Socialism and Why It Fails

Why does socialism fail?  Socialism is not a new idea.  The idea is thousands of years old, and has never worked.  According to a friend of mine, the only really new political idea in the last couple thousand years was the Republic with three branches of government our founding fathers designed. 

Changing the name of socialism and calling it something else does not change how it works and the end result.  It does not matter if you call it socialism, modern socialism, progressivism, modern progressivism, or communism.  The principals and objectives are the same.

Socialism fails because it takes away all incentive to perform and achieve.  Why should someone work when there are no rewards?  The concept of working to one’s ability and being compensated only according to one’s needs just does not work in the long run. 

Socialism often shows early signs of success, but eventually fails.  Early success is because of wealth redistribution, but over time everyone is reduced to a lower standard of living except for the political elite.  By definition, socialism grows the size and power of government, and ends with tyranny.  The political elite live in luxury and the workers live in near poverty.  This is not just a wild prediction.  Look at history shows every socialist country fails. 

This history lesson is relevant today when we have a self-proclaimed socialist running for President.  In the past political candidates may have advocated socialist ideas, but tried to disguise them under other names. 

We have been moving toward socialism in this country for the last 100 years.  I think it is time we get back to the principles of our Founding Fathers that made this country great. 

Presidential Debates

      I have watched both the Republican and Democratic Presidential debates.  CNN was a little hard on the Republican candidates.  CNN openly said they would concentrate on the candidate’s vulnerabilities and try to pit them against each other.  I was not happy with this agenda, but understood that CNN was going for maximum ratings.  

When CNN hosted the Democratic Presidential debates, they stated they did not want to pit the candidates against each other because these were serious candidates that wanted to discuss the issues.  Was CNN saying the Republican candidates were not serious candidates? 

Let’s take a look at the candidates.  The Republican candidates included seven governors, five senators, two medical doctors, two CEOs, one woman, two Cuban Americans, one Asian American, and one African American.  Most were well known to the politically informed.  The Democratic candidates included one woman, one socialist, and three old white men that most people had even heard of.  This is interesting, considering the Democratic Party tries to present themselves as the party of diversity.  Talk is cheap.

  As with most politicians, the Democratic candidates tried to shout out about all of their accomplishments, both real and imagined.  The exception was Jim Webb, who is actually a war hero and never made a big point of it. 

Because of the self-proclaimed socialist on the stage, all the candidates leaned toward socialism except for Webb.  He obviously was the big loser.  They all promised everything imaginable for free, but never mentioned how to pay for it. 

If the Democratic candidates were serious about the issues, why did the issue of Islamic terrorists never even come up?  The topics included the mythical global warming, but never addressed the serious issues facing this country like, out of control government spending and debt.  I would like to hear a real debate and not a scripted one, but most politicians will say and promise whatever their advisors tell them to say with no intentions of keeping their promises.

For me, one of the scariest things about the Democratic debate was when Anderson Cooper asked the candidates to name their worst enemies.  Hillary Clinton said Republicans were her worst enemy, and also said she was proud of it.  This is at a time when we need a President that will unite and lead this great country.  Clinton’s elitist partisan attitude is the last thing we need at this time.

Speaker of the House

The Speaker of the House is one of the highest ranking positions in our government.  Besides chairing the House of Representatives, the Speaker of the House is third in line for the President, right behind the Vice President. 

John Boehner has been the Speaker of the House since 2011.  He has resigned, but is continuing in the position until a replacement can be named. 

Kevin McCarthy was the House Majority Leader and the obvious successor to Boehner, but he has announced that he is not interested in the position.  McCarthy said he felt a new face was needed that could unite the Republican Party and work across party lines. 

The most common name that now comes up is Paul Ryan, a US Representative from Wisconsin since 1999.  Paul Ryan has been the Chairman of the House Budget Committee since 2011. He came to national recognition when he was Mitt Romney’s running mate for Vice President in 2012.  With Democratic Senator Patty Murray, he negotiated the Bipartisan Budget Act of 2013. This was the first time since 1986 a budget was reached when different parties controlled the House and the Senate.  Ryan is currently the Chairman of the House Committee on Ways and Means.

Paul Ryan probably knows more about Federal government spending and waste than anyone in government.  Partisan politicians that want to continue to grow the size of government consider this a negative, because Ryan will cut the budget and eliminate some of their pet projects. 

I think some of the negative things I have heard about Paul Ryan are interesting.  I heard someone call him a quintessential Midwesterner and not a very good liar.  I heard several comments that he was not a very good politician because he couldn’t lie. 

I am proud of my midwestern farm background.  I don’t like liars and never have.  Why does a large portion of the public accept the notion that a politician needs to be a good liar?  We have some great examples of excellent lies in high positions.  “If you like your health insurance, you can keep your health insurance.”  How is that working out?

I heard someone question Ryan’s ambition and motivation.  They said he went to Washington “to do something and not to be somebody.”  Obviously whoever said that is more comfortable with a narcissist than someone who wants to serve the people.  Personally, I have had enough of unqualified narcissists in government and think someone who wants to serve the people is what our country needs.  Unfortunately, Ryan say’s he is not interested in running for Speaker of the House either. 

Some commentators think the Republican Party is in trouble because there is not a clear heir apparent to the position of Speaker of the House.  I hope it is just the reverse.  Maybe the Republican Party is evolving to put forward qualified candidates to serve the people instead of unqualified party loyalists. 

Real change would be good.

Return On Investment

Return On Investment or ROI is a common accounting term.  It is simply the return or percentage return on an investment.  If someone buys a business for one million dollars and that business generates $100,000 a year in profits, the ROI is 10%. 

I once had a client who was considering buying a small franchise business for $100,000.  The seller was an absentee owner paying a manager a $20,000 annual salary.  The manager was working 60 hours a week.  The business was just breaking even.   I told my client that she would have to increase the profitability of the business, or she was paying $100,000 for a 60-hour per week job that paid $20,000.  She decided the business was not a good option for her. 

If an investment of any kind is made in a business, that investment should generate additional profits.  The increase in profits is the ROI.  A retailer invests $5,000 in a new advertising campaign, and $10,000 in additional sales are generated.  If the retailer has an average profit margin of 20%, the additional gross profits generated by the ad campaign are $2,000.  The additional profits generated did not even cover the cost of the ad campaign.  This was a bad investment if there are no additional residual sales as a result of the campaign. 

See my example of giving cars away at cost in Business Fits.   http://BusinessFits.com

The private sector is very aware of ROI.  Unfortunately, that is rarely the case with the public sector.  The examples of government spending money on things that generate no return on investment are disgusting and all too common. 

There are a few politicians who actually watch the ROI on government spending.  I recently attended a Small Business Summit here in Wisconsin.  I was amazed to see that Governor Walker and his cabinet are aware of the ROI for the way they spent the tax dollar.  Governor Walker actually tries to run the state government like a business.  Amazing! 

The local economic development and tourism groups I am familiar with consider the ROI for any expenditure.  Local government is normally more efficient.

When private corporations, special interest groups, and big money make an investment in a political candidate’s campaign, they expect a return on that investment.  That return may come in the way of loans, grants, subsidies, tax breaks, or special political appointments.  Don’t kid yourself; big money is not making that donation for the good of the country.

Donald Trump admits making large campaign donations to candidates from both parties.  Trump is a very savvy businessman.  He knows how the game is played, and I am sure he received a very good return on investment for those campaign donations.  He could be a game changer.

We are in desperate need of campaign spending reform if we are going to take back our country.  Maybe we should pass legislation making it illegal for any individual, corporation, or special interest group that makes a campaign donation to any candidate from either party to receive federal money in any form. 

Think about this.  Making a campaign donation with this law would eliminate receiving government money or favors. They could not buy politicians, as is now the case.  It would be a real game changer. 

That change might actually help clean up politics and provide the campaign spending reform we desperately need.  Organizations like Planned Parenthood could no longer use federal money to donate to the Democratic Party in order to get more federal money.

I’m probably just dreaming again, but I can hope and pray we can band together and make some real changes to take our country back.