Less than two months after acting to bail out the nation’s money markets because of a liquidity crisis that arose from a surge in U.S. government borrowing to fund its spending, Federal Reserve Chair Jerome Powell testified before the U.S. Congress that the federal government’s current course of debt-fueled spending is on an “unsustainable path.”
When President Grover Cleveland tried to implement an income tax in 1894, the Supreme Court declared it to be unconstitutional because it violated Article 1, Section 2 of the Constitution, which says taxes must be levied in proportion to a state’s population. In response, the supporters of income taxation passed the Sixteenth Amendment, ratified in 1913, which explicitly allows Congress to levy an income tax.
I would like to share with readers three lessons from the fall of the Berlin Wall.
The first, what it teaches us about history. Historicists believe that history is teleologically guided by impersonal forces that shape things inexorably. Several thinkers, among them Karl Popper in The Open Society and its Enemies, debunked this theory compellingly in their day. But many people who are not necessarily inspired by ideological considerations take historical events for granted. How often have we heard that the fall of the Berlin Wall was inevitable?
A close look at what unfolded prior to November 9, 1989, indicates that certain choices individuals made at a particular point in time were crucially important and that there was nothing inevitable about them—nor about their timing.
It was not inevitable that Mikhail Gorbachev would respond to the unrest in the Soviet empire in the way he did weeks before November, 1989. His intention had been not to dismantle communism, but to reform it in order to save it from within.
When East Germans began to flee to Czechoslovakia, seeking to enter the West German embassy, and to Hungary, where the barbed wire on its Austrian border had been removed, Gorbachev could have reacted as his predecessors did, in Hungary in 1956 by crushing Nagy’s attempt at reforming the communist system and in Czechoslovakia in 1968 by destroying Alexander’s Dubcek’s Prague Spring. After all, earlier developments in Poland highlighted the danger of threatening the entire communist structure. But he decided not to intervene, taking many risks against his own position in Moscow.
Another crucial decision was the October 1989 coup led by Egon Krenz against the hardline leader of East Germany, Erich Honecker, whose Stasi was the most robust political police in the empire. Until then Honecker’s loyal disciple, Krenz had been approached about removing Honecker months earlier and had refused. Honecker was not only highly respected in the Soviet orbit but also a powerful ally of those who resisted Gorbachev’s reforms in Moscow and elsewhere.
A second lesson I take is the devastation the communist system can bring on a country with a strong economic base and culture.
East Germany’s Saxony had been the leading state in Germany’s industrial revolution in the 19th century and, as one of the free cities of the Holy Roman Empire and a member of the Hanseatic League, a medieval commercial confederation that had a long tradition of enterprise and trade. But at the time of the country’s reunification in 1990, East Germany’s productivity was one-tenth that of its western counterpart; its per capita income represented about one-third of the other side’s. Despite the equivalent of 1.6 trillion euros spent by the German government in trying to make the eastern states converge with the western states, by 2010 the eastern states’ per capita income was still one-third below that of the western states.
The third lesson is that the fight for freedom needs to be constantly renewed. Today, given the social frustration among many Germans from the east, illiberal populist movements have caught the imagination of many voters. The anti-immigration Alternative for Germany party recently garnered one-fourth of the vote in Brandenburg and Saxony, reaching second place. Their slogan — “Let’s complete the change” — directly addressed the eastern states’ resentment at their failure to catch up.
November 9, 1989, has become engraved in the memories of freedom-loving people around the world. But new walls have been erected and will be erected in the future. The fight goes on.
California Governor Gavin Newsom in September signed the Body Camera Accountability Act, a law prohibiting the use of facial recognition and other biometric tracking software in police body cameras. Following similar measures in San Francisco and Oakland, the law is the first statewide ban of its kind in the country.
Milton Friedman said there’s no such thing as a free lunch. If some people are consuming health care, someone has to pay for it. But that’s not my point here. Many people think that Medicare for All would mean the government would pay for everyone’s health care, so those receiving health care would have no out-of-pocket costs. That’s not how Medicare works.
Chesa Boudin has gained election as district attorney of San Francisco, beating out Suzy Loftus, favorite of the city’s establishment Democrats and backed by Gov. Gavin Newsom. The victory is not surprising, given the victor’s profile.
People tend to view taxes in one of two ways. One view is that taxes are the price people pay for government goods and services. The other is that taxes are a penalty levied on people who earn income or have wealth. Elizabeth Warren’s proposed wealth tax takes the second view.
With all the fires and blackouts going on, Californians may have missed a major legislative milestone last month. As NBC News reports, Gov. Gavin Newsom signed a law “banning hotels from giving guests plastic bottles filled with shampoo, conditioner or soap.” The measure takes effect in 2023 for hotels with more than 50 rooms and 2024 for hotels with less than 50 rooms. Violators could be fined $500 for a first offense and $2,000 for subsequent violations.
Contrary to what backers of the law appear to imagine, California is not the first to impose such a ban.
The Patient Protection and Affordable Care Act (ACA) was supposed to make the cost of health insurance more affordable by slowing the rising trend of increases in health insurance costs. The controversial law was passed in 2010 on a strict party line vote, with nearly all Democrats in favor and all Republicans opposed.
“PG&E as we know it cannot persist and continue,” proclaimed California governor Gavin Newsom last Friday. “It has to be completely transformed, culturally transformed, operationally transformed, with a safety culture first and foremost.”
Embattled and enflamed Californians might wonder how this complete transformation is to be achieved. On Friday, Gov. Newsom provided the answer when he named his cabinet secretary Ana Matosantos the new “Energy Czar.” Gov. Newsom is on record that his cabinet secretary is a “genius” and Capitol Weekly explains that Matosantos “makes the trains run on time.” But can the Energy Czar Ana transform Pacific Gas and Electric, and by implication, the state’s entire energy system?
