Tag Archives: Western Europe

Could a Nazi-type takeover happen in America?

The Kindertransport Association (my grandfather and his brother were on the kindertransport) recently asked, “Could a Nazi-type takeover of our Federal government happen in America. Why? Why not? Could it happen in Western Europe?” My response made the front page of their newsletter:

History teaches us that society is always at risk of losing its freedom and descending into tyranny because there are always people who wish for and actively seek to rule over others and profit at their expense.

With the separation of powers and checks and balances, western civilization has created systems, best exemplified by the United States Constitution, designed to prevent demagogues from gaining power. However, when people think the political system no longer functions properly, they will demand change, thinking that “anything else will be better than this.” At this point, a demagogue may convince them that he will fix the nation and bring prosperity to all with relative ease. These demagogues tell the people that all they need to do is vote for him and their problems will be solved.

Demagogues seeking to take over the government create or find an enemy to attack and blame. The demagogue informs the public that it is not their fault the economy is bad, they lost in a recent war, or that they are poor. Instead, it is somebody else’s fault. Hitler’s blamed Germany’s problems on both the communists and capitalists, with the Jews supposedly supporting both groups. Julius Caesar blamed the Roman Senate. The Communists in Russia blamed both the Czar and the democrats. With the recent economic weakness and increased partisanship in the United States and Western Europe, there has been a lot of blame bandied about, especially by politicians looking to win election.

Weak economies, a wide disparity between rich and poor sparking class warfare rhetoric, and the perception of a broken political system open the door for an eloquent demagogue to trick the people into voting for him, increasing his power, and paving the way for him or his successor to become a tyrant.

So it is possible for a Nazi-type takeover in the United States or Western Europe? Most certainly. In fact, we have already seen something similar happen just recently in Venezuela, which had been a prosperous western-style nation until the late 1980s when an economic crisis and political corruption paved the way for Hugo Chavez and his Bolivarian socialism.

Fortunately, the Founding Fathers of the United States created a system specifically designed to prevent one man or faction from gaining too much power. Western Europe has largely copied that system, with some alterations. Additionally, our long tradition of liberty is not one that people will throw away lightly. However, an eloquent demagogue promising peace and prosperity at no expense amid economic and political chaos may, at times, be able to overthrow the delicate political, economic, and social system we have. This happened in ancient Greece, ancient Rome, ancient Israel, Russia in the 1910s, Italy in the 1920s, Germany in the 1930s, and Venezuela in the 1990s, to name just a few of the most notable examples.

Only through eternal vigilance against demagogues, their false promises, and their scapegoating of minority groups can we prevent Nazi-type takeovers in the United States and Western Europe.

Michael E. Newton, KT3

— Michael E. Newton is the author of the highly acclaimed The Path to Tyranny: A History of Free Society’s Descent into Tyranny. His newest book, Angry Mobs and Founding Fathers: The Fight for Control of the American Revolution, was released by Eleftheria Publishing in July.

Ireland was no bastion of capitalism. Here’s what went wrong!

With Ireland sinking under a huge pile of debt, the socialist liberal left points out that Ireland, with its low taxes and supposedly unregulated banking system, is suffering from the excesses of capitalism. Liberals never waste an opportunity to convince you with pleasant-sounding lies.

I’ll give you a couple of examples of where the Irish and European governments, not capitalism, went wrong.

Minimum Wage

AP reports:

Ireland’s 140-page National Recovery Plan proposes to introduce property and water taxes, raise the sales tax from its current rate of 21 percent to 22 percent in 2013 and to 23 percent in 2014, and cut the minimum wage by euro1 to euro7.65 ($10.20).

So Ireland’s minimum wage was 8.65 Euros or $11.46. The minimum wage in the United States is just $7.25 with some states and cities imposing higher rates (the state of Washington has a $8.55 minimum wage, San Francisco is $9.79, and Santa Fe is $9.85) all of which are much lower than Ireland old $11.46 rate and its new $10.20 rate. With Purchasing Power nearly the same in Ireland as in the United States, the minimum wage there was 58 percent higher than in the US.

While everybody talks about Ireland’s extremely low corporate tax rate, much of that benefit was offset by this too high minimum wage. And the minimum wage did not just affect those at the low end of the wage scale. A minimum wage raises costs throughout the economy forcing employees to demand higher wages even at the higher end of the wage scale.

Liberals may argue that capitalism doomed Ireland to failure, but these high minimum wages are most certainly anti-capitalist.

Low interest rates

For years, the Irish economy was hot, earning the nickname Celtic Tiger. Wikipedia explains:

From 1995 to 2000 GNP rate growth ranged between 6 and 11% through 2001 and early 2002 to 2%. The rate then rose back to an average of about 5%. During that period the Irish GDP rose dramatically to equal then eventually surpass that of all but one state in Western Europe.

This economic growth led to speculative excess which led to inflation:

Inflation brushed 5% per annum towards the end of the ‘Tiger’ period, pushing Irish prices up to those of Nordic Europe, even though wage rates are roughly the same as in the UK.

Also:

Rising wages, inflation and excessive public spending led to a loss of competitiveness in the Irish economy. Irish wages are now substantially above the EU average, particularly in the Dublin region. These pressures primarily affect unskilled, semi-skilled, and manufacturing jobs. Outsourcing of professional jobs is also increasing, with Poland in 2008 gaining several hundred former Irish jobs from the accountancy division of Philips and Dell in January 2009 announced the transfer from Ireland, of 1700 manufacturing jobs, to Poland.

Much of this inflation and rising wages can be attributed to the high minimum wage discussed above. But where was the central bank to deal with this rising inflation?

When Ireland joined the Euro, it lost control of its monetary policy. Normally, a central bank would raise rates and decrease the money supply to fight inflation. But while Ireland was growing quickly, the rest of Europe struggled through most of the 1990s and 2000s with low growth rates and high unemployment. Thus, the European Central Bank (ECB) kept rates low in an attempt to promote growth. As a result, through no choice of its own, Ireland had a loose monetary policy at the exact time it needed a monetary tightening. Thus, Ireland’s economy, most notably its property market and banking system, experienced a huge bubble. We are now suffering the consequence of those previous excesses.

In a true free-market capitalist system, interest rates would have risen through investors’ demand and this would have slowed or stopped the Irish bubble. But the artificial government Euro system prevented this important market process from occurring.

Conclusion

Yes, Ireland was more capitalist than most. But errors like the above led the country to excess and then collapse.