DRI-259 for week of 2-2-14: Kristallnacht for the Rich: Not Far-Fetched

An Access Advertising EconBrief:

Kristallnacht for the Rich: Not Far-Fetched

Periodically, the intellectual class aptly termed “the commentariat” by The Wall Street Journal works itself into frenzy. The issue may be a world event, a policy proposal or something somebody wrote or said. The latest cause célèbre is a submission to the Journal’s letters column by a partner in one of the nation’s leading venture-capital firms. The letter ignited a firestorm; the editors subsequently declared that Tom Perkins of Kleiner Perkins Caulfield & Byers “may have written the most-read letter to the editor in the history of The Wall Street Journal.”

What could have inspired the famously reserved editors to break into temporal superlatives? The letter’s rhetoric was both penetrating and provocative. It called up an episode in the 20th century’s most infamous political regime. And the response it triggered was rabid.

“Progressive Kristallnacht Coming?”

“…I would call attention to the parallels of fascist Nazi Germany to its war on its “one percent,” namely its Jews, to the progressive war on the American one percent, namely “the rich.” With this ice breaker, Tom Perkins made himself a rhetorical target for most of the nation’s commentators. Even those who agreed with his thesis felt that Perkins had no business using the Nazis in an analogy. The Wall Street Journal editors said “the comparison was unfortunate, albeit provocative.” They recommended reserving Nazis only for rarefied comparisons to tyrants like Stalin.

On the political Left, the reaction was less measured. The Anti-Defamation League accused Perkins of insensitivity. Bloomberg View characterized his letter as an “unhinged Nazi rant.”

No, this bore no traces of an irrational diatribe. Perkins had a thesis in mind when he drew an analogy between Nazism and Progressivism. “From the Occupy movement to the demonization of the rich, I perceive a rising tide of hatred of the successful one percent.” Perkins cited the abuse heaped on workers traveling Google buses from the cities to the California peninsula. Their high wages allowed them to bid up real-estate prices, thereby earning the resentment of the Left. Perkins’ ex-wife Danielle Steele placed herself in the crosshairs of the class warriors by amassing a fortune writing popular novels. Millions of dollars in charitable contributions did not spare her from criticism for belonging to the one percent.

“This is a very dangerous drift in our American thinking,” Perkins concluded. “Kristallnacht was unthinkable in 1930; is its descendant ‘progressive’ radicalism unthinkable now?” Perkins point is unmistakable; his letter is a cautionary warning, not a comparison of two actual societies. History doesn’t repeat itself, but it does rhyme. Kristallnacht and Nazi Germany belong to history. If we don’t mend our ways, something similar and unpleasant may lie in our future.

A Short Refresher Course in Early Nazi Persecution of the Jews

Since the current debate revolves around the analogy between Nazism and Progressivism, we should refresh our memories about Kristallnacht. The name itself translates loosely into “Night of Broken Glass.” It refers to the shards of broken window glass littering the streets of cities in Germany and Austria on the night and morning of November 9-10, 1938. The windows belonged to houses, hospitals, schools and businesses owned and operated by Jews. These buildings were first looted, then smashed by elements of the German paramilitary SA (the Brownshirts) and SS (security police), led by the Gauleiters (regional leaders).

In 1933, Adolf Hitler was elevated to the German chancellorship after the Nazi Party won a plurality of votes in the national election. Almost immediately, laws placing Jews at a disadvantage were passed and enforced throughout Germany. The laws were the official expression of the philosophy of German anti-Semitism that dated back to the 1870s, the time when German socialism began evolving from the authoritarian roots of Otto von Bismarck’s rule. Nazi officialdom awaited a pretext on which to crack down on Germany’s sizable Jewish population.

The pretext was provided by the assassination of German official Ernst vom Rath on Nov. 7, 1938 by a 17-year-old German boy named Herschel Grynszpan. The boy was apparently upset by German policies expelling his parents from the country. Ironically, vom Rath’s sentiments were anti-Nazi and opposed to the persecution of Jews. Von Rath’s death on Nov. 9 was the signal for release of Nazi paramilitary forces on a reign of terror and abduction against German and Austrian Jews. Police were instructed to stand by and not interfere with the SA and SS as long as only Jews were targeted.

According to official reports, 91 deaths were attributed directly to Kristallnacht. Some 30,000 Jews were spirited off to jails and concentration camps, where they were treated brutally before finally winning release some three months later. In the interim, though, some 2-2,500 Jews died in the camps. Over 7,000 Jewish-owned or operated businesses were damaged. Over 1,000 synagogues in Germany and Austria were burned.

The purpose of Kristallnacht was not only wanton destruction. The assets and property of Jews were seized to enhance the wealth of the paramilitary groups.

Today we regard Kristallnacht as the opening round of Hitler’s Final Solution – the policy that produced the Holocaust. This strategic primacy is doubtless why Tom Perkins invoked it. Yet this furious controversy will just fade away, merely another media preoccupation du jour, unless we retain its enduring significance. Obviously, Tom Perkins was not saying that the Progressive Left’s treatment of the rich is now comparable to Nazi Germany’s treatment of the Jews. The Left is not interning the rich in concentration camps. It is not seizing the assets of the rich outright – at least not on a wholesale basis, anyway. It is not reducing the homes and businesses of the rich to rubble – not here in the U.S., anyway. It is not passing laws to discriminate systematically against the rich – at least, not against the rich as a class.

Tom Perkins was issuing a cautionary warning against the demonization of wealth and success. This is a political strategy closely associated with the philosophy of anti-Semitism; that is why his invocation of Kristallnacht is apropos.

The Rise of Modern Anti-Semitism

Despite the politically correct horror expressed by the Anti-Defamation Society toward Tom Perkins’ letter, reaction to it among Jews has not been uniformly hostile. Ruth Wisse, professor of Yiddish and comparative literature at HarvardUniversity, wrote an op-ed for The Wall Street Journal (02/04/2014) defending Perkins.

Wisse traced the modern philosophy of anti-Semitism to the philosopher Wilhelm Marr, whose heyday was the 1870s. Marr “charged Jews with using their skills ‘to conquer Germany from within.’ Marr was careful to distinguish his philosophy of anti-Semitism from prior philosophies of anti-Judaism. Jews “were taking unfair advantage of the emerging democratic order in Europe with its promise of individual rights and open competition in order to dominate the fields of finance, culture and social ideas.”

Wisse declared that “anti-Semitism channel[ed] grievance and blame against highly visible beneficiaries of freedom and opportunity.” “Are you unemployed? The Jews have your jobs. Is your family mired in poverty? The Rothschilds have your money. Do you feel more secure in the city than you did on the land? The Jews are trapping you in the factories and charging you exorbitant rents.”

The Jews were undermining Christianity. They were subtly perverting the legal system. They were overrunning the arts and monopolizing the press. They spread Communism, yet practiced rapacious capitalism!

This modern German philosophy of anti-Semitism long predated Nazism. It accompanied the growth of the German welfare state and German socialism. The authoritarian political roots of Nazism took hold under Otto von Bismarck’s conservative socialism, and so did Nazism’s anti-Semitic cultural roots as well. The anti-Semitic conspiracy theories ascribing Germany’s every ill to the Jews were not the invention of Hitler, but of Wilhelm Marr over half a century before Hitler took power.

The Link Between the Nazis and the Progressives: the War on Success

As Wisse notes, the key difference between modern anti-Semitism and its ancestor – what Wilhelm Marr called “anti-Judaism” – is that the latter abhorred the religion of the Jews while the former resented the disproportionate success enjoyed by Jews much more than their religious observances. The modern anti-Semitic conspiracy theorist pointed darkly to the predominance of Jews in high finance, in the press, in the arts and running movie studios and asked rhetorically: How do we account for the coincidence of our poverty and their wealth, if not through the medium of conspiracy and malefaction? The case against the Jews is portrayed as prima facie and morphs into per se through repetition.

Today, the Progressive Left operates in exactly the same way. “Corporation” is a pejorative. “Wall Street” is the antonym of “Main Street.” The very presence of wealth and high income is itself damning; “inequality” is the reigning evil and is tacitly assigned a pecuniary connotation. Of course, this tactic runs counter to the longtime left-wing insistence that capitalism is inherently evil because it forces us to adopt a materialistic perspective. Indeed, environmentalism embraces anti-materialism to this day while continuing to bunk in with its progressive bedfellows.

We must interrupt with an ironic correction. Economists – according to conventional thinking the high priests of materialism – know that it is human happiness and not pecuniary gain that is the ultimate desideratum. Yet the constant carping about “inequality” looks no further than money income in its supposed solicitude for our well-being. Thus, the “income-inequality” progressives – seemingly obsessed with economics and materialism – are really anti-economic. Economists, supposedly green-eyeshade devotees of numbers and models, are the ones focusing on human happiness rather than ideological goals.

German socialism metamorphosed into fascism. American Progressivism is morphing from liberalism to socialism and – ever more clearly – honing in on its own version of fascism. Both employed the technique of demonization and conspiracy to transform the mutual benefit of free voluntary exchange into the zero-sum result of plunder and theft. How else could productive effort be made to seem fruitless? How else could success be made over into failure? This is the cautionary warning Perkins was sounding.

The Great Exemplar

The great Cassandra of political economy was F.A. Hayek. Early in 1929, he predicted that Federal Reserve policies earlier in the decade would soon bear poisoned fruit in the form of a reduction in economic activity. (His mentor, Ludwig von Mises, was even more emphatic, foreseeing “a great crash” and refusing a prestigious financial post for fear of association with the coming disaster.) He predicted that the Soviet economy would fail owing to lack of a functional price system; in particular, missing capital markets and interest rates. He predicted that Keynesian policies begun in the 1950s would culminate in accelerating inflation. All these came true, some of them within months and some after a lapse of years.

Hayek’s greatest prediction was really a cautionary warning, in the same vein as Tom Perkins’ letter but much more detailed. The 1945 book The Road to Serfdom made the case that centralized economic planning could operate only at the cost of the free institutions that distinguished democratic capitalism. Socialism was really another form of totalitarianism.

The reaction to Hayek’s book was much the same as reaction to Perkins’ letter. Many commentators who should have known better have accused both of them of fascism. They also accused both men of describing a current state of affairs when both were really trying to avoida dystopia.

The flak Hayek took was especially ironic because his book actually served to prevent the outcome he feared. But instead of winning the acclaim of millions, this earned him the scorn of intellectuals. The intelligentsia insisted that Hayek predicted the inevitable succession of totalitarianism after the imposition of a welfare state. When welfare states in Great Britain, Scandinavia, and South America failed to produce barbed wire, concentration camps and German Shepherd dogs, the Left advertised this as proof of Hayek’s “exaggerations” and “paranoia.”

In actual fact, Great Britain underwent many of the changes Hayek had feared and warned against. The notorious “Rules of Engagements,” for instance, were an attempt by a Labor government to centrally control the English labor market – to specify an individual’s work and wage rather than allowing free choice in an impersonal market to do the job. The attempt failed just a dismally as Hayek and other free-market economists had foreseen it would. In the 1980s, it was Hayek’s arguments, wielded by Prime Minister Margaret Thatcher, which paved the way for the rolling back of British socialism and the taming of inflation. It’s bizarre to charge the prophet of doom with inaccuracy when his prophecy is the savior, but that’s what the Left did to Hayek.

Now they are working the same familiar con on Tom Perkins. They begin by misconstruing the nature of his argument. Later, if his warnings are successful, they will use that against him by claiming that his “predictions” were false.

Enriching Perkins’ Argument

This is not to say that Perkins’ argument is perfect. He has instinctively fingered the source of the threat to our liberties. Perkins himself may be rich, but argument isn’t; it is threadbare and skeletal. It could use some enriching.

The war on the wealthy has been raging for decades. The opening battle is lost to history, but we can recall some early skirmishes and some epic brawls prior to Perkins.

In Europe, the war on wealth used anti-Semitism as its spearhead. In the U.S., however, the popularity of Progressives in academia and government made antitrust policy a more convenient wedge for their populist initiatives against success. Antitrust policy was a crown jewel of the Progressive movement in the early 1900s; Presidents Theodore Roosevelt and William Howard Taft cultivated reputations as “trust busters.”

The history of antitrust policy exhibits two pronounced tendencies: the use of the laws to restrict competition for the benefit of incumbent competitors and the use of the laws by the government to punish successful companies for various political reasons. The sobering research of Dominick Armentano shows that antitrust policy has consistently harmed consumer welfare and economic efficiency. The early antitrust prosecution of Standard Oil, for example, broke up a company that had consistently increased its output and lowered prices to consumers over long time spans. The Orwellian rhetoric accompanying the judgment against ALCOA in the 1940s reinforces the notion that punishment, not efficiency or consumer welfare, was behind the judgment. The famous prosecutions of IBM and AT&T in the 1970s and 80s each spawned book-length investigations showing the perversity of the government’s claims. More recently, Microsoft became the latest successful firm to reap the government’s wrath for having the temerity to revolutionize industry and reward consumers throughout the world.

The rise of the regulatory state in the 1970s gave agencies and federal prosecutors nearly unlimited, unsupervised power to work their will on the public. Progressive ideology combined with self-interest to create a powerful engine for the demonization of success. Prosecutors could not only pursue their personal agenda but also climb the career ladder by making high-profile cases against celebrities. The prosecution of Michael Milken of Drexel Burnham Lambert is a classic case of persecution in the guise of prosecution. Milken virtually created the junk-bonk market, thereby originating an asset class that has enhanced the wealth of investors by untold billions or trillions of dollars. For his pains, Milken was sent to jail.

Martha Stewart is a high-profile celebrity who was, in effect, convicted of the crime of being famous. She was charged and convicted of lying to police about a case in which the only crime could have been the offense of insider-trading. But she was the trader and she was not charged with insider-trading. The utter triviality and absence of any damage to consumers or society at large make it clear that she was targeted because of her celebrity; e.g., her success.

Today, the impetus for pursuing successful individuals and companies today comes primarily from the federal level. Harvey Silverglate (author of Three Felonies Per Day) has shown that virtually nobody is safe from the depredations of prosecutors out to advance their careers by racking up convictions at the expense of justice.

Government is the institution charged with making and enforcing law, yet government has now become the chief threat to law. At the state and local level, governments hand out special favors and tax benefits to favored recipients – typically those unable to attain success on their own efforts – while making up the revenue from the earned income of taxpayers at large. At the federal level, Congress fails in its fundamental duty and ignores the law by refusing to pass budgets. The President appoints czars to make regulatory law, while choosing at discretion to obey the provisions of some laws and disregard others. In this, he fails his fundamental executive duty to execute the laws faithfully. Judges treat the Constitution as a backdrop for the expression of their own views rather than as a subject for textual fidelity. All parties interpret the Constitution to suit their own convenience. The overarching irony here is that the least successful institution in America has united in a common purpose against the successful achievers in society.

The most recent Presidential campaign was conducted largely as a jihad against the rich and successful in business. Mitt Romney was forced to defend himself against the charge of succeeding too well in his chosen profession, as well as the corollary accusation that his success came at the expense of the companies and workers in which his private-equity firm invested. Either his success was undeserved or it was really failure. There was no escape from the double bind against which he struggled.

It is clear, than, that the “progressivism” decried by Tom Perkins dates back over a century and that it has waged a war on wealth and success from the outset. The tide of battle has flowed – during the rampage of the Bull Moose, the Depression and New Deal and the recent Great Recession and financial crisis – and ebbed – under Eisenhower and Reagan. Now the forces of freedom have their backs to the sea.

It is this much-richer context that forms the backdrop for Tom Perkins’ warning. Viewed in this panoramic light, Perkins’ letter looks more and more like the battle cry of a counter-revolution than the crazed rant of an isolated one-percenter.

DRI-382 for week of 8-19-12: About Aunt Flossie

About Aunt Flossie

The political news du jour – until it is overshadowed by the next gaffe or juicy scandal – is the announcement by Republican Presidential nominee Mitt Romney of his running mate, Rep. Paul Ryan of Wisconsin. Ryan’s chief claim to fame – or shame, according to the eye of his beholder – is his plan for budgetary reform of the two largest federal entitlement programs, Medicare and Social Security.

The Democrats’ take on Ryan is that his plan would “end Medicare as we know it.” This appraisal is presumably based not on Ryan’s actual plan but on its predecessor, which would have offered seniors a choice of private-sector-based plans for medical care. The current plan does that, but also gives seniors the option to remain in the current federal system.

The fact that Democrats factually distort the nature of Ryan’s plan is not a surprise. It would not be an election if Democrats (or Republicans, for that matter) engaged in sober, responsible, rational debate. It is the way Democrats present this issue that is so horrifying.

A syndicated column (August 19, 2012) by the New York Times’ Gail Collins is entitled “Wait a Minute: What Will Happen to Aunt Flossie?” After performing the ritual preliminaries – ridiculing Ryan for his hobbies (running and fishing) and for being physically fit – she gets down to the business of “consider[ing] what the selection of Ryan… will mean to the American health-care system.”

Choice is Good, Right? No, Choice is Bad

Ryan’s plan would leave the system unchanged for those 55 and older. This element offers Ms. Collins nothing to excoriate him for, so she makes the best of it by using her literary license. She creates a hypothetical voter who is 54 years old and “totally falling apart” health-wise. He (or she; Ms. Collins is atypically silent on the matter of gender) moans that “nobody cares about my health care.” Ms. Collins does not explain how the fact that Ryan revamped the entire system of government health care expressly for his benefit should have led him to that conclusion.

Instead, she quotes candidate Romney’s general approach to Medicare: “We’re going to give you a bigger choice.” For at least 236 years, the economics profession has unanimously supported enlargement of the range of human choices. And economics is the study of human choice, at least the rational side of it.

But Ms. Collins’ Everyman doesn’t see it that way. “And now you’re telling me that people just one year older than me will get guaranteed government coverage that everybody likes, while I am going to be getting a choice? What if I don’t want a choice?”

To which the obvious rejoinder, after an astonished pause, is: Well, in that case, you simply select the government option, the one you just got through saying you preferred. See how easy it is?

Just in case the reader thought he had experienced an optical or cognitive illusion, Ms. Collins reinforces her point with some purported sarcasm, spoken in Republican “voice”: “Freedom is always good” – meaning that freedom is not always good. The wonder is, of course, that Ms. Collins could write this sentence as sarcasm. If we were to elect any generalization as universal, this one might head the list of nominations. Just exactly how often is freedom bad? When we abuse our freedom by using to hurt other people or usurp their rights, we usually banish the word “freedom” from that context, don’t we?

At this point, having made the Big Points that Ryan and Republicans Do Not Care About Under-55s and that Choice Is Bad, Ms. Collins rhetorically claps the dust from her hands and moves on to her next Big Point. Everyman complains: “So, about Medicare. Why don’t Romney and Ryan want to let me have it?”

The reader is already reeling at this display of stupidity mixed with mendacity. But Ms. Collins has more in store.

Spending Reductions vs. Cost Savings

Ms. Collins’ Big Finish is that Republicans give lip service to saving Medicare but really want to destroy it. And to add insult to injury, the Republicans accuse the Obama administration of wanting to destroy Medicare when all along the administration is simply trying to preserve it in its present form.

“The National Republican Congressional Committee has warned all its candidates that whenever the subject comes up, they are to avoid mentioning ‘entitlement reform,’ or ‘privatization,’ or ‘every option is on the table.’ Instead, the keywords are ‘strengthen, secure, save, preserve and protect…’ Which will involve a lot of choices, even though every option is not on the table. Totally not.”

The late semanticist and Senator S. I. Hayakawa would have had a field day with Ms. Collins’ use of the words “theory,” “force,” “savings,” and “efficient.” “The administration’s theory is that new federal guidelines will force providers to be more efficient, reducing anticipated Medicare costs over the next 10 years by a little more than $700 billion. The savings could be used to help provide health-insurance coverage for the poor.”

“Under Paul Ryan’s proposal, instead of simply getting Medicare, people…will be given a voucher and told to choose from among a whole bunch of health-care plans. The Ryan theory was that the competition would force providers to be more efficient, reducing anticipated Medicare costs over the next 10 years by a little more than $700 billion.”

Ms. Collins then interrupts her comparison to point out that – look here, Mr. Everyman! –

both plans purport to achieve the same $700 billion in cost reductions. “But that was before [Ryan] joined the ticket. Now all talk of $700 billion in savings is being retracted, like a great catfish being yanked by the throat from its cozy burrow.”

Ms. Collins uses the word “theory” in the layman’s sense to mean a crackpot notion that appeals to improvident souls but probably has no practical use or validation. To a scientist, a theory is a set of propositions accepted as true. What she calls “the Ryan theory” of competitive efficiency has been validated by centuries of experience. It is what has built the standard of living enjoyed in the United States. It explains the fact that centrally planned economies in Soviet Russia and Communist China failed miserably during the 20th century while free-market ones throughout Southeast Asia and in the U.S. flourished. Her failure to distinguish between an unproved hypothesis and the theory that we demonstrate by our daily existence marks her intelligence equal to that of a box of rocks. Alternatively, she knows full well the meaning and effect of competition but is pretending to doubt it – which makes her a knave rather than a fool.

Ms. Collins’ “theory” is that governments “force” companies and individuals to be efficient by making them obey “guidelines,” e.g., rules. This implies that bureaucrats know efficient prices, quantities, inputs and employment ratios – otherwise how would they know what rules to write? Economic theory says that no government bureau or expert body knows that data – instead, the data necessary to formulate it is locked inside billions of individual brains. Free-market competition unlocks it and its release enables the production of more goods using given quantities of resources.

Notice also that while both government and the market “force” people to do things, the word operates differently in the two contexts. President Obama uses force majeure – commands that force people to obey rules or face criminal or civil penalties. The market uses voluntary exchange, but the powerful incentives it delivers force producers to obey the desires of consumers or go out of business. The difference is that the market gives people the latitude to uncover the information that makes consumers happy, while government merely forces people to obey rules. Unless the rules happen to duplicate the results of the market – which they never do – consumers are out of luck.

When President Obama commands money to be cut from Medicare and re-allocated to ObamaCare, he is not saving anything because there are no competitive efficiency gains. No market process unlocks new information; no resources are freed up to be used to produce more output. People are merely reshuffled from one inefficient, unproductive activity (Medicare) to another one (ObamaCare). Neither activity utilizes the price system by confronting individuals with the actual costs of their health-care consumption decisions, as the Ryan proposal would do in its competitive alternatives. The Obama administration can talk endlessly about “cost-cutting” and “cost-saving,” but this is mere accounting talk, not economics. True economic cost is reflected in the foregone uses of resources. Only a free market prices resources according to their value in the highest-valued alternative use; thus, only a free market can generate a true system of costs.

Let’s face it. If government already knew what needed to be done to achieve least-cost production, efficiency and cost-savings, we would simply dispense with markets completely and have government publish a list of all prices, quantities, input combinations and job assignments on the Internet. We might or might not bridle at being ordered around, but nobody could quibble with the efficiency of the results. Not only does government not know all this, it isn’t even close – and government attempts to plan production of whole economies or parts thereof have led to unshirted disaster for close to two centuries.

The End of Aunt Flossie

Finally, we are presented with Ms. Collins’ rhetorical peroration.” If you want my opinion -“is there a life form on Earth above the protozoan that wants Ms. Collins’ opinion at this point? – “Ryan’s passion for health-care cost-cutting is actually not directed at Medicare so much as Medicaid. The seniors who could really take a hit would be the ones in nursing homes who’ve already run through their own savings.”

That’s my Aunt Flossie! What’s going to happen to her?”

“Do you have a spare bedroom?”

And, with the flourish of a ham actor leaving the stage on an exit line, Ms. Collins concludes a history-making column. She thinks that she has delivered the ultimate zinger. After all, what could be more lethal, more demeaning, more terrifying than to suggest that Aunt Flossie spend her declining years living with her relatives? My God – do Republicans possess no drop of mercy, no scrap of compassion, no hint of sympathy?

Medicaid is the adjunct to Medicare designed to provide for the aged and disabled poor, where “poor” is defined in terms of assets or wealth rather than income per se. The logic behind this is straightforward. At least in principle, a retired person might have substantial assets while realizing little or no income. These assets should be depleted before drawing upon taxpayers as a source of funds for medical care. The original mandate of the program, which dates back to 1965, was expanded to include disabled persons and their offspring as well. Responsibility for Medicaid is shared between the federal government and the states, with each state administering its own version of the program.

That Ms. Collins takes it so completely for granted that the compassionate, caring alternative of first medical resort for the elderly is public rather than private is a fact of enormous significance. Part of the significance is the glaring falsity of the premise. The last thing in the world anybody would call federal government bureaucracy in general or the Medicaid in particular is “compassionate.” This is not right-wing rhetoric. Ask the nurses who staff nursing homes how Medicaid patients are treated. You will find they are accepted with reluctance, treated perfunctorily and neglected disgracefully. Once a patient becomes too senile or feeble to speak and act on their own behalf, their interests generally go unheeded. Doctors resent the parsimonious reimbursement rates. Everybody abhors the endless paperwork and compliance rituals that accompany the program.

Why do the elderly prize independence above virtually all other perquisites? Because it them to oversee and control their own daily lives. In an institutional setting, they give up this control in exchange for security. But as one’s days dwindle down to the proverbial precious few, this security dwindles more-than-commensurately in value. That is why so many old people risk death willingly rather than go gently into that good night of institutional living.

The next-best thing to living on your own is living with people who share your heartfelt desire for happiness. As a practical matter, relatives are usually the only people who fill that bill. That is why Ms. Collins’ callous, dismissive portrait of Republicans as those anxious to exile Flossie to the spare bedroom is so shocking. Her perception of reality is 180 degrees out of phase – she really believes that government is compassionate and families are cold and insensitive.

In racing parlance, Ms. Collins is betting a parlay. The odds are way against her. In an individual case, a family could be callous and indifferent. In this same case, the rare instance of a caring, sensitive bureaucracy might emerge. In the words of Damon Runyan, the race is not always to the swift or the battle to the strong – but that’s the way to bet. And when we introduce the role of private charity – people and institutions specialized to be caring and sensitive to the needs of the aged and less fortunate – it becomes clear that by relying solely on government bureaucracy, Ms. Collins is actually betting an even less likely trifecta. She is betting that both the family and private charity will fail and that only government can succeed. This is like continually betting on a mule to defeat a race horse at one-and-a-half furlongs.

A Few Minor Peccadilloes

In the face of this all-out assault on truth, justice and the American way, it seems almost trivial to point out the mere lies and errors of fact committed by Ms. Collins. Conservatives have sometimes promoted vouchers as a means of introducing a competitive element into the government provision of goods or services, notably in education, but contrary to Ms. Collins’ assertion there is no voucher component in Paul Ryan’s Medicare reform. The plan relies instead of premium support by the federal government.

Her characterization of Medicare as “guaranteed government coverage that everybody likes” is a lie of breathtaking proportions. Obviously everybody doesn’t like it or we wouldn’t be trying to reform it; in fact, something close to half the country is unhappy with it.

The warranty on that “guaranteed government coverage” is about to expire in Europe, where government expenditures on social insurance and medical care have driven various countries broke and threaten to bankrupt the entire region.

Even an apprentice wordsmith, groping to describe Ryan’s pastime of “noodling” (grabbing catfish by hand rather than landing them using rod and reel), wouldn’t settle on “retracted.”

Still, the lie that takes the Pinocchio palm for bald-faced, boldfaced, barefaced annihilation of truth is her bland assertion that Romney and Ryan don’t want to let under-55s have Medicare, when (11 years down the line) all those future seniors will have to do is check the box marked “Medicare” in order to receive it.

The Totalitarians in Our Midst

In his 1944 tract The Road to Serfdom, F. A. Hayek identified “the totalitarians in our midst” as those who unknowingly paved the way for the advent of fascism by sacrificing freedom on the altar of economic planning. Ms. Collins has applied for membership in that club.

Her denigration of choice (“What if I don’t want a choice?”) is chillingly reminiscent of the pre- and post-World War II socialist rhetoric. Her elevation of federal bureaucracy and simultaneous demotion of private care on the scale of compassion is nothing less than Orwellian. Her casual disregard for fact calls to mind the intellectual climate Hayek characterized as “the end of truth,” in which all notion of virtue is sacrificed to political necessity. Her apparent ignorance of the significance and purpose of markets leaves her with no recourse but the default option of all-powerful government, which has been the time-honored alternative to markets.

There has been much talk about the historic divide represented by the upcoming election. Ms. Collins’ column proves that the talk is not mere election-year hype. One of the choices available to voters really is totalitarian. The emotions it appeals to are those called upon by Hitler in the 1930s – fear, economic insecurity and envy. The techniques are also the same, particularly the use of the Big Lie. And as lies go, they don’t come much bigger than those retailed by Ms. Collins in this dreadful column.