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ISRAEL FALOU’S BATTLE WITH RUGBY AUSTRALIA IS A TEST FOR ALL AUSTRALIANS

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Where does society end and the rights of the individual begin? That is the true question that lies at the bottom of the Israel Folau controversy. The courts have been given the unenvious task of determining whether an organisation has the right to punish those members who don’t share its views, or if the rights of the individual should be upheld.

Former rugby player, Israel Folau and his lawyers are seeking up to AuS$15 million (including Aus$5m for the irreparable damage done to Folau’s reputation) from Rugby Australia. Folau had had his contract with Rugby Australia terminated after he was found guilty of a high-level breach (the only kind that can result in termination) of their code of conduct. This high-level breach came from Folau’s decision to post a picture on Instagram stating that hell awaited “drunks, homosexuals, liars, fornicators, thieves, atheists, and idolaters.”

Having failed to reach a settlement with Rugby Australia at a Fair Work hearing, Folau and his lawyers have moved their case on to the Federal Court. Folau himself has merely expressed his desire for Rugby Australia to admit they terminated his contract because of his religious beliefs. In a video, Folau stated: “Hopefully, Rugby Australia will accept that my termination was unlawful and we can reach an agreement about how they can fix that mistake. First and foremost, I am hoping for an apology from Rugby Australia and an acknowledgement that even if they disagree with my views, I should be free to peacefully express my religious beliefs without fear of retribution or punishment.”

According to Rugby Australia’s, Folau’s contract was terminated on the basis that he had violated their requirement to “treat everyone equally, fairly and with dignity regardless of gender or gender identity, sexual orientation, ethnicity, cultural or religious background, age or disability.”

Of course, what really lies at the centre of the Folau case is not homophobia, but freedom of speech and freedom of religion. It is really a question of whether Israel Folau should be allowed to express his religious views without suffering economic or judicial penalty.

Both the US Supreme Court and the Australian Law Reform Commission have placed a special emphasis on freedom of speech. The US Supreme Court has noted that all other rights and freedoms are put in peril when freedom of speech is not protected. Similarly, the Australian Law Reform Commission has stated: “freedom of speech is a fundamental common law right. It has been described as the ‘freedom part excellence: for without it, no other freedom can survive.’

Likewise, the Australian Magna Carta Institute stated:

“Freedom of speech is an essential aspect of the rule of law and ensures there is accountability in government. People must be free to express their opinion about the content of laws, as well as the decisions of government or accountability is greatly reduced. Freedom of expression is a boarder term which incorporates free speech, the right to assemble, and other important ways of expressing ideas and opinions. The balance the law of Australia strikes between protecting and restricting freedom expression generally is very important to understand the health of the rule of law in Australia.”

It is remarkable to note, however, that freedom of speech is protected by neither the Constitution of Australia nor by Federal Legislation. In fact, there is a wide array of laws and regulations that place legal restrictions on expression. One cannot publish military secrets, incite criminal activity, or defame or libel another person.

Rather, freedom of speech is considered a common-law right adopted from the Westminster system. It is a feature of our political and legal traditions. The Australian High Court has stated that there is an implied right to freedom of expression embedded in the Australian Constitution (they did not say anything, however, about non-political expression). Likewise, Australia is also a signatory of the International Covenant on Civil and Political Rights which lists freedom of expression as a fundamental right.

Freedom of religion is a natural extension of freedom of speech, expression, and association. It is derived from the simple fact that the government has no right to dictate what my beliefs should be. The government has no right to force me, a Christian, to accept gay marriage, abortion, or anything else I find incompatible with my beliefs.

Unlike freedom of speech, freedom of religion is a right guaranteed by the Australian Constitution. Section 116 of the Australian Constitution reads:

Commonwealth not to legislate in respect of religion

The Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required for any office or public trust under the Commonwealth.”

Similarly, freedom of religion is protected by Australian case law. In the case of Church of the New Faith v. Commissioner for Payroll Tax (Vic), the Judges Mason ACJ and Brennan J. commented: “freedom of religion, the paradigm freedom of conscience, is the essence of a free society.” Similarly, in the case of Evans v. New South Wales, the Federal Court decreed that religious freedom as an “important freedom generally accepted in society.”

The road to hell is paved with good intentions. A decision that favours Rugby Australia will give large organisations the legal mandate to bully and intimidate those that don’t agree with their views. If Australia’s Federal Court truly believes in freedom, it will uphold Israel Folau’s right to freedom of speech and religion, and rule against Rugby Australia.

TRANSGENDERISM IS NO BASIS FOR PUBLIC POLICY

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It has been over fourteen-year since David Reimer, the victim of an insane and evil scientific experiment, committed suicide. After his penis had been burnt off in a botched circumcision, David’s parents had turned to the infamous sexologist and social constructionist, Dr. John Money for help. Following Dr. Money’s advice, David’s parents agreed to allow a sex change operation to be performed on their young son and raised him as a girl.

Despite Dr. Money’s boasting that his experiment had been a success, however, David Reimer did not settle comfortably into his female identity. David tore up his dresses at three, asked if he could have his head shaved like his father, and engaged in all manner of boyish behaviour. David was bullied at school and, upon hitting puberty, decided that he was a homosexual (in reality, of course, he was heterosexual).

Finally, when he was fourteen David’s parents revealed the truth about his gender identity. David reverted to his masculine identity, broke off contact with Dr. Money whom he described as an abusive brainwasher, and received a non-functioning penis through phalloplasty. Unable to handle the immense psychological damage that had been inflicted upon him, David Reimer blew his brains out with a shotgun at the age of thirty-eight.

For all of human history, boy has meant boy and girl has meant girl. Traditionally, sex was used to refer to the biological markers of gender. If you were born with a penis and an XY chromosome, you were a man. If you were born with a vagina and an XX chromosome, you were a woman. One’s gender expression was thought to compliment one’s biological sex. A biological man would have masculine personality traits and a biological female would have feminine personality traits. These complimentary characteristics, among them body shape, dress, mannerisms, and personality, were thought to be produced by a mixture of natural and environmental forces.

Recently, however, gender theorists have begun to question the relationship between biological sex and gender identity. They argue that gender, which they see as distinctive from sex, is a social construct. Since gender refers to the expression of masculinity and femininity, gender is something that a person acquires. (Needless to say, this movement is driven by a pernicious post-modern, Neo-Marxist worldview). Under this philosophy, gender expression is the manner in which a person expresses their gender identity. Gender identity is expressed through dress, behaviour, speech, and nothing else besides.

Neuroplasticity provides the gender theorist with perhaps his greatest argument. If underlying brain processes are theoretically strengthened through repetitive use, it follows that gender identity comes from a narrowing down of potential gender categories through the repetitive use of certain brain processes. However, it also reveals a fatal flaw in the gender theorist’s (and social constructionist’s) philosophy. If the human brain is so malleable that an individual’s gender identity is constructed, then why can’t the brain of a transgender person be adapted out of its transgenderism?

The primary problem with gender theory is that it just plain wrong. The idea that gender is distinct from sex has absolutely no basis in science whatsoever. As Jordan Peterson, the Canadian psychology/philosopher, has stated: “the idea that gender identity is independent of biological sex is insane. It’s wrong. The scientific data is clear beyond dispute. It’s as bad as claiming that the world is flat.” Men and women differ both at the cellular and the temperamental level. Unlike men, for example, women menstruate, they can have babies, and they show a slew of personality characteristics that mark them as different from men. David C. Page, the Director of the Whitehead Institution at the Massachusetts Institute of Technology, has even claimed that genetic differences exist at the cellular level asserting that “throughout human bodies, the cells of males and females are biochemically different.” These differences even affect how men and women contract and fight diseases.

The philosopher Alain de Benoist has also strongly criticised gender theory. De Benoist argued against the scientific errors and philosophical absurdities in his work Non à la théorie de genre (No to Gender Theory).

First, De Benoist points out that the gender theorists have used the fact that some gender characteristics are socially constructed to argue that all characteristics are socially constructed.

Second, De Benoist argued that the “hormonal impregnation of the foetus” (as De Benoist puts it) causes the brain to become genderised because it has a “direct effect on the organisation of neural circuits, creating a masculine brain and a feminine brain, which can be distinguished by a variety of anatomical, physiological, and biochemical markers.”

Third, De Benoist argued that biological sex has a profound effect on the way people think, act, and feel. In order to support their theory, gender theorists are forced to deny the natural differences between men and women. De Benoist wrote:

“From the first days of life, boys look primarily at mechanized objects or objects in movement while girls most often search for visual contact with human faces. Only a few hours after birth, a girl responds to the cries of other infants while a boy shows no interest. The tendency to show empathy is stronger in girls than in boys long before any external influence (or “social expectations”) have been able to assert themselves. At all ages and stages of development, girls are more sensitive to their emotional states and to those of others than boys … From a young age, boys resort to physical strategies where girls turn to verbal ones … From the age of two, boys are more aggressive and take more risks than girls.”

Furthermore, gender theory cheapens what it means to be a man or a woman. And, by extension, it denigrates the contributions that each gender has to make to civil society. Gender values give people ideals to strive for and helps them determine the rules that govern human interactions. The idea that men and women ought to be treated the same is ludicrous beyond belief. No parent would like to see their son treat a woman the same way they treat their male friends. Men have been taught to be gentlemen and women have been taught to be ladies for a reason.

All of this is not to say, however, that those pushing transgender rights do not have a case. They are right when they claim that the transgender peoples of the world face discrimination, prejudice, and violence. Some countries treat transgenderism as a crime, and it is certainly true that transgender people are more likely to be victims of violence, including murder. A reasonable transgender rights argument would be that transgender people cannot help their affliction and that society ought to treat them with kindness, tolerance, and compassion.

Unfortunately, that is not the argument that gender activists like to make. Rather than focusing on promoting tolerance, gender activists have instead sought to do away with gender distinctions altogether (which is, more likely than not, their actual aim). Using a very tiny minority of the population as their moral basis, the gender activists are attempting to force society to sacrifice its traditional classifications of male and female.

Transgenderism is clearly a mental health disorder. In the past, it was referred to as “gender dysphoria”, considered a mental illness, and treated as such. To assert the fact that transgenderism is a mental health disorder is not a denial of an individual’s integral worth as a human being. It is merely the acknowledgement of the existence of an objective reality in which gender is both binary and distinct. Unfortunately, this is not the attitude of those who influence public opinion. Consequently, programs for LGBTQ youth have seen an increase in youth who identify as transgender. The transgender journalist, Libby Down Under, has blamed instances of rapid-onset gender dysphoria on the normalisation of transgenderism in the culture. With a slew of celebrities coming out as transgender (former Olympian Bruce Jenner being a primary example), and with transgender characters being featured on numerous television shows, many teens and tweens have suddenly decided that they are transgender despite having no prior history of gender confusion.

Transgender youth increasingly feel that it is their right to express themselves however they please. And they feel that it is their right to silence all who dare to criticise or disagree with that expression. Cross-living, hormone therapy, and sex reassignment surgery are seen as part of this self-expression. Alarmingly, the mainstream response of psychotherapists to these children and adolescents is the “immediate affirmation of [their] self-diagnosis, which often leads to support for social and even medical transition.”

It is a classic case of political posturing overshadowing the pursuit of truth. Most youth suffering from gender dysphoria grow out of their predilection. Dr. James Cantor of the University of Toronto has cited three large-scale studies, along with other smaller studies, to show that transgender children eventually grow out of their gender dysphoria. The Diagnostic and Statistics Manual 5th Edition claims that desistance rates for gender dysphoria is seventy to ninety percent in “natal males” and fifty to eighty-eight percent in “natal females.” Similarly, the American Psychological Association’s Handbook of Sexuality and Psychology concludes that the vast majority of gender dysphoria-afflicted children learn to accept their gender by the time they have reached adolescence or adulthood.

It is not a secret that transgenderism lends itself to other mental health problems. Forty-one percent of transgender people have either self-harmed or experienced suicidal ideation (this percentage, of course, does not reveal at what stage of transition suicidal ideation or attempts occur). The postmodern, neo-Marxist answer to this problem is that transgender people are an oppressed minority and that they are driven to mental illness as a result of transphobia, social exclusion, bullying, and discrimination.

It is typical of the left to presume that society is to blame for an individual’s suffering. And to a certain extent, they are right. Transgender people are the victims of discrimination, prejudice, and violence. But it is more than likely that these abuses exacerbate their problems rather than causing them. One in eight transgender people, for example, rely on sex and drug work to survive. Is that the fault of society or the fault of the individual? The National Center for Transgender Equality claims that it is common for transgender people to have their privacy violated, to experience harassment, physical and sexuality violence, and to face discrimination when it comes to employment. They claim that a quarter of all transgender people have lost their jobs and three-quarters have faced workplace discrimination because of their transgender status.

In Australia, there has been a move to allow transgender children access to hormone-blocking drugs and sex-change surgeries. Australian gender activists – surprise, surprise – support the idea of as a way to reduce the rates of suicide among transgender people. The Medical Journal of Australia has approved the use of hormone therapy on thirteen-year-olds despite the fact that the scientific community remains, as of 2018, undecided on whether or not puberty-blocking drugs are either safe or reversible.

In the United States, a great deal of debate has occurred over transgender rights. In particular, there have been debates over what bathroom they should be allowed to use, how they should be recognised on official documents, and whether they should be allowed to serve in the military. In 2016, former President Barack Obama ordered state schools to allow transgender students to use whatever bathroom they desire. Similar ordinances have been passed in hundreds of cities and counties across the United States. Seventeen states and the District of Columbia are subject to ‘non-discrimination’ laws which include gender identity and gender expression. These include restrooms, locker rooms, and change rooms.

In March of 2016, North Carolina passed a law which required people in government buildings to use the bathroom appropriate to their biological gender. The US Federal Government decried the decision as bigotry and accused the government of North Carolina of violating the Civil Rights Act. The Federal Government threatened to withhold over US$4 billion in education funding. The government of North Carolina responded by filing suit against the government of the United States. The US government responded by filing suit against North Carolina. North Carolina received support from Mississippi, Tennessee, and Texas whilst Washington received support from most of the northern states.

Pro-transgender bathroom policies are not limited to government, however. Many businesses in the United States have similar bathroom policies. Many large corporations, among them Target, allow transgender people to use the bathroom of their choice. And they are perfectly prepared to enforce these policies, as well. A Macy’s employee in Texas was fired after he refused to allow a man dressed as a woman to use the female change rooms. Similarly, Planet Fitness revoked the membership of a woman who complained that a transgender man was in the female change rooms.

The most alarming trend of the gender theory movement is the attempt to indoctrinate children through changes to the education system. In 2013, France unleashed the ABCD de l’égalité (the ABCs of Equality) on six hundred elementary schools. In their own words, the program was designed to teach students that gender was a social construct:

“Gender is a sociological concept that is based on the fact that relations between men and women are socially and culturally constructed. The theory of gender holds that there is a socially constructed sex based on differentiated social roles and stereotypes in addition to anatomical, biological sex, which is innate.”

The creators of the program are smart enough to include the disclaimer: “biological differences should not be denied, of course, but those differences should not be fate.”

Fortunately, it would seem that many people are not taken in by this race to fantasyland. They are not taken in by the idea that the program merely exists to combat gender stereotypes and teach respect, and have protested. The French Minister of Education dismissed the protestors by saying that they “have allowed themselves to be fooled by a completely false rumour… at school we are teaching little boys to become little girls. That is absolutely false, and it needs to stop.” In America, The Boston Globe dismissed the protests against the program as being motivated by fear. Judith Butler event went as far as to say that France’s financial instability was the true cause of the protests.

And such a profound misuse of the education system isn’t limited to France, either. In Scotland, teachers are given guidance by LGBT Youth Scotland, children are expected to demonstrate “understanding of diversity in sexuality and gender identity”, and children are allowed to identify as either a girl or boy, or neither. The government of the United Kingdom has mandated that transgender issues be taught as part of the sex and relationships curriculum in primary and secondary school. Justine Greening, the education secretary, said: “it is unacceptable that relationships and sex education guidance has not been updated for almost twenty years especially given the online risks, such as sexting and cyberbullying, our children and young people face.”

It is in Australia, however, that there is the most shocking case of gender theory indoctrination. A great deal of controversy has been generated over the Safe Schools program. The program, which was established by the Victorian government in 2010, is supposedly designed to provide a safe, supportive, and inclusive environment for LGBTI students. It states that schools have the responsibility to challenge “all forms of homophobia, biphobia, transphobia, intersexism to prevent discrimination and bullying.”

The Safe Schools program promotes itself as an anti-bullying resource supporting “sexual diversity, intersex and gender diversity in schools.” It requires Victorian schools to eliminate discrimination based on gender identity, intersex, and sexual orientation, including in terms of an inclusive school environment.

The program addresses the issues of sleeping and bathroom arrangements and dress code. In terms of dress code, the program states:

“An inflexible dress code policy that requires a person to wear a uniform (or assume characteristics) of the sex that they do not identify with is likely to be in breach of anti-discrimination legislation including under the Equal Opportunity Act (1984) SA”

Likewise, the program states on the issue of bathrooms and change rooms that “transgender and diverse students should have the choice of accessing a toilet/changeroom that matches their gender identity.” In addition, the program states:

“Schools may also have unisex/gender neutral facilities. While this is a helpful strategy for creating an inclusive school environment for gender diverse students broadly, it is not appropriate to insist that any student, including a transgender student, use this toilet if they are not comfortable doing so.”

The idea that a transgender boy or girl should be allowed to sleep, shower, and defecate in the same place as a group of boys or girls ought to ring alarm bells for everyone. It increases the risk of sexual activity, sexual assault, pregnancy, and the transmission of sexually-transmitted-diseases. There is a reason why schools segregate changerooms, toilets, and dormitories.

The tragedy of David Reimer reveals just how dangerous it is to ignore the truth in favour of a false and malevolent social philosophy. It is one thing to seek tolerance and compassion for those in the community who may be struggling with their identity. It is something else entirely to use the plight of transgender peoples as a means of cording society to change the way it categorises gender. And it is completely insane to allow a false philosophy like gender theory to be used as the basis of public policy. If we don’t want more tragedies like David Reimer’s, we should put gender theory out in the trash where it belongs.

DEMAND-SIDE ECONOMICS VERSUS SUPPLY-SIDE ECONOMICS

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On May 9th, 2018, the YouTube Channel, Juice Media uploaded a video entitled “Honest Government Ad: Trickle Down Economics.” In the video, the rather obnoxious and condescending female presenter tells the audience that the reason Australia has “one of the fastest growing inequality rates in the world” is trickle-down economics, which she defines as “when we [the government] piss on you and tell you it’s raining.”

According to the video, tax cuts for investors, entrepreneurs, and business are directly correlated with poverty and the lack of wage growth in Australia. The presenter argues that the government cuts taxes on the rich while simultaneously claiming that they don’t have enough money for healthcare (which would be a lot more effective if people took responsibility for their own health), renewable energy (which is really an excuse to take control of the energy market), and the ABC (which doesn’t deserve a cent of anyone’s money).

The primary problem with the video is that the premise of its argument does not actually exist. There is not a single economic theory that can be identified as trickle-down economics (also known as trickle-down theory). No reputable economist has ever used the term, nor have they ever presented an argument that could be said to conform to the idea of what it is supposed to be. As Thomas Sowell (1930 – ) wrote in his book, Basic Economics:

“There have been many economic theories over the centuries accompanies by controversies among different schools and economists, but one of the most politically prominent economic theories today is one that has never existed among economists: the trickle-down theory. People who are politically committed to policies of redistributing income and who tend to emphasise the conflicts between business and labour rather than their mutual interdependence often accuse those opposed to them of believing that benefits must be given wealthy in general, or to business in particular that these benefits will eventually trickle down to the masses of ordinary people. But no recognised economist of any school of thought has ever had any such theory or made any such proposal.”

The key to understanding why political players disparage pro-capitalist and pro-free market economic policies as trickle-down economics is understanding how economics is used to deceive and manipulate. Political players understand that simple and emotionally-charged arguments tend to be more effective because very few people understand actual economics. Anti-capitalists and anti-free marketeers, therefore, use the term trickle-down economics to disparage economic policy that disproportionately benefits the wealthy in the short term, and increases the standards of living for all peoples in the long-term

The economic theory championed by liberals (read: leftists) is demand-side economics. Classical economics rejected demand-side economic theory for two reasons. First, manipulating demands is futile because demand is the result of product, not its cause. Second, it is (supposedly) impossible to over-produce something. The French economist, Jean-Baptiste Say (1767 – 1832) demonstrated the irrelevance of demand-side economics by pointing out that demand is derived from the supply of goods and services to the market. As a consequence of the works of Jean-Baptiste Say, the British economist, David Ricardo (1772 – 1823), and other classical economists, demand-side economic theory lay dormant for more than a century.

One classical economist, however, was prepared to challenge the classical economic view of demand-side economics. The English economist, Thomas Robert Malthus (1766 – 1834) challenged the anti-demand view of classical economics by arguing that the recession Great Britain experienced in the aftermath Napoleonic Wars (1803 – 1815) was caused by a failure of demand. In other words, purchasing power fell below the number of goods and services in the market. Malthus wrote:

“A nation must certainly have the power of purchasing all that it produces, but I can easily conceive it not to have the will… You have never I think taken sufficiently into consideration the wants and tastes of mankind. It is not merely the proportion of commodities to each other but their proportion to the wants and tastes of mankind that determines prices.”

Using this as his basis, Malthus argued that goods and services on the market could outstrip demand if consumers choose not to spend their money. Malthus believed that while production could increase demand, it was powerless to create the will to consume among individuals.

Demand-side economics works on the theory that economic growth can be stimulated by increasing the demand for goods and services. The American economist, J.D. Foster, the Norman B. Ture Fellow in the Economics of Fiscal Policy at the Heritage Foundation, argued that demand-side works on the theory that the economy is underperforming because the total demand is low, and, as a consequence, the supply needed to meet this demand is likewise low.

The American economist, Paul Krugman (1953 – ), and other economists believe that recessions and depressions are the results of a decrease in demand and that the most effective method of revivifying the economy is to stimulate that demand. The way to do this is to engage in large-scale infrastructure projects such as the building of bridges, railways, and highways. These projects create a greater demand for things like steel, asphalt, and so forth. And, furthermore, it provides people with a wage which they can spend on things like food, housing, clothing, entertainment, so on and so forth.

Policies based on demand-side economics aims to change the aggregate demand in the economy. Aggregate demand is consumer spending + investment + net import/export. Demand-side economics policies are either expansive or contractive. Expansive demand-side policies aim at stimulating spending during a recession. By contrast, contractive demand-side policies aim at reducing expenditure during an inflationary economy.

Demand-side policy can be split into fiscal policy and monetary policy. The purpose of fiscal policy in this regard is to increase aggregate demand. Demand-side based fiscal policy can help close the deflationary gap but is often not sustainable over the long-term and can have the effect of increasing the national debt. When such policies aim at cutting spending and increasing taxes, they tend to be politically unpopular. But when such policies that involve lowering taxes and increasing spending, they tend to be politically popular and therefore easy to execute (of course they never bother to explain where they plan to get the money from).

In terms of monetary policy, expansive demand-side economic aims at increasing aggregate demand while contractive monetary policy in demand-side economics aims at decreasing it. Monetary expansive policies are less efficient because it is less predictable and efficient than contractive policies.

Needless to say, demand-side economics has plenty of critics. According to D.W. McKenzie of the Mises Institute, demand-side economics works on the idea that “there are times when total spending in the economy will not be enough to provide employment to all want to and should be working.” McKenzie argued that the “notion that economics as a whole, sometimes lacks sufficient drive derives from a faulty set of economic doctrines that focus on the demand side of the aggregate economy.” Likewise, Thomas Sowell argued in Supply-Side Politics that there is too much emphasis placed on demand-side economics to the detriment of supply-side economics. He wrote in an article for Forbes:

“If Keynesian economics stressed the supposed benefit of having government manipulate aggregate demand, supply-side economics stressed what the marketplace could accomplish, one it was freed from government control and taxes.”

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John Maynard Keynes

The man who greatly popularised demand-side economics was the British economist, John Maynard Keynes (1883 – 1946). Keynes, along with many other economists, analysed the arguments of the classical economists against the realities of the Great Depression. Their analysis led many economists to question the arguments of the classical economists. They noted that classical economics failed to answer how financial disasters like the Great Depression could happen.

Keynesian economics challenged the views of the classical economists. In his 1936 book, The General Theory of Employment, Interest and Money (one of the foundational texts on the subject of modern macroeconomics) Keynes revivified demand-side economics. According to Keynes, output is determined by the level of aggregate demand. Keynes argued that resources are not scarce in many cases, but that they are underutilised due to a lack of demand. Therefore, an increase in production requires an increase in demand. Keynes’ concluded that when this occurs it is the duty of the government to raise output and total employment by stimulating aggregate demand through fiscal and monetary policy.

The Great Depression is often seen as a failure of capitalism. It popularised Keynesian economics and monetary central planning which, together, “eroded and eventually destroyed the great policy barrier – that is, the old-time religion of balanced budgets – that had kept America relatively peaceful Republic until 1914.”

David Stockman of the Mises Institute argues that the Great Depression was the result of the delayed consequences of the Great War (1914 – 1918) and financial deformations created by modern central banking. However, the view that the Great Depression was a failure of capitalism is not one shared by every economist. The American economist, Milton Friedman (1912 – 2006), for example, argued that the Great Depression was a failure of monetary policy. Friedman pointed out that the total quantity of money in the United States – currency, bank deposits, and so forth – between 1929 and 1933 declined by one-third. He argued that the Federal Reserve had failed to prevent the decline of the quantity of money despite having the power and obligation to do so. According to Friedman, had the Federal Reserve acted to prevent the decline in the quantity of money, the United States (and subsequently, the world) would only have suffered a “garden variety recession” rather than a prolonged economic depression.

It is not possible to determine the exact dimensions of the Great Depression using quantitative data. What is known, however, is that it caused a great deal of misery and despair among the peoples of the world. Failed macroeconomic policies combined with negative shocks caused the economic output of several countries to fall between twenty-five and thirty-percent between 1929 and 1932/33. In America between 1929 and 1933, production in mines, factories, and utilities fell by more than fifty-percent, stock prices collapsed to 1/10th of what they had been prior to the Wall Street crash, real disposable income fell by twenty-eight percent, and unemployment rose from 1.6 to 12.8 million.

According to an article for the Foundation for Economic Education, What Caused the Great Depression, the Great Depression occurred in three phases. First, the rise of “easy money policies” caused an economic boom followed by a subsequent crash. Second, following the crash, President Herbert Hoover (1874 – 1964) attempted to suppress the self-adjusting aspect of the market by engaging in interventionist policies. This caused a prolonged recession and prevented recovery. Hourly rates dropped by fifty-percent, millions lost their jobs (a reality made worse by the absence of unemployment insurance), prices on agricultural products dropped to their lowest point since the Civil War (1861 – 1865), more than thirty-thousand businesses failed, and hundreds of banks failed. Third, in 1933, the lowest point of the Depression, the newly-elected President Franklin Delano Roosevelt (1882 – 1945) combatted the economic crisis by using “new deal” economic policies to expand interventionist measures into almost every facet of the American economy.

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Let’s talk about the New Deal a little bit more. The New Deal was the name for the Keynesian-based economic policies that President Roosevelt used to try and end the Great Depression. It included forty-seven Congress-approved programs that abandoned laissez-faire capitalism and enacted the kind of social and economic reforms that Europe had enjoyed for more than a generation. Ultimately, the New Deal aimed to create jobs, provide relief for farmers, boost manufacturing by building partnerships between the private and public sectors, and stabilise the US financial system.

The New Deal was largely inspired by the events of the Great War. During the War, the US Government had managed to increase economic activity by establishing planning boards to set wages and prices. President Roosevelt took this as proof positive that it was government guidance, not private business, that helped grow the economy. However, Roosevelt failed to realise that the increase in economic activity during the Great War came as the result of inflated war demands, not as the achievement of government planning. Roosevelt believed, falsely, that it was better to have government control the economy in times of crisis rather than relying on the market to correct itself.

The New Deal came in three waves. During his first hundred days in office, President Roosevelt approved the Emergency Banking Act, Government Economy Act, the Civilian Conservation Corps, the Federal Emergency Relief Act, Agricultural Adjustment Act, Emergency Farm Mortgage Act, the Tennessee Valley Authority Act, the Security Act, Abrogation of Gold Payment Clause, the Home Owners Refinancing Act, the Glass-Steagall Banking Act, the National Industrial Recovery Act, the Emergency Railroad Transportation Act, and the Civil Works Administration.

In 1934, President Roosevelt bolstered his initial efforts by pushing through the Gold Reserve Act, the National Housing Act, the Securities Exchange Act, and the Federal Communications Act.

In 1935, the Supreme Court rejected the National Industrial Act. President Roosevelt, concerned that other New Deal programs could also be in jeopardy, embarked on a litany of programs that would help the poor, the unemployed, and farmers. Second-wave New Deal programs included Soil Conservation and Domestic Allotment Act, Emergency Relief Appropriation, the Rural Electrification Act, the National Labor Relations Act, the Resettlement Act, and the Social Securities Act.

In 1937, Roosevelt unleashed the third wave of the New Deal by aiming to combat budget deficits. It included the United States Housing Act (Wagner-Steagall), the Bonneville Power Administration, the Farm Tenancy Act, the Farm Security Administration, the Federal National Mortgage, the New Agriculture Adjustment Act, and the Labor Standards Act.

According to the historical consensus, the New Deal proved effective in boosting the American economy. Economic growth increased by 1.8% in 1935, 12.9% in 1936, and 3.3% in 1937. It built schools, roads, hospitals, and more, prevented the collapse of the banking system, reemployed millions, and restored confidence among the American people.

Some even claim that the New Deal didn’t go far enough. Adam Cohen, the author of Nothing to Fear: FDR’s Inner Circle and the Hundred Days that Created Modern America, claims that the longevity of the Depression (the American economy didn’t return to pre-depression prosperity until the 1950s) is evidence that more New Deal spending was needed. Cohen commented that the New Deal had the effect of steadily increasing GDP (gross domestic product) and reducing unemployment. And, which is more, it reimagined the US Federal government as a welfare provider, a stock-market regulator, and a helper of people in financial difficulty.

However, the historical consensus is not to say that the New Deal is without its critics. The New Deal was criticised by many conservative businessmen for being too socialist. Others, such as Huey Long (1893 – 1935), criticised it for failing to do enough for the poor. Henry Morgenthau, Jr. (1891 – 1967), the Secretary of the Treasury, confessed before Democrats in the House Ways and Means Committee on May 9th, 1939 that the New Deal had failed as public policy. According to Morgenthau, it failed to produce an economic recovery and did not erase historic unemployment. Instead, it created a recession – the Roosevelt Recession – in 1937, failed to adequately combat unemployment because it created jobs that were only temporary, became the costliest government program in US history, and wasted money.

Conservatives offer supply-side economics as an alternative to demand-side economics. Supply-side economics aims at increasing aggregate supply. According to supply-side economics, the best way to stimulate economic growth or recovery is to lower taxes and thus increase the supply of goods and services. This increase leads, in turn, to lower prices and higher standards of living.

The lower-taxes policy has proved quite popular with politicians. The American businessman and industrialist, Andrew Mellon (1855 – 1937) argued for lower taxes in the 1920s, President John Fitzgerald Kennedy (1917 – 1963) argued for lower taxes in the 1960s, and both President Ronald Reagan (1911 – 2004) and President George Walker Bush (1946 – ) lowered taxes in the 1980s and 2000s, respectively.

Supply-side economics works on the principle that producers will create new and better products if they are allowed to keep their money. Put simply, supply-side economics (supply merely refers to the production of goods and services) works on the theory that cutting taxes on entrepreneurs, investors, and business-people incentives them to invest more in their endeavours. This money can be invested in capital – industrial machinery, factories, software, office buildings, and so forth.

The idea that lower taxes lead to greater economic prosperity is one of the central tenants of supply-side economics. Supporters of supply-side economics believe that providing financial benefits for investors (cutting capital gains tax, for example) stimulates economic growth. By contrast, high taxes, especially those metered out on businesses, discourage investment and encourages stagnation.

Tax rates and tax revenue are not the same thing, they can move in opposite directions depending on economic factors. The revenue collected from income tax for each year of the Reagan Presidency was higher than the revenues collected during any year of any previous Presidency. It can be argued that people change their economic behaviour according to the way they are taxed. The problem with increasing taxes on the rich is that the rich will use legal, and sometimes illegal, strategies for avoiding paying it. A businessman who is forced to pay forty-percent of his business’ profits on taxation is less likely to increase his productivity. As a consequence, high tax rates on businesses leads to economic stagnation.

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Supply-side supporters use Arthur Laffer’s (1940 – ) – an advisor to President Ronald Regan –  Laffer Curve to argue that lower taxes lead to higher tax revenue. The Laffer curve showed the dichotomy between tax revenue and the amount of tax that is collected. Laffer’s idea that the more taxation increased, the more tax revenue is collected. However, if taxes are increased beyond a certain point, less revenue is collected because people are no longer willing to make an economic contribution.

Taxation only works when the price of engaging in productive behaviour is likewise reduced. Daniel Mitchell of the Heritage Foundation stated in an article entitled a “Supply-Side” Success Story, that tax cuts are not created equally. Mitchell wrote: “Tax cuts based on the Keynesian notion of putting money in people’s pockets in the form of rebates and credits do not work. Supply-side cuts, by contrast, do improve economic performance because they reduce tax rates on work, saving, and investment.” Mitchell used the differences between the 2001 and 2003 tax cuts as evidence for his argument. Mitchell pointed out that tax collections fell after the 2001 tax cuts whereas they grew by six-percent annually after the 2003 cuts. Mitchell points out that job numbers declined after the 2001 cuts whereas net job creation averaged more than 150,000 after the 2003 cuts. Mitchell points out that economic growth averaged 1.9% after the 2001 tax cuts, compared to 4.4% after the 2003 cuts.

Proposals to cut taxes have always been characterised by its opponents as “tax cuts for the rich.” The left believes that tax cuts, especially cuts on the top rate of tax, does not spur economic growth for lower and middle-class people and only serves to widen income inequality. They argue that tax cuts benefit the wealthy because they invest their newfound money in enterprises that benefit themselves. Bernie Sanders (1941 – ), the Independent Senator from Vermont, has argued that “trickle-down economics” is pushed by lobbyists and corporations to expand the wealth of the rich. Whilst opponents of President Ronal Reagan’s tax cuts likewise referred to the policy as “trickle-down economics.”

In reality, the left-wing slander of tax cuts can best be described as “tax lies for the gullible.” The rich do not become wealthy by spending frivolously or by hiding their money under the mattress. The rich become rich because they are prepared to invest their money in new products and ventures that will generate greater wealth. In reality, it is far more prudent to give an investor, entrepreneur, or business owner a tax cut because they are more likely to use their newfound wealth more prudently.

According to Prateek Agarwal at Intelligent Economist, supply-side economics is useful for lowering the natural rate of unemployment. Thomas Sowell, a supporter of supply-side economics, claims that while tax cuts are applied primarily to the wealthy, it is the working and middle classes who are the first and primary beneficiaries. This occurs because the wealthy, in Sowell’s view, are more likely to invest more money in their businesses which will provide jobs for the working class.

The purpose of economic policy is to facilitate the economic independence of their citizens by encouraging economic prosperity. Demand-side economics and supply-side economics represent two different approaches to achieving this endeavour. Demand-side economics argues that economic prosperity can be achieved by having the government increase demand by taking control of the economy. By contrast, supply-side economics, which is falsely denounced as “trickle-down economics” by the likes of people like Juice Media, champions the idea that the best way to achieve economic prosperity is by withdrawing, as far as humanly possible, government interference from the private sector of the economy. Supply-side economics is the economic philosophy of freedom, demand-side economics is not.

WHITE HOUSE REVEALS NEW TAX REFORM PLAN

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President Trump unleashed a new plan for tax reform in a speech at the Indianapolis State Fairgrounds on Wednesday.

The plans are the product of discussions between White House Treasury Secretary, Steve Mnuchin, the House Ways and Means Chairman, Kevin Brady, the Senate Finance Chairman, Orrin Hatch, House Speaker, Paul Ryan,  Senate Majority Leader, Mitch McConnell, and White House economic policy chief, Gary Cohn. Their purpose will be to strengthen the middle class, grow the economy, and engender economic recovery by broadening the tax base, closing loopholes, and fostering growth.

According to a press release by the Treasury Department, the reforms will mean that less of the earnings of middle-class families will be subject to Federal income tax, and will reduce the number of tax brackets from seven to three: 12%, 25%, and 35%. It will also increase child tax credits and repeal the death tax and alternative minimum tax.

For business, the reforms seek to reduce the corporate tax rate to 20% and limit the taxation imposed on small and family-based businesses operating as sole proprietorships and small businesses corporations to 25%.

The reforms have received support from both politicians and numerous free-market groups. The Republican Congressman from Wisconsin, Paul Ryan, said on Capitol Hill:

“This has been a long time coming. Instead of a source of pride, our tax code has become a constant source of frustration. It’s too big. It’s too complicated. It’s too expensive. Today, we are taking  the next step to liberate America from our broken tax code.”

Similarly, the House Freedom Caucus, which is comprised of Congress’ most conservative members, said in a statement:

“President Trump has delivered a forward-looking tax reform framework that will let hard-working  Americans keep more of their money, simplify our system, end carve-outs for special interests,  and will help make our businesses competitive abroad. The Freedom Caucus looks forward to sending a final  bill based on this framework to President Trump’s desk as soon as possible.”