I Believe

• Russia’s Ancient Strategy, and Why the West Keeps Falling for It

  From the Kalka River to Lake Peipus: Russia Turns East(Begin with ambient medieval Eastern European music, fading under narration)After the Rus’ catastrophic defeat at the Kalka River in 1223, and especially following the full-scale Mongol conquest in the campaigns of the late 1230s, Mongol dominance reshaped the eastern and western reaches of the Russian world.In the 13th century, Kyiv, now the capital of Ukraine, was still the spiritual and cultural heart of a region known as Kievan Rus. It wasn’t Russian in the modern sense. Its roots were Viking. The Norsemen who arrived in Eastern Europe, mostly of Swedish origin, were Varangians, also referred to as the Rus. They settled among the Slavic tribes, built river trade routes, and founded ruling dynasties. Over the generations, their Norse identity blended into the local Slavic world.Kievan Rus was a loose federation of Slavic principalities spanning what we now know as Ukraine, Belarus, and the western edge of Russia. Rivers made its borders. Trade flowed south along the Dnieper to the Black Sea and north along the Volkhov and Northern Dvina toward the Baltic and the White Sea. The Dnieper linked Kyiv to Byzantium and the wider Mediterranean, while the collective waterways connected the forest to the steppe and bound distant peoples into a shared political and spiritual world.(A quick note: If you’re listening to the audio-only version, the written piece available on Substack includes a detailed map. Kievan Rus stretched from the White Sea, above the Arctic Circle, to the Black Sea, just north of present-day Turkey.) By this point, Kyiv’s political power had faded from its earlier role as the capital of Kievan Rus, but the city still carried immense symbolic weight.That changed in December 1240. Batu Khan, the grandson of Genghis Khan, led the Mongol army that laid siege to the city. After a brutal assault, they slaughtered its people and left the city in ruins. Many towns across Rus met the same fate. Some never fully recovered. Others vanished entirely.In the years that followed, the world of Viking Rus, once shaped by Norse leadership and open trade, gave way to something new. In the northeast, Muscovy rose, its name the root of what we now call Moscow. The people were still Slavic, but operated under a different system. Under Mongol rule, governance became centralized, hierarchical, and dominated by Eastern thought.Western thought emphasized law, feudal contracts, and the rights of lords and cities. Eastern philosophy favored absolute authority, obedience, and control. Power flowed from the top, not from mutual obligation. In the West, oaths bound lords and vassals. In the East, obedience flowed downward from an unquestioned ruler.Russia turned its back on the Latin West and aligned itself with systems of power born from the East, imperial and unyielding.That pivotal shift came into sharp focus with Alexander Nevsky’s decisive choice in 1242.…Alexander Nevsky, a prince of Novgorod, faced invasions from two directions. From the West, Catholic crusaders from the Teutonic Order pushed aggressively, determined to impose Western religious and political order. From the East, Mongol overlords watched closely, prepared to assert their brutal authority should Nevsky waver in his allegiance.On April 5, 1242, on the frozen surface of Lake Peipus, Nevsky met the heavily armored Teutonic knights in a legendary clash known as the Battle of the Ice. His lightly equipped Russian troops were agile and intimately familiar with the terrain. They employed tactics blending patience, deception, and carefully calculated retreat. These tactics distinctly reflected Eastern strategic thinking, including principles of manipulation and timing.The heavy crusader knights were ill-equipped for the battle. The ice cracked beneath their weight, plunging many into the freezing water. Nevsky’s victory became symbolic of Russia’s decisive choice to turn away from Western European dominance and instead accept the Eastern yoke of Mongol power. Nevsky’s choice entrenched Russia in Eastern political philosophy, characterized by pragmatism, indirect manipulation, and power calculation.So, the Battle of the Ice wasn’t so much a military victory as a decisive statement that Russia’s future would unfold under the Eastern logic of calculated statecraft. Russia would be shaped by the pragmatic wisdom echoed centuries earlier by Eastern philosopher Kautilya.The Philosopher Kautilya Long before the Mongols or the Rus, one philosopher wrote the handbook for survival in a ruthless world.Kautilya, also known as Chanakya or Vishnugupta, was the chief adviser to Chandragupta Maurya, the founder of India’s Mauryan Empire in the fourth century BC. Educated at the ancient university of Takshashila, he wrote the Arthashastra, a sweeping manual on statecraft, intelligence, and war. It describes how politics works, not how it ought to work. Kautilya was a ruthless realist. Even the philosopher himself was born in legend. Picture a dusty village in fourth-century BC India. A newborn boy arrives to a humble household. His father is Chanin. His mother is Chaneshvari. Both are followers of the Jain faith. Jainism is one of the world’s oldest religions. Jains believe in the existence of souls and strive to minimize harm to all living beings, including plants and animals.In the newborn parent’s tiny courtyard, the village elders gather. They are curious for signs that foretell the child’s fate. The baby startles everyone. He is born with a full set of teeth, a sign in local belief that marks a future king. The boy’s father worries. Kings collect enemies, and enemies bring suffering. To blunt the omen, he breaks one of the infant’s teeth. The monks study the infant again and shake their heads. The prophecy shifts. He will never sit on a throne; he will stand behind it, guiding its power. Kautilya guided Chandragupta Maurya to dismantle the Nanda dynasty, unify the Indian subcontinent, and lay the foundation for the Mauryan Empire, one of the most powerful and administratively sophisticated empires of the ancient world. At its height, it controlled almost the entire Indian subcontinent, from the Himalayas in the north to the Deccan Plateau in the south, and from the Indus Valley in the west to the borders of present-day Bangladesh in the east.The Mauryan Empire ruled about sixty million people, nearly a quarter of humanity at the time. No one matched that scale for more than a thousand years, until the rise of the Mongols.When he wasn’t training an emperor or shaping a dynasty, Kautilya wrote. His words, etched in Sanskrit, became a manual for survival in a ruthless world.In the Arthashastra, survival rests on four tools.First, ‘Sama.’ Sama is persuasion, but not for the sake of harmony. Sama is influence without resistance. It is calm words, flattery, charm, even seduction, if the moment demands it. The aim is not agreement, it is control. Power exercised without force, where the opponent believes it was their own choice.Next, ‘Dana.’ Dana is inducement. A reward, but not a gesture of goodwill. It is a calculated investment. Gold, land, favors, each given not for kindness, but for leverage. In the East, generosity is often strategy in disguise.Third, ‘Bheda.’ Bheda is the use of logic or trickery to influence others. It plants suspicion, quietly unravelling unity from within. The most efficient way to defeat an enemy is to make them defeat themselves.Last, ‘Danda.’ Danda means the open use of force. Not unleashed in anger, but in certainty. When all other tools have served their purpose, Danda completes what the others began.Eastern thought is vast, but Kautilya’s four-tool schema offers its sharpest lesson in political realism. Kautilya serves as a diagnostic lens, not as evidence that medieval Russia consulted the Arthashastra; the parallels emerge from convergent strategic logic. That blueprint echoes through Sun Tzu, the Mongol khans, and the rulers of Muscovy. Eastern philosophy does not ask a ruler to be noble; it asks the ruler to be effective. A wise leader puts self-interest first and moves between persuasion, reward, division, and force when the moment demands.When Muscovy absorbed Mongol methods, it closely echoed Kautilya’s ideas, whether consciously or simply through historical resonance. Two centuries after Nevsky, on the banks of the Ugra River, a grand prince would embody these Eastern lessons. Ivan III and the Great Stand on the UgraPicture Muscovy in 1480. Two centuries have passed since Nevsky. The grand princes of Moscow now rule a realm knit together by tribute, surveillance, and a network of loyal boyars. Over those two centuries, Muscovy gathered taxes for the khan, slowly turning that machinery to its own ends. Ivan III, Grand Prince of Moscow, born in 1440, hidden from murderers as a child, who started leading armies at the age of 12, has stopped sending silver to the steppe. Akhmat Khan of the Great Horde leads his army west to punish Ivan’s defiance.Summer turns to autumn. The two armies meet on opposite banks of the Ugra River, a quiet tributary of the Oka about one hundred fifty miles southwest of Moscow. It is a tense, prolonged standoff. Ivan blocks every ford, posts archers in the reeds, and waits. No arrows fly. No charges thunder. Day after day, the river lies between them like a mirror.Ivan is not idle. He enters negotiations with the khan to delay. He uses persuasion and trickery to buy time. Meanwhile, he sends envoys to Lithuania, urging them to stay neutral. He releases gifts to minor Tatar princes who resent Akhmat. He spreads whispers that Muscovy’s allies had already raided the Horde’s rear camp. Persuasion, reward, and division work together silently while the army shows strength only in reserve.Weeks pass. The Horde’s supplies run low. Winter fog settles over the water. Hidden from Akhmat, Ivan’s allies struck, or seemed to strike, at the Horde’s base. Whether real or whispered, the threat broke the Khan’s nerve. On a cold November night, Akhmat breaks camp and retreats to the steppe. Ivan’s host watches the torches fade, then marches home without a battle. Russians will remember it as the Great Stand on the Ugra River, the moment the Mongol yoke snapped without a sword stroke. Ivan returns to Moscow and orders the double-headed eagle of Byzantium carved above the Kremlin gate. He claims the title Sovereign of All Rus, collects tribute for himself, and binds the boyars under a single, autocratic will. The lesson is pure Kautilyan philosophy: persuade, reward if useful, divide when necessary, and strike only when certainty is absolute. Ivan’s stand at the Ugra wasn’t a single moment in history. It became a blueprint. From Ivan, through the tsars and into the Soviet era, Russia’s leaders have consistently drawn from that Eastern playbook, refining persuasion, division, and deception into an art.Today, we continue to miss the obvious. Russia still plays from the Eastern playbook. They don’t play with obvious brute strength. The Eastern playbook necessitates Kautilyan precision.Sama - to persuade us with lies, false narratives about NATO aggression (Putin’s 2007 Munich speech), historical grievances, red lines, and misunderstood borders. Their aim isn’t agreement. It’s control.Dana - to induce us to enter into prolonged negotiations, knowing some in the West will see a path to glory in a quick diplomatic win. But this generosity is leverage in disguise. It results in delay.Bheda - to divide us, whispering into the cracks between NATO allies (2016 Brexit disinformation), feeding fatigue, exploiting dissent, and making us question each other’s allegiance long before we question them. Danda - to strike. Yes, with missiles raining down on Kyiv and Kharkiv, but also in quieter, equally destructive ways. Think of the Sandworm Team cyberattacks crippling Estonia and Ukraine’s power grids, or the carefully planted disinformation campaigns that fracture the West from within.We, the democratic republics, NATO nations, the transatlantic West…still haven’t learned how to play the game. Many days, we don’t even remember our purpose. And yes, sometimes we compromise our ideals, trading principles for short-term security or convenience. Iraq in 2003 showed the West can trade procedure for speed, too, and we paid the strategic price for that haste. But we still believe those ideals matter.The war in Ukraine isn’t just about Ukraine. It’s not even just about NATO or security guarantees.It’s about the deepest division between West and East. In the West, power answers to the people. Governance is a messy, slow contract built on consent. Liberal systems aim (imperfectly) to make power answer upward.In the East, people answer to power. In Russia’s strategic culture, rooted in centuries of centralized rule, power tends to flow downward. We reject Eastern philosophy because it relies on influence built on lies and division to control the people. Instead, we believe the Almighty grants us all the inherent right to life, liberty, and self-determination. We believe that no government can endow individuals with those rights. That governance is for the people, not the oligarchs.In the long arc of history, governance for the people promotes strong, resilient societies.How long will we appease Russia, hoping for peace on their terms, while the war in Ukraine grinds on?May God bless the United States of America.Music from #Uppbeat (free for Creators!):https://uppbeat.io/t/arnito/le-quarter-du-samedi-soirLicense code: ITDHTFNPJJJMUH0X Get full access to I Believe at joelkdouglas.substack.com/subscribe

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  17:04
• Negotiating with Russians

  Before we get started, a personal note. Last week, “I Believe” broke into Apple Podcasts’ Top 10 in philosophy.The show would go on out of conviction alone, but your encouragement makes the work lighter. Thank you for listening, thinking, and being here.And in the words of Bill Belichick, “We're on to Cincinnati.”Part 1. The Broken Oath and How the Mongols Deceived the Rus’ Princes(Sound of galloping horses fades slightly into the background, replaced by a more narrative, almost hushed tone)Imagine the vast, open grassland steppe. For centuries, the scattered principalities of Rus’ fought their own small wars. But a new threat was emerging from the East, a storm on horseback: the Mongols.At first, these nomadic warriors were a distant rumor. But in 1223, they arrived in force. The Rus’ princes, for once united by a common enemy, gathered their armies. Among them were Mstislav the Bold and other proud princes with their own ambitions.After initial skirmishes, as the Rus’ and their Cuman allies faced the seemingly relentless Mongol advance, a message arrived. It was from the Mongol generals, a promise of safe passage if the princes would lay down their arms. They swore on their honor that no harm would come to those who surrendered.(A slight pause for dramatic effect)Mstislav the Bold, trusting in this oath, perhaps foolishly, perhaps desperately seeking to avoid further bloodshed, convinced some of the other princes. They agreed. They laid down their swords, believing the conflict was over, that a truce had been secured.But the Mongol word, it turned out, was as brittle as dry steppe grass in winter.(Sound of a sudden, sharp, metallic clang)The moment the Rus’ princes and their men were vulnerable, disarmed and unsuspecting, the Mongols fell upon them. It became a slaughter, not a battle. The ground ran red with the blood of the betrayed. Some princes were brutally executed; legend says the Mongols crushed the remaining princes under a platform where the victors celebrated their gruesome triumph.(Tone becomes slightly lower, more somber)This wasn’t just a military defeat; it was a betrayal that echoed through Rus’ for generations, deepening distrust and revealing the invaders’ ruthlessness. Though Rus’ stayed connected to Europe, Mongol rule pushed trade and politics eastward. Harsh penalties, executions, and torture grew common. Scholars still debate the human cost: estimates run from single‑digit population losses to claims approaching one‑half. Kalka became a stark warning that promises can vanish like steppe wind. This initial, devastating betrayal paved the way for the Mongol Yoke, centuries of subjugation that forever shaped Russian history.…The betrayal at the Kalka River is the first key piece to understand when negotiating with Russians. For Russia, betrayal isn’t theory; it’s memory.Napoleon and Tsar Alexander I of Russia signed the Treaty of Tilsit in 1807, forging an alliance. Napoleon then invaded Russia in 1812.In 1939, Hitler and Stalin signed a non-aggression pact. Two years later, Nazi tanks crossed the Russian border. Russia claims that Western leaders gave informal assurances in the early 1990s that NATO wouldn’t expand eastward. Declassified memcons show James Baker told Mikhail Gorbachev in 1990 that NATO would move ‘not one inch eastward.’ When NATO expanded anyway, Russians logged it as another broken promise.Put plainly, Russians assume promises are conditional and alliances are temporary. America views international relations through the lens of the Rational Actor Model, or the idea that leaders make decisions like rational calculators. We view logical entities as pursuing self-interest. We assume to generally uphold agreements because they serve our long-term interests. As the first key piece to understand, this truth is also the biggest limitation. Russia assumes we will double-cross them. That assumption changes how we should orient ourselves. Negotiation, to Moscow, is zero‑sum. Anything they concede feels like a loss they’ll pay for later.This is a legacy of Kalka, Napoleon, Hitler, and NATO. Should we be Russian apologists? No. But we should treat our adversary with dignity and respect.When negotiating with Russians, understanding this environment of deep-seated suspicion is critical. And it’s important to recognize its self-fulfilling potential. Russia’s expectation of betrayal provokes actions that make trust impossible.This isn’t to say that negotiation is impossible. But it does fundamentally alter the landscape. We need strategies that accept mistrust as the starting point.Next, let’s think about why orienting talks solely from a Western lens falls short. When we think about negotiations, we need to consider how the Russians approach negotiating. We fast-forward to 1962 and a moment when misunderstanding nearly ended civilization, the Cuban Missile Crisis. Part 2. The Cuban Missile Crisis(Sound of a ticking clock begins—steady, deliberate—fades slightly under narration)October 1962. The Cold War reached its most dangerous peak. American U-2 reconnaissance flights over Cuba captured photographic evidence that the Soviets were emplacing medium- and intermediate-range ballistic missiles just ninety miles from the coast of Florida.An American early warning radar designed to watch for incoming missile strikes became operational in Thule, Greenland, in 1959. Another in Clear, Alaska, came online in 1961. Both looked north, towards the North Pole and the direction of ballistic missiles from the Soviet Union. We were blind to the south.To President John F. Kennedy, the missiles in Cuba were an intolerable threat. With missiles only minutes away, our radars would give no advance notice, leaving the United States no time to respond. For Soviet leadership, particularly Nikita Khrushchev, the move was not sudden. It was strategic and rooted in a long-standing perception: that the United States had already encircled the Soviets.In 1961, the US had Jupiter nuclear missiles in Turkey, a NATO ally and direct neighbor to the Soviet Union. These missiles could strike major Soviet cities with very little warning. To Moscow, they were a daily reminder that the US held a gun to their head. The US refused to remove them. Until Cuba.In early 1962, Khrushchev approved Operation Anadyr, the secret plan to deploy Soviet nuclear missiles, troops, and equipment to Cuba. Officially, this was framed as a defensive act, meant to protect a fellow socialist state from US aggression. Unofficially, it intended to correct a strategic imbalance. If the United States could threaten the USSR from Turkey, the USSR would threaten the United States from Cuba.Simply put, Khrushchev matched threat for threat because he believed it was the only way the US would listen. To negotiate on equal footing, the Soviets needed a threat of equal measure.And so, Soviet missile forces began shipping warheads and launch equipment to Cuba. When the U‑2s spotted them, most sites were nearly ready.What followed was thirteen days of unprecedented tension. The Kennedy administration weighed air strikes, invasion, and ultimately settled on a naval blockade. American military forces were placed on DEFCON 2, meaning war was imminent.Meanwhile, Soviet field commanders in Cuba continued to complete missile deployment, unaware of the full extent of the geopolitical negotiations underway. And both sides knew how close they were to catastrophic escalation.Then, backchannel diplomacy broke the deadlock.On October 26, a Soviet message proposed to remove the missiles from Cuba in exchange for a US guarantee not to invade the island. American intelligence questioned the authenticity of the message. On October 27, a more formal message insisted any deal include removing US Jupiters from Turkey. (Sound of a ticking clock grows slightly louder, then recedes)The Kennedy administration was divided. Publicly agreeing to remove the missiles could make the US appear weak. But ignoring the second message threatened progress in negotiations.So they did both.Publicly, the US accepted the first offer: the Soviets would remove their missiles, and the US would pledge not to invade Cuba.Privately, through Robert Kennedy’s backchannel meeting with Soviet Ambassador Anatoly Dobrynin, the US agreed to dismantle the Jupiter missiles in Turkey, and we would do so within a few months, quietly, without any public linkage to the crisis.…Russians win concessions by making America lose something tangible. Understanding Russian logic means recognizing negotiation is zero‑sum. Leverage and pressure, not goodwill, drive results, though Moscow accepts deals when symmetry and verification are airtight.As an interim summary, let’s remember:First, Russia expects betrayal. Second, negotiation is pressure, not compromise. There’s at least a third piece that demonstrates Russia’s approach to negotiation. Russia negotiates to, and beyond, the brink of conflict. Brinkmanship means the US must back diplomacy with credible, non‑symbolic military power.There are many ways to exert military influence. A great example of military influence that potentially averted conflict was the Berlin Airlift.Part 3. The Berlin AirliftJune 24, 1948 to May 12, 1949By the summer of 1948, the postwar alliance between the Soviet Union and the Western powers had unraveled. Germany, divided among the victors, became the front line of a new kind of war. The Soviet Union controlled East Germany and the eastern half of Berlin, while the US, Britain, and France administered the west. West Berlin was 100 miles deep in the Soviet zone of Germany. When the Western allies announced plans to introduce a new currency, the Deutsche Mark, in their zones, including West Berlin, Stalin saw it as a direct threat to Soviet influence. The day after the Western Allies announced the Deutsche Mark, the Soviets cut off all ground access to West Berlin. No roads, no trains, no barges. Nothing and no one could enter the city by land or water. The aim was to starve West Berlin into submission and force the Allies out without a shot fired.Roughly two million Berliners depended on outside supplies for survival. The city had food for just over a month. The Soviet calculation was that the US and its allies wouldn’t risk war over a remote, encircled city. They expected we would withdraw quietly and allow East Germany and the Soviets to take over. But Washington and our allies chose a different path.On June 26, just two days after the blockade began, the Western Allies launched the Berlin Airlift. US Air Force C-47s and C-54s began flying continuous missions into the city’s airports, landing supplies around the clock. The British joined almost immediately, followed by other allies.At the height of the airlift, a plane landed every 45 seconds. Over the course of 11 months, Allied aircraft made 277,000 flights, delivering more than 2.3 million tons of supplies, including food, medicine, fuel, clothing, and coal. Crews even dropped candy with miniature parachutes to the children of Berlin, an effort led by US pilot Gail Halvorsen that became known as Operation Little Vittles.These weren’t just missions of mercy. They were statements of resolve. The Soviets disputed the Western Allies’ currency and opened negotiations, intending for us to change our position. They had used military influence to exert pressure, and we would need to use ours to overcome that pressure.The operation required incredible coordination. Crews flew through narrow air corridors set in post‑war agreements that the Soviets could not legally block. Any accidental deviation could have been used as a pretext for military escalation. US and British crews flew in all conditions, including fog, snow, and darkness, risking mechanical failure, Soviet harassment, or fatal crashes.And yet, they kept flying.Meanwhile, the Soviets intensified pressure. East German newspapers mocked the airlift, calling it doomed. Soviet planes buzzed Allied aircraft. Propaganda tried to portray the West as abandoning the people of Berlin.The Soviets pushed Berlin to the brink because they expected America to back down diplomatically rather than risk conflict.The effort continued, and the gamble failed. Public opinion in West Berlin solidified around the Allies, not the Soviets. The West had not only refused to back down, it had demonstrated both logistical superiority and moral clarity.On May 12, 1949, after 322 days, the Soviets lifted the blockade. They had lost the battle for Berlin without firing a shot. In the months that followed, West Germany became a democratic state, and the NATO alliance soon took shape.The Berlin Airlift remains one of the clearest examples of what works when confronting Russian brinkmanship.Knowing we prefer to avoid conflict, the Russians provoke it, hoping we’ll back down.To clarify, the Berlin Airlift wasn’t an act of war. It was an act of resolve. Military influence can be forceful without being aggressive.In sum, we must respond to Russian brinkmanship by combining diplomacy with direct action.When negotiating with Russia on the world stage, credible willingness to act militarily is essential to successful outcomes.So…What Have We Learned?First: Russia expects betrayal. That mindset is centuries deep.Second: They negotiate through pressure, not compromise. To them, negotiation is zero-sum.Third: They push to the brink and expect us to pull back.So negotiating with Russia means pairing diplomatic finesse with credible resolve, an approach grounded in their centuries‑deep suspicion, zero‑sum mindset, and brinkmanship. To achieve our goals, the US must fully understand how Russia plays the game and be ready to respond to Russian brinkmanship by combining diplomacy with direct action.May God bless the United States of America.Further Reading / Source Material* Airbridge to Berlin by D.M. Giangreco* CIA Declassified Document: Soviet Harassment of Allied Aircraft during the Berlin Airlift* The Berlin Candy Bomber by Gail Halvorsen* Essence of Decision by Graham Allison (for theoretical backdrop) Get full access to I Believe at joelkdouglas.substack.com/subscribe

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  17:15
• Guest Crom Carmichael and Social Security

  ☘️ Joel (00:00:00):Today, I'm pleased to host Crom Carmichael. Crom is an entrepreneur, investor, and business leader. He has served as the CEO and board member of Nishai Biotech, and if I said that wrong, I apologize, since 2002.🎤 Crom (00:00:16):Nope, that's exactly right.☘️ Joel (00:00:19):He's a native of South Bend, Indiana, graduated from Vanderbilt University in 1971. Crom has extensive leadership experience and a demonstrated strong commitment to innovation and growth, especially in biotech.Key aspects of your career include you're a founding investor in Serif Group, who provides seed and early stage funding to startups.You sit on the board of multiple companies, and those are all going to be in the written version (including Consensus Point, TrackPoint Systems, Confirmation.com, BancVue, 3SAE Technologies, and The Gardner School).You own an audio program that covers history's most influential thinkers called Giants of Political Thought. And the series fascinatingly outlines the philosophy of governance, including thinking of giants such as Thomas Paine, Thomas Jefferson, John Locke, Adam Smith, and others.And you and Mike Hassell now just started to host a podcast From Our Generation To Yours, where you offer lessons on business, politics, and life for the next generation.Crom, it's great to talk to you today.🎤 Crom (00:01:22):Well, Joel, thanks for having me. I appreciate it very much.☘️ Joel (00:01:26):I really appreciate that you focus so much on philosophy in governance because philosophy informs how and why we think about things.We establish goals based on some hopefully philosophical logic. And we need to orient ourself toward those goals because when we take our eyes or focus off of the goal, we get to start doing things that don't really make sense.I bet we can find common ground with the question, well, I bet we would both answer yes to the question of whether individuals have a duty to prepare for an uncertain future so they aren't a burden on others.I'm fascinated to hear your take on: Do we have a mandate for individuals to prepare for an uncertain future?As in, like a government requirement mandate. Essentially, should we have social security?Do we have a mandate for individuals to prepare for their future? And you have to make the assumption that me paying into Social Security is me funding my own Social Security in the future. I know that is not the way the system works.I know that it's not me paying in because I pay in for someone who's older than me and then somebody younger than me would theoretically pay in for me. But if I don't pay into the system, then I don't get the benefit.🎤 Crom (00:03:02):Right.So Social Security, when it was founded, it was promised to be like an insurance program where the money that you put in would go into your own social security account.And every year people get in the, I get, now I'm on social security and I get a piece in the mail that tells me how much I'm going to get. And I believe that even when you're younger, I believe that you can request and find out what the Social Security system, quote, promises, unquote, to pay you.But the Social Security system, as it actually works today, and you hit it right on the head. You're right on target. The Social Security tax is just simply a tax.The Social Security benefit is a promise that the government makes so long as it's able to keep it.But the money that you pay in, it does not go into an account in your name.It just goes into a Social Security fund that then is used to pay for Social Security and any other general expenses that the government might need the money for.And so the right word for it is, unfortunately, it's a Ponzi scheme.☘️ Joel (00:04:29):So I was going to ask, so some people call it a Ponzi scheme instead of an insurance program or, or however you want to describe it. Um, so you and I agree that it is not, that you put money into a bucket that money grows like the stock market or like a bond or whatever. And then at the retirement age of your life, you have access to that money.You don't ever theoretically own that money.And because you don't own it, some people call it a Ponzi scheme.I don't, I think that institutionally, there's a reason that we created the program and that came out of the Great Depression and people not having enough.So if that is still true, if we eliminated the program, then don't we have an obligation to maintain our commitment to it?🎤 Crom (00:05:34):Well, I mean, you know, Social Security from a political standpoint, I mean, people who have worked all their lives and now everybody who is retired today worked their entire life and paid into the Social Security system.So it is an obligation that the government has based on the promise that the government has made to every American citizen.And the government will keep that promise as long as it can. But the point that you make is that somebody's ability to receive or the government's ability to pay the benefit is what will depend on whether or not the benefit always gets paid.And so what age, I'm 76. And so I've been collecting Social Security for about, let's say seven or eight years. I paid into Social Security for about 45 years. And most people who are collecting Social Security feel that they have earned the money that they are receiving.And the reason that they do is that the people who started receiving Social Security in the 40s and 50s and even in the 60s paid very little into the system compared to the benefits that they were receiving.And so therein lies the Ponzi scheme.☘️ Joel (00:07:04):Sure, yeah.🎤 Crom (00:07:05):It's a little bit like, when I was in college many years ago, if I needed, I may be telling on myself here a bit, but if I needed a few bottles of alcohol I would send out a chain letter. Do you know what a chain letter is?☘️ Joel (00:07:21):Yeah.🎤 Crom (00:07:23):And I would put my name at the top. I'd put three of my friends under me and I'd send out the chain letter to about 100 people that I didn't know and tell them to send a bottle of such and such to the top person on the list and then remove that person, move the second person to the top and put their name on the bottom.And I'd send out 100 of those things, and I would inevitably get three or four bottles of whiskey. And so that's how Social Security worked from the beginning.Now, there was a senator named Senator Clark who offered an amendment to make it so that when people put money into Social Security, that it would actually go into an account in their name in the same way that an IRA works today.And that amendment, it was voted down.☘️ Joel (00:08:19):I wrote a previous idea back in, I think, May of last year. Why doesn't the government give every baby born in America a $100,000 loan when they're born?And over the lifetime of that child, and I understand the math doesn't perfectly work out because there's inflation and the reality of things,but...That individual repays their $100,000 to the government over their lifetime.And then the investment of that grows at some government promised kind of low rate, like 3%.And then at their retirement age, then they get, depending on what year they retire, then they get a benefit of that divided into 30 years.And so then if you don't live long enough, which most people won't because if you retired 65 and your benefits are planned to last till you're 95, then most people just statistically don't live to be 95. Then whatever you didn't earn in that, you still don't own. The government seizes it.And then that funds people who through not necessarily any fault of their own were injured or for whatever reason couldn't work.And so then the program always has full funding because of that.But I understand that there's political consensus that would have to take place for Congress to pass that and change Social Security.But to me, that makes sense that FDR could have when he created the Social Security program. He could have created it to benefit retirees at the time, but then somehow morphed it into a self-funded thing.Because we're going to have generations that are smaller than than previous generations. And like Gen X is smaller than the baby boomers. And so we have a problem now that social security is running out of funding because the baby boomers are a bigger generation than those that follow.And so then there are not enough people in the way that FDR set up, there's not enough people paying into the program.🎤 Crom (00:10:26):Well, yeah, and, you know, your ideas make a great deal of sense as a practical matter.I mean, they make a great deal of sense from a mathematical matter, but as a practical matter, getting Congress to agree to do something like that, I think would probably be giving $100,000 to every baby.I'm not quite sure how that $100,000 would be invested on behalf of that person.And then the problem becomes the politicians as that amount of money, if you even could establish it to begin with. Politicians would see that pool of money and want to do something, do something with it.And that's always been the problem because when Social Security was originally passed, I went back and did a little bit of preparation for this conversation.And the original Social Security tax for the individual was 1% on their first $3,000. So it was $30 a year. And the employer matched that. So the employer also put up $30 a year. And Roosevelt promised that those two numbers would never change. And, of course, that was not true. But he said that in order to get the bill passed.And then the media then reported what Roosevelt said, and the bill got – the Social Security bill got passed.And then as politicians started to see, well, gee, there are a lot of people who are now, and by the way, when Roosevelt passed that bill, average life expectancy was 62 and you didn't start collecting Social Security until you were 65.Well, then over the next 25 years, life expectancy increased to approximately 75 and they actually lowered the year that you could collect Social Security down to 62.And they increased the benefits.And that's because politicians found that if they ran on a platform back in those days of increasing Social Security benefits by 5%, people who were collecting Social Security benefits would vote for them.And so it's unfortunate that we could have an interesting conversation sometime on what the founding fathers, what some of their discussions were, and it's all in the Federalist Papers, by the way, what their discussions were when they were devising the Constitution, what were the principles that they tried to take into account in writing a constitution that they hoped would last for hundreds of years.Please, go ahead.☘️ Joel (00:13:26):It is really interesting to me, the John Locke piece that got lost in the translation between John Locke's philosophy and the Declaration of Independence that Life, liberty, and property, because it was one of John Locke's big things.The role of government is to protect your property. And then Jefferson changed that to Pursuit of Happiness.So I understand the challenge of saying that the government's role is to protect your property, because some people might hear that and say, oh, I don't own a house. I don't own 10 acres or whatever, so I don't have property, and the government promised me property, and so now you are obliged to give me a yard or whatever.That's not what that means.But it does mean that for your body, as an example, you can make decisions about your body. But if your dollars are your property because you work and generate funds from that work, and those funds become your property, then does the government have a responsibility to protect your property? And then that actually ties in with the insurance piece, because if the government does have a responsibility to protect your property, but you're facing an uncertain future, then do you buy an insurance plan to make it so you still have some money at the end of your life or in the instance that you can't work and that insurance would become Social Security?That's an interesting premise that I thought about.🎤 Crom (00:15:04):Back in the 20s, before the Great Depression, back in the 20s, more than half of the American people bought insurance policies in the form of annuities. And that was buying insurance privately that would provide for their retirement.☘️ Joel (00:15:27):So do you think we should still commit to Social Security?Essentially, you and I agree you have a mandate to prepare for an uncertain future.There are different ways that you can do that.How do you think we should get that done? Because we need to probably reform the program so that it's healthy again.🎤 Crom (00:15:52):Well, the government does have. A number of years ago, he federal government passed legislation they passed. And I'm going to I may get this, Joel, slightly wrong, but they provided for people if people wanted to set up IRAs, individual retirement accounts, they could do that if they worked for a company that offered a 401k. Then they could contribute to the 401 , and oftentimes the company matched that amount.And then there's this other thing called Roth IRAs. And I'm not that familiar with any of those in very, very specific detail other than there's lots of tax deferring that goes on in those plans so that they can build.And so for the average, for the regular person, if they work in a company that has a 401k, and the company contributes to that 401k with a matching grant, matching amount of money, I encourage people to put as much as they possibly can in those IRAs if they're matched by the company because that automatically gives them 100% return on that investment.And there's nothing that comes close to that in any other way of investing.☘️ Joel (00:17:22):But I agree, totally agree with the investment vehicles that are there.If it's going to take the place of social security, though, they can't be an elective thing. They have to be mandated, right?Because there will always be people that choose not to invest because they don't have the money, because we talked about low wages a minute ago.And because they don't have the money, they're not going to do it.And then they're going to get to the end of their life. And what do you do?Do you just leave them to die?And the answer is no, you can't. And so if you're going to have people be able to use their 401k as their retirement money, then it can't be optional.🎤 Crom (00:18:10):Well, in the society that we're in today, Social Security is going to exist until it can't. And that would be if you had an economic collapse and the value of money would have to be redefined. That's a possibility.That type of thing has happened throughout history.But for our discussion, for practical purposes, Social Security benefits are going to continue to be paid out because it would be political suicide to call for the elimination of Social Security benefits and exchange it for some other program.And so as long as Social Security benefits are going to be paid out, there would need to be some form of Social Security tax that really forces people who are working and earning money to pay money toward, as you say, the Social Security for the people who are currently retired.So I don't think there's a way out of the Social Security trap, if that's the way that you and I want to describe it, only because it's been around now for close to 90 years.☘️ Joel (00:19:35):Yeah, I don't know that I would call it a trap. I don't know that I would use that term. I would probably say it's a very inefficient vehicle to prepare for your retirement.And anytime we choose to funnel money through the government, you're just going to waste at a minimum 40% of it by people working government jobs.They're going to kind of siphon off that money.And so then by wasting 40% of it, you would have less money than you would if you had invested that money instead.But I don't know that the only way I think that we could change it, and that's an interesting point, if you elected to invest your own money and could prove that through your taxes every year, whether or not you could elect to not pay Social Security.That'd be an interesting point.🎤 Crom (00:20:34):Well, that's why I called it. That's why I referred to it as the Social Security trap.Because if you work and receive a paycheck, your employer is required to take your Social Security tax out of your pay.So it's not a choice that you as a worker, you don't have that choice.You can't say, well, I think I'd rather do this rather than pay the tax. You don't have a choice.☘️ Joel (00:21:01):Yeah, then it gets back to the Edmund Burke thing that institutionally we chose as a nation to do X at this time.And Burke would say we have a commitment to the institution to maintain the viability for people who don't have resources.So...🎤 Crom (00:21:23):Yeah, but it's also just there's a philosophical point, and then there's the practical political point, and that is that if anybody, if any politician ran saying that we're going to take away people's Social Security benefits who don't need the money, I will promise you that that politician will not win the next election.☘️ Joel (00:21:45):Yeah, yeah.🎤 Crom (00:21:47):So the tax will always be there as long as the social security system is viable enough to pay out the benefits.☘️ Joel (00:21:58):Yeah.And I actually, I personally think that we have to have social security or some form of social insurance so that elderly people aren't freezing to death in their apartments.I think that Social security, as it is shaped right now, probably needs reformed so that it better benefits those people.Because, for instance, if you consider the $100,000 loan when you're a baby thing, and then the worker pays that back through their lifetime earnings, you would pay less in social security taxes because you could even make poverty level wages and pay that $100,000 back.And you would almost double your entitlement benefit or your benefit at your retirement age is, I don't want to call it an entitlement at that point because that's an investment that the government made on your behalf when you were born.But I think that it's just something that we need to, we can't get rid of because too many elderly people and people who can't work depend on it.🎤 Crom (00:23:05):Yeah, I would suggest that the biggest area of federal savings is not going to be in Social Security because I would disagree with you just a bit on the cost of administering Social Security is actually relatively low compared to the cost of managing our healthcare system because with Social Security, it's just a formula and they pay it out.☘️ Joel (00:23:38):I really appreciate your time. And thanks for sharing the phone call with me.🎤 Crom (00:23:43):Joel, I appreciate it. Thanks for having me.May God bless the United States of America. Get full access to I Believe at joelkdouglas.substack.com/subscribe

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  24:21
• What Do We Owe Those Struck by Misfortune?

  Jennifer worked for more than forty years. She spent just a few years at home when the baby was born, then went right back to it.She didn’t ask for handouts.Never made a scene.She went to church on Sunday and to work every day during the week.She paid her taxes, saved a little, and kept going.She wasn’t rich.Didn’t have a pension.But she had her 401K and maybe some Social Security waiting if the government didn’t take that away.She thought she was doing it right.Then, her son got sick.He was in his twenties. Just getting started. No real savings. Barely enough insurance.The money he had didn’t come close to what he needed.He was the kind of sick that throws everything into chaos.The kind that doesn’t care how old you are or how prepared your mother thought she was.Jennifer fought the denials.Sat through the waiting lists.She watched the out-of-pocket bills pile up. The bills didn’t care about her budget or her plans.She wasn’t going to watch her son die sitting on any money, so she drained her savings.Sold her car.Skipped her own treatments to stretch the money. She never complained.She just did what any mother would do. She tried to save her child.So now, she’s 60.Her son’s alive.The savings are gone.She hopes to get a small Social Security check. She knows that because of the choice she made and would make again, she will have to work longer to cover rent. She doesn’t regret her decision.…Jennifer’s situation begs a question: what do we owe those struck by misfortune? To answer that, we have to ask something deeper…Why does this system exist in the first place?We consent to governance in order for those we elect to protect our property.Individuals possess inherent rights. These include the right to life, liberty, and the ability to strive toward purpose. These rights are your property. No one can own you but you. So, you are your own property, and only you have the right to make decisions about yourself.These rights exist independently of government. Even if government didn’t exist, we would still have the inherent right to live, make choices, grow from the result of those choices, and strive for a fulfilling life.By choosing to submit to governance, we assign a duty to those we elect to protect these rights and the property that comes from us exercising those rights.Beyond protecting the property that is our natural rights, government also resolves disputes over property. These might involve employers and workers, neighbors, families, or other rub points in society.This duty is not optional, and it applies to both the strong and the weak. Elected officials are charged with protecting the life and property of every individual, including those who cannot defend their rights on their own. We give up some control through laws, regulations, and taxes. Sometimes, we pool our resources to build things that multiply our individual capability, like roads, power grids, or schools. Other times, we give up control because we know we can’t always protect our own rights alone. This is where the tension in funding Social Security begins.Some succeed and come to see it as a kind of fraudulent Ponzi scheme. They feel that if they can’t access the money their government took from them in taxes when they want it, then those officials failed to protect their property.But that’s the view from the top of the hill. It’s not wrong, just incomplete. It’s the view of the world from the folly of wealth.Because eventually, time and chance happen to us all.The fastest runner doesn’t always win the race. The strongest doesn’t always win the fight. Wisdom, intelligence, and skill don’t always lead to wealth, health, or success.Sooner or later, misfortune visits everyone. We get injured. Or sick. Or old. Or maybe our child is the one who suffers.Because we don’t know when misfortune will strike, we hedge our bets. As a nation of individuals, we buy insurance in case we, as individuals, can no longer work due to age or injury.So…Our property begins with our ability to choose and pursue our life’s purpose. That includes our labor, our time, and what we create with them. But we live in a world that’s unpredictable and sometimes violent. We know that no amount of planning can fully protect us from injury, illness, or age.So, in our individual self-interest, we agree to pool some of what we earn. We buy insurance together so that if misfortune strikes before we’ve saved enough, we’re not left with nothing.This insurance is called Social Security. It’s not built to be flexible. It’s built to be there for when we can no longer work.But we still haven’t directly answered our question about Jennifer’s situation:What do we owe those struck by misfortune?What do we owe those struck by misfortune?We don’t owe those struck by misfortune sympathy. Nor do we owe them charity. We may have personal beliefs that direct us to love and serve others through our churches and nonprofits, but we cannot force others to share our personal beliefs. What we owe those struck by misfortune is commitment to stable institutions that protect the life and property of individuals, including those who cannot defend these rights on their own. Institutions like Social Security don’t spring up by accident. They develop organically over generations and embody the collective wisdom of society. They are built over time in response to painful lessons and misfortune. They reflect the accumulated judgment of generations who saw what happened when nothing was there to catch the falling. They are not the product of a single generation’s will. They are the accumulated wisdom of America refined by need and time.These institutions carry memory. They remember the cost of doing nothing, the pain of the Great Depression, and the reason we built a floor for those struck by misfortune to stand on.For those blinded by the folly of wealth and comfort, it’s easy to call for reform. They make claims of fraud without showing evidence. They bought in like everyone else, but now they want to walk away with their share as if the deal was only about them.We do need to reform the institution to better serve the needs of those struck by misfortune while still maintaining our commitment to it. Not to eliminate it or make it more difficult to use but to better serve those who depend on it. But reform should come from people who understand the purpose and history of the institution, not from oligarchs in power trying to tear it down.So, what does America owe Jennifer and others struck by misfortune? We owe Jennifer commitment to institutions that protect the rights and property of every American, including the weak who cannot defend those rights on their own.May God bless the United States of America.Music from #Uppbeathttps://uppbeat.io/t/eversafe/eversafeLicense code: STFNDGAT8W2XKNIF Get full access to I Believe at joelkdouglas.substack.com/subscribe

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  8:30
• Why Do We Tax Businesses at All?

  We want real prosperity for working Americans without piling debt on future generations. So, we’ve got to be open to new ideas. Some of those ideas might sound like they’ll never work. That’s fine. What matters is that we consider the options, build consensus, and stay focused on the results, not just the method.Consensus makes lasting change possible. If we build real consensus across parties and regions, then we open the door to a rarity in American policy: a permanent solution. Not a temporary fix. Not a patch for the next election cycle. We need a system that works because enough people agree on the goal and not the method for achieving that goal. Achieving the goal matters. How we get there is secondary.There’s another angle we need to consider. When we’re looking at solutions, we have to be willing to think all the way to the edges. On one end of the spectrum is the “do nothing” option. This option is something we should consider even when everyone’s yelling that we have to act. On the other end is the option that delivers overwhelming, decisive results.At both ends, we have to ask: Why wouldn’t that work? And if we can’t find a good answer, then maybe that so-called extreme isn’t extreme at all. Maybe it’s the best option we’ve got.So, with that in mind, here’s a question worth asking:If our goal is food on the table and heat in the house for all American workers, why do we tax businesses at all?If that made you pause or even angry, that means we’re asking the right question.Goals Matter More Than MethodsDuring World War II, America faced a nearly impossible problem. The country needed tanks, planes, and ships. We needed millions of them. We needed them fast. But at the time, the factories that could build them were busy making cars, stoves, and washing machines. The problem was so dire that adversary global leaders assessed there was no way we could achieve our goals and win the war. Reichsmarschall Hermann Göring, one of Adolf Hitler’s top lieutenants, said that Americans could only make refrigerators and razor blades. He assessed we would never be able to produce the military equipment and supplies necessary to defeat Nazi Germany.At the time, Göring was right. President Franklin D. Roosevelt knew it, too. So, Roosevelt started building consensus in order to create permanent effects to win the war. And he had a tough row to hoe. Many thought FDR was anti-business. He had expanded government oversight of banking, labor, and markets. He raised income taxes on the wealthy and introduced new corporate taxes many saw as hostile to business investment. He supported unions and workers’ rights that businesses viewed as empowering strikes and weakening employer control. He framed the wealthy elite as obstacles to recovery.But FDR wasn’t anti-business. He was pro-American worker. He opposed exploitation. He knew he needed a strong business culture. In his annual Budget Message to Congress on January 5, 1942, FDR said…“We cannot outfight our enemies unless, at the same time, we outproduce our enemies. It is not enough to turn out just a few more planes, a few more tanks, a few more guns, a few more ships, than can be turned out by our enemies. We must outproduce them overwhelmingly, so that there can be no question of our ability to provide a crushing superiority of equipment in any theater of the world war.”FDR’s administration couldn’t mandate patriotism or force companies to comply. It had to make the pivot profitable. The administration partnered with industry and offered massive contracts, tax incentives, and full-throttle support to retool factories for war production. The government offered something called cost-plus contracts. For every dollar a company spent retooling its factory, it got that dollar back, plus a guaranteed profit. There were advance payments, tax incentives, and full reimbursement for production costs. That meant zero financial risk for the companies. If they stepped up, they didn’t just help the country. They came out ahead.The results were fantastic.Ford built a mile-long assembly line just for B-24 bombers. Chrysler stopped making cars and started producing tanks. General Motors converted its plants to churn out machine guns and aircraft engines. These weren’t small measures. They were full-scale industrial makeovers. Entire factories partnered with FDR’s administration and reimagined themselves for the singular purpose of achieving the national goal. The method for achieving that goal was secondary.And it worked. Not because everyone agreed on the politics but because everyone agreed on the goal. And the government made it profitable to help achieve that goal. The system rewarded those who helped achieve it.America became the Arsenal of Democracy not just through sacrifice but through consensus. The right incentives produced the right results in the timeframe we needed. Fast forward to today. If we want prosperity for American workers, if we want families to thrive without leaning on public assistance, maybe the answer isn’t another patch or another tax. Maybe it’s the same principle. Let’s reward the businesses that help us achieve our national goals.If a business pays livable wages, covers worker healthcare, and doesn’t push its costs onto taxpayers, what are we taxing them for?In the end, it’s not about the method. It’s about the national goal of any worker being able to work for and achieve food on the table and heat in the house, all without taxpayer support. If we can achieve our goal, the method is irrelevant.If Low Wages Are a Business Model, the IRS Should Send a BillBusiness taxes bring in less revenue than the cost of low wages. So, maybe we’re taxing the wrong thing.Let’s take a closer look at the numbers.In 2024, the federal government brought in about $4.9 trillion in revenue. Out of that, corporate income taxes made up just 10 percent or around half a trillion dollars of that five trillion. At the same time, low wages cost the American taxpayer far more than half a trillion dollars a year. They cost about a quarter of the entire federal budget or 1.25 trillion dollars.When companies pay poverty wages, workers still need to survive. No matter what, people need food on the table and heat in the house. We have all agreed to this principle. Both parties have expanded social programs to help people meet these necessities.Because we all agreed that people need to be able to work for and achieve food on the table and heat in the house, these programs become mandatory funding. Mandatory means we must pay them. So, mandatory taxpayer-funded social programs kick in. These programs, including Medicaid, SNAP, housing aid, and refundable tax credits like the Earned Income Tax Credit, are automatic payments written into law. If someone qualifies, the American taxpayer pays.In 2024, nearly 25 percent of all federal spending went to these kinds of programs. Much of this deficit is wage-related. Medicaid alone serves millions of low-income workers, especially in food service, retail, and care work. The EITC is specifically designed to supplement low wages with taxpayer dollars. In short, the federal government spends far more cleaning up after low wages than it ever collects from taxing business profits.But rather than be angry at the state of the world, we need to figure out a healthy path forward.So here’s the question. If a business pays its people enough to live, doesn’t push its labor costs onto taxpayers, and supports self-sufficiency, should we tax that business at all?Because right now, we’re taxing good businesses and subsidizing the bad ones. And that makes no sense.But … we also can’t raise the minimum wage to mandate the change. Just like FDR couldn’t compel businesses to get on board to achieve national goals, we can’t compel businesses to eliminate the need for taxpayer-funded social programs by asking nicely. When we needed Ford Motor Company to build B-24 bombers, we had to incentivize the change.If businesses don’t increase revenue, they can’t raise wages. Mandating higher wages leads to job losses, not higher wages.Two Studies Arguing Past the PointIt’s been a year since California raised its minimum wage for fast food workers to $20 an hour. And, of course, some sources claim the wage increase mandate is killing businesses, and others claim it had no negative effect.First, a study conducted by the Berkeley Research Group, dated February 18, 2025, found that nearly 9 in 10 restaurant operators cut employee hours in the first few months. A third reduced benefits. Most said they planned to cut even more over the coming year.Jobs declined. According to federal data, California’s fast food sector saw its first December job loss in over two decades outside of a recession or pandemic. That’s not a small dip. That’s a reversal of a long-term trend.And prices jumped. Fast food menu prices in California rose almost 15% in one year, nearly double the national average. In April 2024 alone, the month the new wage took effect, prices in California spiked by nearly 3%, the biggest one-month jump in the country.…But before we jump to conclusions, let’s look at the second viewpoint.A study by the University of California at Berkeley from February 24, 2025, found something very different.According to their analysis, the $20 fast-food minimum wage in California did what it was supposed to do. It raised pay by about 8 to 9 percent for covered workers. It did not reduce jobs, it did not cause mass closures, and the price of a typical fast-food meal went up by only about 6 cents on a four-dollar burger.The University of California study used government data, private payroll sources, and job posting platforms. It compared covered restaurants to valid control groups and adjusted for seasonality and economic trends. Again, they found no significant job losses. In fact, the number of fast-food restaurants in California actually grew faster than in the rest of the country.University of California economists pushed back on the BRG study. They said BRG cherry-picked data, failed to separate correlation from causation, and relied on sources that weren’t central to the wage policy itself. For example, job losses had already begun before the law took effect, and the price spike BRG cited didn’t account for restaurant type or broader inflation. So who’s right? Both are likely correct.Businesses act in their self-interest to maximize profits. This statement does not intend to demonize businesses. If a business can invest in automation in such a way that results in higher profits, it will do so, as it is a means to reduce labor costs. But let’s get away from the contradiction. It only muddies our view.The decisive point is not whether the government should mandate a wage increase. Any mandate the government makes to the business pool has ripple effects, and there are winners and losers. The decisive point is that the government mandating a wage increase does not build consensus. We will not achieve long-term consensus with a wage mandate. Just like FDR couldn’t compel businesses to get on board to achieve national goals, we will not achieve our goals in a lasting manner with mandates. We have to incentivize change.We Won’t Agree on the Method. Let’s Agree on the GoalThe first step to building consensus is agreeing on the goal.And we can agree on the goal: food on the table and heat in the house for working Americans. We can build from there.Here’s a fact: any business that pays poverty wages costs the American taxpayer more than it pays in taxes.Here’s another: if we’re against raising wages to a livable standard for every worker, then we are for continued dependence on social programs. You can’t be against both livable wages and social programs. No matter how much we argue for market freedom, if wages stay low, taxpayers pick up the tab.So, we need to build consensus to get through our gridlock.Let’s throw out a proposal.If a business can prove it pays every worker a livable wage, including the dishwasher, the pipefitter, the burger cook, the philosophy major, the ranch hand … then how about they pay no federal taxes?It doesn’t matter if a business thinks those are low-skill jobs that don’t justify higher wages. If they don’t pay their workers enough, the taxpayer fills the gap, and that costs America a trillion dollars a year.But when workers earn livable wages, they don’t need food stamps. They can afford private healthcare, so they don’t need Medicaid. They no longer need the Earned Income Tax Credit. Higher wages reduce the taxpayer’s mandatory funding commitment. As a bonus, this approach reduces the burden on the federal budget and raises revenue because higher wages mean more income taxes paid by workers.Some will say that we can’t eliminate business taxes because we should mandate businesses pay both livable wages and taxes. And they have a valid point. But that stance has blocked progress towards our goal for more than 40 years. We will likely never gain the political consensus to make lasting progress with mandates.Whether a business pays taxes or how large its tax bill is isn’t the point.The decisive point is whether Americans can work for and achieve food on the table and heat in the house without piling debt on future generations.That’s the goal. That’s the consensus.If we reward the right behavior, we don’t need mandates. We build a system that works, even if not everyone agrees with how we got there.How we achieve our goal matters less than achieving it.May God bless the United States of America. Get full access to I Believe at joelkdouglas.substack.com/subscribe

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  16:17

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