Wednesday, May 04, 2016

“Creative Destruction,” the Bloody Sox, and 0.5% Growth

Boston Red Sox Curt Schilling's Bloody Sock (2004)
The 1981 Warren Beatty film “Reds” was a triumph. Beatty won his “Best Director” Oscar, and “Reds” scored nominations for Best Picture, Best Actor (Beatty), and Best Actress -- the Big Four. Based on John Reed’s book Ten Days that Shook the World, the movie successfully captured the exhilaration of “Reds” (Communists) winning the 1917 Russian revolution.

In 1991, ten years after “Reds” appeared, the Russian revolution was over. Communists were out of power after only three generations. Revolution had turned into just hanging onto power, to corruption, decay, and finally defeat.

It was ever thus. Idealism carries new leaders to the top. The next generation begins caring more about hanging on while securing a better life for self and family. Growth slows, the people become restless, the elite counters with bread, circuses, and suppression. Decline and fall.

So it is with America’s meritocratic elite. Rising to power in the name of ending the Vietnam War and equality for blacks and women, promising that America’s best would deliver prosperity for all, our establishment now exists to enrich themselves and their families, preserve the status quo and divert the people from their current economic plight with bread, circuses, and fixation on identity politics.

It also increasingly practices coercion toward its enemies.

The TV sports empire ESPN, owned by the Disney Corporation, is an integral piece (circuses) of our meritocratic elite. ESPN first suspended, then fired, baseball hero Curt Schilling for inappropriate comments on his personal Twitter account, not for anything said on air. So much for “freedom of speech.”

Here’s the Schilling Tweet that got him suspended last year:

Yes, it’s both inaccurate and offensive to compare the Muslim ummah to the 1940 German population. Schilling apologized and pulled down his Tweet, but ESPN nevertheless punished Schilling by suspending him for the rest of 2015.

A few weeks ago, Schilling offended ESPN again. This time, the sports network fired him for Tweeting:
A man is a man no matter what they call themselves. I don’t care what they are, who they sleep with, men’s room was designed for the penis, women’s not so much. Now you need laws telling us differently? Pathetic.
Fired for saying that on his private account? The guy’s a conservative!

But ESPN hasn’t stopped there. Now, in a gesture the conservative New York Post accurately called “Stalinist,” ESPN completely edited Schilling out of its 2010 film on the epic 2004 American League Championship Series between Schilling’s Boston Red Sox and the rival New York Yankees, who had won six of the previous eight such championships. The Sox came back from being down 3 games to 0 in the 2004 series, and down 4-3 in the 9th inning of the 4th game facing ace closer Mariano Rivera, who was set to wrap up yet another Yankees series win.

The Yankees, Rivera pitching, managed to give up a 9th inning run, lose the game, lose the next 3 as well, and become the first baseball team ever to blow a 3-0 advantage in a 7-game series. The Yankees have won only one league championship series since that crushing defeat, while Boston has gone on to win three World Championships.

In the epic 2004 series, Schilling won the 6th game, heroically pitching with a torn tendon sheath in his right ankle, sutured in place in an unprecedented procedure by Red Sox team doctors so that he could play (see bloody sock above). Schilling’s heroics covered 17 minutes of ESPN's original film. ESPN removed all 17 minutes. That makes ESPN like Soviet dictator Joseph Stalin; each time Stalin purged one of his colleagues, he removed all traces of the victim from the state’s photographic record.

Such tactics -- in the end -- didn’t save Communism. They won’t save today’s “politically correct” elite either, no matter how hard the establishment seeks to turn popular attention toward perceived injustices visited on transvestites and other identity groups, and more importantly, away from America’s unsolved economic problems.

In this year’s first quarter, the U.S. GDP grew by only 0.5%. John H. Cochrane, writing in the conservative Wall Street Journal (subscription), documents the pain caused by growth slowing from 3.5% between 1950 to 2000 to only 1.7% since:
By 2008, the average American was more than three times better off than in 1952. Real GDP per person rose from $16,000 to $49,000. And those numbers understate the advances in the quality of goods, health and environment that came with growth. But if U.S. growth between 1950 and 2000 had been the 2% of recent years, instead of 3.5%, income per person in 2000 would have risen to just $23,000, not $50,000. That’s a huge difference.
Over the next 50 years, if income could be doubled relative to 2% growth, the U.S. would be able to pay for Social Security, Medicare, defense, environmental concerns and the debt. Halve that income gain, and none of those spending challenges can be addressed. Doubling income per capita would help the less well off far more than any imaginable transfer scheme.
Given the importance of income growth, Cochrane asks: “Why are growth-oriented policies resisted?” His answer:
Growth comes from productivity, which comes from new technologies and new companies. These displace the profits of old companies, and the healthy pay and settled lives of their managers and workers. Economic regulation is largely designed to protect profits, jobs and wages tied to old ways of doing things. Everyone likes growth, but only in someone else’s backyard.
After all, capitalism IS “creative destruction” (Joseph Schumpeter, from Karl Marx).

So what do we do? People want security and are threatened by change. Tyler Cowen, an economist writing in the liberal New York Times, surprisingly advanced religion as one way out of our current difficulties:
Mormons have done relatively well in economic terms, perhaps. . . because their religious culture encourages behavior consistent with prosperity, such as savings, mutual assistance, family values and no drug and alcohol abuse. . . it seems reasonable to observe that changing social norms, sometimes associated with religion, can help improve living standards. . . Technology, trade and even religion may help restore prosperity to the middle class.
Such emphasis on sound values is consistent with the recommendations of Charles Murray (Coming Apart), whose response to the gap he documents between the meritocracy and America’s lower class includes a working class return to religious values.

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