong Kong freedom, including Mr. Morey’s tweet, so they would not offend the ruling communist Chinese authorities.

Golden State coach Steve Kerr said no one ever asks him about human rights oppression in China so apparently it doesn’t bother him either.

The NBA gets revenues exceeding $4 billion annually from China. Nike gets 20% of its $35 billion in revenue, or $7 billion, from China. Fear of losing money is what caused the abrupt about-face over Mr. Morey’s support of freedom in his Hong Kong tweet. Nothing else.

Should the NBA or any major corporation have qualms about doing business in a country with a long history of horrendous human rights abuses and oppression among many other transgressions such as being the major contributor in the world to carbon pollution? Should the NBA or any business stay silent when they see injustice or keep their mouth shut to protect their bottom line of profit and loss statements?

More than 65 million Chinese citizens have been executed or buried alive since the communists took control in 1949. If there ever was a country to boycott because of their suppression of freedom, China would top the list.

The people of Hong Kong enjoyed democratic freedom until the “Handover of 1997” when the UK relinquished control of Hong Kong to China. The Hong Kong freedom fighters are no different from American colonists who disagreed with the heavy-handed rule of King George III.

They want freedom, period. Hong Kong protestors are waving American flags for goodness sakes.

Is the NBA willing to be a “social warrior” for freedom around the globe? Or will they turn a blind eye to the human rights abuses of Chinese communist rule for the past 70 years to keep selling their games and jerseys to Chinese customers?

Dealing with China while ignoring their past and present oppression is not unlike British textile merchants who had no problem with American slavery as long as they could get American cotton for their products.

Maybe the Chinese dictatorial authorities will ban the NBA from China if LeBron James and Zion Williamson stand up for freedom for Hong Kong. How odd would it be if future historians look back to 2019 and say that one of the triggers that led to the dissolution of Communist China was a full-scale revolt by 330 million Chinese basketball fans once the government banned the NBA because they could not see LeBron and Zion dunk anymore.

Call it the second “shot heard around the world.” If the NBA truly stands for freedom, maybe it will happen.

(first published in North State Journal 10/16/19)

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