A Pamphlet from Don Stuart, Preserve Our Nation, LLC
Pamphlet #29 - 12/19/2009

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Is the End of Socialism in Sight?

The path to Socialism is dead! Right?

I hope that you will pay attention as I describe the death of Socialism in America. Let’s start with a little economic review.

Supply-Demand Economic Curves

Let me begin by talking about the Economic Supply-Demand curves as depicted by British Philosopher John Stuart Mill (1806 – 1873).

The Supply-Demand curve is created by graphing Price (Y-axis) of a product versus Units or Quantity (X-Axis) of a single product (car, I-Pod, shovel, coffee, etc…). Draw two curves on the graph and call the intersection of the curves the equilibrium point that will satisfy the consumers’ demand and manufacturers’ supply.

Supply-Demand Curve
Supply-Demand Curve

Demand Curve

The Demand curve represents the consumer demand in units of a product (Quantity) at any given purchase price. The curve shows that as the sale price decreases the number of units desired would increase. As an example, if coffee cost $50 per pound then very few pounds would be purchased (Demand). As the price per pound drops to $10 per pound, then much more coffee will be purchased.

Supply Curve

The Supply curve represents the manufacturers’ supply of units (Quantity) of a product at any given sales price. The curve shows that as the price increases the number of units (Quantity) manufactured increases. This indicates more investments made to meet consumers’ demand.

The intersection of the two curves is called the equilibrium point illustrating the actual number of units that would be sold at a particular price.

There are three variables in this graph: Demand Curve, Supply Curve and Price. At least two of these variables must be set for the third to be determined.

The options are:
  • Set Demand and Supply, Determines Price
  • Set Price and Demand, Determines Supply
  • Set Price and Supply, Determines Demand
  • Setting Price, Supply and Demand yields Failure

(Market Sets Demand and Supply)

In a free market, the supply-demand intersection (price) is determined by consumers’ (demand) and manufacturers’ (supply) negotiation. Many consumers and suppliers are involved in this silent negotiation and it has been referred to as the “Invisible Hand” by Adam Smith.

Socialism 1
(Government Sets Price and Supply)

The price is set by the government. The supply is manipulated to provide units at that price. The demand will adjust to the price. If you can afford the price you may buy it. If you can’t afford the price, then you do without.

The government does not have to own the manufacturer to set the quantity produced. This can be accomplished with laws allowing government groups to set the quantity. But owning part or all of the manufacturers does make it easier to manipulate (GM, Chrysler, and AIG).

Socialism 2
(Government Sets Price and Demand)

The price is set by the government. The demand is manipulated by controlling incomes as in setting the pay that groups or individuals can earn. The supply will adjust to the price. If you can afford the price you may buy it. If you can’t afford the price, then you do without.

The government specifies how much individuals are able to earn via setting wages or limits on income. This can be accomplished with laws allowing government to take earnings from one group and give to another group: redistribution. The government does not have to employ everyone.

(Government Sets Price, Demand and Supply)

The price is set by the government, wages are controlled by the government and the government owned manufacturers are told what to produce and how much. There will be no adjustments. Everything is specified by the government. Prices are set lower than cost to manufacture the product and wages are set to allow a few to purchase products. Finally, scarcity of products becomes a reality. The economy fails. (Reference the Soviet Union’s Central Planning Committee as a good example.)

Obama’s Central Planning Committee

President Obama created the Obama Central Planning Committee (OCPC) which consists of 35 Intellectual Elite Czars (so far). Most of these Czars have no oversight from Congress and are there to fulfill the wishes and programs of the Liberal Progressive's Agenda.

So how do we compare OCPC goals with the above discussion of the Supply-Demand Curve and Socialism?

  • (Demand/Supply) A Czar is in charge of the economy.
  • (Demand) A Czar is in charge of setting salaries and wages.
  • (Demand) A Czar is in charge of creating green jobs.
  • (Demand) A Czar is in charge of the Stimulus.
  • (Supply) A Czar is in charge of auto recovery.
  • (Supply) A Czar is in charge of auto production detailing what types of cars to produce.
  • (Supply) A Czar is in charge of Federal regulation.
  • (Supply) A Czar is in charge of Energy and Environment.
  • (Supply) A Czar is in charge of Health and Healthcare.
  • (Price) Cap and Trade Legislation.
  • (Price/Demand/Supply) Healthcare Legislation.
  • (Price/Demand/Supply) Home Mortgage Bailout Legislation.

Given the above stated OCPC goals, I leave the decision to the reader to decide which goal fits the above scenarios: Capitalism, Socialism, or Communism.

For Socialism to work, the government has to be able to collect data and control the multiple variables dealing with the Supply-Demand curve for each product produced or sold in America. They must also be able to adjust wages and determine how each individual desires to spend their income. They must be able to track everyone’s income (IRS).

This data collection and analysis will not be easy. There are millions of products and 200 million wage earners in America. During the reign of the Soviet Union’s Central Planning Committee, they were in control of approximately 24 million products. Did they really try to analysize the data? I bet not!

In a Capitalist Free Market all of these data are contained in the PRICE. This is the “Invisible Hand” that guides the economy. There is no massive governmental data collection system and no data analysis. The Price automatically contains all the necessary economic data, has analyzed itself and provided the answer.

Socialism requires that the government takes on the task of collecting the data, analyzing the data and setting a price for each product. This is the “Visible Hand” control of the economy. Under this type of control, the economy will stagnate and finally collapse.

Can the government accomplish this? I think not.

My experience working in the process control field has clearly demonstrated that it takes considerable time, effort and money to capture data and utilize it. For example, one project took two years to design and create a system to control one major variable.

Obama's Central Planning Committee (OCPC) created an $18 million+ Recovery.gov website for the simple task of collecting two items of data from each state: jobs created and jobs saved. They failed and have abandoned correcting the website data. So should we expect them to capably collect data on millions of products and desires/needs of 200 million people in order to control the economy?

What will that cost? How long will it take?

Socialism has no chance of succeeding! But we may have to suffer as the Liberals test their plan for Socialism. We must bring a Halt to the process, immediately; otherwise we will continue to suffer painful consequences.

The intellectual elite are abandoning the Capitalist system (which has benefited them); for Socialism. They live far from reality. They know not what they are doing.

Personal Note: I have worked in Industrial Process Control for the past 35 years and am President of Preserve Our Nation, LLC, a 527 political tax-exempt group organized to repeal the 16th and 17th Amendments to the Constitution as well as adding new Amendments.

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