Why Does the United States Never Hold China Accountable?

by Dr. Gerard Emershaw

The Chinese recently unveiled its new J-31 stealth fighter over the skies of the city of Zhuhai. Funny thing about the J-31. It looked strikingly like the United States F-35. Coincidence? Not at all. Chinese cyber spies were able to hack into the systems of Lockheed Martin and six subcontractors and steal all but the most sensitive of blueprints—which were stored off-line—for the American F-35. China’s cyber spies are busy, constantly targeting the military, government, and economy of the United States—“from the Pentagon to Los Alamos, oil pipelines to power plants, Google to Coca-Cola.”

Why does the United States put up with this? How is this not an act of war? The American military under the rule of bellicose neoconservatives and neo-progressives in recent decades has become increasingly hostile toward even the most innocuous of threats to “American interests.” President Obama waged an unconstitutional war against Libya, which was no threat to the United States and had not as much as rattled a saber against Americans in years. The United States has become embroiled in all sides of the Syrian Civil War despite Syria having no strategic importance. The United States also appears determined to begin a new Cold War against Russia over Ukraine, which also has nothing to do with the United States. So why is China always given a free pass even when it actively commits acts of blatant espionage against the United States government and American corporations?

One reason that the United States refuses to hold China accountable for its acts of war is that China holds over $1.2 trillion in American debt. This accounts for 8% of American publicly held debt. This dependence on China in order to keep the warfare/welfare state funded and operating makes it unlikely that the United States will ever stand up to China for its extensive program of espionage. The Big Government Neoconservative and Neo-Progressive Statists will not dare bite the hand that feeds.

Another reason is that American corporations are dependent upon the cheap labor and goods that China provides. Hundreds of United States corporations including Apple Computers, Banana Republic, Dell, Cisco Systems, Coca Cola, GAP, LL Bean, Nabisco, Revlon, Walmart, and Xerox produce goods in factories in China. In 2013, the United States imported more than $440 billion of goods from China, resulting in a $318 billion trade deficit. As a result, the corporate interests which control American politics and government will never allow the United States government to exercise a foreign policy which threatens the corporate bottom line.

Unlike nations like Iran and Syria and insurgent groups like the Islamic State, China is a genuine threat to the United States. Not only has the United States become economically dependent on China in numerous ways and not only does China possess the espionage capabilities to victimize American government and corporations, but China possesses the capability to hack into American banks and its electrical grid. As a result, China is an actual threat to the United States. While collapsing the American economy would be equally destructive to China, having so much leverage over the United States makes China a grave threat to the safety of the American people.

(For a detailed discussion of the danger that China poses to the United States, read my new book The Real Culture War: Individualism vs. Collectivism & How Bill O’Reilly Got It All Wrong. Available now on Amazon in both print and Kindle.)

Minimum Wage and Why Bill O’Reilly Doesn’t Understand Economics

by Dr. Gerard Emershaw

In a recent Talking Points Memo on his show, Bill O’Reilly discussed things he believes the GOP must do to improve the economy now that the party will be in control of the Senate as well as the House. A few of his ideas were undeniably good. For example, he suggests that the Republican Congress lower the corporate tax rate. He correctly recognizes that lowering corporate taxes could very well led to more jobs being created and aptly states: “When there are more jobs, there is more competition for workers and salaries go up.” Unfortunately, almost immediately after this, the Fox News Channel host suggests the following:

Third, raise the minimum wage.  That will encourage young people to get into the marketplace and other folks to get off the dole. Ten bucks an hour will not break anyone.

And with the corporate income tax cut, the minimum wage rise will not affect profits.

Bill O’Reilly’s ignorance concerning economics is breathtaking. First, he is under the impression that all employers pay corporate tax. The true machine for economic growth in the United States is made up of small businesses. A large number of small businesses are owned by people who pay taxes on their business profits as part of their individual federal income tax. Lowering corporate taxes would not help these small business owners. Raising minimum wage while simultaneously lowering corporate income taxes will benefit big business at the expense of small businesses. It will become yet another corporatist program aimed at crushing the small business competitors to large corporations.

Secondly, forcing employers to pay a minimum wage means that employers will be able to hire fewer workers or will be forced to fire some. Those who are not hired become “unseen victims.”

Thirdly, Secondly, low-skilled workers will not be able to learn basic job skills if they are not hired. This disproportionately harms the young and the uneducated and could very well trap them in poverty for their entire lives. The current minimum wage only affects about 5% of the population in the United States. Few of those at minimum wage remain there for long—“as they acquire skills, their productivity rises and they command higher wages.”

(For a much more detailed discussion of Bill O’Reilly’s dubious views of economic, political, and social issues, read my new book The Real Culture War: Individualism vs. Collectivism & How Bill O’Reilly Got It All Wrong. Available now on Amazon in both print and Kindle.)

The Purge: Pop Culture, Psychology, and the Broken Window Fallacy

by Dr. Gerard Emershaw

The 2013 horror film The Purge and its 2014 sequel The Purge: Anarchy present a near future dystopian (or utopian depending on your perspective) version of the United States. The year is 2022, and “the New Founding Fathers” have instituted a totalitarian government which passes a Constitutional amendment which suspends all laws for 12 hours from 7:00 pm on March 21 until 7:00 am on March 22. This event is known as the Purge and allows Americans to “release the beast” by satisfying their destructive urges. During these 12 hours, no laws are enforced by the police. Emergency services of all kind are suspended. While weapons above class 4 (weapons like grenades, bombs, or rocket launchers) are prohibited, all other weapons are fair game. All crimes (murder, rape, robbery, etc.) are excusable during the Purge. The only individuals who may not be victimized are government officials “holding Rank 10 or higher.” According to the narrative, as a result of the Purge, the United States is enjoying prosperity with only 1% unemployment. The logic seems to be that the poor and homeless are targeted the most, solving the nation’s “problems.”

Writers of science fiction and horror are often not the most knowledgeable when it comes to economics and human psychology. The paradigm case of this is the original “Star Trek.” In the “Star Trek” universe, Marxist economics somehow led a civilization that had been ravaged by a Third World War into a space age society. However, history, psychology, and logic all show that the incentives for such innovation are not and cannot be present in a Marxist system. (For a detailed discussion of how communism could not have led to the Earth society presented in “Star Trek,” read my new book The Real Culture War.) The Purge similarly makes dubious assumptions concerning economics and human psychology.

1. The Broken Window Fallacy

Frederic Bastiat ingeniously presents the Parable of the Broken Window in his brilliant 1850 essay “That Which Is Seen, and That Which Is Not Seen.” In Bastiat’s parable, the careless son of a shopkeeper breaks the window of the shop. However, since the shopkeeper has to pay the glazier six francs to replace the window, money circulates. The glazier now has six francs to spend. So, this was good for the economy, right? But Bastiat points out that that is merely what is seen. What is not seen is that the shopkeeper would have used the six francs in some other way—buying shoes, a book, etc. In the case where the window was broken, there are six francs circulating. In the case where the window was not broken, there are also six francs circulating. However, in this second case, there is also one additional window. Namely, the window which was not broken. This second case is a world that is richer and better off. If a community could become better off by having a window broken and replaced, then wouldn’t it be even better off if each resident destroyed his or her house and all of the belongings inside and paid to replace them? This fallacy is what makes Keynesians wrongly believe that war is good for the economy. Destruction is never good. If Europe and Japan had not been destroyed during World War II, then the money used to rebuild them could have been spent on different projects. A world where World War II never occurred would have the old cities of Europe and Japan intact plus whatever projects the money was used on instead. This would be a richer world.

The Purge commits this fallacy. On one night each year, all crime is permissible and no emergency services are in place. The films mostly focus upon murder. But imagine other crimes that will be taking place. Joe X’s pizza place might be burned to the ground. Bank Y may have its funds stolen electronically by hackers. John Z’s car dealership may have its new vehicles destroyed. In both movies, it seems as though there is widespread destruction. Damaged businesses and homes will all need to be repaired. The injured will need to receive health care. With so many deaths, funerals and burials will need to be held. Inheritance taxes will need to be paid. Probate lawyers will be needed. Before the Purge even begins, individuals and business owners will need to spend a good deal of money to protect their families, homes, places of business, and business assets. None of this provides an economic benefit. Money is circulating, but there has been destruction. Replacing what has been destroyed is only getting back to square one. Money spent on extra security is money that could have been spent on shoes or books. Or laptops, cellphones, cars, etc. The Purge World has fewer goods than a world without a Purge. The Purge world is poorer and not better off.

Businesses that need to spend so much money to protect themselves and possibly to later repair damage will have less money to hire new workers or to give raises to the workers they currently have. It is difficult to see how the world of The Purge can have only 1% unemployment or be prosperous at all.

2. Cull the Useless Eaters

According to the logic of The Purge, eliminating the poor and homeless somehow produces prosperity. It is difficult to see if this is simply a “neato” idea that writer James DeMonaco came up with or if there is a political point to be made. Is it the idea that we ought to kill the poor and the homeless? Is it the idea that we should choose to be humane even though doing so is economically disadvantageous?

Killing these “useless eaters”—to use the disgusting language of Collectivist “Philosopher-Kings”—will not lead to prosperity. Corporate welfare is a much greater drain on taxpayer resources than government assistance for the poor. Furthermore, poverty and homelessness are not the causes of economic malaise. They are symptoms. These problems are generally caused by a lack of jobs. Job shortages are caused by government overregulation and overtaxation of business and by inflation caused by central banks such as the Federal Reserve “printing” too much fiat currency. As long as a central bank and progressive, socialist, or fascist government policies regarding business are in place, economic problems will persist. Killing off members of society will not help solve these problems but will eliminate consumers and destroy human capital.

3. Release the Beast

The Purge also suggests that committing murders, rapes, robberies, etc. one night out of the year will have some kind of therapeutic effect. For example, it will allow society to get violent impulses “out of its system.” But is this true? Would allowing a pedophile to rape just one child help him “get it out of his system?” Or will it just make him want to commit another such crime? Furthermore, is it not possible that many will commit crimes because of the Purge that they wouldn’t have committed otherwise? The government not only condones going out during the Purge but encourages it. It has become a national holiday. In addition, in order to better defend themselves during the Purge, the poor and defenseless are likely to commit more crimes during the rest of the year in order to get money to pay for the means of defense or to eliminate those who might pose a threat during the Purge. If you suspect that your much stronger, meaner, and better armed neighbor might want to cull you on Purge night, why not take him by surprise and kill him on one of the other 364 nights of the year? There is simply no reason to believe that a United States which practices the Purge will have lower crime rates in the course of a year than a United States like ours which does not.

4. Mistrust and Fear

A nation that practices the Purge is going to quickly become a nation of mistrust. How can you trust a government that chooses not to defend the natural rights of its citizens one on night a year? How can you trust that the government is not using it as an excuse to be more lawless than usual? Remember, government agents can also participate. It is likely that the government would send death squads out or at least violate Constitutional rights on an epic scale. What would prevent the President from simply droning anybody that he or she feels like? Furthermore, does anyone believe that if you and I might be trying to legally murder, rape, or rob each other on the night of March 21 that we will be cordial to each other on March 20, March 22, or any other night of the year?

A society that practices the Purge is also one in which it will be rational not to stand up to bullies during the rest of the year. Did someone assault or sexually abuse you? It is probably not a good idea to seek to have him or her prosecuted. On Purge night, he or she may come looking for revenge. Did a megacorporation harm you? It is probably not a good idea to sue it. If you win a judgment against Global International Conglomerate Consolidated, it may hire a hitman to take you out on Purge night. In essence, the Purge would lead to injustice not only on Purge night but during the rest of the year.

(For a much more detailed discussion of the economic and social issues discussed here, read my new book The Real Culture War: Individualism vs. Collectivism & How Bill O’Reilly Got It All Wrong. Available now on Amazon in both print and Kindle.)